AdUx : Financial Report – H1 2020

2020 INTERIM FINANCIAL REPORT

A corporation with a capital of 9 416 887,50 euros 101 - 109 Rue Jean Jaures - 92300 Levallois-Perret Nanterre Trade and Companies Register 418 093 761 www.adux.com

INTERIM FINANCIAL REPORT	2
Summary
MANAGEMENT REPORT	3
GROUP'S SUMMARY CONSOLIDATED FINANCIAL STATEMENTS	7
NOTES CONCERNING THE GROUP'S SUMMARY CONSOLIDATED INTERIM FINANCIAL STATEMENTS	12
STATEMENT BY THE PERSON RESPONSIBLE FOR THE INTERIM FINANCIAL REPORT	25
STATUTORY AUDITORS' REVIEW REPORT ON THE 2020 HALF-YEAR FINANCIAL INFORMATION	26

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INTERIM FINANCIAL REPORT 3

Management report

PRESENTATION OF EARNINGS FOR THE FIRST HALF OF 2020

1. Comments concerning the consolidated income statement

Revenues reached €8.3 million against €11.9 million in the first semester 2019 (corresponding to a decrease of 30%). This decrease of the revenue is explained by the health crisis caused by the Covid-19 epidemic and the lockdown of a majority of the European population which had an immediate impact on household consumption and on the marketing expenses of advertisers.

Indeed, in the second half of March, the group's activity is in very severe decline in France compared to the previous year. With lags of a few weeks, the trend is the same in all the countries where AdUX is located. The decline was confirmed and accentuated in April and May 2020. As a consequence of this decline in activity, cost-saving measures, in particular the use of partial unemployment, were implemented in the main countries where the business of AdUX is established.

Despite a decline in activity, the margin rate is relatively stable. It reaches 45% in the first half of 2020 versus 47% in the first half of 2019.

Purchases, which amount to 1.3 million of euros, have decreased compared to the first half of 2019 (2.4 million of euros), this is the result of savings measures implemented by the company following the crisis sanitary.

Depreciation and amortization, for 0.8 million of euros, are mainly the result of investments induced by the continued development of technological platforms and include the impact of the implementation of IFRS 16 (see note 8).

Current operating profit before stock based compensation and free bonus shares and without including other non-current products and costs amounts to -€1.1 million.

Net income of the consolidated companies amounts to -€0.9 million (versus -€2 million for the 2019 first semester).

This net result can be detailed as follow:

• EBITDA of -€0.4 million (vs. -€0.9 million in the first half of 2019)
• The current operating profit of -€1.1 million (vs. -€1.7 million in the first half of 2019)
• A non-operating income of +€0.3 million (against -€0.1 million in the first half of 2019)
• And a tax expense of -€0.1 million (against -€0.1 million in the first half of 2019).

1. Internal developments and innovations

Capitalized development costs during the period mainly correspond to:

• The continuation of developments for the lunch of the Quantum platform,
• The continuation of developments for Admoove platform,

III. Significant events of the period

Azerion Holding B.V., since December 30th, 2019, holds 54.95% of the share capital of AdUX.

On January 31st, 2020, the Board of Directors of the Company terminated duties of Chief Executive Officer of Mr. Cyril Zimmermann.

The Company's Board of Directors decided to dissociate the functions of Chairman of the Board of Directors and Chief Executive Officer. It has appointed Mr. Salih Hikmet Cosgun as Chief Executive Officer from February 1st, 2020 for an indefinite period and has appointed Mr. Trond Dale as Chairman of the Board of Directors for the remainder of his term as director.

Following the resignations of Azerion Holding B.V., represented by Mr. Atilla Aytekin, and Mr. Umut Akpinar, from their directorship on January 31st, 2020, Azerion Holding B.V. is now solely represented at the Board of Directors by Ms. Kyra Steegs. The Board of Directors therefore consists of a representative of Holding B.V., Ms. Kyra Steegs, an independent personality, Mrs. Catharina Hillstrom, and its Chairman, Trond Dale.

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INTERIM FINANCIAL REPORT 4

On April 30th, 2020, Admoove sold its platform MaPubFacile for 1€. The net book value of this platform in the financial statements, on April 30th, 2020 was 0.2 million euros.

On June 30th, 2020, AdUX sold AdMoove Sweden AB for €315,000, of which €10,000 will be paid in cash and €305,000 settled by offsetting the debt of AdUX toward its former subsidiary. The activity of this subsidiary had dropped very significantly and had become loss-making following the loss of its main contract during the summer of 2018. This event had led to the depreciation of the entire goodwill attached to this activity in the Group's financial statements in 2018 for a total amount of €8.5 million. In the first quarter of 2020, AdMoove Sweden had not returned to profitability and generated around €0.2 million of revenue. This sale is part of the Group's desire to regain profitability by focusing on its main activities in the countries where it has critical size.

Others events

AdUX reimbursed the loans contracted on July 19th, 2019 and October 3rd, 2019 with Azerion on May 5th, 2020.

The company Adysseum contracted a €400,000 loan guaranteed by the State from BNP on June 19th, 2020.

IV.	Event posterior of the closing

It is recalled that on June 21st, 2016, AdUX had assigned a publisher as well as agencies having taken over the marketing of advertising space from this publisher due to:

• wrongful termination of the advertising network and partnership contract concluded with the publisher; and
• the transfer of the effects of this contract to other agencies.

To this end, AdUX, among others things, claimed from these various companies the sum of €2.4 million.

In 2019, the Paris Commercial Court condemned the publisher for abusive breach of contract to pay €1 million and ordered provisional execution.

AdUX served the judgment.

The publisher appealed the judgment.

