Safe-T Group Ltd.
(Nasdaq: SFET) (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
six-month period ended June 30, 2022.
Key highlights for the six months ended June 30,
2022:
- Revenues for the six months ended
June 30, 2022 reached a record high of $8,798,000, an increase of
181% compared to the six-month period ended June 30, 2021. In the
three months ended June 30, 2022, revenues totaled a record of
$4,777,000, an increase of 168% compared to the three months ended
June 30, 2021.
- Gross profit for the six-month
period ended June 30, 2022 amounted to $4,733,000, an increase of
279% compared to the corresponding period in 2021. For the
three-month period ended June 30, 2022,gross profit amounted to
$2,616,000, an increase of $225% compared to the corresponding
period in 2021.
- Operating expense reduction efforts
resulted in a 33% decrease in net loss in the second quarter of
2022 compared to the first quarter of 2022 (25% on a non-IFRS
basis). Ongoing expense reduction efforts are expected to drive
improved operational results in the third quarter of 2022.
- The Company's privacy enterprises
business reached break-even operating results (excluding recently
eliminated legal expenses).
“The financial results of the first half of 2022
reflect how effectively we continued to execute our strategy with
diversified businesses into the large cybersecurity and privacy
markets. We continue to drive significant and sustainable revenue
growth while efficiently executing ongoing cost reduction efforts.
During May and August, we secured a $2 million non-dilutive credit
line facility from a leading Israeli bank and a strategic financing
of up to $4 million, which may lead to potential future funding at
premium valuations for the Company. Supporting our current level of
growth requires investment into our consumer products and into
acquiring new customers, and we are extremely proud to have secured
additional funding through creative financing initiatives that
support the Company’s growth well into 2023, without impacting our
shareholders at current market valuations. We believe these
achievements are a strong validation of our business model and the
long-term potential of Safe-T,” said Shachar Daniel, Chief
Executive Officer of Safe-T.
Second Quarter 2022
Highlights and Recent Business Developments:
- Strong Continued Growth: Safe-T
continued to deliver strong year-over-year financial performance,
driven largely by growth in the Company’s consumer and enterprise
privacy businesses.
- Cost Reduction: Ongoing cost
reductions implemented across the business last quarter, as well as
the final settlement of patent litigation related to the Company’s
enterprise privacy business, will contribute significantly to
reduced general and administration costs throughout the remainder
of 2022.
- Financing Initiatives: In the
second quarter, the Company secured a $2 million non-dilutive
credit line facility from United Mizrahi-Tefahot Bank Ltd. to
support the growth of its consumer privacy solution. In August,
Safe-T secured a strategic investment of up to $4 million which
will be also utilized to bolster its operations and growth. Led by
a former CEO of the Company’s enterprise privacy business
subsidiary, this investment features a unique structure to protect
shareholders from near-term dilution and is based on a revenue
share model on newly acquired customers. The investor is also
incentivized to provide additional funding through warrants
exercisable at premiums ranging from 135% to 300% of the closing
share price at the date of the agreement. The cash available under
these financing initiatives, aggregating up to more than $5
million, is in addition to the $4.04 million cash and cash
equivalents as of June 30, 2022.
- Product Development and Offering:
In July, the Company introduced two new products as it further
penetrates the global consumer market. Safe-T launched its privacy
solution for Windows, allowing it to enter the large desktop
computer market with its first product and introduced its privacy
solution for Android mobile devices. With these launches, Safe-T
can now serve customers across all major hardware platforms
including mobile devices running Apple iOS, Android, and personal
computers.
“Our strong first half results reinforce our
confidence in the prospects and outlook for our business, as our
growth strategy continues to build momentum. In the second half of
2022, our team’s focus will be on further building upon the
strength of our cybersecurity and privacy business by leveraging
the recent funding and our new products to drive additional growth.
Over the past four quarters, our Apple iOS offerings have driven
continuous record growth. Through the strategic expansion of our
consumer portfolio with new solutions for the large, untapped
desktop computer and Android markets, Safe-T is now positioned to
capitalize on exciting new revenue opportunities. We remain firmly
focused on our cost reduction plan, improving the efficiency of the
business and together with our new products and investments into
our customer acquisition program, we expect to not only drive
significant additional revenue growth, but deliver improved
financial performance in the months ahead,” concluded Mr.
