QUARTERLY REPORT

Q1 2014 UNAUDITED

2

Contents

Q1 2014 in Brief __________________________________________________________________________________________ 4

About Cxense _____________________________________________________________________________________________ 7

Outlook __________________________________________________________________________________________________ 11

Condensed Financial Report ___________________________________________________________________________ 12

Consolidated Income Statement (unaudited) ________________________________________________________ 14

Consolidated Statement of Financial Position ________________________________________________________ 15

Consolidated Statement of Changes in Equity ________________________________________________________ 16

Consolidated Statement of Cash Flow ________________________________________________________________ 17

Notes to the Consolidated Financial Statements _____________________________________________________ 18

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OFFICE LOCATIONS

North America Latin America Japan Europe Asia Pacific

New York City, NY

Cxense, Inc. 1180 Avenue of the Americas

8th Floor Rockefeller Centre NY 10036 USA

Buenos Aires, Argentina

Cxense Argentina Victoria Ocampo 360 Piso 3 Puerto Madero Ciudad de Buenos Aires Argentina

Tokyo, Japan

Cxense Co., Ltd. SU Building 204 3-1 Uguisudani-cho, Shibuya-ku Tokyo, 150-0032, Japan

Oslo, Norway (Corporate HQ)

Cxense AS Sommerogaten 17 P.O. Box 2920 Solli NO-0230 Oslo, Norway

Melbourne, Australia

Cxense Australia Pty Ltd Level 2, 84 William Street Melbourne, 3000 Australia

San Francisco, CAxxxxx

Cxense, Inc. 20 N.San Mateo Drive Suite 3 San Mateo, CA 94001 USA Miami, FL

Cxense Latin America Suite 232, 4801 South University Drive Davie, FL 33328 USA

Rio de Janeiro, Brazil

Cxene Brazil

Praia Botafogo, 300 - 5º andar - Botafogo

London, UK

Cxense UK 5 Regent St. Charles House, 5th Floor United Kingdom Copenhagen, Denmark

Cxense Denmark Emediate ApS Emdrupvej 28B 2100 Copenhagen Denmark Stockholm, Sweden

Cxense Sweden Emseas Teknik AB Drottninggatan 67 111 36 Stockholm Sweden

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Q1 2014 in Brief

Q1 2014 was an exciting quarter for Cxense, with a range of new important customer wins for our Software-

as-a-Service (SaaS) business. The software development teams also made good progress with a number of

additional capabilities added to the Cxense software Solution Suite.

Q1 2014 revenues for the Cxense SaaS segment

amounted to USD 3.57 million, a growth of USD

2.73 million compared to Q1 2013 revenues of

USD 0.84 million. The quarter-to-quarter growth

from Q4 2013 to Q1 2014 amounted to USD 0.92

million (or 35%). The main growth drivers were

new customer contracts with recurring

subscription license revenues, subscription

license fee growth on existing customers, and the

acquisition of Emediate (the leading Nordic

advertising technology company)1.

The robust growth is increasing the company’s

global reach and broadening the utilization of its

Big Data-based solutions that help publishers

better understand and engage with their users,

as well as increase online ad revenues and paid

subscriptions.

Q1 2014 gross margin was 82% compared to Q1 2013 gross margin of 83%.

In Q1 2014, Emediate was fully integrated into the Cxense SaaS organization, which strengthened our sales,

marketing, account management, support, and R&D capabilities.

During the first quarter, Cxense continued to build the organization for future growth and the Cxense SaaS

organization grew from 92 employees at the beginning of the quarter to 106 at the end of Q1 2014, a growth

of 14 employees. Of the 106 employees, there are 42 employees within the R&D organization. Furthermore,

28 works within Sales & Marketing, whereof 19 within front-end sales; a growth of five since Q4 2013. 28

works within the Operations (Onboarding, support, and retention) organization, and 8 within Finance &

Admin.

In Q1 2014, the Cxense R&D teams launched improved audience segmentation integration between our real-

time data engine (“The Extraordinary Insight EngineTM”), Cxense Analytics, and Cxense Advertising. With

1 Q4 2013 included Emediate revenues for the months of November and December of USD 1336, i.e. not a full quarter. See financial development summary for further details.

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this new integration the link between exploring user and audience segments in Cxense Analytics, and

executing it in Cxense Advertising has never been easier for an online publisher.

Cxense Content also got a vastly improved configuration editor, a feature that will significantly improve the

self-service capabilities for customers working to optimize their content experiences, and also reduce

implementation time for the Cxense Onboarding team.

In April 2014, Cxense also launced its new Data Management Platform (DMP). Cxense

DMP offers publishers improved aggregation, segmentation and use of customer data to

better engage and monetize visitors across all digital channels, including mobile phones

and tablets. Cxense DMP is an expanded version of our previous Big Data Solution with

new customer data integration opportunities and extended features2.

