TechFinancials Inc. - Annual Report & Accounts and AGM Update
RNS Number : 0823H
TechFinancials Inc.
30 July 2021
 

30 July 2021

TechFinancials, Inc

("TechFinancials" or the "Company" or the "Group")

 

Annual Report & Accounts and AGM Update

 

TechFinancials Inc. (AQSE: TECH),  announces that its audited Annual Report and Accounts, for the year ended 31 December 2020, is available to view on the Company's corporate website at https://group.techfinancials.com.

Based on the latest available advice, the Company will hold the AGM via a zoom meeting. A notice containing the full text of the resolutions to be proposed along with the place of the meeting will be sent in due course.

Financial Highlights

·   As at 31 December 2020, the Company discontinued all its traditional operational activities and continues to look for investment opportunities

·   Revenues of US$1.3 million (2019: US$3.4 million) a decrease of 62%

·   Pre-tax profit attributable to shareholders of US$1.0 million (2019: loss of US$5.7   million)

·   Cash position of US$1.4 million as at 31 December 2020 (2019: US$0.7 million)

·   Basic earnings per share ('EPS') US$0.01 (2019: (US$0.07))

·   In January 2020, the Company's admission to trading on AIM was cancelled and subsequently the Company remains quoted solely on the AQSE Growth Market ("AQSE")

·   In April 2020, the Company exercised its option over Cedex Holdings Limited ("Cedex"), Consequently the accounts of Cedex are consolidated for the first time from this date with the Company accounts. In November 2020 the Company purchased additional shares of Cedex from a third party for a total consideration of US$17,500. Following the above, the Company hold 99.84% of Cedex' issued share capital (93.62% on a fully diluted basis)

·   In October 2020, the IP of Footies Ltd. ("Footies), the wholly owned subsidiary, was transferred to the Company. Footies has an application for voluntary strike-off, and unless cause is shown against strike-off, Footies will be dissolved on approximately 15 August 2021

·   In October 2020, the Company terminated all its agreements with the Company's B2B clients. Consequently, the Company no longer operates any B2B business

·   In October 2020 Cedex, the Company's 99% subsidiary, terminated all its engagements with its employees and consultants. Consequently, the Company no longer operates any Blockchain business

·   In November 2020, the Company signed a Simple Agreement for Future Equity ("SAFE") with RenewSenses Ltd. ("RenewSenses"), an Israeli Company, developing assistive technologies for the visual impaired, for a total amount of US$152k. The conversion of the loan will entitle the Company to hold not less than 17% of RenewSenses issued share capital

·   At the beginning of 2021, the Company acquired shares of companies entering into transactions and listed on the LSE and AIM

 

Covid-19 crisis along with the continuing regulatory challenges led eventually to the closing all the Company's core operations.

 

 

 

 

 

 

Operational Highlights 

 

Blockchain Trading Technology

 

·   The Company decided to close the operations of Footies during the year due to the negative business conditions that existed in the market resulting from the Covid-19 pandemic and relating restrictions, which put on hold sports and other events that Footies' controlling tickets solutions target. As a result of the lack of capital and interest by the market, in October 2020, the Company acquired from Footies its entire IP and subsequently notified HMRC of Footies' impending strike off.

·   The Company exercised its option over Cedex in April 2020 in order to gain full control over Cedex. The Company continued to support Cedex during the period in the blockchain-related projects, while continuing to look for opportunities to materialize Cedex's assets or join forces with other companies, in order to move forward with its Cedex blockchain diamond exchange and related projects. The various attempts to close a deal with potential partners, investors or purchasers did not martialize, in some cases due to the market conditions related to the Covid -19 pandemic in the second half of the year. As a result, the Company decided to close Cedex's operations and in October 2020 terminated all Cedex' contracts with employees and other technical consultants.

Software Licensing (B2B)

 

·   The Company continued to support customers of its B2B division through 1 November 2020, when all contract obligations ended. Subsequently the Company laid of all its B2B employees and service providers.

Simple Agreement Future Equity (SAFE)

●   In November 2020, the Company signed with RenewSenses Ltd., an Israeli start-up, a SAFE, following which the Company invested in RenewSenses a total amount of US$ 152k.

