TIDMSIV
RNS Number : 7312Q
Sivota PLC
30 June 2022
Sivota Plc
Annual Report and Financial Statements
For the period starting 22 September 2020 to 31 December
2021
Sivota Plc
Table of Contents
Company Information 1
Chief Executive Officer report 2
Strategic report 4
Director's report 9
Directors' remuneration report 19
Report of the Independent Auditors 22
Statement of Comprehensive Income 27
Statement of Financial Position 28
Statement of Changes in Equity 29
Statement of Cash Flows 30
Notes to the Financial Statements 31
Sivota Plc
Company Information
For the period starting 22 September 2020 to 31 December
2021
Directors Registered Office
Tim Weller - Non-Executive Chairman New London House,
Ziv Ben-Barouch - CEO 172 Drury Lane
Neil Jones - Non-Executive Director, London, England
Secretary WCB 5QR
Auditors Register
Crowe UK LLP Computershare Investor
55 Ludgate Hill Services PLC
London, England The Pavilions
EC4M 7JW Bridgwater Rd
Bristol
BS13 8AE
Financial Adviser & Broker
Canaccord Genuity Limited
88 Wood Street
London, England
EC2V 7QR
1
Sivota Plc
Chief Executive Officer's report for the period starting 22
September 2020 to 31 December 2021
Dear Shareholders,
I'm delighted to be introducing the first annual report of
Sivota Plc for the period from its establishment day, 22 September
2020, to 31 December 2021.
Sivota was established in September 2020 in order to acquire
controlling stakes and then act as a holding company for various
target businesses operating or founded in Israel, predominantly
across the technology sector.
Sivota has a strong local presence and an extensive business
network throughout Israel. The Company believes that these
networks, relationships, and partnerships are all essential for
identifying future investments and developing a robust investment
pipeline.
Management have worked hard to execute our strategy, with the
progress and results achieved:
-- In July 2021, the Company successfully completed its listing
on the Main Market (Standard Segment) of the London Stock Exchange
by issuing 1,035,000 ordinary shares of GBP0.01 each at a
subscription price of GBP1 per share, which raised GBP1,035,000.
Substantially all of the cash raised is used for working capital,
to be primarily used to undertake financial, commercial and legal
due diligence on potential transactions.
-- On 12 May 2022, the Company completed the acquisition of a
majority stake in Apester Ltd, a digital marketing engagement
platform (the "Acquisition"). Under the terms of the Acquisition
agreement, the Company received Preferred Seed Shares in the
capital of Apester for an aggregate price of US $12.0 million
(GBP9.8 million), which provided the Company with 57.5 per cent. of
Apester's voting rights.
-- The cash consideration for the Acquisition was funded through
a GBP11.5 million (gross) placing and direct subscription of
11,500,000 new ordinary shares of Sivota of one pence each. The
Company is currently suspended from trading pending the publication
of a prospectus relating to the Acquisition, which is expected to
be published in [July] 2022.
Apester is Sivota's first acquisition and is closely aligned
with Sivota's strategic principles. Sivota is keen to leverage
Apester's existing assets whilst applying forward thinking
leadership and insight in order to increase value for Sivota's
shareholders over time.
2
Sivota Plc
Chief Executive Officer's report for the period starting 22
September 2020
to 31 December 2021 (continued)
Sivota's strategy is to continue to seek investment
opportunities predominantly in the Israeli technology sector while
supporting and advising Apester and the execution of its growth
strategy, is a key focus.
I look forward to reporting to you on our progress over the
coming year.
Ziv Ben-Barouch,
Chief Executive Officer
29 June 2022
3
Sivota Plc
Strategic report for the period starting 22 September 2020 to 31
December 2021
The Directors present the Strategic Report of Sivota ("the
Company") for the period starting 22 September 2020 to 31 December
2021.
Business model, review of the business and future
developments
Sivota was established in order to acquire controlling stakes
and then act as a holding company for various target businesses
operating or founded in Israel, predominantly in the technology
sector. Whilst the acquisition of a controlling stake is Sivota's
expected strategy, it may elect to acquire full control or less
than a controlling holding. In addition, it may elect to do so in
connection with a target which is not operating or founded in
Israel.
On 12 May 2022, Sivota has completed its first acquisition,
being a majority stake (57.5%) in Apester Ltd, a digital marketing
engagement platform.
Sivota's strategy is to continue to seek investment
opportunities in companies which have most, if not all, of the
following attributes:
-- later stage of growth;
-- organic and/or external growth potential;
-- unique technology;
-- Israeli-related/founded companies;
-- international exposure/potential; and
-- existing management with ability to contribute to growth and success.
Sivota has developed a clear methodology including a strategic,
operational and financial diagnostic plan to apply to companies
following their acquisition, after which, Sivota will:
-- focus initially on the growth and then expansion of the target company;
-- bring in specialists who combine deep sector knowledge with
foresight that comes from experience;
-- bring in the support of investors and leadership;
-- enhance management on a temporary basis with Sivota's
industry partners and professionals; and
-- involve management and employees.
4
Sivota Plc
Strategic report for the period starting 22 September 2020 to 31
December 2021 (continued)
Investment in Apester
On 12 May 2022, the Company completed the acquisition of a
majority stake in Apester Ltd, a digital marketing engagement
platform, for a consideration of US$12.0 million (GBP9.8
million).
Apester is a digital experience end-to-end software platform
that enables brands to engage and understand customers across all
digital media channels, in turn increasing lead generation, brand
uplift, conversion and sales for its customers.
Apester is a user friendly, cost effective and scalable
technology. Code free, it allows untrained users to create
interactive experiences in a matter of minutes and then to
distribute it across multiple digital media channels, and later
gather data and analyse it to improve performance. The platform
provides tools to create a range of personalised interactive
experiences and applications, including customer surveys, mobile
landing pages, onboarding forms, interactive videos, polls,
quizzes, custom applications and web stories.
Apester is Sivota's first acquisition and is closely aligned
with Sivota's strategic principles.
The Company's business is directed by the Board and is managed
on a day-to-day basis by the CEO, Ziv Ben-Barouch. The Board
oversees compliance, sets objectives and policies of Sivota through
performance reporting, budget updates and periodic operational
reviews.
