REG - Sivota PLC - Final Results
30/06/2022 07:16
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RNS Number : 7312Q Sivota PLC 30 June 2022
Sivota Plc
Annual Report and Financial Statements
For the period starting 22 September 2020 to 31 December 2021
Sivota Plc
Table of Contents
Company
Information
1
Chief Executive Officer
report
2
Strategic report
4
Director's report
9
Directors' remuneration report
19
Report of the Independent
Auditors
22
Statement of Comprehensive
Income
27
Statement of Financial
Position
28
Statement of Changes in
Equity
29
Statement of Cash
Flows
30
Notes to the Financial
Statements
31
Sivota Plc
Company Information
For the period starting 22 September 2020 to 31 December 2021
Directors Registered Office
Tim Weller - Non-Executive Chairman New London House,
Ziv Ben-Barouch - CEO 172 Drury Lane
Neil Jones - Non-Executive Director, Secretary London, England
WCB 5QR
Auditors Register
Crowe UK LLP Computershare Investor Services PLC
55 Ludgate Hill The Pavilions
London, England Bridgwater Rd
EC4M 7JW Bristol
BS13 8AE
Financial Adviser & Broker
Canaccord Genuity Limited
88 Wood Street
London, England
EC2V 7QR
1
Sivota Plc
Chief Executive Officer's report for the period starting 22 September 2020 to
31 December 2021
Dear Shareholders,
I'm delighted to be introducing the first annual report of Sivota Plc for the
period from its establishment day, 22 September 2020, to 31 December 2021.
Sivota was established in September 2020 in order to acquire controlling
stakes and then act as a holding company for various target businesses
operating or founded in Israel, predominantly across the technology sector.
Sivota has a strong local presence and an extensive business network
throughout Israel. The Company believes that these networks, relationships,
and partnerships are all essential for identifying future investments and
developing a robust investment pipeline.
Management have worked hard to execute our strategy, with the progress and
results achieved:
· In July 2021, the Company successfully completed its listing on
the Main Market (Standard Segment) of the London Stock Exchange by issuing
1,035,000 ordinary shares of £0.01 each at a subscription price of £1 per
share, which raised £1,035,000. Substantially all of the cash raised is used
for working capital, to be primarily used to undertake financial, commercial
and legal due diligence on potential transactions.
· On 12 May 2022, the Company completed the acquisition of a
majority stake in Apester Ltd, a digital marketing engagement platform (the
"Acquisition"). Under the terms of the Acquisition agreement, the Company
received Preferred Seed Shares in the capital of Apester for an aggregate
price of US $12.0 million (£9.8 million), which provided the Company with
57.5 per cent. of Apester's voting rights.
· The cash consideration for the Acquisition was funded through a
£11.5 million (gross) placing and direct subscription of 11,500,000 new
ordinary shares of Sivota of one pence each. The Company is currently
suspended from trading pending the publication of a prospectus relating to the
Acquisition, which is expected to be published in July 2022.
Apester is Sivota's first acquisition and is closely aligned with Sivota's
strategic principles. Sivota is keen to leverage Apester's existing assets
whilst applying forward thinking leadership and insight in order to increase
value for Sivota's shareholders over time.
2
Sivota Plc
Chief Executive Officer's report for the period starting 22 September 2020
to 31 December 2021 (continued)
Sivota's strategy is to continue to seek investment opportunities
predominantly in the Israeli technology sector while supporting and advising
Apester and the execution of its growth strategy, is a key focus.
I look forward to reporting to you on our progress over the coming year.
Ziv Ben-Barouch,
Chief Executive Officer
29 June 2022
3
Sivota Plc
Strategic report for the period starting 22 September 2020 to 31 December 2021
The Directors present the Strategic Report of Sivota ("the Company") for the
period starting 22 September 2020 to 31 December 2021.
Business model, review of the business and future developments
Sivota was established in order to acquire controlling stakes and then act as
a holding company for various target businesses operating or founded in
Israel, predominantly in the technology sector. Whilst the acquisition of a
controlling stake is Sivota's expected strategy, it may elect to acquire full
control or less than a controlling holding. In addition, it may elect to do so
in connection with a target which is not operating or founded in Israel.
On 12 May 2022, Sivota has completed its first acquisition, being a majority
stake (57.5%) in Apester Ltd, a digital marketing engagement platform.
Sivota's strategy is to continue to seek investment opportunities in companies
which have most, if not all, of the following attributes:
· later stage of growth;
· organic and/or external growth potential;
· unique technology;
· Israeli-related/founded companies;
· international exposure/potential; and
· existing management with ability to contribute to growth and success.
Sivota has developed a clear methodology including a strategic, operational
and financial diagnostic plan to apply to companies following their
acquisition, after which, Sivota will:
· focus initially on the growth and then expansion of the target
company;
· bring in specialists who combine deep sector knowledge with foresight
that comes from experience;
· bring in the support of investors and leadership;
· enhance management on a temporary basis with Sivota's industry
partners and professionals; and
· involve management and employees.
4
Sivota Plc
Strategic report for the period starting 22 September 2020 to 31 December 2021
(continued)
Investment in Apester
On 12 May 2022, the Company completed the acquisition of a majority stake in
Apester Ltd, a digital marketing engagement platform, for a consideration of
US$12.0 million (£9.8 million).
Apester is a digital experience end-to-end software platform that enables
brands to engage and understand customers across all digital media channels,
in turn increasing lead generation, brand uplift, conversion and sales for its
customers.
Apester is a user friendly, cost effective and scalable technology. Code free,
it allows untrained users to create interactive experiences in a matter of
minutes and then to distribute it across multiple digital media channels, and
later gather data and analyse it to improve performance. The platform
provides tools to create a range of personalised interactive experiences and
applications, including customer surveys, mobile landing pages, onboarding
forms, interactive videos, polls, quizzes, custom applications and web
stories.
Apester is Sivota's first acquisition and is closely aligned with Sivota's
strategic principles.
The Company's business is directed by the Board and is managed on a day-to-day
basis by the CEO, Ziv Ben-Barouch. The Board oversees compliance, sets
objectives and policies of Sivota through performance reporting, budget
updates and periodic operational reviews.
