TIDMSTAR
RNS Number : 9503J
Starcom PLC
27 August 2021
27 August 2021
Starcom Plc
("Starcom" or the "Company")
Interim Results
Starcom (AIM: STAR), which specialises in the development of
wireless, Internet-Of-Things (IoT) based solutions for the remote
tracking, monitoring and protection of a variety of assets,
announces its results for the six months ended 30 June 2021.
Highlights
-- Revenues decreased by 3% to $2.27m (H1 2020: $2.34m)
-- Recurring SaaS revenues increased by 3% to $1.1m (H1 2020: $1.0m)
-- Adjusted EBITDA* loss of $167,000 (H1 2020: loss of $167,000)
-- Gross margin for the period was 40% (H1 2020:33%)
-- General expenses reduced by 5% to $1.4m (H1 2020: $1.5m)
-- Statutory loss for the period of $531,000 (H1 2020: $716,000)
-- Strong pipeline of potential new orders over next few months
Avi Hartmann, CEO of Starcom, commented:
"I am delighted that despite the continuous challenges Starcom
faced due to the COVID-19 pandemic we managed to show stable
results with increased opportunities in the future. We now have
several sales prospects we hope to convert when conditions permit,
and I am confident that Starcom technology will continue to create
value in this and following years."
*Adjusted EBITDA is earnings before interest, tax, depreciation,
amortisation and share-based payment expense.
Contacts:
Starcom Plc
Michael Rosenberg, Chairman 07785 727595
Avi Hartmann, CEO +972 5477 35663
Allenby Capital Limited (AIM Nominated Adviser
and Joint Broker)
Jeremy Porter/Piers Shimwell 020 3328 5656
Peterhouse Capital Limited (Joint Broker)
Lucy Williams/Charles Goodfellow/Eran Zucker 020 7469 0930
CHAIRMAN'S STATEMENT
The results for the first half of 2021 still bear the impact of
COVID-19. However, there are strong signals that business is
starting to revive, and we expect this trend to continue in the
next few months.
Revenues in the first six months were similar to those in the
equivalent period last year at $2.3m. These revenues comprised a
more profitable product mix, with the legacy low margin product,
the Helios, coming down to 48% of the hardware sales compared with
62% in 2020.
During the first half Starcom has managed to retain most of its
recurrent customers. This is reflected in the SaaS revenues which
marginally increased (by 3%), to $1.07 million.
The higher quality revenue mix enabled gross margin to increase
to 40% compared with 33% in the same period last year. The
improvement in the gross margin was achieved despite the dramatic
increase in components and shipping costs imposed on the Company by
the unfavourable global conditions.
The electrical components sphere suffered by not only lack of
equipment, but extremely long lead times and an increased freight
cost. Starcom managed this issue by adjusting its hardware bill of
materials ("BOM") several times during the period.
Starcom also continues to monitor and reduce the level of
general expenses.
Starcom took the opportunity during this challenging period to
add technological strength and value to its products. We managed to
add a new low-cost version for Helios to support its needs in
certain geographical areas. This hardware solution is expected to
create additional and more significant volumes of SaaS revenues in
the next few years. We also released a new version of Kylos (called
"Kylos E") with an extended battery life of ten years.
Marketing and business development efforts continued, and the
pipeline of potential future deals is now at an all time high,
although timing of conversions into revenues is still uncertain
with some of these prospects. In particular, there has been
increased interest and sales of our Lokies product from several
sources.
Further to the previous announcement regarding the cooperation
with DHL, we can now update that DHL's proof of concept ("POC"),
intended to ascertain Lokies's fit for DHL's monitoring of its
fleets operation, is expected to be completed in the next couple of
months.
A major emergency service provider in Israel, United Hatzalah,
has chosen our Helios Pro solution for the deployment of smart
lifesaving technology. In partnership with Partner
Telecommunication, Starcom is providing smart defibrillator
cabinets that can be controlled and monitored by United Hatzalah
operators and deployed in public areas for emergency response.
