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Shelfie Tech — Audit Report / Information 2024
May 9, 2025
48529_rns_2025-05-08_112cf86f-9c01-4356-8d75-126d037aa096.pdf
Audit Report / Information
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SHELFIE-TECH LTD
FINANCIAL STATEMENTS
For the years ended December 31, 2024 and
2023
SHELFIE-TECH LTD
FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
TABLE OF CONTENTS
Page
REPORT OF INDEPENDENT AUDITORS 3-6
FINANCIAL STATEMENTS IN U.S. DOLLARS:
- Statements of financial position 7
- Statements of comprehensive loss 8
- Statements of changes in shareholders' equity (deficit) 9
- Statements of cash flows 10
- Notes to financial statements 11-24
MOORE Israel
LION, ORLITZKY & CO.
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
To the Shareholders of
SHELFIE-TECH LTD
Opinion
We have audited the financial statements of SHELFIE-TECH LTD (the Company), which comprise the statements of financial position as of December 31, 2024 and 2023, and the statements of comprehensive loss, changes in shareholders' equity and cash flows for the years then ended, and notes to the financial statements, including a summary of accounting policies.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and its financial performance and its cash flows for the years ended December 31, 2024 and 2023 in accordance with International Financial Reporting Standards (IFRS).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Israel, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1.b in the financial statements, which indicates that the Company has invested the majority of its funds in the development of its robotic retail shelf monitoring system, resulting in accumulated losses amounting to $2,504,707. As stated in Note 1.b, the continuance of the Company’s operations is subject to continued financing from its shareholders and other investors. These conditions, along with other matters as set forth in Note 1.b, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
An independent member
firm of Moore global network
limited - members in
principal cities throughout
the world
Main: 3 HaYarkon St., LYFE (B) Towers, Bnei Brak 5120125, Israel Tel: 972-3-6155155, Fax. 972-3-6155150 E mail: [email protected] www.lionorl.co.il
Jerusalem: 8 Hartom St., Har Hotzvim Jerusalem 9777508, Israel Tel. 972-77-2717600, Fax. 972-2-6537364 E mail: [email protected]
MOORE Israel
LION, ORLITZKY & CO.
Certified Public Accountants
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements. These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Except for the matter described in the Material Uncertainty Related to Going Concern section of our report, we have determined that there are no other key audit matters to communicate in our report.
Other Information
Management is responsible for the other information. The other information obtained at the date of this auditor's report includes Management’s Discussion and Analysis.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
MOORE Israel
LION, ORLITZKY & CO.
Certified Public Accountants
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the 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 Financial Statements
Our objectives are to obtain reasonable assurance about whether the 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 ISAs 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 financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the 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.
MOORE Israel
LION, ORLITZKY & CO.
Certified Public Accountants
-
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 to cease to continue as a going concern.
-
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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.
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.
The engagement partner on the audit resulting in this independent auditor's report is Yael Hilman Rasmovich.
Lion Orlitzky & Co.
Lion Orlitzky & Co.
Certified Public Accountants (Israel).
Bnei Brak, Israel
May 8, 2025
SHELFIE-TECH LTD
STATEMENTS OF FINANCIAL POSITION
Expressed in U.S dollars
| Note | December 31, 2024 | December 31, 2023 | |
|---|---|---|---|
| ASSETS | |||
| Current Assets | |||
| Cash | $ 426,321 | $ 9,616 | |
| Restricted cash | 6 | 1,183,030 | - |
| VAT receivable | 5,615 | 5,520 | |
| Prepaid expenses | 5 | 14,252 | 90,749 |
| Total Current Assets | 1,629,218 | 105,885 | |
| Total assets | $ 1,629,218 | $ 105,885 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | |||
| Current Liabilities | |||
| Receipt on account of shares | 6 | $ 1,183,030 | $ - |
| Accounts payable | 256,048 | 273,831 | |
| Related parties | 7 | 18,279 | 53,197 |
| Accrued expenses | 16,452 | 13,752 | |
| Total Current Liabilities | 1,473,809 | 340,780 | |
| Total liabilities | 1,473,809 | 340,780 | |
| Shareholders' Equity (Deficit) | |||
| Share Capital | 6 | 51 | 51 |
| Additional paid in capital | 6 | 2,660,065 | 2,158,439 |
| Accumulated deficit | (2,504,707) | (2,393,385) | |
| Total Shareholders' Equity (Deficit) | 155,409 | (234,895) | |
| Total Liabilities And Shareholders' Equity (Deficit) | $ 1,629,218 | $ 105,885 |
“Ben Tsur Joseph”
Director, Chief Executive Officer
Ben Tsur Joseph
“Alan Rootenberg”
Director, Chief Financial Officer
Alan Rootenberg
Date of approval of financial statements: May 8, 2025.