     The investment will be automatically converted at a 20% discount to the next round valuation, with a valuation cap of 2M NIS (US$0.6 million). The Company will therefore hold at least 17% of RenewSenses share capital. RenewSenses aims to revolutionize the way people with visual impairment experience the world. The company develops a wearable mobile device that combines cutting-edge computer vision, vision-to-audio and vision-to-touch sensory substitution methods. The device will enable users to detect and locate objects, people, and general visual characteristics in their immediate surroundings through alternative senses. The company is in the final stages of developing its MVP and will be raising additional funds during 2021 to support its go to market plans

 

Chairman's Statement

 

2020 continued to be a very challenging year, mainly due to the impact of the Covid-19 pandemic, following which the Board has taken major decisions to close all the Blockchain related operations in Footies and Cedex.

 

As informed in the previous year's accounts, the Company closed in October 2020 the entire B2B historical business, which suffered from ongoing declining revenues and losses due to challenging regulatory environment affecting its customers' ability to operate.

 

In order to reduce costs, in January 2020 the Company's admission on AIM was cancelled and following that the Company remained listed solely on the AQSE Growth Market ("AQSE").

 

The Board decided to look for new business opportunities which led the Company in November 2020 to engage in a SAFE with a start-up company that it believes has the potential for creating value for the shareholders. The Company will continue to look for new ways to increase its value.

 

Dividends

 

The Board will not be recommending a final dividend to the shareholders of the Company for FY2020 (2019: $nil).

 

Outlook and current trading

 

The year was a turning point for the Group, where it had to close its operations, release all employees and cancel its admission to AIM while seeking new business opportunities to increase the value of the company.

 

The Company will continue to look for business opportunities to maximize the Company's value, leveraging its available cash and investment in RenewSenses.

 

I would like to thank our shareholders for their continued support in what has been a difficult year.

 

We look forward to updating the market on our progress in due course.

 

Eitan Yanuv

Independent Non-Executive Chairman

 

Going concern (extracted from the Auditor Report note 3u)

The Consolidated Financial Statements have been prepared under the going concern assumption, which presumes that the Group will be able to meet its obligations as they fall due for at least the next twelve months from the date of the signing of the Financial Statements.

Directors have prepared a budget plan till the end of 2022. Analysing the expected expenses and the current cash position, the directors believe that the company can meet its obligations throughout 2022.

The Financial Statements do not include any adjustments that may be required should the Group be unable to continue as a going concern.

 

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, Executive Board member

 

 

Peterhouse Capital Limited (AQSE Growth Market Advisor and  Broker)

Tel: +44 (0) 20 7469 0930

Guy Miller and Mark Anwyl 

 

Consolidated Statement of Comprehensive Income

 

For the year ended 31 December 2020

 

 

 

 

 

2020

2019

 

 

 

US$'000

US$'000

 

 

 

 

 

 

Revenue

 

1,309

3,418

 

Cost of sales

 

                         (87)  

                  *(911)

 

 

 

 

 

 

Gross profit

 

1,222

2,507

 

 

 

 

 

 

Expenses:

 

 

 

 

Research and development

 

(512)

                    (2,177)

 

Selling and marketing

 

(53)

(648)

 

Administrative

 

(654)

(2,648)

 

Other expenses

 

-

(153)

 

Impairment of goodwill                       

 

                                        -

                         (2,606)

 

 

 

 

 

 

 

Operating Income (Loss)

 

 

3

 

(5,725)

 

 

 

 

 

 

Bank fees

 

(50)

(31)

 

Foreign exchange gain (loss)

 

70

(58)

 

Other financial (expenses) / income

 

(1)

(10)

 

Financing Income (expenses)

 

19

(99)

 

 

 

 

 

 

Other Income (expenses)

 

 

 

 

Other non-operational income (expenses)

 

875

(400)

 

 

 

 

 

 

Profit (Loss) before taxation

 

897

      (6,224)

 

 

 

 

 

 

Taxation

 

70

(47)

 

 

Profit (Loss) for the year from continuing operations**

 

 

 

967

 

(6,271)

 

Gain (Loss) from discontinued operations

 

                                       50

(19)

  Capital gain from a sale of subsidiary

 

  ____________________-

_______________65_

 

