ADCORE Inc.

CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2020

ADCORE INC.

CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2020

Independent Auditors' Statement Consolidated Statements of Financial Position Consolidated Statements of Comprehensive Income Consolidated Statements of Changes in shareholders' equity Consolidated Statements of Cash Flows Notes to the consolidated Financial Statements	Page
	1-5 6-7 8 9 10-11 12-41

The amounts are stated in thousand US dollars

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INDEPENDENT AUDITORS' STATEMENT

TO THE SHAREHOLDERS OF

ADCORE INC.

We have audited the consolidated financial statements of Adcore Inc. (the "Company"), which comprise the consolidated statement of financial position as at December 31, 2020 and December 31, 2019 and the consolidated statements of comprehensive income, changes in shareholders’ equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at December 31, 2020 and December 31, 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB).

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements relevant to the audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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Recognition of Revenues

How the matter was addressed in our audit

The Company offers its technologies on a self-serve basis for indirect agency customers ("Indirect”) or acts as the principal for direct to customers advertisers ("Direct").

The key risks on revenue recognition are: Cut-off where revenue is not recognized in line with the Company policy. The presentation of revenue where the Company acts as a principal and revenue is recognized and presented on a gross rather than a net basis. Refer to the revenue recognition in note 2 to the consolidated financial statements for further detail.

We obtained a detailed understanding of each of the revenue streams and the processes for capturing and recording revenue. Our key audit procedures in relation to the recognition of revenue included:

Gaining an understanding of the recognition of the revenue process.
Testing on a sample basis for invoices (i.e. media budget, fees related to its software products) to significate contracts.
We have considered the appropriateness and accuracy of any cut-off adjustments processed.
We evaluated management’s assessment whether revenue has been recognized in accordance with IFRS 15 ‘Revenue’ and with the Company’s accounting policy by reviewing details of the Company revenue recognition policy, the application of this, and any significant new contracts; and
Confirmed that all material temporary worker contractual arrangements where the Company acts as a principal and maintains the majority of the risk and rewards associated with the underlying agreement have been recognized and presented on a gross revenue basis in the financial statements.

Other Information

Management is responsible for the other information. The other information comprises:

The information, other than the consolidated financial statements and our auditor’s report thereon, included in the Management’s Discussion and Analysis.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

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In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained the Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor’s report. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditor’s responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

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As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit 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 Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company’s to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Company audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matters or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor’s report is Tomer Fromovich.

Tel-Aviv, Israel Ziv haft March 30, 2020 Certified Public Accountants (Isr.) BDO Member Firm

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ADCORE INC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(US Dollar in thousands)

CURRENT ASSETS: Cash and cash equivalents Trade accounts receivable, net Other accounts receivable Total current assets NON-CURRENT ASSETS: Long term deposit Property, plant and equipment, net Intangible assets, net Total non-current assets Total Assets	Note 2 7 4 5	December 31, December 31, 2020 2019	December 31, December 31, 2020 2019	December 31, December 31, 2020 2019
			8,763 1,775 66 10,604 72 392 1,668 2,132 12,736	3,710 2,101 204 6,015 - 269 1,472 1,741 7,756

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

ADCORE INC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(US Dollar in thousands)

CURRENT LIABILITIES: Trade accounts payable Other accounts payable Deferred Revenues Lease liability Total current Liabilities NON-CURRENT LIABILITIES: Accrued severance pay, net Deferred tax liability, net Derivative liability - warrants Lease liability Long term loan Total non-current Liabilities SHAREHOLDERS' EQUITY: Share capital Additional paid in capital Actuarial reserve Retained earnings Total Shareholders' Equity Total Liabilities And Shareholders' Equity * Less than 1 thousand dollars. “Omri Brill” “Roy Nevo” Omri Brill Director Roy Nevo Director	CURRENT LIABILITIES: Trade accounts payable Other accounts payable Deferred Revenues Lease liability Total current Liabilities NON-CURRENT LIABILITIES: Accrued severance pay, net Deferred tax liability, net Derivative liability - warrants Lease liability Long term loan Total non-current Liabilities SHAREHOLDERS' EQUITY: Share capital Additional paid in capital Actuarial reserve Retained earnings Total Shareholders' Equity Total Liabilities And Shareholders' Equity * Less than 1 thousand dollars. “Omri Brill” “Roy Nevo” Omri Brill Director Roy Nevo Director	Note 6 14 7 8	December 31, December 31, 2020 2019	December 31, December 31, 2020 2019
				2,881 808 997 105 4,791 50 75 647 101 187 1,060 * 4,771 (83) 2,197 6,885 12,736 March 30, 2021
	Omri Brill Director Roy Nevo Director

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

ADCORE INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(US Dollar in thousands)

Revenues Cost of revenues Gross profit Research and development expenses Selling , general and administrative expenses Listing Expenses Operating profit Financial expenses Financial income Profit before taxes on income Tax Expense (recovery) Net Profit Other comprehensive expense : Item that will not be reclassified to profit or loss: Total actuarial (income) loss on defined benefit pension schemes Total other comprehensive income Total comprehensive income for the year Basic profit per share attributable to shareholders Diluted profit per share attributable to shareholders Weighted average number of ordinary shares Weighted average number of dilutive ordinary shares	Note	Year ended December 31, 2020	Year ended December 31, 2019
	10 11 12 13 14	16,997 10,141 6,856 908 4,705 - 1,243 701 - 542 (106) 648 (12) (12) 60 6 0.012 0.011 55,839,784 60,765,863	11,301 4,008 7,293 590 3,243 1,541 1,919 369 124 1,674 356 1,318 (6) (6) 1,324 3 0.0 3 0.0 49,366,023 51,474,197

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

ADCORE INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(US Dollar in thousands)

Balance at January 1, 2019 Changes during the year: Reverse take over Issuance of shares, net Share-based compensation Exercise of options Total comprehensive income Balance at December 31, 2019 Changes during the year: Share-based compensation Exercise of options Exercise of warrants Exercise of RSU Total comprehensive income Balance at December 31, 2020**	Number of Shares	Share capital	Additional paid in capital	Actuarial reserve	Retained earnings 231 - - - - 1,318 1,549 - - - - 648 2,197	Total Shareholders' equity
	40,482,552 5,000,001 5,117,000 - 4,756,700 - 55,356,253 - 375,000 206,417 391,666 - 56,329,336	- - - - - - - - -	785 1,701 1,475 167 - - 4,128 422 131 90 - - 4,771	(101) - - - - 6 (95) - - - - 12 (83)		915 1,701 1,475 167 * 1,324 5,582 422 131 90 - 660 6,885

Represents an amount lower than 1 thousand.
** After giving affect to the Podium Split.

