| FINANCIAL INSTRUMENTS-RISK MANAGEMENT: | NOTE
14 - FINANCIAL INSTRUMENTS – RISK MANAGEMENT: The
Company’s activities expose it to various financial risks, such as market risk, including currency risk, credit risk and liquidity
risk. The Company’s overall risk management plan focuses on minimizing possible adverse effects on the Company’s financial
performance. Risk
management is performed by the CFO, which includes examining certain exposures to risks, such as exchange rate risk, credit risk. In 2022,
the Company did not use derivative financial instruments to hedge its operations. Credit
risk: Credit
risk is created when the failure of parties against the fulfillment of their obligations may reduce the amount of future cash flows from
the financial assets held by the Company to the balance sheet date. The Company’s main financial assets are cash and cash equivalents,
customers and other receivables, and represent the Company’s maximum exposure to credit risks in connection with its financial assets.
The company holds cash in large financial institutions. The
par value of financial assets represents the maximum credit exposure. The
maximum exposure to credit risk at the time of reporting was:
December 31, 2022
December 31, 2021
Cash
11,934
3,854
Trade
accounts receivables
1,295
806
Other
accounts receivable
2,166
711
FPA
40,852
-
Contract
assets
5,035
6,015
Total
61,282
11,386
a.
Currency risk: Currency
risk is the risk that the value of financial instruments will be affected by changes in exchange rates. Currency risk is created when
future commercial transactions and recognized assets and liabilities are denominated in a currency other than the Company’s operating
currency. The company is exposed to foreign currency risk resulting from exposures to various currencies, mainly in relation to the New
Israeli Shekel, the Euro and the British Pound. The
company's policy is not to execute currency protection transactions. As
of the balance sheet date, the Group’s exposure to currencies as follows:
December
31, 2022
NIS
EUR
GBP
USD
Total
Assets:
Cash and cash equivalents
1,281
640
607
9,406
11,934
Trade receivables
-
187
804
304
1,295
Prepaid expenses and
other
-
2,149
-
17
2,166
Derivatives FPA
-
-
-
40,852
40,852
Contract Assets
-
-
3,720
1,315
5,035
1,281
2,976
5,131
51,894
61,282
Liabilities:
Current
liabilities:
Current maturities long-term
loans
-
-
-
-
-
Trade payables
(614
)
(324
)
(433
)
(89
)
(1,460
)
Payables and credit balances
(2,644
)
(942
)
(721
)
(3,322
)
(7,629
)
(3,258
)
(1,266
)
(1,154
)
(3,411
)
(9,089
)
Non-current
liabilities:
Long term loans from
banks
-
-
-
(54,926
)
(54,926
)
Net
balances
(1,977
)
1,710
3,977
(6,443
)
(2,733
)
December 31, 2021
NIS
EUR
GBP
USD
Total
Assets:
Cash and cash equivalents
747
19
2,454
634
3,854
Trade receivables
80
77
608
41
806
Other accounts receivable
-
711
-
-
711
Contract Assets
-
-
1,248
4,767
6,015
827
807
4,310
5,442
11,386
Liabilities:
Current liabilities:
Current maturities long-term loans
(508
)
-
-
(5,826
)
(6,334
)
Trade payables
(518
)
(945
)
(3,594
)
(3,465
)
(8,522
)
Payables and credit balances
(5,164
)
-
(1,032
)
(436
)
(6,632
)
(6,190
)
(945
)
(4,626
)
(9,727
)
(21,488
)
Non-current liabilities:
Long term loans from banks
(1,543
)
-
-
(5,400
)
(6,943
)
Net balances
(6,906
)
(138
)
(316
)
(9,685
)
(17,045
)
b.
Sensitivity analysis: A
10%
strengthening of the dollar against the following currencies would have resulted in an increase (decrease) in the equity and profit and
loss in the amounts presented below. This analysis assumes that all other variables, and especially interest rates, remain constant. A
10%
weakening of the currency against the relevant currencies will have the same effect in the opposite direction on equity and profit and
loss.
