Post on 09-Jun-2020
QUARTERLY REPORT
Q2 2013 (SUBJECT TO REVIEW)
2
Contents
Q2 2013 in Brief __________________________________________________________________________________________ 3
Selected Highlights _______________________________________________________________________________________ 5
Outlook ____________________________________________________________________________________________________ 5
About Cxense _____________________________________________________________________________________________ 6
Condensed Financial Report _____________________________________________________________________________ 8
Consolidated Income Statement (subject to review) ________________________________________________ 10
Consolidated Statement of Financial Position ________________________________________________________ 11
Consolidated Statement of Cash Flow ________________________________________________________________ 14
Notes to the Consolidated Financial Statements _____________________________________________________ 15
OFFICE LOCATIONS
North America Latin America Japan Europe Asia Pacific
Boston, MA
Cxense, Inc. 30 Turnpike Road Southborough, MA 01772 USA
Miami, FL
Cxense Latin America Suite 232, 4801 South University Drive Davie, FL 33328 USA
Tokyo, Japan
Cxense Co., Ltd. SU Building 204 3-1 Uguisudani-cho, Shibuya-ku Tokyo, 150-0032, Japan
London, UK
Cxense UK 5 Regent St. Charles House, 5th Floor United Kingdom
Melbourne, Australia
Cxense Australia Pty Ltd Level 2, 84 William Street Melbourne, 3000 Australia
San Francisco, CA xxxxx
Cxense, Inc. 1625 El Camino Real, Suite 2 Belmont, CA 94002 USA
Buenos Aires, Argentina
Victoria Ocampo 360 Piso 3 Puerto Madero Ciudad de Buenos Aires Argentina
Oslo, Norway (Corporate Headquarters)
Cxense AS Henrik Ibsens gate 100 P.O. Box 2920 Solli NO-0230 Oslo, Norway
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Q2 2013 in Brief
During Q2 2013, Cxense Software-as-a-Service (SaaS) closed 14 new contracts. Eight of the new contracts
were signed in Europe, five in the Americas and one in Japan. Two of the signed contracts represented
additional purchases from existing customers, while 12 of the contracts were signed with new customers,
predominantly premium publishers.
During the quarter, it became evident that the Cxense Solution Suite strongly supports the major market
trends within online media and publishing. A strong recent trend among premium publishers is the move
toward charging for digital content. According to the World Association of Newspapers and News
Publishers, 86% of publishers say that they will start or have started to implement paid content into their
online business model in 2013. During Q2, Cxense signed two contracts with customers who will utilize the
Cxense Solution Suite to fuel their paid-content solutions. Cxense Content will be used to recommend paid-
content articles based on the users interest, Cxense Advertising to promote the subscription product in the
right context, and Cxense Analytics will be used to analyze the subscriber conversion path to enable optimal
positioning of the paid content toward users who are inclined to subscribe.
Another market trend that became more evident during Q2 was
the development of publisher-controlled content networks.
During the quarter, Cxense signed two contracts with large
multi-publication publishers that now use Cxense Content to
power personalized cross-publication article recommendations.
The publisher objective with cross-publication content
recommendations is to utilize all their publications as sources
for personalized content experiences. This improves the
relevancy of the recommendations, and also helps drawing
traffic from high/traffic-lower-advertising-price publications
(e.g., general news sites) to lower-traffic/high-advertising price
publications (e.g., online magazines).
Finally, there continues to be very strong traffic growth with
mobile and tablet devices. During Q2, Cxense signed one
contract with a pure-play mobile advertising player that chose
Cxense Advertising for its excellent mobile capabilities,
including highly targeted advertising.
The Cxense Extraordinary Insight Engine™(EIE™) powers the core functionality of all the software
applications in the Cxense software suite: Advertising, Analytics, Big Data, Content, and Search. With unique
real-time data capture, processing and output capabilities, the EIE enables the efficient targeting and
personalization methods of the applications. In Q1 2013, Cxense started to market the EIE as a stand -alone
offering through our Big Data solution, where customers may access the application programming
interfaces (APIs) of the EIE to utilize its unique real-time capabilities for customer-specific use cases that
involves Big Data capture, processing and output. In Q2, Cxense signed a new, significant contract in which
Figure 1 Cxense quarterly revenue development 1) (SaaS segment only)
1) Q3 12 and Q4 12 revenue figures are partly based on NGAAP and IFRS accounts and developed before the full year 2012 audit according to IFRS. Thus Q3 12 and Q4 12
numbers might slightly change when revisited according to IFRS during Q3 13 and Q4 13. All other quarters are presented according to IFRS
4
the EIE also will be integrated into the customer’s CRM systems to help improve customer support, and to
facilitate targeted marketing campaigns and various upsell activities toward its customer base.
For Q2 2013 (Q2 2012), Cxense group revenues for continued operations amounted to USD 1.500 million
(USD 0.619 million), of which USD 0.993 million (USD 0.503 million) came from our core business segment,
Cxense SaaS and USD 0.547 million (USD 117 million) came from the PCAN segment. Q2 2013 (Q2 2012)
inter-segment revenues amounted to USD 0.040 million (USD 0.001 million). At the end of Q2 2013, the
Swiss PCAN, PPN, was acquired by Tamedia AG, the leading Swiss media group and the most significant
participant in this ad network. Tamedia purchased the ad network from Cxense to increase its control over
future development of the network. Cxense will continue to deliver its SaaS services to the ad network as
before the transaction. Further details about the transaction and the financials of the discontinued
operations can be found in the notes to the accounts.
