Exhibit 99.2
ALARUM TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2024
ALARUM TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2024
TABLE OF CONTENTS
|
Page | |
| CONDENSED CONSOLIDATED FINANCIAL STATEMENTS: | |
| Condensed Consolidated Statements of Financial Position | 3 |
| Condensed Consolidated Statements of Profit or Loss | 4 |
| Condensed Consolidated Statements of Changes in Equity | 5 |
| Condensed Consolidated Statements of Cash Flows | 6-7 |
| Notes to Condensed Consolidated Financial Statements | 8-11 |
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ALARUM TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(UNAUDITED)
| June 30, 2024 | December 31, 2023 | |||||||
| U.S. dollars in thousands | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | ||||||||
| Accounts receivable: | ||||||||
| Trade, net | ||||||||
| Other | ||||||||
| Non-current assets: | ||||||||
| Long-term deposits | ||||||||
| Property and equipment, net | ||||||||
| Right-of-use assets | ||||||||
| Deferred tax assets | ||||||||
| Intangible assets, net | ||||||||
| Goodwill | ||||||||
| Other non-current assets | ||||||||
| Total assets | ||||||||
| Liabilities and equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accruals: | ||||||||
| Trade | ||||||||
| Other | ||||||||
| Current maturities of long-term loans | ||||||||
| Contract liabilities | ||||||||
| Derivative financial instruments | ||||||||
| Short-term lease liabilities | ||||||||
| Non-current liabilities: | ||||||||
| Long-term lease liabilities | ||||||||
| Long-term loans, net of current maturities | ||||||||
| Total liabilities | ||||||||
| Equity: | ||||||||
| Ordinary shares | ||||||||
| Share premium | ||||||||
| Other equity reserves | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total equity | ||||||||
| Total liabilities and equity | ||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
ALARUM TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
(UNAUDITED)
| Six months ended June 30 | ||||||||
| 2024 | 2023 | |||||||
| U.S. dollars in thousands (except per share amounts) | ||||||||
| Revenue | ||||||||
| Cost of revenue | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Research and development | ||||||||
| Selling and marketing | ||||||||
| General and administrative | ||||||||
| Impairment of goodwill | ||||||||
| Total operating expenses | ||||||||
| Operating profit (loss) | ( | ) | ||||||
| Finance expense | ||||||||
| Finance income | ( | ) | ( | ) | ||||
| Finance expense (income), net | ( | ) | ||||||
| Profit (loss) before income tax | ( | ) | ||||||
| Tax benefit (expense) | ( | ) | ||||||
| Net profit (loss) for the period | ( | ) | ||||||
| Basic and diluted profit (loss) per share: | ||||||||
| Basic profit (loss) per share | ( | ) | ||||||
| Diluted profit (loss) per share | ( | ) | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
ALARUM TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(UNAUDITED)
| Ordinary shares | Other | |||||||||||||||||||||||
| Number of shares | Amount | Share premium | equity reserves | Accumulated deficit | Total | |||||||||||||||||||
| U.S. dollars in thousands (except share data) | ||||||||||||||||||||||||
| Balance at January 1, 2024 | ( | ) | ||||||||||||||||||||||
| Changes during the six months ended June 30, 2024: | ||||||||||||||||||||||||
| Issuance of ordinary shares upon exercise of options and vesting of RSUs | ( | ) | ||||||||||||||||||||||
| Issuance of ordinary shares upon exercise of warrants | ( | ) | ||||||||||||||||||||||
| Expiration of options | - | ( | ) | |||||||||||||||||||||
| Share-based payments | - | |||||||||||||||||||||||
| Net profit for the period | - | - | - | - | ||||||||||||||||||||
| Balance at June 30, 2024 | ( | ) | ||||||||||||||||||||||
| Balance at January 1, 2023 | ( | ) | ||||||||||||||||||||||
| Changes during the six months ended June 30, 2023: | ||||||||||||||||||||||||
| Issuance of ordinary shares upon exercise of options | ( | ) | ||||||||||||||||||||||
| Expiration of options | - | ( | ) | |||||||||||||||||||||
| Share-based payments | - | |||||||||||||||||||||||
| At-the-market offering, net of issuance costs | ||||||||||||||||||||||||
| Net loss for the period | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||
| Balance at June 30, 2023 | ( | ) | ||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
ALARUM TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Six months ended June 30 | ||||||||
| 2024 | 2023 | |||||||
| U.S. dollars in thousands | ||||||||
| Cash flows from operating activities | ||||||||
| Net profit (loss) for the period | ( | ) | ||||||
| Adjustments for: | ||||||||
| Effect of exchange rate differences on cash and cash equivalents and restricted deposits balances | ||||||||
| Change in fair value of derivative financial instruments | ( | ) | ||||||
| Impairment of goodwill and intangible assets | ||||||||
| Depreciation and amortization | ||||||||
| Interest income related to short-term bank deposits | ( | ) | ||||||
| Interest portion of lease payments | ||||||||
| Interest and other finance expense )income( related to long-term loan | ( | ) | ||||||
| Interest expense related to short-term bank loans | ||||||||
| Share-based payments | ||||||||
| Changes in asset and liability items: | ||||||||
