REG - Sivota PLC - Half-year Report
30/08/2024 09:00
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RNS Number : 2179C Sivota PLC 30 August 2024
30 August 2024
SIVOTA PLC
("Sivota," or "the Company")
HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2024
Sivota, the London-listed investment vehicle focused on later-stage Israeli
technology companies, announces its results for the six months ended 30 June
2024 ("H1 2024").
Key financial highlights for the six months ended 30 June 2024:
o Net loss from continuing operations of $368,000 (H1 2023: $328,000)
o Net loss from discontinued operation of $6.0 million
o Cash as at 30 June 2024 of $142,000 (31 December 2023: $969,000)
o No debt as at 30 June 2024 (31 December 2023: $1.6 million).
Apester Ltd ("Apester")
As previously announced, at the end of June 2024, Sivota was informed by the
board of Apester, its majority-owned subsidiary in Israel, that due to a
deterioration in trading performance, it can no longer proceed as a going
concern. Following legal advice Apester filed (the 'filing decision') for
bankruptcy in the court of Tel Aviv.
Following the filing decision, the Company now presents Apester as a
discontinued activity and recorded a loss of $830,000 from discontinued
operations for the first six months of 2024.
At this time, Sivota cannot assess what, if any, recovery it will make in
respect of its investment in Apester, although any recovery is likely to be
minimal. As a result, the Company has recorded a loss from impairment of
Apester's net assets in the amount of $5.2 million.
Termination of transaction negotiations
In May 2024 Sivota announced that negotiations for investment in a leading
online technology platform operating across the travel sector, have been
terminated. The Company remains committed to exploring further M&A
activity and is evaluating its pipeline of opportunities.
Current trading and going concern
The Company continues to evaluate investment opportunities but will need to
raise further debt or equity finance to fund its current business development
pipeline. During 2024, the Company is expected to generate further losses from
operations, which will be expressed in negative cash flows from operating
activity. While the directors believe they will be able to raise the
additional finance required, this is not guaranteed and hence, there is a
material uncertainty with respect of the Company's going concern.
As of the signing of this report, the Company is a cash shell, and therefore
there are no material effects of assuming a going-concern basis of accounting
in preparing the financial statements.
Ziv Ben-Barouch, Chief Executive Officer of Sivota, commented:
"Despite announcing the filing decision of Apester and the termination of
transaction negotiations with the online technology platform, we remain
encouraged with our current pipeline and initial state of negotiations with
potential prospects and remain confident at least one of these prospects will
advance to signing a term sheet.
As funding within the technology sector remain challenging, we believe Sivota
is well placed to benefit from opportunities it pursues. The board and
management remain committed to securing new investment prospects and executing
the company's strategy."
For further information, please visit www.sivotacapital.com
(http://www.sivotacapital.com) or contact:
Sivota PLC via Vigo Consulting
Tim Weller, Non-Executive Chairman
Ziv Ben-Barouch, Chief Executive Officer
Canaccord Genuity Limited + 44 (0) 20 7523 8000
Bobbie Hilliam
Vigo Consulting + 44 (0)20 7390 0230
Jeremy Garcia
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) 596/2014.
Financial Review
Cash flow and net debt
The Company's cash balance as at 30 June 2023 was $142,000 compared to
$969,000 as at 31 December 2023. As a result of Apester's disposal there was
no debt as at 30 June 2024, compared to net debt of $1.6 million as at 31
December 2023.
Operation results
The Company's ongoing operations resulted in a loss of $368,000 in the six
months ended 30 June 2024, compared to the loss of $328,000 in the same period
in 2023.
The company's discontinued operation resulted in a loss of $6.0 million.
Current trading and outlook
The Company continues to evaluate investment opportunities.
Risk and uncertainties
The Company operates in an uncertain environment and is subject to several
risk factors. The Directors have assessed the principal risks facing the
Company, including those that threaten its business model, future performance,
solvency, or liquidity.
