The technological activity of Apply Advanced Mobile Technologies Ltd. (TASE:APLY), controlled by its chairman Noam Lanir, has been in decline for some time, and the company has been examining 'possibilities of cooperation" both by way of expansion of existing activity and "in other sectors."
According to its website, Apply creates "unique digital campaigns and develop innovative platforms, distribution methods and monetization tools for brands in the Mobile and Digital world." The deterioration in the company's position is confirmed by the "going concern" warning appended to its financial statements for the first half of 2019, after an absence of such warnings in 2017 and 2018. The company's auditors draw attention to the company's accumulated losses and its negative cash flow from regular activities.
In addition they state that the company's future "depends on growth in its regular business until it reaches operating profitability, or alternatively on raising more cash." They mention the collaborations that Apply seeks as among "the various possibilities for improvement in its business position."
Meanwhile, Apply's first half revenue plummeted 75% to just over NIS 2 million. In 2018 as a whole, Apply had revenue of NIS 15 million. The company's first half loss grew 37% to NIS 2.5 million.
Apply attributes the sharp decline in its revenue to "a decline in media activity", which also affected selling costs, gross profit and various expense items.
Apply's revenue of NIS 15 million in 2018 represented a 44% decline in comparison with 2017, and at the time the company attributed the shrinkage to "sectoral changes in the media industry."
In its current financial statements, Apply also reports a write-down of goodwill of nearly NIS 700,000 in its video distribution subsidiary Totalik, which is now valued at NIS 650,000, down from NIS 1.1 million in the company's previous statements.
As part of the effort to shore up the company, Lanir in his capacity as chairman of the company (a 33% post) and CEO Oron Zell have notified Apply that they will continue to forego 75% of the monthly compensation due to them, on which they decided last April, "until further notice". The cost of employing the two of them in 2018 totaled NIS 1.8 million.
Published by Globes, Israel business news - en.globes.co.il - on September 3, 2019
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