TIDMALB
RNS Number : 6377R
Albert Technologies Ltd
25 September 2017
This announcement contains inside information which is disclosed
in accordance with the Market Abuse Regulation.
25 September 2017
Albert Technologies Ltd.
("Albert Technologies" or the "Company")
Interim results for the six months ended 30 June 2017
Albert Technologies (AIM: ALB) today announces half year results
for the six months ended 30 June 2017. The Company continues to
execute its core development strategy, with revenue from its
pioneering AI-based SaaS marketing platform on a good growth
trajectory.
Operational highlights
-- Good progress deploying SaaS artificial intelligence marketing platform
o Increase of 240% in monthly recurring revenues, 180% in
average monthly revenue per customer, and growing number of paying
customers, during the period December 2016 to June 2017
o 12-month rolling contract with global nutrition company
announced in March 2017
o Strategic partnership with leading business services group in
Australia and NZ
o Expansion of sales, marketing and R&D activity to support
future growth
o Industry recognition for Albert technology- International
Business Award for "Best New Product"
-- As expected, continued market challenges significantly
impacted revenues and margins of Indirect and Performance Sales
channels, which operate through the Company's wholly owned
subsidiary, All Aspect
o Net loss from this business during the first half of the
year
o The Board is currently reviewing the quality of earnings of
this business and its prospects and is considering a disposal of
All Aspect. It is expected that a disposal of All Aspect will
result in a fundamental change of business of the Company under
Rule 15 of the AIM Rules and would therefore be conditional on the
approval of shareholders. It is anticipated that a nominal value
would be attributed to All Aspect given its reliance the Company's
technology, which would remain proprietary to the Company.
Financial summary
-- Overall performance reflects continuing challenges in
Indirect Sales and Performance Sales channels, combined with rapid
revenue growth in SaaS
o Revenues lower at $4.4m (H1 2016: $8.7m)
o Adjusted EBITDA loss of $(6.2m) (H1 2016: $(2.7m))
o SaaS revenues for the period represent 10% of total
revenues
o SaaS gross profit represents 45% of total gross profit
-- Continued close cash control - net cash balance, including
short-term bank deposits of $16.9m (30 June 2016: $28.1m),
representing $0.27 cash per share.
Current trading
-- Continued growth in SaaS monthly recurring revenues post period-end
-- Number of customers, as well as average monthly revenue per
customer, continued to grow post period-end
-- SaaS gross profit currently tracking at more than 50% of total gross profit
Or Shani, Chief Executive Officer of Albert Technologies,
commented:
"The first half of 2017 marked an important transition for
Albert Technologies. The rollout of Albert 2.0 - our AI-based
market platform - was highly successful and has delivered
significant contract wins and partnerships. This reflects the
long-term structural demand for the automated, efficient marketing
solutions we offer.
As expected, our Indirect and Performance Sales businesses
continued to be impacted by market challenges and showed weak
results in the first half of the year. Our strategic focus is on
developing the high-quality earnings SaaS platform and therefore,
the Board is currently reviewing the quality of earnings, as well
as the prospects of the Indirect and Performance Sales
businesses."
"We have developed AI-based marketing technology which is
attracting growing market recognition and we continue to develop
Albert's customer base with an increasing number of SaaS pilots now
underway with leading global brands. We therefore expect to further
expand Albert's customer base during the remainder of the financial
year and the Board is focused on delivering growth and building
shareholder value."
For further information, please contact:
Albert Technologies Tel: +972
Ltd. 3537 7137
Or Shani, Chief Executive
Officer
Yoram Freund, Chief
Financial Officer
https://albert.ai/
Liberum (NOMAD and Tel: +44 20
Broker) 3100 2000
Neil Patel / Chris
Clarke
Joanna Davidson (PR) Tel: +44 77
3190 2092
OPERATIONAL REVIEW
INTRODUCTION
The first half of 2017 was an important period in the transition
and evolution of Albert Technologies. We continued our rollout of
our SaaS marketing platform, Albert, which is our core driver of
future growth.