Selected highlights:

Cxense announced a range of new and expanded customer relationships on five continents during the first quarter of 2014:

Source Interlink is a leading internet magazine publisher based in Los Angeles, with well-known brands such as MotorTrend, Surfer, Automobile, and nearly 100 other titles. Source Interlink is using Cxense Analytics and Content to better understand its audiences, gain increased site “stickiness” and provide targeted content recommendations to readers.

DMM in Japan is a leading e-commerce site with more than 6.4 million registered users and 880 million page views per month. DMM uses the Cxense Advertising and DMP solutions to segment and target its audiences for site promotions and advertising, and has a goal of boosting click-through rates and increasing conversions. During Q1 2014 DMM increased its subscription capacity limits.

Times Media Group is one of South Africa’s largest news publishing companies, with titles including BDLive, TimesLive and Sowetan. The publisher began using Cxense Analytics and DMP solutions to harvest user insight.

Ireland’s Sunday World, the top selling Sunday newspaper and the second largest newspaper in Ireland, is using Cxense Analytics and Content Solutions to gain audience insight and provide personalized content recommendations throughout its website.

Colombia’s leading news portal, El Colombiano will use Cxense Analytics, Content and Search solutions to increase audience engagement.

Other new contracts signed in the quarter: Kampanje Forlag (Norway), Barnebys (Sweden), QX Forlag (Sweden), VOYAGE GROUP (Japan), Publicaciones Semana (Colombia), Grupo RAC, Brazil.

2 Scan the QR code with your QR app on the phone to see the Cxense DMP video or use this link: http://youtu.be/x0xO_d-T284

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Cxense group – financial development summary

1) Q2 2013 cont’d and and quarters thereafter exclude the discontinued operations of PPN AG (See note 4 for details). All other

quarters are presented including PPN AG. Segment notes in the financial reports published after the PPN divestment are re-

stated with figures for continuing operations.

2) Cost of sales includes the elimination difference from elimination of inter group transactions.

3) Emediate is included within operations for in Q4 2013 with the months of November and December, i.e. not a full quarter, as

the effective date for the acquisition was November 1. For Q1 2014 and onwards Emediate is consolidated with normal full

quarterly effect.

4) Direct acquisition costs include cost to lawyers and financial advisors that performed due-diligence and general advisory

services in connection with the acquisition of Emediate (Transactions costs related to the share issue financing the

acquisition are booked against other paid in capital and therefore visible in the consolidated statement of changes in equity,

i.e. not in the profit and loss statement).

USD 1,000 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013

Q2 2013

cont'd.

Qtr 3

2013

Qtr 4

2013 excl.

Emediate

Qtr 4 2013

incl.

Emediate

Nov & Dec 13 Q1 2014

IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS

SaaS segment

Revenues total 389 503 674 736 840 993 993 1,090 1,314 2,650 3,568

Cost of sales 10 134 58 117 146 203 203 179 244 501 644

Gross profit 379 369 616 619 694 790 790 911 1,070 2,149 2,923

Gross magin % 97% 73% 91% 84% 83% 80% 80% 84% 81% 81% 82%

Personnel 1,206 1,443 1,312 1,579 1,790 1,832 1,832 1,833 2,383 2,935 3,055

Other OPEX 218 348 489 221 676 802 802 643 1,580 1,849 1,662 Whereof direct acqusition costs 436 436 -

OPEX 1,423 1,791 1,801 1,800 2,466 2,633 2,633 2,476 3,963 4,784 4,717

EBITDA -1,044 -1,422 -1,185 -1,181 -1,772 -1,844 -1,844 -1,565 -2,893 -2,635 -1,794 EBITDA before direct acqusition cost -2,457 -2,199 -1,794

PCAN segment

Revenues total 809 976 1,437 1,375 1,534 547 685 634 634 672

Cost of Goods Sold 765 965 1,443 1,390 1,263 487 523 450 450 502

Gross profit 43 11 -5 -15 272 60 162 184 184 170

Gross magin % 5% 1% 0% -1% 18% 11% 24% 29% 29% 25%

Personnel 180 202 226 238 291 124 109 107 107 145

Other OPEX 119 66 107 97 129 73 35 78 78 84

OPEX 299 268 332 335 419 196 144 185 185 229

EBITDA -256 -257 -338 -350 -148 -137 18 -1 -1 -59

GROUP

Revenues all segments 389 1,312 1,650 2,173 2,215 2,527 1,540 1,775 1,948 3,284 4,239

Intra-segment eliminations - -61 -84 -112 -110 -126 -40 -67 -72 -72 -66

Revenues consolidated 389 1,251 1,566 2,061 2,105 2,401 1,500 1,708 1,876 3,212 4,173

EBITDA -1,044 -1,678 -1,442 -1,519 -2,122 -1,991 -1,980 -1,547 -2,894 -2,636 -1,852

EBITDA before direct acqusition cost -2,458 -2,200

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About Cxense

Cxense was founded in February 2010. The Company provides cloud-based Software-as-a-Service (SaaS)

solutions to media and e-commerce companies that want to increase the functionality, relevance, and overall

performance of their content and monetization applications.