FINANCIAL REVIEW
Revenues for the period were $2.27m, compared with $2.34m for
six months ended 30 June 2020.
Recurring SaaS revenues improved to $1.07m (H1 2020 $1.04m).
The gross margin for the period was 40%, compared with 33% for
the equivalent period in 2020.
Total operating expenditure decreased by 5% to $1.40m (H1 2020:
$1.48m), achieved by continuous cost reduction in headcount and
office expenses.
The Adjusted EBITDA loss was $167,000, as it was in the
equivalent period in 2020 as the slight decrease in revenues was
compensated for by the higher gross margin and the 12% reduction in
G&A costs. Accordingly, the statutory loss for the period
improved to $531,000 (H1 2020: $716,000).
The balance sheet showed a decrease in trade receivables to
$0.7m, compared with $1.7m as at 30 June 2020.
Inventories at the period end were $2.0m, compared with $2.1m as
of 31 December 2020.
Trade payables were $1.37m, compared with $1.58m as of 31
December 2020.
Net cash generated in operating activities in the period was
$0.2m compared with $0.4m consumed in the period ended 31 December
2020. Cash and cash equivalents at 30 June 2021 was $0.3m.
OUTLOOK
While uncertainty continues, the strong pipeline of potential
new deals we have developed in recent months with both existing and
new customers give us confidence that Starcom can deliver
considerable improvement in results in the second half of this year
and beyond. The pandemic has had a significant impact on the
Company, but we have managed to stabilise the situation, secure
finance and government support, and are ready to leverage our
technological advantages. We believe that as global logistics
become even more challenging and freight costs spiral up, the
security and control that Starcom's solutions provide in the supply
chain become more important and increasingly valuable.
Michael Rosenberg
Chairman
STARCOM Plc
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
U.S. Dollars in thousands
June 30 December
31
Note 2021 2020 2020
--------- --------- --------
Unaudited Unaudited Audited
--------- --------- --------
ASSETS
NON-CURRENT ASSETS :
Property, plant and equipment, net 325 3 50 318
Rights of use assets, net 260 208 330
Intangible assets, net 31,811 1,976 1,900
Income tax authorities 56 56 56
Total Non-Current Assets 2,452 2,590 2,604
----- ----- -----
CURRENT ASSETS :
Inventories 2,030 2,348 2,127
Trade receivables (net of allowance
for doubtful accounts of $583, $89
and $607 thousand as of June 30,
2021 and 2020 and December 31,2020) 734 1,715 1,129
Other receivables 74 68 81
Short-term deposit 148 67 150
Cash and cash equivalents 328 278 264
Total Current Assets 3,314 4,476 3,751
----- ----- -----
TOTAL ASSETS 5,766 7,066 6,355
===== ===== =====
LIABILITIES AND EQUITY
EQUITY
1,641 3,418 2,101
----- --------------- -----
NON- CURRENT LIABILITIES:
Long-term loans from banks, net of
current maturities 265 123 303
Amortized cost of a convertible loan 5 287 249 254
Conversion component of a convertible
loan at fair value 5 16 57 42
Leasehold liabilities 170 96 236
----- --------------- -----
Total Non-Current Liabilities 738 525 835
CURRENT LIABILITIES:
Short-term bank credit 1 85 25
Short-term loans and current maturities
of long-term loans 958 137 751
Warrants at fair value 5 6 11 10
Trade payables 1,373 1,888 1,579
Shareholders and related parties 6 665 561 615
Other payables 254 307 303
Leasehold liabilities 130 134 136
Total Current Liabilities 3,387 3,123 3,419
----- --------------- -----
TOTAL LIABILITIES AND EQUITY 5,766 7,066 6,355
===== =============== =====
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
26(th) August 2021 Igor Vatenmacher
--------------------------------- ----------------
Date of Approval of the Financial
Statements Director
STARCOM Plc
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS
U.S. Dollars in thousands
Year Ended
Six Months Ended June December
30 31
Note 2021 2020 2020
----------- ---------- ----------
Unaudited Unaudited Audited
