HERZLIYA, Israel, Nov. 21, 2018 /PRNewswire/ -- Safe-T Group
Ltd. (NASDAQ: SFET) (TASE: SFET), a leading provider of
software-defined access solutions for the hybrid cloud, today
announced financial results for the third quarter and nine-month
period ended September 30, 2018.
Safe-T announced continuing progress and achievements during the
first nine months of 2018. During the nine-month period ended
September 30, 2018, the Company
reported customer bookings totaling $1,363,000 ($432,000 of which are contingent bookings), an
increase of approximately 94% compared with $701,000 in the nine-month period ended
September 30, 2017 (including
contingent bookings of $70,000, of
which one booking of $54,000 did not
come to fruition).
Company revenues in the nine-month period ended September 30, 2018, totaled $1,003,000, an increase of 39% compared with
$719,000 in the nine-month period
ended September 30, 2017.
In the third quarter of 2018, the Company reported customer
bookings totaling approximately $220,000, a 90% increase compared with
$116,000 in the corresponding quarter
last year. This amount includes orders totaling $59,000 which are contingent on the completion of
successful proof of concept tests by customers or on other
commercial terms, compared with contingent bookings of $16,000 in the third quarter of 2017.
Customer bookings are an important performance metric which
predicts future revenue. According to the Company's revenue
recognition policy, the period from the receipt of payment or
booking to the date of recognition can be one to four quarters. As
the Company's bookings increase on a quarterly basis, future
revenue is expected to increase as well. In addition, the
maintenance services provided for most customers are recognized on
a proportionate basis over the engagement period of up to five
years.
The Company reported revenues of $248,000 in the third quarter of 2018,
representing a 32% increase compared with $187,000 in the corresponding quarter last year.
The Company ended the quarter with a cash balance of $6,121,000 and non-IFRS loss of $2,022,000.
"During the third quarter, Safe-T made great strides toward our
goal of strengthening penetration in the U.S., which is the
Company's primary target market. Our successful listing on Nasdaq
and subsequent raise of gross amount of $7.3
million represents another stage in our strategy to increase
our visibility and market position," said Shachar Daniel, Chief Executive Officer of
Safe-T Group Ltd. "As the Company continues to leverage its
extensive knowledge and experience to launch innovative technology
solutions, we expect to see increased interest and adoptions by
government entities and other high-caliber organizations."
Recent Developments:
- Safe-T Obtains Certification to Sell to American Federal
Entities: Safe-T obtained FIPS PUB 140-2 certification through
its subsidiary, Safe-T USA,
enabling the sale of its software-defined access (SDA) product to
American federal entities. The certification, confirmed by Acumen
Security, allows federal agencies to use Safe-T's SDA solution to
secure their data exchanges.
- Safe-T Announces U.S. Advisory Committee: In an effort
to support Safe-T USA's
penetration in the U.S. market, the company formed a U.S. Advisory
Committee comprised of six information security experts. The
Committee will investigate privacy and security challenges, expand
contacts in vertical markets and support the efforts of Safe-T's
local U.S. team by providing insight into trends that will enable
continued penetration into this market.
- Indiana Office of Technology Implements Software-Defined
Access Solution: Indiana's
Office of Technology (IOT) successfully completed deployment of
Safe-T's SDA solution to securely store and share information.
Safe-T's SDA product will provide data protection to dozens of
government agencies in the State of
Indiana, both in transit and at rest.
- Safe-T Completes Acquisition of CyKick Labs' Intellectual
Property: During the third quarter, Safe-T completed its
acquisition of the intellectual property of CyKick Labs, Ltd. This
acquisition is most notable for CyKick Labs' proprietary
technology, Telepath, which will be integrated into Safe-T's SDA
solution. Telepath will provide Safe-T users with better insights
into user and web-based anomalies within their networks.
Third Quarter 2018 Financial Results
- Total bookings for the third quarter of 2018 totaled
$220,000 (including contingent
bookings of $59,000), compared with
$116,000 in the third quarter of 2017
(including contingent bookings of $16,000).
- As of September 30, 2018, the
order backlog of customers who have not yet been charged totaled
$821,000, compared with an order
backlog of $203,000 as of
September 30, 2017. All above
mentioned amounts include contingent bookings.
- Total revenues for the third quarter of 2018 amounted to
$248,000, compared with $187,000 in the third quarter of 2017. The change
is attributed to increased sales in the Middle East.
- In the third quarter of 2018, cost of revenues totaled
$178,000, compared with $127,000 in the third quarter of 2017. The
increase is mainly due to an expansion of the Company's support and
professional services team, which resulted in an increase in
payroll and related expenses.