The accompanying notes are an integral part of the financial statements.
7
SHELFIE-TECH LTD
STATEMENTS OF COMPREHENSIVE LOSS
Expressed in U.S dollars
| Note | Year ended December 31, 2024 | Year ended December 31, 2023 | |
|---|---|---|---|
| Operating Expenses | |||
| Research and development costs | 10 | $ 14,571 | $ 458,292 |
| General and administration costs | 11 | 106,969 | 95,059 |
| Sales and marketing expenses | 2,000 | 32,676 | |
| Operating Loss | (123,540) | (586,027) | |
| Other income (expenses) | |||
| Interest income | 1,976 | 2,927 | |
| Foreign exchange gain (loss) | 10,242 | (6,044) | |
| Total other income (expenses) | 12,218 | (3,117) | |
| Loss and comprehensive loss for the year | $ (111,322) | $ (589,144) | |
| Basic and fully diluted loss per share | $ (0.01) | $ (0.03) | |
| Weighted average number of shares outstanding | 20,060,126 | 19,662,590 |
The accompanying notes are an integral part of the financial statements.
8
SHELFIE-TECH LTD
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
For the years ended December 31, 2024 and 2023
Expressed in U.S. dollars
| Ordinary share capital | Additional paid in capital | Accumulated deficit | Total Shareholders' Equity (Deficit) | |||
|---|---|---|---|---|---|---|
| Ordinary shares | ||||||
| Number of shares | Amount | |||||
| Balance - December 31, 2022 | 19,557,225 | $ 49 | $ 1,940,556 | $ (1,804,241) | $ | 136,364 |
| Issuance of shares | 60,256 | 1 | 60,234 | - | - | 60,235 |
| Issuance of shares | 237,897 | 1 | 157,649 | - | - | 157,650 |
| Loss and comprehensive loss for the year | - | - | - | (589,144) | - | (589,144) |
| Balance - December 31, 2023 | 19,855,378 | $ 51 | $ 2,158,439 | $ (2,393,385) | $ | (234,895) |
| Issuance of shares (note 6c (i)) | 144,622 | (*) | - | - | - | - |
| Issuance of shares (note 6c (ii)) | 65,548 | (*) | 42,351 | - | - | 42,351 |
| Issuance of shares (note 6c (iv)) | 909,092 | 2 | 459,273 | - | - | 459,275 |
| Loss and comprehensive loss for the year | - | - | - | (111,322) | - | (111,322) |
| Balance - December 31, 2024 | 20,974,640 | $ 53 | $ 2,660,063 | $ (2,504,707) | $ | 155,409 |
(*) Less than $1.00
The accompanying notes are an integral part of the financial statements.
9
SHELFIE-TECH LTD
STATEMENTS OF CASH FLOWS
For the years ended December 31, 2024 and 2023
Expressed in U.S. dollars
| Year ended December 31, | Year ended December 31, | |
|---|---|---|
| 2024 | 2023 | |
| Cash flows from operating activities | ||
| Net loss for the year | $ (111,322) | $ (589,144) |
| Adjustments for Interest income | (1,976) | (2,927) |
| Changes in nonCash working capital: | ||
| Decrease (increase) in VAT receivable | (95) | 29,977 |
| Decrease in in amounts owed to related parties | (5,233) | (19,888) |
| Increase (decrease) in accounts payable | (17,783) | 131,517 |
| Decrease in prepaid expenses | 78,473 | 14,390 |
| Increase (decrease) in accrued expenses | 2,700 | (13,943) |
| (55,236) | (450,018) | |
| Cash flows from financing activities | ||
| Amounts received (owe) from (to) related parties | (29,685) | 27,571 |
| Proceeds from issuance of shares | 501,626 | 217,885 |
| Receipt on account of shares | 1,183,030 | - |
| 1,654,971 | 245,456 | |
| Cash flows from investing activities | ||
| Restricted cash | (1,183,030) | - |
| (1,183,030) | - | |
| Increase (decrease) in cash | 416,705 | (204,562) |
| Cash, beginning of year | 9,616 | 214,178 |
| Cash, end of year | $ 426,321 | $ 9,616 |
The accompanying notes are an integral part of the financial statements.
SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
Expressed in U.S. dollars
NOTE 1 - GENERAL
a. SHELFIE-TECH LTD ("Shelfie" or the "Company") was incorporated on November 18, 2021 in Israel. The Company’s robotic retail shelf monitoring system uses advanced machine learning and image processing algorithms to automatically optimize inventory management and retail store shelf filling while ensuring an enhanced customer experience. The Company's head office is located at Aminadav 3, Tel Aviv, Israel.
b. Since its inception, the Company has invested majority of its funds in the development of its robotic retail shelf monitoring system, resulting in accumulated losses amounting to $2,504,707. Management is of the opinion that sufficient working capital will be obtained from external financing to meet the Company’s liabilities and commitments as they become due, although there is a risk that additional financing will not be available on a timely basis or on terms acceptable to the Company. Management's plans in this regard include continued development, marketing and selling of its products and services as well as seeking additional financial arrangements. Although management continues to pursue these plans, these circumstances raise substantial doubt about the Company's ability to continue as a going concern. In the event that the Company is unable to achieve profitability or obtain additional financing, operations will need to be scaled back or discontinued. The financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.
c. On April 28, 2025, the Company received a letter from the Canadian Securities Exchange (the "CSE") confirming conditional approval to list its common shares for trading on the CSE. The conditional approval follows the receipt by the Company of a receipt for its Final Long Form Prospectus dated April 22, 2025 relating to the securities of the Company. On April 29, 2025, the Restricted Funds (as defined in note 6c(iii)) were released to the Company and the Company issued the Underlying Shares.
d. On October 7, 2023, an unprecedented attack was launched against Israel by terrorists from the Hamas terrorist organization that infiltrated Israel’s southern border from the Gaza Strip and in other areas within the state of Israel attacking civilians and military targets while simultaneously launching extensive rocket attacks on the Israeli population. These attacks resulted in extensive deaths, injuries and kidnapping of civilians and soldiers. In response, the Security Cabinet of the State of Israel declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks. To date, the State of Israel continues to be at war with Hamas.
Since the war broke out on October 7, 2023, the Company’s operations have not been adversely affected by this situation, and we have not experienced disruptions to our activities. However, at this time, it is not possible to predict the intensity or duration of the war, nor can we predict how this war will ultimately affect Israel’s economy in general and we continue to monitor the situation closely and examine the potential disruptions that could adversely affect our operations.
11
SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
Expressed in U.S. dollars
NOTE 2 - ACCOUNTING POLICIES
a. Basis for preparation
1) The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board (IASB) and interpretations issued by the IFRS Interpretations Committee (IFRIC).
2) The accounting policies set out below have been applied consistently. In connection with the presentation of these financial statements, it is noted as follows:
a) The significant accounting policies described below have been applied consistently during the period.
b) The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company's accounting policies. Areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements. Actual results may differ materially from estimates and assumptions used by management (see note j).
3) The financial statements have been prepared on a historical cost basis, except for financial instruments classified as financial instruments at fair value through profit or loss, which are stated at their fair value. The financial statements are presented in U.S. dollars, which is also the Company's functional currency. In addition, the financial statements have been prepared using the accrual basis of accounting except for cash flow information. The preparation of financial statements in compliance with IFRS requires management to make certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies. The areas involving a higher degree of judgement of complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4.
b. Functional currency
Management concluded that the currency of the primary economic environment in which the Company conducts its operations is the U.S. dollar. Accordingly, the Company uses the U.S. dollar (hereafter - "dollar" or "$") as its functional and reporting currency.
