Safe-T Group Reports Strong First Half 2022 Performance 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).
https://www.globenewswire.com/news-release/2022/08/31/2507566/0/en/Safe-T-Group-Reports-Strong-First-Half-2022-Performance-with-Revenues-of-8-8-Million-up-181-Compared-to-Prior-Year.html