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

ADCORE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(US Dollar in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES: Net profit for the year Adjustments to reconcile net profit to net cash provided by operating activities: Depreciation and amortization Change in value of marketable securities Listing expenses Share-based compensation Revaluation of derivative warrants Decrease (increase) in trade receivables, net Decrease (increase) in other receivables Increase in trade payables Increase (decrease) in other payables Increase (decrease) in accrued severance pay, net Increase (decrease) in deferred tax, net Increase in deferred revenues Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment Capitalized development cost Increase in long term deposit Sale of marketable securities Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of shares and warrants, net Dividend paid Payments and interest of lease liabilities Increase in long term loan Reverse Take Over (Appendix C) Net cash used in financing activities Increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at the end of the year	Year ended December 31, 2020	Year ended December 31, 2020	Year ended December 31, 2019
		648 494 - - 422 523 327 139 2,341 (299) 26 (94) 997 5,524 (38) (572) (72) - (682) 221 0 (197) 187 - 211 5,053 3,710 8,763	1,318 304 (51) 868 167 (56) (655) (229) 66 1,265 (28) 59 - 3,028 (85) (570) - 562 (93) 1,903 (2,894) (161) - 937 (215) 2,720 990 3,710

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

ADCORE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(US Dollar in thousands)

APPENDIX A - AMOUNT PAID DURING THE PERIOD FOR:

PENDIX A - AMOUNT PAID DURING THE PERIOD	FOR:
Tax Interest on lease liabilities	Year ended December 31, Year ended December 31, 2020 2019
	88 230 - 7

APPENDIX B - REVERSE TAKE OVER:

PENDIX B - REVERSE TAKE OVER:
Working capital other than cash Issuance of shares upon RTO (Note 1) Issuance cost Cash received	As of May 27, 2019
		104 1,701 (868) 937

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

ADCORE INC.

(US Dollars in thousands)

NOTE 1 - GENERAL:

Adcore Inc. (the “Company” or “Adcore”), a reporting issuer listed on the TSX Venture Exchange trading under the symbol ADCO.V, is the parent company of Podium Advertising Technologies Ltd. (“Podium”) Adcore East Limited (“Adcore East”) and Adcore Australia Pty (“Adcore AU”). Podium was established and commenced its operations in July 2006, and is a leading provider of machine-learning powered advertising technologies used by digital advertisers to enhance and maximize their Search Engine Marketing (“SEM”). On March 4, 2021, Adcore Inc. announced that the Company has received final approval to list its common shares of the Company on the TSX. Adcore’s common shares commenced trading on the TSX on the March 4, 2021 market open under the current trading symbol of “ADCO”.

On March 12, 2019 Podium entered into a binding engagement agreement (the “LOI”) with County Capital One Ltd. (“County”), pursuant to which County agreed to acquire all of the issued and outstanding shares in the capital of Podium (the “Transaction” or “RTO”).

Immediately prior to completion of the Transaction, County consolidated its shares on a 4.57 for 1 basis (the “Consolidation”) and Podium split its shares on a 4048.26 for 1 basis into ordinary shares having a par value of NIS 0.0000024702 each (the “Podium Split”). Following the completion of the Consolidation and the Podium Split, County issued common shares, options and warrants for every Podium common share, option or warrant exchanging all of Podium common shares, options and warrants using an exchange ratio of 1 to 1 (the "Exchange Ratio").

On April 18, 2019, Podium, the shareholder of Podium, and County entered into a securities exchange agreement (the “Definitive Agreement”). The Definitive Agreement provided for the acquisition of all of the outstanding equity interests of Podium by County in a transaction in which the security holders of Podium received securities of County. As a result, County became the sole registered and beneficial owner of all of the outstanding securities of Podium, and Podium became a wholly-owned subsidiary of County.

Pursuant to the Definitive Agreement, among other things: (a) County consolidated its common shares according to the Consolidation; (b) Podium subdivided its ordinary shares according to the Podium Split; (c) County acquired all issued and outstanding ordinary shares of Podium (on a post-Podium Split basis) in consideration for the issuance of one County common share (on a post-Consolidation basis) for each ordinary share of Podium and all outstanding securities convertible into ordinary shares of Podium were exchanged for an equal number of securities convertible into common shares of County of like tenor and effect (the “Securities Exchange”); and (e) County changed its name to “Adcore Inc.”

On May 17, 2019, County announced that it has received conditional approval from the TSX Venture Exchange for the Transaction.

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 1 - GENERAL (CONT.):

On May 27, 2019, County announced that it had completed its previously announced acquisition of all of the issued and outstanding securities of Podium as County’s "Qualifying Transaction". Concurrently with the closing of the Transaction, Podium also closed its previously announced brokered private placement of subscription receipts at CAD 0.50 per subscription receipt for gross proceeds of CAD 2,558,500 (approximately 1.9 Million).

On May 29, 2019, County began trading on the TSX Venture Exchange under the new name “Adcore Inc.” with the trading symbol: ADCO.V

COVID -19

The 2019 Novel Coronavirus infection (‘coronavirus’) or ‘COVID-19’ pandemic poses a major public health threat. It has hindered the movement of people and goods worldwide, and many governments are instituting restrictions on both individuals and businesses. The resulting impact on financial reporting will be significant. Significant development and spread of the coronavirus did not take place until January 2020, with the World Health Organization (WHO) announcing the coronavirus as a global health emergency on January 30, 2020, which prompted national governments around the world to begin putting actions in place to slow the spread of COVID-19. Furthermore, significant measures taken by the Chinese government and by private sector organizations did not take place until early 2020. On March 11, 2020, the WHO declared COVID-19 a global pandemic and suggested worldwide containment and mitigation measures. In response to the pandemic, the Company has adjusted its business practices with a focus on the health and well-being of our employees and their families, customers, partners, service providers, and communities. Certain of the Company’s offices have been subject to government-mandated lockdowns for some periods of time. However, the Company’s teams have been able to perform their functions remotely without meaningful reductions in the Company’s ability to service its customers.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:

The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparation

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standard Board ("IASB"). The financial statements have been prepared under the historical cost convention, except for marketable securities, actuarial assessment and share based compensation. The Company has elected to present the statement of comprehensive income using the function of expense method.

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Basis of preparation (cont.)

In addition, these consolidated financial statements are presented in US dollars, all currency amounts have been recorded to the nearest thousand, unless otherwise indicated.

Basis of consolidation

The Financial results of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Intercompany balances and transactions and any unrealized income and expenses arising from such transactions are eliminated upon consolidation.

Estimates and assumptions

The preparation of the financial statements requires management to make estimates and assumptions that have an effect on the application of the accounting policies and on the reported amounts of assets, liabilities and expenses. These estimates and underlying assumptions are reviewed regularly. Changes in accounting estimates are reported in the period of the change in estimate (see also note 3).

Foreign currency

The financial statements are prepared in US Dollars (the functional currency).

Transactions and balances in foreign currencies are converted into US Dollars in accordance with the principles set forth by International Accounting Standard (IAS) 21 "The Effects of Changes in Foreign Exchange Rates". Transactions and balances have been converted as follows:

Monetary assets and liabilities – at the rate of exchange applicable at the statements of the financial position date.
Expense items – at exchange rates applicable as of the date of recognition of those items.
Non-monetary items are converted at the rate of exchange used to convert the related statements of financial position items i.e. at the time of the transaction. Exchange gains and losses from the aforementioned conversion are recognized in the statement of comprehensive income.

Cash and cash equivalents

Cash equivalents are considered by the Company to be highly-liquid investments, including, inter alia, shortterm deposits with banks and the maturity of which do not exceed three months at the time of deposit and which are not restricted.

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Use of estimates and assumptions in the preparation of the financial statements

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. See also Note 3.

Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

A. In the principal market for the asset or liability, or
B. In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

When there are no quoted prices in active markets for identical assets or liabilities, the Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

Classification of financial instruments by fair value hierarchy

Assets and liabilities measured in the statements of financial position at fair value are grouped into classes with similar characteristics using the following fair value hierarchy which is determined based on the source of input used in measuring fair value:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable either directly or indirectly.
Level 3 - Inputs that are not based on observable market data (valuation techniques which use inputs that are not based on observable market data).

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Fair value measurement (cont.)

Items carried at fair value as of December 31, 2020 and 2019 are classified in the tables below:

Fairvalue	measurements using input type	measurements using input type
Level 1	Level 2 Level 3 December 31, 2020	Total

- Fairvalue	- (647) (647) measurements using input type
Level 1	Level 2 Level 3 December 31, 2019	Total

-	- (124)	(124)

The warrants were valued based on the Black Scholes model, when adjusted for dilution. The main parameters used in the process are the expected volatility of 90%, the risk-free rate between 0.15% and 0.5% and expected term range was 0.4 years.

Financial instruments

1. Financial assets

The Company classifies its financial assets into one of the following categories, based on the business model for managing the financial asset and its contractual cash flow characteristics. The Company's accounting policy for the relevant category is as follows:

Amortized cost: These assets arise principally from the provision of goods and services to customers (e.g. trade accounts receivable), but also incorporate other types of financial assets where the objective is to hold these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. They are initially recognized at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortized cost using the effective interest rate method, less provision for impairment.

Impairment provisions for trade accounts receivable are recognized based on the simplified approach within IFRS 9 using a provision in the determination of the lifetime expected credit losses. During this process the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables.

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Financial instruments (cont.)

1. Financial assets (cont.)

For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognized within general and administrative expenses in the statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

2. Financial Liabilities

The Company classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired. The Company's accounting policy for each category is as follows: Fair value through profit or loss: the Company does not have any liabilities held for trading nor has it designated any financial liabilities as being at fair value through profit or loss.

Other financial liabilities include the following items: Bank borrowings are initially recognized at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest bearing liabilities are subsequently measured at amortized cost using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the statement of financial position. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding. Trade accounts payable and other accounts payable, which are initially recognized at fair value and subsequently carried at amortized cost using the effective interest method.

3. De-recognition

Financial assets - the Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the rights to receive the contractual cash flows.
Financial Liabilities - the Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire.

4. Impairment of financial assets

The Company assesses at the end of each reporting period whether there is any objective evidence of impairment of financial assets carried at amortized cost. The Company recognizes an allowance for expected credit losses (ECL) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original effective interest rate. ECLs are recognized in two stages.

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Financial instruments (cont.)

4. Impairment of financial assets (cont.)

For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). For trade accounts receivable and contract assets, the Company applies a simplified approach in calculating ECLs. Therefore, the Company does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The Company's assessed its financial assets that are subject to the expected credit loss model. While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the expected credit losses (“ECL”) and their measurement:

In order to manage the credit risks associated with customer receivables, the Company aims to secure certain financial guarantees prior to entering into business relationship with its customers. To this end, the Company developed a three-level matrix, which is based on past experience and historical data along with projections of the future into consideration, in order to group the ECL:

Receivables which pays either pre-paid or post-paid with a short billing cycle of up-to one week ("Payment option 1").
Receivables which pays post-paid with a standard billing cycle of up-to one month ("Payment option 2").

3. Receivables which pays post-paid with a long billing cycle of over one month ("Payment option 3").

ECL are measured as the unbiased probability-weighted present value of all cash shortfalls over the expected life of each financial asset. For receivables from services, ECL are mainly calculated with a statistical model using three major risk parameters: probability of default, loss given default and exposure at default.

The estimation of these risk parameters incorporates all available relevant information, not only historical and current loss data, but also reasonable and supportable forward-looking information reflected by the future expectation factors.

This information includes macroeconomic factors (e.g., gross domestic product growth, unemployment rate, cost performance index) and forecasts of future economic conditions. For receivables from financial services, these forecasts are performed using a scenario analysis (base case, adverse and optimistic scenarios).

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Financial instruments (cont.)

Impairment of financial assets (cont.)
Definition of default, including reasons for selecting the definition

Prior to commencing a business relationship, the Company will enter into an agreement with the customer. The agreement or contract typically includes details of the terms of payment to which the customer is entitled. In most cases, the customer updates the Company if there is a delay in the payment beyond the terms of the agreement. Any delays in payment for more than two months are subject to approval of management. If a customer's scheduled payment is delayed by more than two months and such delay is not approved by the Company's management, the CEO will typically make direct contact with the customer's management and inform them of the overdue obligation and the Company will pursue remedies available to collect the overdue payment. If the customer and the Company are not able to resolve the matter at that time, the receivable is considered to be in default as the collectability is no longer certain. If the collection effort is not successful, the Company will retain legal counsel in the applicable country to assist with collection and sends a demand letter to that effect.

Write-off policy

The Company writes off its financial assets if any of the following occur:

Inability to locate the debtor.
Discharge of the debt in a bankruptcy.
It is determined that the efforts to collect the debt are no longer cost effective given the size of receivable.

The collections department must comply with the collection efforts outlined in the policy to collect on delinquent customer accounts before any write-offs are made.

Aging Schedule based on due date

Aging Schedule based on due	date
Aging Schedule 31.12.2020 Aging Schedule 31.12.2019	Within payment terms 1,792 2,037	0-30 days over payment terms 30 31	90+ days over payment terms 22 71	Total
				1,844 2,139

Provision for doubtful debts

The Company recognized a provision for doubtful accounts in the amount of $69 and $38 on December 31, 2020 and 2019, respectively.

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Financial instruments (cont.)

4. Impairment of financial assets (cont.)

Accounts receivable by region, type of services

Three-level matrix Payment option 1 Payment option 2 Payment option 3 Total Direct North America APAC EMEA Indirect North America Australia EMEA Total	31.12.2020 31.12.2019 877 628 213 107 754 1,404 1,844 2,139 As at December 31, 20 20 As at December 31, 2019 381 64 842 157 219 246 385 1,633 13 4 4 35 1,844 2,139	As at December 31, 2019
		64 157 246 1,633 4 35
	877 213 754
	1,844

At every reporting date the historical observed default rates are updated and changes in the forward looking estimates are analyzed. In this case it is forecast that economic conditions will deteriorate over the next year.

On that basis the Company estimated the following provision matrix:

Three-level provision matrix

Payment option 1 Payment option 2 Payment option 3 Total	Default rate 3.9% 2.3% 4%	31.12.2020 877 213 754 1,844	ECL 34 5 30 69	Default rate 0.6% 1% 2%	31.12.2019 628 107 1,404 2,139	ECL
						4 1 33
						38

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Financial instruments (cont.)

4. Impairment of financial assets (cont.)

A reconciliation from the opening balance to the closing balance of the loss allowance

Payment option 1	Payment option 2 Payment option 3	Payment option 2 Payment option 3
12 - (8)	3 - (2) 1 4 5	91 (91) 33
4 30		33 (3)
34		30

(*) The changes in the ECL estimation was derived mainly from the Company’s reevaluation of its credit risk policy and the determination that was made based on reasonable and supportable information (i.e extended positive credit history from relevant customers in payment option 3, which were new in 2017), that a more lagging default criterion is more appropriate.