Key performance indicators (KPIs)
At this stage in its development, the Company is focusing on
financing and operating KPI's.
Financial KPIs
Funding
In July 2021, the Company raised GBP1,035,000 (GBP885,075 net of
issuance costs) through a subscription and completed admission to
the London Stock Exchange's Main Market ("LSE").
5
Sivota Plc
Strategic report for the period starting 22 September 2020 to 31
December 2021 (continued)
Revenues and Expenditure
The Company generated no revenue during the year. However, it is
expected that the Apester acquisition will ultimately generate
revenue for the Company.
The Company has made a loss before tax of GBP365,285 for the
period from its incorporation in September 2020 to 31 December
2021, reflecting the cost of being listed, expenses relating to the
Apester Acquisition and administrative expenses.
Liquidity, cash and cash equivalents
At 31 December 2021 Sivota had a cash balance of GBP749,138 and
it had no debt as at 31 December 2021.
Operating KPI's
During 2021 the Company was focusing on the Apester Acquisition,
which was successfully completed in May 2022.
Employees
There were no employees during the year apart from the
directors. The Chief Executive Officer is the sole key manager. All
current members of the Board and the key manager are males. For
more information about the Company's key management personnel see
Note 13.
Social, Community and Human Rights Issues
Sivota is still at an early stage of development and further
consideration will need to be given to social, community and human
rights issues affecting its business.
Principal risks and uncertainties
Difficulties in acquiring suitable targets
The Company's strategy and future success is dependent to a
significant extent on its ability to identify sufficient suitable
acquisition opportunities and to execute these transactions on
terms consistent with the Company's strategy. If the Company cannot
identify suitable acquisitions, or successfully execute any such
transactions, this will have an adverse effect on its financial and
operational performance.
6
Sivota Plc
Strategic report for the period starting 22 September 2020 to 31
December 2021 (continued)
On-going COVID-19 outbreak
COVID-19 may present a wide range of potential issues or
complications for the Company, most of which are unascertainable as
at the date of this document, in particular as the impact of
COVID-19 in different jurisdictions and commercial sectors
continues to develop and/or may not be known for some time.
Section 172(1) Statement - Promotion of the Company for the
benefit of the members as a whole
The Board believes they have acted in a way most likely to
promote the success of the Company for the benefit of its members
as a whole, as required by section 172.
This section serves as the Company's section 172 statement and
should be read in conjunction with the Strategic report and the
Directors' report. Section 172 of the Companies Act 2006 requires
Directors to act in a way that they consider, in good faith, would
most likely promote the success of the Company for the benefit of
its members as a whole, taking into account the factors listed in
s172 in regard to:
(a) the likely consequences of any decision in the long
term;
(b) the interests of the Company's employees;
(c) the need to foster the Company's business relationships with
suppliers, customers and others;
(d) the impact of the Company's operations on the community and
the environment;
(e) the desirability of the Company's maintaining a reputation
for high standards of business conduct; and
(f) the need to act fairly between members of the Company.
However, the company is currently cash shell. Hence, the only
key stakeholder identified is the investor.
7
Sivota Plc
Strategic report for the period starting 22 September 2020 to 31
December 2021 (continued)
Stakeholder Their interest Engagement method
* Business sustainability * Annual and Interim reports
Investors
* High standard of governance * Regular operations and trading updates
* Comprehensive review of financial performance of the * RNS Announcements
business
* Investor relations section on website
* Ethical behaviour
* AGM
* Awareness of long term strategy and direction
* Shareholder circulars
* Continual approval of market perception of the
business
* Shareholder liaison through board
* Delivering long term value
* Board encourages open dialogue with the Company's
investors
* Social media
----------------------------------------------------------------- --------------------------------------------------------------
Tim Weller
Non-Executive Chairman
29 June 2022
8
Sivota Plc
Directors' report for the period from 22 September 2020 to 31
December 2021
The Directors submit their report with the audited Financial
Statements for the period from 22 September to 31 December
2021.
General information
Sivota ("the Company"), was incorporated as a public Limited
Company under the laws of England and Wales with registered number
12897590 on 22 September 2020.
On July 22, 2021 the Company completed a placing and was listed
on the Main Market (Standard Segment) of the LSE.
Sivota was established in order to acquire controlling stakes
and then act as a holding company for various target businesses
operating or founded in Israel, predominantly in the technology
sector.
Results for the year and distributions
The Company results are set out in the Statement of
Comprehensive Income.
The total comprehensive loss for the period was GBP365,285. The
Company received no income, and the full amount of the loss is due
to expenses incurred in capital raising (to the extent not deducted
from share premium), expenses relating to the Apester's Acquisition
and administrative expenses.
The Board continues to prudently manage its cash resources and
has minimised ongoing operating costs.
The Company paid no distribution or dividends during the
period.
9
Sivota Plc
Directors' report for the period from 22 September 2020 to 31
December 2021 (continued)
The Board of Directors
Active directors:
The Directors who held office during the financial year and to
the reporting date, together with details of their interest in the
shares of the Company at the reporting date were:
Number of Percentage
Ordinary Shares of Ordinary
shares
------------------------------------ ------------
Tim Weller - Non-Executive
Chairman 100,000 9.22%
Ziv Ben-Barouch - CEO 325,000 29.95%
Neil Jones - Non-Executive
Director 17,100 1.58%
Tim Weller - Non-Executive Chairman - appointed on 29 June
2021
Tim Weller is a successful entrepreneur. He is the founder of
Incisive Media and was Chairman until its successful sale to
Eagletree Private Equity in March 2022. He successfully floated
Incisive on the Main Market of the London Stock Exchange in 2000
and in 2006 he led the GBP275m management buyout which took the
company private again. Tim has more than 15 years' experience
chairing and investing in public and private equity backed
businesses. He was Non-Executive director and Chairman of RDF Media
from 2005-2010 and was also Non-Executive Chairman of Polestar from
2009-2011 until its sale to Sun European Partners LLP. Tim was
Independent Non-Executive Director and Chairman of Tremor
International between 2014 and August 2020. He was Chairman of TI
Media, one of the largest consumer magazine and digital publishers
in the UK from April 2019 to May 2020 following its sale to Future
Plc. He is also Chairman of Trustpilot, a leading provider of
trusted company reviews and led its $1.4m IPO in March 2021. Tim
was Chairman of Superawesome, a leading technology company that
powers the global kids' digital media ecosystem until its sale to
Epic Games in September 2020. Mr Weller was a member of the Shadow
Cabinet New Enterprise Council, which advised the then Shadow
Chancellor of the Exchequer, George Osborne, on business and
enterprise prior to the 2010 General Election, and was voted Ernst
& Young Entrepreneur of the Year - London in 2001. In 2005, he
received the publishing industry's top honour - the Marcus Morris
award.