Initial deployment of Albert 2.0 has been successful. Having
launched the new product in 2016 and established our sales and
marketing office in New York, in the first half of 2017 we secured
significant contract wins, as well as strategic partnerships. This
reflects the long-term structural demand for the automated,
efficient marketing solutions we offer. We will seek further
partnerships as an effective way of accelerating market penetration
while maintaining good cost control.
To ensure the scalability of our business model and support
further growth, we have continued to increase investment in Sales
and Marketing and R&D activity. During the period, we doubled
our sales team in the United States, as well as increased our
R&D efforts to enhance the scalability and performance of our
SaaS solution.
As previously announced, the ecosystem in which the Indirect
business operates experienced severe disruption commencing in late
2015. Advertising exchanges purged a significant portion of media
running through their platforms in order to seek to reduce the
amount of fraudulent inventory. Many exchanges consolidated or
merged. In parallel, the market started to shift from using open
exchanges to private and self-serve exchanges, mainly being the
relatively "walled" platforms of Google and Facebook. This
disruption resulted in loss of supply for major online advertising
exchanges and a loss of demand from major media buyers, the result
of which was a dramatic decrease in transaction volumes and
significant pressure on margins in the industry.
As a result, the Company continues to witness a decline in its
revenues from the Indirect and Performance Sales businesses,
accompanied by a continued decline in margins, which resulted in
losses from these businesses for the first half of 2017.
Our overall financial performance reflects these pressures,
accompanied by the rapid growth in SaaS, with total revenues lower
at $4.4m (H1 2016: $8.7m), and adjusted gross margin of 19%,
compared to 26% in H1 2016.
The challenging market conditions in Indirect Sales, as well as
investment for long-term growth in our SaaS business, resulted in a
loss before interest, tax, depreciation and amortization of $6.2m
(H1 2016: $2.7m loss). Adjusted R&D investment increased to
$3.0m (H1 2016: $2.2m), and Adjusted Sales and Marketing expenses
increased to $2.9m (H1 2016: $1.5m).
We continued to maintain close cash control, with a net cash
balance of $16.9m (30 June 2016: $28.1m). We believe we have
sufficient resources to continue our investment in growth of our
SaaS business.
In July 2017, the Directors of the Company changed the name of
the Company from Adgorithms Ltd. to Albert Technologies Ltd.. The
Directors believe this better reflects the Company's core business
of developing and promoting the Albert technology behind its
Software as a Service product. It also comes as a result of
increasing recognition for Albert, both in terms of his growing
customer base and recent awards.
The management team was strengthened with the appointment of
Yoram Freund as Chief Financial Officer in April 2017. Mr Freund
comes with significant financial leadership experience within the
technology industry, having held senior finance positions within
Radware Ltd. (a large NASDAQ listed company).
Adjusted* Financial Review
Year ended
Six months ended 30 June 31 December
2017 2016 2016
$'000 $'000 Diff $'000
Revenues 4,393 8,691 (4,298) 16,403
Cost of revenues* (3,547) (6,453) 2,906 (13,247)
gross profit 846 2,238 (1,392) 3,156
-------- -------- -------- ------------
% of revenues 19% 26% 19%
Research and Development
expenses* (3,033) (2,195) (838) (5,096)
Selling and Marketing
expenses* (2,895) (1,485) (1,410) (4,161)
General and Administrative
expenses* (1,139) (1,225) 86 (1,821)
Total operating
expenses (7,067) (4,905) (2,162) (11,078)
-------- -------- -------- ------------
Operating profit
(loss)* (6,221) (2,667) (3,554) (7,922)
-------- -------- -------- ------------
* Non-IFRS and unaudited, excludes share based compensation
expenses of $221K (COGS-$5K, R&D-$72K, S&M-$115K and
G&A-$29K), $774K (COGS-$13K, R&D-$430K, S&M-$127K and
G&A-$204K) and $1,064K (COGS-$20K, R&D-$519K, S&M-$366K
and G&A-$159K) for the six months ended 30 June 2017 and 30
June 2016 and for the year 2016, respectively, depreciation
expenses of $47K (R&D-$34K, S&M-$11K and G&A-$2K), $37K
(COGS-$1K, R&D-$26K, S&M-$6K and G&A-$4K) and $85K
(COGS-$1K, R&D-$45K, S&M-$9K and G&A-$30K) for the six
months ended 30 June 2017 and 30 June 2016 and for the year 2016,
respectively.