Daniel.
Financial Results for the Three Months
Ended June 30, 2022:
- Total revenues amounted to
$4,777,000 (Q2.2021: $1,784,000). 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 $2,161,000
(Q2.2021: $979,000). 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 $889,000 (Q2.2021: $781,000). 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 research and development expenses of the enterprise
security segment, due to the Company’s previously announced
agreement with TerraZone Ltd.
- Sales and marketing expenses
totaled $2,624,000 (Q2.2021: $1,308,000). The increase is
mainly attributed to the consolidation of CyberKick’s sales
and marketing expenses, primarily its media costs, partially offset
by a reduction in the sales and marketing expenses of the
enterprise security segment, due to the agreement with TerraZone
Ltd.
- General and administrative expenses
totaled $1,998,000 (Q2.2021: $1,488,000). The increase is mainly
due to higher professional fees, predominantly legal, in connection
with patent-related proceedings brought by and against Bright Data
Ltd., which were resolved by settlement on May 17, 2022.
- IFRS net loss totaled $3,158,000,
or $0.10 basic loss per ordinary share (Q2.2021: net loss of
$2,370,000, or $0.09 basic loss per ordinary share).
- Non-IFRS net loss totaled
$2,523,000, or $0.08 basic loss per ordinary share (Q2.2021: loss
of $2,174,000, or $0.08 basic loss per ordinary share).
Financial Results for the
Six Months Ended June
30, 2022:
- Total revenues amounted to
$8,798,000 (H1.2021: $3,131,000). 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 $4,065,000
(H1.2021: $1,883,000). The increase is mainly a result of the
consolidation of CyberKick’s cost of revenues, primarily traffic
acquisition costs for third party products.
- Research and development expenses
totaled $2,283,000 (H1.2021: $1,483,000). 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 agreement with
TerraZone.
- Sales and marketing expenses
totaled $5,658,000 (H1.2021: $2,430,000). The increase is
primarily attributed to the consolidation of CyberKick’s sales
and marketing expenses, primarily its media costs, partially offset
by a reduction in the sales and marketing expenses of the
enterprise security segment, due to the agreement with TerraZone
Ltd.
- General and administrative expenses
totaled $4,249,000 (H1.2021: $2,588,000). The increase is mainly
due to higher professional fees, predominantly legal, in connection
with patent-related proceedings brought by and against Bright Data
Ltd, which were resolved by settlement on May 17, 2022.
- IFRS net loss totaled $7,885,000,
or $0.26 basic loss per ordinary share (H1.2021: net loss of
$4,883,000, or $0.20 basic loss per ordinary share).
- Non-IFRS net loss totaled
$5,889,000, or $0.19 basic loss per ordinary share (H1.2021: loss
of $4,186,000, or $0.17 basic loss per ordinary share).
We define non-IFRS net
loss as a loss which excludes, as applicable: (i) amortization and
impairment of intangible assets and goodwill; (ii) share-based
compensation expense; (iii) issuance costs in connection with our
offerings; (iv) changes in fair value of finance liabilities
including measurement of contingent consideration and (v) income
taxes, starting from the second quarter of 2022 (adjusted
retrospectively for all prior periods presented).
