Attunity (ATTU) 6-K 2013 Q2 Current report (foreign)

Exhibit 99.1

ATTUNITY LTD. AND ITS SUBSIDIARIES

 INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2013

U.S. DOLLARS IN THOUSANDS

Unaudited

INDEX

	Page
Condensed Consolidated Balance Sheets	2-3
Consolidated Statements of Operations	4
Consolidated Statements of Comprehensive Income (Loss)	5
Consolidated Statements of Cash Flows	6
Notes to Consolidated Financial Statements	7-10

ATTUNITY LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands, except share and per share data

	June 30,		December 31,
	2013		2012
	Unaudited		Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	1,772	$	3,778
Trade receivables (net of allowance for doubtful accounts of $15 at June 30, 2013 and December 31, 2012)		3,241		3,671
Other accounts receivable and prepaid expenses		498		323
Total current assets		5,511		7,772
Other assets		165		93
Severance pay fund		3,070		2,880
Property and equipment, net		829		423
Intangible assets, net		1,497		1,870
Goodwill		13,075		13,094
Total assets	$	24,147	$	26,132

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

2

ATTUNITY LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands, except share and per share data

	June 30,			December 31,
	2013			2012
	Unaudited			Audited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables	$	396		$	316
Payment obligation		-			1,934
Deferred revenues		5,960			4,759
Employees and payroll accruals		2,267			2,589
Accrued expenses and other current liabilities		807			1,220
Total current liabilities		9,430			10,818
LONG-TERM LIABILITIES:
Long-term deferred revenue		664			888
Liabilities presented at fair value and other long-term liabilities		764			875
Accrued severance pay		4,299			3,989
Total long-term liabilities		5,727			5,752
SHAREHOLDERS' EQUITY:
Share capital - Ordinary shares of NIS 0.4 par value -		1,284			1,270
Authorized: 32,500,000 shares at June 30, 2013 and  December 31, 2012; Issued and outstanding: 11,044,090 shares at June 30, 2013 and 10,919,930 shares at December 31, 2012
Additional paid-in capital		110,761			110,318
Receipt on account of shares		133			-
Accumulated other comprehensive loss		(659	)		(672	)
Accumulated deficit		(102,529	)		(101,354	)
Total shareholders' equity		8,990			9,562
Total liabilities and shareholders' equity	$	24,147		$	26,132

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

3

ATTUNITY LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands, except per share data

	Six months ended
	June 30,
	2013			2012
	Unaudited
Software licenses	$	5,043		$	7,141
Maintenance and services		5,644			5,335
Total revenue		10,687			12,476
Operating expenses:
Cost of revenues		1,046			1,173
Research and development		3,869			3,928
Selling and marketing		5,456			4,813
General and administrative		1,511			1,531
Total operating expenses		11,882			11,445
Operating income (loss)		(1,195	)		1,031
Financial income (expenses), net		(85	)		(557	)
Income (loss) before taxes on income		(1,280	)		474
Taxes on income (benefit)		(105	)		91
Net  income (loss)	$	(1,175	)	$	383
Basic net income (loss) per share		(0.11	)		0.04
Weighted average number of shares used in computing basic net income (loss) per share		10,994			10,382
Diluted net income (loss) per share		(0.11	)		0.03
Weighted average number of shares used in computing diluted net income (loss) per share		10,994			11,759

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

4

ATTUNITY LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

U.S. dollars in thousands

	Six months ended
	June 30,
	2013			2012
	Unaudited
Net income (loss)	$	(1,175	)	$	383
Other comprehensive income (loss):
Foreign currency translation  adjustment		13			(67	)
Net change in accumulated comprehensive income		13			(67	)
Comprehensive income (loss)	$	(1,162	)	$	316

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

5

ATTUNITY LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

	Six months ended June 30,
	2013			2012
	Unaudited
Cash  flows  activities:
Net income (loss)	$	(1,175	)	$	383
Adjustments required to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		114			102
Stock based compensation		306			324
Amortization of  intangible assets		373			524
Accretion of payment obligation		66			132
Convertible debt inducement expenses		-			108
Change in:
Accrued severance pay, net		120			168
Trade receivables		430			(414	)
Other accounts receivable and prepaid expenses		(175	)		(325	)
Other assets		(72	)		(28	)
Trade payables		44			(94	)
Deferred revenues		977			101
Employees and payroll accruals		(322	)		7
Accrued expenses and other liabilities		(413	)		(808	)
Liabilities presented at fair value and other long-term liabilities		(111	)		329
Revaluation of restricted cash		-			2
Net cash provided by operating activities		162			511
Cash flows from investing activities:
Purchase of property and equipment		(484	)		(126	)
Net cash used in investing activities		(484	)		(126	)
Cash flows from financing activities:
Proceeds from exercise of stock options, warrants and rights		151			184
Receipts on account of shares		133			-
Repayment of long-term debt		-			(103	)
Repayment of convertible debt		-			(153	)
Payment of contingent consideration		(2,000	)		-
Net cash used in financing activities		(1,716	)		(72	)
Foreign currency translation adjustments on cash and cash equivalents		32			(45	)
Increase (decrease) in cash and cash equivalents		(2,006	)		268
Cash and cash equivalents at the beginning of the period		3,778			1,484
Cash and cash equivalents at the end of the period		1,772			1,752
Supplemental disclosure of cash flow activities:
Cash paid during the period for:
Interest		5			225
Taxes		389			377
Non cash activities:
Purchase of property and equipment		36			-
Conversion of convertible debt and bifurcated conversion feature		-			630

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

6

ATTUNITY LTD. AND ITS SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 1:- GENERAL

Attunity Ltd. (the "Company" or "Attunity") is a provider of information availability software solutions that enable access, sharing and distribution of data, across heterogeneous enterprise platforms, organizations, and the cloud. Using Attunity's software, organizations are able to connect, transfer, join, stream and distribute to and from a variety of data sources and files in real-time. In addition, the Company provides maintenance, consulting, and other related services for its products.