10
Sivota Plc
Directors' report for the period from 22 September 2020 to 31
December 2021 (continued)
Ziv Ben-Barouch - CEO - appointed on 29 June 2021
Ziv Ben-Barouch is an experienced operator and leader with
decades of experience in finance and investments within technology
companies. He has a proven track record of leading corporate
turnarounds, M&A, IPOs, and strategically guiding companies as
they build their business. Ziv is the co-founder and managing
partner of Pereg Ventures, a US-Israeli Venture Capital Firm
focused on B2B data companies which is backed by investments from
Nielsen, a world leader in marketing intelligence, the Tata Group,
and other leading financial institutions. At Pereg, Ziv has led and
participated in the direct investment of 13 early stage technology
companies that have raised in combined excess of $250M in follow-on
investments from leading investors and led on the disposal of two
portfolio companies to NYSE listed counterparties. Prior to
founding Pereg, he was Senior Principal and CFO at Viola, a
technology-focused investment group with over $3 billion in assets
under management. Before joining Viola, Ziv was the CFO of SpaceNet
Inc, a specialty telecommunications company providing managed
network solutions by satellite and terrestrial technologies for
business, government and residential users in North America. He led
SpaceNet's turnaround and participated in SpaceNet's parent
company's $70m NASDAQ listing. Ziv has key relationships with
Israeli and international investment firms in the technology space
which he will be able to leverage to assist Sivota. Ziv is an
Israeli Certified Public Accountant.
Neil Jones - Non-Executive Director - appointed on 28 June
2021
Neil has held Board positions in UK multi-national public &
private companies for over 20 years. He has a deep understanding of
the UK Corporate Governance code and Board procedures from these
and other NED positions. He is currently Group Corporate
Development Director at Inizio an international healthcare and
communications group formed by the combination of Huntsworth PLC
and UDG PLC both of which were taken private by Private Equity
Group Clayton, Dubilier & Rice in 2020 & 2021, having
previously held the position of COO & CFO at Huntsworth since
February 2016. Prior to Huntsworth he was CFO of ITE Group plc (Now
Hyve plc), a FTSE listed international organiser of exhibitions and
conferences and before that he was Group Finance Director of Tarsus
Group plc, another international trade exhibition organiser. He is
also the Senior Independent Director of Tremor International, a
dual listed (Nasdaq & AIM) Ad-Tech company. Neil is a member of
the ICAEW, qualifying with PWC in 1990.
11
Sivota Plc
Directors' report for the period from 22 September 2020 to 31
December 2021 (continued)
Directors who resigned during the reporting period:
Tal Hagai - Non-Executive Director - appointed on 2 November
2020, resigned on 29 June 2021
Itshayek Irit Segal - Non-Executive Director - appointed on 22
September 2020, resigned on 29 June 2021
Speier Ariel - Non-Executive Director - appointed on 24 December
2020, resigned on 29 June 2021
Policy for new appointments
Without prejudice to the power of the Company to appoint any
person to be a Director pursuant to the Articles the Board shall
have power at any time to appoint any person who is willing to act
as a Director, either to fill a vacancy or as an addition to the
existing Board, but the total number of Directors shall not exceed
any maximum number fixed in accordance with the Articles.
Substantial shareholders
The issued share capital of the Company consists of 1,085,000
Ordinary Shares and 4,950,000 Deferred Shares. The Deferred Shares
carry no voting rights, no rights to dividends and on a return of
capital are only entitled to a return once a sum of GBP1,000,000
has been paid on each
12
Sivota Plc
Directors' report for the period from 22 September 2020 to 31
December 2021 (continued)
Ordinary Share. No single person directly or indirectly,
individually or collectively, exercises control over the
Company.
The Directors are aware of the following persons, who had an
interest in 3% or more of the issued ordinary share capital of the
Company as at 31 May 2022:
Number of Percentage of
Shareholder Ordinary Shares ordinary shares
Prytek Investment Holdings
Pte Ltd 1,787,949 14.21%
---------------- ----------------
Ophir Yahalom 1,668,883 13.26%
---------------- ----------------
Ronen Kirsh 1,418,728 11.27%
---------------- ----------------
Schroders Investment Management
Ltd 1,247,750 9.91%
---------------- ----------------
Trico Fuchs Ltd 1,213,392 9.64%
---------------- ----------------
Ehud Levy 1,023,167 8.13%
---------------- ----------------
Hagai Tal 616,702 4.90%
---------------- ----------------
Herald Investment Management 500,000 3.97%
---------------- ----------------
Tim Weller 400,000 3.18%
---------------- ----------------
Ziv Ben-Barouch 526,821 4.19%
---------------- ----------------
Financial risk management
The Company's principal financial instruments comprise cash
balances and accounts payable arising in the normal course of its
operations.
13
Sivota Plc
Directors' report for the period from 22 September 2020 to 31
December 2021 (continued)
The Company's objectives when managing capital are to safeguard
the Company's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital. In order to maintain or adjust the capital
structure, the Company may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares, or
sell assets to reduce debt.
As at 31 December 2021 the Company's exposure to financial risks
was immaterial. For more information see Note 10.
Responsibility statement
The Directors are responsible for preparing the Directors'
Report and the Financial Statements in accordance with applicable
law and regulations. In addition, the Directors have elected to
prepare the Financial Statements in accordance with International
Financial Reporting Standards ("IFRSs") in conformity with the
requirements of the UK Companies Act 2006.
The Financial Statements are required to give a true and fair
view of the state of affairs of the Company and of the profit or
loss of the Company for that period.
In preparing these Financial Statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- present information and make judgements that are reasonable,
prudent and provide relevant, comparable and understandable
information.