Cxense has built the Extraordinary Insight EngineTM (EIE) for real-time analysis of content, user context, and

user data, including 1st and 3rd party data. The EIE is fully integrated with a range of applications (Cxense

Advertising, Analytics, Big Data/DMP, Content, and Search), which are used by Cxense customers to increase

advertising revenue, user engagement, conversions to digital subscriptions and product sales.

The applications based on the EIE are provided as SaaS (Software-as-a-Service) services with monthly

recurring subscription license fees, as well as additional royalty payments dependent on advertising volume

and transaction levels. In addition, we charge implementation fees and consultancy services amounting to 5-

10% of revenues in each quarter. The sale of our SaaS applications is reported in the Cxense SaaS business

area and represents the Company’s core business.

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The EIE™ (Extraordinary Insight Engine™)

The EIE analyzes the behavior of more than 500 million Internet users and detect their location and device

and deduces their interest, intent, and much more. The EIE gives our customers a 360 degree view of their

online users, including also customer 1st party data, as well as 3rd party data.

The EIE technology has several unique aspects. It is end-to-end real time: From data capture, through data

processing, to actionable data output. It is also mobile optimized through its scalable, low bandwidth user

profiling methodologies, which do not rely on 3rd party cookies. With highly flexible APIs, the EIE can power

any application and make it context aware.

It employs a unique behavioural, contextual, collaborative, and semantic processing; making user and

content insight actionable in real time.

Cxense Analytics

Cxense Analytics is the analytics and reporting dashboard of the Cxense EIE – here our customers can

monitor real-time visualizations of traffic patterns, audience interests, content popularity, first party

customer input data across single sites and group of sites.

Cxense Advertising

Cxense Advertising is our solution for high-yield targeted advertising. Online companies use this application

to increase their advertising revenue by serving relevant advertising and promotions to their users. The

Advertising solution provides targeted advertising on multiple cost models (cost-per-click, cost-per-

impression and cost-per-action basis), cross devices (computer, tablet and mobile) and with every

advertising formats (text, image and video/rich media). The Advertising solution can also be combined with

other Cxense applications for advanced promotion of digital subscriptions and for mixing targeted

advertising with relevant content (natural advertising).

Cxense Content

Cxense Content is used for content optimization and personalization on selected sections of a site or on the

complete site. By providing a personalized and more relevant experience to each user, the publishers

achieve increasing site traffic, readership and dwell time.

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Cxense Search

Cxense Search is a cloud-based and easy to implement enterprise search application. It represents a very

affordable, top quality, low maintenance, enterprise search solution for online companies. It is easy to

integrate with other Cxense applications, and it offers unique personalization and advertising monetization

opportunities for the search results pages.

Cxense Data Management Platform (DMP)

The Cxense DMP solution offers extended APIs for integration with first and third party applications with

the Extraordinary Insight Engine (EIE). The Cxense DMP captures structured and unstructured data in real

time across mobile, tablet and desktop devices and combines this with 1st and 3rd party data, such as age,

gender, subscriber information, etc. It analyses the combined data, develop individual user profiles and

useful audience segments, and put the data to work across our customer sites and multi-channel marketing

plans.

Cxense DMP can be set up to integrate with our customers CRM systems and enable highly effective targeted

marketing campaigns, understanding of digital subscription conversion patterns as well as deep

understanding of your individual customer needs.

Privacy and Transparency

Cxense is fully aware that the type of technology and services the Company provides has the potential to

conflict with the interests of end users, if used inappropriately. Therefore, Cxense is committed to

safeguarding its services and only providing them in a way that improves the end-user experience, and takes

the end user’s privacy fully into account. This is conducted in collaboration with Cxense customers, the data

owners.

Cxense has a clearly stated Privacy Policy and is required to conform to the European Union’s Data

Protection Directive (Directive 95/46/EC, which is also embodied in the US Safe Harbor Privacy Principles

of Notice, Choice, Onward Transfer, Security, Data Integrity, Access and Enforcement, and Safe Harbor

Policies).

Cxense regularly reviews its operations in order to be in compliance in view of this Directive.

Hosting and SaaS operations

Cxense delivers its software-as-a-service from scalable outsourced data centres in both USA and Europe.

The Cxense software solutions are based on distributed software architecture making them data centre

agnostic – thus hosting capacity can be purchased choosing between several reputable providers at a

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market price. With the Emediate acquisition, Cxense also got additional data centers hosting most of the

Emediate advertising business.

The PCAN business segment

Cxense has also helped establish several Publisher-Controlled Advertising Networks (PCANs). The PCANs

act as publisher-controlled broker between the advertisers and the publishers, distributing and sharing the

advertising revenues generated in the network with the publishers. Cxense is an advertising technology

provider to the PCANs and charges a fee based on the PCAN revenues, thus aligning the interest of Cxense

and our customers. In Spain, the Company has retained a 56% ownership interest, and because of its

majority ownership, this PCAN is consolidated into the Group accounts, and it is reported in the Cxense

PCAN business area.