PROGRESS WITH GROWTH STRATEGY
Albert's recent SaaS contract wins underlines our confidence and
belief in this pioneering platform, and has translated into
meaningful SaaS revenues and momentum.
Central to Albert's strategy has been the adoption of its "Land
and Expand" approach, supported by an extended sales team. Brands
benefit from the opportunity to test Albert in a relatively small,
controllable setting such as a trial in one channel (e.g. Facebook)
or one sub-brand or geographical market. Brand managers have been
able to access Albert's dashboard and trial its effectiveness in
terms of speed and cost. A key advantage of Albert, as opposed to
the more established "marketing clouds" for example, is its ease of
implementation. Whereas a brand would need to invest significant
time and financial resource to implement an established marketing
cloud, Albert can be connected in days, with no external set up
costs to the brand.
BUSINESS SUMMARY
SaaS channel
The Board is highly encouraged by the progress in the SaaS
business. Monthly recurring revenues have more than tripled in the
period, and SaaS revenues now represent 10% of total revenues for
the six months to 30 June 2017.
Recent business wins underline the success of the Company's SaaS
rollout, and validates the significant value the platform can
generate.
In March 2017, we secured a 12-month rolling contract with one
of the world's largest nutrition, health and wellness companies. As
part of this agreement, Albert Technologies will deploy Albert
across all this customer's online advertising campaigns, focusing
on its leading brand within its largest South American market.
Management expects this contract to generate a minimum of $0.3m of
annual SaaS fees. This contract win followed a four-month pilot in
which Albert was compared with the customer's existing advertising
agency, which is a subsidiary of a leading global network. During
the pilot, Albert consistently delivered superior return on
investment metrics when compared to previous campaigns managed by
the incumbent agency. In addition, Albert provided greater
transparency, control and valuable marketing insight during the
pilot.
After the period end, in July 2017, the Company announced a
strategic partnership with a leading business services group in
Australia and New Zealand. Under the agreement, the business
services group has the right to distribute Albert to brands direct
and to agencies. This guarantees minimum SaaS revenues during the
first year of $0.8m, and carries the potential to become a
significant revenue opportunity in the second and third years of
activity. As with the contract win outlined above, this partnership
was agreed following a successful trial period. Within 24 hours of
deployment, Albert identified and executed thousands of marketing
actions, which could have taken a human marketing expert up to a
year. Furthermore, the partner's customer acquisition costs were
reduced by more than a quarter within 30 days.
SaaS revenues are becoming increasingly meaningful, supported by
these recent contract wins and ongoing sales and marketing
activity. As a result of the rapid market acceptance to Albert,
during the first half of the year we've changed some of our sales
policies and client minimal thresholds. This is in order to focus
on bigger clients that represent higher revenue per client. Such
changes resulted in increase of 180% in the average monthly revenue
per customer and 25% in the number of paying customers, during the
period December 2016 to June 2017.
SaaS gross profit represents 45% of total gross profit for the 6
months to 30 June 2017.
Indirect channel
As previously set out, the ecosystem in which the Indirect
business operates experienced severe disruption commencing in late
2015. This disruption resulted in a dramatic decrease in
transaction volumes and significant pressure on margins in the
industry.
The decline in revenues from the Indirect and Performance Sales
business, , which operate through the Company's wholly owned
subsidiary (All Aspect), accompanied by continued decline in
margins, resulted in losses from this business for the first half
of 2017.
