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REG - Sivota PLC - Half Year Results

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RNS Number : 8429N  Sivota PLC  27 September 2023

27 September 2023

SIVOTA PLC

("Sivota," or "the Company")

HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2023

Sivota, the London listed investment vehicle focused on later-stage, Israeli
technology companies, announces its results for the six months ended 30 June
2023 ("H1 2023").

 

Sivota seeks to leverage the significant technology investment potential
between the UK and Israel. With Sivota as the investment vehicle, the Group
identifies investment opportunities in undervalued, well-positioned Israeli
technology companies and leverages the Group's experience to introduce
strategic change and growth.

 

Highlights:

 

·      Ongoing implementation of the Group's dual-pronged strategy:

o  Focus on seeking investment opportunities, predominantly across the
Israeli technology sector;

o  Continue to support and advise Apester Ltd ("Apester"), a digital
marketing engagement platform in which Sivota has a 54.1% majority stake, on
the execution of its growth strategy.

 

·      Key financial highlights for the six months ended 30 June 2023:

o  Revenue of $3.1 million (H1 2022: $1.1 million*)

o  Gross profit of $633,000 (H1 2022: $287,000*)

o  Cash at 30 June 2023 of $2.4 million (31 December 2022: $4.4 million)

o  Net debt of $1.5 million (31 December 2022: $1.4 million)

* Revenue and Gross profit generated in H1 2022 were for the period from the
Acquisition date of Apester on 12 May 2022 to 30 June 2022.

 

·      As anticipated Apester has generated a loss of $3.2 million over
the first 6 months of the year as management invest in the development of its
base technology, expand its services and client base despite a very tough
market background with significantly reduced advertising demand. The rate of
loss is reducing rapidly and we anticipate the business will reach breakeven
during H2 '24 as revenues continue to increase and the cost base is now right
shaped.

 

·      Over the course of H1 2023, the Group has implemented a number of
strategic and operational changes within Apester, including:

o  The appointment of Anni Ben Yair as Chief Executive Officer for Apester,
announced in August 2023. Anni is an experienced digital media and technology
executive, well positioned to lead Apester's international go-to-market
strategy;

o  Continued development of Apester's underlying technology, building on the
integration of Permutive, a privacy-safe infrastructure helping publishers and
advertisers reach their audiences which completed in late-2022.

 

·      Apester has fortified a very strong list of prospects and
opportunities, from existing and new partners, which include:

o  A new initiative with Ad Alliance, one of the most prominent German sports
media outlets, which builds on an existing relationship and seeks to leverage
Apester new data collection and segmentation tools that enable first and
zero-party collection, cross-checking with interactions on sight, and matching
to unique identifiers that enable Apester partners to offer a premium tailored
experience while on their site;

o  In the final stages of launching a new partnership with a key European
sports outlet, reinforces our authority within the European market;

o  Launched a new US-based partner that is a new expansion in one of our key
growth markets. We are in final negotiations with one of the largest US media
outlets across multiple key industries.

 

 

Ziv Ben-Barouch, Chief Executive Officer of Sivota, commented:

 

"We are delighted with the progress we have made in H1 2023 as we continue to
implement a number of growth initiatives. In addition to supporting Apester on
driving engagement to capitalise on its market opportunity, we are currently
evaluating a number of additional investment opportunities in the Israeli
technology sector, that our new business pipeline has generated.

 

As funding within the technology sector continues to remain challenging as a
result of the macro-economic conditions, we believe Sivota continues to be
well placed to benefit as the Groups new business pipeline suggests.

 

As we move into the second half, I look forward to updating stakeholders on
ongoing Apesters' progress, along with other investment opportunities that
align with our growth strategy."

 

 

For further information, please visit www.sivotacapital.com
(http://www.sivotacapital.com) or contact:

 

 Sivota PLC                                 via Vigo Consulting

 Tim Weller, Non-Executive Chairman

 Ziv Ben-Barouch, Chief Executive Officer

 Canaccord Genuity Limited                  + 44 (0) 20 7523 8000

 Bobbie Hilliam

 Vigo Consulting                            + 44 (0)20 7390 0230

 Jeremy Garcia

 

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) 596/2014.

