NEW YORK, Oct. 23, 2018 /PRNewswire/ -- Algomizer, a publicly traded company on the Tel Aviv Stock Exchange (TASE: ALMO), which specializes in software solutions leveraging artificial intelligence and sophisticated algorithms, announced today that its subsidiary Linkury has received approval from the tax authorities for a merger, in which Exomode (also a subsidiary company) will be merged into Linkury.
In addition, the merged company has received Preferred Technology Plant status under the "Preferred Technology Enterprise" section of the Encouragement of Capital Investments Law. The Company will be now be taxed at a reduced corporate tax rate of 12% instead of the previous 16% rate. The tax arrangement will apply to the Company from the tax year 2018 to the tax year 2022.
The merger will lead to a streamlining of the businesses while reducing redundancies and saving expenses. The business efficiency that will result from the tax arrangement is expected to result in a NIS 750,000 reduction in operating and tax expenses in the current year, with even more savings likely over the next four years.
The subsidiary Linkury is currently profitable, with an expected growth in profits this year. Algomizer completed the acquisition of Linkury in September 2017. Linkury is active in the field of Internet advertising and software development, through a group of companies that have developed Internet software systems that include video, automated programmatic systems, and other leading technologies.
In the first half of 2018, the Algomizer Group finished with revenues of more than NIS 66.5 million and gross profit totaling NIS 18.6 million. Algomizer also saw the first transition to operating profit from the Group's operations. This amounted to more than NIS 400 thousand in the first half of the year.
Last week, Algomizer CEO Noam Band announced his intention to purchase shares of the Company from the public. This will be done through a plan to purchase shares in blind trust in accordance with the existing provisions regarding the purchase of shares by an officer. Expressing great confidence in the Company, Band stated that the purchase will be made using a significant portion of his net monthly salary.
Certain matters discussed in this news release are forward-looking statements that involve a number of risks and uncertainties including, but not limited to, risks in product development plans and schedules, rapid technological change, changes and delays in product approval and introduction, customer acceptance of new products, the impact of competitive products and pricing, market acceptance, the lengthy sales cycle, proprietary rights of the Company and its competitors, risk of operations in Israel, government regulations, dependence on third parties to manufacture products, general economic conditions and other risk factors detailed in the Company's filings with the United States Securities and Exchange Commission and Israeli laws.