Transactions and balances originally denominated in dollars are presented at their original amounts. Balances in non-dollar currencies are translated into dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-dollar transactions reflected in the statement of operations, the transaction date exchange rates are used. Depreciation and other changes deriving from non-monetary items are based on historical exchange rates. The resulting transaction gains or losses are recorded as financial income or expenses, as appropriate.
12
SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
Expressed in U.S. dollars
NOTE 2 - ACCOUNTING POLICIES (continued)
c. Cash
Cash includes cash on hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less.
d. Financial instruments
1) Classification
The Company classifies its financial assets at amortized cost. The classification is determined, among other things, in accordance with the purpose for which the financial assets were acquired. The basis of classification depends on the Company’s business model and the contractual cash flow characteristics of the financial asset.
Financial assets at amortized cost are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows, and their contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. These assets are classified as current assets, except for maturities of more than 12 months after the balance sheet date, which are classified as non-current assets. The Company's financial assets at amortized cost are included "other receivables" and "cash" in the statements of financial position.
2) Recognition and measurement
Financial assets at amortized cost, which are initially measured at fair value, including any transaction costs, are measured in subsequent periods at amortized cost using the effective interest method. Trade receivables that do not have a significant financing component are initially measured at their transaction price.
3) Impairment of financial assets - financial assets measured at amortized cost
The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost. At each reporting date, the Company assesses whether the credit risk on a financial asset has increased significantly since initial recognition.
If the financial asset is determined to have low credit risk at the reporting date, the Company assumes that the credit risk on a financial asset has not increased significantly since initial recognition.
4) Financial liabilities
Trade accounts payable, other accounts payable and accrued expenses, which are initially recognized at fair value and subsequently carried at amortized cost using the effective interest method.
13
SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
Expressed in U.S. dollars
NOTE 2 - ACCOUNTING POLICIES (continued)
e. Current and Deferred taxes
Current taxes are calculated based on the tax laws that have been enacted or substantively enacted at the balance sheet date, in countries in which the Company operate and generate taxable income.
The Company recognizes deferred taxes using the liability method, for temporary differences between the amounts of assets and liabilities included in the financial statements, and the amounts for tax purposes. Deferred taxes are not recognized, if the temporary differences arise at the initial recognition of the asset or liability which at the time of the transaction has no effect on profit or loss, whether for accounting or tax reporting. The amount of deferred taxes is determined using the tax rates (and laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred tax assets is realized or the deferred tax liabilities will be settled.
Deferred tax assets are recognized for temporary differences that are tax deductible, up to the amount of the differences that are expected to be utilized in the future, against taxable income.
No deferred tax assets have been recorded in the Company’s books and records with respect to accumulated losses since it is not probable that the Company will be able to utilize such losses in the foreseeable future against taxable income.
14
SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
Expressed in U.S. dollars
NOTE 2 - ACCOUNTING POLICIES (continued)
f. Research and development
Research costs incurred in connection with the Company’s products are expensed as incurred.
An intangible asset arising from development (or from the development phase of an internal project) is recognized if all of the following conditions are fulfilled:
- Technological feasibility exists for completing development of the intangible asset so that it will be available for use or sale.
- It is management’s intention to complete development of the intangible asset for use or sale.
- The Company has the ability to use or sell the intangible asset.
- It is probable that the intangible asset will generate future economic benefits, including existence of a market for the output of the intangible asset or the intangible asset itself or, if the intangible asset is to be used internally, the usefulness of the intangible asset.
- Adequate technical, financial and other resources are available to complete development of the intangible asset, as well as the use or sale thereof.
- The Company has the ability to reliably measure the expenditure attributable to the intangible asset during its development.
Other development costs that do not meet the foregoing conditions are charged to profit or loss as incurred. Development costs previously expensed are not recognized as an asset in subsequent periods.
