Document:

ex10-4.htm

Exhibit 10.4

 

Engagement Agreement

July 1, 2014

Mr. Clifford J. Merritt

316 Oak Summit Rd

Edmond, OK. 73025

Dear Cliff:

This letter summarizes our agreement and understanding in connection with the consulting services you will be providing to Energy 11, LP (the “Company”).

 

We agree as follows:

 

1. Engagement. The Company hereby engages you to advise the company in its efforts to establish an energy related investment fund (the “Fund”), and you hereby accept engagement as a contractor to the Company subject to the terms and conditions contained in this Agreement.

 

2. Contractor's Duties. Throughout the term of this Agreement, you will use your reasonable best efforts to advise the Company with; (i) assembling an experienced management team for the Company’s energy related investment fund; and (ii) establishing business perquisites for the Company’s interaction with any manager pursuant to any Management Services Agreement; and (iii) advise the Company regarding its opportunity to secure a purchase option for mineral assets in the “SCOOP” energy play located in Oklahoma.

 

3. Term. The term of our Agreement will be 6 months beginning on July 1, 2014 and automatically renewing each month on the first day of the month unless either you or the Company gives notice of termination. In the event of a termination, the indemnification provisions of this Agreement will continue as provided herein and the Company agrees to pay your outstanding fees and any reimbursable expenses incurred by you through the date of termination.  You agree to cooperate in all ways reasonably requested by the Company in the transfer of responsibility for any pending matters.  Furthermore, this agreement shall terminate upon the Company breaking escrow and such employment will become permanent and controlled by the to-be negotiated Employment Agreement.

 

4. Compensation.  In consideration for the contract services provided, the Company will pay you a fee of $750 per day the "Contracting Fee". The Contracting Fee will be paid within ten (10) business days after receiving an invoice from you on a monthly basis for your services.  Once the Company’s Fund breaks escrow, your compensation will convert to permanent employment with the Company.  Basic terms of that employment will be further detailed through an employment agreement with a minimum annual base pay of $300,000.00, basic health benefits and a 5% economic interest in the General Partner’s Incentive, as defined in the Energy 11,L.P. Partnership Agreement. Such 5% economic interest shall vest concurrently with the General Partner’s incentive however in the event employment is terminated by you or the Company prior to vesting of the General Partners incentive such 5% economic interest or a portion thereof will be earned as defined further in the employment agreement to be mutually negotiated, accepted and executed. Basic parameters of the economic interest earned shall be the earlier of 1) A monetization event of the fund or 2) 20% per annum based on a 5 year period roll up into a merger, listing or disposition of the Fund assets.

 

  

  

  

 

5. Expenses.  In addition to the Contracting Fee, the Company will reimburse you for reasonable out of pocket expenses for travel, lodging, meals and incidental expenses you incur when travelling on business for the Company in accordance with the Company’s policies and procedures.

 

6. Work Product. The Company will own all documents, concepts, trademarks, copyrights, inventions, discoveries, processes, know-how or other similar works and improvements to any of the foregoing you develop or that are developed at your direction, in connection with the services provided under this Agreement (the “Intellectual Property”). You will hold all Intellectual Property in a segregated file subject to the Company’s unqualified right to direct you with respect to possession and control of the Intellectual Property.

 

7. Confidentiality. You recognize that the nature of your services are such that the you will have access to information which constitutes trade secrets, is of a confidential nature, is of great value to the Company and the Affiliates and/or is the foundation on which the business of the Company and the Affiliates is predicated.  You agree not to disclose to any person other than authorized employees of the Company, the Affiliates or their respective legal counsel nor use for any purpose, other than the performance of this Agreement, any confidential information (“Confidential Information”).  Confidential Information includes data or material (regardless of form) which is: (a) a trade secret (a trade secret includes any formula, pattern, device or compilation of information used by the Company or the Affiliates and their businesses); (b) provided, disclosed or delivered to you by the Company, the Affiliates, any officer, director, employee, agent, attorney, accountant, consultant, or other person or entity employed by the Company or the Affiliates in any capacity, any customer, borrower or business associate of the Company or the affiliates, or any public authority having jurisdiction over the Company, the Affiliates or any business activity conducted by the Company or the Affiliates; or (c) produced, developed, obtained or prepared by you or on your behalf or by or on behalf of the Company (whether or not such information was developed in the performance of this Agreement) with respect to the Company, the Affiliates or any assets, oil and gas prospects, business activities, officers, directors, employees, borrowers or customers of the foregoing. If required by law, you may disclose the Confidential Information, but only after notifying the Company of any such request or demand to allow the Company, at the Company’s sole expense, to contest such request or demand.  You agree to return to the Company or destroy any Confidential Information that is in your possession or control at any time at the request of the Company or the Affiliates. Notwithstanding the expiration or termination of this Agreement, while you possess any Confidential Information, you agree that the terms of this paragraph 7 will continue to apply to that Confidential Information.