-- provide additional disclosures when compliance with the
specific requirements in IFRS is insufficient to enable users to
understand the impact of particulars transactions, other events and
conditions on the entity's financial position and financial
performance; and
-- make an assessment of the Company's ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company to enable them to ensure that the
financial statements comply with the requirements of the Companies
Act 2006. They have general responsibility for taking such steps as
are reasonably open to them to safeguard the assets of the Company
and to prevent and detect fraud and other irregularities.
14
Sivota Plc
Directors' report for the period from 22 September 2020 to 31
December 2021 (continued)
The Directors are responsible for the maintenance and integrity
of the corporate and Financial Statements. Legislation governing
the preparation and dissemination of Financial Statements may
differ from one jurisdiction to another.
We confirm that to the best of our knowledge:
-- the Financial Statements, prepared in accordance with
International Accounting Standards in conformity with the
requirements of the UK Companies Act 2006, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company for the period;
-- the Director's report includes a fair review of the
development and performance of the business and the position of the
Company, together with a description of the principal
risks and uncertainties that they face.
-- the annual report and financial statements, taken as a whole,
are fair, balanced and understandable and provide the information
necessary for shareholders to assess the company's performance,
business model and strategy.
The Directors are responsible for maintaining the Company's
systems of controls and risk management in order to safeguard its
assets.
Corporate governance
The Board supports high standards of corporate governance. The
Company complies with the Quoted Companies Alliance Corporate
Governance Code (the "QCA Code") and will continue to do so from
Readmission.
The QCA Code applies the key elements of good corporate
governance in a manner that is consistent with the different needs
of growing companies and therefore is suitable to the Company's
current status.
The company is still at an early stage of development and in the
process of developing its systems, strategy and standards to permit
the Company to comply with the QCA Code.
The Board intends to meet regularly to review, formulate and
approve the Company's strategy, budgets, and corporate actions and
oversee the Company's progress towards its goals.
15
Sivota Plc
Directors' report for the period from 22 September 2020 to 31
December 2021 (continued)
The Board established an Audit Committee and a Remuneration and
Nomination Committee with
effect from the Company's admission to trading on the Main
Market. In addition, the Board
established an Acquisitions Committee which will consider
potential targets where a Director has
a potential conflict and, following completion of investments,
will establish a risk committee
which will monitor the financial and commercial performance of
investments.
Audit Committee
The Audit Committee consists of Neil Jones and Tim Weller, each
of whom have recent and relevant financial experience. The Audit
Committee will normally meet at least twice a year at the
appropriate times in the reporting and audit cycle. The committee
has responsibility for, amongst other things, the monitoring of the
financial integrity of the financial statements of the Group and
the involvement of the Group's auditors in that process. It will
focus in particular on compliance with accounting policies and
ensuring that an effective system of internal financial control is
maintained. The ultimate responsibility for reviewing and approving
the annual report and accounts and the half-yearly reports, remains
with the Board.
The terms of reference of the Audit Committee cover such issues
as membership and the frequency of meetings, as mentioned above,
together with requirements of any quorum for and the right to
attend meetings. The duties of the Audit Committee covered in the
terms of reference are: financial reporting, internal controls,
internal audit, external audit and reserving. The terms of
reference also set out the authority of the committee to carry out
its duties.
During the reporting period the Audit Committee held a meeting
on 27 September 2021 that was chaired by Neil Weller.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee consists of Tim Weller
and Neil Jones. The Remuneration and Nomination Committee will meet
at least once a year. It will have responsibility for the
determination of specific remuneration packages for executive
directors and any senior executives or managers of the Group,
including pension rights and any compensation payments, and
recommending and monitoring the level and structure of remuneration
for senior management, and the implementation of share option, or
other performance-related, schemes.
16
Sivota Plc
Directors' report for the period from 22 September 2020 to 31
December 2021 (continued)
The Remuneration and Nomination Committee will also be
responsible for considering and making recommendations to the Board
in respect of appointments to the Board, the board committees and
the chairmanship of the board committees. It is also responsible
for keeping the structure, size and composition of the Board under
regular review, and for making recommendations to the Board with
regard to any changes necessary. The Remuneration and Nomination
Committee also considers succession planning, taking into account
the skills and expertise that will be needed on the Board in the
future.
The terms of reference of the Remuneration and Nomination
Committee cover such issues as membership and frequency of
meetings, as mentioned above, together with the requirements for a
quorum and the right to attend meetings. The duties of the
Remuneration and Nomination Committee covered in the terms of
reference relate to the following: determining and monitoring
policy on and setting level of remuneration, early termination,
performance-related pay, pension arrangements, authorising claims
for expenses from the chief executive officer and chairman,
reporting and disclosure, share schemes and appointment of
remuneration consultants. The terms of reference also set out the
reporting responsibilities and the authority of the committee to
carry out its duties.
No committee meetings were held during the reporting period.
Acquisitions Committee
The Acquisitions Committee consists of all Independent
Directors, in the event of a potential acquisition target being
introduced to the Company by a Director where that Director has an
interest or other conflict of interest. In such circumstances, the
Acquisitions Committee will have a full remit to negotiate the
terms of such transaction (including engaging and liaising with
professional advisers) and the conflicted or interested Director
will not be invited to join or attend any meetings of the
committee.
No committee meetings were held during the reporting period.
Role of the Board
The Board sets the Company's strategy, ensuring that the
necessary resources are in place to achieve the agreed priorities.
It is accountable to shareholders for the creation and delivery of
long-term shareholder value. To achieve this, the Board directs and
monitors the Company's affairs within a framework of control which
enables risk to be reviewed and managed effectively.
17
Sivota Plc
Directors' report for the period from 22 September 2020 to 31
December 2021 (continued)
Board meetings
The core activities of the Board are carried out in scheduled
meetings and regular reviews of the business are conducted.
Additional meetings and conference calls are arranged to consider
matters which would require discussions outside of scheduled
meetings. The Directors maintain frequent contact with each other
to discuss issues of concern and keep them fully briefed to the
Company's operations. All Directors attended all Board meetings
held.
Employee and greenhouse gas (GHG) emissions
The Company currently has no trade or employees other than the
Directors. Therefore, the Company has minimal carbon or greenhouse
gas emissions as it is not practical to obtain emissions data at
this stage. It does not have responsibility for any emissions
producing sources under the Companies Act 2006.
