SimiGon : Audited Accounts for the year ended 31 December 2020

SIMIGON LTD.

CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2020

U.S. DOLLARS IN THOUSANDS

INDEX
	Page
Independent Auditors' Report	2
Consolidated Statements of Financial Position	3 - 4
Consolidated Statements of Comprehensive Income	5 - 6
Consolidated Statements of Changes in Equity	7
Consolidated Statements of Cash Flows	8 - 9
Notes to Consolidated Financial Statements	10 - 54

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Kost Forer Gabbay & Kasierer	Tel: [phone]
144 Menachem Begin St.	Fax: [phone]
Tel-Aviv 6492102, Israel	ey.com

INDEPENDENT AUDITORS' REPORT

To the Shareholders of

SIMIGON LTD.

We have audited the accompanying consolidated financial statements of SimiGon Ltd. and its subsidiaries "the Group"), which comprise the consolidated statements of financial position as of December 31, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for each of the years ended December 31, 2020, 2019 and 2018, and the related notes to the consolidated financial statements, which, as described in Note 2 to the consolidated financial statements, have been prepared on the basis of International Financial Reporting Standards as adopted by the European Union.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the European Union; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the each of the years ended December 31, 2020, 2019 and 2018, in accordance with International Financial Reporting Standards as adopted by the European Union.

Tel-Aviv, Israel	KOST FORER GABBAY & KASIERER
April 27, 2021	A Member of Ernst & Young Global
	2

				SIMIGON LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
			December 31,
			2020		2019
	Note	U.S. dollars in thousands
ASSETS
CURRENT ASSETS:
Cash and cash equivalents			1,227	2,974
Short-term bank deposit			1,831	1,181
Short-term investments	3		1,889	1,887
Short-term restricted cash	5		-	523
Trade receivables, net	4		956	1,407
Other accounts receivable and prepaid expenses			70		37
Totalcurrent assets			5,973	8,009
NON-CURRENT ASSETS:
Restricted cash	5		50	38
Long-term prepaid expenses			27	27
Property, plant and equipment	6		22	99
Right-of-use assets	7		260	294
Goodwill	8		1,068		1,068
Totalnon-current assets			1,427		1,526
Totalassets			7,400	9,535

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

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				SIMIGON LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
			December 31,
			2020		2019
	Note	U.S. dollars in thousands
EQUITY AND LIABILITIES
CURRENT LIABILITIES:
Current maturities of loans	10		34	-
Trade payables			138	86
Current maturities of lease liabilities	7		242	245
Deferred revenues			72	236
Other accounts payable and accrued expenses	9		701		845
Totalcurrent liabilities			1,187	1,412
NON-CURRENT LIABILITIES:
Lease liabilities	7		21	31
Employee benefit liabilities	10		369	362
Long-term loan	11		215	-
Other non-current liabilities	14a	713		708
Totalnon-current liabilities			1,318		1,101
Totalliabilities			2,505	2,513
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF
THE COMPANY:	12
Share capital			125	125
Additional paid-in capital			16,652	16,651
Treasury shares			(105)	(105)
Accumulated deficit			(11,777)		(9,649)
Totalequity attributable to equity holders of the Company			4,895		7,022
Total equity			4,895		7,022
Totalliabilities and equity			7,400	9,535

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

April 27, 2021
Date of approval of the		Ran Pappo		Ami Vizer		Efraim Manea
financial statements		Independent Non-		Chief Executive Officer		Chief Financial Officer
		Executive Director		and Director		and Director

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SIMIGON LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

					Year ended
				December 31,
			2020		2019			2018
			U.S. dollars in thousands
	Note	(except share and per share amounts)
Revenues	16		3,221	4,882			5,029
Cost of revenues	15a	1,397		1,797			973
Gross profit			1,824	3,085			4,056
Operating expenses:
Research and development	15b	1,850	2,175			2,335
Selling and marketing	15c	1,040	1,187			1,019
General and administrative	15d	1,062		1,171			1,462
Totaloperating expenses			3,952		4,533			4,816
Operating loss			(2,128)	(1,448)			(760)
Other Income			6	-			-
Loss before financial expenses			(2.122)		(1,448)			(760)
Finance income	15e	168	215			134
Finance expenses	15f	226		215			157
Loss before income taxes			(2,180)	(1,448)			(783)
Income tax benefit (expense)	13		-		-			(224)
Loss			(2,180)	(1,448)			(1,007)

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

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