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Outlook

Cxense experiences increasing customer interest for its solutions for real-time analytics and data

management, digital advertising, content optimization and personalization, and search. Online publishers

and media companies continue to be the main customers targeted in the near term, with interesting market

opportunities within the e-commerce sector emerging rapidly.

In the longer term, we also see opportunities in other business verticals for EIE, our Big Data platform, as

companies seek to improve customer understanding, analytics and communication.

Most online companies are experiencing significant growth on new devices and formats, mainly tablets and

mobile smart phones. This requires adaptation of their content and monetization methods. The Cxense

solutions have cross-device support (laptop, mobile tablet) and mobile growth represents a significant

market opportunity for the Company.

Our commercial product platform addresses large and fast-growing markets. The global online advertising

market is estimated to be more than USD 100 billion in 2013, and is expected by leading industry groups to

grow to more than USD 200 billion by 2020. The global e-commerce market passed the USD 1,000 billion

mark in 2013, and is growing about 20% per year. Industry analyst group, Gartner expects that Big Data will

drive USD 230 billion in IT spending through 2016(1). The Company sees significant growth opportunities

within these markets for its software solutions.

1) http://techcrunch.com/2012/10/17/big-data-to-drive-232-billion-in-it-spending-through-2016/

12

Condensed Financial Report

Q1 2014 Group Revenue for continuing operations amounted to USD 4.2 million, an increase of USD 3.1

million over the same period last year (USD 1.1 million). The Cxense SaaS segment revenue for Q1 2014

amounted to USD 3.58 million compared to Q1 2013 revenues of USD 0.73 million, a growth of USD 2.9

million. The growth came from new customers, growth on existing customers and the Emediate acquisition.

The PCAN business segment revenues for Q1 2014 (Q1 2013) amounted to USD 0.67 million (USD 0.38

million). The growth came from increased advertising, advertising performance and advertising requests

from publishers. Inter-segment Revenues were USD 0.07 million.

The Q1 2014 Cost of Sales amounted to USD 1.1 million, compared to USD 0.5 million in Q1 2013. The SaaS

Segment Cost of Sales for Q1 2014 was USD 0.64 million, while the PCAN segment Cost of Sales was USD 0.5

million. Cost of Sales within the SaaS segment relates to the hosting of the software applications used by our

customers as well as sales partner commission from the Emediate business. Cost of Sales within the PCAN

segment relates to revenue share paid to publishers providing online advertising space, as well as agency

commission paid to advertising agencies. The Q1 2014 Gross Profit for the SaaS segment amounted to USD

2.9 million and USD 0.17 million for the PCAN segment. The Q1 2014 Gross Margin in the continuing

operations of the PCAN segment was a positive 25% compared to a negative return in Q1 2013. The

improvement is due to the gradual expiration of a publisher revenue share guarantee clause that originates

from the start-up of the continuing PCAN operations as well as general improvement in revenue share and

agency terms.

The Q1 2014 Employee Benefit Expenses were USD 3.2 million, compared to USD 1.9 million in Q1 2013.

The increase is mostly due to the organizational growth.

The Depreciation & Amortization Expense in Q1 2014 was USD 0.31 million compared to USD 0.003 million

in Q1 2013. Traditionally the Depreciation Expense has been consistently low due to the limited non-current

assets. The large distributed cloud- based systems operated by Cxense are hosted on platforms leased from

large scale, reputable hosting suppliers. Since the acquisition of Emediate the Depreciation & Amortization

expense now includes amortization of identifiable intangible assets of USD 0.28 million for Q1 2014. The

Groups R&D cost is expensed (not capitalized).

Other Operating Expenses amounted to USD 1.7 million in Q1 2014 and USD 0.7 million in Q1 2013. The

majority of the expenses related to marketing and external consulting (audit, legal, and other), the latter

driven by activities such as conversion to Public limited entity (ASA), preparations for the contemplated

listing of Cxense on the Oslo Stock Exchange and the establishment of accounting for the Emediate entities

(previously done by the former Emediate holding company, Ad Pepper).

The Finance Income in Q1 2014 was USD 0.03 million, largely relating to interest earned on bank deposits

and cash arising from the share issue proceeds. Finance Income in Q1 2013 was USD 0.08 million. Finance

Expenses, mostly relating to currency expenses, amounted to USD 0.01 million in Q1 2014 and USD 0.03 in

Q1 2013.

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Income Tax Expense for Q1 2014 was a negative USD 0.06 million compared to a positive USD 0.01 in Q1

2013.

The Group Net Loss from continuing operations amounted to USD 2.1 million in Q1 2014, compared to a Net

Loss of USD 1.9 million in Q1 2013. The continuing PCAN operation for the quarter recorded a small loss of

USD 0.06 million.

Total Assets at the end of Q1 2014 amounted to USD 20.7 million compared to USD 10.6 million at Q1 2013.