As of December 31, 2020 and December 31, 2019, ECL for trade and other account receivables were $69 and $38, respectively, and as such are not disclosed in the financial assets measurement categories in accordance with IFRS 9.

Intangible assets

Intangible assets include internally generated capitalized software development costs (see also Note 2- Research and development costs). Intangible assets with a finite useful life are amortized over their useful life. The amortization period and the amortization method for an intangible asset are reviewed at least at each year end and adjustments, where applicable, are made on a prospective basis. The carrying amount of these assets is reviewed whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable (see also Note 2-Impairment of non-financial assets).

Subsequent expenditure on capitalized intangible assets is capitalized only where it clearly increases the Economic benefits to be derived from the asset to which it relates. All other expenditure, including that incurred in order to maintain an intangible assets current level of performance, is expensed as incurred.

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Property, plant and equipment

Items of property, plant and equipment are initially recognized at cost. Cost includes directly attributable costs and the estimated present value of any future costs of dismantling and removing items. Depreciation is computed by the straight line method, based on the estimated useful lives of the assets, as follows:

Computers Furniture and equipment Electronic equipment	%
	33 6-15 6-15

Impairment of non-financial assets

Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at the financial year end. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down accordingly.

Research and development costs

Expenditure on research activities is recognized in profit or loss as incurred. Expenditure incurred on development activities including the Company’s development is capitalized where the expenditure will lead to new or substantially improved products and only if all the following can be demonstrated:

The product is technically and commercially feasible.
The Company intend to complete the product so that it will be available for use or sale.
The Company has the ability to use the product or sell it.
The Company has the technical, financial and other resources to complete the development and to use or sell the product.
The Company can demonstrate the probability that the product will generate future economic benefits.
The Company is able to measure reliability the expenditure attributable to the product during the development.

Recognition of costs in the carrying amount of an intangible asset, ceases, when the asset is in the condition necessary for it to be capable of operating in the manner intended by management. Capitalized development costs are amortized on a straight line basis over their estimated useful lives once the development is completed and the assets are in use. Subsequent expenditure on capitalized intangible assets is capitalized only where it clearly increases the economic benefits to be derived from the asset to which it relates. All other expenditure, including that incurred in order to maintain an intangible assets current level of performance, is expensed as incurred. During the years 2020 and 2019 the Company capitalized development costs in the amounts of $572 and $570 thousand dollars, respectively.

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Deferred taxes

Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the estimated timing and level of future taxable profits together with future tax planning strategies. Deferred taxes are recognized in respect of temporary differences between the carrying amounts of assets and liabilities in the financial statements and the amounts attributable for tax purposes. Deferred taxes are measured at the tax rates that are expected to apply in the period when the temporary differences are reversed based on tax laws that have been enacted or substantively enacted at the end of the reporting period. Deferred taxes are recognized in Profit or loss, except when they relate to items recognized in other comprehensive income or directly in equity. Deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is not probable that they will be utilized. In addition, temporary differences (such as carry forward losses) for which deferred tax assets have not been recognized are reassessed and deferred tax assets are recognized to the extent that their recoverability is probable. Any resulting reduction or reversal is recognized on "income tax" within the statement of comprehensive income. All deferred tax assets and liabilities are presented in the statement of financial position as non-current items, respectively. Deferred taxes are offset in the statement of financial position if there is a legally enforceable right to offset a current tax asset against a current tax liability and the deferred taxes relate to the same taxpayer and the same taxation authority.

Current taxes

The current tax liability is measured using the tax rates and tax laws that have been enacted or substantively enacted by the reporting date as well as adjustments required in connection with the tax liability in respect of previous years.

Share based payments

The Company measures the share based listing expense and the cost of equity-settled transaction with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using the Binomial model taking into account the terms and conditions upon which the instruments were granted.

Earnings per share

Earnings per share is calculated by dividing the net profit or loss attributable to owners of the parent by the weighted number of ordinary shares outstanding during the period. Basic earnings per share only include shares that were actually outstanding during the period. Potential ordinary shares (convertible securities such as employee options and warrants) are only included in the computation of diluted earnings per share when their conversion decreases earnings per share or increases loss per share from continuing operations.

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Earnings per share (cont.)

Further, potential ordinary shares that are converted during the period are included in the diluted earnings per share only until the conversion date, and since that date they are included in the basic earnings per share. The Company's share of earnings of investees is included based on the earnings per share of the investees multiplied by the number of shares held by the Company.

Revenue recognition

Revenue is recognized based on the five-step model outlined in IFRS 15, Revenue from Contracts with Customers. The Company only recognizes revenue when collection is reasonably assured. If collection is not considered reasonably assured, revenue is recognized only once all amounts are collected. Revenue is recorded net of trade discounts and volume rebates. If it is probable that discounts will be granted and amounts can be measured reliably, then the discount is recognized as a reduction of revenue as the related sales are recognized. Amounts billed in excess of revenue recognized to date on an arrangement by arrangement basis are classified as deferred revenue, whereas revenue recognized in excess of amounts billed is classified as accrued receivables and included as part of accounts receivable.

The Company offers its technologies on a self-serve basis for indirect agency customers ("Indirect”) or service on top of the technology basis for direct advertisers’ customers ("Direct").

While a direct advertiser customer will utilize the Company’s technologies for its own advertising campaigns, an indirect ad-agency customer will utilize the Company’s technologies for its customers’ advertising campaigns.

For a direct advertiser customer, revenues are recognized as the services rendered based on the media budget managed by the Company during the period. A determination is made to recognize revenue on a gross or net basis based on an assessment of whether the Company is acting as the principal or an agent in the transaction. The Company is acting as the principal in these arrangements and therefore revenue earned and costs incurred are recognized on a gross basis as: (1) The Company bears credit risks related to the media buying, as it is contractually required to pay media channels within a negotiated period of time, regardless of whether the Company’s clients pay the Company on time, or at all. Moreover, in some cases the Company’s clients have or may develop higher-risk credit profiles, which may subject the Company to even greater credit risk especially when the Company’s payment cycles to the media channels is relatively short; (2) The Company has full discretion in establishing the price to its customers and sole control of the Costs of the media buying prices, including the campaigns, accounts and media channels’ budget allocation; (3) The Company has the power to use its own advertising technologies and expertise in order to manipulate the media buying process, which is critical to the fulfillment of the customer deliverables; and (4) The Company holds full responsibility towards its clients with regards to the campaigns management and fulfillment.

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Revenue recognition (cont.)

As for an indirect agency advertiser customer, such arrangements entitle the Company for fees related only to its software products. Revenues are recognized as the services rendered based on the customer's usage of the technology, i.e. the media budget processed through the Company’s platform by the customer, during the period. For both direct and indirect customers payments are due on a recurrent basis at the end of the period. The Company offers its own software products, the three ADCORE advertising platforms (i.e., “Feeditor”,

“ADCORE Views”, and “SEMDOC[2] ) to both direct and indirect customers.

Since the three technological products complete one another by providing a unified comprehensive advertising solution, the vast majority of both types of customer agreements include all the three products together as a package.

