TechFinancials Inc. Conditional sale of shareholdings in subsidiaries (4701X)
November 24 2017 - 4:45AM
UK Regulatory
TIDMTECH
RNS Number : 4701X
TechFinancials Inc.
24 November 2017
24 November 2017
TechFinancials, Inc.
("TechFinancials, the "Company" or the "Group")
Binding Agreements for the Conditional Sale of shareholdings in
two subsidiaries
TechFinancials (AIM: TECH), a leading technology provider to
financial trading brokers, today is pleased to announce that it has
entered into legally binding Share Purchase Agreements (the "SPA")
with S. Win Holdings Limited, a Cyprus incorporated company held by
Roy Shagan, Roy Winzelberg and Daniel Winzelberg (the "Buyer") to
sell its holdings in B.O. TradeFinancials Limited ("BOT") and
MarketFinancials Limited ("MF"). The total consideration for these
subsidiaries, which the Company no longer considers to be core to
its future business strategy, will be US$400,000, subject to any
closing adjustments. Going forwards, TechFinancials intends to
apply the extensive experience and knowledge accumulated over many
years, to continue to develop its Forex and CFD and other
innovative solutions including solutions for the rapidly growing
blockchain-based products and technologies market. In this
connection, the Group has been developing technology to integrate
the crypto-payment processing of Bitcoin, BitcoinCash and Etherium
into TechFinancial's core systems, scheduled to be implemented in
Q1 2018. Additionally, the Group will continue to apply its
technology and knowledge to support the innovative CEDEX project
that intends to use blockchain technology to revolutionize the
diamond-trading market.
BOT is a Cyprus Investment Firm ("CIF") licensed by the Cyprus
Securities and Exchange Commission ("CySEC"), and is the operator
of the Group's OptionFair trading platform. Until 30 June 2017, MF,
a company regulated by the Seychelles Financial Services Authority
("SFSA"), was the provider of market maker services and risk
management to DragonFinancials Ltd ("DF"), a subsidiary that is 51%
owned by the Group operating in Asia. Since 1 July 2017, MF only
provides market making services to BOT.
Under the SPA relating to BOT, which is conditional on the
consent of CySEC, TechFinancials will sell its entire shareholding
in BOT to the Buyer along with the CySEC License, the OptionFair
brand (which includes its client's balances as of the closing
date), the Investors Compensation fund of US$50,000 and the fixed
tangible assets for a purchase price of US$300,000, payable upon
the closing date of the deal. In addition, the Buyer will pay to
the Company any surplus net working capital in BOT as at the
closing date along with the loan amount owed by BOT to the Company
which, as of the date of this announcement, was approximately
US$200,000.
Under the SPA relating to MF and conditional the consent of
SFSA, TechFinancials will sell its entire shareholding in MF to the
Buyer for a purchase price of US$100,000, along with any working
capital surplus. In addition, accumulated retained earnings as at
the closing date will be distributed as a dividend to the Company.
The retained earnings as at the 30 June 2017 were US$411,000.
BOT activity (operating OptionFair) continued to shrink in 2017
due to the tightening of regulations in the Binary Options
industry. For the six months ended 30 June 2017, BOT's revenues
were EUR164,000 (For the financial year 2016: EUR1.38m) and the
loss for that period was EUR105,000 compared to a loss of
EUR231,000 for the financial year 2016. Net assets at 30 June 2017
were EUR244,534.
MF's main source of income and profits during the six months
ended 30 June 2017 was derived from the provision of market maker
and risk management services to DF with a decreasing amount from
BOT. Since 1 July 2017, MF has been providing market maker services
only to BOT (with another wholly owned Group company providing
market making services to DF). The decreasing levels of BOT
activity during 2017 impacted the revenue generated by MF for the
six months ended on 30 June 2017, which amounted to US$3.77m (For
the financial year 2016: US$11.8m). The net profit of MF for the
six months ended on 30 June 2017 was US$74,000 (For the financial
year 2016: US$367,000). Net assets at 30 June 2017 were
US$468,000.
Commenting on the share purchasing agreements, Asaf Lahav, CEO,
said: "As a consequence of the regulatory changes which have
impacted the binary options sector, these subsidiary holdings have
become non-core to future business growth strategy. The Company
intends to use its expertise to develop its Forex and CFD solutions
and target the rapidly growing blockchain-based products and
technologies market, and will use the proceeds of the sale to help
build its presence in these new areas."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
For further information:
TechFinancials, Inc.
Asaf Lahav, Group Chief Executive
Officer
Yuval Tovias, Chief Financial www.group.techfinancials.com
Officer
Grant Thornton UK LLP (Nominated
Adviser)
Colin Aaronson / Samantha Harrison Tel: +44 (0) 20
/ Carolyn Sansom 7383 5100
Northland Capital Partners Limited
(Broker)
Patrick Claridge/ David Hignell/ Tel: +44 (0) 20
John Howes 3861 6625
Peterhouse Corporate Finance (Joint
Broker)
Lucy Williams / Eran Zucker Tel: +44 (0) 20
7469 0932
Media enquiries:
Yellow Jersey (Media Relations)
Charles Goodwin / Katie Bairsto Tel: +44 (0) 7748
843 871
About TechFinancials
TechFinancials plc (AIM: TECH) is a leading innovator and
supplier of financial trading solutions for retail clients. The
Group operates a B2B division licensing white label trading
platform solutions to online brokers. In addition, the Company
operates a B2C division operating trading platforms worldwide and
incorporating a strategic joint venture focusing on solutions for
traders in the Asia Pacific region.
Further information can be found at
http://techfinancials.com.
This information is provided by RNS
The company news service from the London Stock Exchange
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