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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Techfinancials Inc | LSE:TECH | London | Ordinary Share | VGG870911077 | ORD USD0.0005 (DI) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.45 | 0.40 | 0.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
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.
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