ADCORE Inc. — Interim / Quarterly Report 2021

Nov 10, 2021

ADCORE INC.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2021

UNAUDITED

ADCORE INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS AS OF SEPTEMBER 30, 2021

TABLE OF CONTENTS

Unaudited Interim Condensed Consolidated Statements of Financial Position Unaudited Interim Condensed Consolidated Statements of Comprehensive Income (Loss) Unaudited Interim Condensed Consolidated Statements of Changes in shareholders' equity Unaudited Interim Condensed Consolidated Statements of Cash Flows Notes to the Unaudited Interim Condensed Consolidated Financial Statements	**Page **
	2 3 4 5-6 7-14

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ADCORE INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS

OF FINANCIAL POSITION

Note 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 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 3 Lease liability Long term loan 6 Total non-current liabilities SHAREHOLDERS' EQUITY: 3 Share capital Additional paid in capital Actuarial reserve Retained earnings Total Equity TOTAL LIABILITIES AND EQUITY * Represents an amount lower than $ 1 thousand. “Omri Brill” “Roy Nevo” Omri Brill Director Roy Nevo Director	Note 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 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 3 Lease liability Long term loan 6 Total non-current liabilities SHAREHOLDERS' EQUITY: 3 Share capital Additional paid in capital Actuarial reserve Retained earnings Total Equity TOTAL LIABILITIES AND EQUITY * Represents an amount lower than $ 1 thousand. “Omri Brill” “Roy Nevo” Omri Brill Director Roy Nevo Director	September 30, 2021	September 30, 2021	December 31, 2020
			US $ in thousands
			12,173 8,763 2,925 1,775 138 66 15,236 10,604 28 72 269 392 1,894 1,668 2,191 2,132 17,427 12,736 4,449 2,881 409 808 - 997 52 105 4,910 4,791 51 50 223 75 985 647 - 101 - 187 1,259 1,060 10,009 4,771 (83) (83) 1,332 2,197 11,258 6,885 17,427 12,736 November 09, 2021 Date of approval of the financial statements
	Omri Brill Director Roy Nevo Director

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

ADCORE INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS

OF COMPREHENSIVE INCOME

Revenues Cost of revenues Gross profit Research and development expenses Selling , general and administrative expenses Operating profit Finance expenses Finance income Profit (Loss) before taxes on income Tax expenses Total comprehensive Profit (Loss) for the period Basic Profit (Loss) per share attributable to shareholders Diluted Profit (Loss) per share attributable to shareholders Weighted average number of ordinary shares Weighted average number of dilutive ordinary shares	Note 4 3	Three months ended September 30, 2021 Three months ended September 30, 2020 Nine months ended September 30, 2021	Three months ended September 30, 2021 Three months ended September 30, 2020 Nine months ended September 30, 2021	Three months ended September 30, 2021 Three months ended September 30, 2020 Nine months ended September 30, 2021	Three months ended September 30, 2021 Three months ended September 30, 2020 Nine months ended September 30, 2021	Three months ended September 30, 2021 Three months ended September 30, 2020 Nine months ended September 30, 2021	Nine months ended September 30, 2020	Nine months ended September 30, 2020
				$ in thousands*
			8,275 3,023 6,408 1,199 1,867 1,824 274 245 1,571 1,053 22 526 187 114 - (58) (165) 470 89 171 (254) 300 (0.004) 0.005 (0.004) 0.005 63,193,570 55,929,410 63,193,570 59,717,532			20,776 14,713 6,057 7 90 4,903 247 733 (120) (360) 505 (865) (0.014) (0.014) 60,357,349 60,357,349

• Except for EPS & number of shares.

3

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

ADCORE INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

For the nine months period ended September 30, 2021:

Balance at January 1, 2021 (Audited) Changes during the period: Share-based compensation Exercise of options Exercise of warrants Exercise of RSUs Issuance of shares, net Comprehensive income for the period Balance at September 30, 2021 (Unaudited)	Number of Shares	Share capital	Additional paid in capital	Actuarial reserve	Retained **earnings **	Total Shareholders' equity
			$ In thousands**
	56,329,336 - 720,000 2,957,609 364,500 3,100,000 - 63,471,445	- - - - - -	4,771 686 271 1,707 - 2,574 - 10,009	(83) - - - - - - (83)	2,197 - - - - - (865) 1,332	6,885 686 271 1,707 - 2,574 (865) 11,258

For the nine months period ended September 30, 2020:

Balance at January 1, 2020 (Audited) Changes during the period: Share-based compensation Exercise of options Exercise of warrants Comprehensive income for the period Balance at September 30, 2020 (Unaudited)	Number of Shares	Share capital	Additional paid in capital	Actuarial reserve	Retained **earnings **	Total Shareholders' equity
			$ In thousands**
	55,356,253 - 285,000 171,674 - 55,812,927	- - - -	4,128 138 96 78 - 4,440	(95) - - - - (95)	1,549 - - - 671 2,220	5,582 138 96 78 671 6,565

• Represents an amount lower than $ 1 thousand.