Key performance indicators (KPIs)
At this stage in its development, the Company is focusing on financing and
operating KPI's.
Financial KPIs
Funding
In July 2021, the Company raised £1,035,000 (£885,075 net of issuance
costs) through a subscription and completed admission to the London Stock
Exchange's Main Market ("LSE").
5
Sivota Plc
Strategic report for the period starting 22 September 2020 to 31 December 2021
(continued)
Revenues and Expenditure
The Company generated no revenue during the year. However, it is expected that
the Apester acquisition will ultimately generate revenue for the Company.
The Company has made a loss before tax of £365,285 for the period from its
incorporation in September 2020 to 31 December 2021, reflecting the cost of
being listed, expenses relating to the Apester Acquisition and administrative
expenses.
Liquidity, cash and cash equivalents
At 31 December 2021 Sivota had a cash balance of £749,138 and it had no debt
as at 31 December 2021.
Operating KPI's
During 2021 the Company was focusing on the Apester Acquisition, which was
successfully completed in May 2022.
Employees
There were no employees during the year apart from the directors. The Chief
Executive Officer is the sole key manager. All current members of the Board
and the key manager are males. For more information about the Company's key
management personnel see Note 13.
Social, Community and Human Rights Issues
Sivota is still at an early stage of development and further consideration
will need to be given to social, community and human rights issues affecting
its business.
Principal risks and uncertainties
Difficulties in acquiring suitable targets
The Company's strategy and future success is dependent to a significant extent
on its ability to identify sufficient suitable acquisition opportunities and
to execute these transactions on terms consistent with the Company's strategy.
If the Company cannot identify suitable acquisitions, or successfully execute
any such transactions, this will have an adverse effect on its financial and
operational performance.
6
Sivota Plc
Strategic report for the period starting 22 September 2020 to 31 December 2021
(continued)
On-going COVID-19 outbreak
COVID-19 may present a wide range of potential issues or complications for the
Company, most of which are unascertainable as at the date of this document, in
particular as the impact of COVID-19 in different jurisdictions and commercial
sectors continues to develop and/or may not be known for some time.
Section 172(1) Statement - Promotion of the Company for the benefit of the
members as a whole
The Board believes they have acted in a way most likely to promote the success
of the Company for the benefit of its members as a whole, as required by
section 172.
This section serves as the Company's section 172 statement and should be read
in conjunction with the Strategic report and the Directors' report. Section
172 of the Companies Act 2006 requires Directors to act in a way that they
consider, in good faith, would most likely promote the success of the Company
for the benefit of its members as a whole, taking into account the factors
listed in s172 in regard to:
(a) the likely consequences of any decision in the long term;
(b) the interests of the Company's employees;
(c) the need to foster the Company's business relationships with
suppliers, customers and others;
(d) the impact of the Company's operations on the community and the
environment;
(e) the desirability of the Company's maintaining a reputation for high
standards of business conduct; and
(f) the need to act fairly between members of the Company.
However, the company is currently cash shell. Hence, the only key stakeholder
identified is the investor.
7
Sivota Plc
Strategic report for the period starting 22 September 2020 to 31 December 2021
(continued)
Stakeholder Their interest Engagement method
- Business sustainability - Annual and Interim reports
- High standard of governance - Regular operations and trading updates
Investors - Comprehensive review of financial performance of the business - RNS Announcements
- Ethical behaviour - Investor relations section on website
- Awareness of long term strategy and direction - AGM
- Continual approval of market perception of the business - Shareholder circulars
- Delivering long term value - Shareholder liaison through board
- Board encourages open dialogue with the Company's investors
- Social media
Tim Weller
Non-Executive Chairman
29 June 2022
8
Sivota Plc
Directors' report for the period from 22 September 2020 to 31 December 2021
The Directors submit their report with the audited Financial Statements for
the period from 22 September to 31 December 2021.
General information
Sivota ("the Company"), was incorporated as a public Limited Company under the
laws of England and Wales with registered number 12897590 on 22 September
2020.
On July 22, 2021 the Company completed a placing and was listed on the Main
Market (Standard Segment) of the LSE.
Sivota was established in order to acquire controlling stakes and then act as
a holding company for various target businesses operating or founded in
Israel, predominantly in the technology sector.
Results for the year and distributions
The Company results are set out in the Statement of Comprehensive Income.
The total comprehensive loss for the period was £365,285. The Company
received no income, and the full amount of the loss is due to expenses
incurred in capital raising (to the extent not deducted from share premium),
expenses relating to the Apester's Acquisition and administrative expenses.
The Board continues to prudently manage its cash resources and has minimised
ongoing operating costs.
The Company paid no distribution or dividends during the period.
9
Sivota Plc
Directors' report for the period from 22 September 2020 to 31 December 2021
(continued)
The Board of Directors
Active directors:
The Directors who held office during the financial year and to the reporting
date, together with details of their interest in the shares of the Company at
the reporting date were:
Number of Ordinary Shares Percentage of Ordinary shares
Tim Weller - Non-Executive Chairman 100,000 9.22%
Ziv Ben-Barouch - CEO 325,000 29.95%
Neil Jones - Non-Executive Director 17,100 1.58%
Tim Weller - Non-Executive Chairman - appointed on 29 June 2021
Tim Weller is a successful entrepreneur. He is the founder of Incisive Media
and was Chairman until its successful sale to Eagletree Private Equity in
March 2022. He successfully floated Incisive on the Main Market of the London
Stock Exchange in 2000 and in 2006 he led the £275m management buyout which
took the company private again. Tim has more than 15 years' experience
chairing and investing in public and private equity backed businesses. He was
Non-Executive director and Chairman of RDF Media from 2005-2010 and was also
Non-Executive Chairman of Polestar from 2009-2011 until its sale to Sun
European Partners LLP. Tim was Independent Non-Executive Director and
Chairman of Tremor International between 2014 and August 2020. He was Chairman
of TI Media, one of the largest consumer magazine and digital publishers in
the UK from April 2019 to May 2020 following its sale to Future Plc. He is
also Chairman of Trustpilot, a leading provider of trusted company reviews and
led its $1.4m IPO in March 2021. Tim was Chairman of Superawesome, a leading
technology company that powers the global kids' digital media ecosystem until
its sale to Epic Games in September 2020. Mr Weller was a member of the
Shadow Cabinet New Enterprise Council, which advised the then Shadow
Chancellor of the Exchequer, George Osborne, on business and enterprise prior
to the 2010 General Election, and was voted Ernst & Young Entrepreneur of
the Year - London in 2001. In 2005, he received the publishing industry's top
honour - the Marcus Morris award.
