TIDMTECH
RNS Number : 8155V
TechFinancials Inc.
11 August 2020
11 August 2020
TechFinancials, Inc.
("TechFinancials" or the "Company" or the "Group")
Unaudited Interim Report for the Six Months Ended 30 June
2020
TechFinancials Inc. (AQSE: TECH), a fintech software provider of
financial solutions including blockchain-based digital assets and
traditional financial trading solutions for retail clients, today
announces its unaudited interim results for the six month period
ended 30 June 2020 ("H1 2020").
The Company was listed on AIM until January 2020 and is
currently listed solely on the Aquis Stock Exchange.
Financial Overview
-- Group Revenues of US$0.61m (H1 2019: US$2.07m)
-- Loss for the period attributable to shareholders of US$0.55m
(H1 2019: loss of US$1.09m)
-- Loss of US$0.75m from investments written off in subsidiaries
DragonFinancials Ltd and B.O. TradeFinancials Ltd that have
been struck off during the period
-- Cash position at the period end of US$0.72m (31 December
2019: US$0.67m)
-- Basic earnings per share ("EPS") of (US$0.006) (H1 2019
(US$0.013))
-- The Company gained full control over Footies Ltd and Cedex
Holdings Ltd
-- Cedex has been included for the first time in the Group's
financial statements
Asaf Lahav, Group Chief Executive Officer of TechFinancials,
commented:
"In the first half of the year we have gained full control of
Footies, following a conversion of a convertible loan in March 2020
and the signing of a separation agreement with Footies partners
which led to holdings of 100% of Footies by the Group. The Group
also decided to get full control over Cedex and, in March 2020,
exercised its option that led to holdings of 97.3% of Cedex' issued
share capital (90.81% on a fully diluted basis)."
"Nonetheless, the Covid-19 crisis has affected dramatically all
the plans of the Company. Footies' plan to complete the development
of its ticketing solution and launching the product in 2020 was put
on hold. It is unclear when and how the Event market will return to
normal. It is clear that event organizers are suffering major
losses and may not be in a position to try new technologies.
Therefore, the Company will take a decision in the near future
whether or not to continue to pursue this opportunity. The
Company's plans to sell all or part of its interest in Cedex to a
third party were also slowed down as a result of the new business
atmosphere."
"The Company will cease its core software licensing business by
the end of October this year. It is still uncertain how long the
Covid-19 disruption will continue and what ongoing effect it will
have on the remaining business of the Group."
The directors of the Company accept responsibility for the
contents of this announcement.
For further information:
TechFinancials, Inc. Tel: +972 54 5233
943
Asaf Lahav, Group Chief Executive Officer
Peterhouse Capital Limited (AQSE Growth Tel: +44 (0) 20
Market Advisor and Broker) 7469 0930
Guy Miller and Allie Feuerlein
Chairman's Statement
In H1 2020 the Company gained full control over the remaining
businesses it owns (Footies and Cedex). Nevertheless, and in light
of the Covid-19 epidemic, the plans to take these businesses
forward were disrupted.
Outlook
The next twelve months will continue to be challenging for the
Company. In the next few months we will close our B2B business and
the entire historical trading solutions of the Group. We will make
decisions regarding the feasibility to continue the remaining
businesses (Footies and Cedex) in light of the negative business
conditions that currently exist in the market. We will continue to
look for opportunities to materialize our assets or join forces
with other companies in order to be able move forward.
I would like to thank our shareholders and staff for their
continued support in what has been a difficult period globally as
well as to the Group.
We look forward to updating the market on our progress in due
course.
Eitan Yanuv
Independent Non-Executive Chairman
11 August 2020
Chief Executive's Statement
Financial Results
The Group's turnover in the six months ended 30 June 2020
decreased to US$0.62m (H1 2019: US$2.07m). Revenues in the core
software licencing business decreased to US$0.34m from
US$0.41m.