The increase is mainly due to the investment in the Emediate Business resulting in the recording of Goodwill

and Intangible Assets amounting to USD 9.1 million. Cash and cash equivalents amounted to USD 5.9 million

at the end of Q1 2014 and USD 8.0 million at the end of Q1 2013. Trade Receivables were USD 2.9 million at

the end of Q1 2014, compared to USD 1.9 million at the end of Q1 2013. The increase in Q1 2014 Receivables

is due to the growth in external customers billings in the SaaS Cxense and the PCAN segment and includes

the Emediate receivables balance of USD 1.7 million at the end of Q1 2014. Short term assets in Q1 2014

increased by USD 1.85 million on the Q1 2013 amount of 0.49 million mostly due to the USD 1.3 million

Escrow account balance related to the delayed payments of parts of the Emediate acquisition proceeds

(booked as short term assets).

Total Current Liabilities at the end of Q1 2014 were USD 4.95 million compared to USD 3.3 million at Q1

2013. The increase is mainly due to the inclusion of the payment outstanding on the Emediate acquisition

on escrow account of USD 1.3 million as well as the inclusion of the Emediate balance sheet. Total

transaction costs related to the acquisition of Emediate and the corresponding share issue was USD 1.1

million.

The deferred tax balance outstanding of USD 0.63 million at Q1 2014 relates to the Emediate business.

Net Cash Flow used in Operating Activities was USD -2.86 million in Q1 2014. Cash flow from operating

activities in Q1 2014 was negatively affected by USD 0.8 million of transaction costs related to the Emediate

transaction and the corresponding share issue. These costs were booked in Q4 2013, but paid in Q1 2014. Q

2014 investment in associated companies of USD 31 thousands relates to the participation of capitalization

of associated company Matchad AB (a publisher controlled advertising network) where Cxense has a 10%

ownership. The investment was done to co-fund the Matchad AB growth plans.

Net Cash flow from financing activities was USD 0 million in both Q1 2014 and Q1 2013.

14

Consolidated Income Statement (unaudited)

USD 1,000 Note

Q1 ended

31 Mar 2014

Q1 ended

31 Mar 2013

Year Ended

31 Dec

2013

Continuing operations:

Revenue 3, 4,5 4,173 1,110 7,612

Operating expense

Cost of goods sold 3,4,5 1,080 480 2,728

Employee benefit expense 6 3,200 1,876 8,814

Depreciation & Amortisation expense 313 3 227

Other operating expense 7 1,746 729 4,209

Total operating expense 6,338 3,089 15,978

Net operating income/(loss) (2,165) (1,980) (8,366)

Financial income and expense

Finance income 26 77 367

Finance expense (9) (26) (179)

Net financial income/(expense) 17 51 188

Net income/(loss) before taxes (2,148) (1,929) (8,178)

Income tax expense (64) 14 (15)

Net income/(loss) for the period from continuing operations (2,085) (1,943) (8,163)

Discontinued operations

Net income/(loss) for the period from

discontinuing operations 4 0 (146) (24)

Total net income/(loss) for the period (2,085) (2,089) (8,187)

Net income/(loss) attributable to:

Owners of the Company (2,056) (1,998) (8,041)

Non-controlling interests (28) (91) (147)

Earnings per share:

Basic and diluted 8 (0.12) (0.16) (0.60)

Statement of comprehensive income

Net income/(loss) for the period (2,085) (2,089) (8,187)

Other comprehensive income:

- Currency translation differences (343) 74 562

Total comprehensive income/(loss) (2,427) (2,015) (7,625)

Total comprehensive income/(loss) attributable to:

Owners of the Company (2,056) (1,925) (7,478)

Non-controlling interests (28) -91 (147)

15

Consolidated Statement of Financial Position

USD 1,000 Note

As at 31 Mar

2014

As at 31 Mar

2013

As at 31 Dec

2013

Assets

Non-current assets

Goodwill 3,807 - 3,807

Deferred tax asset 49 21 36

Intangible assets 5,337 4 5,429

Office machinery, equipment,etc. 279 84 295

Other financial assets 48 13 20

Total non-current assets 9,519 122 9,586

Current assets

Trade receivables 9 2,931 1,898 3,000

Other short-term assets 10 2,332 487 1,870

Cash and cash equivalents 5,936 8,070 8,843

Total current assets 11,199 10,454 13,714

Total assets 20,718 10,576 23,300

Equity and liabilities

Equity

Share capital 11 2,764 2,168 2,713

Own shares - - -56

Other paid in capital 14,991 8,209 22,914

Currency translation differences 421 275 764

Retained earnings (2,742) (3,167) (9,179)

Equity attributable to the holders of the Company 15,435 7,485 17,155

Non-controlling interest 14 (300) (216) (272)

Total equity 15,135 7,269 16,883

Liabilities

Non-current liabilities

Deferred tax liabilities 633 - 654

Total non-current liabilities 633 - 654

Current liabilities

Trade payables 1,112 1,642 1,933

Current taxes 58 57 35

Other short-term liabilities 12 3,780 1,608 3,794

Total current liabilities 4,950 3,307 5,763

Total liabilities 5,583 3,307 6,417

Total equity and liabilities 20,718 10,576 23,300

16

Consolidated Statement of Changes in Equity

Own shares: At 31.12.2013 Cxense AS held 42 shares (0.25% of outstanding shares) in Cxense AS’ account in the

Norwegian Central Security Depository (the Cxense VPS account) on behalf of employees and smaller non-professional

investors investing in the November 2013 share issue and that were not able to establish a VPS account for themselves

by year end. Establishing a Norwegian VPS account may take some time for foreign private individuals and Cxense

chose to hold these shares on its own VPS account to be able to register the share issue in the VPS register by year end.