Going concern
After making enquiries, the Directors have a reasonable
expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future. Further details
are given in Note 2 to the financial statements. For this reason,
the Directors continue to adopt the going concern basis in
preparing the financial statements.
Subsequent events
Please see Note 15 for details of the Company's subsequent
events.
Auditors
So far as the directors are aware, there is no relevant audit
information of which the Company's auditors are unaware, and they
have taken all steps that they ought to have taken as directors in
order to make themselves aware of any relevant audit information
and to establish that the Company's auditors are aware of that
information.
The auditors, Crowe U.K LLP, have expressed their willingness to
continue in office and a resolution to reappoint them will be
proposed at the Annual General Meeting.
By Order of the Board
Tim Weller, Chairman 29 June 2022
18
Sivota Plc
Directors' remuneration report for the period from 22 September
2020 to 31 December 2021
The Remuneration and Nomination Committee will have
responsibility for the determination of specific remuneration
packages for executive directors.
The current directors' remuneration comprises a basic fee or
salary and at present there is no long-term incentive plan or share
option package for the directors.
Neil Jones
According to the appointment letter signed on in July 2021, Neil
Jones agreed not to be paid any fees until the Company had
undertaken a fundraising of at least GBP8,000,000. Following
completion of a fundraising by the Company in May 2022 he will be
paid GBP22,500 per annum to act as a non-executive director of the
Company.
According to the appointment letter, Neil will be eligible for
participation in the Company's share option plan when adopted.
In addition, Neil agreed to subscribe at 1.71% of the Company's
issued share capital at the admission in July 2021. These ordinary
shares will be subject to lock-in pursuant to which Neil will not
be able to sell or dispose of such ordinary shares for a period of
4 years.
Neil's appointment will be for an initial period of 12 months
from the admission on and will continue unless terminated by either
party giving to the other not less than 3 months' notice or without
notice in cases the Company can terminate the appointment
immediately.
Tim Weller
According to the appointment letter signed in July 2021, Tim
Weller agreed not to be paid any fees until the Company had
undertaken a fundraising of at least GBP8,000,000. Following
completion of a fundraising by the Company in May 2022 he will be
paid GBP70,000 per annum to act as a non-executive director of the
Company.
If the Company's market capitalisation exceeds GBP100,000,000
the Board will consider an increase in the fee.
According to the appointment letter, Tim will be eligible for
participation in the Company's share option plan when adopted.
In addition, Tim agreed to subscribe GBP100,000 for the
Company's issued share capital at the admission in July 2021.
19
Sivota Plc
Directors' remuneration report for the period from 22 September
2020 to 31 December 2021 (continued)
Tim's appointment will continue unless terminated by either
party giving to the other not less than 6 months' notice or without
notice in cases the Company can terminate the appointment
immediately.
Ziv Ben-Barouch
According the employment agreement signed on in July 2021 Ziv
Ben-Barouch is paid a salary of GBP18,000 per annum to act as chief
executive officer. Following completion of a fundraising by the
Company in May 2022 he will be paid a salary of GBP70,000 per
annum.
The Company may, in its absolute discretion pay a bonus of such
amount, at such intervals and subject to such conditions as the
Company may in its absolute discretion determine taking into
account specific performance targets.
Ziv's appointment commenced on the admission in July 2021 and
shall continue until terminated by either party giving to the other
not less than 6 months' written notice or without notice in cases
the Company can terminate the appointment immediately.
Remuneration paid to the Directors' during the reporting
period:
Fee Salary Other remuneration Total
(*)
Neil Jones - - - -
--- -------- ------------------ --------
Tim Weller - - - -
--- -------- ------------------ --------
Ziv Ben-Barouch - GBP9,400 - GBP9,400
--- -------- ------------------ --------
(*) other remuneration such as bonuses, incentives or
share-based payments.
20
Sivota Plc
Directors' remuneration report for the period from 22 September
2020 to 31 December 2021 (continued)
Directors interests in shares as at 31 May 2022:
Number of Percentage
ordinary shares of ordinary
shares
Neil Jones 17,100 0.14%
---------------- ------------
Tim Weller 400,000 3.18%
---------------- ------------
Ziv Ben-Barouch 526,821 4.19%
---------------- ------------
Hagai Tal - resigned on 29 June
2021 566,802 4.90%
---------------- ------------
Irit Itshayek - resigned on
29 June 2021 10,000 0.08%
---------------- ------------
By Order of the Board
Tim Weller
Chairman
29 June 2022
21
Independent auditor's report to the members of Sivota Plc
Opinion
We have audited the financial statements of Sivota plc (the
"Company") for the period ended 31 December 2021 which comprise the
statement of comprehensive income, the statement of financial
position, statement of cash flows, statement of changes in equity
and notes to the financial statements, including significant
accounting policies. The financial reporting framework that has
been applied in preparation of the company financial statements is
applicable law and UK-adopted international accounting
standards.
In our opinion, the financial statements:
-- give a true and fair view of the state of the company's
affairs as at 31 December 2021 and of its loss for the period then
ended;
-- have been properly prepared in accordance with UK-adopted
international accounting standards;
-- have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the Company
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors' assessment of the entity's ability to
continue to adopt the going concern basis of accounting included
obtaining management's assessment of going concern, including a
cash flow forecast that extended for at least the next 12 months
which included the cash flows of the newly acquired Apester
business. We produced scenarios to stress test that forecast to
consider whether the Group has sufficient cash resources to
continue for at least the next 12 months from the dated of approval
of these financial statements.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Company's ability to continue as a going concern for a period of at
least twelve months from when the financial statements are
authorised for issue.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of
materiality. An item is considered material if it could reasonably
be expected to change the economic decisions of a user of the
financial statements.
22
We used the concept of materiality to both focus our testing and
to evaluate the impact of misstatements identified.
Based on our professional judgement, we determined overall
materiality for the financial statements as a whole to be
GBP18,500, based on 3% of the net assets.
We use a different level of materiality ('performance
materiality') to determine the extent of our testing for the audit
of the financial statements. Performance materiality is set based
on the audit materiality as adjusted for the judgements made as to
the entity risk and our evaluation of the specific risk of each
audit area having regard to the internal control environment. We
determined performance materiality to be GBP12,950.
