Zoomd Technologies Ltd. — Interim / Quarterly Report 2020

Nov 17, 2020

ZOOMD TECHNOLOGIES LTD

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2020

ZOOMD TECHNOLOGIES LTD

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2020

TABLE OF CONTENTS

Financial Statements: Statements of financial position Statements of Income Statements of Changes in Equity Statements of Cash Flows Notes to the Financial Statements	**Page **
	2 3 4-6 7-8 9-12

ZOOMD TECHNOLOGIES Ltd.

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(USD in thousands)

Assets Current assets Cash and cash equivalents Trade receivables Other receivables and prepaid expenses Non-current assets Pledged long term deposit Fixed assets, net Rights to use assets Intangible assets Total assets Equity and liabilities Current liabilities Trade payables Other payables and accrued expenses Non-current liabilities IIA liability Lease liability Reserve for employee benefits Shareholders' equity Share capital and premium Reserve from share-based payment transactions and other reserves Accumulated deficit Total equity and liabilities	September 30, 2 0 2 0 2 0 1 9 2,972 5,918 4,619 4,436 564 950 8,155 11,304 173 166 92 95 1,485 1,908 11,197 12,997 12,947 15,166 21,102 26,470 2,249 2,798 4,218 2,697 6,467 5,495 433 562 783 1,382 170 166 1,386 2,110 39,035 39,044 4,930 4,737 ( 30,716 ) ( 24,916 ) 13,249 18,865 21,102 26,470	December 31,	December 31,
	2 0 2 0 2,972 4,619 564 8,155 173 92 1,485 11,197 12,947 21,102 2,249 4,218 6,467 433 783 170 1,386 39,035 4,930 ( 30,716 ) 13,249 21,102		2 0 1 9
			5,890 4,628 961 11,479 159 99 1,739 12,547 14,544 26,023 3,186 3,260 6,446 433 1,105 168 1,706 39,035 4,790 ( 25,954 ) 17,871 26,023

The financial statements were approved by the board of directors of the company on _, 2020.

“Amit Bohensky” Amit Bohensky Chairmen of the board	“Ofer Eitan” Ofer Eitan CEO	“Tsvika Adler”
		Tsvika Adler CFO

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

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ZOOMD TECHNOLOGIES Ltd.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (USD in thousands)

Revenue Cost of sales and services Gross profit Operating costs and expenses Research and development expenses Selling, administrative and general expenses Operating Loss Listing expenses Finance Income Finance expense Finance expense, net Net and comprehensive Loss Net loss per share: Basic and diluted Shares used in calculation of net loss per share: Basic Diluted	For the nine months ended September 30, 2 0 2 0 2 0 1 9 18,814 19,508 13,060 13,780 5,754 5,728 4,764 3,510 5,432 4,495 10,196 8,005 (4,442) ( 2,277 ) - ( 1,519 ) 8 - (328) ( 1,462 ) (320) ( 1,462 ) ( 4,762 ) ( 5,258 ) 0.05 0.06 100,393,464 83,376,872 100,393,464 83,376,872	For the nine months ended September 30, 2 0 2 0 2 0 1 9 18,814 19,508 13,060 13,780 5,754 5,728 4,764 3,510 5,432 4,495 10,196 8,005 (4,442) ( 2,277 ) - ( 1,519 ) 8 - (328) ( 1,462 ) (320) ( 1,462 ) ( 4,762 ) ( 5,258 ) 0.05 0.06 100,393,464 83,376,872 100,393,464 83,376,872	For the three months ended September 30, 2 0 2 0 2 0 1 9 6,625 5,904 4,589 4,002 2,036 1,902 1,644 1,282 1,880 1,679 3,524 2,961 (1,488) ( 1,059 ) - ( 1,519 ) - - ( 35 ) ( 121 ) ( 5 3 ) ( 121 ) ( 1,523 ) ( 2,699 ) 0.02 0.02 100,681,073 97,497,199 100,681,073 97,497,199	For the three months ended September 30, 2 0 2 0 2 0 1 9 6,625 5,904 4,589 4,002 2,036 1,902 1,644 1,282 1,880 1,679 3,524 2,961 (1,488) ( 1,059 ) - ( 1,519 ) - - ( 35 ) ( 121 ) ( 5 3 ) ( 121 ) ( 1,523 ) ( 2,699 ) 0.02 0.02 100,681,073 97,497,199 100,681,073 97,497,199	Year ended December 31, 2 0 1 9 27,052 19,105 7,947 4,916 6,439 11,355 ( 3,408 ) ( 1,519 )	Year ended December 31, 2 0 1 9 27,052 19,105 7,947 4,916 6,439 11,355 ( 3,408 ) ( 1,519 )
	2 0 2 0 18,814 13,060 5,754 4,764 5,432 10,196 (4,442) - 8 (328) (320) ( 4,762 ) 0.05 100,393,464 100,393,464		2 0 2 0 6,625 4,589 2,036 1,644 1,880 3,524 (1,488) - - ( 35 ) ( 5 3 ) ( 1,523 ) 0.02 100,681,073 100,681,073
		- ( 1,462 ) ( 1,462 ) ( 5,258 ) 0.06 83,376,872 83,376,872		- ( 121 ) ( 121 ) ( 2,699 ) 0.02 97,497,199 97,497,199		6 (1,375) ( 369 , 1 ) ( 6,296 ) 0.07 87,524,949 87,524,949

