CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

U.S. dollars in thousands

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

SIVOTA PLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

U.S. dollars in thousands

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

SIVOTA PLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

1.         General information

The Company is a public limited company incorporated and registered in England and Wales on 22 September 2020 with registered company number 12897590 and its registered office situated in England and Wales with its registered office at New London House, 172 Drury Lane, London WC2B 5QR.

On 22 July 2021 the company completed a placing and listed on the Main Market (Standard Segment) of the LSE.

On 12 May 2022, the Company completed the acquisition of a majority stake in Apester Ltd, a digital marketing engagement platform (the "Acquisition") - for more information see Note 5.

The consideration for the Acquisition was funded through placing and subscription of new ordinary shares of Sivota - for more information see Note 6.

2.         Definitions

In these financial statements:

3.         Significant accounting policies

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

a.          Basis of accounting

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

The interim condensed consolidated financial statements for the six months ended 30 June 2022 have been prepared in accordance with IAS 34, Interim Financial Reporting. The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Company's financial statements as at 31 December 2021 and the significant accounting policies that were added as a result of the Acquisition - see 3 (b) to (e) below.

SIVOTA PLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

The functional currency of the Group has changed from Great British Pounds Sterling ("£") to U.S. dollars ("$") with effect from 12 May 2022, as a result of the Acquisition. From this date the currency of the primary economic environment, in which the Group operates, became U.S. dollars ("$").

The Group has changes its presentation currency accounting policy from Great British Pounds Sterling ("£") to U.S. dollars ("$"). As this is a change in accounting policy, it has been applied retrospectively as required by IAS 8. The rates applied for the purpose of the translating the assets and liabilities is the current exchange rate as at the date of each statement of financial position. Income and expenses for each statement of comprehensive income were translated at exchange rate at the dates of the transactions. For more information see Note 8.

The financial statements have been prepared on the historical cost basis, except for the revaluation of financial instruments that are measured at fair values at the end of each reporting period. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

b.         Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary.

The results of subsidiaries acquired or disposed of during the year are included in profit or loss from the date the Company gains control until the date when the Company ceases to control the subsidiary.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are eliminated on consolidation.

Non-controlling interests in subsidiaries are identified separately from the Group's equity therein. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests' share of subsequent changes in equity.

SIVOTA PLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

c.          Business combinations and goodwill

Business combinations are accounted for by applying the acquisition method. The cost of the acquisition is measured at the fair value of the consideration transferred on the date of acquisition with the addition of non-controlling interests in the acquiree. In each business combination, the Company chooses whether to measure the non-controlling interests in the acquiree based on their fair value on the date of acquisition or at their proportionate share in the fair value of the acquiree's net identifiable assets.

Direct acquisition costs are expensed as incurred.

Goodwill is initially measured at cost, which represents the excess of the acquisition consideration and the amount of non-controlling interests over the net identifiable assets acquired and liabilities assumed. After initial recognition, goodwill is measured at cost less any accumulated impairment losses.

d.         Intangible assets

Intangible assets acquired in a business combination are measured at fair value at the acquisition date. Intangible assets with a finite useful life are amortised over their useful life and reviewed for impairment whenever there is an indication that the asset may be impaired. The amortisations period and the amortisation method for an intangible asset are reviewed at least at each year end.

Intangible assets with indefinite useful lives are not systematically amortised and are tested for impairment annually or whenever there is an indication that the intangible asset may be impaired

e.          Share-based payments

Share-based payment transactions of the Company equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the Group's estimate of the number of equity instruments that will eventually vest.

f.          Standards and interpretations issued but not yet applied

            There were no new standards or interpretations effective for the first time for periods beginning on or after 1 January 2022 that had a significant effect on the Company's Financial Statements.

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

SIVOTA PLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

4.         Significant accounting judgments, estimates and assumptions

In preparing the Company Financial Information, the Directors have to make judgments on how to apply the Company's accounting policies and make estimates about the future.