Gain / (loss) for the year from discontinued operations, net

 

 

                                       50

 

                          46

 

 

 

 

 

 

Other comprehensive income                            

 

                                       -

-

 

 

 

 

 

 

Total comprehensive Profit (Loss)*

 

1,017

(6,225)

 

 

 

 

 

 

Profit (Loss) attributeable to:

 

 

 

 

Owners of the Company

 

997

(5,774)

 

Non-controlling interest

 

20

(451)

 

Profit (Loss) for the period

 

1,017

(6,225)

               

 

 

 

 

 

 

 

 

 

Consolidated Statement of Financial Position

 

As at 31 December 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

31 December

31 December

 

 

2020

2019

 

 

US$'000

US$'000

Non-current assets

 

 

 

Intangible assets, net

 

-

112

Property and equipment, net

 

-

16

Investment in related party

 

-

200

Financial asset held at FVTPL

 

152

-

 

 

 

 

 

 

152

328

 

 

 

 

Current assets

 

 

 

Trade receivables, net and other receivables

 

13

606

Restricted bank deposits

 

-

71

Cash

 

1,419

672

 

 

1,432

1,349

 

 

 

 

 

 

 

 

Total Assets

 

1,584

1,677

 

 

 

 

Current liabilities

 

 

 

Trade and other payables

 

88

1,173

Income tax payable

 

-

103

Income tax provision

 

86

-

 

 

 

 

 

 

174

1,276

 

 

 

 

Non-current liabilities

 

 

 

Shareholders loan

 

84

92

 

 

 

 

Equity

 

 

 

Share capital

 

61

61

Share premium account

 

12,022

12,022

Share-based payment reserve

 

798

934

Accumulated profits / (losses)

 

(11,555)

(12, 459)

Equity attributable to owners of the Company

 

1,326

558

Non-controlling interests

 

-

(249)

Total equity

 

1,326

309

 

 

 

 

Total Equity and Liabilities

 

1,584

1,677

 

 

 

 

 

 

For the year ended 31 December 2020

 

 

 

Years ended 31 December

 

 

2020

2019

 

 

US$'000

US$'000

 

 

 

 

Cash Flows from operating activities

 

 

Profit (Loss) before tax for the period

 

946

(6,178)

 

 

 

 

Adjustment for:

 

 

 

Amortisation of intangible assets

 

75

404

Impairment of intangible assets, net

 

37

2,696

Gain on bargain purchases

 

(309)

-

Depreciation of property and equipment

 

4

61

Share option charge

 

6

17

Impairment of account receivables

 

-

153

Forgiveness of loan due to NCI

 

(51)

 

Capital loss on disposal of property and equipment

 

12

400

Gain from revaluation of intangible assets

 

(577)

-

Income tax expenses

 

92

-

 

 

 

 

Operating cash flows before movements in working capital:

 

 

 

Decrease in trade and other receivables

 

589

1,414

Decrease in long term receivables

 

-

-

Decrease in trade and other payables

 

  (1,453)

(267)

Interest Income

 

-

(1)

Income tax received

 

-

1

R&D tax credit received

 

163

-

Income tax paid

 

(109)

(43)

Net cash used for operating activities

 

(575)

(1,343)

 

 

 

 

Cash flows from investing activities

 

 

Proceeds from selling a subsidiary

 

-

112

Proceeds from a refund of deposit

 

-

51

Decrease in restricted bank deposits

 

71

205

Consideration from sale of intangible assets

 

974 

-

Net cash acquired on acquisition (note A)

 

649  

-

Loans eliminated from obtaining control of a subsidiary  

 

(296)

79

Loans refunded to the Company

 

-

68

Funds advanced under SAFE agreement

 

(152)

-

Acquisition of property and equipment

 

 

(4)

Net cash generated from investing activities

 

1,246

511

 

 

 

 

Cash flows from financing activities

 

 

Lease payments

 

-

(262)

Net cash used in financing activities

 

-

(262)

 

 

 

 

Cash and equivalents at beginning of period

 

672

1,712

Effect of changes in exchange rates on Cash

 

76

54

Cash and equivalents at end of period

 

1,419

672

 

 

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.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
NEXEAEXEDEFFEFA ]]>