As of December 31, 2024, the Company has not capitalized development costs since it does not meet the conditions for development costs capitalization.
g. Basic and diluted loss per share
Loss per share is based on the loss that is attributed to the shareholders holding ordinary shares divided by the weighted average number of ordinary shares in issue during the period. For purposes of the calculation of the diluted loss per share, the Company adjusts the loss that is attributed to the holders of the Company’s ordinary, and the weighted average number of ordinary shares in issue, to assume conversion of all of the dilutive potential shares. The potential shares are taken into account only if their effect is dilutive. Diluted amounts are not presented when the effect of the computations is anti-dilutive. Accordingly, at present, there is no difference in the amounts presented for basic and diluted loss per share.
15
SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
Expressed in U.S. dollars
NOTE 2 - ACCOUNTING POLICIES (continued)
h. Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are included in equity as a deduction from the proceeds.
i. Significant Accounting Judgments and Estimates
The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. The financial statements include estimates which, by their nature, are uncertain.
The impacts of such estimates are pervasive throughout the financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and also in future periods when the revision affects both current and future periods.
The critical judgments and significant estimates in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements are:
-
Provisions for taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at the end of the reporting period. However, it is possible that at some future date an additional liability could result from audits by taxing authorities. Where the final outcome of these tax-related matters is different from the amounts that were initially recorded, such differences will affect the tax provisions in the period in which such determination is made.
-
Management expenses the costs directly associated with research and development activities, unless the development asset recognition criteria is met. Indirect costs are estimated using management’s calculation of the amount of the activity that is deemed to be associated with research and development.
-
In order to assess whether it is appropriate for the company to continue as a going concern, management is required to apply judgment and make estimates with respect to future cash flow projections. In arriving at this judgment, there were a number of assumptions and estimates involved in calculating these future cash flow projections. This includes making estimates regarding the timing and amounts of future expenditures and the ability and timing to raising additional financing.
16
SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
Expressed in U.S. dollars
NOTE 3 - CHANGES IN ACCOUNTING POLICIES - INITIAL ADDITION OF NEW FINANCIAL REPORTING AND ACCOUNTING STANDARDS AND AMENDMENTS TO EXISTING FINANCIAL REPORTING AND ACCOUNTING STANDARDS
The Amendments introduce a mandatory exception to entities from the recognition and disclosure of information about deferred tax assets and liabilities related to Pillar Two model rules. The exception is effective immediately and retrospectively. The Amendments also provide for additional disclosure requirements with respect to an entity’s exposure to Pillar Two income taxes.
Management has determined that the Company is not within the scope of OECD’s Pillar Two Model Rules and the exception to the recognition and disclosure of information about deferred tax assets and liabilities related to Pillar Two income taxes is not applicable to the Company.
The following amendments are effective for the period beginning 1 January 2024:
- Classification of Liabilities as Current or Non-Current (Amendments to IAS 1 Presentation of Financial Statements);
- Non-current Liabilities with Covenants (Amendments to IAS 1 Presentation of Financial Statements); and
The amendments to IAS 1 do not have a significant impact on the classification of its liabilities, as the conversion feature in its convertible debt instruments is classified as an equity instrument and therefore, does not affect the classification of its convertible debt as a non-current liability. In addition, the Company does not expect any other standards issued by the IASB, but are yet to be effective, to have a material impact on the Company.
The following amendments are effective for the period beginning 1 January 2025:
- Lack of Exchangeability (Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates)
The Company is currently assessing the impact of these new accounting standards and amendments but does not believe that there is an impact on the financial statements.
New and revised IFRS Accounting Standards in issue but not yet effective
IFRS 18 Presentation and Disclosures in Financial Statements
IFRS 18 replaces IAS 1, carrying forward many of the requirements in IAS 1 unchanged and complementing them with new requirements.
IFRS 18 introduces new requirements to:
- present specified categories and defined subtotals in the statement of profit or loss
- provide disclosures on management-defined performance measures (MPMs) in the notes to the financial statements
- improve aggregation and disaggregation.
An entity is required to apply IFRS 18 for annual reporting periods beginning on or after 1 January 2027, with earlier application permitted. The amendments to IAS 7 and IAS 33, as well as the revised IAS 8 and IFRS 7, become effective when an entity applies IFRS 18. IFRS 18 requires retrospective application with specific transition provisions.
The Company anticipates that the application of these amendments may have an impact on the consolidated financial statements in future periods.