The 42 shares were transferred to each individual during Q1 2014 as they established VPS accounts.

USD 1,000

Nominal

share

capital

Own

shares

Other paid

in capital

Currency

translation

diff

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 (8,041) (8,041) (147) (8,187)

Other comprehensive income 562 562 562

Total comprehensive income/(loss) for the year 0 0 0 562 (8,041) (7,478) (147) (7,625)

Reduction of paid in-capital (4,773) 4,829 0 0

Transaction costs (633) (640) (640)

Share- based payments 191 0 0

Increase in share capital 650 15,583 16,422 16,422

Purhcase own shares (56) (57) (57)

Currency effects from translation of equity (206) 0 (1,256) (57) (57)

Total equity as at 31 December 2013 2,713 (56) 22,913 764 (9,179) 17,154 (272) 16,882

USD 1,000

Nominal

share

capital

Own

shares

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 2014 2,713 (56) 22,913 764 (9,179) 17,154 (272) 16,882

Profit for the period (2,085) (2,085) (28) (2,113)

Other comprehensive income 0 0 0

Total comprehensive income/(loss) for Q1 0 0 0 0 (2,085) (2,085) (28) (2,113)

Reduction of paid in-capital 0 0 0 0 0 0 0 0

Transaction costs 0 0 0 0 0 0 0 0

Share- based payments 0 0 75 0 0 75 0 75

Increase in share capital 0 0 0 0 0 0 0 0

Purhcase own shares 0 56 (56) 0 0 0 0 0

Reclassification of equity 0 0 (8,220) (343) 8,563 0 0 0

Currency effects from translation of equity 51 0 279 0 (37) 294 0 294

Total equity as at 31 March 2014 2,764 0 14,991 421 (2,738) 15,435 (300) 15,134

17

Consolidated Statement of Cash Flow

USD 1,000 Note

Q1 ended

31 Mar

2014

Q1 ended

31 Mar

2013

Year Ended

31 Dec 2013

Cash flow from operating activities

Profit / (loss) before income tax (including disposal group) (2,147) (2,075) 8,202

Adjustments:

Income tax payable

Share- based payments 6 74 44 199

Result from investment in associates 12

Depreciation and amortization 11 313 3 227

Impairment

Net interest expense

Currency translation effects 117 (389) (364)

Change in trade receivables 69 (24) 465

Change in trade payables (821) (9) (544)

Change in other accrual and non-current items (465) 309 409

Net cash flow from / (used in) operating activities (2,860) (2,140) (7,810)

Cash flow from investing activities

Investment in furniture, fixtures and office machines 11 (16) (62)

Investment in intangible assets 11

Investment in associated companies 12 (31)

Investment in subsidiary (1) 3 (9,809)

Sale of subsidiary (1) 4 55

Net cash flow from / (used in) investing activities (47) (9,817)

Cash flow from financing activities

Net proceeds from share issues 16,260

Proceeds from minority interest

Net cash flow from / (used in) financing activities 16,260

Net increase/ (decrease) in cash and cash equivalents (2,907) (2,140) (1,367)

Cash and cash equivalents at the beginning of the period 8,843 10,210 10,210

Cash and cash equivalents at the end of the period 5,936 8,070 8,843

18

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 clients build unique online

experiences.

The Company’s Board of Directors approved the financial statements on 29 April 2014.

These financial statements are unaudited.

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.

19

See the 2013 Annual Report for further details.

Note 3 Business combinations

USD thousands

Fair value

recognised at

acquisition

Intangible assets 5,610

Deferred tax asset 747

Office machinery, equipment, etc. 191

Trade receivables 1,592

Other short-term assets 239

Cash and cash equivalents 471

8,851

Deferred tax liabilities on excess values (1,402)

Trade payables (167)

Other short-term liabilities (808)

(2,377)

Total identifiable net assets 6,474

Goodwill 3,807

Total consideration 10,281

On 15 November 2013 the group acquired 100% of the shares in Emediate Aps from ad pepper media International N.V. for

USD 10,281 thousands. Emediate Aps, and its subsidiaries ("Emediate") is the Nordic's largest ad serving company. By

combining the Emediate ad serving techology with the unique audience insight and targeting capabilities of the Cxense

Extraordinary Insight Engine (EIE), Cxense believes it can create a unique and future proof next generation adserving

technology.

The following table summarises the consideration paid for Emediate, the fair value of assets acquired and liabilities assumed:

Acquisition-related costs of USD 436 thousands have been charged to other operating expenses in the consolidated income

statement for the year ended 31 December 2013.