For Q2 2013 (Q2 2012) ,the group EBIT for continued operations amounted to USD -1.986 million (USD -
1.551 million), of which USD -1.849 million (USD -1.428 million) came from the SaaS segment and USD -
0.137 (USD -0.124 million) came from the PCAN segment.
During Q2 2013, Cxense experienced the first effects of the focused marketing and PR efforts launched
during Q1. The Cxense management was quoted in Big Data related articles in the Guardian, the second most
popular UK online newspaper; in Aftenposten, the largest Norwegian newspaper by circulation; as well as in
the Norwegian Technology publication Digi.no. During Q2 2013, Cxense attended eight marketing events, of
which three were arranged in the Americas, four in Europe, and one in Japan.
The Cxense development teams continued to launch improvements to Extraordinary Insight Engine (EIE)
and the Cxense Big Data solutions. The EIE got improved real-time query capabilities on longer -time series
than before, and Cxense Big Data expanded APIs for wider and easier integration to external customer
applications (e.g., CRM systems). Furthermore, Cxense Analytics got increased reporting and dashboard
features. For Cxense Advertising, we launched a new, extensive back-end service and resource monitoring
which makes troubleshooting and fault detection more cost effective for our support resources. In addition
Cxense Advertising got improved Supply-Side-Platform (SSP) functionality with additional 3rd-party ad
server and creative support, which expands our utility for customers. The Cxense Content solution was
extended with improved collaborative filtering.
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Selected Highlights
Rodale, the North America based magazine publisher, licensed the full Cxense suite. The publisher is
known for magazines such as Men’s Health, Bicycling, Runner’s World, etc.
Styria, one of the leading media companies in Austria, Croatia and Slovenia, chose Cxense Content
to power its cross-publication content recommendation network to increase readership,
engagement and traffic.
Aller Media, the leading Nordic magazine publisher, chose Cxense Content to power its cross
publication content network.
Yomiuri, known as the world’s largest newspaper by circulation, upgraded their use of Cxense
Analytics and Content. Cxense Analytics now powers crucial real-time decision information for the
front -end editorial team of the online edition. Cxense Content now also powers a (Cxense-branded)
recommendation box on the front page of the online edition.
Infobae.com, one of Argentina’s top three sites, chose Cxense Advertising to replace existing
advertising solutions.
Tamedia, the largest Swiss media group, chose the Cxense Big Data Solution, as well as Analytics, to
power the group’s demand for Big Data analytics through integration with its paid content systems
in addition to their CRM system.
Boost Communications AS, the Norway-based mobile advertising technology company, chose
Cxense Advertising to power their mobile ad network.
Videolog, one of the main online video providers in Brazil, chose Cxense Advertising to monetize its
site with Display and Video advertising.
Outlook
Cxense experiences an increasing customer interest for its solutions for real-time analytics, digital
advertising, actionable Big Data processing, content optimization and personalization, and search. Online
publishers and media companies continue to be the main customer focus area in the near term, with
interesting market opportunities within the e-commerce sector emerging in the medium term.
In the longer term, we also see opportunities in other business verticals for EIE, our Big Data platform, as
companies seek to improve their customer understanding and communication.
Most online companies also experience a significant growth on new devices and formats, mainly tablets and
mobile smart phones. This requires adoption of their content and monetization methods. The Cxense
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solutions have cross-device support (laptop, mobile tablet) and thus mobile growth represents a significant
opportunity for us.
Our commercial product platform addresses large and fast-growing markets. The global online advertising
market is estimated at more than USD 100 billion this year, and is expected by leading industry groups to
grow to more than USD 200 billion by 2020. The global e-commerce market is estimated to pass the USD
1,000 billion mark by 2013, now growing about 20% per year. Industry analyst group, Gartner expects that
Big Data will drive USD 230 billion in IT spending through 2016, up from USD 96 billion in 2012.(1).
About Cxense
Cxense was founded in February 2010, and has built the cloud-based Extraordinary Insight Engine (EIE) for
real-time analysis of content, user context, and behavior. The EIE is fully integrated by a range of solutions
(Cxense Advertising, Analytics, Big Data, Content, and Search), which are used by Cxense customers to
improve their online businesses by increasing advertising revenue, user engagement, and conversions to
digital subscriptions.
The solutions based on the
EIE are provided as SaaS
(Software-as-a-service)
services with monthly
software service fees and/or
royalty payments dependent
on advertising volume and
transaction levels. The sale of
our SaaS solutions is reported
in the Cxense SaaS business
area and represents our core
business.
Cxense has also helped
establish a range of publisher-
controlled advertising
networks (PCANs), including
in Spain, where the Company
also has retained an ownership. The PCANs act as publisher-controlled broker between the advertisers and
the publishers, and distribute and share the advertising revenues generated in the network with the
publishers. Due to the majority ownership, the PCAN in Spain is consolidated into the group accounts, and is
reported in the Cxense PCAN business area.
