Aura Smart Air Ltd

Interim / Quarterly Report • Aug 29, 2022

Aura Smart Air Ltd. (the "Company")

This is an English translation of a Hebrew report of the company, that was published on August 29, 2022 (reference No. 2022-01-109384) at the ISA reporting website (magna.isa.gov.il) (hereafter: "The Hebrew Version"). The English version is only for convenience purposes. This is not an official translation and has no binding force. The translation in any case cannot perfectly reflect the Hebrew Version. In the event of any discrepancy between the Hebrew Version and this translation, the Hebrew Version shall prevail.

Aura Smart Air Ltd.

Condensed Consolidated Financial Statements as of June 30, 2022

(Unaudited)

Aura Smart Air Ltd. Condensed Consolidated Balance Sheets

		as of June 30		As of
		2022	2021	December 31, 2021
	Note	Unaudited		Audited
			Thousands of USD
Current Assets
Cash and cash equivalents		2,537	12,388	8,387
Short-term deposits		12	-	62
Related parties		-	5	-
Customers		2,820	2,297	3,325
Accounts receivable		1,381	509	959
Inventory		3,053	1,209	2,130
Total Current Assets		9,803	16,408	14,863
Non-current Assets
Right of use asset		124	51	196
Fixed assets, net	2(2)	1,138	1,460	1,230
Intangible assets		956	-	362
Deferred taxes		190	568	568
Total Non-Current Assets		2,408	2,079	2,356
Total Assets		12,211	18,487	17,219
Current Liabilities
Short-term loans		631	-	1,532
Suppliers and service providers Current maturities of liabilities in respect of		1,094	304	807
leasing		97	40	111
Accounts payable		883	1,095	881
Liability in respect of grants		258	723	600
Liability in respect of fixed assets		624	1,381	927
Liability in respect of employee benefits		27	-	33
Related parties		33	36	38
Total Current Liabilities		3,647	3,579	4,929
Non-Current Liabilities
Lease liability		11	15	80
Liability in respect of grants		237	-	-
Liability in respect of employee benefits		-	51	-
Total Non-Current Liabilities		248	66	80
Equity
Share capital	3	-	-	-
Premium on shares		19,684	19,467	19,569
Capital reserves		1,256	642	959
Accumulated deficit		(12,624)	(5,267)	(8,318)
Total Equity		8,316	14,842	12,210
Total Liabilities and Equity		12,211	18,487	17,219
				August 28, 2022
Ofer Bluemenfeld Aviad Shnaiderman Chief Financial Officer Chief Executive Officer		Yuval Bronstein Chairman of the Board of Directors		Date of approval of the financial statements

Aura Smart Air Ltd. Condensed Consolidated Statements of Comprehensive Income

	For the Six-Month Period Ended on June 30	For the Year Ended on December 31
	2022	2021	2021
		Unaudited
	Audited Thousands of USD
Revenues	3,285	6,377	11,517
Cost of sales	(2,493)	(5,231)	(8,843)
Gross profit	792	1,146	2,674
Research and development expenses	(399)	(458)	(1,355)
Sales and marketing expenses	(2,076)	(1,005)	(2,946)
Management and general expenses Costs of listing for trading on the	(2,204)	(962)	(2,834)
stock exchange	-	(241)	(287)
Operating loss	(3,887)	(1,520)	(4,748)
Financing expenses	(41)	(1,507)	(1,407)
Financing income	-	1	78
Loss before Income Taxes	(3,928)	(3,026)	(6,077)
Income (expenses) from income taxes	(378)	205	205
Loss for the Period	(4,306)	(2,821)	(5,872)
Comprehensive loss	(4,306)	(2,821)	(5,872)
Loss per ordinary basic and diluted share of \$0.00 nominal value	(0.18)	(0.17)	(0.29)
Weighted average of share capital used in calculation of the loss per basic share	23,995,514	16,312,487	20,425,959

