Safe-T Group Ltd.
(Nasdaq, TASE: SFET)
(“Safe-T” or the “Company”), a global provider of
cyber-security and privacy solutions to consumers and
enterprises, today announced record financial results for the
three-month period ended March 31, 2022.
- Revenues for the three-months ended
March 31, 2022 reached a quarterly record high of $4,021,000, an
increase of 199% compared to the three-month period ended March 31,
2021.
- Gross profit for the three-month
period ended March 31, 2022 amounted to $2,117,000, an increase of
378% compared to the corresponding period in 2021.
- In the first quarter of 2022, the
Company witnessed the initial impact of the planned cost reductions
in its enterprise cybersecurity business, which is expected to
increase in the second quarter of the year, contributing, together
with patent litigation dismissal, to an overall material decrease
in the Company’s operating losses starting in the third quarter of
2022.
“First quarter results continue to reflect
significant sequential quarterly and year-over-year growth, being
driven by increased sales in our consumer and enterprise privacy
businesses. Over the past few months, we have taken multiple
actions to improve the efficiency of our operations and direct
investment into revenue drivers such as our customer acquisition
program which we believe will yield future recurring subscription
revenue. In addition, through our collaboration with TerraZone, we
are now seeing the initial impact of our planned reduction in the
enterprise cybersecurity expenses, while maintaining the value of
our IP and partnering in sales,” said Shachar Daniel, Chief
Executive Officer of Safe-T. “Furthermore, we were pleased to
announce the settlement and dismissal of our outstanding patent
litigation, which is expected to contribute, together with our cost
reduction plan, to a significant reduction in the Company’s overall
general and administration costs in the third quarter of 2022 and
onward. Combined with the recently announced credit line, we feel
we are well positioned to execute on our growth plans for both the
consumer and enterprises markets.”
First Quarter 2022 Highlights and Recent
Business Developments:
- Safe-T entered into a global sales,
marketing, and development partnership with TerraZone Ltd.
(“TerraZone”), a specialist focused on providing enterprise and
government customers with an array of advanced information
technology and cyber security services for its ZoneZero® Zero Trust
Network Access software. Under this agreement, TerraZone will fund
all sales, marketing, and development expenses for ZoneZero®, while
Safe-T will maintain all rights and IP for its technology and
products. The TerraZone agreement has contributed to the reduction
of operating expenses at Safe-T’s Enterprise Cybersecurity business
and is expected to reduce expenses further in the second quarter of
2022. In addition, the Company entered into a collaboration with
TerraZone and DreamVPS launching a first-of-its-kind Virtual
Private Workforce cloud service.
- In the Asia-Pacific market, the
Company added over 75 new clients, including e-commerce and NFT
(Non-Fungible Token) organizations for its newly upgraded
Enterprise Privacy product, which was introduced in the fourth
quarter of 2021.
- During the first quarter, the
Company introduced several new cybersecurity and privacy products,
including Ad Blocker Pro, an anti-Malvertising (malicious
advertising) solution and achieved a monthly recurring revenue
milestone for its recently introduced privacy solution for Apple
mobile devices via the App Store, which ended the quarter with
significant recurring monthly revenue.
- On May 19, 2022, the Company
announced the dismissal of all ongoing patent litigation between
its wholly owned subsidiary, NetNut Ltd., and Bright Data Ltd.
- On May 26, 2022, Safe-T
announced that its wholly owned subsidiary, CyberKick Ltd.
(“CyberKick”), entered into a secured, revolving line of credit
agreement with United Mizrahi-Tefahot Bank Ltd., to support the
growth of its consumer privacy solutions in an initial amount of up
to $2,000,000 (the “Credit Facility”). The Credit Facility is part
of the Company’s broader efforts to attract diverse long-term
sources of capital, while also creating non-dilutive financing
pathways.
“As we enter the second half of 2022, our growth
plan remains on track, supported by the strength of our new
partnerships, geographic expansion and a growing portfolio of
products that will extend our offerings onto multiple platforms
including Windows, Android and Apple iOS mobile devices as well as
desktop computers this year. Supported by these innovative
developments, we continue to witness significant momentum in our
business, especially in newer markets such as Asia-Pacific, Western
Europe and in North America for our newly launched consumer privacy
products and enterprise privacy products, all of which are expected
to contribute to our growth throughout this year,” concluded Mr.