 

8. Independent Contractor. The Company has retained you under this Agreement as an independent contractor with duties owed solely to the Company and its affiliates. You will not be deemed an agent or employee of the Company. You and the Company do not intend to create a joint venture, partnership or other relationship which might impose a fiduciary obligation on the either of us in the performance of this Agreement.

 

9. Indemnity. The Company agrees to pay, defend, indemnify, reimburse and hold you harmless for, from and against any loss, damage, claim, liability, debt, obligation or expense (including interest, reasonable legal fees, and expenses of litigation) incurred or suffered or paid by, imposed upon, or resulting to you as a result of any third party claim in connection with this Agreement that is not the result of gross negligence or malfeasance on your part.

 

10. Advisor's Other Activities.  The Company acknowledges that you are engaged directly or indirectly in various activities including, without implied limitation, securities trading, investment, investment management, financing transactions, and oil and gas development. Such investments and activities may be viewed as competitive with the Company, or may involve entities and persons that are customers, competitors or otherwise have a relationship with the Company.  Subject to the confidentiality provisions of this Agreement, neither this Agreement nor the services to be provided hereunder will prevent you from engaging in such activities, require you to disclose such activities to the Company in advance (but you agree to do if requested) or permit the Company to participate in such activities.

 

  

Page 2 of 3

  

 

11. Default Remedy. If either of us fails to perform our respective obligations hereunder (except as excused by the other party's default), the party claiming default will make written demand for performance. If the defaulting party fails to comply with such written demand within five (5) business days after receipt thereof, the non-defaulting party will have the option to waive such default or to exercise any other remedy available at law or in equity. The remedies provided by this Agreement are cumulative and will not exclude any other remedy to which a party might be entitled under this Agreement. If a party elects to selectively and successfully enforce such party's rights under this Agreement, such action will not be deemed a waiver or discharge of any other remedy.

 

12. Miscellaneous. Time is of the essence of this Agreement. This Agreement constitutes the entire agreement between the parties and there are no agreements, understandings, warranties or representations between the parties except as set forth herein. This Agreement can only be changed, waived, discharged or terminated by a document signed by the parties. Waiver of performance of any obligation or term contained in this Agreement by any party will not operate as a waiver of performance of any other obligation or term of this Agreement or a future waiver of the same obligation or term. The paragraph headings contained in this Agreement are for reference purposes only and are not intended to affect in any way the meaning or interpretation of this Agreement. If any party institutes an action or proceeding against any other party relating to the provisions of this Agreement, the party to such action or proceeding which does not prevail will reimburse the prevailing party therein for the reasonable expenses of attorneys' fees and disbursements incurred by the prevailing party. If any clause or provision of this Agreement is illegal, invalid or unenforceable under any present or future law, the remainder of this Agreement will not be affected thereby.  It is the intention of the parties that if any such provision is held to be illegal, invalid or unenforceable, there will be added in lieu thereof a provision as similar in terms to such provisions as is possible and to be legal, valid and enforceable.

 

If the foregoing accurately represents the terms of our agreement, please sign and date below.

 

Best Regards,

 

Energy 11, LP

__________________________

By: David McKenney

Its: Chief Financial Officer

 

 

AGREED TO AND ACCEPTED effective as of July ___, 2014

 

 

                                                                                              

Clifford J. Merritt, individually

 

  

Page 3 of 3Exhibit 10.1

  

PRESS
RELEASE

 

Magic Reports
Second Quarter 2014 Results with Revenues Increasing 17% Year over Year to $40.6 Million, and Non-GAAP Operating Income Increasing
28% Year over Year to $6.0 Million

 

Revenues for
the first half of 2014 increased 20% year over year to $81.6 million; Non-GAAP operating
income for the first half increased 25% to $12.4 million

 

Or Yehuda,
Israel, August 11, 2014 – Magic Software Enterprises Ltd. (NASDAQ
and TASE: MGIC), a
global provider of mobile and cloud-enabled application and business integration
platforms, announced today its financial results for the six months and second quarter ended June 30, 2014.