An insolvency proceedings against the publisher was opened on August 1st, 2019. AdUX declared its claim as a liability of the publisher.

On July 21st, 2020, the dispute with the publisher was brought to an end by the signature of a settlement agreement in return for which AdUX will receive the sum of 80,000 euros and the publisher will withdraw from the appeal procedure.

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INTERIM FINANCIAL REPORT 5

MAIN RISKS AND UNCERTAINTIES CHARACTERISING THE SECOND HALF OF 2020

The main risks to which the Group is exposed are detailed in the Board of Directors' Management Report (Section V - Risk Management) presented in the 2019 annual report. The Company is not aware of other risks and uncertainties affecting the Group.

PROSPECTS

The health crisis caused by the Covid-19 epidemic and the lockdown of the majority of the European population had an immediate impact on household consumption and on the marketing expenses of advertisers. As of March 2020, many advertising campaigns have been cancelled or postponed to September 2020. In the second half of March, the group's activity is in very severe decline in France compared to the previous year. With lags of a few weeks, the trend is the same in all the countries where AdUX is located. The decline was confirmed and accentuated in April and May 2020. The month of June seems to indicate a recovery which needs to be confirmed in September 2020 after the summer months which are traditionally marked by low seasonal activity.

The Company therefore has little visibility on the way out of the crisis and the restart of the market. Consequently, cost-saving measures, in particular recourse to short-time working, have been implemented (see 3.4. Continuity of operations). It is too early at this stage to assess the impact of this crisis on the profitability of the company for the whole of the 2020 financial year, but it is probable that the Company will not be in a position to achieve growth over the full year.

TRANSACTIONS BETWEEN AFFILIATED PARTIES

The affiliated parties of AdUX Group correspond to the executive officers, board of directors and administrators of the group, as well as the companies in which they exercise control, notable influence, or hold a significant voting right.

1. Transaction between affiliated parties

Executive officers

in thousands of Euros	30 June 2020	30 June 2019
Short term employee benefit (including benefits) paid for the current period	91	120
Short term employee benefit (including benefits) paid for the precedent period	-	-
Non current benefit	-	-
Post-employment benefits	-	-
Other long-term benefits	-	-
Providing termination benefits	30	-
Sharebased payment	-	-
Total	121	120

On January 31st, 2020, the Board of Directors of the Company terminated duties of Chief Executive Officer of Mr. Cyril Zimmermann.

Non executive officers

Non executive officers' compensation in 2020 is only composed of attendance fees for 15.167 €.

1. Transactions with the subsidiaries

AdUX SA invoices its subsidiaries for adserving fees, management fees as well as brand fees, eliminated in the consolidated financial statements.

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INTERIM FINANCIAL REPORT 6

1. Other affiliated parties

During the first half of 2020, no significant operation other than described above, in the section "Significant events of the period" and in the section "Loans and financial liabilities", occurred with:

• shareholders holding a significant voting right in the AdUX S.A. capital,
• members of the managing boards, including the administrators,
• entities over which one of the main directors or shareholders exercise control, or notable influence, or hold a significant voting right.

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INTERIM FINANCIAL REPORT 7

Group's summary consolidated financial statements

Consolidated income statements for the half-years ending on 30th June 2020 and 30th June 2019

In thousands of euro	Notes	30 June 2020	30 June 2019
Sales			8 286		11 854
Charges invoiced by the media			-4 547		-6 307
Gross profit			3 739		5 547
Purchases			-1 299		-2 373
Payroll charges	3		-2 800		-4 074
EBITDA (1)			-360		-900
Depreciation and amortization			-757		-768
Current operating profit			-1 118		-1 667
Stock based compensation			-		-12
Other non-current income and charges	4		316		-126
Operating profit			-802		-1 805
Cost of indebtedness			-26		-32
Other financial income and charges			-48		43
Earning of the consolidated companies			-876		-1 794
Share in the earnings of the companies treated on an equity basis			-		-20
Earnings before tax of the consolidated companies			-876		-1 814
Income Tax	5		-72		-139
Net income of the consolidated companies			-948		-1 952
Minority interests from continuing operations			-41		-90
Including Group Share			-989		-2 042
		30 June 2020	30 June 2019
Weighted average number of ordinary shares			6 277 925		3 678 537
Earnings per share, Group share (in euro)		-	0,16	-	0,56
Weighted average number of ordinary shares (diluted)			6 277 925		3 678 537
Diluted earnings per share, Group share (in euro)		-	0,16	-	0,56

1. Current operating income before allocations and reversals of depreciation, amortization and provisions.

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INTERIM FINANCIAL REPORT 8

Statement of comprehensive income for the half years ending on 30th June 2020 and 30th June 2019

in thousands of euro	30 June 2020	30 June 2019
Net result	- 988	- 2 042
Other element of the global result	-
- Hedge accounting on financial instruments	-	-
- Hedge accounting on financial instruments	-	-
- Exchange differences	33	11
- Other	-	142
- Taxes on other elements of the global result	-	-
- Actuarial gain and losses related to post-employment benefits		-
Other elements of the global result, net of tax	33	153
Group share	33	153
Minority interests	-	- 0
Global result	- 956	- 1 889

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INTERIM FINANCIAL REPORT 9

Consolidated balance sheets as of 30th June 2020 and 31st December 2019

ASSETS - In thousands of euro	Notes	30 June 2020	31 Dec 2019
Net Goodwill	6	2 468	2 468
Net intangible fixed assets	7	1 191	1 498
Net tangible fixed assets		189	240
Right of use assets related to leases	8	1 033	1 193
Deferred tax credits	9	-0	-
Other financial assets		173	173
Assets held for sale		-	-