----------- ---------- ----------
Revenues 2,271 2,340 5,041
Cost of sales 7 (1,356) (1,557) (3,374)
-----------
Gross profit 915 783 1,667
Operating expenses:
Research and development, net (137) (71) (206)
Selling and marketing (294) (292) (580)
General and administrative (978) (1,116) (2,680)
Other income (expenses) 21 25 24
----------- ---------- ----------
(1,388) (1,454) (3,442)
----------- ---------- ----------
Operating loss (473) (671) (1,775)
Net finance expenses 8 (58) (45) (270)
----------- ---------- ----------
Total comprehensive loss for
the period (531) (716) (2,045)
=========== ========== ==========
Loss per share:
Basic and diluted loss per
share (in dollars) 4 (0.002) (0.002) (0.006)
=========== ========== ==========
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
STARCOM Plc
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
U.S. Dollars in thousands
Capital
Share Reserve
Capital Premium Capital for Share-based Accumulated
(Unaudited) * on Shares Reserve payment Loss Total
------------ ----------- -------- ----------------- ----------- --------
Balance- January 1,
2021 - 12,328 89 1,123 (11,439) 2,101
Issue of share capital,
net of expenses - see
Note 4 - 109 - - - 109
Share based payment
- Note 4 - - - (38) - (38)
Comprehensive loss
for the period - - - - (531) (531)
-----------------
Balance- June 30, 2021 - 12,437 89 1,085 (11,970) 1,641
============= =========== ======== ================= =========== ========
(Unaudited)
Balance- January 1,
2020 - 12,254 89 942 (9,394) 3,891
Issue of share
capital,
net of expenses - 73 - - - 73
Share based payment - - - 170 - 170
Comprehensive loss
for the period - - - - (716) (716)
-----------------
Balance- June 30, 2020 - 12,327 89 1,112 (10,110) 3,418
============= =========== ======== ================= =========== ========
(Audited)
Balance- January 1,
2020 - 12,254 89 942 (9,394) 3,891
Proceeds from issued
share capital, net
of expenses - 74 - - - 74
Share based payment - - - 181 - 181
Comprehensive loss
for the period - - - - (2,045) (2,045)
-----------------
Balance- December 31,
2020 - 12,328 89 1,123 (11,439) 2,101
============= =========== ======== ================= =========== ========
* An amount less than one thousand.
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
STARCOM Plc
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. Dollars in thousands
Six Months Ended Year Ended
June 30 December
31
2021 2020 2020
--------- --------- ----------
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES: Unaudited Unaudited Audited
--------- --------- ----------
Comprehensive loss (531) (716) (2,045)
Adjustments to reconcile net loss to
net cash provided by
(used in) operating activities:
Depreciation and amortization 366 360 725
Interest expense and exchange rate differences 33 39 50
Share-based payment expense (38) 170 181
Changes in assets and liabilities:
Decrease (Increase) in inventories 97 (2) 219
Decrease (Increase) in trade receivables 395 271 857
Decrease (Increase) in other receivables 7 101 88
Increase in Income Tax Authorities - (2) (2)
Increase (Decrease) in trade payables (97) (193) (502)
Increase (Decrease) in other payables (49) 45 40
Net cash provided by (used in) operating
activities 183 73 (389)
--------- --------- ----------
CASH FLOWS FOR INVESTING ACTIVITIES:
Purchases of property and equipment (41) (12) (18)
Proceeds from sales of property, plant
and equipment - - -
Decrease (Increase) in short-term deposits 2 (6) (89)
Purchase of intangible assets (173) (103) (281)
Net cash used in investing activities (212) (121) (388)
--------- --------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term bank credit,
net (24) 6 (54)
Receipt (Repayment) of Short-term loans
from banks 176 - 739
Receipt of l ong-term loans - - 312
Receipt of convertible loan - 290 290
Proceeds from (Repayment to) shareholders
and related parties, net 50 (7) 57
Repayment of Leasehold liability (67) (78) (162)
Repayment of long-term loans (42) (43) (299)