The Group also recorded US$0.27m from recognition of deferred
revenues related to the token sale initiated in 2018 by the first
time consolidated subsidiary Cedex, while in H1 2019 it recorded
blockchain trading technology revenues of US$0.89m provided to
Cedex which are eliminated on the consolidation in these
reports.
Gross profit decreased by 59% to US$0.54m from US$1.31m in H1
2019, predominantly due to the reduced revenues of the Group.
The operating loss for the period was US$0.54m (H1 2019: loss of
US$ 1.12m); the decrease in the loss is due to operating expenses
decrease in line with the decrease in revenues compared to H1
2019.
Other income for the period was US$ 0.08m, attributed
predominantly to US$0.82m gain from intangible assets realization
and revaluation and a loss of US$0.75m from investments write off
in subsidiaries that has been struck off.
The loss after taxation for the period attributable to
shareholders of the Company was US$ 0.55m (H1 2019: loss of US$
1.09m).
The Group's cash position for the period ended 30 June 2020 was
US$0.72m (31 December 2019: US$0.67m).
The unaudited interim financial results have not been reviewed
by the Company's auditor.
Asaf Lahav
Chief Executive Officer of the Group
11 August 2020
Statement of Comprehensive Income
For the six month period ended 30 June 2020
Unaudited
6 Month Period Unaudited Audited
Ended 6 Month Period Ended 12 Month Period Ended
30 June 2020 30 June 2019 31 December 2019
Note US$'000 US$'000 US$'000
Revenue 7 614 2,065 3,418
Cost of sales (79) (757) (911)
---------------- ---------------------- -----------------------
Gross profit 535 1,308 2,507
Research and development (464) (583) ( 2 , 177 )
Selling and marketing (41) (442) (648)
Administrative (565) (1,341) ( 2 ,648)
Impairment of intangible assets - - (2,606)
Other expenses - (59) (153)
Operating loss (535) (1,117) (5,725)
---------------- ---------------------- -----------------------
Bank fees (32) (20) (31)
Foreign exchange loss (5) (5) (58)
Other financial expenses (2) (4) (10)
---------------- ---------------------- -----------------------
Financing expenses (39) (29) (99)
Other income / (expenses)
Other income / (expenses), net 8 82 - (400)
Loss before taxation (492) (1,146) (6,224)
---------------- ---------------------- -----------------------
Taxation (13) (19) (47)
---------------- ---------------------- -----------------------
Loss from continuing operations (505) (1,165) (6,271)
---------------- ---------------------- -----------------------
Loss from discontinued operations - (14) (19)
Capital gain from a sale of
subsidiary - - 65
---------------- ---------------------- -----------------------
Gain / (Loss) from discontinued
operations, net - (14) 46
---------------- ---------------------- -----------------------
Other comprehensive income - - -
Total comprehensive loss (505) (1,179) (6,225)
---------------- ---------------------- -----------------------
Profit / (loss) attributable to:
Owners of the Company (545) (1,086) (5,774)
Non-controlling interests 9 40 (93) (451)
---------------- ---------------------- -----------------------
Loss for the period (505) (1,179) (6,225)
Earnings per share attributable to owners of the parent during the year (Note 3) :
Unaudited
6 Month Period Unaudited Audited
Ended 6 Month Period Ended 12 Month Period Ended
30 June 2020 30 June 2019 31 December 2019
(Cents USD) (Cents USD) (Cents USD)
Basic (0.64) (1.28) (6.77)
Diluted (0.64) (1.28) (6.77)
From continuing operations - Basic (0.64) (1.26) (6.82)
From continuing operations -
Diluted (0.64) (1.26) (6.82)
From discontinued operations -
Basic - (0.02) 0.05
From discontinued operations -
Diluted - (0.02) 0.05
================ ====================== =======================
Consolidated Statement of financial position
As of 30 June 2020
Unaudited
30 June Unaudited Audited
2020 30 June 2019 31 December 2019
Note US$'000 US$'000 US$'000
Non-current assets
Intangible assets, net 4 707 3,412 112
Property and equipment 3 798 16