17
SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
Expressed in U.S. dollars
NOTE 4 - FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
Financial risk factors
The Company is exposed to a variety of financial risks such as: market risks (mainly currency risks), credit risks and liquidity risks. The Company’s overall risk management plan focuses on the unpredictability of financial markets and seeks to minimize the potential adverse effects on the Company’s financial performance.
Risk management is performed by the finance department according to the policy authorized by the board of directors.
a) Market risk - Currency risk
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates.
The functional currency of the Company is the United States dollar, (“USD”) however, some of the Company's assets and liabilities are financial instruments denominated in ILS.
The Company operates internationally and is exposed to foreign exchange risks due to exposure to foreign currencies. Foreign exchange risk arises from future commercial transactions, assets or liabilities denominated in foreign currency.
The Company’s policy to reduce its exposure to changes in exchange rates is based on maintaining, where possible, the balances of current monetary assets, according to the currency of the current liabilities.
As of December 31, 2024, if the Company’s functional currency (USD) had strengthened/ weakened by 5% against the ILS, with all other variables held constant, the loss for the period would decrease /increase by approximately $16,900.
b) 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 end of the reporting period.
Credit risks are treated at the Company level. Credit risks arise typically from cash and cash equivalents, trade receivables and other current assets.
No credit limits were exceeded during the reported periods and Company’s management does not expect any losses from non-performance of these parties.
18
SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
Expressed in U.S. dollars
NOTE 4 - FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
c) Liquidity risk
Liquidity risk exists where the Company might encounter difficulties in meeting its financial obligations as they become due. The Company monitors its liquidity in order to ensure that sufficient liquid resources are available to allow it to meet its obligations.
Cash flow forecasting is performed by the Company’s finance department. The finance department monitors rolling forecasts of the Company’s liquidity requirements to ensure that it has sufficient cash to meet operational needs. The table below presents the Company’s financial liabilities based on contractual undiscounted payments, the maturities of which are within one year.
| Carrying amount | |
|---|---|
| Receipt on account of shares | $ 1,183,030 |
| Accounts payable | 256,048 |
| Related parties | 18,279 |
| Accrued expenses | 16,452 |
| $ 1,473,809 |
NOTE 5 – PREPAID EXPENSES
During 2022, the Company advanced $87,822 to a service provider in return for consultancy services in connection with the Company’s IPO process. The balance owed by the service provider to the Company accrued interest at 3% per annum. As of December 31, 2024, the Company received these services and the amounts plus accrued interest were set off against Additional Paid in Capital in the Statement of Shareholders’ Equity.
NOTE 6 - SHARE CAPITAL
a. Composition of share capital:
| December 31, 2024 | December 31, 2023 | |||
|---|---|---|---|---|
| Authorized | Issued and outstanding | Authorized | Issued and outstanding | |
| Number of shares | Number of shares | |||
| Ordinary shares of NIS 0.0000075 par value each ("Shares") | 1,600,000,000 | 20,974,640 | 1,600,000,000 | 19,855,378 |
On July 27, 2023, the Company effected a 1-for-5,294 share split of its issued and outstanding shares, on April 15, 2024, the Company effected a 1-for-3.96901 share consolidation of its issued and outstanding shares and on October 8, 2024, the Company effected a 1-for-1.0004 share split of its issued and outstanding shares. All share amounts have been retroactively restated for all periods presented.
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SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
Expressed in U.S. dollars
NOTE 6 - SHARE CAPITAL (continued)
b. Rights attached to shares
Voting rights at the general meeting, right to dividend, rights upon liquidation and right to nominate the directors in the Company.
c. Issuance of ordinary shares during the year ended December 31, 2024:
i. On April 10, 2024, the Company issued 144,622 shares to certain existing shareholders of the Company to compensate them for financing rounds that took place after their investment, at a lower valuation. The fair value of the issuance is $93,441.
ii. On June 18, 2024, the Company and A2Z Cust2Mate Solutions Corp (“A2Z”) agreed to settle an amount of $42,351 owing by the Company to A2Z through the issue to A2Z of 65,548 shares of the Company.