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

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ZOOMD TECHNOLOGIES Ltd.

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD in thousands)

Share capital Share capital and premium Balance - January 1, 2020 93,265,918 39,035 Share-based compensation - - Exercise of options 1,120,300 - )( Loss for the period - - Balance - September 30, 2020 (Unaudited) 94,386,218 39,035 Note Number of ordinary shares Share capital and premium Balance - January 1, 2019 73,758,097 27,898 Loss for the period - Share-based compensation - Conversion of convertible loans 1 5,970,069 3,672 Exercise of warrants 1 1,927,053 1,485 Issuance of shares (net of issuance expenses) 1 11,574,990 4,470 Balance - September 30, 2019 (Unaudited)* 93,230,209 37,525	Share capital Share capital and premium Balance - January 1, 2020 93,265,918 39,035 Share-based compensation - - Exercise of options 1,120,300 - )( Loss for the period - - Balance - September 30, 2020 (Unaudited) 94,386,218 39,035 Note Number of ordinary shares Share capital and premium Balance - January 1, 2019 73,758,097 27,898 Loss for the period - Share-based compensation - Conversion of convertible loans 1 5,970,069 3,672 Exercise of warrants 1 1,927,053 1,485 Issuance of shares (net of issuance expenses) 1 11,574,990 4,470 Balance - September 30, 2019 (Unaudited)* 93,230,209 37,525	Share capital Share capital and premium Balance - January 1, 2020 93,265,918 39,035 Share-based compensation - - Exercise of options 1,120,300 - )( Loss for the period - - Balance - September 30, 2020 (Unaudited) 94,386,218 39,035 Note Number of ordinary shares Share capital and premium Balance - January 1, 2019 73,758,097 27,898 Loss for the period - Share-based compensation - Conversion of convertible loans 1 5,970,069 3,672 Exercise of warrants 1 1,927,053 1,485 Issuance of shares (net of issuance expenses) 1 11,574,990 4,470 Balance - September 30, 2019 (Unaudited)* 93,230,209 37,525	Reserve for share-based payment transactions and other reserves 4,790 140 - - 4,930 Reserve for share-based payment transactions and other reserves 4,170 - 567 - - 1,519 6,256 -	Reserve for share-based payment transactions and other reserves 4,790 140 - - 4,930 Reserve for share-based payment transactions and other reserves 4,170 - 567 - - 1,519 6,256 -	Accumulated deficit (25,954) - ( 4,762 ) ( 30,716 ) Accumulated deficit	Total shareholders' equity 17,871 140 - ( 4,762 ) 13,249 Total shareholders' equity
		27,898 - - 3,672 1,485 4,470		4,170 - 567 - - 1,519	(19,658) (5,258) - - - - (24,916)	12,410 (5,258) 567 3,672 1,485 5,989 18,865
	93,230,209	37,525		6,256

(*) Less than 1 thousand dollars.

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

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ZOOMD TECHNOLOGIES Ltd.