 

Financial Review

Cash flow and net debt

The Group's cash balance as at 30 June 2023 was $2.4 million compared to $4.4
million at 31 December 2022. The debt at 30 June 2023 was $1.5 was compared to
$1.4 million at 31 December 2022.

Revenues

The Group generated $3.1 million of revenues in the six months ended 30 June
2023, compared to $1.1 million revenues generated in the period from the
acquisition of Apester on 12 May 2022 to 30 June 2022.

Current trading and outlook

Sivota was established in order to acquire controlling stakes and then act as
a holding company for various target businesses operating or founded in
Israel, predominantly in the technology sector. The Group has made a solid
start to FY 2023, with the recently acquired Apester performing in line with
management expectations.

Apester's acquisition is the first step in executing the Group strategy.
Alongside working to help Apester implement its growth strategy, the Group
continues to evaluate a robust pipeline of new investment opportunities,
refining our next targets.

As a result of the challenging macro-economic environment, access to funding
for start-up companies has become more challenging. Against this backdrop, the
Board of Directors believe Sivota is well-placed to assess and evaluate more
opportunities to identify the right investment opportunities where the team
can leverage our experience to maximise growth and shareholder returns.

The Group continues to evaluate investment opportunities, generating a strong
new business pipeline. Furthermore, the Group is continuing to support Apester
and ensure the right executive team is in place for Apester to maximise its
potential as an interactive experience platform that helps business to better
engage with their audience.

Risk and uncertainties

The Group operates in an uncertain environment and is subject to a number of
risk factors. The Directors have carried out an assessment of the principal
risks facing the Group, including those that threaten its business model,
future performance, solvency or liquidity.

The Group continues to monitor the principal risks and uncertainties to ensure
that any emerging risks are identified, managed, and mitigated.

Keeping pace with technological developments

Apester's ability to attract new customers and increase revenue from existing
customers largely depends on its ability to enhance and improve its existing
solutions and introduce compelling new technology products. The success of any
enhancement to its solutions depends on several factors, including timely
completion and delivery, competitive pricing, adequate quality testing,
integration with other technologies and the Apester platform, and overall
market acceptance. Apester seeks to mitigate this risk by continuing to
improve its solutions and products.

Concentration of key clients

Apester has significant contracts and relationships with a number of key
customers. Although the Company knows of no reason why such contracts should
be terminated or will not be renewed on the same or more favorable terms, the
Directors cannot guarantee such relevant parties' commercial position or
market conditions will not alter their position. Should any of these contracts
be terminated or not be renewed, it could have a material adverse effect on
the financial position and future prospects of the Group. Apester seeks to
mitigate this risk by increasing the number of customers.

Changes to the digital advertising landscape

Apester's current revenues are derived partly from revenue sharing agreements
for advertising space sold through its platform. Such revenues are dependent
on the worldwide demand and ask prices for advertising, which are mainly
controlled by large market participants, such as search engines.  If a search
engine decides to reduce its pricing or demand for advertising space is
depressed, this will adversely affect Apester's revenues.

Funding

 

Although the Directors have confidence in the future revenue earning potential
of the Group from its interests in Apester, there can be no certainty that the
Group will achieve or sustain profitability or positive cash flow from its
operating activities. If Apester does not meet its targets the Group may not
be able to obtain additional external financing. The board regularly reviews
the revenues, KPIs and expenditures of Apester and continues to prudently
manage its cash resources and has minimised ongoing operating costs.
Additionally, if the Group intends to acquire further businesses the Company
will likely need to raise further funds.