1) http://techcrunch.com/2012/10/17/big-data-to-drive-232-billion-in-it-spending-through-2016/
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Cxense group – financial development summary
USD thousands Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013
Q2 2013
cont'd. 2) 2 011 FY 2012
IFRS IFRS NGAAP / IFRS NGAAP / IFRS IFRS IFRS IFRS IFRS IFRS
SaaS segment
Revenues total 389 503 655 755 840 993 993 435 2 302
Hosting 55 73 80 171 153 171 171 130 378
Other cost of sales -45 61 -64 -11 -6 32 32 -409 -59
Cost of sales 10 134 16 159 146 203 203 -280 319
Gross profit 379 369 639 596 694 790 790 715 1 983
Gross magin % 97 % 73 % 98 % 79 % 83 % 80 % 80 % 164 % 86 %
Personnel 1 206 1 443 1 276 1 615 1 790 1 832 1 832 4 000 5 540
Other OPEX 218 348 475 235 676 802 802 930 1 276
OPEX 1 423 1 791 1 751 1 850 2 466 2 633 2 633 4 930 6 816
EBITDA -1 044 -1 422 -1 112 -1 254 -1 772 -1 844 -1 844 -4 215 -4 832
PCAN segment
Revenues total - 809 976 1 437 1 375 1 534 547 - 3 222
Gross profit - 43 11 -5 -15 272 60 - 49
Gross magin % 5 % 1 % 0 % -1 % 18 % 11 % 2 %
OPEX - 299 268 332 335 419 196 - 900
EBITDA - -256 -257 -338 -350 -148 -137 - -850
GROUP
EBITDA -1 044 -1 678 -1 369 -1 592 -2 122 -1 991 -1 980 -4 215 -5 683
1) Q3 12 and Q4 12 revenue figures are partly based on NGAAP and IFRS accounts and were
developed before the full year 2012 audit according to IFRS. Thus, Q3 12 and Q4 12 numbers might
slightly change when revisited according to IFRS during Q3 13 and Q4 13. All other quarters are
presented according to IFRS.
2) Q2 2013 cont’d excludes the discontinued operations of PPN AG (See note 4 for details). All other
quarters are presented including PPN AG. Segment results excluding the discontinued operations
can be found in note 3.
3) Other cost of sales includes the elimination difference from elimination of inter group transactions.
For 2011 other cost of sales also includes governmental R&D cost refunds booked as negative costs.
8
Condensed Financial Report
Q2 2013 Group revenue for continued operations amounted to USD 1.5 million, an increase of USD 0.9
million over the same period last year (USD 0.6 million). The increase in revenue is due to the steady growth
in the number of external customers (SaaS Segment) and the establishment of the PCAN business from Q2
2012 (PCAN Segment). The PCAN business in continued operations relates to one Published-Controlled Ad
Network company in Spain. The Q2 2013 revenue from the SaaS Segment was USD 0.9 million for external
customers and inter-segment revenue was USD 0.04 million. Revenue from the PCAN segment was USD 0.5
million.
The Q2 2013 cost of sales amounted to USD 0.65 million, compared to USD 0.25 in Q2 2012. The SaaS
Segment cost of sales for Q2 2013 was USD 0.2 million, while the PCAN segment cost of sales was USD 0.49
million. Cost of sales within the SaaS segment relates to the hosting of the software applications used by our
customers. Cost of sales within the PCAN segment relates to revenue share paid to publishers providing
their advertising space, as well as agency commission paid to advertising agencies. The Q2 2013 gross profit
for the SaaS segment amounted to USD 0.79 million and USD 0.06 million for the PCAN segment. The Q2
2013 gross margin in the continuing operations of the PCAN segment was 11% compared to 1% in Q2 2012.
The increase is due to the gradual expiration of a publisher revenue share guarantee clause that originates
from the start-up of the continuing PCAN operations.
The Q2 2013 employee benefit expenses were USD 1.9 million, compared to USD 1.5 million in Q2 2012. The
increase is attributable to the number of employees rising to 62 full-time employees (FTE) from 48 FTE at
Q2 2012.
The depreciation expense in Q2 2013 and the same period last year was USD 0.006. The depreciation
expense is consistently low because the group has limited non-current assets. The large distributed cloud-
based systems operated by Cxense are hosted on platforms leased by large reputable hosting suppliers. The
group has limited intangible assets, and the R&D is expensed.
Other operating expenses amounted to USD 0.87 million in Q2 2013 and US 0.4 million Q2 2012. The
majority of the expenses related to marketing and external consulting (audit, legal and other). The increase
is in line with the expansion of the existing SaaS business and the inclusion of the PCAN subsidiary since Q2
2012.
The Finance income in Q2 2013 was USD 0.105 million largely relating to interest earned on bank deposits
and cash arising from the Share issue proceeds raised in June and December. Finance income in Q2 2012
was USD 0.01. Finance expenses, mostly relating to currency expenses, amounted to USD 0.012 million in
2013 and USD 0.08 in Q1 2012.
Income tax expense for Q2 2013 was USD 0.003 million compared to USD (0.002) positive in 2012. The
income tax expense arises in the Cxense SaasS subsidiaries in USA, Japan and Australia that perform Sales &
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Marketing and Research & Development activities. In both quarters, the tax expenses are estimates only,
with full reviews being performed at year-end.