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD in thousands)

Balance - July 1, 2020 Share-based compensation Exercise of options Loss for the period Balance - September 30, 2020 (Unaudited)	Share capital 93,365,993 - 1,020,225 94,386,218	Share capital and premium 39,035 - - )*( 39,035	Reserve for share-based payment transactions and other reserves 4,905 25 - 4,930	Accumulated deficit (29,193) - - (1,523) (30,716)	Total shareholders' equity
					14,747 25 - (1,523) 13,249

Balance - July 1, 2019 Loss for the period Share-based compensation Conversion of convertible loan Exercise of warrants Issuance of shares (net of issuance expenses) Balance - September 30, 2019 (Unaudited)	Note 1 1	Number of shares 79,728,166 - - - 1,927,053 11,574,990	Share capital and premium 31,570 - - - 1,485 4,470 37,525	Reserve for share-based payment transactions and other reserves	Reserve for share-based payment transactions and other reserves	Accumulated deficit ( 22,217 ) (2,699) - - - - (24,916)	Accumulated deficit ( 22,217 ) (2,699) - - - - (24,916)	Total shareholders' equity	Total shareholders' equity
					4,632 - 105 - - 1,519 6,256		( 22,217 ) (2,699) - - - - (24,916)		13,985 (2,699) 105 - 1,485 5,989 18,865
		93,230,209

(*) Less than 1 thousand dollars.

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

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ZOOMD TECHNOLOGIES Ltd.

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(USD in thousands)

Balance - January 1, 2019 Conversion of convertible loan Exercise of warrants Share-based compensation Exercise of options Issuance of shares (net of issuance expenses) Loss for the year Balance - December 31, 2019	Share capital 73,758,097 5,970,069 1,927,053 - 35,709 11,574,990 - 93,265,918	Share capital and premium 27,898 3,672 1,485 - (*) - 5,980 - 39,035	Reserve for share-based payment transactions and other reserves 4,170 - - 620 - - - 4,790	Accumulated deficit (19,658) - - - - - ( 6,296 ) (25,954)	Total shareholders' equity
					12,410 3,672 1,485 620 - 5,980 ( 6,296 ) 17,871

(*) Less than 1 thousand dollars.

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

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ZOOMD TECHNOLOGIES Ltd.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD in thousands)

Cash flows- operating activities Loss from operations Adjustments to reconcile net loss to net cash from operating activities (Appendix A) Net cash used in operating activities Cash flows- investing activities Investment in bank deposits Purchase of property, plant, and equipment Net cash used in investing activities Cash flows- financing activities Lease liabilities Exercise of options Issuance of shares Exercise of warrants Net cash generated from (used in) financing activities Increase (Decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Erosion of cash and cash equivalents Cash and cash equivalents at the end of the financial year	For the nine months ended September 30, 2 0 2 0 2 0 1 9 ( 4,762 ) ( 5,258 ) 2,545 3,055 (2,217) ( 2,203 ) ( 14 ) ( 97 ) ( 21 ) ( 83 ) (35) ( 180 ) (495) ( 152 ) - )*( - 4,792 - 57 (495) 4,697 ( 2,747 ) 2,314 5,890 3,604 (171) - 2,972 5,918	For the three months ended September 30, 2 0 2 0 2 0 1 9 ( 1,523 ) ( 2,699 ) 532 1,732 (991) ( 967 ) ( 4 ) ( 7 ) ( 6 ) ( 22 ) (10) ( 29 ) (193) ( 114 ) - )*( - 4,792 - 57 (193) 4,735 ( 1,194 ) 3,739 4,203 2,179 (37) - 2,972 5,918	Year ended December 31,	Year ended December 31,
	2 0 2 0 ( 4,762 ) 2,545 (2,217) ( 14 ) ( 21 ) (35) (495) - )*( - - (495) ( 2,747 ) 5,890 (171) 2,972	2 0 2 0 ( 1,523 ) 532 (991) ( 4 ) ( 6 ) (10) (193) - )*( - - (193) ( 1,194 ) 4,203 (37) 2,972		2 0 1 9
				( 6,296 ) 4,075 ( 2,221 ) ( 89 ) ( 96 ) ( 185 ) ( 147 ) - )*( 4,782 57 4,692
				2,286 3,604 - 5,890

(*) Less than 1 thousand dollars.

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

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ZOOMD TECHNOLOGIES Ltd.