The Board is currently reviewing the quality of earnings of this
business and its prospects and is considering a disposal of All
Aspect. It is expected that a disposal of All Aspect will result in
a fundamental change of business of the Company under Rule 15 of
the AIM Rules and would therefore be conditional on the approval of
shareholders. It is anticipated that a nominal value would be
attributed to All Aspect given its reliance the Company's
technology, which would remain proprietary to the Company.
SUMMARY AND OUTLOOK
Albert Technologies achieved some important milestones in the
first half of 2017 in the rollout of Albert - our AI-based SaaS
market platform. We believe the significant contract wins and
partnership agreements secured during the period reflects the
long-term structural demand for the technology-led simple and
efficient marketing solutions we offer.
We have invested for long-term growth, and as we continue to
develop Albert's customer base and conduct pilots with leading
global brands, we expect to report further progress in the rollout
of the SaaS product second half of the year. The Board is focussed
on building shareholder value and remains confident in the overall
long-term growth prospects of the Company.
About Albert Technologies Ltd.
Albert (AIM: ALB.L) is the first-ever fully autonomous
artificial intelligence marketing platform, driving digital
marketing campaigns from start to finish for some of the world's
leading brands. Albert's mission is to liberate businesses from the
complexities of digital marketing-not just by replicating their
existing efforts, but by executing them at a pace and scale not
previously possible. He serves as a highly intelligent and
sophisticated member of brands' marketing teams, wading through
mass amounts of data, converting this data into insights, and
autonomously acting on these insights, across channels, devices and
formats, in real time. This eliminates the manual and
time-consuming tasks that currently limit the effectiveness and
results of modern digital advertising and marketing. Brands such as
Harley Davidson, EVISU, The Big Red Group, and Dole Asia credit
Albert with significantly increased sales, an accelerated path to
revenue, the ability to make more informed investment decisions,
and reduced operational costs.
The Company operates an Indirect Sales Channel, where its
technology is deployed in advertising exchanges to match
undervalued inventory with suitable demand as well as the
strategically significant SaaS Sales Channel, which offers its
artificial intelligence-based software, Albert, to brands using a
SaaS model. Albert Technologies Ltd. listed in 2015 to accelerate
both investment into and commercialisation of Albert.
The Company and Albert have received many awards in its short
existence, including two platinum MarCom awards and silver in the
Best in Biz awards 2016 for best new product of the year. Albert
was also named AI Application of the Year by The Global Annual
Achievement Awards for Artificial Intelligence.
About Albert
Albert replaces the human campaign manager in managing a brand's
online advertising campaigns. A brand provides Albert with access
to its Google, Facebook, Bing, Twitter and other online marketing
channels. When a brand manager wishes to launch a new online
advertising campaign, she simply logs into Albert and deploys that
new campaign, which is usually no more than a 15 minute task.
Albert autonomously creates hundreds of micro campaigns across
all relevant online marketing channels (Google, Facebook, Bing,
Twitter, Instagram, Display, Email, etc), then reviews these
hundreds of micro campaigns every few minutes and optimises each of
them as needed. Albert works in very much the same way that a human
campaign manager would, making correlation and cost/benefit based
decisions.
Where an experienced campaign manager could possibly make circa
100 decisions per day, Albert can make thousands per minute.
Albert's ability to launch hundreds of micro strategies and review
and amend them all every few minutes typically brings about a
significant increase in ROI. In addition, all learnings from the
decisions made remain in house, so the brand has full and instant
transparency and can easily scale up marketing activity through
larger budgets or application to new brands and new geographies
without hiring new expert campaign managers.
FORWARD LOOKING STATEMENT
This announcement includes statements that are, or may be deemed
to be, "forward-looking statements". By their nature,
forward-looking statements involve risk and uncertainty since they
relate to future events and circumstances. Actual results may, and
often do, differ materially from any forward-looking statements.