The group net loss from continuing operations amounted to USD 1.9 million in Q2 2013, compared to USD
1.6 million in Q2 2012. This represents a loss of USD 15 per share, compared to USD 17 per share in Q2
2012.
The net loss attributable to discontinued operations for Q2 2013 amounted to USD 0.011 million, compared
to USD 0.13 million for Q2 2012. Full details of the sale of the PCAN subsidiary are outlined in Note 4 to the
accounts.
Total assets at the end of Q2 2013 amounted to USD 8.8 million compared to USD 4.3 million at Q2 2012.
The increase is predominantly due to the increase in cash and cash equivalents, which amounted to USD 5.8
million at the end of Q2 2013 and USD 2.9 million at the end of Q2 2012. Trade receivables were USD 1.7
million at the end of Q2 2013, compared to USD 0.6 million at the end of Q2 2012. The increase in Q2 2013
receivables is due to the growth in external customers billings in the SaaS Cxense and the PCAN segment.
The Q2 2013 current assets also include USD 0.8 million of assets held for sale relating to the sale of the
Swissad PCAN subsidiary.
Total current liabilities at the end of Q2 2013 were USD 3.8 million compared to USD 1.6 million at Q2 2012.
The increase is largely due to increased trade payables, accrued expenses, prepayments from customers and
employee-related payables. The Q2 2013 figure also includes USD 0.8 million of liabilities relating to the
sale of the Swissad PCAN subsidiary.
Net cash flow used in operating activities was USD 2.2 million in Q2 2013, compared to a positive amount of
USD 1.8 million in Q2 2012. The positive cash flow in Q2 2012 is due to the share proceeds issue of USD
$3.3 million that occurred in June 2012.
The available liquidity is deemed to be adequate for the remaining 2013 year.
10
Consolidated Income Statement (subject to review)
USD 1,000 Note
Q2 ended
30 June
2013
Q2 ended
30 June
2012
Half Year to
30 June
2013
Half Year to
30 June
2012
Year ended
31 December
2012
Year ended
31 December
2011
Continuing operations:
Revenue 3, 4 1 500 619 2 689 1 009 2 961 435
Operating expense
Cost of sales 3 650 251 1 211 261 1 061 (280)
Employee benefit expense 5 1 955 1 504 3 832 2 709 5 700 4 000
Depreciation expense 6 6 9 11 21 17
Other operating expense 6 875 410 1 604 627 1 446 930
Total operating expense 3 486 2 171 6 656 3 609 8 228 4 667
Net operating income/(loss) (1 986) (1 551) (3 966) (2 600) (5 266) (4 232)
Financial income and expense
Finance income 105 9 182 24 91 76
Finance expense (12) (8) (28) (9) (97) (16)
Net financial income/(expense) 93 1 155 15 (7) 60
Net income/(loss) before taxes (1 893) (1 550) (3 812) (2 585) (5 273) (4 171)
Income tax expense 3 (2) 18 2 33 11
Net income/(loss) for the period from continuing operations (1 897) (1 548) (3 829) (2 587) (5 306) (4 183)
Discontinued operations
Net income/(loss) for the period from
discontinuing operations 4 (11) (132) (167) (132) (442) 0
Total net income/(loss) for the period (1 907) (1 681) (3 996) (2 720) (5 748) (4 183)
Net income/(loss) attributable to:
Owners of the Company (1 846) (1 626) (3 844) (2 665) (5 564) (4 183)
Non-controlling interests (61) (55) (152) (55) (183) 0
Earnings per share:
Basic and diluted 7 (0,15) (0,17) (0,30) (0,29) (0,57) (0,53)
Statement of comprehensive income
USD 1,000
Q2 ended
30 June
2013
Q2 ended
30 June
2012
Half Year to
30 June
2013
Half Year to
30 June
2012
Year ended
31 December
2012
Year ended
31 December
2011
Net income/(loss) for the period (1 907) (1 681) (3 996) (2 720) (5 748) (4 183)
Other comprehensive income:
- Currency translation differences 23 297 97 239 (72) 264
Total comprehensive income/(loss) (1 884) (1 384) (3 899) (2 480) (5 820) (3 919)
Total comprehensive income/(loss) attributable to:
Owners of the Company (1 823) (1 329) (3 747) (2 425) (5 636) (3 919)
Non-controlling interests (61) (55) (152) (55) (183) 0
11
Consolidated Statement of Financial Position
USD 1,000 Note
Half Year to
30 June
2013
Half Year to
30 June 2012
As at 31 December
2012
Assets
Non-current assets
Deferred tax asset 18 - 14
Intangible assets 4 2 2
Office machinery, equipment,etc. 72 73 82
Other financial assets 13 10 12
Total non-current assets 107 86 110
Current assets
Trade receivables 8 1 685 603 1 873
Other short-term assets 9 449 594 764
Cash and cash equivalents 5 754 2 980 10 210
Total current assets 7 888 4 177 12 847
Assets classified as " held for sale" 787
Total assets 8 781 4 263 12 958
12
USD 1,000 Note
Half Year to
30 June
2013
Half Year to
30 June 2012
As at 31 December
2012
Equity and liabilities
Equity
Share capital 10 2 083 1 668 2 269
Other paid in capital 7 891 4 007 13 803
Currency translation differences 298 513 201,4
Retained earnings (4 987) (3 508) (6 453)
Equity attributable to the holders of the Company 5 286 2 680 9 820