iii. During November and December 2024, the Company received $1,183,030 from investors to be held by the Company (“Restricted Funds”). The Restricted Funds are in respect of subscription receipts to issue 1,792,469 Shares at $0.66 per share (“Underlying Shares”). The Restricted Funds will be released by the Company upon (a) the receipt by the Company of a final receipt from the Ontario Securities Commission (or such other securities regulator as the Company selects as its principal regulator) for a final long form prospectus qualifying the underlying shares; and (b) the Company being conditionally approved for listing on the CSE. See also note 1c.
iv. During December 2024, the Company received $600,000 in respect of a private placement and issued 909,092 shares, representing a price per share of $0.66. Net proceeds from the private placement were $459,273.
d. Issuance of ordinary shares during the year ended December 31, 2023:
i. From January 1, 2023 to January 25, 2023, the Company received $60,235 in respect of a private placement and issued 60,256 shares.
ii. On September 30, 2023, the Company issued 237,897 shares to a related party in the amount of $157,650.
20
SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
Expressed in U.S. dollars
NOTE 7- TRANSACTIONS AND BALANCES WITH RELATED PARTIES
Compensation to key management personnel
a. On February 1, 2022, a CEO services consulting agreement was signed between the Company and Mida Consulting and Investments Ltd (“Mida”), a company controlled by the CEO of the Company, pursuant to which the Company shall pay the CEO NIS 50,000 per month (approximately $13,500) (“2022 CEO Compensation Agreement”). From the month following the completion of an IPO, RTO or listing of the Company’s shares for trade on an international stock exchange or a similar transaction the fee shall increase to NIS 100,000 per month (approximately $27,000). On February 1, 2023, the Company and the CEO verbally agreed to terminate the agreement. A new agreement was signed on January 1, 2024, pursuant to which the Company shall pay the CEO $5,000 per month. On June 3, 2024 an amendment to the new agreement was signed between the Company and Mida, pursuant to which Mida, will not be paid any compensation until such time as the Company is a publicly listed company and has raised an additional $1,000,000 post such listing.
b. On February 1, 2022, the Company entered into an occupancy rental agreement with A2Z Cust2Mate Solutions Corp, (“A2Z”), a company controlled by the CEO of the Company (“Rental Agreement”). The Rental Agreement expired on January 31, 2023 and was renewed for a further 12 months. On February 1, 2024, the Rental Agreement was renewed for 11 months to December 31, 2024. On January 1, 2025, Rental Agreement was renewed for 6 months, through to June 30, 2025. The Company’s base rent is ILS2,000 per month ($590) The Company has elected to not recognize right-of-use assets and lease liabilities for leases that have a lease term of 12 months or less and for leases of low-value assets.
c. On April 1, 2022, the Company and the CFO of the Company entered into a CFO services consulting agreement pursuant to which the CFO shall receive $2,000 per month. From the month following the completion of an IPO, RTO or listing of the Company’s shares for trade on an international stock exchange or similar transaction, the amount shall increase to $3,000 per month.
d. On November 1, 2022, the Company and the President of the Company entered into an agreement pursuant to which the President of the Company shall receive NIS 50,000 per month (approximately $13,500). The Company also paid the President one month fee as a signing bonus. On February 1, 2023, the Company and the President verbally agreed to terminate the agreement. A formal agreement to this effect was signed on May 22, 2024.
e. The compensation to key management personnel for consulting services they have provided to the Company is as follows:
| Year ended December 31, | Year ended December 31, | |||
|---|---|---|---|---|
| 2024 | 2023 | |||
| CEO | $ | - | $ | 14,388 |
| CFO | 24,000 | 24,000 | ||
| President | - | 14,168 | ||
| $ | 24,000 | $ | 52,556 |
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SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
Expressed in U.S. dollars
NOTE 7 - TRANSACTIONS AND BALANCES WITH RELATED PARTIES (continued)
Compensation to key management personnel (continued)
f. Balances with related parties:
| December 31, | December 31, | |||
|---|---|---|---|---|
| 2024 | 2023 | |||
| Amounts owed to the CFO | $ | 36,000 | $ | 24,000 |
| Amounts owed to the Company by a company controlled by the CEO | (17,721) | 29,197 | ||
| $ | 18,279 | $ | 53,197 |
NOTE 8 - TAXES ON INCOME
a. Corporate taxation in Israel
The Company is taxed under the laws of the State of Israel at a corporate tax rate of 23%.