Where considered appropriate performance materiality may be
reduced to a lower level, such as, for related party transactions
and directors' remuneration.
We agreed with the Audit Committee to report to it all
identified errors in excess of GBP925. Errors below that threshold
would also be reported to it if, in our opinion as auditor,
disclosure was required on qualitative grounds.
Overview of the scope of our audit
Sivota plc was a stand alone company as at the year ended 31
December 2021 and all audit work was conducted by the audit team
remotely.
Key Audit Matters
Key audit matter How the scope of our
audit addressed the key
audit matter
================================================== ================================
Allocation of share issue costs We have assessed the nature
Sivota was admitted to the Main Market of of share issue costs based
London Stock Exchange during the period. on documentation and reviewed
To facilitate this process, various costs management's allocation
were incurred both related to the stock market of these costs between
listing and issuance of new shares. There the statement of comprehensive
is a risk that these costs have not been income and equity.
allocated between statement of comprehensive Key observations
income and equity on a rational and consistent We are satisfied that
basis. the allocation between
Management allocated these costs based on statement of comprehensive
their nature. Costs that relate to the stock income and equity is on
market listing have been recorded as an expense a reasonable basis.
in the statement of comprehensive income.
Incremental costs that are directly attributable
to issuing new shares have been deducted
from equity. Common costs have been apportioned
between other comprehensive income and equity
as discussed in Note 5.
================================================== ================================
23
Our audit procedures in relation to these matters were designed
in the context of our audit opinion as a whole. They were not
designed to enable us to express an opinion on these matters
individually and we express no such opinion.
Other information
The other information comprises the information included in the
annual report other than the financial statements and our auditor's
report thereon. The directors are responsible for the other
information contained within the annual report.
Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and,
in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion the part of the directors' remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion based on the work undertaken in the course of our
audit
-- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the directors' report and the strategic report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the financial statements and the part of the directors'
remuneration report to be audited are not in agreement with the
accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit
Responsibilities of the directors for the financial
statements
As explained more fully in the directors' responsibilities
statement set out on page 14, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
24
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below, however the primary responsibility for the
prevention and detection of fraud lies with management and those
charged with the governance of the company. We obtained an
understanding of the legal and regulatory frameworks that are
applicable to the company and the procedures in place for ensuring
compliance. The most significant areas identified were the
Companies Act 2006.
-- As part of our audit planning process we assessed the
different areas of the financial statements, including disclosures,
for the risk of material misstatement. This included considering
the risk of fraud where direct enquiries were made of management
and those charged with governance concerning both whether they had
any knowledge of actual or suspected fraud and their assessment of
the susceptibility of fraud.
-- We have read board and committee minutes of meetings, as well
as regulatory announcements, as part of our risk assessment process
to identify events or conditions that could indicate an incentive
or pressure to commit fraud or provide an opportunity to commit
fraud. As part of this process, we have considered whether
remuneration incentive schemes or performance targets exist for the
Directors.
-- In addition to the risk of management override of controls,
we have considered the fraud risk related to any unusual
transactions or unexpected relationships, including assessing the
risk of undisclosed related party transactions. Our procedures to
address this risk included testing a risk-based selection of
journal transactions, both at the year end and throughout the
year.
Owing to the inherent limitations of an audit, there is an
unavoidable risk that some material misstatements of the financial
statements may not be detected, even though the audit is properly
planned and performed in accordance with the ISAs (UK). The
potential effects of inherent limitations are particularly
significant in the case of misstatement resulting from fraud
because fraud may involve sophisticated and carefully organized
schemes designed to conceal it, including deliberate failure to
record transactions, collusion or intentional misrepresentations
being made to us.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities .
This description forms part of our auditor's report.
Other matters which we are required to address
We were appointed by the board on 25 April 2022 to audit the
financial statements for the period ended 31 December 2021. This is
our first year of acting as the company auditors.
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the company and we remain independent of the
company in conducting our audit.
Our audit opinion is consistent with the additional report to
the audit committee.
25
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Leo Malkin
Senior Statutory Auditor
For and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
29 June 2022
26
Sivota PLC
Statement of Comprehensive Income
For the Period starting 22 September 2020 to 31 December
2021
For the
period starting
22 September
2020 to
31 December
2021
GBP
Note
------- ----------------
Revenue -
Administrative expenses 375,691
Operating loss (375,691)
Finance income 10,406
----------------
Loss before taxation (365,285)
Income tax -
----------------
Loss and total comprehensive loss for
period (365,285)
================
Loss per share 8 (0.27)
================
The accompanying notes are an integral part of the Financial
Statements.
27
Sivota PLC
Statement of Financial Position
As at
31 December
2021
ASSETS Note GBP
------- ------------
Current assets
Other receivables 6 40,867
Cash and cash equivalents 749,138
------------
Total current assets 790,005
============
EQUITY AND LIABILITIES
Equity attributable to 8
owners
Share capital 10,850
Deferred shares 49,500
Share premium 921,832
Accumulated Losses (365,285)
------------
Total equity attributable
to Shareholders 616,897
Current liabilities 7
Accruals 170,893
Other payables 2,215
------------
Total current liabilities 173,108
790,005
============
The accompanying notes are an integral part of the Financial
Statements.
The financial statements on page 27 to 38 were authorised for
issue by the board of directors on 30 June 2022 and were signed on
its behalf by Ziv Ben-Barouch.
Ziv Ben-Barouch
CEO
29 June 2022
28
Sivota PLC
Statement of Changes in Equity
For the Period starting 22 September 2020 to 31 December
2021
Ordinary
Share capital Deferred Share Premium Accumulated Total equity
Shares losses
---------------- ----------- ---------------- -------------- ---------------
GBP
--------------------------------------------------------------
Balance as at 22 September - - - - -
2020
Loss for the period starting
22 September 2020 to 31 December ( 365,285
2021 - - - ) (365,285)
---------------- ----------- ---------------- -------------- ---------------
Total comprehensive loss for
the period - - - (365,285) (365,285)
Transactions with owners:
Share capital issuance on
incorporation 50,000 - - - 50,000
Deferred shares (49,500) 49,500 - - -
Share capital issuance on admission 10,350 - 1,024,650 - 1,035,000
Share issue cost - - (102,818) - (102,818)
---------------- ----------- ---------------- -------------- ---------------
Total transactions with the
owners 10,850 49,500 921,832 - 982,182
Balance as at 31 December 2021 10,850 49,500 921,832 (365,285) 616,897
================ =========== ================ ============== ===============
The accompanying notes are an integral part of the Financial
Statements.