Long term deposits - 51 -
Investment in related party 9 - 200 200
710 4,461 32 8
---------- -------------- ------------------
Current assets
Trade receivables, net and other receivables 5 87 1,025 606
Loans to related parties - 68 -
Restricted bank deposits 63 287 71
Cash 716 1,227 672
---------- --------------
866 2,607 1,349
---------- -------------- ------------------
Total Assets 1,576 7,068 1,677
========== ============== ==================
Non-Current liabilities
Shareholders loan 92 92 92
Other long term liabilities for lease, net - 357 -
92 449 92
Current Liabilities
Trade and other payables 6 334 1,214 1,173
Deferred income liability 7 631 - -
Income tax payable 9 107 103
---------- -------------- ------------------
974 1,321 1,276
---------- -------------- ------------------
Total Liabilities 1,066 1,770 1,368
---------- -------------- ------------------
Unaudited Audited
30 June Unaudited 31 December 2019
2020 30 June 2019 US$'000
US$'000 US$'000
Equity
Share Capital 61 61 61
Share premium account 12,022 12,022 12,022
Share-based payment reserve 798 945 934
Accumulated profits / (losses) (12,392) (7,839) (12,459)
---------- -------------- ------------------
Equity attributable to owners of the Company 489 5,189 558
---------- -------------- ------------------
Non-controlling interests 9 21 109 (249)
---------- -------------- ------------------
Total equity 510 5,298 309
Total Equity and Liabilities 1,576 7,068 1,677
========== ============== ==================
Consolidated Statement of changes in equity
For the six month period ended 30 June 2020
Share-based Accumulated Non-
Share payment profits/ controlling
capital Share premium reserve (losses) Total interests Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 31
December 2018 61 12,022 937 (6,755) 6,265 202 6,467
============ ============= ============ ============ ========= ============ ========
Total
comprehensive
loss for the
period - - - (1,086) (1,086) (93) (1,179)
Share-based
payment - - 10 - 10 - 10
Transfer of
Shared based
payment
reserve on
lapsed
options - - (2) 2 - - -
Balance at 30
June 2019 61 12,022 945 (7,839) 5,189 109 5,298
============ ============= ============ ============ ========= ============ ========
Total
comprehensive
loss for the
period - - - (4,688) (4,688) (358) (5,046)
Retained
earnings of
subsidiary
disposed of
during the
year - - - 50 50 - 50
Share-based
payment - - 7 - 7 - 7
Transfer of
Shared based
payment
reserve on
lapsed
options - - (18) 18 - - -
Balance at 31
December 2019 61 12,022 934 (12,459) 558 (249) 309
============ ============= ============ ============ ========= ============ ========
Total
comprehensive
loss for the
period - - - (545) (545) 40 (505)
Retained
earnings of
subsidiary
disposed of
during the
year 700 700 - 700
Accumulated
loss
purchased
from NCI
(note 9) (230) (230) 230 -
Share-based
payment - - 6 - 6 - 6
Transfer of
Shared based
payment
reserve on
lapsed
options - - (142) 142 - - -
Balance at 30
June 202 0 61 12,022 798 (12,392) 489 21 510
============ ============= ============ ============ ========= ============ ========
Consolidated statement of cash flows
For the six month period ended 30 June 2020
Note Unaudited Unaudited 6 Audited Year
6 months ended months ended ended 31 December
30 June 2020 30 June 2019 2019
US$'000 US$'000 US$'000
Cash Flow from operating
Activities
Loss before tax for the
period ( 492 ) (1,160) (6,178)
Adjustment for:
Depreciation of property
and equipment 2 34 61
Depreciation of leased
asset - 176 -
Amortization of intangible
assets 4 37 201 404
Impairment of intangible
assets - - 2,696
Share Option Charge 6 10 17
Impairment of account
receivables - 59 153
Financial expenses from
leased asset - 3 -
Capital loss on disposal
of property and equipment 12 - 400
Capital gain from realization
and revaluation of intangibles
assets ( 818 ) - -
Capital loss on write
off investments in subsidiaries 749 - -
Operating cash flows before movements
in working capital:
Decrease in trade and
other receivables 5 405 994 1,414