The Company did not disclose the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period, as all contracts has an original expected duration of one year or less.

Employee benefits

The Company contributes towards the state pension in accordance with local legislation where required. The only obligation of the Company is to make the required contributions. Costs related to such contributions are expensed in the period in which they are incurred.

The Company has several employee benefit plans as to Israeli employees:

Short-term employee benefits: Short-term employee benefits include salaries, paid annual leave, paid sick leave, recreation and social security contributions and are recognized as expenses as the services are rendered. A liability in respect of a cash bonus or a profit-sharing plan is recognized when the Company has a legal or constructive obligation to make such payment as a result of past service rendered by an employee and a reliable estimate of the amount can be made.
Post-employment benefits: The plans are normally financed by contributions to insurance companies and classified as defined contribution plans or as defined benefit plans.

This liability is calculated based on actuary measurement. Contributions to the defined contribution plan in respect of severance or retirement pay are recognized as an expense simultaneously with receiving the employee's services and no additional provision is required in the financial statements except for the unpaid contribution. The Company also operates for some employees an immaterial defined benefit plan in respect of severance pay pursuant to the Severance Pay Law.

The Company present the accrued severance pay liability net from severance pay fund.

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

New standards, interpretations and amendments not yet effective

The Company has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

IAS - 1 Presentation of Financial Statements

In January 2020, the IASB issued amendments to IAS 1, which clarify the criteria used to determine whether liabilities are classified as current or non-current. These amendments clarify that current or non-current classification is based on whether an entity has a right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period. The amendments also clarify that ‘settlement’ includes the transfer of cash, goods, services, or equity instruments unless the obligation to transfer equity instruments arises from a conversion feature classified as an equity instrument separately from the liability component of a compound financial instrument. The amendments are effective for annual reporting periods beginning on or after January 1, 2022. However, in May 2020, the effective date was deferred to annual reporting periods beginning on or after January 1, 2023.

NOTE 3 - CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS:

The areas requiring the use of estimates and critical judgments that may potentially have a significant impact on the Company's earnings and financial position are the recognition and amortization of development costs and the useful life of property and equipment and income tax.

Revenue Recognition

For revenue from direct advertiser customers, management's judgement is applied regarding the determination of whether the Company is a principal or agent to the transactions. In making, this judgement, management places significant weight on the fact: (1) The Company bears credit risks related to the media buying, as it is contractually required to pay media channels within a negotiated period of time, regardless of whether the Company’s clients pay the Company on time, or at all. Moreover, in some cases the Company’s clients have or may develop higher-risk credit profiles, which may subject the Company to even greater credit risk especially when the Company’s payment cycles to the media channels is relatively short;, (2) The Company has full and sole control of the Cost per Click or Cost per Impression of the media buying prices, including the campaigns, accounts and media channels’ budget allocation. (3) The Company has the power to use its own advertising technologies and expertise in order to manipulate the media buying process, which is critical to the fulfillment of the customer deliverables. And (4) The Company holds full responsibility towards its clients with regards to the campaign’s management and fulfillment.

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 3 - CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT.):

Revenue Recognition (cont.)

The Company considered to the extent of Reporting Revenue "Gross versus Net" that it applies to the Company's revenue arrangements and concluded that the Company acts as the principal in these arrangements and therefore reports revenue earned and costs incurred related to these transactions on a gross basis.

Taxes on income

The Company recognized tax- related assets and liabilities based on the Company's current understanding of tax laws as applied to the Company's circumstances. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current, deferred tax provisions and uncertain tax positions in the period in which such determination is made.

Amortization of capitalized development costs and the useful life of property and equipment

Intangible assets and property and equipment are amortized or depreciated over their useful lives. Useful lives are based on management's estimates of the period that the assets will generate revenue, which are periodically reviewed for continued appropriateness. Changes to estimates can result in significant variations in the amounts charged to the statement of comprehensive income in specific periods.

Intangible assets with a finite useful life are amortized over their useful life and reviewed for impairment whenever there is an indication that the assets may be impaired. The amortization period and the amortization method for an intangible asset are reviewed at least at each year end.

Share based payments

The Company has a share based plan for its employees. The estimated fair value of share options is determined using the binomial model and Black Scholes model. Inputs to the model are subject to various estimates related to volatility, interest rates, dividend yields and expected life of the stock options issued. Fair value inputs are subject to market factors, as well as internal estimates (see also Note 8C).

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 4 - PROPERTY, PLANT AND EQUIPMENT, NET:

Cost: As of January 1, 2020 Additions Disposals As of December 31, 2020 Accumulated depreciation: As of January 1, 2020 Additions Disposals As of December 31, 2020 Net Book Value: As of December 31, 2020 Cost: As of January 1, 2019 Additions Disposals As of December 31, 2019 Accumulated depreciation: As of January 1, 2019 Additions Disposals As of December 31, 2019 Net Book Value: As of December 31, 2019		Right of use	Computers	Furniture and equipment	Furniture and equipment		Electronic equipment		Total
		168 206 - 374 84 84 - 168 206 Right of use	147 23 - 170 120 19 - 139 31 Computers	183 9 - 192 45 11 - 56 136 Furniture and equipment			60 6 - 66 40 7 - 47 19 Electronic equipment		558 244 - 802 289 121 - 410 392 Total
		- 168 - 168 - 84 - 84 84	132 15 - 147 107 13 - 120 27		119 64 - 183 36 9 - 45 138		54 6 - 60 33 7 - 40 20		305 253 - 558 176 113 - 289 269

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 5 - INTANGIBLE ASSETS, NET:

Cost: At January 1, 2019 Additions At December 31, 2019 Additions At December 31, 2020 Accumulated depreciation: At January 1, 2019 Additions At December 31, 2019 Additions At December 31, 2020 Net book value at December 31, 2020 Net book value at December 31, 2019 NOTE 6 - OTHER ACCOUNTS PAYABLE: Employees related liabilities Institutions Controlling shareholder Other		Software-Internally generated capitalized development costs 1,337 570 1,907 572 2,479 244 191 435 376 811 1,668 1,472 December 31, 2020 December 31, 2019	Software-Internally generated capitalized development costs 1,337 570 1,907 572 2,479 244 191 435 376 811 1,668 1,472 December 31, 2020 December 31, 2019	Software-Internally generated capitalized development costs 1,337 570 1,907 572 2,479 244 191 435 376 811 1,668 1,472 December 31, 2020 December 31, 2019
		462 150 90 106 808		391 335 223 158 1,107

NOTE 6 - OTHER ACCOUNTS PAYABLE:

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 7 - LONG TERM LOAN:

Government grant

Following the Israeli government’s decision to establish a dedicated loan fund to help deal with the impact of the COVID-19 pandemic on small and medium-sized businesses in Israel, in May 2020 the Company signed an agreement to receive a long-term loan for the amount of $187 from Bank Hapoalim (the “Loan”).

According to the terms of the Loan: (i) principal payments will be deferred for twelve months from the funding date, and the Company will start paying the principal payments from the second year of the Loan; (ii) interest payments will be paid by the government for the first twelve months from the funding date, and the Company will start paying the interest payments from the second year of the Loan; (iii) other than a 5% deposit, no collateral or personal guarantees are required; (iv) the Loan is guaranteed by the Israeli government; and (v) the Loan has a maturity of five years and an interest rate of Prime +1.5%.