In April 2013 the Company paid the earn-out payment to RepliWeb Inc.'s former shareholders in the amount of $2.0 million.

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES

a. Unaudited interim consolidated financial statements:

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. In the opinion of management, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair presentation of the Company's consolidated financial position as of June 30, 2013, consolidated results of operations for the six months ended June 30, 2013 and 2012 and cash flows for the six months ended June 30, 2013 and 2012.

The balance sheet at December 31, 2012 has been derived from the audited consolidated financial statements of the Company at that date but does not include all of information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

The accompanying unaudited interim  consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2012 included in the Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission ("SEC") on March 29, 2013. Results for the six months ended June 30, 2013 are not necessarily indicative of results that may be expected for the year ending December 31, 2013.

Unless otherwise noted, all references to "dollars" or "$" are to United States dollars.

b. Use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

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ATTUNITY LTD. AND ITS SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 3:- LIABILITIES PRESENTED AT FAIR VALUE

According to the loan agreement (“Agreement”) with Plenus Technologies Ltd. and its affiliates, ("Plenus"), dated January 31, 2007 (as amended on March 30, 2009 and September 4, 2011), Plenus is entitled to compensation of 15% of the proceeds payable in a Fundamental Transaction (as defined in the Agreement), upon consummation of a Fundamental Transaction until December 31, 2017. During such period, Plenus may elect to receive the $300 in cash in lieu of such compensation.

The above mentioned was accounted for in accordance with ASC No. 815-40, “Derivatives and Hedging”, based on which was considered a derivative and presented at fair value, within liabilities presented at fair value and other long term  liabilities, which is marked to market at each reporting period. As of June 30, 2013, the liability amounted to $667. The fair value of this derivative was based on valuation performed by third- party valuation firm using the Binomial Model for options valuation based on assumptions provided by management.

The Company classified the fair value of this derivative as level 3, in accordance with ASC No. 820, "Fair Value Measurements".

NOTE 4:- SHAREHOLDERS' EQUITY

The fair value for options granted in the periods presented is estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted average assumptions:

	Six months ended June 30,
	2013	2012
	Unaudited
Risk free interest	0.57%	1.00%
Dividend yields	0%	0%
Volatility	81%	127%
Expected life (in years)	4	4

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ATTUNITY LTD. AND ITS SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 4:- SHAREHOLDERS' EQUITY (Cont.)

The following is a summary of the Company's stock options activity for the six months ended June 30, 2013:

	Number of options (in thousands)			Weighted Average exercise price		Weighted- average remaining contractual term (in years)		Aggregate intrinsic value
	Unaudited
Outstanding at December 31, 2012		1,670		$	2.44
Granted		68			6.47
Exercised		(50	)		2.29
Canceled or forfeited		(41	)		4.51
Outstanding at June 30, 2013		1,647		$	2.56		2.74	$	5,700
Exercisable at June 30, 2013		1,257		$	2.31		2.18	$	4,719
Vested and expected to vest at June 30, 2013		1,620		$	2.55		2.71	$	5,638

The weighted average fair value of options granted during the six months ended June 30, 2013 was $3.8.

The following table shows the total stock-based compensation expense included in the interim consolidated statements of operations:

	Six months ended June  30,
	2013		2012
	Unaudited
Research and development	$	132	$	121
Selling and marketing		88		76
General and administrative		86		127
Total stock-based compensation expense	$	306	$	324

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ATTUNITY LTD. AND ITS SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 5:- NET INCOME (LOSS) PER SHARE

The following table sets forth the computation of the basic and diluted net income per share:

	Six months ended June 30,
	2013			2012
	Unaudited
Net income (loss)	$	(1,175	)	$	383
Weighted average ordinary shares outstanding		10,994			10,382
Dilutive effect:
Warrants and Options		-			1,377
Diluted weighted average ordinary shares		10,994			11,759
Basic net income (loss) per share	$	(0.11	)	$	0.04
Diluted net income (loss) per share	$	(0.11	)	$	0.03

NOTE 6:- FINANCIAL EXPENSE, NET

	Six months ended June 30,
	2013			2012
	Unaudited
Financial income:
Revaluation of liabilities presented at fair value	$	(63	)	$	-
Exchange rate differences		(22	)		(109	)
		(85	)		(109	)
Financial expenses:
Interest		29			97
Exchange rate differences		75			-
Revaluation of liabilities presented at fair value		-			329
Convertible Debt inducement expenses		-			108
Accretion of contingent payment obligation		66			132
		170			666
	$	85		$	557

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