Any forward-looking statements in this announcement reflect Albert
Technologies' view with respect to future events as at the date of
this announcement. Save as required by law or by the AIM Rules for
Companies, Albert Technologies undertakes no obligation to publicly
revise any forward-looking statements in this announcement
following any change in its expectations or to reflect events or
circumstances after the date of this announcement.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
U.S. dollars in thousands
30 June 31 December
2017 2016
--------- -----------
Unaudited Audited
--------- -----------
CURRENT ASSETS:
Cash and cash equivalents $7,877 $22,577
Short-term bank deposits 9,043 -
Restricted cash 192 187
Trade receivables, net 2,311 3,239
Other accounts receivable and prepaid
expenses 505 361
--------- -----------
Total current assets 19,928 26,364
--------- -----------
NON-CURRENT ASSETS:
Property and equipment, net 236 228
Total non-current assets 236 228
--------- -----------
Total assets $20,164 $26,592
========= ===========
The accompanying notes are an integral part of the interim
consolidated financial statements.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
U.S. dollars in thousands
30 June 31 December
2017 2016
--------- -----------
Unaudited Audited
--------- -----------
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Trade payables $1,823 $2,306
Other accounts payable and accrued
expenses 1,274 981
--------- -----------
Total current liabilities 3,097 3,287
--------- -----------
NON-CURRENT LIABILITIES:
Employee benefit liabilities, net 115 112
--------- -----------
EQUITY:
Share capital -
Ordinary shares 161 160
Share premium 39,367 39,146
Capital reserve (193) (193)
Accumulated deficit (22,383) (15,920)
--------- -----------
Total equity 16,952 23,193
--------- -----------
Total liabilities and equity $20,164 $26,592
========= ===========
The accompanying notes are an integral part of the interim
consolidated financial statements.
22 September 2017
-------------------- ---------------- ----------------
Date of approval Or Shani Yoram Freund
of the
financial statements CEO and Director CFO and Director
CONSOLIDATED STATEMENTS OF INCOME
U.S. dollars in thousands (except per share data)
Six months ended Year ended
30 June 31 December
----------------------
2017 2016 2016
---------- ---------- ------------
Unaudited Audited
---------------------- ------------
Revenues $4,393 $8,691 $16,403
Cost of revenues 3,552 6,467 13,268
---------- ---------- ------------
Gross profit 841 2,224 3,135
---------- ---------- ------------
Operating expenses:
Research and development 3,139 2,651 5,710
Sales and marketing 3,021 1,687 4,536
General and administrative 1,170 1,433 2,010
Total operating expenses 7,330 5,771 12,256
---------- ---------- ------------
Operating loss (6,489) (3,547) (9,121)
Financial income 100 55 105
Financial expenses (11) (86) (148)
Loss before taxes on income (6,400) (3,578) (9,164)
Taxes on income (63) - (50)
---------- ---------- ------------
Net loss $(6,463) $(3,578) $(9,214)
---------- ---------- ------------
Net loss per share attributable
to the Company's shareholders
(in $)
Basic and diluted loss per
Ordinary share $(0.10) $(0.06) $(0.15)
========== ========== ============
Weighted average number of
shares of Common stock used
in computing basic and diluted
net loss per share 61,744,259 61,698,853 61,703,256
========== ========== ============
The accompanying notes are an integral part of the interim
consolidated financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
U.S. dollars in thousands
Share Capital Accumulated Total
Share capital premium reserve deficit equity
------------- -------- -------- ------------ -------
Balance as of 1
January 2016 (audited) $160 $38,082 $(193) $(6,706) $31,343
Exercise of options *) - - - - *) -
Cost of share-based
payment, net - 1,064 - - 1,064
Total comprehensive
loss - - - (9,214) (9,214)
Balance as of 31
December 2016
(audited) 160 39,146 (193) (15,920) 23,193
Exercise of options 1 - - - 1
Cost of share-based
payment, net - 221 - - 221
Total comprehensive
loss - - - (6,463) (6,463)
Balance as of 30
June 2017 (unaudited) 161 39,367 (193) (22,383) 16,952
============= ======== ======== ============ =======
*) Represents an amount lower than $ 1.