 

Financial
Highlights for the Second Quarter Ended June 30, 2014

 

		·	Revenues
                                         for the second quarter increased 17% year over year to $40.6 million from $34.8 million
                                         in the same period last year.

 

		·	Operating
                                         income for the second quarter increased 26% to $5.1 million, compared to $4.1 million
                                         in the same period last year; Non-GAAP operating income for the second quarter increased
                                         28% to $6.0 million, compared to $4.7 million in the same period last year.

 

		·	Net
                                         income for the second quarter increased 11% to $3.9 million (or $0.09 per fully
                                         diluted share) compared to $3.5 million (or $0.09 per fully diluted share) in the
                                         same period last year; Non-GAAP net income for the second quarter increased 24% to $4.7 million,
                                         compared to $3.8 million in the same period last year.

 

Financial
Highlights for the Six-Month Period Ended June 30, 2014

 

		·	Revenues
                                         for the first half of 2014 increased 20% to $81.6 million compared to $68.2 million
                                         in the same period last year.

 

		·	Operating
                                         income for the first half of 2014 increased 27% to $11.1 million compared to $8.7 million
                                         in the same period last year; Non-GAAP operating income for the first half of 2014 increased
                                         25% to $12.4 million compared to $9.9 million in the same period last year.
                                         

 

		·	Net
                                         income for the first half of 2014 increased 19% to $8.3 million (or $0.20 per fully
                                         diluted share) compared to $7.0 million (or $0.19 per fully diluted share) in the
                                         same period last year. Non-GAAP net income for the first half of 2014 increased 20% to
                                         $9.7 million compared to $8.0 million in the same period last year. 

 

		·	Operating
                                         cash flow for the first half of 2014 totaled approximately $12 million.

 

		·	Total
                                         net cash, cash equivalents and short-term investments as of June 30, 2014, amounted
                                         to $92.8 million.

 

    	 

    	 

    

 

Comments
of Management

 

Guy Bernstein,
Chief Executive Officer of Magic Software Enterprises, said, “I am very pleased to report that Magic maintained double-digit
growth momentum through the second quarter and first half of 2014 with strong performance in sales and profitability across our
products and professional services. We are further encouraged by the favorable reception for our latest enterprise mobility releases,
offering user-experience enhancements and a component-based mobile accelerator framework."

 

“Our
business visibility coupled with our well-diversified portfolio and global reach gives us the confidence to reassert our commitment
to our previously announced revenue guidance of $161 million to $165 million for the full-year 2014,” added Bernstein.

  

Conference
Call Details

 

Magic’s
Management will host an interactive conference today, August 11, at 10:00am Eastern Time (7:00am Pacific Time, 17:00 Israel Time).
On the call, management will review and discuss the results, and will also be available to answer investors’ questions.

 

To participate,
please call one of the following teleconferencing numbers. Please begin placing your calls at least 10 minutes before the conference
call commences. If you are unable to connect using the toll-free numbers, call the international dial-in number.

 

NORTH AMERICA:
1.888.668.9141

 

UK: 0 800 917
5108

 

ISRAEL: 03.918.0650

 

INTERNATIONAL:
+972.3.918.0650

 

For those unable
to listen to the live call, a replay of the call will be available for three months from the day after the call under the investor
relations section of Magic’s website.

  

Non-GAAP
Financial Measures

 

This release
includes non-GAAP operating income, net income, basic and diluted earnings per share and other non-GAAP financial measures. These
non-GAAP measures exclude the following items:

 

		·	Amortization
                                         of purchased intangible assets;

 

		·	In-process
                                         research and development capitalization and amortization;

 

		·	Equity-based
                                         compensation expense;

 

		·	Change
                                         in valuation of contingent consideration; and

 

		·	The
                                         related tax effects of the above items.