Consideration from issue of shares - -
--------- --------- ----------
Net cash provided by financing activities 93 168 883
--------- --------- ----------
Increase (Decrease) in cash and cash
equivalents 64 120 106
Cash and cash equivalents at the beginning
of the period 264 158 158
--------- --------- ----------
Cash and cash equivalents at the end
of the period 328 278 264
========= ========= ==========
Appendix A - Additional Information
Interest paid during the period (30) (26) (69)
========= ========= ==========
Appendix B - Non-cash financing activities
Issuance of shares to a related party
in payment of debt 109 75 74
=== =====
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
STARCOM Plc
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
U.S. Dollars in thousands
NOTE 1 GENERAL INFORMATION
-
a. The Reporting Entity
1. Starcom Plc ("the Company") was incorporated in Jersey
on November 28, 2012.
The Group specializes in easy-to-use practical wireless solutions
that combine advanced technology, telecommunications and
digital data for the protection and management of people,
fleets of vehicles, containers and assets and engages in
production, marketing, distribution, research and development
of G.P.S. systems.
The Company fully owns Starcom G.P.S. Systems Ltd., an Israeli
company that engages in the same field, and Starcom Systems
Limited, a company in Jersey.
The Company's shares are admitted for trading on the London
Stock Exchange's AIM market.
Address of the official Company office in Israel of Starcom
G.P.S. Systems Ltd. is:
16 Hata'as St., Kfar-Saba, Israel.
Address of the Company's registered office in Jersey of Starcom
Systems Limited is:
Forum 4, Grenville Street, St Helier, Jersey, Channel Islands,
JE4 8TQ
b. Definitions in these financial statements:
1. International Financial Reporting Standards
(hereinafter:
"IFRS") - Standards and interpretations
adopted by the
International Accounting Standards Board
(hereafter: "IASB")
that include international financial
reporting standards
(IFRS) and international accounting standards
(IAS), with
the addition of interpretations to these
Standards as
determined by the International Financial
Reporting Interpretations
Committee (IFRIC) or interpretations
determined by the
Standards Interpretation Committee (SIC),
respectively.
2. The Company - Starcom Plc.
3. The subsidiaries - Starcom G.P.S. Systems
Ltd. And Starcom
Systems Limited.
4. Starcom Jersey - Starcom Systems Limited.
5. Starcom Israel - Starcom G.P.S. Systems Ltd.
6. The Group - Starcom Plc. and the
Subsidiaries.
7. Related party - As determined by
International Accounting
Standard No. 24 in regard to related parties.
NOTE 2 - BASIS OF PREPARATION AND CHANGE IN THE GROUP'S ACCOUNTING
POLICIES
a. Basis of preparation
The interim consolidated financial statements have been
prepared in accordance with generally accepted accounting
principles for the preparation of financial statements
for interim periods, as prescribed in International Accounting
Standard No. 34 ("Interim Financial Reporting").
The interim consolidated financial information should
be read in conjunction with the annual financial statements
as of December 31, 2020 and for the year ended on that
date and with the notes thereto.
The significant accounting policies applied in the annual
financial statements of the Company as of December 31,
b. 2020 are applied consistently in these interim consolidated
financial statements.
Use of estimates and judgments
The preparation of financial statements in conformity
with IFRS requires management of the Company to make
judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts
of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
The judgment of management, when implementing the Group
accounting policies and the basic assumptions utilized
in the estimates that are bound up in uncertainties are
consistent with those that were utilized to prepare the
annual financial statements.