20

Note 4 Discontinuing operations

Profit from the discontinued operations

USD 1,000 31 Mar 2013

Year Ended

December 2013

Revenue 995 1,982

Operating expenses 1,140 2,139

Net operating income/(loss) (145) (156)

Net finance (11) (11)

Income tax expense 0 0

Gain from sale of discontinued operation 0 143

Net income/(loss) for the period from discontinuing operations (156) (24)

Earnings per share:

Basic and diluted (0.012) (0.002)

Cash flow from discontinuing operations

USD 1,000 31 Mar 2013

Year ended

31 December 2012

Net cash flow from operating activities (88) (88)

Net cash flow from investing activities 0 0

Net cash flow from financing activities 0 0

Net cash inflow/(outflow) (88) (88)

(1) All of operating income in 2013 comes from the six months ending 30 June, since the subsidiary was sold

effective from 1 July 2013.

(1) All of operating income in 2013 comes from the six months ending 30 June, since the subsidiary was sold

effective from 1 July 2013. Cash effects acquisition in 2012 and disposal are not included cash flow summary

above.

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 103 thousand. The final transaction values have subject to a separate audit of the PPN AG accounts and now fully finalised. The sale resulted in a gain of USD 143 thousand.

21

Note 5 Segment information

Q1 ended 31 March 2014

USD 1,000 Cxense SaaS PCAN Eliminations Consolidated

Revenue

External customers 3,501 672 0 4,173

Inter-segment 66 0 (66) 0

Revenues total 3,568 672 (66) 4,173

Cost of goods sold 644 502 (66) 1,080

Gross profit 2,923 170 (0) 3,093

Employee benefit expense 3,055 145 0 3,200

Depreciation & Amortization expenses 311 2 0 313

Other operating expense 1,663 84 0 1,746

EBIT (2,105) (61) (0) (2,166)

Net finance income/(expense) 17 0 0 17

Income tax income/(expense) 64 0 0 64

Net income/(loss) before continuing operation (2,024) (61) (0) (2,085)

Net income/(loss) for the period from discontinuing operations 0 0 0 0

Total net income/(loss) for the period (2,024) (61) (0) (2,085)

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. The business generated by Emediate is included in the

Cxense Saas segment below. Information regarding revenue and Net income/(loss) generated by Emediate after the acquisition is

disclosed in note 3.

- 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.

22

Balance sheet information 31 March 2014

USD 1,000 Cxense SaaS PCAN

Eliminations and

unallocated Consolidated

Segment assets:

Non-current assets 9,443 28 51 9,519

Current assets

- Trade receivables 2,528 403 2,931

- Other short term assets 2,218 114 0 2,332

- Cash and cash equivalents 5,742 194 5,936

Total segment assets 19,931 739 51 20,718

Segment liabilities:

Non-current liabilities 633 0 0 633

Current liabilities 4,004 985 (40) 4,950

Total segment liabilities 4,637 985 (40) 5,583

Geographic information

Revenues from external customers: Q1 2014 Q1 2013 2 013

EMEA 3 485 680 7 568

Americas 373 193 984

Pacific 314 237 882

Total revenue from external customers 4 173 1 110 9 435

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

23

Q1 ended 31 March 2013

USD 1,000 Cxense SaaS PCAN Eliminations Consolidated

Revenue

External customers 730 380 0 1,110

Inter-segment 110 0 (110) 0

Revenues total 840 380 (110) 1,110

Cost of goods sold 146 444 (110) 480

Gross profit 694 (64) 0 630

Employee benefit expense 1,790 87 0 1,877

Depreciation expenses 3 1 0 4

Other operating expense 676 53 0 729

EBIT (1,775) (204) 0 (1,980)

Net finance income/(expense) 63 (12) 0 51

Income tax income/(expense) (14) 0 0 (14)

Net income/(loss) before continuing operation (1,726) (217) 0 (1,943)

Net income/(loss) for the period from discontinuing operations 0 (146) 0 (146)

Total net income/(loss) for the period (1,726) (363) 0 (2,089)

Balance sheet information 31 March 2013

USD 1,000 Cxense SaaS PCAN

Eliminations and

unallocated Consolidated

Segment assets:

Non-current assets - - 110 110

Current assets

- Trade receivables 773 1,125 - 1,898

- Other short term assets 567 126 -206 487

- Cash and cash equivalents 7,970 99 8,070

Total segment assets 9,310 1,350 -84 10,576

Segment liabilities:

Non-current liabilities - - - -

Current liabilities 1,741 1,761 -195 3,307

Total segment liabilities 1,741 1,761 -195 3,307

24

Note 6 Employee benefit expense

Specification of employee expense

USD 1,000 Q1 2014 Q1 2013 2013

Payroll expense 2 674 1 709 7 502

Share-based payments 74 44 228

Social security tax 342 171 860

Pensions 104 59 273

Other personnel expense 6 44 270

Presented as part of discontinued operations 0 (151) (318)