10
Sivota Plc
Directors' report for the period from 22 September 2020 to 31 December 2021
(continued)
Ziv Ben-Barouch - CEO - appointed on 29 June 2021
Ziv Ben-Barouch is an experienced operator and leader with decades of
experience in finance and investments within technology companies. He has a
proven track record of leading corporate turnarounds, M&A, IPOs, and
strategically guiding companies as they build their business. Ziv is the
co-founder and managing partner of Pereg Ventures, a US-Israeli Venture
Capital Firm focused on B2B data companies which is backed by investments from
Nielsen, a world leader in marketing intelligence, the Tata Group, and other
leading financial institutions. At Pereg, Ziv has led and participated in
the direct investment of 13 early stage technology companies that have raised
in combined excess of $250M in follow-on investments from leading investors
and led on the disposal of two portfolio companies to NYSE listed
counterparties. Prior to founding Pereg, he was Senior Principal and CFO at
Viola, a technology-focused investment group with over $3 billion in assets
under management. Before joining Viola, Ziv was the CFO of SpaceNet Inc, a
specialty telecommunications company providing managed network solutions by
satellite and terrestrial technologies for business, government and
residential users in North America. He led SpaceNet's turnaround and
participated in SpaceNet's parent company's $70m NASDAQ listing. Ziv has key
relationships with Israeli and international investment firms in the
technology space which he will be able to leverage to assist Sivota. Ziv is
an Israeli Certified Public Accountant.
Neil Jones - Non-Executive Director - appointed on 28 June 2021
Neil has held Board positions in UK multi-national public & private
companies for over 20 years. He has a deep understanding of the UK Corporate
Governance code and Board procedures from these and other NED positions. He is
currently Group Corporate Development Director at Inizio an international
healthcare and communications group formed by the combination of Huntsworth
PLC and UDG PLC both of which were taken private by Private Equity Group
Clayton, Dubilier & Rice in 2020 & 2021, having previously held the
position of COO & CFO at Huntsworth since February 2016. Prior to
Huntsworth he was CFO of ITE Group plc (Now Hyve plc), a FTSE listed
international organiser of exhibitions and conferences and before that he was
Group Finance Director of Tarsus Group plc, another international trade
exhibition organiser. He is also the Senior Independent Director of Tremor
International, a dual listed (Nasdaq & AIM) Ad-Tech company. Neil is a
member of the ICAEW, qualifying with PWC in 1990.
11
Sivota Plc
Directors' report for the period from 22 September 2020 to 31 December 2021
(continued)
Directors who resigned during the reporting period:
Tal Hagai - Non-Executive Director - appointed on 2 November 2020, resigned on
29 June 2021
Itshayek Irit Segal - Non-Executive Director - appointed on 22 September 2020,
resigned on 29 June 2021
Speier Ariel - Non-Executive Director - appointed on 24 December 2020,
resigned on 29 June 2021
Policy for new appointments
Without prejudice to the power of the Company to appoint any person to be a
Director pursuant to the Articles the Board shall have power at any time to
appoint any person who is willing to act as a Director, either to fill a
vacancy or as an addition to the existing Board, but the total number of
Directors shall not exceed any maximum number fixed in accordance with the
Articles.
Substantial shareholders
The issued share capital of the Company consists of 1,085,000 Ordinary Shares
and 4,950,000 Deferred Shares. The Deferred Shares carry no voting rights, no
rights to dividends and on a return of capital are only entitled to a return
once a sum of £1,000,000 has been paid on each
12
Sivota Plc
Directors' report for the period from 22 September 2020 to 31 December 2021
(continued)
Ordinary Share. No single person directly or indirectly, individually or
collectively, exercises control over the Company.
The Directors are aware of the following persons, who had an interest in 3% or
more of the issued ordinary share capital of the Company as at 31 May 2022:
Number of Ordinary Shares Percentage of ordinary shares
Shareholder
Prytek Investment Holdings Pte Ltd 1,787,949 14.21%
Ophir Yahalom 1,668,883 13.26%
Ronen Kirsh 1,418,728 11.27%
Schroders Investment Management Ltd 1,247,750 9.91%
Trico Fuchs Ltd 1,213,392 9.64%
Ehud Levy 1,023,167 8.13%
Hagai Tal 616,702 4.90%
Herald Investment Management 500,000 3.97%
Tim Weller 400,000 3.18%
Ziv Ben-Barouch 526,821 4.19%
Financial risk management
The Company's principal financial instruments comprise cash balances and
accounts payable arising in the normal course of its operations.
13
Sivota Plc
Directors' report for the period from 22 September 2020 to 31 December 2021
(continued)
The Company's objectives when managing capital are to safeguard the Company's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital. In order to maintain or
adjust the capital structure, the Company may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares, or
sell assets to reduce debt.
As at 31 December 2021 the Company's exposure to financial risks was
immaterial. For more information see Note 10.
Responsibility statement
The Directors are responsible for preparing the Directors' Report and the
Financial Statements in accordance with applicable law and regulations. In
addition, the Directors have elected to prepare the Financial Statements in
accordance with International Financial Reporting Standards ("IFRSs") in
conformity with the requirements of the UK Companies Act 2006.
The Financial Statements are required to give a true and fair view of the
state of affairs of the Company and of the profit or loss of the Company for
that period.
In preparing these Financial Statements, the Directors are required to:
· select suitable accounting policies and then apply them
consistently;
· present information and make judgements that are reasonable,
prudent and provide relevant, comparable and understandable information.