Non-current assets		5 053	5 572
Customers and other debtors	10	12 375	14 245
Other current assets	11	8 766	11 560
Cash and cash equivalents		1 803	3 172
Current assets		22 944	28 977
TOTAL ASSETS		27 997	34 548

LIABILITIES - In thousands of euro	Notes	30 June 2020	31 Dec 2019
Share capital		9 417	9 417
Premiums on issue and reserves		-14 080	-13 130
Treasury shares		-97	-84
Consolidated net income (Group share)		-989	-400

Shareholders' equity (Group share)		-5 749	-4 197
Minority interests		67	26
Shareholders' equity		-5 682	-4 171
Long-term borrowings and financial liabilities	12	960	1 510
Long-term lease liabilities	8	809	959
Non-current Provisions		505	480
Deferred tax liabilities	9	-	-
Liabilities held for sale		-	-
Non-current liabilities		2 274	2 949
Short-term financial liabilities and bank overdrafts	12	2 617	3 407
Short-term lease liabilities	8	291	293
Current provisions		1 972	2 052
Suppliers and other creditors		19 702	20 296
Other current debts and liabilities	13	6 825	9 723
Current liabilities		31 405	35 771
TOTAL LIABILITIES		27 997	34 548

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			INTERIM FINANCIAL REPORT	10
	Consolidated statement of cash flows for 2020 and the half-year ending on 30th June 2020 and on 30th June 2019
	In thousands of euro	Notes	30 June 2020	31 Dec 2019	30 June 2019
	Net income		-948	-372		-1 952
	Depreciation of the fixed assets		688	1 564		771
	Value losses		-	-		-
	Other non-current without impact on the cash		82	-1 435		77
	Cost of net financial indebtedness		26	52		32
	Share in associated companies		-	16		20
	Net income on disposals of fixed assets		-47	-75		-174
	Cash flow from discontinued operations		-	-		-
	Costs of payments based on shares		-	12		12
	Tax charge or proceeds	5	71	58		139
	Operating profit before variation of the operating capital need		-128	-179		-1 076
	Variation of the operating capital need		-375	-2 572		-737
	Cash flow coming from operating activities		-503	-2 752		-1 813
	Interest paid		-11	-34		-32
	Tax on earnings paid		-69	-35		-12
	NET CASH FLOW RESULTING FROM OPERATING ACTIVITIES		-583	-2 820		-1 857
	Income from disposals of fixed assets		-	-		-
	Valuation at fair value of the cash equivalents		-	-		-
	Proceeds from disposals of financial assets		-	-31		-
	Disposal of subsidiary, after deduction of cash transferred		-	1 214		1 184
	Acquisition of a subsidiary		-	132		132
	Acquisition of fixed assets		-351	-894		-442
	Variation of financial assets		-	-2		-
	Variation of suppliers of fixed assets		-46	-139		-84
	Effect of the perimeter variations		-2	-35		-35
	NET CASH FLOW COMING FROM INVESTMENT ACTIVITIES		-399	245		754
	Proceeds from share issues		-	3 885		-
	Redemption of own shares		-13	106		65
	New borrowings		400	1 165		585
	Repayments of borrowings		-776	-1 409		-382
	Other financial liabilities variation		1	-		-
	Dividends paid to minority interests		-	-		-
	NET CASH FLOW COMING FROM FINANCING ACTIVITIES		-387	3 746		268
	Effect of exchange rate variations		-0	0		-4
	NET VARIATION OF CASH AND OF CASH EQUIVALENTS		-1 369	1 171		-838
	Cash and cash equivalents on January 1st		3 172	2 001		2 001
	CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD		1 803	3 172		1 163

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INTERIM FINANCIAL REPORT 11

Consolidation statement of changes in equity for the half years ending on 30th June 2020 and on 30th June 2019

								Shareholders'	Shareholders'
					Reserve for	Income and	Reserves and	equity	equity
	Number of			Treasury	options and	expenses on	consolidated		Minority	Shareholders'
In thousands of euro	shares	Share capital	Premiums	shares	free shares	equity	earnings	(Group share)	interests	equity
January 1, 2019	3 622 037	5 433	129 249	-190	1 626	-51 622	-92 046	-7 550	149	-7 402

Dividends paid by subsidiaries to		-		-	-	-	-	-	-		-		-	-
the minorities		56 500		85	0	-	-	-	-85		0		-	0
Call exercise
	-		-	-	65	-	-	-		65		-	65
Shares redemptions (1)
Stock options and free shares		-		-	-	-	12	-	-		12		-	12
impact(2)
Perimeter variation		-		-	-	-	-	0	-		0		-323	-323
Others		-		-	-	-	-	-285	0		-285		91	-194
Income and charges directly posted		-		-	-	-	-	11	-		11		0	11
in shareholders' equity
Net income of the period		-		-	-	-	-	-	-2 042		-2 042		90	0
Total global income		-		-	-	-	-	11	-2 042		-2 031		90	-1 941
June 30, 2019		3 678 537		5 518	129 249	-125	1 638	-51 897	-94 173		-9 789		6	-9 783
Dividends paid by subsidiaries to		-		-	-	-	-	-	-		-		0	0
the minorities		2 599 388		3 899	0	-	-	-	85		3 984		-	3 984
Call exercise
	-		-	-	-65	-	-	0		-65		-	-65
Shares redemptions (1)
Stock options and free shares		-		-	-	106	0	-	-		106		-	106
impact(2)
Perimeter variation		-		-	-	-	-	-	30		30		174	204
Others		-		-	-	-	-	285	-489		-204		-91	-295
Income and charges directly posted		-		-	-	-	-	98	-		98		0	98
in shareholders' equity
Net income of the period		-		-	-	-	-	-	1 642		1 642		-62	-372
Total global income		-		-	-	-	-	98	1 642		1 741		-62	1 678
December 31, 2019		6 277 925		9 417	129 249	-84	1 638	-51 513	-92 904		-4 197		26	-4 171
Dividends paid by subsidiaries to		-		-	-	-	-	-	-		-		-	-
the minorities		-		0	0	-	-	-	0		0		-	0
Call exercise
	-		-	-	-13	-	-	-		-13		-	-13
Call exercise
	-		-	-	0	-	-	-		0		-	0
Shares redemptions (1)
Stock options and free shares		-		-	-	-	0	-	-		0		-	0
impact(2)
Perimeter variation		-		-	-	-	-	0	-		0		0	0
Others		-		-	-	-	-	-583	-		-583		0	-583
Income and charges directly posted		-		-	-	-	-	33	-		33		0	33
in shareholders' equity
Net income of the period		-		-	-	-	-	-	-988		-988		41	-
Total global income		-		-	-	-	-	33	-988		-956		41	-915
June 30, 2020		6 277 925		9 417	129 249	-97	1 638	-52 063	-93 893		-5 748		67	-5 682