 

    	 

    	 

    

 

Summary
of Non-GAAP Financial Information

 

U.S. Dollars
in thousands, except per share amounts

 

	 	 	Three months ended	 	 	Six months ended	 
	 	 	June 30,	 	 	June 30,	 
	 	 	2014	 	 	2013	 	 	2014	 	 	2013	 
	 	 	Unaudited	 	 	Unaudited	 
	Non-GAAP	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Revenues	 	$	40,633	 	 	$	34,756	 	 	$	81,582	 	 	$	68,170	 
	Gross profit	 	 	16,740	 	 	 	14,900	 	 	 	34,457	 	 	 	29,446	 
	Operating income	 	 	6,023	 	 	 	4,690	 	 	 	12,431	 	 	 	9,921	 
	Net income attributable to Magic Software shareholders	 	 	4,715	 	 	 	3,792	 	 	 	9,677	 	 	 	8,032	 
	Basic earnings per share	 	 	0.11	 	 	 	0.10	 	 	 	0.23	 	 	 	0.22	 
	Diluted earnings per share	 	 	0.11	 	 	 	0.10	 	 	 	0.23	 	 	 	0.22	 

  

Magic Software’s
management believes that the presentation of non-GAAP measures provides useful information to investors and management regarding
financial and business trends relating to the Company’s financial condition and results of operations as well as the net
amount of cash generated by its business operations after taking into account capital spending required to maintain or expand
the business.

 

These non-GAAP
financial measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different
from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any
comprehensive set of accounting rules or principles. Magic Software believes that non-GAAP financial measures have limitations
in that they do not reflect all of the amounts associated with Magic Software’s results of operations as determined in accordance
with GAAP and that these measures should only be used to evaluate Magic Software’s results of operations in conjunction
with the corresponding GAAP measures.

 

Please refer
to the Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP tables below.

  

About
Magic Software Enterprises

 

Magic Software
Enterprises Ltd. (NASDAQ and TASE: MGIC) is a global provider of mobile and cloud-enabled application and business integration
platforms.

 

For more information,
visit www.magicsoftware.com.

 

 

    	 

    	 

    

 

Forward
Looking Statements

 

Some of the
statements in this press release may constitute “forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the United States Private Securities Litigation
Reform Act of 1995. Words such as "will," "expects," "believes" and similar expressions are used
to identify these forward-looking statements (although not all forward-looking statements include such words). These forward-looking
statements, which may include, without limitation, projections regarding our future performance and financial condition, are made
on the basis of management’s current views and assumptions with respect to future events. Any forward-looking statement
is not a guarantee of future performance and actual results could differ materially from those contained in the forward-looking
statement. These statements speak only as of the date they were made, and we undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise. We operate in a changing environment. New risks
emerge from time to time and it is not possible for us to predict all risks that may affect us. For more information regarding
these risks and uncertainties as well as certain additional risks that we face, you should refer to the Risk Factors detailed
in our Annual Report on Form 20-F for the year ended December 31, 2013 and subsequent reports and registration statements filed
from time to time with the Securities and Exchange Commission.

 

Magic is a
registered trademark of Magic Software Enterprises Ltd. All other product and company names mentioned herein are for identification
purposes only and are the property of, and might be trademarks of, their respective owners.

 

Press
Contact:

 

Tania
Amar, VP Global Marketing

Magic Software
Enterprises

Tel: +972 (0)3
538 9300

tania@magicsoftware.com

  

    	 

    	 

    

 

MAGIC SOFTWARE ENTERPRISES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

U.S. dollars in thousands (except per share data)                

 