· provide additional disclosures when compliance with the specific
requirements in IFRS is insufficient to enable users to understand the impact
of particulars transactions, other events and conditions on the entity's
financial position and financial performance; and
· make an assessment of the Company's ability to continue as a
going concern.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company to
enable them to ensure that the financial statements comply with the
requirements of the Companies Act 2006. They have general responsibility for
taking such steps as are reasonably open to them to safeguard the assets of
the Company and to prevent and detect fraud and other irregularities.
14
Sivota Plc
Directors' report for the period from 22 September 2020 to 31 December 2021
(continued)
The Directors are responsible for the maintenance and integrity of the
corporate and Financial Statements. Legislation governing the preparation and
dissemination of Financial Statements may differ from one jurisdiction to
another.
We confirm that to the best of our knowledge:
· the Financial Statements, prepared in accordance with
International Accounting Standards in conformity with the requirements of the
UK Companies Act 2006, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company for the period;
· the Director's report includes a fair review of the development
and performance of the business and the position of the Company, together with
a description of the principal
risks and uncertainties that they face.
· the annual report and financial statements, taken as a whole, are
fair, balanced and understandable and provide the information necessary for
shareholders to assess the company's performance, business model and strategy.
The Directors are responsible for maintaining the Company's systems of
controls and risk management in order to safeguard its assets.
Corporate governance
The Board supports high standards of corporate governance. The Company
complies with the Quoted Companies Alliance Corporate Governance Code (the
"QCA Code") and will continue to do so from Readmission.
The QCA Code applies the key elements of good corporate governance in a manner
that is consistent with the different needs of growing companies and therefore
is suitable to the Company's current status.
The company is still at an early stage of development and in the process of
developing its systems, strategy and standards to permit the Company to comply
with the QCA Code.
The Board intends to meet regularly to review, formulate and approve the
Company's strategy, budgets, and corporate actions and oversee the Company's
progress towards its goals.
15
Sivota Plc
Directors' report for the period from 22 September 2020 to 31 December 2021
(continued)
The Board established an Audit Committee and a Remuneration and Nomination
Committee with
effect from the Company's admission to trading on the Main Market. In
addition, the Board
established an Acquisitions Committee which will consider potential targets
where a Director has
a potential conflict and, following completion of investments, will establish
a risk committee
which will monitor the financial and commercial performance of investments.
Audit Committee
The Audit Committee consists of Neil Jones and Tim Weller, each of whom have
recent and relevant financial experience. The Audit Committee will normally
meet at least twice a year at the appropriate times in the reporting and audit
cycle. The committee has responsibility for, amongst other things, the
monitoring of the financial integrity of the financial statements of the Group
and the involvement of the Group's auditors in that process. It will focus in
particular on compliance with accounting policies and ensuring that an
effective system of internal financial control is maintained. The ultimate
responsibility for reviewing and approving the annual report and accounts and
the half-yearly reports, remains with the Board.
The terms of reference of the Audit Committee cover such issues as membership
and the frequency of meetings, as mentioned above, together with requirements
of any quorum for and the right to attend meetings. The duties of the Audit
Committee covered in the terms of reference are: financial reporting, internal
controls, internal audit, external audit and reserving. The terms of reference
also set out the authority of the committee to carry out its duties.
During the reporting period the Audit Committee held a meeting on 27 September
2021 that was chaired by Neil Weller.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee consists of Tim Weller and Neil
Jones. The Remuneration and Nomination Committee will meet at least once a
year. It will have responsibility for the determination of specific
remuneration packages for executive directors and any senior executives or
managers of the Group, including pension rights and any compensation payments,
and recommending and monitoring the level and structure of remuneration for
senior management, and the implementation of share option, or other
performance-related, schemes.
16
Sivota Plc
Directors' report for the period from 22 September 2020 to 31 December 2021
(continued)
The Remuneration and Nomination Committee will also be responsible for
considering and making recommendations to the Board in respect of appointments
to the Board, the board committees and the chairmanship of the board
committees. It is also responsible for keeping the structure, size and
composition of the Board under regular review, and for making recommendations
to the Board with regard to any changes necessary. The Remuneration and
Nomination Committee also considers succession planning, taking into account
the skills and expertise that will be needed on the Board in the future.
The terms of reference of the Remuneration and Nomination Committee cover such
issues as membership and frequency of meetings, as mentioned above, together
with the requirements for a quorum and the right to attend meetings. The
duties of the Remuneration and Nomination Committee covered in the terms of
reference relate to the following: determining and monitoring policy on and
setting level of remuneration, early termination, performance-related pay,
pension arrangements, authorising claims for expenses from the chief executive
officer and chairman, reporting and disclosure, share schemes and appointment
of remuneration consultants. The terms of reference also set out the reporting
responsibilities and the authority of the committee to carry out its duties.
No committee meetings were held during the reporting period.
Acquisitions Committee
The Acquisitions Committee consists of all Independent Directors, in the event
of a potential acquisition target being introduced to the Company by a
Director where that Director has an interest or other conflict of interest.
In such circumstances, the Acquisitions Committee will have a full remit to
negotiate the terms of such transaction (including engaging and liaising with
professional advisers) and the conflicted or interested Director will not be
invited to join or attend any meetings of the committee.
No committee meetings were held during the reporting period.
Role of the Board
The Board sets the Company's strategy, ensuring that the necessary resources
are in place to achieve the agreed priorities. It is accountable to
shareholders for the creation and delivery of long-term shareholder value. To
achieve this, the Board directs and monitors the Company's affairs within a
framework of control which enables risk to be reviewed and managed
effectively.
17
Sivota Plc
Directors' report for the period from 22 September 2020 to 31 December 2021
(continued)
Board meetings
The core activities of the Board are carried out in scheduled meetings and
regular reviews of the business are conducted. Additional meetings and
conference calls are arranged to consider matters which would require
discussions outside of scheduled meetings. The Directors maintain frequent
contact with each other to discuss issues of concern and keep them fully
briefed to the Company's operations. All Directors attended all Board meetings
held.
Employee and greenhouse gas (GHG) emissions
The Company currently has no trade or employees other than the Directors.