1. As of June 30th, 2020, AdUX S.A. holds 7,708 treasury shares along with 32 020 shares within the framework of the liquidity contract
2. See Note 15 in connection with the share subscription option plans and the allocations of free shares.

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INTERIM FINANCIAL REPORT 12

Notes concerning the Group's summary consolidated interim financial statements

Note 1. Accounting principles and methods

1. Preparation bases for the summary financial statements

The interim financial statements for the 1st half of 2020 are to be read as a complement to the audited consolidated financial statements for the financial year ending on December 31, 2019 as published in the annual report on May 4th, 2020.

The interim consolidated financial statements as of June 30th, 2020 are established in accordance with the accounting and valuation principles of the IFRS international accounting standards adopted by the European Union. Those international accounting standards consist of the IFRS (International Financial Reporting Standards), of the IAS (International Accounting Standards), as well as of their interpretations adopted by the European Union on June 30th, 2020 (publication in the Official Journal of the European Union).

The interim consolidated financial statements for the half-year ending on June 30th, 2020 have been prepared in accordance with the provisions of standard IAS 34 concerning "Interim financial information".

AdUX Group's consolidated financial statements include the financial statements of AdUX S.A. and of its subsidiaries (the whole being designated as "the Group"), as well as the Group's holdings in its affiliated companies or companies under joint control. They are presented in thousands of euro.

The interim consolidated financial statements dated June 30th, 2020 as well as the notes relating thereto have been established on the responsibility of the Board of Directors, and were closed out at its meeting held on July 28th, 2020.

1. Accounting principles and valuation methods

AdUX Group has applied the same accounting methods as in its consolidated financial statements for the financial year ending on December 31st, 2019.

1. Use of estimates and judgments

Preparation of the financial statements in accordance with the IFRS standards requires Management to take account of estimates and of assumptions for determination of the amounts to be posted with regard to certain assets, liabilities, income and charges, as well as of certain information provided in notes attached to the assets and liabilities, in particular :

• The goodwill and the related depreciation tests,
• The intangible assets acquired,
• The deferred tax credits,
• The depreciation of receivables,
• The provisions for risk,
• The charge for stock options and free shares.

The estimates and underlying assumptions are developed on the basis of past experience and other factors, such as events to come, considered reasonable in light of the circumstances. They are also used as the basis for exercise of the judgment necessary for determination of the book values of assets and liabilities, which cannot be obtained directly from other sources. In view of the inherently uncertain nature of these valuation procedures, the definitive amounts may prove to be different from the ones initially estimated.

The estimates and the underlying assumptions are continuously reconsidered. The impact of the changes in accounting estimates is directly entered in the accounting during the period of the change if it affects only said period, or during the period of change and in subsequent periods if they are also affected by the change.

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INTERIM FINANCIAL REPORT 13

1. Continuity of operations

It is recalled in section "3.4. Continuity of operations" of the 2019 consolidated financial statements for the year ended December 31st, 2019 that following the approval of the safeguard plan by the Paris Commercial Court on December 4th, 2019 and the completion of the increase capital on December 30th, 2019, the uncertainty regarding the Group's going concern was reduced.

As in previous closings, the Group forecasts cash flow over a rolling year. In the current context of the health crisis linked to Covid-19, the latest versions of the cash flow plans, taking into account the cash flow situation and the outlook until June 31st, 2021, are based on the following main assumptions:

• 2020 revenue lower than in 2019, resulting of an activity in the second quarter of 2020 much lower than the second quarter of 2019, and of a gradual restart of activity in the second half of 2020. The Group expects a rebound in activity in the first semester 2021 allowing to it to return to similar levels in the first half of 2019.
• Cost saving measures, particularly in France with the implementation of short-time working and the freezing of certain direct variable costs.
• Regarding cash flows, Bpifrance has suspended the calls for capital and interests terms for a period of 6 months.

Next payment due of €120k for the zero-interest financing for innovation is scheduled for the 1st of January 2021.

• In addition, as part of the mechanism announced by the President of the Republic on March 16th, 2020, the Group obtained a State guaranteed loan of €400k for its subsidiary Adysseum. Discussions with its relational banks are still underway regarding other subsidiaries for the granting of State guaranteed loans for an amount estimated for the moment of € 500K.

The current health crisis creates uncertainty with regard to the main operational assumptions described above. However, taking into account the main assumptions described above, the AdUX Group considers that it will be able to meet the deadlines to come by June 30th, 2021.