The Company continues to monitor the principal risks and uncertainties to
ensure that any emerging risks are identified, managed, and mitigated.
Financing
The Company intends to acquire further businesses, so it will need to raise
further funds, although the war in Israel, as described below, may adversely
affect the company's ability to raise additional funds.
Difficulties in acquiring suitable targets
The Company's strategy and future success are dependent to a significant
extent on its ability to identify sufficient suitable acquisition
opportunities and to execute these transactions on terms consistent with its
strategy. If the Company cannot identify suitable acquisitions or execute any
such transactions successfully, this will adversely affect its financial and
operational performance.
Security, political and economic instability in Israel and the Middle East
Sivota seeks target companies based in Israel. Therefore, security, political,
and economic conditions in the Middle East, particularly in Israel, may affect
the Group's business directly.
The intensity and duration of Israel's ongoing war against Hamas is difficult
to predict. While the operations and business of the target companies are not
materially impacted by the ongoing war to date, future disruptions could
materially adversely affect their business as a direct result of employees
located in Israel called for reserve duty or of third parties boycotting
business with Israeli companies as a political step.
Taxation
The Group will be subject to taxation in several different jurisdictions, and
adverse changes to the taxation laws of such jurisdictions could negatively
affect its profitability.
Statement of directors' responsibilities in respect of the interim results
The Directors being Tim Weller (Chairman), Ziv Ben-Barouch (CEO), and Neil
Jones (Non-Executive) confirm that the set of interim financial statements has
been prepared in accordance with International Accounting Standard 34 "interim
financial reporting", and that interim report includes a fair review of the
information required by DTR 4.2.7R and DTR 4.2.8R, namely an indication of
important events that have occurred during the six months period ended 30 June
2024; and material related party transactions in the six months ended 30 June
2024.
SIVOTA PLC
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
U.S. dollars in thousands
The accompanying notes are an integral part of the condensed consolidated
financial statements.
The condensed consolidated financial statements on page 5 to 14 were
authorised for issue by the board of directors on 30 August 2024 and were
signed on its behalf by Ziv Ben-Barouch.
Ziv Ben-Barouch, CEO,
30 August 2024
SIVOTA PLC
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
U.S. dollars in thousands
As at As at
30 June 31 December
2024 2023
Unaudited Audited
ASSETS
Non-current assets
Intangible assets, net - 5,200
Property and equipment, net 1 15
Total non-current assets 1 5,215
Current assets
Trade receivables - 1,084
Other receivables 29 249
Cash and cash equivalents 142 969
Total current assets 171 2,302
Total assets 172 7,517
EQUITY AND LIABILITIES
Equity
Ordinary share capital 157 157
Deferred shares 65 65
Capital reserve from transactions with non-controlling interests
- (426)
Share premium 15,139 15,139
Accumulated losses (15,597) (12,020)
Total equity attributable to the owners (236) 2,915
Non-controlling interests - 1,203
Total equity (236) 4,118
Current liabilities
Current maturity of long-term loan from related party
- 727
Trade payables 46 1,047
Other payables 362 796
Total current liabilities 408 2,570
Non-current liabilities
Long-term loan from related party - 829
Total non-current liabilities - 829
Total equity and liabilities 172 7,517
The accompanying notes are an integral part of the condensed consolidated
financial statements.
SIVOTA PLC
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
U.S. dollars in thousands
Capital reserve from transactions with non-controlling interests
Ordinary Share capital Total equity attributable to the owners Non-controlling interests
Deferred Share Premium Accumulated losses
Shares Total equity
Unaudited
For the six months ended 30 June 2024:
Balance as at 1 January 2024 157 65 15,139 (426) (12,020) 2,915 1,203 4,118
Net loss - - - - (3,577) (3,577) (2,832) (6,409)
Net comprehensive loss - - - (3,577) (3,577) (2,832) (6,409)
Transactions with owners:
Disposal of subsidiary - see Note 4 - - - 426 - 426 1,629 2,055
Total transactions with the owners
- - - 426 - 426 1,629 2,055
Balance as at 30 June 2024 157 65 15,139 - (15,597) (236) - (236)
The accompanying notes are an integral part of the condensed consolidated
financial statements.