29
Sivota PLC
Statements of Cash Flow
For the Period starting 22 September 2020 to 31 December
2021
For the period starting
22 September 2020 to
31 December
2021
GBP
------------------------
Cash generated used in operating activities
Loss for the period (365,285)
Working capital adjustments:
Increase in other receivables (40,867)
Increase in accruals 170,893
Increase in other payables 2,215
------------------------
Net cash used in operating activities (233,044)
Cash flows from financing activities
Proceeds from the issue of Ordinary Shares, net of issuance costs 982,182
Net cash flow from financing activities 982,182
Net increase in cash and cash equivalents 749,138
Cash and cash equivalents at beginning of period -
------------------------
Cash and cash equivalents at end of period 749,138
========================
The accompanying notes are an integral part of the Financial
Statements.
30
Sivota Plc
Notes to the Financial Statements
For the Period starting 22 September 2022 to 31 December
2021
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 and its registered office
situated in England and Wales with its registered office at New
London House, 172 Drury Lane, London WC2B 5QR.
On 22 July 2021 the company completed a placing and listed on
the Main Market of the London Stock Exchange - see Note 8
below.
2. Basis of preparation
The principal accounting policies applied in the preparation of
the Company Financial Information are set out below. These policies
have been consistently applied throughout the period presented,
unless otherwise stated.
The Company Financial Statements have been prepared in
accordance with International Accounting Standards in conformity
with the requirements of the UK Companies Act 2006.
The Company Financial Information of the Company is presented in
Great British Pounds Sterling ("GBP"); also the Company's
functional currency.
Standards and interpretations issued but not yet applied
New standards, interpretations and amendments effective from 22
September 2020
There were no new standards or interpretations effective for the
first time for periods beginning on or after 22 September 2020 that
had a significant effect on the Company's Financial Statements.
New standards, interpretations and amendments not yet
effective
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.
31
Sivota Plc
Notes to the Financial Statements
For the Period starting 22 September 2020 to 31 December
2021
At the date of authorisation of the Company Financial
Information, the Directors have reviewed the standards in issue by
the International Accounting Standards Board and the International
Financial Reporting Interpretations Committee, which are effective
for the accounting periods ending on or after the stated effective
date. In their view, none of these standards would have a material
impact on the financial reporting of the Company.
Going concern
As at 31 December 2021 the Company had cash and cash equivalents
in amount of GBP749,138. Subsequent to the year-end the Company
raised additional GBP11,500,000 to fund Apester's investment - see
Note 15.
As part of their going concern assessment, the Board of
Directors have reviewed cash flow forecasts consolidated with
Apester for the 12 months from the date these financial statements
were signed.
The Directors are satisfied that the Company has adequate
resources to continue in operation for at least 12 months from the
date of approval of the financial statements and that it is
appropriate to prepare financial statements on the going concern
basis.
3. Accounting policies
Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash
at bank and in hand and short-term deposits with original
maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant
risk of changes in value.
4. Financial assets and liabilities
Financial assets and financial liabilities are recognised when
the Company becomes a party to the contractual provisions of a
financial instrument. Financial assets and financial liabilities
are offset if there is a legally enforceable right to set off the
recognised amounts and interests and it is intended to settle on a
net basis.
32
Sivota Plc
Notes to the Financial Statements
For the Period starting 22 September 2020 to 31 December
2021
5. Use of assumptions and estimates
In preparing the Company Financial Information, the Directors
have to make judgments on how to apply the Company's accounting
policies and make estimates about the future.
The Directors do not consider there to be any critical judgments
that have been made in arriving at the amounts recognised in the
Company Financial Information.
Cost of new shares and cost of listing
The cost of new shares issued is deducted from share premium
while the cost of the Initial Public Offering is record as
administrative expense. In arriving at the split of the common
costs a rational and appropriate basis has been applied in order to
estimate the allocation.
6. Other receivables
As at
31 December
2021
GBP
------------
Vat receivable 38,939
Other receivables 1,929
40,867
============
7. Current Liabilities
As at
31 December
2021
GBP
------------
Accruals (*) 170,893
Other payables 2,215
------------
173,108
============
(*) includes GBP 119,810 accruals related the Apester's
Transaction - see Note 15.
33
Sivota Plc
Notes to the Financial Statements
For the Period starting 22 September 2020 to 31 December
2021
8. Equity
a. Composition of share capital:
Issued and Outstanding
Class of Shares Number of Shares
--------------------------- ----------------------
Ordinary Shares of GBP0.01
par value 1,085,000
Deferred Shares of GBP0.01
par value 4,950,000
The company has no authorised share capital limit.
b. Movement in Ordinary Shares' capital:
Total proceeds,
Price net of issuance
Number Par per share costs
of Ordinary value GBP GBP
Date Movement Shares GBP
Issuance of Ordinary
Shares to the original
Incorporation on subscriber - Mr. Hagai
22 September 2020 Tal 5,000,000 0.01 0.01 50,000
-------------------------- ------------- ------- ----------- ----------------
Redesignation of Ordinary
Shares to Deferred
18 December 2020 Shares (*) (4,950,000) 0.01 1.00 -
-------------------------- ------------- ------- ----------- ----------------
Issuance of Ordinary
22 July 2021 shares on the Admission 1,035,000 0.01 1.00 932,182
-------------------------- ------------- ------- ----------- ----------------
Total as at 31 December
2021 1,085,000 982,182
------------- ------- ----------- ----------------
(*) The Deferred Shares carry no voting rights, no rights to
dividends and on a return of capital are only entitled to a return
once a sum of GBP1,000,000 has been paid on each Ordinary Share.