- In the third quarter of 2018, research and development
(R&D) expenses were $603,000,
compared with $444,000 in the third
quarter of 2017. The increase was mainly attributed to expansion of
the R&D team and a resulting increase in payroll and related
expenses.
- In the third quarter of 2018, sales and marketing (S&M)
expenses totaled $1,120,000, compared
with $1,155,000 in the third quarter
of 2017. The decrease was primarily attributed to lower share-based
payments which were partially offset by higher payroll and related
expenses.
- In the third quarter of 2018, general and administrative
(G&A) expenses totaled $443,000,
compared with $530,000 in the third
quarter of 2017. The decrease was primarily attributed to lower
share-based payments which were partially offset by higher
professional expenses.
- IFRS net loss for the third quarter of 2018 totaled
$4,610,000, or $0.12 basic loss per ordinary share, compared
with $1,074,000, or $0.05 basic loss per ordinary share, in the third
quarter of 2017.
- Non-IFRS net loss for the third quarter of 2018 was
$2,022,000, or $ 0.05 basic loss per ordinary share, compared
with $1,660,000, or $0.08 basic loss per ordinary share, in the third
quarter of 2017. Non-IFRS results exclude the effect of share-based
payment expenses, derivative warrants and anti-dilution
liability.
Financial Results for the Nine Months Ended September 30, 2018
- Total revenues for the nine months ended September 30, 2018, were $1,003,000, compared with $719,000 in the nine months ended September 30, 2017. The increase was attributed
to sales in the Middle East and
APAC.
- Total bookings in the nine months ended September 30, 2018, totaled $1,363,000 (including contingent bookings of
$432,000), compared with $701,000 in the nine months ended September 30, 2017 (including contingent bookings
of $70,000, of which one booking of
$54,000 did not come to
fruition).
- Cost of revenues in the nine months ended September 30, 2018, totaled $607,000, compared with $410,000 in the nine months ended September 30, 2017. The increase is mainly due to
an expansion of the Company's support and professional services
team, which resulted in an increase in payroll and related
expenses.
- R&D expenses in the nine months ended September 30, 2018, totaled $1,637,000, compared with $1,091,000 in the nine months ended September 30, 2017. The increase was mainly
attributed to payroll and related expenses.
- S&M expenses in the nine months ended September 30, 2018, totaled $4,269,000, compared with $2,647,000 in the nine months ended September 30, 2017. The increase was attributed
to payroll and related expenses, professional services expenses,
and marketing expenses.
- G&A expenses in the nine months ended September 30, 2018, totaled $1,370,000, compared with $1,604,000 in the nine months ended September 30, 2017. The change was mainly
attributed to a decrease in share-based payment.
- IFRS net loss for the nine months ended September 30, 2018, totaled $8,522,000, or $0.31 basic loss per ordinary share, compared
with $3,620,000, or $0.20 basic loss per ordinary share, for the nine
months ended September 30, 2017.
- Non-IFRS net loss for the nine months ended September 30, 2018, totaled $6,416,000, or $0.24 basic loss per ordinary share, compared
with $3,712,000, or $0.21 basic loss per ordinary share, for the nine
months ended September 30, 2017.
The following table presents the reconciled effect of the
non-cash expenses/income on the Company's net loss for the nine and
three-month periods ended September 30,
2018 and September 30, 2017,
and for the year ended December 31,
2017:
|
Nine-months
ended
|
Three-months
ended
|
Year
ended
|
|
|
September
30,
|
September
30,
|
December
31,
|
|
|
2017
|
2018
|
2017
|
2018
|
2017
|
|
|
In thousands of
USD
|
|
Net loss for the
period
|
3,620
|
8,522
|
1,074
|
4,610
|
5,313
|
|
Amortization of
intangible
assets
|
188
|
201
|
63
|
75
|
251
|
|
Share-based
payment
|
1,016
|
315
|
396
|
12
|
1,318
|
|
Finance liabilities
at fair value
|
(1,296)
|
1,590
|
(1,045)
|
2,501
|
(1,981)
|
|
Total
adjustment
|
(92)
|
2,106
|
(586)
|
2,588
|
(412)
|
|
Non-IFRS net
loss
|
3,712
|
6,416
|
1,660
|
2,022
|
5,725
|
|
|
|
|
|
|
|
|
|
Balance Sheet Highlights
- As of September 30, 2018, cash
and cash equivalents totaled $6,121,000, compared with $3,514,000 on December 31,
2017. The increase in cash and cash equivalents compared
with December 31, 2017 is attributed
to capital raised as part of the private offering in June 2018 and the public offering in August 2018.
