TIDMTECH
RNS Number : 2421V
TechFinancials Inc.
02 December 2019
2 December 2019
Techfinancials, Inc
("TechFinancials" or the "Company" or the "Group")
Update on DragonFinancials
Proposed cancellation of admission to trading on AIM
and sole listing on the NEX Exchange Growth Market
The Company announces that, as a result of the continuing
regulatory challenges facing the Company's traditional systems
unit, the Company has taken the decision to make substantial
adjustments to its operating structure and cost base while seeking
to develop its newer blockchain based businesses.
On the operational front, the Company's 51 per cent. owned B2C
subsidiary, DragonFinancials has suffered from an increasingly
challenging regulatory and business environment which has resulted
in it incurring losses which started in 2018 and which have
continued throughout H1 2019. As prospects for DragonFinancials
have not improved in H2 2019, in conjunction with its joint-venture
partners at DragonFinancials, the Company has decided to close
DragonFinancials with immediate effect in order to stem further
losses. Consequently, the Company will no longer operate any B2C
business in its traditional systems unit.
The Company is continuing to support customers of its B2B
division. However, this division of the Company has also seen
declining revenues which will also suffer from losing
DragonFinancials revenues, its major customer and the Company is
reviewing the viability of the remaining B2B business and a further
decision will be taken in due course.
In light of its decision to close DragonFinancials and the
decline in revenues in its traditional B2B business, the board has
undertaken a review of the benefits of being a quoted company on
both the AIM Market of the London Stock Exchange ("AIM") and the
NEX Exchange Growth Market ("NEX"). Following this review, the
TechFinancials board considers that NEX is a more appropriate
market given TechFinancials' currently reduced size and its focus
on new business streams. A sole listing on NEX would also result in
a reduction in total listing costs. Consequently, the Board has
concluded that the cancellation of admission of its Ordinary Shares
to trading on AIM (the "Cancellation") is in the best interests of
the Company and its Shareholders as a whole.
Company strategy update
In the past three years, changes in the regulatory environment
related to the Company's traditional systems businesses (both B2C
and B2B) have adversely affected both the Company's revenue streams
and profitability. Unfortunately, the Company's initiatives to
diversify into other product areas such as FOREX and CFDs have met
with limited success.
These changes have led the board to decide to make adjustment
both the Company's operating structure and cost base including the
closing down of DragonFinancials, the Company's subsidiary in which
the Company holds a 51 per cent. interest, as a consequence of the
downturn in operations.
During the year to 31 December 2018, the Company's B2C Trading
Platform (which principally comprised DragonFinancials) reported
revenues of approximately US$2,683k, EBITDA of approximately
US$261k and profit before tax of nil. For the half year to 30 June
2019, the B2C Trading Platform reported a loss before tax of
US$169k and as at 30 June 2019 had net assets of US$482k. The
closure of DragonFinancials will lead to an impairment in the
Company's accounts of approximately US$2,600k.
The board has decided that the Company will primarily focus its
business efforts going forward on its initiatives in blockchain
applications. The Company currently has two initiatives in this
area: Footies Ltd. ("Footies")and Cedex Holdings Limited ("Cedex").
Accordingly, the Company will reorganise its resources, including
adjusting its headcount, closing non active subsidiaries and moving
to new offices, in order to align its activities to the development
of these and other blockchain based initiatives.
Proposed cancellation of admission to trading on AIM
The Company has taken the decision to seek Cancellation as it
believes NEX is a more appropriate market given TechFinancials'
currently reduced size following the closure of DragonFinancials
and its focus on new business streams as it prepares to move
forwards with the opportunities it has in the blockchain arena.
The Company is therefore announcing its intention to seek
Shareholders' approval for the Cancellation. A circular will be
published and sent to all Shareholders as soon as practicable
setting out further details of the Cancellation, which the Company
hopes will take place in January 2020, and the implications for
Shareholders ("Circular") along with a notice convening a general
meeting at which the approval of Shareholders for the Cancellation
will be sought ("General Meeting"). Pursuant to Rule 41 of the AIM
Rules for Companies, cancellation is conditional upon the approval
of not less than 75 per cent. of the votes cast by shareholders
(whether in person or by proxy) at the General Meeting.
The Company's shares will continue to be traded on NEX should
Shareholders approve the Cancellation.
Update on Footies
Footies is a subsidiary incorporated in the UK in which
TechFinancials has an interest of just over 75 per cent. It has
been established to develop a digital ticketing and fan engagement
solution for sports organizations and venues.
The Company's strategy is to increase Footies' value by closing
sales contracts with its first customers.
Approximately a year from inception, the first version of the
platform has become available for testing with potential clients.
In the past three months, Footies started approaching potential
customers with a 'demo' product.
Footies has now received feedback from potential customers and
consequently will focus its product development on ticket control
and integrating engagement. Footies initial sales efforts are
focusing on mid-size clubs and other types of venues where knowing
and caring for your customers through ticketing control and
dedicated app is crucial for the business. The Company is
considering providing Footies an additional credit line by way of a
Convertible Loan of up to $225k.
Strategy for Cedex
The Company continues to hold an option to acquire 90 per cent.
of Cedex at an exercise price of approximately GBP52,000. In the
event that the option were to be exercised TechFinancials would
hold 97.49% (85.92% on fully diluted basis) of Cedex . The Company
remains positive about its investment in Cedex and will take a
decision as to how to maximise the value from its investment in
Cedex in 2020, after its proposed cancellation from AIM and sole
listing on NEX and will provide further updates to the market in
due course.
In the past year, Cedex has concentrated its business efforts on
business development activities in order to create the eco-system
for issuing advanced financial instruments based on diamonds as an
underlying asset, such as ETP and futures contracts utilizing
CEDEX's proprietary technology, comprising the DEX algorithm, and
the Cedex trading platform.
Cedex's vision is to transform diamonds into a new financial
asset class. In parallel, the CEDEX board will be looking for other
opportunities to commercialise the CEDEX technology. The Company
will consider selling all or part of its interest in CEDEX to a
third party if it believes that to be in the best interests of the
Company.
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
For further information:
TechFinancials, Inc. Tel: +972 54 5233
943
Asaf Lahav, Group Chief Executive Officer
Yuval Tovias, Chief Financial Officer
Grant Thornton UK LLP (Nominated Adviser) Tel: +44 (0) 20 7383
5100
Colin Aaronson / Samantha Harrison / Seamus
Fricker
Peterhouse Capital Limited (Broker) Tel: +44 (0) 20 7469
0930
Lucy Williams / Eran Zucker
Media enquiries:
Yellow Jersey PR Limited (Media Relations) Tel: +44 (0) 7747
788 221
Charles Goodwin
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCLFFSFFLLLIIA
(END) Dow Jones Newswires
December 02, 2019 02:00 ET (07:00 GMT)
Techfinancials (LSE:TECH)
Historical Stock Chart
From Sep 2024 to Oct 2024
Techfinancials (LSE:TECH)
Historical Stock Chart
From Oct 2023 to Oct 2024