| Trade receivables | ( | ) | ( | ) | ||||
| Other receivables | ( | ) | ||||||
| Trade payables | ( | ) | ||||||
| Other payables | ( | ) | ||||||
| Deferred taxes | ( | ) | ( | ) | ||||
| Contract liabilities | ||||||||
| ( | ) | |||||||
| Net cash provided by (used in) operating activities | ( | ) | ||||||
| Cash flows from investing activities | ||||||||
| Withdrawn of short-term restricted deposits | ||||||||
| Withdrawn of long-term deposits | ||||||||
| Interest related to short-term bank deposits | ||||||||
| Investment in long-term deposits | ( | ) | ||||||
| Investment in long-term restricted deposits | ( | ) | ||||||
| Repayment of long-term restricted deposits | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net cash provided by investing activities | ||||||||
| Cash flows from financing activities | ||||||||
| Long-term loans received | ||||||||
| Long-term loans interest payments | ( | ) | ( | ) | ||||
| Long-term loans principal payments | ( | ) | ( | ) | ||||
| Short-term bank loans received | ||||||||
| Repayment of short-term bank loans | ( | ) | ||||||
| Short-term bank loans interest payments | ( | ) | ||||||
| Principal portion of lease payments | ( | ) | ( | ) | ||||
| Interest portion of lease payments | ( | ) | ( | ) | ||||
| Proceeds from exercise of options and warrants | ||||||||
| Proceeds from at-the-market offering | ||||||||
| Issuance costs in connection with offerings | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
ALARUM TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Six months ended June 30 | ||||||||
| 2024 | 2023 | |||||||
| U.S. dollars in thousands | ||||||||
| Changes in cash and cash equivalents | ||||||||
| Cash and cash equivalents at beginning of the period | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents at end of the period | ||||||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Receivables due to exercise of options | ||||||||
| Addition of right-of-use assets | ||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
ALARUM TECHNOLOGIES LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - GENERAL:
Background
Alarum Technologies Ltd. (“Alarum”, and collectively referred to with its wholly-owned subsidiaries as the “Company”) is a global provider of internet access and web data collection solutions.
The Company’s ordinary shares are listed on the Tel Aviv Stock Exchange (“TASE”) and the Company’s American Depositary Shares (“ADSs”) are listed on the Nasdaq Capital Market.
The Company currently operates in
The Company currently funds its operations primarily
through cash generated from operating activities. Accordingly, cash and cash equivalents as of June 30, 2024, were $
War in Israel
In October 2023, Israel was attacked by the Hamas terrorist organization and entered a state of war. To date, there is no material adverse impact on the Company’s operations and financial results as a result of this war. However, at this time, it is not possible to predict the intensity or duration of the war, nor can the Company predict how this war will ultimately affect Israel’s economy in general. The Company continues to monitor the situation closely and examine the potential disruptions that could adversely affect its operations.
NOTE 2 - ACCOUNTING POLICIES:
Basis of presentation
The Company’s condensed consolidated financial statements for the six months ended June 30, 2024, have been prepared in accordance with International Accounting Standard (“IAS”) 34, “Interim Financial Reporting”. These condensed consolidated financial statements, which are unaudited, do not include all of the information and disclosures that would otherwise be required in a complete set of annual financial statements and should be read in conjunction with the annual financial statements for the year ended December 31, 2023 and their accompanying notes, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as published by the International Accounting Standards Board.
The results of operations for the six months ended June 30, 2024, are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 31, 2024, or for any other interim period.
Estimates
The preparation of interim financial statements requires the Company’s management to exercise its judgment and to use significant accounting estimates and assumptions that affect the application of the Company’s accounting policies and the amounts of reported assets, liabilities, income and expenses. Actual results may materially differ from those estimates.
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ALARUM TECHNOLOGIES LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(UNAUDITED)
In preparation of these condensed consolidated financial statements, the significant judgments that were exercised by the management in applying the Company’s accounting policies and the key sources of estimation uncertainty were similar to those applied in the Company’s annual financial statements for the year ended December 31, 2023.
Accounting policies
The accounting policies applied in the preparation of these condensed consolidated financial statements are consistent with those applied in the preparation of the annual financial statements for the year ended December 31, 2023, except as described below.