Non-controlling interest 13 (277) (54) (125)
Total equity 5 008 2 626 9 695
Liabilities
Non-current liabilities
Deferred tax liabilities - (5) -
Total non-current liabilities - (5) -
Current liabilities
Trade payables 713 354 1 651
Current taxes 72 40 76
Other short-term liabilities 11 2 206 1 249 1 536
Total current liabilities 2 992 1 643 3 263
Liabilities related to assets "held for sale" 781
Total liabilities 3 773 1 638 3 263
Total equity and liabilities 8 781 4 264 12 958
13
Consolidated Statements of Changes in Equity
USD 1,000
Nominal
share
capital
Other paid
in capital
Currency
translation
differences
Retained
earnings
Attributable to
owners of
parent
company
Non
Controlling
interest
Total
equity
Total equity as at 1 January 2012 1 505 4 939 273 (4 663) 2 054 0 2 054
0
Profit for the period (2 665) (2 665) (55) (2 720)
Other comprehensive income 239 239 0 239
Total comprehensive income/(loss) for half
year to 30 June 2012 0 239 (2 665) (2 425) (55) (2 480)
Reduction of paid in capital (3 957) 3 957 0 0
Increase in share capital 181 3 084 3 265 0 3 265
Currency effects from translation of equity (18) (58) (138) (214) (214)
Total equity as at 30 June 2012 1 668 4 007 513 (3 508) 2 680 (54) 2 626
0
USD 1,000
Nominal
share
capital
Other paid
in capital
Currency
translation
differences
Retained
earnings
Attributable to
owners of
parent
company
Non
Controlling
interest
Total
equity
Total equity as at 1 January 2013 2 269 13 803 201 (6 453) 9 820 (125) 9 695
0 0
Profit for the period (3 844) (3 844) (152) (3 996)
Other comprehensive income 97 97 97
Total comprehensive income/(loss) for the
half year to 30 June 2013 0 97 (3 844) (3 747) (152) (3 899)
Reduction of paid in-capital (4 823) 4 823 0 0
Transaction costs 0 0
Share- based payments 41 41 41
Increase in share capital 0 0
Currency effects from translation of equity (186) (1 129) 488 (828) (828)
Total equity as at 30 June 2013 2 083 7 892 298 (4 987) 5 286 (277) 5 009
14
Consolidated Statement of Cash Flow
USD 1,000 Note
Q2 ended
30 June
2013
Q2 ended
30 June
2012
Half Year to
30 June
2013
Half Year to
30 June
2012
Year ended
31 December
2012
Cash flow from operating activities
Profit / (loss) before income tax (1 904) (1 685) (3 979) (2 720) (5 715)
Adjustments:
Income tax payable (3)
Share- based payments 5 4 49 53
Result from investment in associates 52
Depreciation and amortization 6 6 9 11 23
Currency translation effects (353) (40) (741) 26 (113)
Change in trade receivables (453) (287) (477) (467) (1 737)
Change in trade payables (256) 255 (265) 305 1 602
Change in other accrual and non-current items 694 371 1 003 638 750
Net cash flow from / (used in) operating activities (2 261) (1 381) (4 401) (2 207) (5 088)
Cash flow from investing activities
Investment in furniture, fixtures and office machines (3) (5) (3) (13) (34)
Investment in intangible assets (4) (2) (4) (2) (2)
Investment in associated companies (52)
Net cash flow from / (used in) investing activities (7) (7) (7) (15) (87)
Cash flow from financing activities
Net proceeds from share issues 3 265 3 265 13 390
Proceeds from minority interest 58
Net cash flow from / (used in) financing activities 3 265 3 265 13 448
Net increase/ (decrease) in cash and cash
equivalents (2 268) 1 878 (4 408) 1 043 8 272
Cash and cash equivalents at the beginning of the
period 8 070 1 103 10 210 1 938 1 938
Cash and cash equivalents at the end of the period
(1) 5 802 2 980 5 802 2 980 10 210
(1) Of cash and cash equivalents as at 30 June 2013 USD 49 thousand are presented as part of assets held for sale in the statement
of financial position. Summary of cash flow effects from discontinued operations and which are incorporated above are presented
in note 4.
15
Notes to the Consolidated Financial Statements
Note 1 General information
Cxense AS, which is the parent company of the Cxense group (the Group), is a limited liability company
incorporated and domiciled in Norway, with its corporate headquarters in Oslo. The Group is a global
technology company delivering innovative and intuitive products that help companies build unique online
experiences.
The company’s Board of Directors approved the financial statements on August 26, 2013.
These financial statements have been subject to review by independent Cxense auditor BDO.
Note 2 Basis of preparation and accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are
set out below.
The consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union (EU) and in accordance with the additional
requirements following the Norwegian Accounting Act.
The accounting policies applied in this condensed consolidated interim financial report are consistent with
those applied and described in the latest consolidated annual financial statements.