Daniel.
Financial Results for the Three Months
Ended March 31, 2022:
- Total revenues amounted to
$4,021,000 (Q1 2021: $1,347,000). The growth is attributed to the
increase in enterprise privacy business revenues and the
consolidation of CyberKick’s revenues following the completion of
its acquisition on July 4, 2021.
- Cost of revenues totaled $1,904,000
(Q1 2021: $904,000). The increase is mainly a result of the
consolidation of CyberKick’s cost of revenues, mainly in traffic
acquisition costs for third party products.
- Research and development expenses
totaled $1,394,000 (Q1 2021: $702,000). The increase is attributed
to the consolidation of CyberKick’s research and development
expenses and the development of new products, partially offset by a
reduction in the research and development expenses of the
enterprise security segment, due to the TerraZone agreement.
- Sales and marketing expenses
totaled $3,034,000 (Q1 2021: $1,122,000). The increase is
primarily attributed to the consolidation of CyberKick’s sales
and marketing expenses, primarily its products’ advertising costs,
partially offset by a reduction in the sales and marketing expenses
of the enterprise security segment, due to the TerraZone
agreement.
- General and administrative expenses
totaled $2,251,000 (Q1 2021: $1,100,000). The increase is mainly
due to higher professional fees, predominantly legal, in connection
with patent-related proceedings brought by and against Bright Data
Ltd.
- IFRS net loss totaled $4,727,000,
or $0.16 basic loss per ordinary share (Q1 2021: net loss of
$2,513,000, or $0.11 basic loss per ordinary share).
- Non-IFRS net loss totaled
$3,286,000, or $0.11 basic loss per ordinary share (Q1 2021: loss
of $1,950,000, or $0.09 basic loss per ordinary share).
The following table presents the reconciled
effect of the non-cash expenses/income and certain expenses further
described below on the Company’s net loss for the three months
periods ended March 31, 2022 and 2021, and for the year ended
December 31, 2021:
|
|
For the Three MonthPeriod
EndedMarch 31, |
|
|
For the Year
EndedDecember 31, |
(thousands of U.S.
dollars) |
|
2022 |
|
|
2021 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
Net loss for the
period |
|
4,727 |
|
|
2,513 |
|
|
|
13,125 |
|
|
|
|
|
|
|
|
|
|
Amortization and impairment of
intangible assets and goodwill |
|
417 |
|
|
270 |
|
|
|
2,112 |
|
Share-based compensation |
|
935 |
|
|
330 |
|
|
|
2,356 |
|
Changes in fair value of
finance liabilities, including measurement of contingent
consideration |
|
89 |
|
|
(37 |
) |
|
|
(1,644 |
) |
Total adjustment |
|
1,441 |
|
|
563 |
|
|
|
2,824 |
|
Non-IFRS net
loss |
|
3,286 |
|
|
1,950 |
|
|
|
10,301 |
|
Balance Sheet Highlights:
- As of March 31, 2022, shareholders’
equity totaled $20,397,000, or approximately $0.67 per outstanding
American Depository Share, as of March 31, 2022, compared to
shareholders’ equity of $24,187,000 on December 31, 2021. The
reduction is mainly due to the Company’s operating loss during the
period.
- As of March 31, 2022, the Company’s
cash and cash equivalents balance and short-term investments
balance aggregated to $7,168,000, compared to $9,715,000 on
December 31, 2021.
Additional details on the Company’s financials,
products and strategy are available on the Company’s website
here.