The accompanying notes are an integral part of the interim
consolidated financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
U.S. dollars in thousands
Share Capital Accumulated Total
Share capital premium reserve deficit equity
------------- -------- -------- ----------- -------
Balance as of 1
January 2016 (audited) 160 38,082 (193) (6,706) 31,343
Cost of share-based
payment - 774 - - 774
Total comprehensive
loss - - - (3,578) (3,578)
------------- -------- -------- ----------- -------
Balance as of 30
June 2016 (unaudited) 160 38,856 (193) (10,284) 28,539
============= ======== ======== =========== =======
The accompanying notes are an integral part of the interim
consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Six months ended Year ended
30 June 31 December
------------------
2017 2016 2016
-------- -------- ------------
Unaudited Audited
------------------ ------------
Cash flows from operating
activities:
Net loss $(6,463) $(3,578) $(9,214)
-------- -------- ------------
Adjustments to reconcile net
income to net cash provided
by operating activities:
Adjustments to the profit
or loss items:
Share-based payment 221 774 1,064
Tax expense 63 - 50
Depreciation 47 37 85
Exchange rate differences
in respect of cash and cash
equivalents (53) 77 105
-------- -------- ------------
278 888 1,304
-------- -------- ------------
Changes in asset and liability
items:
Increase in restricted cash (5) (1) -
Decrease in trade receivables 928 854 1,501
Decrease (increase) in other
accounts receivable 47 (148) (104)
Decrease in trade payables (483) (1,679) (1,511)
Increase in other accounts
payable 230 932 90
Accrued interest on short-term
bank deposits (43) - -
Change in employee benefit
liabilities, net 3 12 27
677 (30) 3
-------- -------- ------------
Cash paid and received during
the year for:
Taxes paid (191) (94) (229)
-------- -------- ------------
Net cash used in operating
activities (5,699) (2,814) (8,136)
-------- -------- ------------
The accompanying notes are an integral part of the interim
consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Six months ended Year ended
30 June 31 December
------------------
2017 2016 2016
--------- ------- ------------
Unaudited Audited
------------------ ------------
Cash flows from investing
activities:
Purchase of property and equipment $(55) $(133) $(195)
Investment in short-term bank
deposits (9,000) - -
Investment in restricted cash - - (136)
Net cash used in investing
activities (9,055) (133) (331)
--------- ------- ------------
Cash flows from financing
activities:
Exercise of options 1 - *) -
IPO proceeds, net - (40) (40)
--------- ------- ------------
Net cash provided by (used
in) financing activities 1 (40) (40)
--------- ------- ------------
Exchange rate differences
in respect of cash and cash
equivalents 53 (77) (105)
--------- ------- ------------
Decrease in cash and cash
equivalents (14,700) (3,064) (8,612)
Cash and cash equivalents
at the beginning of the period 22,577 31,189 31,189
--------- ------- ------------
Cash and cash equivalents
at the end of the period $7,877 $28,125 $22,577
========= ======= ============
Significant non-cash transactions:
IPO expenses $- $- $40
========= ======= ============
The accompanying notes are an integral part of the interim
consolidated financial statements.
NOTE 1:- GENERAL
a. Company description:
Albert Technologies Ltd. (formerly: Adgorithms Ltd.) ("the
Company") was incorporated under the laws of Israel and commenced
operations in September 2010. The Company's registered address is
20 Lincoln Street, Tel-Aviv, Israel.
The Company offers Artificial Intelligence-based software
("Albert") to brands using a SaaS model, as well as engaged in the
field of solutions for online advertising. The Company develops and
deploys algorithmic solutions aiming to maximize return on income
("ROI") for the brand advertiser. The Company operates across the
channels of video, display, social, search and e-mail marketing on
the platforms of desktop and mobile.