The going concern assumption has been applied when preparing this interim financial report
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Note 3 Segment information
Q2 ended 30 June 2013
USD 1,000 Cxense SaaS PCAN Eliminations Consolidated
Revenue
External customers 953 547 0 1 500
Inter-segment 40 0 (40) 0
Revenues total 993 547 (40) 1 500
Cost of sales 203 487 (40) 650
Gross profit 790 60 (0) 849
Employee benefit expense 1 832 124 0 1 955
Depreciation expenses 5 0 0 5
Other operating expense 802 73 0 875
EBIT (1 849) (137) (0) (1 986)
Net finance income/(expense) 95 (2) 0 93
Income tax income/(expense) (3) 0 0 (3)
Net income/(loss) from continuing operation (1 758) (139) (0) (1 896)
Net income/(loss) for the period from discontinuing operations 0 (11) (11)
Total net income/(loss) for the period (1 758) (149) (0) (1 907)
For management purpose the Group is organized into business units based on its product and services and has two
reportable segments:
- Cxense Saas, which sells software-as-a-service applications based on the Extraordinary Insight Engine™ (EIE™) for real-
time analysis of content, user context, and behaviour. The EIE is fully integrated by a range of applications (web analytics,
recommendations, search and targeted advertising), which are used by Cxense customers to improve their online businesses
by increasing advertising revenue, page views, readership and conversion.
- Publisher-Controlled Advertising Networks (PCANs) which sell online advertising on the sites of various publishers, and
distribute and share the advertising revenues generated in the network with publishers.
Segment performance is evaluated by the management based on operating profit or loss and is measured consistently with
operating profit in the financial statements. Transfer prices between operating segments are on an arm's length basis in a
manner similar to transactions with third parties.
Discontinued operations:
To be consistent with the presentation in the income statement and statement of financial position, the PCAN segment
presented below is exclusive to the discontinued operations. Furthermore, Cxense SaaS sale to the discontinued operation is
presented as a sale to external customers.
17
Half Year to 30 June 2013
USD 1,000 Cxense SaaS PCAN Eliminations Consolidated
Revenue
External customers 1 763 927 2 689
Inter-segment 70 (70) 0
Revenues total 1 833 927 (70) 2 689
Cost of sales 349 931 (70) 1 211
Gross profit 1 484 (5) (0) 1 479
Employee benefit expense 3 621 210 0 3 832
Depreciation expenses 8 1 0 9
Other operating expense 1 478 126 0 1 604
EBIT (3 624) (342) (0) (3 966)
Net finance income/(expense) 158 (3) 0 155
Income tax income/(expense) (18) 0 0 (18)
Net income/(loss) from continuing operation (3 484) (345) (0) (3 829)
Net income/(loss) for the period from discontinuing operations 0 (167) (167)
Total net income/(loss) for the period (3 484) (512) (0) (3 996)
Balance sheet information 30 June 2013
USD 1,000 Cxense SaaS PCAN
Eliminations
and
unallocated Consolidated
Segment assets:
Non-current assets 0 0 107 107
Current assets
- Trade receivables 1 202 482 1 685
- Other short term assets 575 17 (143) 449
- Cash and cash equivalents 5 586 167 5 754
Assets classified as "held for sale" 787 787
Total segment assets 7 364 1 454 (36) 8 781
Segment liabilities:
Non-current liabilities 0 0 0 0
Current liabilities 2 063 962 (34) 2 992
Liabilities related to assets "held for sale" 781 781
Total segment liabilities 2 063 962 (34) 3 773
18
PCAN segment in 2012:
Q2 ended 30 June 2012
USD 1,000 Cxense SaaS PCAN Eliminations Consolidated
Revenue
External customers 502 117 0 619
Inter-segment 1 (1) 0
Revenues total 503 117 (1) 619
Cost of sales 134 119 (1) 251
Gross profit 369 (1) 0 368
Employee benefit expense 1 443 60 0 1 504
Depreciation expenses 6 0 0 6
Other operating expense 348 62 0 410
EBIT (1 428) (124) 0 (1 551)
Net finance income/(expense) 1 (1) 1 1
Income tax income/(expense) 2 0 0 2
Net income/(loss) from continuing operation (1 425) (124) 1 (1 548)
Net income/(loss) for the period from discontinuing operations 0 (132) (132)
Total net income/(loss) for the period (1 425) (256) 1 (1 681)
Half Year to 30 June 2012
USD 1,000 Cxense SaaS PCAN Eliminations Consolidated
Revenue
External customers 891 117 0 1 009
Inter-segment 1 (1) 0
Revenues total 892 117 (1) 1 009
Cost of sales 144 119 (1) 261
Gross profit 749 (1) 0 748
Employee benefit expense 2 649 60 0 2 709
Depreciation expenses 11 0 0 11
Other operating expense 565 62 0 627
EBIT (2 477) (124) 0 (2 600)
Net finance income/(expense) 15 (1) 1 15
Income tax income/(expense) (2) 0 0 (2)
Net income/(loss) from continuing operation (2 464) (124) 1 (2 587)
Net income/(loss) for the period from discontinuing operations 0 (132) (132)
Total net income/(loss) for the period (2 464) (256) 1 (2 720)
The business incorporated as the PCAN segment was established at the beginning of Q2 2012, and thus segment
information from this segment are equal for Q2 ended 30 June 2012 and for first half year 2012.