Information about critical judgment in applying accounting
policies that have a significant effect on the amounts
recognized in the consolidated financial statements is
included in the following Notes:
Note 5 - financial liabilities of convertible loans and
warrants.
c. Exchange rates:
Year Ended December
Six Months Ended 31
June 30
2021 2020 2020
------------- ------------ --------------------
Exchange rate of U.S.
$ in NIS 0.30 0.28 0.311
Exchange rate of U.S.
$ in GBP 0.72 0.81 0.732
Change of U.S. $ in NIS (3.53%) (0.29%) (6.97%)
Change of U.S. $ in GBP (1.64%) 6.5% (3.68%)
NOTE 3 INTANGIBLE ASSETS, NET
-
Total
----------
Unaudited
----------
Cost:
Balance as of January
1, 2021 5,036
Additions during the period 173
Balance as of June 30,
2021 5,209
----------
Accumulated Depreciation:
Balance as of January
1, 2021 (2,934)
Amortization during the
period (262)
Balance as of June 30,
2021 (3,196)
----------
Impairment of assets (202)
Net book value as of June
30, 2021 1,811
==========
Total
----------
Unaudited
----------
Cost:
Balance as of January
1, 2020 4,755
Additions during the period 103
Balance as of June 30,
2020 4,858
----------
Accumulated Depreciation
:
Balance as of January
1, 2020 (2,434)
Amortization during the
period (246)
Balance as of June 30,
2020 (2,680)
----------
Impairment of assets (202)
----------
Net book value as of June
30, 2020 1,976
==========
Total
--------
Audited
--------
Cost:
Balance as of January
1, 2020 4,755
Additions during the year 281
Balance as of December
31, 2020 5,036
--------
Accumulated Depreciation
:
Balance as of January
1, 2020 (2,434)
Amortization during the
year (500)
Balance as of December
31, 2020 (2,934)
--------
Impairment of assets (202)
--------
Net book value as of December
31, 2020 1,900
========
NOTE 4 SHARE CAPITAL
-
a. Composition - ordinary shares of no-par value, issued
and outstanding - 364,726,576 shares and 351,479,801
shares as of June 30, 2021 and December 31, 2020, respectively.
b. A Company share grants to its holder voting rights, rights
to receive dividends and rights to net assets upon dissolution.
c. Weighted average number of shares used for calculation
of basic and diluted loss per share:
June 30 June 30 December 31
2021 2020 2020
------------------ ------------------ ------------------
Unaudited Unaudited Audited
------------------ ------------------ ------------------
Number 352,245,828 346,892,750 349,205,037
================== ================== ==================
The following table lists the number of share options and the
exercise prices of share options during the reported period:
June 30, 2021 December 31, 2020
-------------------------- -----------------------------
Unaudited Audited
-------------------------- -----------------------------
Weighted
average
Number of exercise Number of Weighted average
options price options exercise price
------------- ----------- ---------- ----------------
GBP GBP
-------------------------- ----------------------------
Share options outstanding at
beginning of period 49,953,947 0.028 49,293,947 0.027
Share options expired during
the period - - 3,340,000 0.018
Shares options exercised during
the period 3,560,000 0
Share options granted during
the period 4,000,000 0.018 4,000,000 0.015
Share options outstanding at
end of period 50,393,947 0.028 49,953,947 0.027
============= =========== ========== ================
Share options exercisable at
end of period 44,560,614 0.030 45,953,947 0.028
============= =========== ========== ================
d. During May 2021 the Company
1. Issued 3,000,000 new share options to executive management
and additional 1,000,000 share options to other employees.
The executive management options will be exercisable,
subject to their continued employment with the Company,
over three years as to one third at 1.5p per share from
the first anniversary of the date of grant, one third
at 2p per share from the second anniversary of date of
grant and one third at 2.5p per share from the third
anniversary of date of grant
The employees' options will become exercisable, subject
to their continued employment with the Company, at 1.25p
per share over three years as to one third for each anniversary
of the date of grant.