Decrease in trade and
other payables 6 ( 841 ) (224) (267)
Increase in other current
liabilities 7 631 - -
Interest income - (1) (1)
Income tax received 53 - 1
Income tax paid (2) (20) (43)
---------------- -------------- -------------------
Net cash (used in) / generated
from operating activities ( 258 ) 72 (1,343)
Cash Flow from investing
Activities:
Proceeds from selling
a subsidiary - - 112
Proceeds from a refund
of deposit - - 51
Decrease/(Increase) of
restricted bank deposits 8 (11) 205
Development of intangible
assets 4 - (402) -
Loans refund to the Company - - 68
Loans eliminated from
obtaining control of a
subsidiary - - 79
Investment eliminated
on consolidation from
obtaining control of a
subsidiary 9 200 - -
Leased asset of right
in use - (509) -
Acquisition of property
and equipment - (4) (4)
---------------- -------------- -------------------
Net cash generated from/
(used in) investing activities 20 8 (926) 511
Cash Flow from financing
Activities:
Interest payments (2) - -
Lease payments - 509 (262)
Repayment of lease - (176) -
Net cash generated from/
(used in) financing activities (2) 333 (262)
---------------- -------------- -------------------
Net decrease in cash and
cash equivalents (52) (521) (1,094)
Cash and equivalents at
beginning of period 672 1,712 1,712
Effect of changes in exchange
rates on Cash 96 36 54
---------------- -------------- -------------------
Cash and equivalents at
end of period 716 1,227 672
================ ============== ===================
Notes to the financial statements
1. General Information
Techfinancials Inc (the "Company") and its subsidiaries
(together, the "Group") are engaged in the development of
blockchain-based digital assets solutions and licensing of
financials trading platforms to businesses. The financial
statements present the consolidated results of the Group for each
of the periods ending 30 June 2020, 30 June 2019 and 31 December
2019.
Group changes in the period
In March 2020, the Company exercised its option to acquire
additional shares in Cedex Holdings Limited. Following the
exercise, the Company increased its holding in Cedex from 2% to
97.3% of Cedex' shares.
As a result, these financial statements consolidate for the
first time the results of Cedex Holdings Limited.
In March 2020, DragonFinancials Limited, a company owned 51% by
TechFinancials Inc has been struck off.
During the period of the report, the Company increased its
holding in Footies Ltd from 75% to 100% of Footies shares,
following a conversion of a convertible loan and an acquisition of
the entire shares held by the non-controlling partners of Fotties
Ltd, and as such, these financial statements fully consolidates the
results of Footies Ltd.
In March 2020, B.O. TradeFinancials Ltd the Company's fully
owned subsidiary has been struck off.
Basis of preparation
As permitted, the Group has chosen not to adopt International
Accounting Standard 34 'Interim Financial Reporting' in preparing
these interim financial statements. The condensed consolidated
interim financial statements should be read in conjunction with the
annual financial statements for the year ended 31 December 2019,
which have been prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union.
The interim financial information set out above does not
constitute statutory accounts. The information has been prepared on
a going concern basis in accordance with the recognition and
measurement criteria of International Financial Reporting Standards
(IFRS) as adopted by the European Union.
The accounting policies applied in preparing the interim
financial information are consistent with those that have been
adopted in the Group's 2019 audited financial statements. Statutory
financial statements for the year ended 31 December 2019 were
approved by the Board of Directors on 18 June 2020. The report of
the auditors on those financial statements were not modified in
respect of the matter mentioned, however, has drawn attention to
material uncertainty related to going concern.