19
Balance sheet information 30 June 2012
USD 1,000 Cxense SaaS PCAN
Eliminations
and
unallocated Consolidated
Segment assets:
Non-current assets 0 0 86 86
Current assets
- Trade receivables 322 414 (132) 603
- Other short term assets 349 245 0 594
- Cash and cash equivalents 2 772 208 2 980
Total segment assets 3 442 867 (46) 4 263
Segment liabilities:
Non-current liabilities (6) 162 (162) (6)
Current liabilities 805 868 (30) 1 643
Total segment liabilities 799 1 030 (192) 1 637
Geographic information
Revenues from external customers:
Half Year to
30 June
2013
Half Year to
30 June
2012
Year ended
31 December
2012
EMEA 3 696 1 125 3 933
Americas 387 154 502
Pacific 430 362 826
Total revenue from external customers 4 513 1 640 5 260
Information about major customers
The Company does not have single customers that generate 10% or more of the entity's total revenue.
The revenue information above is based on the location of the entity generating the revenue and includes sales generated
by discontinued operations. Revenues from discontinued operations has solely been booked to the EMEA segment in the
table above.
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Note 4 Discontinuing operations
Profit from the discontinued operations
USD 1,000
Half Year to
30 June 2013
Half Year to
30 June 2012
Year ended
31 December
2012
Revenue 1 982 691 2 515
Operating expenses 2 139 824 2 954
Net operating income/(loss) (156) (132) (440)
Net finance (11) 0 (2)
Income tax expense 0 0 0
Net income/(loss) for the period from discontinuing operations (167) (132) (442)
Earnings per share:
Basic and diluted (0,013) (0,014) (0,045)
Cash flow from discontinuing operations
USD 1,000
Half Year to
30 June 2013
Half Year to
30 June 2012
Year ended
31 December
2012
Net cash flow from operating activities (88) (138) (469)
Net cash flow from investing activities 0 (3) (7)
Net cash flow from financing activities 0 0 58
Net cash inflow/(outflow) (88) (141) (417)
At the end of Q2 2013 Cxense negotiated an agreement to sell the PCAN subsidiary PPN AG to Tamedia AG,
the Swiss based media group. The transaction is effective as of July 1, 2013. PPN AG is presented as
discontinuing operations through out this report.
Tamedia AG has been the most significant publisher in the Publisher Controlled Advertising Network
alongside a number of other publishers in the Swiss market. Tamedia states that the rationale for the
transaction is to improve the control of PPN and to use PPN as part of their strategy to develop an exclusive
networked advertising offering for their online publications. Tamedias intention is to continue to cooperate
with the other existing publishers in PPN around click-based performance advertising.
One hundred percent of the shares in PPN AG were sold for USD 106 thousand. Net assets from PPN AG
included in the consolidated accounts as of June 30, 2013 and presented as "held for sale" is USD 5
thousand. The final transaction values are subject to a separate audit of the PPN AG accounts. The final
gain/loss calculation of the transaction will be presented in the Q3 2013 report when the transaction is
completed.
21
Assets classified as "held for sale"
USD 1,000
As at 30 June
2013
Assets
Intangible assets 2
Office machinery, equipment etc. 5
Trade receivables 666
Other short term assets 66
Cash and cash equivalents 49
Total assets 787
Liabilities
Trade payables 673
Other short term liabilities 108
Total liabilities 781
Net assets included from discontinued operations 5
The following shows assets and liabilities that are included in the consolidated figures as at 30 June 2013 and
which are presented as "held for sale" in the statement of financial position.
Note 5 Employee benefit expense
Specification of employee expense
USD 1,000 Q2 2013 Q2 2012
Half Year to
30 June
2013
Half Year to
30 June
2012
Year ended
31 December
2012
Payroll expense 1 768 1 350 3 477 2 396 5 226
Share-based payments 4 0 49 0 53
Social security tax 188 127 359 217 464
Pensions 47 38 105 90 219
Other personnel expense 115 109 159 126 186
Presented as part of discontinued operations (167) (120) (318) (120) (449)
Total employee benefit expense 1 955 1 504 3 832 2 709 5 700
22
Note 6 Other operating expense
Specification of other operating expense
USD 1,000 Q2 2013 Q2 2012
Half Year
to 30 June
2013
Half Year to
30 June
2012
Year ended
31
December
2012
Audit, legal and other consulting fees 306 121 522 147 431
Office rental and related expenses 120 90 234 157 343
Marketing and representation 148 63 381 99 263
Travel expenses 243 132 390 188 474
Other operating expense 114 61 177 92 56
Presented as part of discontinued operations (56) (57) (100) (57) (121)
Total other operating expense 875 410 1 604 627 1 446
Note 7 Earnings per share
USD 1,000 Q2 2013 Q2 2012
Half Year to
30 June
2013
Half Year to
30 June
2012
Year ended
31 December
2012
Net income/(loss) for the year attributable to the
parent company (1 846) (1 626) (3 844) (2 665) (5 564)
Weighted average number of shares outstanding
for basic earnings per share 12 630 9 308 12 630 9 163 9 763
Earnings per share
- Basic (0,15) (0,17) (0,30) (0,29) (0,57)
- Diluted (1) (0,15) (0,17) (0,30) (0,29) (0,57)
(1) The Company has 366 potential dilutive shares from share options outstanding. Since the Group has a loss for the
year, and since the the potential shares do not have a dilutive effect, they are not included in the calculation.