Therefore, the Company has minimal carbon or greenhouse gas emissions as it is
not practical to obtain emissions data at this stage. It does not have
responsibility for any emissions producing sources under the Companies Act
2006.
Going concern
After making enquiries, the Directors have a reasonable expectation that the
Company has adequate resources to continue in operational existence for the
foreseeable future. Further details are given in Note 2 to the financial
statements. For this reason, the Directors continue to adopt the going concern
basis in preparing the financial statements.
Subsequent events
Please see Note 15 for details of the Company's subsequent events.
Auditors
So far as the directors are aware, there is no relevant audit information of
which the Company's auditors are unaware, and they have taken all steps that
they ought to have taken as directors in order to make themselves aware of any
relevant audit information and to establish that the Company's auditors are
aware of that information.
The auditors, Crowe U.K LLP, have expressed their willingness to continue in
office and a resolution to reappoint them will be proposed at the Annual
General Meeting.
By Order of the Board
Tim Weller, Chairman 29 June 2022
18
Sivota Plc
Directors' remuneration report for the period from 22 September 2020 to 31
December 2021
The Remuneration and Nomination Committee will have responsibility for the
determination of specific remuneration packages for executive directors.
The current directors' remuneration comprises a basic fee or salary and at
present there is no long-term incentive plan or share option package for the
directors.
Neil Jones
According to the appointment letter signed on in July 2021, Neil Jones agreed
not to be paid any fees until the Company had undertaken a fundraising of at
least £8,000,000. Following completion of a fundraising by the Company in May
2022 he will be paid £22,500 per annum to act as a non-executive director of
the Company.
According to the appointment letter, Neil will be eligible for participation
in the Company's share option plan when adopted.
In addition, Neil agreed to subscribe at 1.71% of the Company's issued share
capital at the admission in July 2021. These ordinary shares will be subject
to lock-in pursuant to which Neil will not be able to sell or dispose of such
ordinary shares for a period of 4 years.
Neil's appointment will be for an initial period of 12 months from the
admission on and will continue unless terminated by either party giving to the
other not less than 3 months' notice or without notice in cases the Company
can terminate the appointment immediately.
Tim Weller
According to the appointment letter signed in July 2021, Tim Weller agreed not
to be paid any fees until the Company had undertaken a fundraising of at least
£8,000,000. Following completion of a fundraising by the Company in May
2022 he will be paid £70,000 per annum to act as a non-executive director of
the Company.
If the Company's market capitalisation exceeds £100,000,000 the Board will
consider an increase in the fee.
According to the appointment letter, Tim will be eligible for participation in
the Company's share option plan when adopted.
In addition, Tim agreed to subscribe £100,000 for the Company's issued share
capital at the admission in July 2021.
19
Sivota Plc
Directors' remuneration report for the period from 22 September 2020 to 31
December 2021 (continued)
Tim's appointment will continue unless terminated by either party giving to
the other not less than 6 months' notice or without notice in cases the
Company can terminate the appointment immediately.
Ziv Ben-Barouch
According the employment agreement signed on in July 2021 Ziv Ben-Barouch is
paid a salary of £18,000 per annum to act as chief executive officer.
Following completion of a fundraising by the Company in May 2022 he will be
paid a salary of £70,000 per annum.
The Company may, in its absolute discretion pay a bonus of such amount, at
such intervals and subject to such conditions as the Company may in its
absolute discretion determine taking into account specific performance
targets.
Ziv's appointment commenced on the admission in July 2021 and shall continue
until terminated by either party giving to the other not less than 6 months'
written notice or without notice in cases the Company can terminate the
appointment immediately.
Remuneration paid to the Directors' during the reporting period:
Fee Salary Other remuneration (*) Total
Neil Jones - - - -
Tim Weller - - - -
Ziv Ben-Barouch - £9,400 - £9,400
(*) other remuneration such as bonuses, incentives or share-based payments.
20
Sivota Plc
Directors' remuneration report for the period from 22 September 2020 to 31
December 2021 (continued)
Directors interests in shares as at 31 May 2022:
Number of ordinary shares Percentage of ordinary shares
Neil Jones 17,100 0.14%
Tim Weller 400,000 3.18%
Ziv Ben-Barouch 526,821 4.19%
Hagai Tal - resigned on 29 June 2021 566,802 4.90%
Irit Itshayek - resigned on 29 June 2021 10,000 0.08%
By Order of the Board
Tim Weller
Chairman
29 June 2022
21
Independent auditor's report to the members of Sivota Plc
Opinion
We have audited the financial statements of Sivota plc (the "Company") for the
period ended 31 December 2021 which comprise the statement of comprehensive
income, the statement of financial position, statement of cash flows,
statement of changes in equity and notes to the financial statements,
including significant accounting policies. The financial reporting framework
that has been applied in preparation of the company financial statements is
applicable law and UK-adopted international accounting standards.
In our opinion, the financial statements:
· give a true and fair view of the state of the company's affairs
as at 31 December 2021 and of its loss for the period then ended;
· have been properly prepared in accordance with UK-adopted
international accounting standards;
· have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the Company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC's Ethical
Standard, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the entity's ability to continue to adopt the going concern
basis of accounting included obtaining management's assessment of going
concern, including a cash flow forecast that extended for at least the next 12
months which included the cash flows of the newly acquired Apester business.
We produced scenarios to stress test that forecast to consider whether the
Group has sufficient cash resources to continue for at least the next 12
months from the dated of approval of these financial statements.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Company's ability to continue
as a going concern for a period of at least twelve months from when the
financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of materiality. An
item is considered material if it could reasonably be expected to change the
economic decisions of a user of the financial statements.
22
We used the concept of materiality to both focus our testing and to evaluate
the impact of misstatements identified.
Based on our professional judgement, we determined overall materiality for the
financial statements as a whole to be £18,500, based on 3% of the net assets.
We use a different level of materiality ('performance materiality') to
determine the extent of our testing for the audit of the financial
statements. Performance materiality is set based on the audit materiality as
adjusted for the judgements made as to the entity risk and our evaluation of
the specific risk of each audit area having regard to the internal control
environment. We determined performance materiality to be £12,950.
Where considered appropriate performance materiality may be reduced to a lower
level, such as, for related party transactions and directors' remuneration.