The following table presents the reconciled
effect of the above on the Company’s net loss for the three- and
six-months periods ended June 30, 2022 and 2021, and for the year
ended December 31, 2021:
|
|
For the Six-Month Period
EndedJune 30,
|
|
For the Three-MonthPeriod
EndedJune 30,
|
|
For the year
EndedDecember 31,
|
(thousands of U.S. dollars)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period
|
|
|
7,885
|
|
|
|
4,883
|
|
|
|
3,158
|
|
|
|
2,370
|
|
|
13,125
|
|
Amortization and impairment of intangible assets and
goodwill
|
|
|
1,409
|
|
|
|
541
|
|
|
|
992
|
|
|
|
272
|
|
|
2,112
|
|
Benefit from income tax
|
|
|
(155
|
)
|
|
|
(120
|
)
|
|
|
(75
|
)
|
|
|
(60
|
)
|
|
(975
|
)
|
Share-based compensation
|
|
|
1,014
|
|
|
|
565
|
|
|
|
79
|
|
|
|
236
|
|
|
2,356
|
|
Changes in fair value of finance liabilities
|
|
|
(272
|
)
|
|
|
(289
|
)
|
|
|
(361
|
)
|
|
|
(252
|
)
|
|
(1,644
|
)
|
Total adjustment
|
|
|
(1,996
|
)
|
|
|
(697
|
)
|
|
|
(635
|
)
|
|
|
(196
|
)
|
|
(1,849
|
)
|
Non-IFRS net loss
|
|
|
5,889
|
|
|
|
4,186
|
|
|
|
2,523
|
|
|
|
2,174
|
|
|
11,276
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Highlights:
- As of June 30, 2022, shareholders’
equity totaled $17,316,000, or approximately $0.57 per outstanding
American Depository Share, as of June 30, 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 June 30, 2022, the Company’s
cash and cash equivalents balance aggregated to $4,040,000,
compared to $3,828,000 on December 31, 2021. The Company’s cash
balance does not account for up to an additional $5.6 million in
funds under its recently secured credit line facility and
investment financing.
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 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.
Second 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 August 31, 2022, at 08:30 a.m. ET,
to discuss the second 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:
|
Wednesday, August 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:
|
1-809-406-247
|
International dial-in number:
|
1-201-689-8562
|
Conference ID:
|
13732264
|
|
|
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=1564701&tp_key=1dbb884489
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 September 28,
2022:
Toll-free replay number:
|
1-844-512-2921
|
International replay number:
|
1-412-317-6671
|
Replay ID:
|
13732264
|
|
|
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 - consumer cyber-security and privacy solutions,
enterprise privacy solutions and enterprise cyber-security
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 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 based on our proprietary
reflection technology 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.
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.
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 its expectation that ongoing expense reduction
efforts will drive improved operation results, the potential for
future funding at premium valuations, the Company’s expectations
regarding its momentum, potential, prospects and outlook, its
expectations regarding additional growth in the second half of
2022, the ability to capitalize on new revenue opportunities,
improving the efficiency of the business and to drive significant
additional revenue growth and deliver improved financial
performance in the months ahead. 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@safetgroup.com
Michal EfratyInvestor Relations,
Israel+972-(0)52-3044404michal@efraty.com
Consolidated Statements of Financial Position(In
thousands of USD)
|
June 30,
|
|
December 31,
|
|
2022
|
|
2021
|
|
2021
|
|
(Unaudited)
|
|
(Audited)
|
Assets
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
4,040
|
|
|
13,122
|
|
|
3,828
|
|
Short-term restricted deposit
|
560
|
|
|
-
|
|
|
-
|
|
Short-term investments
|
-
|
|
|
6,182
|
|
|
5,887
|
|
Trade receivables
|
1,857
|
|
|
615
|
|
|