- As of September 30, 2018,
shareholders' equity totaled $3,397,000, compared with $3,141,000 as of December
31, 2017.
Use of Non-IFRS Financial Results
In addition to disclosing financial results calculated in
accordance with International Financial Reporting Standards (IFRS),
as issued by the International Accounting Standards Board, the
Company's earnings release contains non-IFRS financial measures of
net loss for the period that excludes the effect of share-based
compensation expenses, the revaluation of other investments and
revaluation of derivative warrant and anti-dilution
liability. The earnings release also contains non-IFRS
financial measures for bookings. Bookings are a non-IFRS financial
metric that we define as binding and non-revocable customers
purchase orders over a defined period. 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 business
internally, and as such deemed it important to provide all 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.
About Safe-T Group Ltd.
Safe-T Group Ltd. (Nasdaq, TASE: SFET), is a leading provider of
software-defined access solutions which mitigate attacks on
enterprises' business-critical services and sensitive data. Safe-T
solves the data access challenge by masking data at the perimeter,
keeping information assets safe and limiting access only to
authorized and intended entities in hybrid cloud environments.
Safe-T enhances operational productivity, efficiency, security, and
compliance by protecting organizations from data exfiltration,
leakage, malware, ransomware, and fraud. With Safe-T's patented,
multi-layer software-defined access, financial services,
healthcare, utility companies and governments can secure their
data, services, and networks from internal and external data
threats.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995 and other Federal
securities laws. 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 it expects to see increased interest and adoptions by
government entities and other high-caliber organizations and that
Telepath will provide Safe-T users with better insights into user
and web-based anomalies within their networks. 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 final prospectus filed
pursuant to rule 424(b)(4) filed with the Securities and Exchange
Commission ("SEC") on August 20,
2018, 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.
Consolidated
Statements of Financial Position
|
(In thousands of
USD)
|
|
|
|
September
30,
|
|
December 31,
|
|
|
2017
|
|
2018
|
|
2017
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Audited)
|
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
5,045
|
|
6,121
|
|
3,514
|
Restricted
deposits
|
|
48
|
|
94
|
|
93
|
Trade
receivables
|
|
318
|
|
484
|
|
644
|
Other
receivables
|
|
278
|
|
309
|
|
*163
|
Total current
assets
|
|
5,689
|
|
7,008
|
|
4,414
|
|
|
|
|
|
|
|
Restricted
deposits
|
|
14
|
|
-
|
|
-
|
Property plant and
equipment, net
|
|
89
|
|
150
|
|
165
|
Deferred issuance
expenses
|
|
-
|
|
-
|
|
*61
|
Goodwill
|
|
523
|
|
523
|
|
523
|
Intangible
assets
|
|
827
|
|
872
|
|
764
|
Total non-current
assets
|
|
1,453
|
|
1,545
|
|
1,513
|
Total
assets
|
|
7,142
|
|
8,553
|
|
5,927
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Trade
payables
|
|
73
|
|
270
|
|
178
|
Other
payables
|
|
641
|
|
726
|
|
877
|
Contract
liability
|
|
356
|
|
411
|
|
424
|
Liability in respect
of the Israeli Innovation
Authority
|
|
92
|
|
49
|
|
92
|
Total current
liabilities
|
|
1,162
|
|
1,456
|
|
1,571
|
|
|
|
|
|
|
|
Contract
liability
|
|
60
|
|
237
|
|
286
|
Liability in respect
of anti-dilution feature
|
|
514
|
|
-
|
|
692
|
Liability in respect
of compensation feature
|
|
-
|
|
3,387
|
|
-
|
Derivatives financial
instruments - warrants
|
|
937
|
|
-
|
|
237
|
Liability in respect
of the Israeli Innovation
Authority
|
|
-
|
|
76
|
|
-
|
Total
non-current liabilities
|
|
1,511
|
|
3,700
|
|
1,215
|
Total
liabilities
|
|
2,673
|
|
5,423
|
|
2,786
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
Share
Capital
|
|
**
|
|
**
|
|
**
|
Share
premium
|
|
28,013
|
|
37,893
|
|
28,494
|
Other capital
reserve
|
|
12,699
|
|
11,962
|
|
12,583
|
Accumulated
loss
|
|
(36,243)
|
|
(46,458)
|
|
(37,936)
|
Total
equity
|
|
4,469
|
|
3,397
|
|
3,141
|
Total liabilities
and equity
|
|
7,142
|
|
8,553
|
|
5,927
|
|
*
Reclassified.
|
** Represents an
amount of less than $1 thousand.