	 	 	Three months ended	 	 	Six months ended	 
	 	 	June 30,	 	 	June 30,	 
	 	 	2014	 	 	2013	 	 	2014	 	 	2013	 
	 	 	Unaudited	 	 	Unaudited	 
	Revenues	 	$	40,633	 	 	$	34,756	 	 	$	81,582	 	 	$	68,170	 
	Cost of Revenues	 	 	24,965	 	 	 	20,965	 	 	 	49,272	 	 	 	40,855	 
	Gross profit	 	 	15,668	 	 	 	13,791	 	 	 	32,310	 	 	 	27,315	 
	Research and development, net	 	 	1,220	 	 	 	919	 	 	 	2,400	 	 	 	1,802	 
	Selling, marketing and general and administrative expenses	 	 	9,321	 	 	 	8,805	 	 	 	18,830	 	 	 	16,805	 
	Total operating costs and expenses	 	 	10,541	 	 	 	9,724	 	 	 	21,230	 	 	 	18,607	 
	Operating income	 	 	5,127	 	 	 	4,067	 	 	 	11,080	 	 	 	8,708	 
	Financial expenses, net	 	 	321	 	 	 	122	 	 	 	460	 	 	 	520	 
	Income before taxes on income	 	 	4,806	 	 	 	3,945	 	 	 	10,620	 	 	 	8,188	 
	Taxes on income	 	 	646	 	 	 	282	 	 	 	1,612	 	 	 	777	 
	Net income	 	$	4,160	 	 	$	3,663	 	 	$	9,008	 	 	$	7,411	 
	Net income attributable to non-controlling interests	 	 	(308	)	 	 	(182	)	 	 	(661	)	 	 	(410	)
	Net income attributable to Magic Software's Shareholders	 	$	3,852	 	 	$	3,481	 	 	$	8,347	 	 	$	7,001	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net earnings per share attributable to Magic Software's shareholders:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Basic	 	$	0.09	 	 	$	0.10	 	 	$	0.20	 	 	$	0.19	 
	Diluted	 	$	0.09	 	 	$	0.09	 	 	$	0.20	 	 	$	0.19	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Weighted average number of shares used in	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	     computing net earnings per share attributable to	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	     Magic Software's shareholders:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	        Basic	 	 	44,158	 	 	 	36,722	 	 	 	42,407	 	 	 	36,691	 
	 	 	 	 	 	 	 	.	 	 	 	 	 	 	 	 	 
	        Diluted	 	 	44,470	 	 	 	37,243	 	 	 	42,563	 	 	 	37,165	 

 

    	 

    	 

    

  

MAGIC SOFTWARE ENTERPRISES LTD. AND ITS SUBSIDIARIES

RECONCILIATION OF GAAP AND NON-GAAP RESULTS

STATEMENTS OF INCOME FOR COMPARATIVE PURPOSES

U.S. dollars in thousands (except per share data)                

  

	 	 	Three months ended	 	 	Six months ended	 
	 	 	June 30,	 	 	June 30,	 
	 	 	2014	 	 	2013	 	 	2014		 	2013	 
	 	 	Unaudited	 	 	Unaudited	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	GAAP gross profit	 	$	15,668	 	 	$	13,791	 	 	$	32,310	 	 	$	27,315	 
	Amortization of capitalized software	 	 	992	 	 	 	1,037	 	 	 	1,992	 	 	 	2,010	 
	Amortization of other intangible assets	 	 	73	 	 	 	70	 	 	 	147	 	 	 	115	 
	Stock-based compensation	 	 	7	 	 	 	2	 	 	 	8	 	 	 	6	 
	Non-GAAP gross profit	 	$	16,740	 	 	$	14,900	 	 	$	34,457	 	 	$	29,446	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	GAAP operating income	 	$	5,127	 	 	$	4,067	 	 	$	11,080	 	 	$	8,708	 
	Gross profit adjustments	 	 	1,072	 	 	 	1,109	 	 	 	2,147	 	 	 	2,131	 
	Amortization of other intangible assets	 	 	857	 	 	 	714	 	 	 	1,693	 	 	 	1,403	 
	Capitalization of software development	 	 	(1,142	)	 	 	(1,290	)	 	 	(2,241	)	 	 	(2,500	)
	Change in valuation of contingent consideration	 	 	-	 	 	 	-	 	 	 	(400	)	 	 	-	 
	Stock-based compensation	 	 	109	 	 	 	90	 	 	 	152	 	 	 	179	 
	Non-GAAP operating income	 	$	6,023	 	 	$	4,690	 	 	$	12,431	 	 	$	9,921	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	GAAP net income attributable to Magic Software's shareholders	 	$	3,852	 	 	$	3,481	 	 	$	8,347	 	 	$	7,001	 
	Operating income adjustments	 	 	896	 	 	 	623	 	 	 	1,351	 	 	 	1,213	 
	Unwinding of discount in connection with liabilities due to acquisitions	 	 	-	 	 	 	8	 	 	 	-	 	 	 	215	 
	Amortization expenses attributed to redeemable non-controlling interests	 	 	(37	)	 	 	(30	)	 	 	(74	)	 	 	(60	)
	Deferred taxes on the above items	 	 	4	 	 	 	(290	)	 	 	53	 	 	 	(337	)
	Non-GAAP net income attributable to Magic Software's shareholders	 	$	4,715	 	 	$	3,792	 	 	$	9,677	 	 	$	8,032	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Non-GAAP basic net earnings per share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	   attributable to Magic Software shareholders	 	 	0.11	 	 	 	0.10	 	 	 	0.23	 	 	 	0.22	 
	Weighted average number of shares used in	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	   computing basic net earnings per share	 	 	44,158	 	 	 	36,722	 	 	 	42,407	 	 	 	36,691	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Non-GAAP diluted net earnings per share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	   attributable to Magic Software shareholders	 	 	0.11	 	 	 	0.10	 	 	 	0.23	 	 	 	0.22	 
	Weighted average number of shares used in	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	   computing diluted net earnings per share	 	 	44,502	 	 	 	37,293	 	 	 	42,579	 	 	 	37,221	 