SIVOTA PLC
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
U.S. dollars in thousands
Capital reserve from transactions with non-controlling interests
Ordinary Share capital Total equity attributable to the owners Non-controlling interests
Deferred Share Premium Accumulated losses
Shares Total equity
Unaudited
For the six months ended 30 June 2023:
Balance as at 1 January 2023 157 65 15,139 (413) (3,697) 11,251 5,141 16,392
Net loss - - - - (1,796) (1,796) (1,423) (3,219)
Net comprehensive loss - - - (1,796) (1,796) (1,423) (3,219)
Transactions with owners:
Transactions with non-controlling interests
- - - - - - 3 3
Share-based compensation by subsidiary
- - - - - - 197 197
Total transactions with the owners
- - - - - - 200 200
Balance as at 30 June 2023 157 65 15,139 (413) (5,493) 9,455 3,918 13,373
The accompanying notes are an integral part of the condensed consolidated
financial statements.
SIVOTA PLC
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
U.S. dollars in thousands
The accompanying notes are an integral part of the condensed consolidated
financial statements.
SIVOTA PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
U.S. dollars in thousands
For year ended 31 December
Six months ended
30 June
2024 2023 2023
Unaudited Audited
Cash flows from operating activities
Net loss (6,409) (3,219) (12,324)
Adjustments for:
Depreciation and amortisation - 819 1,646
Loss on impairment subsidiary's net assets - see Note 4
5,211 - 7,123
Share-based compensation by subsidiary - 197 44
Financial expenses, net 98 127 241
Working capital adjustments:
Decrease in trade receivables 457 1,245 1,383
Decrease in other receivables 4 178 150
Decrease in trade and other payables (7) (1,300) (1,648)
Decrease in long term employee benefits - (12) (12)
Net from operating activities (646) (1,965) (3,397)
Cash flows from investing activities
Net cash of subsidiary that ceased to be consolidated
(178) - -
Proceeds from sale of equipment - 6 -
Net cash from (for) investing activities (178) 6 -
Cash flows from financing activities
Exercise of subsidiary's options - 3 6
Net cash from financing activities - 3 6
Net change in cash and cash equivalents
(824) (1,956) (3,391)
Effect of foreign exchange rate changes (3) (66) (79)
Cash and cash equivalents at beginning of period
969 4,439 4,439
Cash and cash equivalents at end of period
142 2,417 969
The accompanying notes are an integral part of the condensed consolidated
financial statements.
SIVOTA PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
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. Its
registered office is The Scalpel, 18th Floor, 52 Lime Street, London, EC3M
7AF.
In July 2021, the Company completed a placing and listed on the Main Market
(Standard Segment) of the London Stock Exchange ("LSE").
In December 2021, the Company announced that it had entered into a non-binding
term sheet with Apester. As a result, the Company's shares were suspended
pending the completion of the transaction and the publication of
the prospectus regarding its enlarged group. On 12 May 2022, the Company
completed the acquisition, published the prospectus in September 2022, and
completed its readmission to the LSE.
The cash consideration for the Acquisition was funded through a $14.2 million
(gross) placing and direct subscription of 11,500,000 new ordinary shares of
Sivota of one pence each.
In July 2024 the Company announced Apester's filing decision, as detailed in
Note 4.
2. Definitions
In these financial statements:
The Company - Sivota PLC
The Group - The Company and its consolidated subsidiaries
Subsidiaries - Entities that are controlled (as defined in IFRS 10) by the Company and whose
accounts are consolidated with those of the Company.