** Except for number of shares.

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

ADCORE INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

CASH FLOWS FROM OPERATING ACTIVITIES: Net profit (loss) for the period Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization Share based compensation Increase in trade accounts receivable Increase (decrease) in other accounts receivable Increase (decrease) in deferred tax liability, net Increase (decrease) in trade accounts payable Increase (decrease) in other accounts payable Increase in long term deposit Revaluation of derivative-warrants Decrease in accrued severance pay, net Decrease in deferred revenues Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment Decrease in long term deposit Capitalized development cost Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Exercise of warrants, net Exercise of options, net Issuance of shares and warrants, net Payments and interest of lease liabilities Increase (decrease) in long term loan Net cash provided financing activities Exchange rate differences on cash and cash equivalents Increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at the end of the period	Nine months ended September 30, 2021 Unaudited	Nine months ended September 30, 2021 Unaudited	Nine months ended September 30, 2020 Unaudited	Nine months ended September 30, 2020 Unaudited
		US $ In thousands
		(865) 487 686 (1,150) 11 148 1,568 (399) - (120) 1 (997) (630) (94) 44 (612) (662) 1,707 271 3,032 (121) (187) 4,702 - 3,410 8,763 12,173		671 354 138 (147) 78 (1) (38) 81 (9) (28) (2) - 1,097 (22) - (405) (427) 174 - - (146) 173 201 1 872 3,710 4,582

5

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

ADCORE INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

APPENDIX A - AMOUNT PAID DURING THE PERIOD FOR:

PENDIX A - AMOUNT PAID DURING THE PERIOD	FOR:
Tax Interest on lease liabilities	Nine months ended September 30, 2021	Nine months ended September 30, 2020
	Unaudited
	US $ In thousands
	501 96 3 5

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

ADCORE INC.

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS

(US $ in thousands)

NOTE 1 - GENERAL:

• A. Adcore Inc. (the “Company” or “Adcore”), a reporting issuer listed on the TSX trading under the symbol ADCO.TO, is the sole shareholder of Podium Advertising Technologies Ltd. (“Podium”), Adcore Australia Pty (“Adcore AU”) and Adcore East Limited (“Adcore East”), which holds Adcore China (“Adcore CH”). 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.TO”.

B. 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. The Company experienced significant increases in its existing clients’ online spending (same store growth) and in its acquisition of new direct clients across all regions.

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ADCORE INC.

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS

(US $ in thousands)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:

The significant accounting policies followed in the preparation of the condensed interim financial statements, on a consistent basis, are:

Basis of preparation

These unaudited interim condensed consolidated financial statements of the Company are for the nine months ended September 30, 2021 and presented in US dollar, which is the presentation and functional currency of the Company. These unaudited interim condensed consolidated financial statements have been prepared in accordance with the requirements of International Accounting Standard IAS 34 "Interim Financial Reporting". They do not include all the information required in annual financial statements in accordance with IFRS, and should be read in conjunction with the financial statements of the Company for the year ended December 31, 2020.

These unaudited interim condensed consolidated financial statements have been prepared in accordance with the same accounting policies adopted in the last annual financial statements of the Company for the year ended December 31, 2020.

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 condensed interim 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, revenues and expenses. These estimates and underlying assumptions are reviewed regularly. Changes in accounting estimates are reported in the period of the change in estimate.

The key assumptions made in the condensed interim financial statements concerning uncertainties at the end of the reporting period and the critical estimates used by the Company that may result in a material adjustment to the carrying amounts of assets and liabilities are discussed below.

Warrants

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 of 0.31% and the expected term range of 2 years. During the three and nine months ended September 30, 2021, 0 and 2,957,609 warrants were exercised, respectively, with an exercise price between CAD 0.5 to CAD 0.75.

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NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL

ADCORE INC.

STATEMENTS

(US $ in thousands)

NOTE 3 - 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. On June 17, 2021, the Company announced the closing of a marketed offering (the “Offering”) of units (the “Units”). The Company issued 3,100,000 Units at CAD $1.33 (approx. USD $1.08) per Unit (the “Offering Price”) for gross proceeds of CAD $4,123,000 (approx. USD $3,349,310). Each Unit consists of one common share of the Company (a “Common Share”) and one-half of one common share purchase warrant (each whole purchase warrant, a “Warrant”). Each Warrant is exercisable into one Common Share for a period of 24 months from the closing of the Offering at an exercise price of CAD $1.80 (approx. USD $1.46).