b. Tax assessment
The Company has not received any tax assessment since its incorporation.
c. Carry forward tax losses
As of December 31, 2024, carry forward losses of the Company amounted to $2,076,929. Carry forward losses may be deductible against future taxable income. Management currently believes that since the Company had incurred losses since its inception, it is more likely than not that the deferred tax regarding that carry forward losses will not be realized in the foreseeable future.
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SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
Expressed in U.S. dollars
NOTE 8 - TAXES ON INCOME (continued)
d. Taxes on income included in the Statements of Loss and Other Comprehensive Loss for the periods presented:
The following is reconciliation between the "theoretical" tax, which would apply to the Company if all of its income were taxed at the regular rate applicable to the Company in Israel and the amount of tax reflected in the Statements of Loss for the reported period:
The reconciliation between the tax expense, assuming that all the income, expenses, gains and losses in profit or loss were taxed at the statutory tax rate and the taxes on income recorded in profit or loss is as follows:
| Year ended December 31, | Year ended December 31, | |||
|---|---|---|---|---|
| 2024 | 2023 | |||
| Loss before taxes on income | $ | (111,322) | $ | (589,144) |
| Statutory tax rate in Israel | 23% | 23% | ||
| Tax benefit computed at the statutory tax rate | (25,604) | (135,503) | ||
| Increase in taxes on income resulting from the following: | ||||
| Loss for tax purposes | 118,513 | 175,530.0 | ||
| Research and development- amortize over 3 years for tax purposes | (92,455) | (39,354) | ||
| Other differences | (454) | (673) | ||
| Actual taxes on income | $ | - | $ | - |
NOTE 9 – CAPITAL MANAGEMENT
The Company's capital comprises share capital, share based payment reserve, warrant reserve, and accumulated other comprehensive loss. The Company manages its capital structure, and makes adjustments to it, based on the funds available to the Company in order to support the Company's business activities. The Board of Directors does not establish quantitative return on capital criteria for management; it relies on the expertise of the Company's management to sustain future development of the business.
The intellectual property in which the Company currently has an interest is in the development stage; as such, the Company is dependent on external financing to fund its activities. In order to carry out the planned research and development and pay for administrative costs, the Company intends to raise additional amounts as needed (Note 1.b).
Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.
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SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
Expressed in U.S. dollars
NOTE 10 – RESEARCH AND DEVELOPMENT COSTS
| Year ended December 31, 2024 | Year ended December 31, 2023 | |
|---|---|---|
| Hardware engineering- subcontractors | $ - | $ 355,575 |
| Professional and consulting fees | - | 48,562 |
| Patent | 11,752 | - |
| Software development- subcontractors | 2,819 | 54,155 |
| $ 14,571 | $ 458,292 |
NOTE 11 – GENERAL AND ADMINISTRATION COSTS
| Year ended December 31, 2024 | Year ended December 31, 2023 | |
|---|---|---|
| Professional and consulting fees | $ 95,680 | $ 79,030 |
| Office rental and other related expenses | 11,289 | 16,029 |
| $ 106,969 | $ 95,059 |
NOTE 12 – COMMITMENTS
On October 30, 2022, the Company entered into an agreement with Buchwalter Presentation and Storage Ltd. (“Buchwalter”) under which Buchwalter, a leading supplier of products, fixtures and technologies to supermarkets in Israel will serve as exclusive representatives of the Company in Israel. Buchwalter will have exclusive distribution rights for the Company’s products in Israel until December 31, 2024 with an extension to March 31, 2026 based on Buchwalter achieving specified sales targets.
NOTE 13 – SUBSEQUENT EVENTS
a. During January 2025, the Company received an additional $47,618 of Restricted Funds. The Restricted Funds are in respect of subscription receipts to issue 72,148 Shares at $0.66 per share.
b. On April 29, 2025, the Restricted Funds were released to the Company and the Company issued 1,864,617 Shares.
24