NOTE 8 – SHAREHOLDERS' EQUITY:

A. The common shares in the Company confer upon their holders the right to receive notice, to participate and vote in general meetings of the Company and the right to receive dividends, if and when declared.
B. The number of authorized common shares for the years ended December 31, 2020 and 2019 was an unlimited amount of common shares.
C. Share based compensation:
On May 27, 2019, Albert Bentov exercised 4,756,700 options of Adcore Inc. to 4,756,700 ordinary shares of Adcore Inc.
On May 16, 2019, County approved a share option plan (the “Plan”). Under the plan, the Company granted on May 29, 2019 1,950,000 options with a CAD$0.50 exercise price per share to its directors, officers, employees and consultants, the options will expire 4 years from issuance. The Company has applied a Black-Scholes option-pricing model to determine the fair value of options. The fair value of options was applied the Black Scholes model. Under the following inputs: Risk free rate: 1.52%, expected volatility: 66%, expected term: 4 years, expected dividend yield: 0%, p.a.
On July 4, 2019, the Company granted 250,000 options with a CAD$0.50 exercise price per share to one of its employees and to one of its consultants, the options will expire 4 years from issuance. The Company has applied a Black-Scholes option-pricing model to determine the fair value of options. Under the following inputs: Risk free rate: 1.39%, expected volatility: 66%, expected term: 4 years, expected dividend yield: 0%, p.a.
On September 2, 2019, the Company granted 208,333 options with a CAD$0.48 exercise price per share to one of its employees, the options will expire 4 years from issuance. The Company has applied a Black-Scholes option-pricing model to determine the fair value of options. Under the following inputs:

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 8 – SHAREHOLDERS' EQUITY (CONT.):

C. Share based compensation (cont.):

Risk free rate: 1.39%, expected volatility: 66%, expected term: 4 years, expected dividend yield: 0%, p.a.

On June 2, 2020, the Company granted 780,000 options with a CAD$0.60 exercise price per share to its directors, officers, employees and consultants, the options will expire 4 years from issuance. The Company has applied a Black-Scholes option-pricing model to determine the fair value of options. Under the following inputs: Risk free rate: 0.72%, expected volatility: 66%, expected term: 4 years, expected dividend yield: 0%, p.a.
On August 18, 2020, the Company granted 100,000 options with a CAD$0.64 exercise price per share to its employees the options will expire on August 15, 2024. The Company has applied a Black-Scholes option-pricing model to determine the fair value of options. Under the following inputs: Risk free rate: 1.7%, expected volatility: 66%, expected term: 4 years, expected dividend yield: 0%, p.a.

The following table reflects the activity with respect to options of the Company for the year ended December 31, 2020 compared to the year ended December 31, 2019:

Year ended December 31, 2020 Year ended December 31, 2019 Number of options Weighted average Exercise price Number *of options () Weighted average Exercise price ()* 7,569,081 CAD 0.26 9,517,448 CAD 0.06 - - (4,756,700) CAD 0.00 880,000 CAD 0.65 2,958,333 CAD 0.49 (375,000) CAD 0.47 - - (330,000) CAD 0.53 (150,000) CAD 0.50 7,744,081 CAD 0.28 7,569,081 CAD 0.26 6,606,998 CAD 0.23 4,760,748 CAD 0.12	Year ended December 31, 2020 Year ended December 31, 2019 Number of options Weighted average Exercise price Number *of options () Weighted average Exercise price ()* 7,569,081 CAD 0.26 9,517,448 CAD 0.06 - - (4,756,700) CAD 0.00 880,000 CAD 0.65 2,958,333 CAD 0.49 (375,000) CAD 0.47 - - (330,000) CAD 0.53 (150,000) CAD 0.50 7,744,081 CAD 0.28 7,569,081 CAD 0.26 6,606,998 CAD 0.23 4,760,748 CAD 0.12	Year ended December 31, 2020 Year ended December 31, 2019 Number of options Weighted average Exercise price Number *of options () Weighted average Exercise price ()* 7,569,081 CAD 0.26 9,517,448 CAD 0.06 - - (4,756,700) CAD 0.00 880,000 CAD 0.65 2,958,333 CAD 0.49 (375,000) CAD 0.47 - - (330,000) CAD 0.53 (150,000) CAD 0.50 7,744,081 CAD 0.28 7,569,081 CAD 0.26 6,606,998 CAD 0.23 4,760,748 CAD 0.12
Number of options
7,569,081 - 880,000 (375,000) (330,000)	CAD 0.26 - CAD 0.65 CAD 0.47 CAD 0.53 CAD 0.28 CAD 0.23	9,517,448 (4,756,700) 2,958,333 - (150,000) 7,569,081 4,760,748
7,744,081 6,606,998

(*) After giving affect to the Podium Split. The price translated from NIS to CAD.

During the years ended December 31, 2020 and 2019, the Company recorded expenses in the amount of $422 and $167 thousand, respectively.

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 8 – SHAREHOLDERS' EQUITY (CONT.):

C. Share based compensation (cont.):

Restricted Share Units

Following the Company’s shareholder’s approval of the Restricted Share Unit Plan (the “RSU Plan”) on June 29, 2020:

On July 9, 2020, the Company approved an aggregate grant of 641,666 Restricted Share Units (“RSUs”) to directors and senior officers of the Company pursuant to the RSU Plan. Each vested RSU entitles the holder to receive one common share of the Company for a period of 4 years.
On August 18, 2020 the Company approved an aggregate grant of 52,500 RSUs to employees and senior officers of the Company pursuant to the RSU Plan. Each vested RSU entitles the holder to receive one common share of the Company for periods ranging between 3 and 4 years.

The following table reflects the activity with respect to RSUs of the Company for the year ended December 31, 2020 compared to the year ended December 31, 2019:

Outstanding at beginning of year Granted Exercised Forfeited and cancelled Outstanding at end of year Exercisable RSUs	Year ended December 31, 2020 Year ended December 31, 2019 Number of RSUs Weighted average Exercise price Number of RSUs Weighted average Exercise price - CAD 0 - - 694,166 CAD 0 - - (391,666) CAD 0 - - - CAD 0 - - 302,500 CAD 0 - - 24,375 CAD 0 - -	Year ended December 31, 2020 Year ended December 31, 2019 Number of RSUs Weighted average Exercise price Number of RSUs Weighted average Exercise price - CAD 0 - - 694,166 CAD 0 - - (391,666) CAD 0 - - - CAD 0 - - 302,500 CAD 0 - - 24,375 CAD 0 - -	Year ended December 31, 2020 Year ended December 31, 2019 Number of RSUs Weighted average Exercise price Number of RSUs Weighted average Exercise price - CAD 0 - - 694,166 CAD 0 - - (391,666) CAD 0 - - - CAD 0 - - 302,500 CAD 0 - - 24,375 CAD 0 - -
	Number of RSUs	Weighted average Exercise price Number of RSUs
	- 694,166 (391,666) - 302,500 24,375	CAD 0 CAD 0 CAD 0 CAD 0 CAD 0 CAD 0	- - - - - -

D. Private Placement:

Immediately prior to the completion of the Transaction, Podium completed a private placement of subscription receipts (“Subscription Receipts”) at a price of CAD$ 0.50 per Subscription Receipt for gross proceeds of CAD$ 2,558,500 (approximately 1.9 million) (the “Private Placement”). Pursuant to the terms of a Subscription Receipt Agreement entered into upon closing of the Private Placement, each Subscription Receipt automatically converted into one unit of securities of Podium (a “Unit”) composed of one ordinary share (as constituted after giving effect to the Podium Split) and one-half of one warrant (each whole such warrant, a “Warrant”) immediately before the Securities Exchange.