UNAUDITED APPENDICES TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(USD in thousands)

Cash flows from operating activities: A. Adjustments to reconcile net profit to net cash from operating activities Depreciation and amortization Change in employee benefit liabilities, net Cost of share-based payment Listing expenses Convertible loans and warrants revaluation Finance expenses, net Changes in assets and liabilities: Decrease (increase) in trade receivables and other receivables Increase (decrease) in trade and other payables, and other current and non-current liabilities Changes in IIA liabilities Interest Payments Total B. Significant non-cash transactions: Conversion of Convertible loans	For the nine months ended September 30, 2 0 2 0 2 0 1 9	For the nine months ended September 30, 2 0 2 0 2 0 1 9	For the three months ended September 30, 2 0 2 0 2 0 1 9 Unaudited	For the three months ended September 30, 2 0 2 0 2 0 1 9 Unaudited	Year ended December 31,	Year ended December 31,
	2 0 2 0					2 0 1 9
	1,845 2 140 - - 98 406 ( 29 ) - 2,462 83 2,545 -	1,588 12 567 1,519 1,118 ( 41 ) ( 1,762 ) ( 56 ) 83 3,028 27 3,055 3,672	613 3 25 - - 23 (180) (5) - 479 53 532 -	574 4 105 1,519 ( 1 ) ( 25 ) ( 814 ) 280 63 1,705 27 1,732 3,672		2,162 14 620 1,519 1,118 ( 129 ) ( 1,965 ) 751 (46) 4,044 31 4,075 3,672

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

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ZOOMD TECHNOLOGIES Ltd.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands)

NOTE 1 - DESCRIPTION OF BUSINESS AND GENERAL

Description of Business:

Zoomd Technologies Ltd. (formerly DataMiners Capital Corp.) (the “ Company ”) was incorporated under the Business Corporations Act (Alberta) on October 1, 2013 and completed its initial public offering on May 29, 2014. The Company was designated as a Capital Pool Company as such term is defined by Policy 2.4 (“ Policy 2.4 ”) of the TSX Venture Exchange (the “ TSXV ”) with no commercial operations or assets other than cash and its only business being the identification and evaluation of assets or businesses with a view to completing a “Qualifying Transaction” as such term is defined by Policy 2.4.

On May 28, 2019, the Company, Zoomd Ltd. (“ Zoomd ”) and Dotima 2019 Ltd. (“ Subco ”), a whollyowned Israeli subsidiary of the Company, entered into an agreement and plan of merger (the “ Business Combination Agrement ”) pursuant to which the Company and Zoomd agreed to effect the combination of their respective businesses and assets by way of a “three-cornered amalgamation” which upon completion, would result in a reverse takeover of the Company by the shareholders of Zoomd (the “ Transaction ”). The Transaction, which was completed on August 28, 2019, constituted the Company’s Qualifying Transaction under Policy 2.4. Pursuant to the terms of the Business Combination Agreement, the Company acquired all the issued and outstanding shares of Zoomd by way of an amalgamation between Zoomd and Subco, with the amalgamated entity becoming a direct, wholly-owned subsidiary of the Company.

Concurrently with the Qualifying Transaction, Zoomd raised CAD$9,265,990 (approximately US$7 million) pursuant to a private placement (the “ Concurrent Financing ”) by issuing 8,385,990 subscription receipts and 880,000 common shares of Zoomd FinanceCo Ltd. each of which, upon completion of the Qualifying Transaction, was exchanged for one common share of the Company.

Upon the completion of the Qualifying Transaction the Company issued an aggregate amount of 90,921,209 common shares to the shareholders of Zoomd (including those holding common shares of Zoomd FinanceCo Ltd. as a result of the Concurrent Financing) in exchange for all the issued and outstanding shares of Zoomd.

Prior to the consummation of the Transaction Zoomd was required to make a share split (the “ Share Split ”) 1:9.674629454 adjustment to its share capital (the " Ratio "), so that immediately prior to the closing of the Transaction (i) Zoomd issued to each of its shareholders, with respect to each ordinary share of Zoomd held, an additional of 8.674629454 ordinary shares (rounded to the nearest whole number) (keeping the ratio of 1:9.674629454) (the " Bonus Shares "); and (ii) the number of ordinary shares or rights convertible into, exercisable or exchangeable into, or entitling the holder thereof to receive directly or indirectly, additional ordinary shares of Zoomd under any option or warrant to purchase ordinary shares currently outstanding or otherwise granted by Zoomd (the " Outstanding Options ") was adjusted as per the Ratio so that each one ordinary share issuable under such Outstanding Option shall be increased by and additional amount of 8.674629454 ordinary shares (rounded to the nearest whole number).