The Company's shares are admitted for trading on AIM, commencing
June 2015, under the symbol "ALB" (formerly "ADGO").
b. The Company has a wholly-owned subsidiary in the United
States, Adgorithms Inc., which is engaged in the distribution of
the Company's products and services in the United States, as well
as provides the Company with advisory and management services.
The Company also has a wholly-owned subsidiary in Israel, AA
Digital Media (All Aspects) Ltd. which commenced operating in
November 2016, and is engaged in trading media in various
strategies with an array of participants in the online advertising
value chain.
In May 2017, the Company established a wholly-owned subsidiary
in Brazil, Adgorithms Brasil Internet Ltda, which commenced
operating in May 2017, and is engaged in the distribution of the
Company's products and services in Brazil.
c. The interim consolidated financial statements were approved
for issuance by the Board of Directors on 22 September 2017.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
The accounting policies applied in the interim consolidated
financial statements have been applied consistently with those
followed in the annual consolidated financial statements for all
periods presented, unless otherwise stated.
a. Revenues
The Company generates direct (performance) and in-direct
revenues, as well as SaaS ("Software as a Service") revenues which
are being recognized ratably over the term of the service period
and are reported on a net basis based on the Company's evaluation
of the accounting guidance for principal-agent considerations.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
b. Unaudited interim financial information
The accompanying unaudited interim consolidated financial
statements have been prepared in a condensed format in accordance
with International Financial Reporting Standards as adopted by the
European Union ("IFRS as adopted by the EU") for interim financial
information. Accordingly, they do not include all the information
and footnotes required by IFRS as adopted by the EU for complete
financial statements, and therefore, they should be read in
conjunction with the annual consolidated financial statements as of
31 December 2016. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the
six-month period ended 30 June 2017 are not necessarily indicative
of the results that may be expected for the year ended 31 December
2017.
c. Disclosure of new standards in the period prior to their adoption
As discussed in Note 2q to the 2016 annual consolidated
financial statements, the Company is currently analyzing the
potential impacts of IFRS 15, "Revenue from Contracts with
Customers", while working on the transition. A specific analysis is
in progress regarding the accounting of principal vs agent
considerations and the disclosures required by IFRS 15 in the
financial statements. The Company will comment on the impacts of
IFRS 15 in its results for the second half of 2017 and confirm its
choice in respect of the transition method.
NOTE 3:- COMMITMENTS
On 6 September 2016, a statement of claim was filed against the
Company, the Company's CEO and founder, Mr. Or Shani, and the
Company's former CFO, Mr. Ron Stern (the "Defendants") by Mr. Tal
Saar (the "Plaintiff"), a former service provider of the Company,
with the Magistrate Court of Tel-Aviv, Israel (the "Court")
claiming, among other things, that the Defendants are liable for
certain fees due to such service provider (the "Claim"). A
statement of defense and a motion to dismiss the Claim were filed
by the Defendants with the Court on 20 November 2016 and 30
December 2016, respectively. A pre-trial hearing was held on 22
March 2017 and a second pre-trial hearing is scheduled for 24
September 2017.
On 29 March 2017, the Plaintiff filed with the Court a
"statement of status and position", in which he requested to amend
the remedy initially requested under the statement of claim, so
that it will be NIS 600 thousands (approximately $ 171, based on
the exchange rate as of 30 June 2017). On 18 May 2017, the
Defendants filed a response to the Plaintiff's statement,
requesting the Court to deny the Plaintiff's request. On 29 May
2017, the Court ruled that this matter will be discussed in the
pre-trial hearing scheduled for 24 September 2017.
No provision in respect of the Claim was recorded in the
financial statements as of 30 June 2017, as the Company's current
position is that all allegations are groundless and it is unlikely
that any allegations brought against the Company, Mr. Shani and Mr.
Stern will be accepted by the Court. However, due to the early
stages of the proceedings, the Company cannot predict with
certainty as to the final outcome of the Claim.