|
Consolidated
Statements of Other Comprehensive Loss
|
(In thousands of USD,
except per share amounts)
|
|
|
|
|
|
|
|
For the Nine-Month
Period
|
|
For the
Three-Month Period
|
|
For the
Year
|
|
Ended
|
|
Ended
|
|
Ended
|
|
September
30,
|
|
September
30,
|
|
December 31,
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
719
|
|
1,003
|
|
*
187
|
|
248
|
|
1,096
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
410
|
|
607
|
|
127
|
|
178
|
|
583
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
309
|
|
396
|
|
60
|
|
70
|
|
513
|
|
|
|
|
|
|
|
|
|
|
Research and
development
expenses, net
|
1,091
|
|
1,637
|
|
444
|
|
603
|
|
1,608
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
expenses
|
2,647
|
|
4,269
|
|
1,155
|
|
1,120
|
|
4,051
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
expenses
|
1,604
|
|
1,370
|
|
530
|
|
443
|
|
2,151
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
(5,033)
|
|
(6,880)
|
|
(2,069)
|
|
(2,096)
|
|
(7,297)
|
|
|
|
|
|
|
|
|
|
|
Finance
income
|
2,351
|
|
984
|
|
1,230
|
|
27
|
|
2,959
|
|
|
|
|
|
|
|
|
|
|
Finance
expense
|
(938)
|
|
(2,626)
|
|
(235)
|
|
(2,541)
|
|
(975)
|
|
|
|
|
|
|
|
|
|
|
Finance income
(expense),
net
|
1,413
|
|
(1,642)
|
|
995
|
|
(2,514)
|
|
1,984
|
|
|
|
|
|
|
|
|
|
|
Total
comprehensive loss
|
(3,620)
|
|
(8,522)
|
|
(1,074)
|
|
(4,610)
|
|
(5,313)
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share
|
(0.20)
|
|
(0.31)
|
|
(0.05)
|
|
(0.12)
|
|
(0.29)
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share
|
(0.26)
|
|
(0.33)
|
|
(0.09)
|
|
(0.12)
|
|
(0.29)
|
|
|
|
|
|
|
|
|
|
|
|
|
* Early application of IFRS 15.
|
Consolidated
Statements of Changes in Equity
|
(In thousands of
USD)
|
|
|
|
|
Other
|
|
|
|
Share
|
Share
|
capital
|
Accumulated
|
Total
|
|
capital*
|
premium
|
reserve
|
loss
|
equity
|
|
|
|
|
|
|
For the nine
months ended September 30, 2018:
|
|
|
|
|
|
Balance as of
December 31, 2017 (Audited)
|
--
|
28,494
|
12,583
|
(37,936)
|
3,141
|
Issuance of ordinary
shares, net
|
--
|
6,069
|
--
|
--
|
6,069
|
Exercise of
anti-dilution feature
|
--
|
2,268
|
--
|
--
|
2,268
|
Exercise of
options
|
--
|
791
|
(689)
|
--
|
102
|
Forfeiture of
options
|
--
|
271
|
(271)
|
--
|
--
|
Share-based
payments
|
--
|
--
|
339
|
--
|
339
|
Net comprehensive
loss for the period
|
--
|
--
|
--
|
(8,522)
|
(8,522)
|
|
|
|
|
|
|
Balance as of
September 30, 2018 (unaudited)
|
--
|
37,893
|
11,962
|
(46,458)
|
3,397
|
|
|
|
|
|
|
For the three
months ended September 30, 2018:
|
|
|
|
|
|
Balance as of June
30, 2018 (Unaudited)
|
--
|
31,585
|
12,156
|
(41,848)
|
1,893
|
Issuance of ordinary
shares, net
|
--
|
3,835
|
--
|
--
|
3,835
|
Exercise of
anti-dilution feature
|
--
|
2,268
|
--
|
--
|
2,268
|
Exercise of
options
|
--
|
--
|
--
|
--
|
--
|
Forfeiture of
options
|
--
|
205
|
(205)
|
--
|
--
|
Share-based
payments
|
--
|
--
|
11
|
--
|
11
|
Net comprehensive
loss for the period
|
--
|
--
|
--
|
(4,610)
|
(4,610)
|
|
|
|
|
|
|
Balance as of
September 30, 2018 (Unaudited)
|
--
|
37,893
|
11,962
|
(46,458)
|
3,397
|
|
|
|
|
|
|
* Represents an amount of less than $1 thousand.
|
CONTACT INVESTOR RELATIONS:
Miri Segal-Scharia, CEO
MS-IR LLC
msegal@ms-ir.com
+1(917)-607-8654
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content:http://www.prnewswire.com/news-releases/safe-t-reports-third-quarter-and-first-nine-months-of-2018-financial-results-300754140.html
SOURCE Safe-T