From accounting perspectives, since the Company’s operations did not constitute a business, the acquisition is not within the scope of IFRS 3 but, nevertheless, resulted in consolidated financial statements that are similar to those produced under reverse acquisition accounting, except that no goodwill arises, with the difference between the fair value of the shares issued by the accounting acquirer and the fair value of the accounting acquiree’s identifiable net assets represents a service of listing for its shares under IFRS 2 Share-based Payments and recognized as an expense in the statement of income and comprehensive income.

As the acquirer for accounting purposes, Zoomd's net assets are included in the consolidated statements of financial position at their carrying amounts.

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ZOOMD TECHNOLOGIES Ltd.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Basis of preparation:

The condensed consolidated interim financial statements of the Company are prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting”. Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) have been condensed or omitted. Accordingly, these condensed consolidated interim financial statements should be read in conjunction with Zoomd annual consolidated financial statements for the year ended December 31, 2019 and accompanying notes, which have been prepared in accordance with IFRS as issued by the International Accounting Standards Board. As explained above, Zoomd is considered the accounting acquirer and this interim report is a direct continuation of the financial statements of Zoomd.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates and requires management to exercise its judgment in the process of applying the Company’s accounting policies.

B. Risks and uncertainties

On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic, which continues to spread around the world. COVID-19 and actions taken to mitigate the spread of it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates.

The severity of the impact of the COVID-19 pandemic on the Company’s business will depend on a number of factors, including but not limited to the duration and severity of the pandemic and the extent and severity of the impact on the Company’s customers, all of which are uncertain and cannot be predicted. The management of the Company is closely evaluating the impact of COVID19 on the Company’s business. The Company took a number of steps to mitigate the impact of the pandemic on its operations for 2020, including decreasing all employees’ salaries by 25% for April and May 2020 and reducing some of its service providers’ expenses. As of July 2020, the Company decreased all of its employees’ salaries and some of its service providers costs by 10%. Further steps will be taken according to the Company’s financial situation.

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ZOOMD TECHNOLOGIES Ltd.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands)

NOTE 3 - SHARE CAPITAL AND OTHER EQUITY:

A. Share based payment:

The Company established a stock option plan (the “ Plan ”) for its key employees, officers and directors, and certain consultants. The Plan is administered by the Board of Directors of the Company. The Board may from time to time grant options to purchase ordinary shares of the Company and the exercise price per share. Options under the Plan expire ten years after the grant date and vest either immediately or over periods up to three years and are equity-settled.

The following table provides the activity of stock option grants for the periods ended September 30, 2020, and December 31, 2019 and January 1, 2019 and for options outstanding, and exercisable as of September 30, 2020, the weighted average exercise price, and the weighted average remaining contractual life.

Outstanding January 1, 2019 Expired Forfeited / Cancelled Exercised Granted Outstanding December 31, 2019 Expired Forfeited / Cancelled Exercised Granted Outstanding September 30, 2020 Options exercisable		Options outstanding	Options outstanding	Options outstanding
		Number 8,447,087 - 50,105 35,709 - 8,361,273 - 81,096 1,120,300 2,376,295 9,536,172 8,135,107	Weighted average exerciseprice - - - - - - 0.40 0.10	Weighted average remaining contractual life (inyears)
				8.21 7.21 1.53 0 5.2

The fair value at the date of grant of the options granted during the periods ended December 31, 2019 and January 1, 2019 equal the share price of $0.41 as the exercise price was set to nil, hence no other parameter affected the grant date fair value.

The following table summarizes information about the assumptions for measuring the fair value of the options under the Black-Scholes option pricing model for the periods ended September 30, 2020, is as follows :

Dividend yield (%) Expected volatility of the share prices (%) Risk-free interest rate (%) Expected life of share options (years)	2020
	0 100% 0.16%-0.17% 1-3.5

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ZOOMD TECHNOLOGIES Ltd.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands)

NOTE 3 - SHARE CAPITAL AND OTHER EQUITY: (Cont.)

A. Share based payment: (Cont.)

The Company recognized total expense of $140 and $620 related to above equity settled sharebased payment transactions for the period ended September 30, 2020 and December 31, 2019, respectively.

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