NOTE 4:- EQUITY
a. Share-based payments:
In October 2013, the Board of Directors of the Company adopted
the Company's 2013 Share Option Plan ("Plan"). The Plan provides
for the grant of options to purchase Ordinary shares of the Company
to employees, officers, directors, consultants and advisors of the
Company.
The share-based payment transactions that the Company granted to
its employees are described below.
b. Option issued to employees:
Options granted under the Plan expire 10 years from the vesting
commencing date. The options generally vest over three years (1/3
at each year).
The following table lists the number of share options, the
weighted average exercise prices of share options and movement in
options during the period:
Year ended
Six months ended 31 December
30 June 2017 2016
---------------------- ----------------------
Weighted Weighted
average average
Number exercise Number exercise
of options Price of options Price
----------- --------- ----------- ---------
Outstanding at
beginning of year 5,395,912 $0.489 4,536,448 $1.399
Granted 1,297,253 0.312 3,072,981 0.219
Exercised (488,262) 0.003 (26,418) 0.003
Forfeited (1,047,794) 0.862 (2,187,099) 1.504
----------- --------- ----------- ---------
Outstanding at
end of period 5,157,109 $0.444 5,395,912 $0.489
=========== ========= =========== =========
Exercisable at
end of period 1,747,973 0.683 1,217,125 0.606
=========== ========= =========== =========
NOTE 4:- EQUITY (Cont.)
The weighted average fair value of options granted for the six
months ended 30 June 2017 is $ 0.26.
c. Option issued to non-employees:
The following table lists the number of share options, the
weighted average exercise prices of share options and movement in
options during the period:
Year ended
Six months ended 31 December
30 June 2017 2016
---------------------- ----------------------
Weighted Weighted
average average
Number exercise Number exercise
of options Price of options Price
----------- --------- ----------- ---------
Outstanding at
beginning of year 506,975 $0.003 506,975 $0.003
Granted 158,504 0.003 - -
Exercised - - - -
Forfeited - - - -
----------- --------- ----------- ---------
Outstanding at
end of period 665,479 $0.003 506,975 $0.003
=========== ========= =========== =========
Exercisable at
end of period 480,557 0.003 242,801 0.003
=========== ========= =========== =========
d. Cost of share-based payment:
The cost of share based payments recognized in profit or loss
for services received from employees and consultants is shown in
the following table:
Six months ended Year ended
30 June 31 December
------------------
2017 2016 2016
-------- -------- ------------
Unaudited Audited
------------------ ------------
Cost of revenues $5 $13 $20
Research and development,
net 72 430 519
Selling and marketing 115 127 366
General and administrative 29 204 159
-------- -------- ------------
$221 $ 774 $1,064
======== ======== ============
NOTE 5:- REPORTABLE SEGMENTS
In the six-month period ended 30 June 2017, revenues from the
in-direct channel amounted to $ 3,110 (compared to revenues of $
8,190 in the first six months of 2016, and $ 15,063 in fiscal year
2016), revenues from the performance channel amounted to $ 832
(compared to revenues of $ 422 in the first six months of 2016, and
$ 1,130 in fiscal year 2016), and revenues from the SaaS channel
amounted to $ 451 (compared to revenues of $ 79 in the first six
months of 2016, and $ 210 in fiscal year 2016).
In the six-month period ended 30 June 2017, no single customer
represented 10% or more of the Company's revenues. In the six-month
period ended 30 June 2016, one single customer represented 49% of
the Company's revenues, the second largest customer represented 11%
of the Company's revenues, and all other customers represented
individually less than 10% of the Company's revenues. In fiscal
year 2016, one single customer represented 39% of the Company's
revenues, the second largest customer represented 12% of the
Company's revenues, and all other customers represented
individually less than 10% of the Company's revenues.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LIMPTMBTTBPR
(END) Dow Jones Newswires
September 25, 2017 02:01 ET (06:01 GMT)
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