In the process of applying the significant accounting policies, the Group made the following judgment which have the most significant effect on the amounts recognised in the financial statements:

Business combinations

The Group is required to allocate the acquisition cost of the subsidiary and activities through business combinations on the basis of the fair value of the acquired assets and assumed liabilities. The Group used external valuations to determine the fair value. The valuations

include management estimates and assumptions as for future cash flow projections from the acquired business and selection of models to compute the fair value of the acquired components and their depreciation period. 

5.         Business combination

a.     On 24 January 2022 the Company entered into a Share Purchase Agreement ("Acquisition") with Apester Ltd, a digital marketing engagement platform, that was completed on 12 May 2022. Under the terms of Acquisition Apester issued to the Company 14,947,409 Preferred Seed Shares for an aggregate consideration of $12.0 million of which $6.0 million was paid on 13 May 2022 and the further $6.0 million was paid on 12 August 2022. The Preferred Seed Shares provide the Company with 57.5% of Apester's voting rights.

b.     Pursuant to the articles of association of Apester, that were exercised following Acquisition completion, the Company also has certain veto and consent rights, including the right to appoint a majority of directors to the Apester's Board.

c.     In addition, amongst other customary provisions, the Share Purchase Agreement contains various warranties typical in a transaction of this nature from Apester in favour of the Company, regarding the operations, employees and the business and assets of Apester.

d.     Following the Acquisition, the Company entered into two convertible loan assignment agreements with lenders to Apester, pursuant to which $1.654 million in convertible loans, including accrued interest, were assigned to the Company. The convertible loans bear interest at a rate of 6% per annum and will be capable of conversion by the Company into Preferred Seed Shares in Apester.  If converted in full, the Preferred Seed Shares immediately after the SPA's completion represent approximately 5.6% of Apester's share capital on a fully diluted basis. If the convertible loans are not so converted, Apester will be required to repay all outstanding principal and interest on the loans in full in 24 monthly instalments starting February 2024.

e.     Following the Acquisition and pursuant to the agreement with the Apester's shareholder ("the Shareholder"), the Shareholder's loan in amount of $2.182 million, including accrued interest, was fully settled by offset against the payment for share capital of the

SIVOTA PLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

Company. The remaining Shareholder's loan in amount of $1.5 million shall bear interest at the rate of 6% per annum, accrued from the actual funding date, will be capable of conversion by the Shareholder into Preferred Seed Shares in Apester.  If converted in full, the Preferred Seed Shares immediately after the SPA's completion represent approximately 5.3% of Apester's share capital on a fully diluted basis. If the convertible loans are not so converted, Apester will be required to repay all outstanding principal and interest on the loans in full in 24 monthly instalments starting February 2024.

f.     The provisional fair value of the identifiable assets and liabilities of Apester on the acquisition date:

6.         Fundraising

The cash consideration for the acquisition of Apester's shares and convertible loans was funded through a $14.2 million (£11.5 million) placing and direct subscription of 11,500,000 new ordinary shares of one pence each in the Company from existing and new investors in the Company. The issue price is 100 pence per new ordinary share.

SIVOTA PLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

7.         Operating segments

a.         General:

The Group has one operating segment which is Apester's digital marketing engagement platform.

b.        Geographic information:

The following table sets forth revenues classified by geographical areas based on client location:

8.         Changes in presentation accounting policy  

The Group has changed its presentation accounting policy in order to align its functional and presentation currency to be U.S. dollars. As a result, the prior period comparatives in these financial statements have been restated from Great British Pounds Sterling ("£") to U.S. dollars ("$"):

SIVOTA PLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

SIVOTA PLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

9.         Subsequent events

a.     In August 2022 the short term loan of $864 thousands was fully repaid.

b.     Subsequent the reporting date a debt for unpaid share capital of $823 thousands was fully paid.

c.     Subsequent the reporting date 1,569,000 options to Apester's ordinary shares were exercised by two former executives of Apester to 1,569,000 ordinary shares of Apester at an exercise price of NIS 0.01 per share. As a result, the Company's share in Apester reduced to 54.2%.