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 8 – SHAREHOLDERS' EQUITY (CONT.):

D. Private Placement (cont.):

Each whole such Warrant is exercisable into one ordinary share of Podium (as constituted on a post-Podium Split basis) at a price of CAD$ 0.75 for a period of 24 months following issuance. WD Capital Markets Inc. was engaged as Agent on the Private Placement on a best-efforts basis (the “Agent”). Podium paid the Agent a cash commission equal to 7% of the gross proceeds of the Private Placement and issued to the Agent warrants (“Broker Warrants”) entitling the Agent to acquire the number of Units that is equal to 7% of the number of Subscription Receipts sold under the Private Placement at $0.50 per Unit. Additionally, Podium and County agreed to pay a corporate finance fee of $25 to the Agent, and Podium paid the Agent’s reasonable expenses, including legal fees.

Pursuant to the Transaction, ordinary shares of Podium, Warrants, and Broker Warrants issued in connection with the Private Placement were exchanged for common shares of County (as constituted on a postConsolidation basis), warrants and broker warrants of County, on a 1:1 basis.

The Broker Warrants were accounted for as a Share-based compensation as part of issuance costs and were deducted from additional paid capital.

NOTE 9 – REVERSE TAKE OVER:

Completion of the Qualifying Transaction with County

On March 12, 2019, Podium entered into a letter of intent with County, a capital pool company, for completing the Transaction that will result in a reverse take-over of County by the security holders of Podium. On April 18, 2019, Podium, the shareholder of Podium, and County entered into a securities exchange agreement, the Definitive Agreement. The Definitive Agreement provided for the acquisition of all of the outstanding equity interests of Podium by County in a transaction in which the security holders of Podium received securities of County. As a result, County became the sole registered and beneficial owner of all of the outstanding securities of Podium, and Podium became a wholly-owned subsidiary of County.

Pursuant to the Definitive Agreement, among other things: (a) County consolidated its common shares on a 4.5738:1 basis (the “Consolidation”); (b) Podium subdivided its ordinary shares, par NIS 0.01 on a 1:4,048.2552 basis, into ordinary shares having a par value of NIS 0.0000024702, (the “Podium Split”); (c) County acquired all issued and outstanding ordinary shares of Podium (on a post-Podium Split basis) in consideration for the issuance of one County common share (on a post-Consolidation basis) for each ordinary share of Podium and all outstanding securities convertible into ordinary shares of Podium were exchanged for an equal number of securities convertible into common shares of County of like tenor and effect (the “Securities Exchange”); and (e) County changed its name to “Adcore Inc.”.

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 9 – REVERSE TAKE OVER (CONT.):

Completion of the Qualifying Transaction with County (cont.)

The Transaction constituted the “qualifying transaction” of County under Policy 2.4 – Capital Pool Companies of the TSX Venture Exchange (the “TSXV”). Podium resulting from the Transaction has continued the business of Podium under the name “Adcore Inc.”, is a reporting issuer British Columbia, Alberta, and Ontario, and is listed on the TSXV as a Tier 1 technology issuer. Current shareholders of Podium acquired 40,482,552 post-Consolidation common shares of County at a deemed value of CAD$0.50 per share, representing 80% of the common shares of County (undiluted) as constituted upon completion of the Transaction and the Private Placement. The Transaction was accounted for as a reverse take-over.

The Transaction was approved by the shareholders of Podium and County, and the TSXV, and all other waivers or other conditions precedent contained in the Definitive Agreement, including completion of the Private Placement were satisfied.

The fair value of the consideration is as follows:

The fair value of the consideration is as follows:
	27/05/2019
Fair value of common shares(22,869,000 shares at CAD$0.10per share)

Total fair value of consideration	1,701
Less: Net assets of County	(833)
Listingexpense	868

For accounting purposes, Podium is considered the accounting acquirer and County is considered the acquired company. Since County's operations do not constitute a business, the acquisition of County is not a business combination pursuant to IFRS 3 and the transaction is accounted for as a reverse takeover of the publicly traded company. The reverse takeover will be accounted for under IFRS 2 Share-based Payments.

Accordingly, the acquisition of County is accounted at the fair value of the consideration transferred by the accounting acquirer, which is the fair value of the equity instruments of Podium would have had to issue to the owners of County to effect the transaction. The difference between the net assets acquired and the fair value of the consideration granted will be treated as a listing expense.

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 10 - REVENUES:

A. Geographic Areas Information divided by revenue streams:

The following present the total revenues for the years ended December 31, 2020 and 2019:

Direct North America APAC EMEA Indirect North America APAC EMEA Total	For the year ended December 31,	For the year ended December 31,
	2020	2019
	3,728 7,521 1,774 3,804 133 37 16,997	231 3,657 1,681 5,422 22 288 11,301

B. Major customers (as percentage of total revenues):

B. Major customers (as percentage of total revenues):
Customer A Customer B Customer C NOTE 11 - COST OF REVENUES: Media costs Salary and related expenses Others Total	Year ended December 31,
	2020	2019
	%	%
	20% 43% 20% - 17% - 57% 43% Yearended December 31,	43% - -
		43%
	2020	2019
	9,601 725 (185) 10,141	3,108 724 176 4,008

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 12 – SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:

Salary and related expenses Marketing expenses Professional services Office supplies Share-based compensation Depreciation Change in doubtful debts Others Total		Year ended December 31, 2020	Year ended December 31, 2019
		1,977 1,490 316 306 293 219 24 80 4,705	1,645 908 229 178 137 202 (37) (19) 3,243

NOTE 13 – FINANCIAL EXPENSES:

NOTE 13 – FINANCIAL EXPENSES:
Warrant revaluation Currency Translation differences Bank fees and Credit cards Others Total		Year ended December 31, 2020	Year ended December 31, 2019
		523 120 44 14 701	- 288 74 7 369

NOTE 14 - TAXES ON INCOME:

A. Tax rate applicable in Israel:

Israeli corporate tax rates are 23% in 2020 and 23% in 2019.

On December 2016, the Israel government published the Economic Efficiency Law (2016) (legislative amendments to accomplish budget goals for the years 2017 and 2018) According to which, in 2017 the tax rate will decrease by 1% and starting 2018 by 2%; so that the tax rate will be 24% in 2017 and 23% in 2018 and onwards. Accordingly, the tax rate will be 24% in 2017 and 23% in 2018 and onwards.

B. Preferred technological plant:

In January 1, 2017 a new section was issued to the Investments Law relating to preferred technological income. The section is applicable to industrial companies that apply further preferred enterprise criteria. Accordingly, the Company is entitled for the benefit and therefore is subjected to a corporate tax rate of 12% commencing 2017.