23
Note 8 Trade receivables
USD 1,000
Half Year to
30 June
2013
Half Year to
30 June
2012
Trade receivables 2 371 618
Allowance for doubtful debts (21) (7)
Presented as assets "held for sale" (666) 0
Total trade receivables 1 685 610
Trade receivables are non-interest bearing and are generally on 30-day terms.
As at 30 June 2013, the ageing analysis of trade receivables is as follows:
USD 1,000
Total
Neither past
due nor
impaired
<30
days 31-90 days >90 days
30 June 2013 2 371 1 438 657 225 51
30 June 2012 618 239 183 138 57
Movements in allowance for doubtful debt: June June
USD 1,000 2013 2012
Balance at the beginning of the year 30 0
Impairment losses recognized on receivables 32 7
Amounts written off during the year as uncollectible (41) 0
Amounts recovered during the year 0 0
Impairment losses reversed 0 0
Balance at the end of the year 21 7
Past due but not impaired
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Note 9 Other short-term assets
USD 1,000
Half Year to
30 June 2013
Half Year to
30 June 2012
Year ended
31
December
2012
Accrued income 15 267 64
Prepayments 50 12 48
Receivable on authorities and government grants 349 275 509
Other short-term receivables 34 39 143
Other short term assets 449 594 764
Note 10 Share capital and shareholder information
Number of
shares
Share capital
NOK
Share capital
USD
Balance at 1 January 2012 9 018 9 018 000 1 505
Issued during the year 3 612 3 612 000 764
Balance at 31 December 2012 12 630 12 630 000 2 269
Issued during the year 0 0 0
Balance at 30 June 2013 12 630 12 630 000 2 083
Subscription rights
The Board of Directors has been authorized to issue 1040 shares as part of the share based payment
program. As at June 30, 2013 the Board of Directors had allocated 366 share options as part of the share
based-payment program, of which 0 had been exercised. In addition, as at 30 June 2013 the Board of
Directors has been authorized to issue an additional 1226 ordinary shares.
Nominal value per share at 30 June 2013 is Norwegian Krone (NOK) 1 000. Cxense AS has one class of
shares with equal rights for all shares.
25
Note 11 Other short-term liabilities
USD 1,000
Half Year to
30 June 2013
Half Year to
30 June 2012 31 Dec 2012
Public duties payables 308 157 202
Prepayments from customers 214 259 480
Accrued expenses 354 253 327
Salary-related provisions 496 296 376
Other current liabilities 388 283 150
Total other short-term liabilities 1 760 1 249 1 535
Note 12 Related party disclosure
USD 1,000
Purchase of services from Description of servicesHalf year ended
30 June 2013
Half year ended
30 June 201231 Dec 2012
Advokatfirma Ræder (1) Legal services - 111 118
Theoline AS (2) Consulting services 31 9
(1) The Chairman of the Board in Cxense AS is a partner in Advokatfirma Ræder.
(2) Stig Eide Sivertsen, Board member, is the owner of Theoline AS
(3) Autoscale Group is controlled by Marco Billeter and Tony Hrnek, Managing Directors of PPN Switzerland AG
USD 1,000
Balances with related parties Balance typeHalf year ended
30 June 2013
Half year ended
30 June 201231 Dec 2012
Advokatfirma Ræder Trade payables 94 42 102
Theoline AS Trade payables - - 9
Autoscale Group AG (3) Loan 76 79 82
Balances and transactions between the Company and its subsidiaries, which are related parties to the Company, have
been eliminated on consolidation and are not disclosed in this note. The group does not have other transactions with
related parties, except for remuneration to management as disclosed below:
26
Note 13 Subsidiaries
Name of subsidiary
Place of
incorporation
Portion of ownership and
voting power
Cxense Ltd. Cxense SaaS Australia 100 %
Cxense Co., Ltd. Cxense SaaS Japan 100 %
Cxense, Inc. Cxense SaaS USA 100 %
Cxense Inc. NV Holdings Cxense SaaS USA 100 %
Premium Audience Network, s.l.u. PCAN Spain 56 %
PPN Schweiz AG PCAN Switzerland 100% (1)
Principal activity according
to segment
(1) During Q2 2013 Cxense agreed to sell PPN AG to Tamedia AG. See Note 4 for details.
Note 14 Contingent liabilities
Note 15 Events after the reporting period
Sale of Subsidary:
Issue of Shares and allocation of share options:
The BoD has allocated 40 share options to key employees between June 30, 2013 and the approval of
this report. At the approval of this report 406 share options were allocated.
On June 3, 2013 the Board of Directors (BoD) authorized the issue of 32 shares in Cxense AS to four
employees and 5 shares to Polaris Media ASA, a total of 37 shares. The share issue was registered in
the company register in Q3 2013. The BoD used the authorization to issue shares given by the Annual
General Meeting for 2013. After this share issue the BoD is authorized to issue an additional 1226
shares under the same authorization.
The sale of the subsidiary PPN AG as explained in Note 4.
The Group has not been involved in any legal or financial disputes in Q2 2013 or Q2 2012, where an
adverse outcome is considered more likely than remote.
Since June 30, 2013 and until the date of these financial statements, the Board of directors is not aware
of any matter or circumstance not otherwise dealt with in this report, that has significantly or may
significantly affect the operations of the Consolidated Entity with the exception of the following:
27