2. Issued 9,686,775 new ordinary shares in lieu of 60%
of director fees for 14-18 months ending May 31 2021
in a total amount of GBP 77 thousands ($109 thousands).
The shares were issued at 0.8p per share, being the most
recent closing offer price for ordinary shares.
e. During May 2021 the Company's CEO and its Board of directors
chairman exercised 3,560,000 options granted to them
under the Company's share option scheme in lieu of salary
and fees, as announced on 17 June 2019. The options were
exercisable at nil cost.
NOTE 5 - FINANCIAL LIABILITIES OF CONVERTIBLE LOANS AND WARRANTS
a. During March 2020, The Company received from its Directors,
CFO and an employee (hereinafter: "the lenders") loans
in the total amount of $290 thousand (GBP244 thousand)
in the form of convertible loans enabling the lenders to
convert the loans at an exercise price of GBP0.0125 per
share at any time up to September 30, 2021. The convertible
loan bears interest at the rate of 8% per annum calculated
by reference to the principal amount of the convertible
loan.
In addition, the lenders received fully vested warrants
to subscribe a total of 4 million further shares at an
exercise price of GBP0.015 per share. Any unexercised warrants
expire at the end of two-years from grant.
The loan was evaluated and divided to different components
by independent appraisers as follows:
Conversion component at fair value - 59$ thousand
Warrants at fair value - 12$ thousand
Amortized cost of a loan - 210$ thousand
Transaction costs were allocated according to the component's
fair value ratio.
The part of the expenses that is attributed to the amortized
cost of the loan was reduced from its cost.
An effective interest rate was calculated for the liability
component of the loan, based on its amortization table.
The effective interest rate is 35.2% per annum.
Total revaluation expenses regarding these components in
the statement of comprehensive loss for the reported period
are as follows:
Loan component Option Warrant
--------------- ------- --------
Balance as of January - - -
1, 2020
Additions during the
period 210 59 12
Finance (income) expenses 73 (17) (2)
Payments (29) - -
--------------- ------- --------
Balance as of December
31, 2020 254 42 10
Additions during the - - -
period
Finance (income) expenses 43 (26) (4)
Payments (10) - -
Balance as of June 30,
2021 287 16 6
NOTE 6 SHAREHOLDERS AND RELATED PARTIES
-
a. Related parties that own the controlling shares in
the Group are:
Mr. Avraham Hartman ( 9.13 %), Mr. Uri Hartman (6.47%),
Mr. Doron Kedem (6.47%).
b. Short-term balances: June 30 December
31
2021 2020 2020
---------- ----------------- ---------
Unaudited Unaudited Audited
---------- ----------------- ---------
Credit balance
Avi Hartmann (47) (73) (56)
Uri Hartmann (446) (367) (444)
Doron Kedem (173) (173) (173)
Total Credit balance (666) (613) (673)
---------- ----------------- ---------
Loans
Avi Hartmann 31 73 87
Uri Hartmann (237) (228) (236)
Doron Kedem 207 207 207
---------- ----------------- ---------
Total Loans 1 52 58
---------- ----------------- ---------
Total Short-term
balances (665) (561) (615)
========== ================= =========
c. Transactions: Six Months Ended Year Ended
June 30 December
31
2021 2020 2020
---------- ---------- -------------
Unaudited Unaudited Audited
---------- ---------- -------------
Total salaries, services
rendered and related
expenses for shareholders 192 151 312
========== ========== =============
Total share-based
payment expenses 2 72 80
========== ========== =============
Interest to related
parties 5 5 10
========== ========== =============
NOTE 7 - COST OF SALES
Six Months Ended Year Ended
June 30 December
31
2021 2020 2020
---------- ---------- -----------
Unaudited Unaudited Audited
---------- ---------- -----------
Purchases and other 997 1,313 2,655
Amortization 262 246 500
Increase in Inventory 97 (2) 219
1,356 1,557 3,374
========== ========== ===========
NOTE 8 - NET FINANCE EXPENSES
Six Months Ended Year Ended
June 30 December
31
2021 2020 2020
----------- ----------- -----------
Unaudited Unaudited Audited
----------- ----------- -----------
Exchange rate differences 25 22 (140)
Bank charges (31) (24) (43)
Interest to banks and
others (43) (22) (62)
Interest to suppliers (4) (16) (16)
Interest to related parties (5) (5) (10)
Interest income from
deposits - - 1
Net finance expenses (58) (45) (270)
=========== =========== ===========
NOTE 9 SEGMENTATION REPORTING
-
Differentiation policy for the segments:
The Company's management has defined its segmentation policy
based on the financial essence of the different segments.