We agreed with the Audit Committee to report to it all identified errors in
excess of £925. Errors below that threshold would also be reported to it if,
in our opinion as auditor, disclosure was required on qualitative grounds.
Overview of the scope of our audit
Sivota plc was a stand alone company as at the year ended 31 December 2021 and
all audit work was conducted by the audit team remotely.
Key Audit Matters
Key audit matter How the scope of our audit addressed the key audit matter
Allocation of share issue costs We have assessed the nature of share issue costs based on documentation and
reviewed management's allocation of these costs between the statement of
Sivota was admitted to the Main Market of London Stock Exchange during the comprehensive income and equity.
period. To facilitate this process, various costs were incurred both related
to the stock market listing and issuance of new shares. There is a risk that Key observations
these costs have not been allocated between statement of comprehensive income
and equity on a rational and consistent basis. We are satisfied that the allocation between statement of comprehensive income
and equity is on a reasonable basis.
Management allocated these costs based on their nature. Costs that relate to
the stock market listing have been recorded as an expense in the statement of
comprehensive income. Incremental costs that are directly attributable to
issuing new shares have been deducted from equity. Common costs have been
apportioned between other comprehensive income and equity as discussed in Note
5.
23
Our audit procedures in relation to these matters were designed in the context
of our audit opinion as a whole. They were not designed to enable us to
express an opinion on these matters individually and we express no such
opinion.
Other information
The other information comprises the information included in the annual report
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report.
Our opinion on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon. Our responsibility is to
read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this gives rise
to a material misstatement in the financial statements themselves. If, based
on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors' remuneration report to be audited
has been properly prepared in accordance with the Companies Act 2006.
In our opinion based on the work undertaken in the course of our audit
· the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the directors' report and the strategic report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the company, or
returns adequate for our audit have not been received from branches not
visited by us; or
· the financial statements and the part of the directors'
remuneration report to be audited are not in agreement with the accounting
records and returns; or
· certain disclosures of directors' remuneration specified by law
are not made; or
· we have not received all the information and explanations we
require for our audit
Responsibilities of the directors for the financial statements
As explained more fully in the directors' responsibilities statement set out
on page 14, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the Company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Company or
to cease operations, or have no realistic alternative but to do so.
24
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below, however the primary
responsibility for the prevention and detection of fraud lies with management
and those charged with the governance of the company. We obtained an
understanding of the legal and regulatory frameworks that are applicable to
the company and the procedures in place for ensuring compliance. The most
significant areas identified were the Companies Act 2006.
· As part of our audit planning process we assessed the different
areas of the financial statements, including disclosures, for the risk of
material misstatement. This included considering the risk of fraud where
direct enquiries were made of management and those charged with governance
concerning both whether they had any knowledge of actual or suspected fraud
and their assessment of the susceptibility of fraud.
· We have read board and committee minutes of meetings, as well as
regulatory announcements, as part of our risk assessment process to identify
events or conditions that could indicate an incentive or pressure to commit
fraud or provide an opportunity to commit fraud. As part of this process, we
have considered whether remuneration incentive schemes or performance targets
exist for the Directors.
· In addition to the risk of management override of controls, we
have considered the fraud risk related to any unusual transactions or
unexpected relationships, including assessing the risk of undisclosed related
party transactions. Our procedures to address this risk included testing a
risk-based selection of journal transactions, both at the year end and
throughout the year.
Owing to the inherent limitations of an audit, there is an unavoidable risk
that some material misstatements of the financial statements may not be
detected, even though the audit is properly planned and performed in
accordance with the ISAs (UK). The potential effects of inherent limitations
are particularly significant in the case of misstatement resulting from fraud
because fraud may involve sophisticated and carefully organized schemes
designed to conceal it, including deliberate failure to record transactions,
collusion or intentional misrepresentations being made to us.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor's report.
Other matters which we are required to address
We were appointed by the board on 25 April 2022 to audit the financial
statements for the period ended 31 December 2021. This is our first year of
acting as the company auditors.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the company and we remain independent of the company in conducting
our audit.
Our audit opinion is consistent with the additional report to the audit
committee.
25
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Leo Malkin
Senior Statutory Auditor
For and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
29 June 2022
26
Sivota PLC
Statement of Comprehensive Income
For the Period starting 22 September 2020 to 31 December 2021
For the period starting
22 September 2020 to
31 December
2021
£
Note
Revenue -
Administrative expenses 375,691
Operating loss (375,691)
Finance income 10,406
Loss before taxation (365,285)
Income tax -
Loss and total comprehensive loss for period (365,285)
Loss per share 8 (0.27)
The accompanying notes are an integral part of the Financial Statements.
27
Sivota PLC
Statement of Financial Position
As at
31 December
2021
ASSETS Note £
Current assets
Other receivables 6 40,867
Cash and cash equivalents 749,138
Total current assets 790,005
EQUITY AND LIABILITIES
Equity attributable to owners 8
Share capital 10,850
Deferred shares 49,500
Share premium 921,832
Accumulated Losses (365,285)
Total equity attributable to Shareholders
616,897
Current liabilities 7
Accruals 170,893
Other payables 2,215
Total current liabilities 173,108
790,005
The accompanying notes are an integral part of the Financial Statements.
The financial statements on page 27 to 38 were authorised for issue by the
board of directors on 30 June 2022 and were signed on its behalf by Ziv
Ben-Barouch.
Ziv Ben-Barouch
CEO
29 June 2022
28
Sivota PLC
Statement of Changes in Equity
For the Period starting 22 September 2020 to 31 December 2021
Ordinary Share capital
Deferred Share Premium Accumulated losses Total equity
Shares
£
Balance as at 22 September 2020 - - - - -
Loss for the period starting 22 September 2020 to 31 December 2021
- - - (365,285) (365,285)
Total comprehensive loss for the period - - - (365,285) (365,285)
Transactions with owners:
Share capital issuance on incorporation 50,000 - - - 50,000
Deferred shares (49,500) 49,500 - - -
Share capital issuance on admission 10,350 - 1,024,650 - 1,035,000
Share issue cost - - (102,818) - (102,818)
Total transactions with the owners 10,850 49,500 921,832 - 982,182
Balance as at 31 December 2021 10,850 49,500 921,832 (365,285) 616,897
The accompanying notes are an integral part of the Financial Statements.