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INTERIM FINANCIAL REPORT 14

Note 2. Consolidation scope

		% held directly	% control on		Consolidation	Date of	Date of
			financial
Corporate name	Country	and indirectly on		creation or of
30/06/2020		method	year
		30/06/2020		acquisition
					closeout
Adysseum SARL	France	100%	100%		FC	13.05.02	31.12
Adexpert SPRL	Belgium	100%	100%		FC	06.06.14	31.12
Allopass Scandinavia AB	Sweden	100%	100%		FC	30.09.09	31.12
Fotolog SAS	France	49%	49%		EM	15.05.14	31.12
AdPulse SAS	France	100%	100%		FC	02.12.14	31.12
AdUX Regions SAS	France	49%	49%		EM	06.12.12	31.12
Quantum Publicidad S.L.	Spain	100%	100%		FC	28.02.19	31.12
Hi-Media LLC	USA	100%	100%		FC	30.04.15	31.12
Admoove SAS	France	100%	100%		FC	02.12.11	31.12
Local Media SARL	Tunisia	100%	100%		FC	23.09.11	31.12
Quantum Belgium SPRL	Belgium	100%	100%		FC	27.12.17	31.12
Quantum Advertising Germany GmbH	Germany	100%	100%		FC	13.04.18	31.12
Quantum Advertising España SL	Spain	100%	100%		FC	14.07.16	31.12
Quantum Native Solutions Italia SRL	Italy	100%	100%		FC	22.12.15	31.12
Quantum Advertising Nederland BV	Netherland	51%	51%		FC	04.10.18	31.12
Quantum SAS	France	100%	100%		FC	23.04.14	31.12
Groupe Hi-media USA Inc	USA	100%	100%		FC	27.11.07	31.12
Hi-media Italia SRL	Italy	100%	100%		FC	31.08.09	31.12
Hi-media Nederland BV	Netherland	100%	100%		FC	31.08.09	31.12
AdUX Benelux SPRL	Belgium	100%	100%		FC	14.03.08	31.12

FC: Full Consolidation

EM: Equity Method

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INTERIM FINANCIAL REPORT 15

Note 3. Personnel costs

The breakdown of the personnel costs between salaries, social security charges and provision for pensions indemnities are as follows:

In thousands of euro	30 June 2020	30 June 2019
Salaries	1 740	2 896
Social security charges	783	1 149
Provision for end-of-career indemnities	25	29
Recharge on salaries costs	252
Payroll charges	2 800	4 074

In 2019, AdUX has signed a services agreement with Azerion Holding B.V. by which the support teams assist the teams of Azerion Holding B.V. in the implementation of sales marketing support and commercial and financial reporting tools in its subsidiaries. This agreement implements the synergies with the Azerion group giving rise to billing and remuneration of ADUX.

The Group average headcount change as follows:

	H1 2020	H1 2019
Average headcount	106	136

Note 4. Other non-current income and expenses

The other non-current income and expenses (+€0.3 million) mainly result from :

• The restructuring costs for -€0.3 million
• The gain on disposal of different shares for +€0.6 million

Note 5. Income taxes

The income taxes are as follows:

In thousands of euro	30 June 2020		30 June 2019
Current taxes		-69	-139
Deferred taxes		-3	0
Tax (charge)/Proceeds		-72	-139
Effective tax rate (%)		-8%	-8%

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INTERIM FINANCIAL REPORT 16

The difference between the effective tax rate and the theoretical tax rate needs to be analyzed as follows:

In thousands of euro	30 June 2020	30 June 2019
Tax rate in France	28,00%	33,33%
Theoretical tax (charge)/proceeds	513	605
Elements concerning the comparison with the effective
rate:
Effect of change in rates	0	0
Earnings charged to losses subject to carryover not previously
recorded	18	8
Recognition of deferred tax credits on losses carried over	0	0
Difference of tax rate between the countries	17	-18
Effect of non-asset deficit transfers from the fiscal year	-651	-849
Permanent differences and other elements	75	151
Taxes without basis	-44	-35
Real tax (charge)/proceeds	-72	-139
Effective tax rate	-8%	-8%

AdUX S.A., Adpulse SAS, Admoove SAS, Adysseum SARL and Quantum SAS are consolidated for tax purposes.

Note 6. Goodwill

In thousands of euro	31 Dec 2019	Forex		Ch. In scope	Transfert	Increases	Decreases	30 June 2020
Goodwill	85 243		-	-15 174	-	-	-	70 069
Impairments	-82 776		-	15 174	-	-	-	-67 602
Net goodwill	2 468		0	0	0	0	0	2 468

An impairment test is implemented when a loss value exists at the time of the half-year closing period, in accordance with the procedures defined in Note 10 of the appendix to the consolidated financial statements dated on December 31st, 2019.

Following a significant deterioration in the economic environment these last months, especially because of the health crisis linked to the COVID-19 epidemic, the group decided to proceed to an impairment test on all CGUs.

As of June 30th, 2020, an impairment test on all of these CGUs was carried out according to the same procedures as on December 31st, 2019. This procedure, mainly based on the discounted future net cash flow method, consists of the assessment of the recoverable value of each entity generating its own cash flows.

The main assumptions used to determine the value of the cash-generating unit are as follows:

• valuation method of the cash-generating unit: value in use,
• number of years over which cash flows are estimated and projected to infinity: 4 years (2020-2023 normative),
• long-termgrowth rate: 2.5% (2.5% in 2019),
• Europe discount rate: 11.2% (11.2% in 2019),
• revenue growth rate: between + 5% and + 26% per year over the period 2020-2023 (+ 5% and + 25% in 2019), depending on the country, activities and new product launches.

