Xylo Technologies Ltd.(XYLO) - 2022 Q4 - Annual Report

Financial Performance - Total revenue for 2022 was $91,858,000, a significant increase from $10,118,000 in 2021, with online advertising contributing $83,534,000[240]. - Revenues for the year ended December 31, 2022, were $91,858,000, representing an increase of $81,740,000 or 808% compared to $10,118,000 for the year ended December 31, 2021[275]. - Cost of revenues for the year ended December 31, 2022, was $77,406,000, representing an increase of $72,089,000 or 1,356% compared to $5,317,000 for the year ended December 31, 2021[279]. - Gross profit for the year ended December 31, 2022, was $14,452,000, an increase of $9,651,000 compared to a gross loss of $4,801,000 for the year ended December 31, 2021[280]. - Revenues from commissions in 2022 were $2,465,000, up from $1,185,000 in 2021, reflecting growth in this segment[240]. - The company incurred a net loss of $10,208,000 for the year ended December 31, 2022, a decrease of $14,254,000 or 352% compared to a profit of $4,046,000 for the year ended December 31, 2021[294]. Expenses - Research and development expenses for the year ended December 31, 2022, were $4,853,000, an increase of $3,808,000 or 364% compared to $1,045,000 for the year ended December 31, 2021[281]. - Sales and marketing expenses for the year ended December 31, 2022, were $4,006,000, an increase of $2,018,000 or 102% compared to $1,988,000 for the year ended December 31, 2021[282]. - General and administrative expenses for the year ended December 31, 2022, were $14,174,000, an increase of $4,210,000 or 42% compared to $9,964,000 for the year ended December 31, 2021[284]. Capital Expenditures and Investments - Capital expenditures for the years ended December 31 were approximately $74,000 in 2022, $139,000 in 2021, and $324,000 in 2020, primarily for network infrastructure and technology[212]. - The company has invested a total of $1,286,000 in Charging Robotics, which is developing an autonomous wireless charging system for electric vehicles[229]. - The company holds a 67% stake in Fuel Doctor following a share exchange transaction on April 7, 2023, with an option to increase holdings to 71%[217]. - The company currently holds 46.21% of Eventer Technologies, which focuses on online event management and ticketing, capitalizing on the growing demand for online communication[220]. - The company holds 40.35% of Parazero, which specializes in drone safety systems, and has made multiple investments in this area[235]. - The company increased its holdings in Gix Internet to 42.25% as of June 19, 2022, following multiple share purchases[272]. - The company participated in Jeffs' Brands IPO, acquiring 240,385 units, and currently holds 34.87% of its outstanding share capital[271]. Regulatory and Compliance - The company has structured its operations to comply with applicable legal requirements, although there is a risk of differing interpretations by governmental entities[258]. - The healthcare industry is subject to extensive regulation, with ongoing scrutiny from federal and state agencies regarding billing practices and marketing of healthcare products[257]. - The company has filed applications for patent registration in various countries to protect its intellectual property[307]. Compensation and Governance - Total compensation paid to the six highest compensated directors and officers for the year ended December 31, 2022, was approximately $1.2 million[341]. - Chief Executive Officer Liron Carmel received a total compensation of $449,000, including a salary of $216,000, a bonus of $102,000, and equity-based compensation of $133,000[338]. - Chief Financial Officer Tali Dinar's total compensation was $221,000, comprising a salary of $151,000, a bonus of $21,000, and equity-based compensation of $50,000[338]. - The company has granted options to purchase 1,212,500 Ordinary Shares to current executive officers and directors, with an average exercise price of NIS 6.78 per share[347]. - The company’s board of directors consists of four members, with staggered three-year terms for each class of directors[355][356]. - The audit committee consists of Mr. Eli Cohen, Mr. Eliyahu Yoresh, and Mr. Ronen Rosenbloom, with Mr. Eli Cohen as the chairperson[368]. - The compensation committee oversees the development and implementation of the compensation policy for directors and officers[376]. - The company has adopted a new compensation policy for directors and officers, approved by shareholders on August 30, 2021[379]. Future Outlook and Capital Requirements - The company may require additional capital beyond currently forecasted amounts, which may not be available on reasonable terms[300]. - The future capital requirements will depend on various factors, including revenue generated from current and future products and expenses incurred in selling and marketing[301]. - The company plans to seek additional sources of funds, including selling equity or entering into credit facilities[300].