The entire class of Deferred Share can be acquired by the Company
at any time for no consideration.
c. Loss per share
The weighted average number of shares - 1,336,710
Loss for the period - (365,285)
Loss per share - (0.27)
34
Sivota Plc
Notes to the Financial Statements
For the Period starting 22 September 2020 to 31 December
2021
Diluted earnings per share has not been disclosed on the basis
the company was loss making and therefore the impact of any
potentially dilutive ordinary shares would be anti-dilutive. In
addition, the company does not have any potentially dilutive
instruments.
9. Capital management policy
The Directors' objectives when managing the Company's capital
are to safeguard the Company's ability to continue as a going
concern in order to provide returns for Shareholders and benefits
for other stakeholders and to maintain an optimal capital structure
to reduce the cost of capital. The capital structure of the Company
consists of equity attributable to equity holders of the Company,
comprising issued share capital and reserves.
10. Financial instruments
The Company's principal financial instruments comprise other
payables. The Company's accounting policies and method adopted,
including the criteria for recognition, the basis on which income
and expenses are recognised in respect of each class of financial
asset and equity instrument are set out in Note 3 "Accounting
policies" to the Company Financial Information. The Company does
not use financial instruments for speculative purposes.
Financial risk management
The Directors use a limited number of financial instruments,
comprising mainly cash and other payables, which arise directly
from the Company's initial operations. The Company does not trade
in financial instruments.
Financial risk factors
The Company's activities expose it to a variety of financial
risks, being currency risk, credit risk, liquidity risk and cash
flow interest rate risk. The Directors' overall risk management
programme focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the Company's
financial performance.
Currency risk
The Company does not currently operate internationally and its
exposure to foreign exchange risk is limited to transactions and
balances that are denominated in currencies other than GBP.
35
Sivota Plc
Notes to the Financial Statements
For the Period starting 22 September 2020 to 31 December
2021
Credit risk
Credit risk is the risk of financial loss to the Company if a
counterparty to a financial instrument fails to meet its
contractual obligations. As at 31 December 2021 the company's
exposure to credit risk is immaterial.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient
cash and available funding through an adequate amount of committed
credit facilities. The Directors ensure that the Company has
adequate resource to discharge all its liabilities. The Directors
have considered the liquidity risk as part of their going concern
assessment.
Cash flow interest rate risk
The Company has no significant interest-bearing liabilities and
assets.
Fair values
The Directors assessed that the fair values of cash, other
receivables and trade payables approximate their carrying
amounts.
11. Related Party Transactions
On 8 December 2020 the sole shareholder, Mr. Hagai Tal,
transferred GBP50,000 to the bank account at the nominal value of
100% of the share capital on incorporation.
In January 2021, the Company received $1,010,000 from Mr. Hagai
Tal and GBP125,000 cash from Mr. Tim Weller, in advance of the
issue of Ordinary Shares. On 9 April 2021, all amounts owed to Mr.
Hagai Tal were repaid in full, without any issue of shares.
12. Ultimate controlling party
From the incorporation to 22 July 2021 Mr. Hagai Tal was the
ultimate controlling party. Following listing and placing on the
Main Market (Standard Segment) of the LSE, see Note 1 above, there
ceased to be any controlling party.
36
Sivota Plc
Notes to the Financial Statements
For the Period starting 22 September 2020 to 31 December
2021
13. Key management personnel compensation
There were no staff costs on the basis that no staff were
employed by the Company during the period ended 31 December 2021.
The only key management compensation incurred during the reporting
period was Ziv Ben Barouch's director fees in amount of
GBP9,400.
14. Auditors remuneration
The auditors' remuneration for the reported period was as
follows:
Audit fees GBP27,000
Non-audit fees GBP50,250
15. Subsequent events
Apester's Share Purchase Agreement
On 24 January 2022 the Company entered into a Share Purchase
Agreement ("SPA") with Apester Ltd, a digital marketing engagement
platform, that was completed on 12 May 2022. Under the terms of SPA
Apester will issue to the Company Preferred Seed Shares for an
aggregate consideration of $12.0 million (GBP9.8 million) of which
$6.0 million was paid on 13 May 2022 and the further $6.0 million
is to be paid within 90 days. The issue of the Preferred Seed
Shares will provide the Company with 57.5% of Apester's voting
rights. The purchase price to be allocated mainly to net tangible
assets of Apester (after the investment) in the amount of
approximately $4.0 million (GBP3.3 million) and the intangible
assets in the total of amount of approximately $14.6 million
(GBP11.9 million).
Pursuant to the articles of association of Apester, that were
exercised following SPA's completion, the Company also has certain
veto and consent rights, including the right to appoint a majority
of directors to the Apester's Board.
In addition, amongst other customary provisions, SPA contains
various warranties typical in a transaction of this nature from
Apester in favour of the Company, regarding the operations,
employees and the business and assets of Apester.
37
Sivota Plc
Notes to the Financial Statements
For the Period starting 22 September 2020 to 31 December
2021
Apester's Convertible loans
In addition to the acquisition of Apester's shares, the Company
entered into two convertible loan assignment agreements with
lenders to Apester, pursuant to which $1.6 million (GBP1.3 million)
in convertible loans (plus interest) were assigned to the Company,
for consideration equal to the aggregate outstanding principal and
interest accrued until the date of SPA's completion. The
convertible loans bear interest at a rate of 6% per annum and will
be capable of conversion by the Company into Preferred Seed Shares
in Apester. If converted in full, the Preferred Seed Shares
immediately after the SPA's completion represent approximately 5.6%
of Apester's share capital on a fully diluted basis. If the
convertible loans are not so converted, Apester will be required to
repay all outstanding principal and interest on the loans in full
in 24 monthly instalments starting February 2024.
Fundraising
The cash consideration for the acquisition of Apester's shares
and convertible loans was funded through a GBP11.5 million (gross)
placing and direct subscription of 11,500,000 new ordinary shares
of one pence each in the Company from existing and new investors in
the Company. The issue price is 100 pence per new ordinary share.
As a result of the acquisition and the fundraising the Company will
bear additional transaction costs at the amount of approximately
GBP490,000.
Management agreement
With the completion of SPA, the Company and Apester also entered
into a Management Services Agreement, according to which the
Company will provide certain management services to Apester in
consideration of the annual management fee, calculated as 2% of the
total investment made by the Company into Apester. The agreement
will continue for up to five years from the SPA's completion.
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