Difficulties in acquiring suitable targets

The Company's strategy and future success are dependent to a significant
extent on its ability to identify sufficient suitable acquisition
opportunities and to execute these transactions on terms consistent with the
Company's strategy. If the Company cannot identify suitable acquisitions, or
execute any such transactions successfully, this will have an adverse effect
on its financial and operational performance.

Security, political and economic instability in Israel and the Middle East

Apester is incorporated under the laws of the State of Israel, and its
principal offices and research and development facilities are located in
Israel. In addition, Sivota seeks additional target companies based in Israel.
Therefore, security, political and economic conditions in the Middle East,
particularly in Israel, may affect Group's business directly.

Taxation

The Group will be subject to taxation in several different jurisdictions, and
adverse changes to the taxation laws of such jurisdictions could have an
adverse effect on its profitability.

Statement of directors' responsibilities in respect of the interim results

The Directors; being Tim Weller (Chairman); Ziv Ben-Barouch (CEO)  and Neil
Jones (Non-Executive) confirm that the set of interim financial statements has
been prepared in accordance with international Accounting Standard 34 "interim
financial reporting", and that interim report includes a fair review of the
information required by DTR 4.2.7R and DTR 4.2.8R, namely an indication of
important events that have occurred during the six months period ended 30 June
2023; and material related party transactions in the six months period ended
30 June 2023.

SIVOTA PLC

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                                                                                                                                                                         For the year ended

                                                                                                                                               Six months ended          31 December

                                                                                                                                               30 June
                                                          Note                                                                                 2023      2022               2022
                                                                                                                                               Unaudited                     Audited

 Revenues                                                                                                                                      3,129     1,114           5,918
 Cost of revenues                                                                                                                              2,496     827             4,361

 Gross Profit                                                                                                                                  633       287             1,557

 Operating expenses:
 Research and development expenses                                                                                                             972       333             1,553
 Sales and marketing expenses                                                                                                                  745       261             1,309
 General and administrative expenses                                                                                                           1,974     1,110           3,513

 Total operating expenses                                                                                                                      3,691     1,704           6,375

 Operating loss                                                                                                                                (3,058)   (1,417)         (4,818)

 Financial income                                                                                                                              -         -               -
 Financial expenses                                                                                                                            161       420             295
 Financial expenses, net                                                                                                                       (161)     (420)           (295)

 Loss before taxes                                                                                                                             (3,219)   (1,837)         (5,113)

 Taxes on income                                                                                                                               -         -               1

 Net loss                                                                                                                                      (3,219)   (1,837)         (5,114)

 Net loss attributable to the owners                                                                                                           (1,796)   (1,258)         (3,199)
 Net loss attributable to non-controlling interest                                                                                             (1,423)   (579)           (1,915)
 Net loss                                                                                                                                      (3,219)   (1,837)         (5,114)

 Net comprehensive loss
 Net comprehensive loss attributable to the owners                                                                                             (1,796)   (1,258)         (3,199)
 Net comprehensive loss attributable to non-controlling interest

                                                                                                                                               (1,423)   (579)           (1,915)
 Net comprehensive loss                                                                                                                        (3,219)   (1,837)         (5,114)

 Loss per                                                                                                          4
 share:
 Basic loss per ordinary share in U.S. dollars                                                                                                 (0.14)    (0.30)          (0.38)
 Diluted loss per ordinary share in U.S. dollars                                                                                               (0.14)    (0.30)          (0.38)

U.S. dollars in thousands

The accompanying notes are an integral part of the condensed consolidated
financial statements.

The condensed consolidated financial statements on page 5 to 15 were
authorised for issue by the board of directors on 27 September 2023 and were
signed on its behalf by Ziv Ben-Barouch.

