TechFinancials Inc. — Earnings Release 2021

Jul 1, 2022

National Storage Mechanism | Additional information

RNS Number : 9261Q

TechFinancials Inc.

01 July 2022

TechFinancials Inc.

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

Preliminary non audited Annual Report for the year ended 31 December 2021

The information set out below has been extracted from the Company's draft report and accounts for the year ended 31 December 2021 and has not been audited. A further announcement will be released by the Company on completion of the audit, expected shortly, and any material changes between the financial information set out below and the audited financial information will be disclosed in that announcement.

Financial Highlights

·   No Revenues in 2021 as there are no operating businesses left.

·   Pre-tax loss attributable to shareholders of US$0.368 million (2019: profit of US$1.1   million)

·   Cash position of US$0.92 million as at 31 December 2021 (2020: US$1.4 million)

·   Basic earnings per share ('EPS') (US$0.43) (2020:  (US$0.01))

·   In October 2021, the Company's sold its subsidiary Cedex Holdings Limited ("Cedex"),.

·   In June 2021, the Company stuck off Footies Ltd. ("Footies)

·   In 2021, the Company acquired shares in few transactions, of listed companies in the LSE and AIM (Note 28)

Operational Highlights 

Operational Cost Reduction

·   The Company decided to close all its subsidiaries and initiated the strike-off of its entities in Israel in 2021. The strike off of both TechFinaials Israel 2014 Ltd and Softbox was initiated in H2 2021 and concluded in 2022.

·   The Company sold Cedex in October 2021.

Investment  Activities

·   The Company invested small amounts in several London placings in 2021. This activity resulted in profit of $88k.

·   As of today, the Company has only one legal entity - TechFinancials Inc, and as results the costs of operating the Company is set to the minimum possible.

Chairman's Statement

2021 was a year in which the company focused on reducing costs and consolidating its assets. We initiated the closure of all our subsidiaries and sold Cedex.

The Board decided to invest some amounts in listed companies and was able to generate good returns for these investments. 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 FY2021 (2020: $nil).

Outlook and current trading

The year was a turning point for the Group, where we initiated to closure of all our subsidiaries and consolidated all our assets, while seeking new investment opportunities to increase the value of the Company.

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

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

30 July 2022

Strategic Report

Financial Results

The Company did not have any revenues in 2021 as it shut down all its operation businesses and closed all subsidiaries. The Company will continue to look for business and investment opportunities.

The loss for the period attributable to shareholders of the Company was US$ 0.368m (2020: US$ 1.00m*).

The Group's cash position for the period ended 31 December 2021 was US$0.92m (31 December 2020: US$1.42m).

Operations

In October 2021, TechFinancials sold its 99.84% holding of Cedex in order to consolidate cash and reduce operating expenses.

On October 2021 TechFinancials sold its 99.84% owned subsidiary, Cedex Holdings Limited ("Cedex"), to Lem Management Limited ("Buyer"), to consolidate cash and reduce operating expenses. According to the terms of the Agreement, the Company will be entitled to future consideration upon the Buyer succeeding to raise US$20 million in a single or series of related transactions, for the future operation of Cedex, or selling Cedex for a minimum of US$2 million. In certain circumstances of a sale of Cedex, or the assets of Cedex, by the Buyer, the Company will be entitled to receive 50% of that consideration above US$ 2 million. Between US$5 million and US$50 million, the Company will be entitled to receive US$1.6 million out of the first US$5 million and 4% out of the remainder, but no more than US$2 million. US$50 million and above, the Company will be entitled to receive 4% of the proceeds.

The Group has closed all its operating activities.

Growth Strategy and Outlook

Since the company has laid off its last few employees in 2020, the Board is focused on attempts to generate value to the shareholders by locating investment opportunities. The Company has invested in London placings. The Board will also continue to search for additional investment opportunities that may have a positive outcome on the Company's cashflow.

We hope that our new strategy will create a positive impact on the Company's business value for the shareholders.

I would like to thank our shareholders once again for their continued support during this challenging year.

Asaf Lahav

Executive Director

30 July 2022

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 2021

		2021	2020
		US$'000	US$'000
Revenue		-	1,309
Cost of sales		-	(87)
Gross profit		-	1,222
Expenses:
Research and development		-	(512)
Selling and marketing		-	(53)
Administrative		(200)	(662)
Impairment of goodwill		-	-
Operating Income (Loss)		(200)	3
Bank fees		(9)	(50)
Foreign exchange income (loss)		(30)	70
Other financial (expenses) / income		86	(1)
Financing income (expenses		47	19
Other Income (expenses)
Other non-operational income (expenses)		(152)	875
Profit (Loss) before taxation		(305)	897
Taxation		(4)	70
Profit (Loss) for the year from continuing operations**		(309)	967
Gain (loss) from discontinued operations		(181)	50
Capital loss from a sale of subsidiary		____________________(30)	____________________-
Gain / (loss) for the year from discontinued operations, net		(211)	50
Other comprehensive income		-	-
Total comprehensive Profit (Loss)**		(520)	1,017
Profit (Loss) attributeable to:
Owners of the Company		(520)	997
Non-controlling interest		-	20
Profit (Loss) for the period		(520)	1,017