Total employee benefit expense 3 200 1 876 8 814

Note 7 Other operating expense

Specification of other operating expense

USD 1,000 Q1 2014 Q1 2013 2013 2012

Audit, legal and other consulting fees 832 217 1 876 431

Office rental and related expenses 212 114 532 343

Marketing and representation 238 234 729 263

Travel expenses 277 146 906 474

Other operating expense 187 63 251 56

Presented as part of discontinued operations 0 (44) (100) (121)

Total other operating expense 1 745 729 4 195 1 446

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Note 8 Earnings per share

USD 1,000 Q1 2014 Q1 2013 2013

Net income/(loss) for the year attributable to the

parent company (2,056) (1,998) (8,045)

Weighted average number of shares outstanding

for basic earnings per share 16,612 12,630 13,305

Earnings per share

- Basic (0.12) (0.16) (0.60)

- Diluted (1) (0.12) (0.16) (0.60)

(1) The Company has 704 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

Note 9 Trade receivables

USD 1,000 Q1 2014 Q1 2013 2013

Trade receivables 3,237 1,898 3,300

Allowance for doubtful debts (306) 0 (300)

Total trade receivables 2,931 1,898 3,000

Trade receivables are non-interest bearing and are generally on 30-day terms.

As at 31 March, 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

31 Dec 2013 3,300 1,981 931 246 143

31 Mar 2014 3,237 1,989 559 428 261

Movements in allowance for doubtful debt:

USD 1,000 Q1 2014 2013

Balance at the beginning of the year 300 30

Impairment losses recognized on receivables 6 300

Amounts written off during the year as uncollectible 0 (30)

Amounts recovered during the year 0 0

Impairment losses reversed 0 0

Balance at the end of the year 306 300

Past due but not impaired

26

*Other short-term receivables includes the Emediate purchase price Escrow amount of USD 1.3 million

On April 2nd 2014 (after the reporting period, but before publishing of this report) the Annual General

Meeting (AGM) resolved a 1/200 stock split. After the AGM there were 3 322 400 shares in the Company.

Note 10 Other short-term assets

USD 1,000 31 March 2014

31 March

2013 2013

Accrued income 381 29 6

Prepayments 147 23 141

Receivable on authorities and government grants 223 337 293

Other short-term receivables 1,580 96 1,448

Other short term assets 2,332 487 1,887

Note 11 Share capital and shareholder information

Number of

shares

Share capital

NOK

Share capital

USD

Balance at 1 January 2013 12,630 12,630,000 2,269

Issued during the year 3,982 3,982,000 444

Balance at 31 March 2013 16,612 16,612,000 2,269

Issued during the year 0 0 0

Balance as at 31 March 2014 16,612 16,612,000 2,764

Nominal value per share at 31 March 2014 is NOK 1000. Cxense AS has one class of shares with equal

rights for all shares.

As at 31 March 2014 Cxense had 704 oustanding share options, issued according to the Share Option

Program established in September 2012.

27

*Other current liabilities includes the Emediate purchase price Escrow amount of USD 1.3 million

Note 12 Other short-term liabilities

USD 1,000

31 March

2014

31 March

2013 2013

Public duties payables 729 138 331

Prepayments from customers 0 545 170

Accrued expenses 1,157 320 1,056

Salary-related provisions 0 421 805

Other current liabilities 1,894 183 1,438

Total other short-term liabilities 3,780 1,608 3,800

Note 13 Related Party Disclosures

USD 1,000

Purchase of services from Description of servicesQ1

2014Q1 2013 2013

Advokatfirma Ræder (1) Legal services 226 0 299

Theoline AS (2) Consulting services 8 13 45

(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

USD 1,000

Balances with related parties Balance typeQ1

2014Q1 2013 2013

Advokatfirma Ræder Other Short Term Liabilties 275 98 239

Theoline AS Trade payables 10 11 0

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:

28

Note 14 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%

Emediate Aps Cxense SaaS Copenhagen 100%

Emseas Teknik AB (Emediate Sweden) Cxense SaaS Sweden 100%

Emediate Norway NUF Cxense SaaS Norway 100%

Premium Audience Network, s.l.u. PCAN Spain 56%

Principal activity

according to segment

On 1st July 2013, PPN Schweiz AG a wholly owned subsidiary was sold to Tamedia AG. See Note 4 for details.

On 1st November 2013 100% of shares in Emediate Aps and its subsidiaries were purchased.

Note 15 Contingent liabilities

Note 16 Events after the reporting period

- Conversion from limited liability company to public limited liability company (ASA)

- Stock split 1/200

- Election of an ASA and stock exchange compliant BoD

- Modifications to the share option program to make it ASA compliant

The Group has not been involved in any legal or financial disputes in Q1 2014 or Q1 2013, where an

adverse outcome is considered more likely than remote.

The Annual General Meeting (AGM) was helg at April 2 2014. The AGM resolved several matters in

connection with the comtemplated listing of Cxense on the Oslo Stock Exchange:

Between 31 March 2014 and the presentation of this report, no other event has occurred which

substantially impact on the result for Q1 2014 or the value of Cxense's assets and liabilities.

- The BoD were given the right to issue shares up to 50% of outstanding share capital in connection

with the contemplated listing