Use of Non-IFRS Financial
ResultsIn addition to disclosing financial results
calculated in accordance with International Financial Reporting
Standards (IFRS), as issued by the International Accounting
Standards Board, this press release contains non-IFRS financial
measures of net loss for the periods presented that exclude the
effect of share-based compensation expenses, amortization of
intangible assets, non-cash issuance and acquisition expenses and
the revaluation of finance liabilities at fair value, including
measurement of contingent consideration. The Company’s management
believes the non-IFRS financial information provided in this
release is useful to investors’ understanding and assessment of the
Company’s ongoing operations. Management also uses both IFRS
and non-IFRS information in evaluating and operating its business
internally, and as such deemed it important to provide this
information to investors. The non-IFRS financial measures
disclosed by the Company should not be considered in
isolation, or as a substitute for, or superior to, financial
measures calculated in accordance with IFRS, and the financial
results calculated in accordance with IFRS and reconciliations to
those financial statements should be carefully
evaluated. Investors are encouraged to review the
reconciliations of these non-IFRS measures to their most directly
comparable IFRS financial measures provided in the financial
statement tables herein.
First Quarter 2022
Financial Results Conference Call
Mr. Shachar Daniel, Chief Executive Officer of
Safe-T, and Mr. Shai Avnit, Chief Financial Officer of Safe-T, will
host a conference call today, on May 31, 2022, at 08:30 a.m. ET, to
discuss the first quarter of 2022 financial results, followed by a
Q&A session.
To attend the conference call, please dial one
of the following teleconferencing numbers. Please begin by placing
your call five minutes before the conference call commences. If you
are unable to connect using the toll-free number, please try the
international dial-in number:
Date: |
Tuesday, May 31, 2022 |
Time: |
08:30 a.m. Eastern time, 05:30 a.m. Pacific time |
Toll-free dial-in number: |
1-877-407-0789 |
Israel Toll Free: |
1-0809-406-247 |
International dial-in number: |
1-201-689-8562 |
Conference ID: |
13730248 |
Participants will be required to state their
name and company upon entering the call. If you have any difficulty
connecting with the conference call, please contact Michael
Glickman on behalf of Safe-T at 917-397-2272.
The conference call will be broadcast live and
available for replay at
https://viavid.webcasts.com/starthere.jsp?ei=1551418&tp_key=408e9c26ec and
via the investor relations section of the Company's website at
https://www.safetgroup.com.
A replay of the conference call will be
available after 11:30 a.m. Eastern time through June 28, 2022:
Toll-free replay number: |
1-844-512-2921 |
International replay number: |
1-412-317-6671 |
Replay ID: |
13730248 |
About Safe-T®
Group Ltd.
Safe-T Group Ltd. (Nasdaq, TASE: SFET) is a
global provider of cyber-security and privacy solutions to
consumers and enterprises. The Company operates in three distinct
segments, tailoring solutions according to specific needs. The
segments include, enterprise cyber-security solutions, enterprise
privacy solutions, and consumer cyber-security and privacy
solutions.
Our cyber-security and privacy solutions for
consumers provide a wide security blanket against ransomware,
viruses, phishing, and other online threats, as well as a powerful,
secured and encrypted connection, masking their online activity and
keeping them safe from hackers. The solutions are designed for both
advanced and basic users, ensuring full protection for all personal
and digital information.
Our cyber-security solutions for enterprises,
designed for cloud, on-premises and hybrid networks, mitigates
attacks on enterprises’ business-critical services and sensitive
data, while ensuring uninterrupted business continuity.
Organizational data access, storage and exchange use cases, from
outside the organization or within, are secured according to the
“validate first, access later” philosophy of Safe-T’s zero trust.
Our ZoneZero® solutions are available by our reseller, TerraZone
Ltd., a global information security provider, as a solution or
cloud service.
Our privacy solutions for enterprises are based
on our advanced and secured proxy network, the world’s fastest,
enabling our customers to collect data anonymously at any scale
from any public sources over the web using a unique hybrid network.
Our network is the only one of its kind that is comprised of
millions of residential exit points and hundreds of servers located
at our ISP partners around the world. The infrastructure is
optimally designed to guarantee the privacy, quality, stability,
and the speed of the service.