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 14 - TAXES ON INCOME (CONT.):

C. Tax reconciliation:

Profit (Loss) before tax Corporate statutory tax rate Theoretical tax charge at applicable corporate statutory rate Effect of beneficial tax rate Others Income tax expenses (recovery)	2020 492) ( 23% 113) (54) 47 (106)	2019
		1,674 23%
		385 (184) 155
		356

D. Provision for Taxes:

rovision for Taxes:
Current year tax Deferred tax Previous year tax	Year ended December 31,
	2020 - (106) - (106)	2019
		305 59 (8)
		356

E. Deferred tax liabilities:

Deferred tax liabilities reflect the net tax effects of temporary differences between the carrying amounts of

assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The

Company’s deferred tax liabilities resulting from temporary differences are as follows:

Internally capitalized development costs Accrued severance pay, net Tax loss carryforward Provision for vacation Total deferred tax liabilities, net	December 31, 2020 (226) 14 132 5 (75)	December 31, 2020 (226) 14 132 5 (75)	December 31, 2019	December 31, 2019
		(226) 14 132 5 (75)		(165) (18) 13 (170)

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 15 - RELATED PARTIES AND SHAREHOLDERS:

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party’s making of financial or operational decisions, or if both parties are controlled by the same third party. The Company has transactions with key management personal.

The following transactions arose with related parties:

Transaction	For the Years ended December 31, 2020 2019	For the Years ended December 31, 2020 2019
Management fee to CEO and controlling shareholder Liabilities to related parties: Transaction	413 477 For the Years ended December 31, 2020 2019
Controlling shareholder	90	223

NOTE 16 - FINANCIAL INSTRUMENTS AND RISK MANAGEMENT:

The Company is exposed to a variety of financial risks, which result from its financing, operating and investing activities. The objective of financial risk management is to contain, where appropriate, exposures in these financial risks to limit any negative impact on the Company's financial performance and position. The Company's financial instruments are its cash, marketable securities, trade and other receivables, payables, other payable. The Company actively measures, monitors and manages its financial risk exposures by various functions pursuant to the segregation of duties and principals.

The risks arising from the Company's financial instruments are mainly credit risk and currency risk. The risk management policies employed by the Company to manage these risks are discussed below.

Credit risk:

Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the balance sheet date. The Company closely monitors the activities of its counterparties and controls the access to its intellectual property which enables it to ensure the prompt collection of customers’ balances.

The Company's main financial assets are cash and cash equivalents and trade accounts receivable and represent the Company's maximum exposure to credit risk in connection with its financial assets. Wherever possible and commercially practical the Company holds cash with major financial institutions in North America and EMEA.

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 16 - FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONT.):

Credit risk (cont.):

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

Cash and cash equivalents Trade accounts receivable (indirect) Trade accounts receivable (direct) Total	December 31, 2020 8,763 402 1,394 10,559	December 31, 2019	December 31, 2019
			3,710 1,672 467 5,849

Currency risk:

Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercial transactions and recognized assets and liabilities are denominated in a currency that is not the Company's functional currency. The Company is exposed to foreign exchange risk arising from various currency exposures primarily with respect to the New Israeli Shekel. The Company’s policy is not to enter into any currency hedging transactions. The carrying amounts of the Company's foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:

	December	31, 2020
CAD 504 10 514	AUD 29 54 83	HKD 21 90 111	Total
			919 270
			1,189

	December 31, 2020	December 31, 2020
CAD - 77 27 104 410	AUD - 5 166 171 (88)	HKD - 476 25 501 (390)	Total
			68 558 808
			1,434
			(245)

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 16 - FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONT.):

Currency risk (cont.):

	December 31, 2019
CAD 1,439 37 1,476	AUD HKD 444 - 68 - 512 - December 31, 2019	Total
		1,947 280
		2,227

		Total
		59 98 1,022
		1,179
		1,048

Sensitivity analysis:

A 10% strengthening of the United States Dollar against the following currencies would have increased (decreased) equity and the income statement by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. For a 10% weakening of the United States Dollar against the relevant currency, there would be an equal and opposite impact on the profit and other equity.

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 16 - FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONT.):

Liquidity risks:

Liquidity risk is the risk that arises when the maturity of assets and the maturity of liabilities do not match. An unmatched position potentially enhances profitability, but can also increase the risk of loss.

The Company has procedures with the object of minimizing such loss by maintaining sufficient cash and other highly liquid current assets and by having an available adequate amount of committed credit facilities. The following tables detail the Company's remaining contractual maturity for its financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

which the Company can be required to pay.
Trade accounts payable Other accounts payable	December 31, 2020 2,881 808 3,689	December 31, 2019
		540 1,107
		1,647

Capital management

The Company considers its capital to be comprised of shareholders’ equity. The Company’s objectives in managing its capital are to maintain its ability to continue as a going concern and to further develop its business. To effectively manage the Company’s capital requirements, the Company has a planning and budgeting process in place to meet its strategic goals. In order to facilitate the management of its capital requirements, the Company prepares expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions.

Management reviews the capital structure on a regular basis to ensure the above objectives are met. There have been no changes to the Company’s approach to capital management during the year ended December 31, 2020. There are no externally imposed restrictions on the Company’s capital.

Total liabilities Less: cash and cash equivalents Net debt Less: dividend to pay Adjusted net debt Total equity Adjusted net debt to equity ratio	2020 5,851 8,763 (2,912) - (2,912) 6,885 (0.4)	2019
		2,174 3,710
		(1,536) -
		(1,536) 5,582
		(0.3)

AI assistant

ADCORE Inc. — Annual Report 2020

47658_rns_2021-03-30_760135a2-4cc4-4b25-8c59-264753b36867.pdf

ADCORE INC.

ADCORE INC.

CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2020

TABLE OF CONTENTS

INDEPENDENT AUDITORS' STATEMENT

TO THE SHAREHOLDERS OF

ADCORE INC.

Basis for Opinion

Key Audit Matters

Recognition of Revenues

How the matter was addressed in our audit

Other Information

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditor’s responsibilities for the Audit of the Consolidated Financial Statements

ADCORE INC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

ADCORE INC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

ADCORE INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(US Dollar in thousands)

ADCORE INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(US Dollar in thousands)

ADCORE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(US Dollar in thousands)

ADCORE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

APPENDIX A - AMOUNT PAID DURING THE PERIOD FOR:

APPENDIX B - REVERSE TAKE OVER:

ADCORE INC.

(US Dollars in thousands)

NOTE 1 - GENERAL:

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 1 - GENERAL (CONT.):

COVID -19

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:

Basis of preparation

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Basis of preparation (cont.)

Basis of consolidation

Estimates and assumptions

Foreign currency

Cash and cash equivalents

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Use of estimates and assumptions in the preparation of the financial statements

Fair value measurement

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Fair value measurement (cont.)

Financial instruments

1. Financial assets

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Financial instruments (cont.)

1. Financial assets (cont.)

2. Financial Liabilities

3. De-recognition

4. Impairment of financial assets

ADCORE INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(US Dollar in thousands)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Financial instruments (cont.)

ADCORE Inc. Annual Report 2020