Ziv Ben-Barouch, CEO, 27 September 2023

SIVOTA PLC

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

U.S. dollars in thousands

 

                                                                           As at          As at

                                                                           30 June        31 December

                                                                           2023           2022
                                                                           Unaudited      Audited
 ASSETS
 Non-current assets
 Intangible assets, net                                                    13,136         13,950
 Property and equipment, net                                               23             34
 Total non-current assets                                                  13,159         13,984
 Current assets
 Trade receivables                                                         1,222          2,467
 Other receivables                                                         221            399
 Cash and cash equivalents                                                 2,417          4,439
 Total current assets                                                      3,860          7,305
 Total assets                                                              17,019         21,289
 EQUITY AND LIABILITIES
 Equity
 Ordinary share capital                                                    157            157
 Deferred shares                                                           65             65
 Capital reserve from transactions with non-controlling interests

                                                                           (413)          (413)
 Share premium                                                             15,139         15,139
 Accumulated losses                                                        (5,493)        (3,697)
 Total equity attributable to the owners                                   9,455          11,251
 Non-controlling interests                                                 3,918          5,141
 Total equity                                                              13,373         16,392
 Current liabilities
 Current maturity of long-term loan from related party                     316            -
 Trade payables                                                            1,113          2,042
 Other payables                                                            1,078          1,449
 Total current liabilities                                                 2,507          3,491
 Non-current liabilities
 Long-term loan from related party                                         1,139          1,394
 Employee benefits                                                         -              12
 Total non-current liabilities                                             1,139          1,406
 Total equity and liabilities                                              17,019         21,289

The accompanying notes are an integral part of the condensed consolidated
financial statements.

SIVOTA PLC

CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

U.S. dollars in thousands

                                                                                                   Capital reserve from transactions with non-controlling interests

                                              Ordinary Share capital                                                                                                                      Total equity attributable to the owners   Non-controlling interests

                                                                       Deferred    Share Premium                                                                     Accumulated losses

                                                                       Shares                                                                                                                                                                                   Total equity
                                              Unaudited

 For the six months ended 30 June 2023:

 Balance as at 1 January 2023                 157                      65          15,139          (413)                                                             (3,697)              11,251                                    5,141                       16,392

 Net loss                                     -                        -           -               -                                                                 (1,796)              (1,796)                                   (1,423)                     (3,219)
 Net comprehensive loss                       -                        -           -                                                                                 (1,796)              (1,796)                                   (1,423)                     (3,219)

 Transactions with owners:
 Transactions with non-controlling interests

                                              -                        -           -               -                                                                 -                    -                                         3                           3
 Share-based compensation by subsidiary

                                              -                        -           -               -                                                                 -                    -                                         197                         197
 Total transactions with the owners           -                        -               -           -                                                                 -                    -                                         200                         200

 Balance as at 30 June 2023                   157                      65          15,139          (413)                                                             (5,493)              9,455                                     3,918                       13,373

 

The accompanying notes are an integral part of the condensed consolidated
financial statements.

 

 

SIVOTA PLC

CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

U.S. dollars in thousands

                                                                                                              Capital reserve from transactions with non-controlling interests

                                                         Ordinary Share capital                                                                                                                      Total equity attributable to the owners   Non-controlling interests

                                                                                  Deferred    Share Premium                                                                     Accumulated losses

                                                                                  Shares                                                                                                                                                                                   Total equity
                                                         Unaudited

 For the six months ended 30 June 2022:

 Balance as at 1 January 2022                            15                       65          1,251           -                                                                 (498)                833                                       -                           833

 Net loss                                                -                        -           -               -                                                                 (1,258)              (1,258)                                   (579)                       (1,837)
 Net comprehensive loss                                  -                        -           -                                                                                 (1,258)              (1,258)                                   (579)                       (1,837)

 Transactions with owners:
 Non-controlling interests on acquisition of subsidiary

                                                         -                        -           -               -                                                                 -                    -                                         6,327                       6,327
 Share-based compensation by subsidiary                  -                        -           -               134                                                               -                    134                                       -                           134
 Share capital issuance                                  142                      -           14,053          -                                                                 -                    14,195                                    -                           14,195
 Share issue cost                                        -                        -           (131)           -                                                                 -                    (131)                                     -                           (131)
 Total transactions with the owners                      142                      -               13,922      134                                                               -                    14,198                                    6,327                       20,525

 Balance as at 30 June 2022                              157                      65          15,173          134                                                               (1,756)              13,773                                    5,748                       19,521

 

 

The accompanying notes are an integral part of the condensed consolidated
financial statements.