For more information about Safe-T, visit
www.safetgroup.com
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the “safe harbor” Words such as
“expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,”
“estimates” and similar expressions or variations of such words are
intended to identify forward-looking statements. For example,
Safe-T is using forward-looking statements in this press release
when it discusses that positive impacts of cost reductions expected
to increase in the second quarter of 2022 and accelerate in the
third quarter of 2022, extension of the Company’s offerings onto
multiple platforms including Windows, Android and Apple iOS mobile
devices as well as desktop computers in 2022, its belief that
revenue drivers, such as customer acquisition program, will yield
future recurring subscription revenue, that the recent development
and distribution partnership with TerraZone will continue to reduce
the Company’s expenses in the second quarter of 2022, and its
belief that the combination of new products and new markets will
contribute to the Company’s growth throughout 2022. Because such
statements deal with future events and are based on Safe-T’s
current expectations, they are subject to various risks and
uncertainties and actual results, performance or achievements of
Safe-T could differ materially from those described in or implied
by the statements in this press release. The forward-looking
statements contained or implied in this press release are subject
to other risks and uncertainties, including those discussed under
the heading “Risk Factors” in Safe-T’s annual report on Form 20-F
filed with the Securities and Exchange Commission (“SEC”) on March
29, 2022, and in any subsequent filings with the SEC. Except as
otherwise required by law, Safe-T undertakes no obligation to
publicly release any revisions to these forward-looking statements
to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events. References and
links to websites have been provided as a convenience, and the
information contained on such websites is not incorporated by
reference into this press release. Safe-T is not responsible for
the contents of third-party websites.
INVESTOR RELATIONS
CONTACTS:
Steve Gersten, Director of Investor RelationsSafe-T Group
Ltd.813-334-9745investors@safe-t.com
Michal EfratyInvestor Relations,
Israel+972-(0)52-3044404michal@efraty.com
|
Consolidated Statements of Financial Position(In thousands of
USD) |
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
|
2022 |
|
|
2021 |
|
|
2021 |
|
|
|
(Unaudited) |
|
(Audited) |
Assets |
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
4,595 |
|
|
21,570 |
|
|
3,828 |
|
Restricted deposit |
|
|
65 |
|
|
- |
|
|
- |
|
Short-term investments |
|
|
2,573 |
|
|
- |
|
|
5,887 |
|
Trade receivables |
|
|
1,219 |
|
|
770 |
|
|
1,496 |
|
Other receivables |
|
|
685 |
|
|
663 |
|
|
713 |
|
Total current
assets |
|
|
9,137 |
|
|
23,003 |
|
|
11,924 |
|
|
|
|
|
|
|
|
|
Non-current
assets: |
|
|
|
|
|
|
|
Long-term restricted
deposits |
|
|
143 |
|
|
87 |
|
|
84 |
|
Long-term deposit |
|
|
66 |
|
|
47 |
|
|
65 |
|
Property and equipment,
net |
|
|
121 |
|
|
120 |
|
|
119 |
|
Right of use assets |
|
|
423 |
|
|
530 |
|
|
451 |
|
Goodwill |
|
|
10,998 |
|
|
5,387 |
|
|
10,998 |
|
Intangible assets, net |
|
|
6,596 |
|
|
4,032 |
|
|
7,013 |
|
Total non-current
assets |