		2021	2020
		Cents USD	Cents USD
Basic		(0.61)	1.16
Diluted		(0.61)	1.16
From continuing operations - Basic		(0.36)	1.10
From continuing operations - Diluted		(0.36)	1.10
From discontinued operations - Basic		(0.25)	0.06
From discontinued operations - Diluted		(0.25)	0.06

Consolidated Statement of Financial Position

As at 31 December 2021

		31 December	31 December
		2021	2020
		US$'000	US$'000
Non-current assets
Long-term investments		-	152
		-	152
Current assets
Trade receivables, net and other receivables		-	13
Short-term investments		26	-
Cash		920	1,419
		946	1,432
Total Assets		946	1,584
Current liabilities
Trade and other payables		56	88
Income tax payable		-	86
		56	174
Non-current liabilities
Shareholders loan		84	84
Equity
Share capital		61	61
Share premium account		12,022	12,022
Share-based payment reserve		798	798
Accumulated profits / (losses)		(12,075)	(11,555)
Equity attributable to owners of the Company		806	1,326
Non-controlling interests		-	-
Total equity		806	1,326
Total Equity and Liabilities		946	1,584

Consolidated statements of changes in equity

For the year ended 31 December 2021

	Share capital (Note 14)	Share Premium (Note 14)	Share based payment reserve (Note, 15)	Revaluation reserve (Note, 9)	Accumulated profits/ (losses)	Total	Non -controlling interests (Notes 18)	Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Balance at 1 January 2020			934		(12,459)	558	(249)	309

Balance at 1 January 2020	61	12,022	934		(12,459)	588	(249)	309
Total comprehensive income (expense) for the year	-	-	-	-	997	997	20	1,017
Gain on revaluation of cryptocurrency digital assets in the year	-	-	-	577	577			577
Disposal of cryptocurrency digital assets in the year	-	-	-	(577)	(577)			(577)
Purchase of NCI in Footies during the year	-	-	-	-	(229)	(229)	229	-
Share based payment	-	-	6		(6)	-	-	-
Transfer of Share based payment reserve on lapsed options	-	-	(142)		142	-	-	-
Balance at 31 December 2020	61	12,022	798	-	(11,555)	1,326	-	1,326

Total comprehensive loss for the year	-	-	-	-	(520)	(520)	-	(520)

Balance at 31 December 2021	61	12,022	798	-	(12,075)	806	-	806

Consolidated statements of cash flows

For the year ended 31 December 2021

The consolidated statements of cash flows for the Group for the years ended 31 December 2020 and 31 December 2021 are set out below:

		Years ended 31 December
		2021	2020
		US$'000	US$'000
Cash Flows from operating activities
Profit (Loss) before tax for the period		(516)	946
Adjustment for:
Amortisation of intangible assets		-	75
Impairment of intangible assets, net		-	37
Gain on bargain purchase			(309)
Depreciation of property and equipment		-	4
Revaluation of traded securities		(87)
Share option charge		-	6
Waiver of loan due to NCI		-	(51)
Loss on disposal of subsidiary		30	-
Capital loss on disposal of property and equipment		-	12
Gain from revaluation of intangible assets		-	(577)
Impairment of investment		152	-
Income tax expenses		-	92
Operating cash flows before movements in working capital:
Decrease in trade and other receivables		13	589
Decrease in long term receivables		-	-
Increase (decrease in trade and other payables		15	(1,453)
R&D tax credit received		-	163
Income tax paid		(92)	(109)
Net cash used for operating activities		(485)	(575)
Cash flows from investing activities
Decrease in restricted bank deposits		-	71
Consideration from sale of intangible assets		-	974
Net cash acquired on acquisition (note A)		-	649
Net cash on disposal of a subsidiary		(75)	-
Loans eliminated from obtaining control of a subsidiary		-	(296)
Purchase of traded securities		(102)	-
Sale of traded securities		163	-
Funds advanced under SAFE agreement		-	(152)
Net cash generated from (used in) investing activities		(14)	1,246
Net increase (decrease) in cash and cash equivalents		(499)	671
Cash and equivalents at beginning of period		1,419	672
Effect of changes in exchange rates on Cash		-	76
Cash and equivalents at end of period		920	1,419

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 [email protected] 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

NEXGZGFVMGFGZZZ