 

    	 

    	 

    

  

MAGIC SOFTWARE ENTERPRISES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands      

 

	 	 	June 30,	 	 	December 31,	 
	 	 	2014	 	 	2013	 
	 	 	Unaudited	 	 	 	 
	       ASSETS	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	CURRENT ASSETS:	 	 	 	 	 	 	 	 
	     Cash and cash equivalents	 	$	92,342	 	 	$	35,134	 
	     Available-for-sale marketable securities	 	 	442	 	 	 	854	 
	     Trade receivables, net	 	 	35,377	 	 	 	31,976	 
	     Other accounts receivable and prepaid expenses	 	 	5,464	 	 	 	5,209	 
	Total current assets	 	 	133,625	 	 	 	73,173	 
	 	 	 	 	 	 	 	 	 
	LONG-TERM RECEIVABLES:	 	 	 	 	 	 	 	 
	    Severance pay fund	 	 	418	 	 	 	403	 
	    Other long-term receivables	 	 	4,102	 	 	 	3,792	 
	Total long-term receivables	 	 	4,520	 	 	 	4,195	 
	 	 	 	 	 	 	 	 	 
	PROPERTY AND EQUIPMENT, NET	 	 	2,095	 	 	 	1,773	 
	INTANGIBLE ASSETS AND GOODWILL, NET	 	 	87,208	 	 	 	87,862	 
	 	 	 	 	 	 	 	 	 
	TOTAL ASSETS	 	$	227,448	 	 	$	167,003	 
	 	 	 	 	 	 	 	 	 
	       LIABILITIES AND EQUITY	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	CURRENT LIABILITIES:	 	 	 	 	 	 	 	 
	     Short-term debt	 	$	1,056	 	 	$	1,055	 
	     Trade payables	 	 	3,827	 	 	 	4,149	 
	     Accrued expenses and other accounts payable	 	 	15,095	 	 	 	16,937	 
	     Deferred tax liability	 	 	1,641	 	 	 	2,567	 
	     Deferred revenues	 	 	8,303	 	 	 	3,294	 
	Total current liabilities	 	 	29,922	 	 	 	28,002	 
	 	 	 	 	 	 	 	 	 
	NON-CURRENT LIABILITIES:	 	 	 	 	 	 	 	 
	     Long-term debt	 	 	1,945	 	 	 	2,274	 
	     Long-term deferred tax liabilty	 	 	2,235	 	 	 	2,204	 
	     Liabilities due to acquisition activities	 	 	779	 	 	 	1,396	 
	     Accrued severance pay	 	 	1,358	 	 	 	1,275	 
	Total
    non-current liabilities	 	 	6,317	 	 	 	7,149	 
	 	 	 	 	 	 	 	 	 
	REDEEMABLE NON-CONTROLLING INTEREST	 	 	3,184	 	 	 	2,721	 
	 	 	 	 	 	 	 	 	 
	SHAREHOLDERS' EQUITY:	 	 	 	 	 	 	 	 
	   Magic Software Shareholders' equity	 	 	186,694	 	 	 	128,144	 
	   Non-controlling interests	 	 	1,331	 	 	 	987	 
	Total shareholders' equity	 	 	188,025	 	 	 	129,131	 
	 	 	 	1331	 	 	 	 	 
	TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND EQUITY	 	$	227,448	 	 	$	167,003

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