SIVOTA PLC

CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

U.S. dollars in thousands

                                                          Capital reserve from transactions with non-controlling interests

                                                                                                                                                  Total equity attributable to the owners

      Ordinary share capital                                                                                                                                                                Non-controlling interests

                               Deferred   Share premium                                                                      Accumulated losses                                                                         Total equity

                               shares
      Audited

 For the year ended 31 December 2022:

Balance as at 31 December 2021  15  65  1,251  -  (498)  833      -  833
 Net loss                                                -    -   -                -      (3,199)  (3,199)  (1,915)  (5,114)
 Net comprehensive loss                                  -    -   -                       (3,199)  (3,199)  (1,915)  (5,114)

 Transactions with owners:
   Share capital issuance                                142  -   14,054           -      -        14,196   -        14,196
   Share issue cost                                      -    -   (166)            -      -        (166)    -        (166)
 Non-controlling interests on acquisition of subsidiary

                             -  -   -                -      -        -        6,355    6,355
 Transactions with non-controlling interests             -    -   -                (413)  -        (413)    428      15
 Share-based compensation by subsidiary                  -    -   -                -      -        -        273      273
 Total transactions with the owners                      142  -        13,888      (413)  -        13,617   7,056    20,673

 Balance as at 31 December 2022                          157  65  15,139           (413)  (3,697)  11,251   5,141    16,392

 Net loss

 -

 -

 -

 -

 (3,199)

 (3,199)

 (1,915)

 (5,114)

 Net comprehensive loss

 -

 -

 -

(3,199)

 (3,199)

 (1,915)

 (5,114)

 Transactions with owners:

 

 

   Share capital issuance

 142

 -

 14,054

 -

 -

 14,196

 -

 14,196

   Share issue cost

 -

 -

 (166)

 -

 -

 (166)

 -

 (166)

 Non-controlling interests on acquisition of subsidiary

 -

 -

 -

 -

 -

 -

 6,355

 6,355

 Transactions with non-controlling interests

 -

 -

 -

 (413)

 -

 (413)

 428

 15

 Share-based compensation by subsidiary

 -

 -

 -

 -

 -

 -

 273

 273

 Total transactions with the owners

 142

 -

      13,888

 (413)

 -

 13,617

 7,056

 20,673

Balance as at 31 December 2022

 157

 65

 15,139

 (413)

 (3,697)

 11,251

 5,141

 16,392

Net loss

-

-

-

-

(3,199)

(3,199)

(1,915)

(5,114)

Net comprehensive loss

-

-

-

(3,199)

(3,199)

(1,915)

(5,114)

 

Transactions with owners:

 

 

 

 

  Share capital issuance

142

-

14,054

-

-

14,196

-

14,196

  Share issue cost

-

-

(166)

-

-

(166)

-

(166)

Non-controlling interests on acquisition of subsidiary

 

-

 

-

 

-

 

-

 

-

 

-

 

6,355

 

6,355

Transactions with non-controlling interests

-

-

-

(413)

-

(413)

428

15

Share-based compensation by subsidiary

-

-

-

-

-

-

273

273

Total transactions with the owners

142

-

     13,888

(413)

-

13,617

7,056

20,673

Balance as at 31 December 2022

157

65

15,139

(413)

(3,697)

11,251

5,141

16,392

 

 

 

The accompanying notes are an integral part of the condensed consolidated
financial statements.