Aura Smart Air Ltd. Condensed Consolidated Statements of Cash Flows

	For the Six-Month Period Ended on June 30	For the Year Ended on December 31
	2022	2021	2021
	Unaudited	Audited
		Thousands of USD
Cash flows for current activity
Loss for the Period	(4,306)	(2,821)	(5,872)
Adjustments required for presentation of cash flows from current activity - Appendix A	340	(1,780)	(3,021)
Net cash used for current activity	(3,966)	(4,601)	(8,893)
Cash flows for investing activities
Investment in short-term deposits	50	-	(62)
Capitalization of development costs	(594)	-	(362)
Purchase of fixed assets	(321)	(85)	(629)
Net cash used for investment activity	(865)	(85)	(1,053)
Cash flows from financing activity
Receiving short-term credit	631	-	1,529
Repayment of short-term credit	(1,532)	-	-
Net proceeds from an issue of shares	-	10,150	10,149
Issue of a bridging investment	-	4,387	4,387
Receiving development grants	-	93	93
Repayment of development grants	(78)	(113)	(436)
Repayment of a lease liability	(49)	(17)	(72)
Payment of deposit in respect of a right-of-use asset	-	-	(7)
Net cash used from financing activity	(1,028)	14,500	15,643
Increase (decrease) in cash and cash equivalents	(5,859)	9,814	5,697
Balance of cash and cash equivalents at the beginning of the year	8,387	2,634	2,634
Effect of exchange rate fluctuations on cash balances held in foreign currency	9	(60)	56
Balance of cash and cash equivalents at the end of the year	2,537	12,388	8,387

Aura Smart Air Ltd. Condensed Consolidated Statements of Cash Flows

Appendix A - Adjustments Required for Presentation of Cash Flows from Current Activity

		For the Six-Month Period Ended on June 30	For the Year Ended on December 31
		2022	2021	2021
			Unaudited	Audited
	Note		Thousands of USD
Income and Expenses not Involving Cash Flows:
Depreciation and amortization	2(2)	158	96	467
Exchange rate differences on cash balances		(9)	60	(56)
Financing expenses, net Expenses for revaluation of a liability to the		(10)	17	3
Chief Scientist		(27)	-	217
Expenses in respect of a share-based payment Expenses in respect of revaluation of a bridging		412	317	736
investment		-	1,358	1,358
Income taxes		378	(205)	(205)
		902	1,643	2,520
Changes in assets and liability items:
(Increase) decrease in customers		505	(2,193)	(3,221)
(Increase) in accounts payable		(422)	(180)	(629)
(Increase) in inventory		(923)	(387)	(1,308)
(Increase) decrease in related parties Increase (decrease) in other suppliers and		-	(5)	2
service providers		287	(1,119)	(616)
Increase in accounts payable		(9)	461	231
		(562)	(3,423)	(5,541)
Total Adjustments Required for Presentation of Cash Flows from Current Activity		340	(1,780)	(3,021)
Appendix B - Transactions not Involving Cash Flows
Sale of bridging investment		-	5,745	5,745
Increase in right-of-use asset liability		-	-	242
Purchase of fixed asset offsetting a liability (*)		-	1,454	1,514
(*)Non-substantial correction in respect of comparison figures
Appendix C - Interest Payments
Interest paid on a short-term loan		15	-	-

Note 5 - Revenues

Sales Figures According to Customer Characteristics:

As of the reporting date, 54% of the Company's sales are to distributors and 46% are to end customers.

Distribution of Sales to Regular Customers:

1. Classification of the Company's Income According to Types of Customers:

		For the Period Ended on June 30	For the Year Ended on December 31, 2021
	2022				2021
	Unaudited
	Thousand	Rate	Thousands	Rate	Thousands	Rate
	s of USD		of USD		of USD
Institutional	1,072	33%	74	1%	290	3%
Distributor	1,767	54%	5,941	93%	10,626	92%
Others	446	13%	362	6%	601	5%
Total	3,285		6,377		11,517

1. CLASSIFICATION OF THE COMPANY'S INCOME ACCORDING TO GEOGRAPHIC MARKETS, BASED ON THE CUSTOMERS' LOCATION:

		For the Period Ended on June 30	For the Year Ended on
	2022		2021		December 31, 2021
		Unaudited
	Thousand Rate		Thousands Rate		Thousands	Rate
	s of USD		of USD		of USD
Israel	1,135	35%	317	5%	638	6%
Europe	329	10%	1,789	28%	3,594	31%
North America	521	16%	2,413	38%	3,025	26%
Asia	403	12%	1,489	23%	2,981	26%
Latin America	469	14%	258	4%	673	6%
Australia	410	12%	-	-
Other	18	1%	111	2%	606	5%
Total	3,285		6,377		11,517