1,496
|
|
Other receivables
|
450
|
|
|
544
|
|
|
713
|
|
Total current assets
|
6,907
|
|
|
20,463
|
|
|
11,924
|
|
|
|
|
|
|
|
Non-current assets:
|
|
|
|
|
|
Long-term restricted deposits
|
150
|
|
|
89
|
|
|
84
|
|
Long-term deposit
|
65
|
|
|
57
|
|
|
65
|
|
Property and equipment, net
|
127
|
|
|
124
|
|
|
119
|
|
Right of use assets
|
333
|
|
|
605
|
|
|
451
|
|
Goodwill
|
10,429
|
|
|
5,387
|
|
|
10,998
|
|
Intangible assets, net
|
6,176
|
|
|
3,845
|
|
|
7,013
|
|
Total non-current assets
|
17,280
|
|
|
10,107
|
|
|
18,730
|
|
Total assets
|
24,187
|
|
|
30,570
|
|
|
30,654
|
|
|
|
|
|
|
|
Liabilities and equity
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Trade payables
|
2,638
|
|
|
280
|
|
|
1,219
|
|
Other payables
|
2,004
|
|
|
1,668
|
|
|
2,839
|
|
Short-term bank loans
|
400
|
|
|
-
|
|
|
-
|
|
Contract liabilities
|
533
|
|
|
403
|
|
|
514
|
|
Contingent consideration
|
-
|
|
|
250
|
|
|
-
|
|
Derivative financial instruments
|
216
|
|
|
1,553
|
|
|
488
|
|
Short-term lease liabilities
|
288
|
|
|
367
|
|
|
365
|
|
Total current liabilities
|
6,079
|
|
|
4,521
|
|
|
5,425
|
|
|
|
|
|
|
|
Non-current liabilities:
|
|
|
|
|
|
Long-term contract liabilities
|
8
|
|
|
38
|
|
|
18
|
|
Long-term lease liabilities
|
88
|
|
|
347
|
|
|
197
|
|
Deferred tax liabilities
|
490
|
|
|
673
|
|
|
645
|
|
Liability in respect of the Israeli Innovation Authority
|
206
|
|
|
158
|
|
|
182
|
|
Total non-current liabilities
|
792
|
|
|
1,216
|
|
|
1,042
|
|
Total liabilities
|
6,871
|
|
|
5,737
|
|
|
6,467
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
Ordinary shares
|
-
|
|
|
-
|
|
|
-
|
|
Share premium
|
92,520
|
|
|
85,159
|
|
|
91,112
|
|
Other equity reserves
|
16,338
|
|
|
15,089
|
|
|
16,732
|
|
Accumulated deficit
|
(91,542
|
)
|
|
(75,415
|
)
|
|
(83,657
|
)
|
Total equity
|
17,316
|
|
|
24,833
|
|
|
24,187
|
|
Total liabilities and equity
|
24,187
|
|
|
30,570
|
|
|
30,654
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Profit or Loss
(In thousands of USD, except per share
amounts)
|
For the Six
MonthsEndedJune
30,
|
|
For the Three
MonthsEndedJune
30,
|
|
For the Year Ended December 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2021
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
8,798
|
|
|
3,131
|
|
|
4,777
|
|
|
1,784
|
|
|
10,281
|
|
Cost of revenues
|
4,065
|
|
|
1,883
|
|
|
2,161
|
|
|
979
|
|
|
5,145
|
|
Gross profit
|
4,733
|
|
|
1,248
|
|
|
2,616
|
|
|
805
|
|
|
5,136
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses
|
2,283
|
|
|
1,483
|
|
|
889
|
|
|
781
|
|
|
4,771
|
|
Sales and marketing expenses
|
5,658
|
|
|
2,430
|
|
|
2,624
|
|
|
1,308
|
|
|
8,348
|
|
General and administrative expenses
|
4,249
|
|
|
2,588
|
|
|
1,998
|
|
|
1,488
|
|
|
7,013
|
|
Impairment of goodwill
|
569
|
|
|
-
|
|
|
569
|
|
|
-
|
|
|
700
|
|
Contingent consideration measurement
|
-
|
|
|
(434
|
)
|
|
-
|
|
|
(434
|
)
|
|
(684
|
)
|
Operating expenses
|
12,759
|
|
|
6,067
|
|
|
6,080
|
|
|
3,143
|
|
|
20,148
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
(8,026
|
)
|
|
(4,819
|
)
|
|
(3,464
|
)
|
|
(2,338
|
)
|
|
(15,012
|
)
|
|
|
|
|
|
|
|
|
|
|
Finance income (expense), net
|
(10
|
) |
|
(140
|
)
|
|
234
|
|
|
(70
|
)
|
|
942
|
|
Tax benefit
|
151
|
|
|
76
|
|
|
72
|
|
|
38
|
|
|
945
|
|
Net loss
|
(7,885
|
)
|
|
(4,883
|
)
|
|
(3,158
|
)
|
|
(2,370
|
)
|
|
(13,125
|
)
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share*
|
(0.26
|
)
|
|
*(0.20
|
)
|
|
(0.10
|
)
|
|
*(0.09
|
)
|
|
(0.48
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share*
|
(0.26
|
)
|
|
*(0.20
|
)
|
|
(0.10
|
)
|
|
*(0.09
|
)
|
|
(0.48
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Adjusted retrospectively to reflect a 1:1 reverse share split
of our ordinary shares, effective as of October 15, 2021
Safe T (NASDAQ:SFET)
Historical Stock Chart
From Mar 2024 to Apr 2024
Safe T (NASDAQ:SFET)
Historical Stock Chart
From Apr 2023 to Apr 2024