SIVOTA PLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

U.S. dollars in thousands

                                                                                          For year ended 31 December

                                                                    Six months ended

                                                                    30 June
                                                                    2023       2022       2022
                                                                    Unaudited             Audited
 Cash flows from operating activities
 Net loss                                                           (3,219)    (1,837)    (5,114)
 Depreciation and amortisation                                      819        223        1,076
 Share-based compensation by subsidiary                             197        134        273
 Financial expenses, net                                            127        316        83
 Working capital adjustments:
 Decrease (increase) in trade receivables                           1,245      144        (762)
 Decrease (increase) in other receivables                           178        (37)       (55)
 Decrease in trade and other payables                               (1,300)    (820)      (816)
 Decrease in long term employee benefits                            (12)       (46)       (46)
 Net from operating activities                                      (1,965)    1,923      (5,361)

 Cash flows from investing activities
 Decrease (increase) in short-term deposit                          -          (47)       7
 Net cash acquired on acquisition of subsidiary                     -          34         337
 Proceeds from sale of equipment                                    6          -          -
 Convertible loans acquisition                                      -          (1,654)    (1,654)
 Net cash from (for) investing activities                           6          (1,667)    (1,310)

 Cash flows from financing activities
 Proceeds from the issue of Ordinary Shares, net of issuance costs

                                                                    -          11,059     11,848
 Repayment of lease liability                                       -          -          (9)
 Exercise of subsidiary's options                                   3          -          8
 Loan repayments                                                    -          (387)      (1,512)
 Net cash from financing activities                                 3          10,672     10,335

 Net change in cash and cash equivalents                            (1,956)    7,082      3,664
 Effect of foreign exchange rate changes                            (66)       -          (237)
 Cash and cash equivalents at beginning of period                   4,439      1,012      1,012
 Cash and cash equivalents at end of period                         2,417      8,094      4,439

 

The accompanying notes are an integral part of the condensed consolidated
financial statements.

 

 

SIVOTA PLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

U.S. dollars in thousands

 

 (a)                                    Financing non-cash transactions:

                                                                                                 For year ended 31 December

                                                                           Six months ended

                                                                           30 June
                                                                           2023       2022       2022
                                                                           Unaudited             Audited

     Debt offset against the payment for share capital of the Company

                                                                           -          2,182      2,182
     Unpaid share capital                                                  -          823        7
     Receivables from exercise of subsidiary's options                     -          -          7

 

The accompanying notes are an integral part of the condensed consolidated
financial statements.

 

 

SIVOTA PLC

 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

 

1.            General information

 

The Company is a public limited company incorporated and registered in England
and Wales on 22 September 2020 with registered company number 12897590 and its
registered office situated in England and Wales with its registered office The
Scalpel, 18th Floor, 52 Lime Street, London, EC3M 7AF.

 

In July 2021, the Company completed a placing and listed on the Main Market
(Standard Segment) of the LSE.

 

In May 2022, the Company completed the acquisition of a majority stake in
Apester Ltd, a digital marketing engagement platform (the "Acquisition").

 

The cash consideration for the Acquisition was funded through a $14.2 million
(gross) placing and direct subscription of 11,500,000 new ordinary shares of
Sivota of one pence each. In September 2022 the Company completed its
readmission to the London Stock Exchange.

 

2.            Definitions

 

In these financial statements:

 The Company   -  Sivota PLC
 The Group     -  The Company and its consolidated subsidiaries
 Subsidiaries  -  Entities that are controlled (as defined in IFRS 10) by the Company and whose
                  accounts are consolidated with those of the Company.
 Dollar/USD    -  U.S. dollar/"$"

 

3.            Significant accounting policies

 

The following accounting policies have been applied consistently in the
financial statements for all periods presented, unless otherwise stated.

a.             Basis of accounting

 

The Group Financial Statements have been prepared in accordance with
International Accounting Standards in conformity with the requirements of the
UK Companies Act 2006.

 

The interim condensed consolidated financial statements for the six months
ended 30 June 2023 have been prepared in accordance with IAS 34, Interim
Financial Reporting. The interim condensed consolidated financial statements
do not include all the information and disclosures required in the annual
financial statements and should be read in conjunction with the Company's
financial statements as at 31 December 2022.