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INTERIM FINANCIAL REPORT 17

The growth in revenue has been estimated including all the elements available at the date of performance of the impairment tests. Indeed, following the health crisis caused by the Covid-19 epidemic and the lockdown of the majority of the European population which had an impact on the marketing expenses of advertisers, the Company has little visibility on the way out of crisis and the restart of the market. As of March 2020, many advertising campaigns were canceled or postponed to September 2020. In the second half of March, the group's activity was in very severe decline in France compared to the previous year. With lags of a few weeks, the trend is the same in all the countries where AdUX is located. The decrease was confirmed and accentuated in April and May 2020.

The month of June seems to indicate a recovery that needs to be confirmed in September 2020 after the summer months which are traditionally marked by low seasonal activity. The company has thus a rapid recovery for its activity, with "Drive to Store" and "Native Advertising" returning to their 2019 level in 2021.

The discount rate corresponds to the weighted average cost of capital. It was calculated by the company according to the standards on the basis of sectoral data, and the market data source for the beta, the risk-free rate, the risk premium and the debt.

The long-term growth rate is an average estimated with a representative sample from market sources.

A sensitivity analysis calculating the variation in key parameters did not point to any likely scenario in which the recoverable value of a CGU will become less than its book value. The key parameters variations used for the sensitivity analysis are presented below:

		Discounting			Growth rate		Rate EBITDA		Revenue
		rate			to infinity			Growth Rate*
		Rate used	Var		Rate used	Var
Native Advertising	11,2%	+200 pts	2,5%	-150 pts	-100 pts	-10 %
Drive to Store	11,2%	+100 pts	2,5%	-100 pts	-50 pts	-1,5%

In the impairment tests, the above variables have been adjusted together or two per two separately and the results didn't show any likely scenario where the recoverable value of a CGU is under its accounting value.

Note 7. Intangible assets

In thousands of euro	30 June 2020	31 Dec 2019
Software and licences	829	1 231
Trademarks	74	74
Customer relations	0	0
Fixed assets in progress	288	193
Other	1	1
Total	1 191	1 498

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INTERIM FINANCIAL REPORT 18

Note 8. IFRS 16

This accounting standard considers all lease contracts under a single model by which a lease contract is accounted for as a liability (discounted future payments), and a right of use is accounting for as an asset. The right of use will be amortized over the period of the lease contract (taking into account option periods during which the exercise is reasonably certain).

Contracts committed by AdUX for which this accounting standard applies, are:

• Mainly, real-estate leases: AdUX is a tenant of the offices in most cities where the Group operates,
• And to a lesser extent, vehicles and IT hardware leases.

The discount rates applied are based on the Group's estimated marginal borrowing rate per currency based on market data available at that date. The weighted average marginal borrowing rate as of January 1, 2019 for all rental debts amounts to 8%.

The Group has also chosen to use the two capitalization exemptions proposed by the standard on contracts with a maturity up to twelve months and / or leases of assets with an individual value of less than US $ 5,000.

P&L including IFRS 16 impact

In thousands of euro	30 June 2020	30 June 2019
Depreciation and amortization	-185	-174
Finance costs	-56	-67
Simplified balance sheet including IFRS 16 impact
In thousands of euro	30 June 2020	31 Dec 2019
Property, plant and equipements	1 033	1 193
Non-current assets	1 033	1 193
Long-term lease liabilities	809	959
Short-term lease liabilities	291	293
Other liabilities	1 100	1 252

Note 9. Deferred taxes

On June 30th, 2020, the unrecognized deferred tax assets consisted mainly of the undefined losses carried over 20 years through HiMedia Group USA for €19.3 million, as well as undefined losses carried of AdUX France S.A. for €57.2 million, which can be undefined carried forward.

Note 10. Trade and other receivables

In thousands of euro	30 June 2020	31 Dec 2019
Customers	15 159	16 931
Depreciation	-2 784	-2 687
Customers and other debtors	12 375	14 245

The carrying value indicated above represents the maximum exposure to the credit risk for this heading.

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INTERIM FINANCIAL REPORT 19

Receivables sold to third parties (factoring agreement) are retained in the Group's assets as the risks and benefits associated are not transferred to these third parties. In particular, the factoring company does not bear the credit risk

Credit risk is the risk of non-recovery of the receivable. In the context of contracts signed with Group entities, credit risk is managed by these entities, which means that the Group is exposed to the risk of recovering the invoice.

Note 11. Other current assets

All of the other current assets are aged below one year.

The prepaid charges correspond mainly to overheads invoiced for the first half of 2020 but relating to the period after June 30th, 2020.

In thousands of euro	30 June 2020	31 Dec 2019
Financial and corporate assets	4 933	8 679
Receivables of related parties	1 180	976
Prepaid charges	249	94
Others	2 405	1 811
Other current assets	8 766	11 560

Financial and corporate assets are mainly composed of VAT receivables and CIR receivables.

Note 12. Loans and financial liabilities

	Balance sheet balance on 30 June 2020
	Non-current		Current		Issue	Expiration
In thousands of euro			currency
Zero-interest financing for innovation	960		240		EUR	2023
CIR / CICE financing	-		-		EUR	-
State guaranteed loan	-		400		EUR	2021
Factoring	-		1 977		EUR	2021
Total	960		2 617

• Following the measures implemented as support for companies due to the Covid-19 health crisis, the BPI has automatically postponed the deadlines by 6 months for the zero rate loan for innovation, the last deadline will therefore be the March 31, 2023.
• As part of the measures put in place by the government following the COVID-19 crisis, the company Adysseum contracted a State Guaranteed Loan for the amount of 400,000 euros with the BNP on June 19th, 2020.

