TechFinancials Inc. - Annual Report & Accounts and AGM Update

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:

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2020

Consolidated statements of cash flows

For the year ended 31 December 2020