The Directors approved these condensed interim financial
statements on 11 August 2020.
Risks and uncertainties
The key risks that could affect the Group's short and medium
term performance and the factors that mitigate those risks have not
substantially changed from those set out in the Group's 2019 Annual
Report and Financial Statements, a copy of which is available on
the Company's website: www.techfinancials.com. The Group's key
financial risks are the availability of adequate funding and the
COVID-19 lockdown restrictions on the events industry.
2. Accounting policies
The condensed consolidated interim financial statements have
been prepared under the historical cost convention, as modified by
the revaluation of certain financials assets and liabilities at
fair value through the statement of profit and loss.
The business is not subject to seasonal variations.
The financial information for the 6 months ended 30 June 2020
and the 6 months ended 30 June 2019 has not been audited.
No dividends have been paid in the period (2019: $nil).
Critical accounting estimates and judgements
The preparation of condensed consolidated interim financial
statements requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the end of the
reporting period. Significant items subject to such estimates and
have not changed during the interim period and are set out in note
3(v) of the Group's 2019 Annual Report and Financial
Statements.
Critical accounting estimates and judgements of deferred revenue
related to the new consolidated subsidiary
In determining the deferred revenue, the calculation includes
determining future cost estimates associated with utilisation of
the token sale proceeds as detailed in notes 4.1 and 7. The
calculation of the amount deferred requires assumptions such as
application of cost estimates and utilisation. The revenue
recognised is periodically reviewed and updated based on the facts
and circumstances available at the time.
3. Earnings per share
The calculation of earnings per share is based on the following
losses and number of shares:
Earnings per share Unaudited Unaudited
6--month period ended 6--month period ended Audited
30 June 2020 30 June 2019 Year ended 31 December 2019
US$'000 US$'000 US$'000
Basic
Loss attributable to equity
holders (545) (1,086) (5,774)
Weighted average number of
shares basic 85,680,979 84,980,979 85,234,130
======================= ======================= =============================
US$ US$ US$
Loss per share - basic (0.0064) (0.013) (0.0677)
Earnings per share from
continuing operations - basic (0.0064) (0.013) (0.0682)
Earnings per share from
discontinued operations - basic - (0.0002) 0.0005
Earnings per share Unaudited Unaudited
6--month period ended 6--month period ended Audited
30 June 2020 30 June 2019 Year ended 31 December 2019
US$ US$ US$
Diluted
Weighted average number of
shares diluted 85,680,979 85,680,979 85,234,130
======================= ======================= =============================
Earnings/(loss) per share -
diluted (0.0064) (0.013) (0.0677)
Earnings per share from
continuing operations - diluted (0.0064) (0.013) (0.0682)
Earnings per share from
discontinued operations -
diluted - (0.0002) 0.0005
4. Intangible assets net
Note Unaudited
Unaudited 6--month
6--month period Audited
period ended ended Year ended
30 June 30 June 31 December
2020 2019 2019
US$'000 US$'000 US$'000
Consist of:
Goodwill - 2,606 -
License - 90 -
4.1,
Crypto assets 7 633 - -
Development expenditure capitalised
as intangible assets:
Trading platform projects,
net 4.2 74 314 112
Footies Ticketing Product - 402 -
Expenditure
Intangible assets, net 707 3,412 112
Current estimates of the useful economic life of intangible
assets are as follows:
Development expenditure for trading projects 5 years
Goodwill N/A
License N/A
Crypto assets N/A
Development expenditure for ticketing Product N/A
Impairment review and estimates of intangible assets are as
follows:
The intangible assets are reviewed for impairment annually or
more frequently whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be
recoverable.
4.1 Crypto assets
The Crypto assets are measured at the available fair values as
of 30 June 2020.