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Note 13. Other current debts and liabilities
All other debts and liabilities due date are below one year.
In thousands of euro	30 June 2020	31 Dec 2019
Taxation and social liabilities	5 306	8 567
Debts on fixed assets	113	159
Prepaid income	342	454
Other liabilities	1 063	544
Other current liabilities	6 825	9 723

Note 14. Operational sectors

In thousands of		Quantum			Admoove			Adpulse Social		Autres activités		Total
euro
		2020		2019		2020		2019		2020	2019		2020	2019		2020	2019
Sales		4 267		6 494		3 122		3 425		624	917		272	1 019		8 286	11 854
Gross profit																3 739	5 547
EBITDA		(148)		(516)		(205)		(30)		99	(454)		(108)	101		(360)	(900)

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INTERIM FINANCIAL REPORT 21

Note 15.Stock option plan and allocations of free shares

a. Stock options

	Plan n°11	Plan n°12		Total
Meeting date	03 May 11	03 May 11
Date of Board of Directors meeting	31 jan. 12	27 Aug. 2012
Total number of shares allocated (before distribution of the	385 000	105 000		490 000
HiPay and consolidation shares)
Total number of shares available for subscription	159 620	64 600		224 220
Including number of shares that could be acquired by executive	0	49 600		49 600
officers
Including number of shares that could be acquired by the ten	159 620	0		159 620
leading employee
Beginning of exercise of the options	31 jan. 14	27 Aug. 2014
Date of expiration	31 jan. 22	27 Aug. 2022
Subscription price (in euros) (1)	2,13	1,93
Number of options subscribed to on June 30th, 2019	-	-		-

	Data after share consolidation and after adjustments resulting		Plan n°11		Plan n°12			Total
	from the distribution of HiPay securities (2) and the capital
	increase on December 30th, 2019 (3)
	Options cancelled during the period	0	0			0
	Total number of shares available for subscription after the	27 618	10 907			38 525
	closing
	Including number of shares that could be acquired by executive	0	0			0
	officers
	Including number of shares that could be acquired by the ten	27 618	0			27 618
	leading employee
	Subscription price (in euros)	12,31	11,43

1. Subscription price of the calculated options on the day of allocation of the options and corresponding to the weighted average of the market prices for the last twenty trading sessions (for certain plans, a 5% reduction has been applied).
2. As part of the distribution of 80% of HiPay Group's shares in June 2015, the company adjusted the subscription price of the options to take into account the effect of this distribution on the share price Hi-Media.
   The company also adjusted the number of allocated options to preserve the rights of allottees.
   Finally, the number of options takes into account the grouping of shares made in July, 2015 with a parity of 1 new action for 15 old actions.
3. Following the completion of the capital increase on December 30, 2019, the rights of the option holders were adjusted according to the conditions set out in b) of 1 ° of article R.228-91 of the Commercial Code.

The number of options and the weighted average of the exercise prices are as follows:

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			INTERIM FINANCIAL REPORT	22
		2020			2019
After share consolidation information			Weighted			Weighted
	Options		average	Options		average
			exercise price		exercise price
Options in circulation at the opening		35 247	13,18		35 247	13,18
Options allocated during the period		-	-	-		-
Options exercised during the period		-	-		-	-
Options cancelled during the period		-	-		-	-
Options in circulation at the close		35 247	13,18		35 247	13,18
Options that could be exercise at the close		35 247	13,18		35 247	13,18

1. Allocation of free shares

According to IFRS 2, the plans for allocation of free shares are valued on the basis of the AdUX share price on the day of the meeting of the Board of Directors deciding on allocation of the said free shares.

	Plan n°28	Plan n°29a	Plan n°29b	Plan n°30		Total
Meeting date	06 May 14	04 May 17	04 May 17	04 May 17
Date of the Board of Directors' meeting	07 Sep. 2015	04 May 17	04 May 17	12 Dec 17
Total number of shares allocated	66 000	29 300	17 500	39 000		151 800
Including the number of shares that can be subscribed to by	-	-	-	-		-
the executive officers
Including the number of shares that can be subscribed to by
38 800	29 300	17 500	39 000		124 600
the leading ten employee allocated
Number of cancelled shares	26 400	-	-	-
	26 400
Number of shares definitively allocated as at Jun. 30, 2016	39 600	29 300	-	-		68 900
Number of shares that can be definitively allocated	-	-	17 500	39 000		56 500
End of acquisition period	07 Sep. 2018	04 May 18	04 Feb 19	12 Dec 18
End of retention period	07 Sep. 2019	04 May 19	04 May 19	12 Dec 19
Share price on the date of the executive board meeting	7,65	9,77	9,77	4,53
Non-transferability discount	yes	yes	yes	yes
Fair value of the free share	6,51	9,02	8,49	4,18

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INTERIM FINANCIAL REPORT 23

Note 16.Transactions between affiliated parties

The affiliated parties of AdUX Group correspond to the executive officers, board of directors and administrators of the group, as well as the companies in which they exercise control, notable influence, or hold a significant voting right.

1. Transaction between affiliated parties

Executive officers

in thousands of Euros	30 June 2020	30 june 2019
Short term employee benefit (including benefits) paid for the current period	91	120
Short term employee benefit (including benefits) paid for the precedent period	-	-
Non current benefit	-	-
Post-employment benefits	-	-
Other long-term benefits	-	-
Providing termination benefits	30	-
Sharebased payment	-	-
Total	121	120

On January 31st, 2020, the Board of Directors of the Company terminated duties of Chief Executive Officer of Mr. Cyril Zimmermann.

Non executive officers

Non executive officers' compensation is only composed of attendance fees for 15.167€.