29
Sivota PLC
Statements of Cash Flow
For the Period starting 22 September 2020 to 31 December 2021
For the period starting
22 September 2020 to
31 December
2021
£
Cash generated used in operating activities
Loss for the period (365,285)
Working capital adjustments:
Increase in other receivables (40,867)
Increase in accruals 170,893
Increase in other payables 2,215
Net cash used in operating activities (233,044)
Cash flows from financing activities
Proceeds from the issue of Ordinary Shares, net of issuance costs
982,182
Net cash flow from financing activities 982,182
Net increase in cash and cash equivalents 749,138
Cash and cash equivalents at beginning of period -
Cash and cash equivalents at end of period 749,138
The accompanying notes are an integral part of the Financial Statements.
30
Sivota Plc
Notes to the Financial Statements
For the Period starting 22 September 2022 to 31 December 2021
1. General information
The Company is a public limited company incorporated and registered in England
and Wales on 22 September 2020 with registered company number 12897590 and its
registered office situated in England and Wales with its registered office at
New London House, 172 Drury Lane, London WC2B 5QR.
On 22 July 2021 the company completed a placing and listed on the Main Market
of the London Stock Exchange - see Note 8 below.
2. Basis of preparation
The principal accounting policies applied in the preparation of the Company
Financial Information are set out below. These policies have been consistently
applied throughout the period presented, unless otherwise stated.
The Company Financial Statements have been prepared in accordance with
International Accounting Standards in conformity with the requirements of the
UK Companies Act 2006.
The Company Financial Information of the Company is presented in Great British
Pounds Sterling ("£"); also the Company's functional currency.
Standards and interpretations issued but not yet applied
New standards, interpretations and amendments effective
from 22 September 2020
There were no new standards or interpretations effective for the first time
for periods beginning on or after 22 September 2020 that had a significant
effect on the Company's Financial Statements.
New standards, interpretations and amendments not yet effective
At the date of authorisation of these Financial Statements, a number of
amendments to existing standards and interpretations, which have not been
applied in these Financial Statements, were in issue but not yet effective for
the year presented. The Directors do not expect that the adoption of these
standards will have a material impact on the financial information of the
Company in future periods.
31
Sivota Plc
Notes to the Financial Statements
For the Period starting 22 September 2020 to 31 December 2021
At the date of authorisation of the Company Financial Information, the
Directors have reviewed the standards in issue by the International Accounting
Standards Board and the International Financial Reporting Interpretations
Committee, which are effective for the accounting periods ending on or after
the stated effective date. In their view, none of these standards would have a
material impact on the financial reporting of the Company.
Going concern
As at 31 December 2021 the Company had cash and cash equivalents in amount of
£749,138. Subsequent to the year-end the Company raised additional
£11,500,000 to fund Apester's investment - see Note 15.
As part of their going concern assessment, the Board of Directors have
reviewed cash flow forecasts consolidated with Apester for the 12 months from
the date these financial statements were signed.
The Directors are satisfied that the Company has adequate resources to
continue in operation for at least 12 months from the date of approval of the
financial statements and that it is appropriate to prepare financial
statements on the going concern basis.
3. Accounting policies
Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and in
hand and short-term deposits with original maturities of three months or less
that are readily convertible to known amounts of cash and which are subject to
an insignificant risk of changes in value.
4. Financial assets and liabilities
Financial assets and financial liabilities are recognised when the Company
becomes a party to the contractual provisions of a financial instrument.
Financial assets and financial liabilities are offset if there is a legally
enforceable right to set off the recognised amounts and interests and it is
intended to settle on a net basis.
32
Sivota Plc
Notes to the Financial Statements
For the Period starting 22 September 2020 to 31 December 2021
5. Use of assumptions and estimates
In preparing the Company Financial Information, the Directors have to make
judgments on how to apply the Company's accounting policies and make estimates
about the future.
The Directors do not consider there to be any critical judgments that have
been made in arriving at the amounts recognised in the Company Financial
Information.
Cost of new shares and cost of listing
The cost of new shares issued is deducted from share premium while the cost of
the Initial Public Offering is record as administrative expense. In arriving
at the split of the common costs a rational and appropriate basis has been
applied in order to estimate the allocation.
6. Other receivables
As at
31 December
2021
£
Vat receivable 38,939
Other receivables 1,929
40,867
7. Current Liabilities
As at
31 December 2021
£
Accruals (*) 170,893
Other payables 2,215
173,108
(*) includes £119,810 accruals related the Apester's Transaction - see Note
15.
33
Sivota Plc
Notes to the Financial Statements
For the Period starting 22 September 2020 to 31 December 2021
8. Equity
a. Composition of share capital:
Issued and Outstanding Number of Shares
Class of Shares
Ordinary Shares of £0.01 par value 1,085,000
Deferred Shares of £0.01 par value 4,950,000
The company has no authorised share capital limit.
b. Movement in Ordinary Shares' capital:
Total proceeds, net of issuance costs
Price per share £
Number of Ordinary Shares Par value £ £
Date Movement
Incorporation on 22 September 2020 Issuance of Ordinary Shares to the original subscriber - Mr. Hagai Tal 5,000,000 0.01 0.01 50,000
Redesignation of Ordinary Shares to Deferred Shares (*) (4,950,000) 0.01 1.00 -
18 December 2020
22 July 2021 Issuance of Ordinary shares on the Admission 1,035,000 0.01 1.00 932,182
Total as at 31 December 2021 1,085,000 982,182
(*) The Deferred Shares carry no voting rights, no rights to dividends and on
a return of capital are only entitled to a return once a sum of £1,000,000
has been paid on each Ordinary Share. The entire class of Deferred Share can
be acquired by the Company at any time for no consideration.
c. Loss per share
The weighted average number of shares - 1,336,710
Loss for the period -
(365,285)
Loss per share
-
(0.27)
34
Sivota Plc
Notes to the Financial Statements
For the Period starting 22 September 2020 to 31 December 2021
Diluted earnings per share has not been disclosed on the basis the company was
loss making and therefore the impact of any potentially dilutive ordinary
shares would be anti-dilutive. In addition, the company does not have any
potentially dilutive instruments.