According to IFRS 9 and IAS 32, the allocation is based on the following hierarchy :

1. Derivative and other financial instruments measured at fair value through their contractual life.

2. Financial liabilities and other complex instruments which are not recognized at fair value.

3. Equity instruments .

4. C. In accordance with IAS 32, because the exercise prices of new warrants issued, are not a fixed amount as they are denominated in a currency (Canadian dollar) other than the Company’s functional currency (U.S. dollar), the warrants are accounted for as a derivative financial liability. Each Warrant Liability is initially measured at fair value and subsequent changes in fair value are recorded through Net and Comprehensive Loss for the year. The fair value of these warrants was determined initially using a comparable warrant quoted in an active market, adjusted for differences in the terms of the warrant.

5. D. The Warrants were categorized as level 3. As of September 30, 2021, the warrant's fair value measurement was USD 985 thousand. 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 of 0.31% and the expected term range of 2 years. For further information see note 3C.

E. Share based compensation:

Options

Between June 2, 2020 and September 29, 2021, the Company granted 2,372,000 options with a CAD$0.65CAD$2.75 exercise price per share to its directors, officers, employees and consultants. the options will vest between 0 and 36 months and will expire within 4 years from the 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.

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ADCORE INC.

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(US $ in thousands)

NOTE 3 – SHAREHOLDERS' EQUITY (CONT.):

C. Share based compensation (cont.):

Options (Cont.)

The following table reflects the activity with respect to options of the Company for the nine months ended

September 30, 2021 compared to the nine months ended September 30, 2020:

Outstanding at beginning of year Granted Exercised Forfeited and cancelled Outstanding at end of period Exercisable options	Nine months ended September 30, 2021 Nine months ended September 30, 2020 Number of options Weighted average Exerciseprice Number of options Weighted average Exerciseprice 7,744,081 CAD 0.28 7,569,081 CAD 0.26 1,492,000 CAD 1.20 880,000 CAD 0.65 (720,000) CAD 0.51 (285,000) CAD 0.46 (65,000) CAD 0.84 (20,000) CAD 0.50 8,451,081 CAD 0.42 8,144,081 CAD 0.29 6,809,708 CAD 0.26 6,669,498 CAD 0.23	Nine months ended September 30, 2021 Nine months ended September 30, 2020 Number of options Weighted average Exerciseprice Number of options Weighted average Exerciseprice 7,744,081 CAD 0.28 7,569,081 CAD 0.26 1,492,000 CAD 1.20 880,000 CAD 0.65 (720,000) CAD 0.51 (285,000) CAD 0.46 (65,000) CAD 0.84 (20,000) CAD 0.50 8,451,081 CAD 0.42 8,144,081 CAD 0.29 6,809,708 CAD 0.26 6,669,498 CAD 0.23
	Number of options
	7,744,081 1,492,000 (720,000) (65,000)	CAD 0.28 CAD 1.20 CAD 0.51 CAD 0.84 CAD 0.42 CAD 0.26
	8,451,081 6,809,708

During the nine months ended September 30, 2021 and 2020, the Company recorded expenses in the amount of $686 and $138, respectively. During the three months ended September 30, 2021 and 2020, the Company recorded expenses in the amount of $251 and ($4), respectively.

Restricted Share Units

Between July 9, 2020 and August 5, 2021, the Company approved an aggregate grant of 1,109,608 Restricted Share Units (“RSUs”) to its directors, employees and senior officers. The RSUs will vest between 0 and 12 months. 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 nine months ended September 30, 2021 compared to the nine months ended September 30, 2020:

Outstanding at beginning of year Granted Exercised Forfeited and cancelled Outstanding at end of period Exercisable RSUs	Nine months ended September 30, 2021	Nine months ended September 30, 2020
	Number of RSUs	Number of RSUs
	302,500 415,442 (364,500) - 353,442 124,609	- 694,166 (391,666) -
		302,500 -

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ADCORE INC.

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(US $ in thousands)

NOTE 3 – SHAREHOLDERS' EQUITY (CONT.):

C. Share based compensation (cont.):

Warrants

The following table reflects the activity with respect to warrants of the Company for the nine months

ended September 30, 2021 compared to the nine months ended September 30, 2020:

Outstanding at beginning of year Issued Exercised Forfeited and cancelled Outstanding at end of period Exercisable Warrants	Nine months ended September 30, 2021 Nine months ended September 30, 2020 Number of Warrants Weighted average Exerciseprice Number of Warrants Weighted average Exerciseprice 2,949,310 CAD 0.72 3,026,008 CAD 0.71 1,777,099 CAD 1.74 - - (2,957,609) CAD 0.72 (171,674) CAD 0.61 (1,800) CAD 0.50 - - 1,767,700 CAD 1.74 2,854,334 CAD 0.72 1,767,700 CAD 1.74 2,854,334 CAD 0.72	Nine months ended September 30, 2021 Nine months ended September 30, 2020 Number of Warrants Weighted average Exerciseprice Number of Warrants Weighted average Exerciseprice 2,949,310 CAD 0.72 3,026,008 CAD 0.71 1,777,099 CAD 1.74 - - (2,957,609) CAD 0.72 (171,674) CAD 0.61 (1,800) CAD 0.50 - - 1,767,700 CAD 1.74 2,854,334 CAD 0.72 1,767,700 CAD 1.74 2,854,334 CAD 0.72
	Number of Warrants
	2,949,310 1,777,099 (2,957,609) (1,800)	CAD 0.72 CAD 1.74 CAD 0.72 CAD 0.50 CAD 1.74 CAD 1.74
	1,767,700 1,767,700

During the three and nine months ended September 30, 2021, 0 and 2,957,609 warrants were exercised, respectively, with an exercise price between CAD 0.5 to CAD 0.75.

During the three and nine months ended September 30, 2020, 0 and 171,674 warrants were exercised, respectively, with an exercise price between CAD 0.4574 to CAD 0.75.

The following table reflects the fair value composition:

Balance as of January 1, 2021 Issuance of warrants Fair value revaluation Balance as of September 30, 2021	Nine months ended September 30, 2021
	647 458 (120)
	985

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 is 0.31% and expected term range of 2 years.

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ADCORE INC.

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS

(US $ in thousands)

NOTE 4 - REVENUES:

A. Geographic Areas Information:

The following present the total revenues for the three and nine months ended September 30, 2021 and 2020:

Direct APAC EMEA North America Indirect APAC EMEA North America Total	For the three months period ended September 30,	For the three months period ended September 30,	For the nine months period ended September 30,	For the three months period ended September 30, For the nine months period ended September 30,	For the three months period ended September 30, For the nine months period ended September 30,
		2021	2021		2020 2020
		1,996 1,306 4,546 159 35 227 8,269	10,637 3,227 5,992 401 55 458 20,770		832 1,850 509 917 103 229 13 29 20 115 1,546 3,653 3,023 6,793

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

Customer A Customer B	For the three months period ended September 30, For the nine months period ended September 30,	For the three months period ended September 30, For the nine months period ended September 30,	For the three months period ended September 30, For the nine months period ended September 30,
	2021 2021		2020 2020
	33% 38% 23% 16% 56% 54%		49% 49% 17% 17% 66% 66%

NOTE 5 - OPERATING SEGMENTS:

A. General

The Company and its subsidiaries are engaged in the following segments:

• AdTech- e-commerce advertising management and automation platform.

• EdTech- marketplace for live classes, connecting and enriching humanity through knowledge.

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ADCORE INC.

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS

(US $ in thousands)

NOTE 5 - OPERATING SEGMENTS (CONT.):

B. Segment information

Revenues External Inter-segment Total Segment Profit (Loss) Unallocated expenses: Finance expense Tax expenses Loss	For the three months ended September 30, 2021 AdTech EdTech Total 8,266 3 8,269 - - - 8,266 3 8,269 356 (340) 16 181 98 (254)	For the nine months ended September 30, 2021	For the nine months ended September 30, 2021
	AdTech EdTech	AdTech EdTech	Total
	8,266 3 - - 8,266 3 356 (340)	20,763 7 - - 20,763 7 950 (703)	20,770 - 20,770 247 607 505 (865)

Revenues External Inter-segment Total Segment Profit Unallocated expenses: Finance expense Tax expenses Profit	For the three months ended September 30, 2020 AdTech EdTech Total 3,023 - 3,023 - - - 3,023 - 3,023 526 - 526 56 171 300	For the nine months ended September 30, 2020	For the nine months ended September 30, 2020
	AdTech EdTech	AdTech EdTech	Total
	3,023 - - - 3,023 - 526 -	6,793 - - - 6,793 - 1,123 -	6,793 - 6,793 1,123 156 296 671

Segment assets Segment liabilities	As of September 30, 2021 AdTech EdTech Total 17,418 9 17,427 6,122 47 6,169	As of December 31, 2020
		AdTech EdTech Total
		12,736 - 12,736 5,851 - 5,851

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ADCORE INC.

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(US $ in thousands)

NOTE 6 - 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%.

On June 6, 2021, the Company made full repayment of the loan. As of September 30, 2021, the Company doesn’t have any loans from financial institutions.

IAS 20 requires government loans with a below-market rate of interest to be recognized and measured in accordance with IFRS 9. The difference between the initial carrying value of the loan (its fair value) and the proceeds received is treated as a government grant. The difference was deemed immaterial.

NOTE 7 - 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:

The following transactions arose with related parties:
Transaction	For the nine months period ended September 30, 2021 2020
Management fee to CEO and controlling shareholder Share based compensation to the CEO and controlling shareholder	427 22	200 7

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