December
31, 2022
December
31, 2021
Linked to NIS
(1,977
)
(6,906
)
10
%
10
%
(198
)
(690
)
Linked to EUR
1,711
(138
)
10
%
10
%
171
(14
)
Linked to GBP
3,977
(316
)
10
%
10
%
398
(32
)
c.
Liquidity risks: Liquidity
risks arise from the management of the Group’s working capital as well as from the financing expenses and principal repayments of
the Group’s debt instruments. Liquidity risk is the risk that the Group will find it difficult to meet obligations related to financial
liabilities. Liquidity
risks arise from the management of the Group’s working capital as well as from the financing expenses and principal repayments of
the Group’s debt instruments. Liquidity risk is the risk that the Group will find it difficult to meet obligations related to financial
liabilities. The
following is an analysis of the contractual maturities of financial liabilities in accordance with nominal values for settlement. Based
on the earliest time the company will be required to pay:
December
31, 2022s
Within
30 days
1-12
Months
1-5
Years
Total
Current maturities long-term
loans
-
-
-
-
Liabilities in respect
of leases-ST
269
752
-
1,021
Trade payables
251
1,209
-
1,460
Payables to related parties
-
-
-
-
Other Accounts Payable
3,534
4,309
-
7,843
Long term loans from
banks, net
-
-
77,543
77,543
Liabilities in respect
of leases-LT
-
-
2,280
2,280
Loan from Shareholder
-
-
-
-
Derivatives Liabilities
-
-
20,305
20,305
Total
4,054
6,270
100,128
110,452
December
31, 2021
Within
30 days
1-12
Months
1-5
Years
Total
Current maturities long-term
loans
448
5,886
-
6,334
Liabilities in respect
of leases-ST
132
857
-
989
Trade payables
-
8,522
-
8,522
Payables to related parties
-
2,149
-
2,149
Other Accounts Payable
-
4,483
-
4,483
Long term loans from
banks, net
-
-
6,943
6,943
Liabilities in respect
of leases-LT
-
-
2,984
2,984
Loan from Shareholder
-
-
4,533
4,533
Derivatives Liabilities
-
1,392
-
1,392
Total
580
23,289
14,460
38,329
d.
Fair value of financial instruments measured at fair value on a periodic
basis
Level
December
31, 2022
December
31, 2021
Financial
Liabilities:
Warrants
3
-
1,392
SPAC Public Warrant
1
286
-
SPAC Private Warrant
2
121
-
Price Adjustment shares
3
19,898
-
Total
20,305
1,392
e.
Classification of financial
instruments by fair value hierarchy: The
financial instruments measured in the balance sheet at fair value are classified, according to groups with similar characteristics, into
a fair value ranking as follows, determined in accordance with the data source used to determine the fair value: Level
1: Quoted prices (without adjustments) in an active market of identical assets and liabilities. Level
2: Non-quoted prices data included in Level 1 which can be viewed directly or indirectly. Level
3: Data that are not based on viewable market information (assessment techniques without the use of viewable market data). As
mentioned in Note 13, the warrants granted to the bank and to Liquidity are derivative financial liablities and accordingly measured at
each balance date at fair value through profit or loss. All warrants balance as of December 31, 2021
Warrants
Balance at January 1,
2021
1,118
Issuance of warrants
74
Changes in fair value
recognized in finance expenses
200
Balance at December 31,
2021
1,392
Exercise of warrants
to shares
(397
)
Exercise of warrants
to cash (adjustment to other accounts payables)
(800
)
Changes in fair value
recognized in finance expenses
(195
)
Balance at December 31,
2022
-
f.
SPAC warrants: As
part of the Business Combination Agreement (see note 1) the company has issued new warrants: 7.63
million SPAC Private warrants, 10
million SPAC Public Warrants and 1
miliion Pipe warrants (together with the PAS called "Derivatives"). The
Company is required to allocate the Warrants transferred between the identifiable assets received and the listing expense in accordance
with IFRIC agenda decision from October 2022. The portion of the Warrants in the scope of IAS 32/IFRS 9 would be recognized as a liability
on initial recognition and re-measured through P&L until settlement. The
total value of the new warrants was 3,906
(see note 24) and was divided between equity and liability as follow: 3,490
for equity and 416
for liability under derivatives. The value of the warrants derivatives on October 27, 2022 was based on the market price of the closing
date of the Business Combination $0.22. On
December 8, 2022 3.364
million SPAC private warrants were chashless exercised into 553,692
shares. On
December 11, 2022 0.935
million PIPE warrants were exercised into 2
million shares with in returen to $1.5
million.