Income tax
Income tax expense for interim periods is recognized at an amount determined by multiplying the profit before income tax for the interim period of each individual jurisdiction by management’s best estimate of the expected effective annual income tax rate of each jurisdiction, adjusted for the tax effects of certain items recognized in full in the interim period.
New standards and amendments adopted
Several new standards, amendments to standards and interpretations that are effective for annual periods beginning on January 1, 2024, have been applied in preparing these condensed consolidated financial statements. None of these had a material effect on the Company’s condensed consolidated financial statements.
New standards and amendments not yet adopted
IFRS 18, “Presentation and Disclosure in Financial Statements” (“IFRS 18”)
IFRS 18 replaces IAS 1, “Presentation of Financial Statements” (“IAS 1”). As part of the new disclosure requirements, companies will be required to present new defined subtotals in the statement of profit or loss, as follows: (i) operating profit and (ii) profit before financing and tax. In addition, items in the statement of profit or loss will be classified into three defined categories: operating, investment and financing. The standard also includes a requirement to provide a separate disclosure in the financial statements regarding the use of management-defined performance measures (“non-GAAP measures”), and specific instructions were added for the grouping and splitting of items in the financial statements and their accompanying notes. IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027, with an option for early adoption. The Company is currently in a preliminary stage of assessing the expected effect of this new standard.
NOTE 3 - SIGNIFICANT CHANGES IN THE CURRENT REPORTING PERIOD:
Shares issuance
During the six months ended June 30, 2024,
During the six months ended June 30, 2024,
9
ALARUM TECHNOLOGIES LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(UNAUDITED)
Derivative financial instruments
Derivative financial instruments consist of certain warrants previously issued to investors which are accounted for as financial liabilities at fair value through profit or loss. Accordingly, these warrants are measured at fair value (level 3) and changes are recorded to profit or loss on a periodic basis.
During the six months ended June 30, 2024, there
was a significant increase in the fair value of derivative financial instruments, mainly due to an increase in the Company’s share
price, which resulted in an increase of $
The fair value of the warrants as of June 30, 2024,
was estimated using the Black-Scholes model, with the following principal assumptions: risk-free interest rate of
As of June 30, 2024, derivative financial instruments
totaled to $
O.R.B agreement
Further to the described in Note 10 to the Company’s
annual financial statements for the year ended December 31, 2023, during the six months ended June 30, 2024, the Company repaid to O.R.B.
Spring Ltd. an amount of $
For the six months ended June 30, 2024, interest
expenses related to long-term loan totaled to $
As of June 30, 2024, long-term loan, including
current maturities, totaled to $
Options and RSUs grants
During the six months
ended June 30, 2024, the Company’s board of directors (“BOD”) approved grants of
NOTE 4 - SEGMENT AND REVENUE INFORMATION:
Disaggregation of revenue
The Company’s revenue is disaggregated by segments and source.
| Six months ended June 30 | ||||||||
| 2024 | 2023 | |||||||
| U.S. dollars in thousands | ||||||||
| Software as a Service | ||||||||
| Advertising services | ||||||||
10
ALARUM TECHNOLOGIES LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(UNAUDITED)
Segments
Management has determined the Company’s operating segments based on the information reviewed by the Company’s chief operating decision maker for the purpose of allocating resources to the segments and assessing their performance.
The chief operating decision maker, who is the Company’s Chief Executive Officer (“CEO”), examines the performance of each operating segment based on revenue and segment adjusted EBITDA. The Company defines segment adjusted EBITDA as net profit (loss) before depreciation, amortization and impairment of intangible assets, finance income (expense) and income tax, as further adjusted for the effect of impairment of goodwill, share-based payments and other adjustments, as applicable.
| Six months ended June 30 | ||||||||
| 2024 | 2023 | |||||||
| U.S. dollars in thousands | ||||||||
| Revenue | ||||||||
| Enterprise internet access | ||||||||
| Consumer internet access | ||||||||
| Segment adjusted EBITDA | ||||||||
| Enterprise internet access | ||||||||
| Consumer internet access | ||||||||
| Non-attributable corporate costs | ( | ) | ( | ) | ||||
| Depreciation, amortization and impairment of intangible assets | ( | ) | ( | ) | ||||
| Impairment of goodwill | ( | ) | ||||||
| Share-based payments | ( | ) | ( | ) | ||||
| Finance income (expense), net | ( | ) | ||||||
| Profit (loss) before income tax | ( | ) | ||||||
NOTE 5 - SUBSEQUENT EVENTS:
On July 16, 2024, the
Company’s BOD approved a grant of
In addition, the Company’s
BOD approved grants of
11