4.2 Trading Platform related products
The net balance of intangible assets as of 30 June 2020 and 31
December 2019 represents the Trading solution for CFD Project.
5. Trade and other receivables
Unaudited
6--month Unaudited
period 6--month Audited
ended period ended Year ended
30 June 30 June 31 December
2020 2019 2019
US$'000 US$'000 US$'000
Trade Receivables, net 16 650 358
Other Receivables * 25 199 194
Prepayments 44 38 23
Short term deposit 2 46 31
Related party receivables - 92 -
in respect of trade
---------- -------------- -------------
87 1,025 606
========== ============== =============
*Other receivables balance relates mostly to VAT and tax
advances on account of income tax payables.
The carrying amounts of trade and other receivables approximate
their fair values.
6. Trade and other payables
Unaudited
6--month Unaudited
period 6--month Audited
ended period ended Year ended
30 June 30 June 31 December
2020 2019 2019
US$'000 US$'000 US$'000
Trade Payable 76 525 475
Other Payable - 2 8
Deposit held - 242 239
Advance received - 114 -
Employees' salaries related
balance 93 248 199
Accrued liabilities 165 82 138
Related party payables
in respect of trade - - 114
---------- -------------- -------------
334 1,214 1,173
========== ============== =============
7. deferred revenues and deferred income liability
The deferred income liability balance in the amount of US$0.631m
relates to a subsidiary consolidated for the first time, Cedex
Holdings Limited. The subsidiary performed a token sale during 2018
and the proceeds were received in crypto assets, predominantly
Ether and Bitcoin, which are presented as intangible assets.
The deferred revenues related to the token sale exits in the
subsidiary's historical financial statements since 2018, where a
portion of the token sale proceeds has been deferred and a
proportion of the consideration has been recognised as deferred
revenue.
The deferred revenues from the above token sale proceeds that
has been recognised in the reported period is in the amount of
US$0.273m.
8. O THER INCOME AND EXPENSES NET
Unaudited
6--month Unaudited
period 6--month Audited
ended period ended Year ended
30 June 30 June 31 December
2020 2019 2019
US$'000 US$'000 US$'000
Loss from a disposal of
fixed assets (12) - (400)
Investments write off
in subsidiaries (749) - -
Gain from intangible assets
realization and revaluation 818 - -
Gain from NCI 25 - -
82 - (400)
========== ============== =============
9. Non - Controlling Interest changes
In March 2020 the company has converted a US$0.3 million loan
provided to its subsidiary Footies Ltd, following this conversion
the Company holdings has increased to 82.5%.
In addition, in May 2020 the Company has signed a separation
agreement with Footies partners in which TechFinancials shall
purchase from Footies partners all of the Footies partners Shares
(the "Purchased Shares") at no cost, so that following the purchase
of the Purchased Shares TechFinancials holdings will increase from
82.5% to 100% of the issued share capital of Footies Ltd. on a
fully diluted basis. In return Footies partners will receive the
basic source code of the Footies Ltd. as it existed on 31 May 2019.
The ownership in the Basic Source Code will be jointly owned by the
Company and Footies partners and each side will be free to continue
and develop the product on its own.
As such in these reports Footies Ltd has no longer
non-controlling interest holders (NCI holdings in 2019 reports were
25% holdings in Footies Ltd results).
In March 2020 the Company exercised its option over Cedex
Holdings Limited. Following the exercise, the Company will hold
97.3% of Cedex' issued share capital (90.81% on a fully diluted
basis).
As such these reports includes non-controlling interest holders
of 2.7% over Cedex Holdings Ltd results.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
NEXPBMBTMTIBBAM
(END) Dow Jones Newswires
August 11, 2020 07:49 ET (11:49 GMT)
TechFinancials (AQSE:TECH)
Gráfico Histórico do Ativo
De Jan 2025 até Fev 2025
TechFinancials (AQSE:TECH)
Gráfico Histórico do Ativo
De Fev 2024 até Fev 2025