9. Capital management policy
The Directors' objectives when managing the Company's capital are to safeguard
the Company's ability to continue as a going concern in order to provide
returns for Shareholders and benefits for other stakeholders and to maintain
an optimal capital structure to reduce the cost of capital. The capital
structure of the Company consists of equity attributable to equity holders of
the Company, comprising issued share capital and reserves.
10. Financial instruments
The Company's principal financial instruments comprise other payables. The
Company's accounting policies and method adopted, including the criteria for
recognition, the basis on which income and expenses are recognised in respect
of each class of financial asset and equity instrument are set out in Note 3
"Accounting policies" to the Company Financial Information. The Company does
not use financial instruments for speculative purposes.
Financial risk management
The Directors use a limited number of financial instruments, comprising mainly
cash and other payables, which arise directly from the Company's initial
operations. The Company does not trade in financial instruments.
Financial risk factors
The Company's activities expose it to a variety of financial risks, being
currency risk, credit risk, liquidity risk and cash flow interest rate risk.
The Directors' overall risk management programme focuses on the
unpredictability of financial markets and seeks to minimise potential adverse
effects on the Company's financial performance.
Currency risk
The Company does not currently operate internationally and its exposure to
foreign exchange risk is limited to transactions and balances that are
denominated in currencies other than £.
35
Sivota Plc
Notes to the Financial Statements
For the Period starting 22 September 2020 to 31 December 2021
Credit risk
Credit risk is the risk of financial loss to the Company if a counterparty to
a financial instrument fails to meet its contractual obligations. As at 31
December 2021 the company's exposure to credit risk is immaterial.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and
available funding through an adequate amount of committed credit facilities.
The Directors ensure that the Company has adequate resource to discharge all
its liabilities. The Directors have considered the liquidity risk as part of
their going concern assessment.
Cash flow interest rate risk
The Company has no significant interest-bearing liabilities and assets.
Fair values
The Directors assessed that the fair values of cash, other receivables and
trade payables approximate their carrying amounts.
11. Related Party Transactions
On 8 December 2020 the sole shareholder, Mr. Hagai Tal, transferred £50,000
to the bank account at the nominal value of 100% of the share capital on
incorporation.
In January 2021, the Company received $1,010,000 from Mr. Hagai Tal and
£125,000 cash from Mr. Tim Weller, in advance of the issue of Ordinary
Shares. On 9 April 2021, all amounts owed to Mr. Hagai Tal were repaid in
full, without any issue of shares.
12. Ultimate controlling party
From the incorporation to 22 July 2021 Mr. Hagai Tal was the ultimate
controlling party. Following listing and placing on the Main Market (Standard
Segment) of the LSE, see Note 1 above, there ceased to be any controlling
party.
36
Sivota Plc
Notes to the Financial Statements
For the Period starting 22 September 2020 to 31 December 2021
13. Key management personnel compensation
There were no staff costs on the basis that no staff were employed by the
Company during the period ended 31 December 2021. The only key management
compensation incurred during the reporting period was Ziv Ben Barouch's
director fees in amount of £9,400.
14. Auditors remuneration
The auditors' remuneration for the reported period was as follows:
Audit fees £27,000
Non-audit fees £50,250
15. Subsequent events
Apester's Share Purchase Agreement
On 24 January 2022 the Company entered into a Share Purchase Agreement ("SPA")
with Apester Ltd, a digital marketing engagement platform, that was completed
on 12 May 2022. Under the terms of SPA Apester will issue to the Company
Preferred Seed Shares for an aggregate consideration of $12.0 million (£9.8
million) of which $6.0 million was paid on 13 May 2022 and the further $6.0
million is to be paid within 90 days. The issue of the Preferred Seed Shares
will provide the Company with 57.5% of Apester's voting rights. The purchase
price to be allocated mainly to net tangible assets of Apester (after the
investment) in the amount of approximately $4.0 million (£3.3 million) and
the intangible assets in the total of amount of approximately $14.6 million
(£11.9 million).
Pursuant to the articles of association of Apester, that were exercised
following SPA's completion, the Company also has certain veto and consent
rights, including the right to appoint a majority of directors to the
Apester's Board.
In addition, amongst other customary provisions, SPA contains various
warranties typical in a transaction of this nature from Apester in favour of
the Company, regarding the operations, employees and the business and assets
of Apester.
37
Sivota Plc
Notes to the Financial Statements
For the Period starting 22 September 2020 to 31 December 2021
Apester's Convertible loans
In addition to the acquisition of Apester's shares, the Company entered into
two convertible loan assignment agreements with lenders to Apester, pursuant
to which $1.6 million (£1.3 million) in convertible loans (plus interest)
were assigned to the Company, for consideration equal to the aggregate
outstanding principal and interest accrued until the date of SPA's completion.
The convertible loans bear interest at a rate of 6% per annum and will be
capable of conversion by the Company into Preferred Seed Shares in Apester.
If converted in full, the Preferred Seed Shares immediately after the SPA's
completion represent approximately 5.6% of Apester's share capital on a fully
diluted basis. If the convertible loans are not so converted, Apester will be
required to repay all outstanding principal and interest on the loans in full
in 24 monthly instalments starting February 2024.
Fundraising
The cash consideration for the acquisition of Apester's shares and convertible
loans was funded through a £11.5 million (gross) placing and direct
subscription of 11,500,000 new ordinary shares of one pence each in the
Company from existing and new investors in the Company. The issue price is 100
pence per new ordinary share. As a result of the acquisition and the
fundraising the Company will bear additional transaction costs at the amount
of approximately £490,000.
Management agreement
With the completion of SPA, the Company and Apester also entered into a
Management Services Agreement, according to which the Company will provide
certain management services to Apester in consideration of the annual
management fee, calculated as 2% of the total investment made by the Company
into Apester. The agreement will continue for up to five years from the SPA's
completion.
38
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