Dollar/USD - U.S. dollar/"$"
3. Significant accounting policies
The following accounting policies have been applied consistently in the
financial statements for all periods presented unless otherwise stated.
a. Basis of accounting
The Group Financial Statements have been prepared in accordance with
International Accounting Standards in conformity with the requirements of the
UK Companies Act 2006.
The interim condensed consolidated financial statements for the six months
ended 30 June 2024 have been prepared in accordance with IAS 34, Interim
Financial Reporting. The interim condensed consolidated financial statements
do not include all the information and disclosures required in the annual
financial statements and should be read in conjunction with the Company's
financial statements as at 31 December 2023.
SIVOTA PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
Going concern
The Company projects that it will need to raise further debt or equity finance
to fund the planned business development. During 2024, the company is expected
to generate further losses from operations, which will be expressed in
negative cash flows from operating activity. Hence, the continuation of the
Company's operations depends on raising the required financing resources or
reaching profitability, which are not guaranteed at this point.
While the directors believe they will be able to raise the additional finance
required, this is not guaranteed and hence, there is a material uncertainty
with respect of going concern.
As of the signing of this report, the company is a cash shell, and therefore
there are no material effects of assuming a going-concern basis of accounting
in preparing the financial statements.
b. Standards and interpretations issued but not yet applied
There were no new standards or interpretations
effective for the first time for periods beginning on or after 1 January 2024
that had a significant effect on the Company's Financial Statements.
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.
4. Discontinued operation.
In June 2024, Sivota was informed by the board of Apester, its majority-owned
subsidiary in Israel, that due to a deterioration in trading performance, it
can no longer proceed as a going concern, and following legal advice, Apester
has taken the decision to file for bankruptcy (the "filing
decision"). Following the filing decision, Apester filed for bankruptcy in
the court of Tel Aviv. At this point, Sivota cannot assess what recovery it
will make in respect of its investment in Apester, but that recovery is not
expected to be material.
Following the filing decision, the Company stopped Apester's consolidation at
the end of June and wrote off its investment in Apester to zero. As a result,
the Company recorded Apester's loss in H1 2024 as a loss from discontinued
operation along with a loss on the impairment of Apester's net assets:
SIVOTA PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
For the year ended
31 December
Six months ended
30 June
2024 2023 2023
Unaudited Audited
Revenues 1,557 3,129 5,622
Expenses 2,387 6,020 10,074
Loss before taxes (830) (2,891) (4,452)
Taxes on income - - (3)
Net loss after taxes (830) (2,891) (4,455)
Net assets impairment loss (5,211) - (7,123)
Loss from discontinued operation (6,041) (2,891) (11,578)
Cash flow used in discontinued operation:
Net cash flow used in operating activities (276) (1,613) (2,821)
Net cash flow from investing activities - 6 -
Net cash flow from financing activities - 3 6
Net decrease in cash (276) (1,604) (2,815)
Loss from discontinued operation:
5. Loss per share
The calculation of the basic and diluted loss per share is based on the
following data:
Loss per share for loss from continuing
operations:
The year ended 31 December
Six months ended 30 June
2024 2023 2023
Unaudited Unaudited Audited
Loss for the period attributable to the equity holders of the Company
(368) (328) (746)
Weighted average number of ordinary shares for the purpose of basic and
diluted earnings per share
12,585,000 12,585,000 12,585,000
Basic and diluted loss per share - U.S. dollars (0.03) (0.03) (0.06)
SIVOTA PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
Loss per share for total loss:
The year ended 31 December
Six months ended 30 June
2024 2023 2023
Unaudited Unaudited Audited
Loss for the period attributable to the equity holders of the Company
(3,577) (1,796) (8,323)
Weighted average number of ordinary shares for the purpose of basic and
diluted earnings per share
12,585,000 12,585,000 12,585,000
Basic and diluted loss per share - U.S. dollars (0.28) (0.14) (0.66)
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