SPAC
Warrants
Balance at December 31,
2021
-
Issuance of warrant (SPAC
transactions)
416
Changes in fair value
recognized in finance expenses
872
Exercise of warrants
(881
)
Balance at December 31,
2022
407 The
value of the warrants derivatives on December 31, 2022 was based on the market price of $0.28.
g.
Price Adjustment shares: Immediately
following the closing of the SPAC transaction, the Company issued a total of 27,500,000
Price Adjustment Shares ("PAS) with the Company’s founders receiving 27,000,000
Price Adjustment Shares (18,000,000
to Yoav Leibovitch and 9,000,000
to Simona Gat) and the Sponsor receiving 500,000 Price Adjustment Shares. The
Price Adjustment Shares vest upon three price adjustment achievement dates: (i) one-third of the Price Adjustment Shares will vest if
at any time forty-five (45) days after the date of effectiveness of the applicable registration statement (file no. 333-268510) and within
the 10-year period following the closing, the volume weighted average price (“VWAP”) of SatixFy Ordinary Shares is greater
than or equal to $12.50 for any seven (7) trading days within a period of 30 consecutive trading days, (ii) one-third of the Price Adjustment
Shares will vest if at any time forty-five (45) days after the date of effectiveness of the applicable registration statement (file no.
333-268510) and within the 10-year period following the closing, the VWAP of SatixFy Ordinary Shares is greater than or equal to $14.00
for any seven (7) trading days within a period of 30 consecutive trading days and one-third of the Price Adjustment Shares will vest if
at any time forty-five (45) days after the date of effectiveness of the applicable registration statement (file no. 333-268510) and within
the 10-year period following the closing, the VWAP of SatixFy Ordinary Shares is greater than or equal to $15.50 for any seven (7) trading
days within a period of 30 consecutive trading days. The
share price targets shall be equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalization,
reclassifications, combinations, exchanges of shares and other similar changes or transactions to the SatixFy Ordinary Shares occurring
on or after the Closing. In
the event of a SatixFy change in control transaction within ten (10) years following the closing of the Business Combination, all of the
unvested Price Adjustment Shares not earlier vested will vest immediately prior to the closing of such change in control. If the Price
Adjustment Shares do not vest according to the achievement dates in the Business Combination Agreement, or if a change of control has
not occurred after the Closing and prior to the date that is ten (10) years following the Closing Date, then any unvested Price Adjustment
Shares shall automatically be forfeited back to SatixFy for no consideration. g.
Price Adjustment shares (cont.): The
Company allocated the price adjustment shares between the identifiable assets received and the listing expense (see also note 26). Following
the logic of the tentative agenda decision, the portion in the scope of IAS 32/IFRS 9 would be recognized as a liability on initial recognition
and re-measured through P&L until settlement. The
total value of the PAS was $212,675
(see note 24) and was divided between equity and liability as follow: $191,132
for equity and $21,543
for liability under derivatives. For
the purpose of measuring the price of the PAS derivatives on the merger date, a binomial model was used. The inputs used in determining
the fair value are: a risk-free interest rate of 3.96%,
an expected exercise period of 10.337
years and an expected volatility of approximately 50.
The PAS price for October 27, 2022 is based on a valuation of an average of $7.73
per share.
PAS
Balance on December 31,
2021
-
Issuance of PAS (Liability
part)
21,543
Changes in fair value
recognized in finance expenses
(1,645
)
Balance on December 31,
2022
19,898 For
the purpose of measuring the fair value of the PAS derivatives on December 31, 2022, a binomial model was used. The inputs used in determining
the fair value are: a risk-free interest rate of 3.88%,
an expected exercise period of 10.161
years and an expected volatility of approximately 50% . |