 

 

Going concern

 

The Group raised funds in 2022 to fund the acquisition of Apester and the
Group's working capital needs. The Group projects that it will need to raise
further funds for its planned development. The Group is expected to further
generate losses from operations during 2023 which will be expressed in
negative cash flows from operating activity. Hence the continuation of Group's
operations depends on raising the required financing resources or reaching
profitability, which are not guaranteed at this point.  Whilst the directors
are confident they will be able to raise the additional finance required, this
is not guaranteed and hence there is a material uncertainty in respect of
going concern. However, the directors have, at the time of approving the
financial statements, a reasonable expectation that the Group will have
adequate resources to continue in operational existence for the foreseeable
future, which is defined as twelve months from the signing of this report. For
this reason, the directors continue to adopt the going-concern basis of
accounting in preparing the financial statements.

 

 

b.             Standards and interpretations issued but not yet
applied

 

                There were no new standards or interpretations
effective for the first time for periods beginning on or after 1 January 2023
that had a significant effect on the Company's Financial Statements.

 

At the date of authorisation of these Financial Statements, a number of
amendments to existing standards and interpretations, which have not been
applied in these Financial Statements, were in issue but not yet effective for
the year presented. The Directors do not expect that the adoption of these
standards will have a material impact on the financial information of the
Company in future periods.

 

c.             Critical accounting judgements and key sources of
estimation uncertainty

 

In applying the Group's accounting policies the Directors are required to make
judgements (other than those involving estimations) that have a significant
impact on the amounts recognised and to make estimates and assumptions about
the carrying amounts of assets and liabilities that are not readily apparent
from other sources. The estimates and associated assumptions are based on
historical experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.

 

-     Business combinations

The Group is required to allocate the acquisition cost of the subsidiary and
activities through business combinations on the basis of the fair value of the
acquired assets and assumed liabilities. The Group used external valuations to
determine the fair value. The valuations include management estimates and
assumptions as for future cash flow projections from the acquired business and
selection of models to compute the fair value of the acquired components and
their depreciation period.

 

 

-     Research and development expenses

According to the accounting treatment, as described above, the Group's
management examined whether the conditions for recognising development costs
as intangible assets are met. The Group concluded that, development costs
relating to the group software platform did not meet the conditions for
recognition of as an intangible asset.

 

-     Share-based payment.

The fair value of share-based payment transactions is calculated using the
fair value of Group company's ordinary shares at the date of granting the
options, this fair value is estimated by using valuation techniques that are
based on actual purchasing price when applicable and measurement of the
share's price by valuation technique of discounting future cash flows or other
valuation techniques.

 

4.            Loss per share

 

The calculation of the basic and diluted loss per share is based on the
following data:

                                                                                                        The year ended 31 December

                                                                          Six months ended 30 June
                                                                          2023           2022           2022
                                                                          Unaudited      Unaudited      Audited
 Loss for the period attributable to the equity holders of the Company

                                                                          (1,796)        (1,258)        (3,199)

 Weighted average number of ordinary shares for the purpose of basic and
 diluted earnings per share

                                                                          12,585,000     4,215,556      8,426,096

 Basic and diluted loss per share - U.S. dollars                          (0.14)         (0.30)         (0.38)

 

 

 

5.            Operating segments

 

a.         General:

 

The operating segments are identified on the basis of information that is
reviewed by the chief operating decision maker ("CODM") to make decisions
about resources to be allocated and assess its performance.

 

The Group has one operating segment - digital media

 

 

b.        Geographic information:

 

Revenues classified by geographical areas based on client location:

                                                      For the year ended

                                                      31 December

                     Six months ended 30 June
                     2023       2022                  2022
                     Unaudited                        Audited

 North America       1,171      341                   2,076
 European countries  1,099      467                   1,904
 UK and Ireland      749        275                   1,338
 Other countries     110        31                    600
                     3,129      1,114                 5,918

 

 

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