This refers to services versus goods, delivery method and
allocated resources per sector.
On this basis, the following segments were defined:
Segment information regarding the reported segments:
Hardware SaaS Total
--------- ------ --------
Period Ended 30.06.2021:
(Unaudited)
Segment revenues 1,197 1,074 2,271
Cost of sales (1,220) (136) (1,356)
--------- ------ --------
Gross profit (23) 938 915
Period Ended 30.06.2020:
(Unaudited)
Segment revenues 1,296 1,044 2,340
Cost of sales (1,348) (209) (1,557)
--------- ------ --------
Gross profit (52) 835 783
Year Ended 31.12.2020:
(Audited)
Segment revenues 2,833 2,208 5,041
Cost of sales (3,070) (304) (3,374)
--------- ------ --------
Gross profit (loss) (237) 1,904 1,667
NOTE 10- SIGNIFICANT EVENTS DURING THE REPORTED PERIOD (COVID-19)
Due to the pandemic outbreak since March 2020, most of the
countries across the globe have taken extra measures to
prevent and reduce COVID-19 exposure.
Among the actions taken were noted: citizens transport limitations,
closing of borders, shutting some business activity, limitation
of number of employees per square feet, shutting the education
systems, etc.
The unprecedented conditions resulted in a decrease in revenues
for the period. In addition, normal purchasing processes
and difficult shipping limitations created additional costs
and delays which impacted the fulfilment of some existing
orders. Marketing activities were inevitably disrupted
The Group submitted applications and secured both government
supported loan for long term amounted $315 thousand and
grants amounted $300 thousands.
The continuing cases of COVID-19 and the developments surrounding
the pandemic have had a negative impact on the Group's business.
Significant events affecting the overall economy have historically
had an impact on revenue volumes, with the full extent of
the impact generally determined by the length of time the
event influences decisions as well as general economic conditions.
The COVID-19 outbreak and resulting economic conditions
have had, and the Group believes will continue to have,
an adverse impact on its operations and on its financial
results and liquidity, and such negative impact may continue
well beyond the containment of the outbreak.
The Group has taken, and plans to take further actions to
manage its liquidity, including reducing operating expenses
and strict cash flow monitoring, due to its uncertainty
to assure its assumptions used to estimate its liquidity
requirements will be correct because it has never previously
experienced such a change in demand, and as a consequence,
its ability to be predictive is uncertain. In addition,
the duration of the pandemic is uncertain. However, based
on current operational assumptions, the Group believes it
has adequate liquidity beyond the next twelve months.
Note 11 SIGNIFICANT EVENTS AFTER THE REPORTED PERIOD
-
During July 2021 the Company issued 6,251,162 new share
options to certain directors ("Fee Options") at a price
of 1.075 pence per share in order to reduce fees by GBP5,600
per month, for a twelve-month period until 31 May 2022.
The Fee Options will vest one year after grant date and
can be exercised from that date until 10 years from date
of grant.
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END
IR DGGDIXGDDGBL
(END) Dow Jones Newswires
August 27, 2021 02:00 ET (06:00 GMT)
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