|
|
18,347 |
|
|
10,203 |
|
|
18,730 |
|
Total
assets |
|
|
27,484 |
|
|
33,206 |
|
|
30,654 |
|
|
|
|
|
|
|
|
|
Liabilities and equity |
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
|
|
Trade payables |
|
|
1,642 |
|
|
181 |
|
|
1,219 |
|
Other payables |
|
|
3,007 |
|
|
1,444 |
|
|
2,839 |
|
Contract liabilities |
|
|
581 |
|
|
469 |
|
|
514 |
|
Contingent consideration |
|
|
- |
|
|
515 |
|
|
- |
|
Derivative financial
instruments |
|
|
577 |
|
|
1,408 |
|
|
488 |
|
Short-term lease
liabilities |
|
|
349 |
|
|
302 |
|
|
365 |
|
Total current
liabilities |
|
|
6,156 |
|
|
4,319 |
|
|
5,425 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities: |
|
|
|
|
|
|
|
|
|
|
Long-term contract
liabilities |
|
|
13 |
|
|
28 |
|
|
18 |
|
Long-term lease
liabilities |
|
|
159 |
|
|
328 |
|
|
197 |
|
Deferred tax liabilities |
|
|
565 |
|
|
734 |
|
|
645 |
|
Long-term contingent
consideration |
|
|
- |
|
|
684 |
|
|
- |
|
Liability in respect of the
Israeli Innovation Authority |
|
|
194 |
|
|
149 |
|
|
182 |
|
Total non-current
liabilities |
|
|
931 |
|
|
1,923 |
|
|
1,042 |
|
Total
liabilities |
|
|
7,087 |
|
|
6,242 |
|
|
6,467 |
|
|
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
|
|
|
Ordinary shares |
|
|
- |
|
|
- |
|
|
- |
|
Share premium |
|
|
91,955 |
|
|
85,116 |
|
|
91,112 |
|
Other equity reserves |
|
|
16,826 |
|
|
14,893 |
|
|
16,732 |
|
Accumulated deficit |
|
|
(88,384 |
) |
|
(73,045 |
) |
|
(83,657 |
) |
Total
equity |
|
|
20,397 |
|
|
26,964 |
|
|
24,187 |
|
Total liabilities and
equity |
|
|
27,484 |
|
|
33,206 |
|
|
30,654 |
|
Consolidated Statements of Profit or Loss |
|
(In thousands of USD, except per share amounts) |
|
|
|
|
|
|
|
For the Three Months Ended
March31, |
|
For the Year Ended
December31, |
|
|
2022 |
|
2021 |
|
2021 |
|
2020 |
|
|
(Unaudited) |
|
(Unaudited) |
|
(Audited) |
|
(Audited) |
|
|
|
|
|
|
|
|
|
Revenues |
|
4,021 |
|
|
1,347 |
|
|
|
10,281 |
|
|
4,886 |
|
Cost of revenues |
|
1,904 |
|
|
904 |
|
|
|
5,145 |
|
|
2,499 |
|
Gross
profit |
|
2,117 |
|
|
443 |
|
|
|
5,136 |
|
|
2,387 |
|
|
|
|
|
|
|
|
|
|
|
Research and development
expenses |
|
1,394 |
|
|
702 |
|
|
|
4,771 |
|
|
2,202 |
|
Sales and marketing
expenses |
|
3,034 |
|
|
1,122 |
|
|
|
8,348 |
|
|
4,215 |
|
General and administrative
expenses |
|
2,251 |
|
|
1,100 |
|
|
|
7,013 |
|
|
4,197 |
|
Impairment of goodwill |
|
- |
|
|
- |
|
|
|
700 |
|
|
2,759 |
|
Contingent consideration
measurement |
|
- |
|
|
- |
|
|
|
(684 |
) |
|
345 |
|
Operating
expenses |
|
6,679 |
|
|
2,924 |
|
|
|
20,148 |
|
|
13,718 |
|
|
|
|
|
|
|
|
|
|
|
Operating
loss |
|
(4,562 |
) |
|
(2,481 |
) |
|
|
(15,012 |
) |
|
(11,331 |
) |
|
|
|
|
|
|
|
|
|
|
Finance income (expenses),
net |
|
(244 |
) |
|
(70 |
) |
|
|
942 |
|
|
3,240 |
|
Tax benefit |
|
79 |
|
|
38 |
|
|
|
945 |
|
|
246 |
|
Net loss |
|
(4,727 |
) |
|
(2,513 |
) |
|
|
(13,125 |
) |
|
(7,845 |
) |
|
|
|
|
|
|
|
|
|
|
Basic loss per
share* |
|
(0.16 |
) |
|
(0.11 |
) |
|
|
(0.48 |
) |
|
(0.71 |
) |
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share* |
|
(0.16 |
) |
|
(0.11 |
) |
|
|
(0.48 |
) |
|
(0.84 |
) |
* Adjusted retrospectively to reflect a 40:1 reverse
share split of our ordinary shares, effective as of October 15,
2021
Safe T (NASDAQ:SFET)
Historical Stock Chart
From Aug 2024 to Sep 2024
Safe T (NASDAQ:SFET)
Historical Stock Chart
From Sep 2023 to Sep 2024