1. Transactions with the subsidiaries

AdUX SA invoices its subsidiaries for adserving fees, management fees as well as brand fess, eliminated in the consolidated financial statements.

1. Other affiliated parties

During the first half of 2020, no significant operation other than described above, in the section "Significant events of the period" and in the section "Loans and financial liabilities", has not been realized with :

• shareholders holding a significant voting right in the AdUX S.A. capital,
• members of the managing boards, including the administrators,
• entities over which one of the main directors or shareholders exercise control, or notable influence, or hold a significant voting right.

Note 17.Significant events of the period

Azerion Holding B.V., since December 30th, 2019, holds 54.95% of the share capital of AdUX.

On January 31st, 2020, the Board of Directors of the Company terminated duties of Chief Executive Officer of Mr. Cyril Zimmermann.

The Company's Board of Directors decided to dissociate the functions of Chairman of the Board of Directors and Chief Executive Officer. It has appointed Mr. Salih Hikmet Cosgun as Chief Executive Officer from February 1st, 2020 for an indefinite period and has appointed Mr. Trond Dale as Chairman of the Board of Directors for the remainder of his term as director.

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Following the resignations of Azerion Holding B.V., represented by Mr. Atilla Aytekin, and Mr. Umut Akpinar, from their directorship on January 31st, 2020, Azerion Holding B.V. is now solely represented at the Board of Directors by Ms. Kyra Steegs. The Board of Directors therefore consists of a representative of Holding B.V., Ms. Kyra Steegs, an independent personality, Mrs. Catharina Hillstrom, and its Chairman, Trond Dale.

On June 30th, 2020, AdUX sold AdMoove Sweden AB for €315,000, of which €10,000 will be paid in cash and €305,000 settled by offsetting the debt of AdUX toward its former subsidiary. The activity of this subsidiary had dropped very significantly and had become loss-making following the loss of its main contract during the summer of 2018. This event had led to the depreciation of the entire goodwill attached to this activity in the Group's financial statements in 2018. In the first quarter of 2020, AdMoove Sweden had not returned to profitability and generated around €0.2 million in turnover. This sale is part of the Group's desire to regain profitability by focusing on its main activities in the countries where it has critical size.

Other events

AdUX reimbursed the loans contracted on July 19th, 2019 and October 3rd, 2019 with Azerion on May 5th, 2020.

The company Adysseum contracted a €400,000 loan guaranteed by the State from BNP on June 19th, 2020.

Note 18.Events following closing period

It is recalled that on June 21st, 2016, AdUX had assigned a publisher as well as agencies having taken over the marketing of advertising space from this publisher due to:

• wrongful termination of the advertising network and partnership contract concluded with the publisher; and
• the transfer of the effects of this contract to other agencies.

To this end, AdUX, among others things, claimed from these various companies the sum of €2.4 million.

In 2019, the Paris Commercial Court condemned the publisher for abusive breach of contract to pay €1 million and ordered provisional execution.

AdUX served the judgment.

The publisher appealed the judgment.

An insolvency proceedings against the publisher was opened on August 1st, 2019. AdUX declared its claim as a liability of the publisher.

On July 21st, 2020, the dispute with the publisher was brought to an end by the signature of a settlement agreement in return for which AdUX will receive the sum of 80,000 euros and the publisher will withdraw from the appeal procedure.

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INTERIM FINANCIAL REPORT 25

Statement by the person responsible for the interim financial report

I hereby attest that to my best knowledge, the summary financial statements presented in the 2020 semiannual financial report are established in accordance with the applicable accounting standards and give a fair representation of the property, financial situation and earnings of the company and of the set of companies included in the consolidation, and that the semiannual financial report offers a fair representation of the important events occurring during the first six months of the financial year and of their effect on the semiannual financial statements, of the main risks and uncertainties for the remaining six months of the financial year, and of the main transactions between affiliated parties.

Salih Hikmet Cosgun

CEO of AdUX SA

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INTERIM FINANCIAL REPORT 26

Statutory auditors' review report on the 2020 half-year financial information

Period from January 1, 2020 to June 30, 2020

This is a free translation into English of the Statutory Auditors' review report issued in French and is provided solely for the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.

To the Shareholders,

In compliance with the assignment entrusted to us by your shareholders meeting and in accordance with the requirements of article L. 451-1-2 III of the French monetary and financial code (code monétaire et financier), we hereby report to you on:

• the review of the accompanying condensed half-year consolidated financial statements of AdUX, for the six months ended June 30, 2020
• the verification of the information contained in the half-year management report.

These condensed half-year consolidated financial statements were prepared under the responsibility of the Board of Directors on July 28, 2020 , based on information available at that date in the evolving context of the COVID-19 crisis and difficulties in understanding its impacts and future prospects. Our role is to express a conclusion on these financial statements based on our review.

1. Conclusion on the financial statements

We conducted our review in accordance with professional standards applicable in France.

A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with professional standards applicable in France and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed half-year consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34, the standard of IFRSs as adopted by the European union applicable to interim financial information.

Without qualifying our conclusion, we draw attention to the following matter described in Note 1. iv. "Continuity of operations" to the consolidated financial information relating to the Group's ability to continue as a going concern.

2. Specific verification

We have also verified the information given in the half-year management report on the condensed half-year consolidated financial statements prepared on July 28, 2020 subject to our review. We have no matters to report as to its fair presentation and consistency with the condensed half-year consolidated financial statements.

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INTERIM FINANCIAL REPORT 27

Neuilly-sur-seine and Boulogne Billancourt, July 31, 2020

The Statutory Auditors

PricewaterhouseCoopers Audit	Fiderec Audit
Bertrand Baloche	Adrien Lechevalier

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