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Shefa Gems Ltd (SEFA)

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Thursday 30 September, 2021

Shefa Gems Ltd

Interim Results ended 30 June 2021

RNS Number : 5420N
Shefa Gems Ltd
30 September 2021
 

B"H

 

30 September 2021

 

Shefa Gems Ltd.

 

("Shefa Gems" or the "Company")

 

Interim Financial Results for the 6 months ended June 30, 2021   ( " IFR " )

 

Shefa Gems (LSE: SEFA), is pleased to announce its results for the six months ended June 30, 2021. These reports were prepared considering the reorganization of the assets that the Company is currently implementing, following the approval of the combined transaction as approved by the special general meeting of the Company's shareholders (the "Combined Transaction"; "SGM") held on August 9, 2021 (and reported on August 10, 2021).

 

Corporate and Financial - Highlights

 

· As of March 1, 2021, all the Company's mining activity was transferred to its fully owned Subsidiary - Shefa in Israel (G.M.) Ltd. (the "Subsidiary"). As of that date, the subsidiary is solely responsible for covering the expenses related to the mining activity (See Note 3A to the IFR). The Subsidiary received loans from 2 of Shefa's old shareholders, in the amount of approximately £ 983,000 for the benefit of continued financing and promotion of mining activities.

 

· The Company financed its limited operations (excluding the mining business) through the realization of shares of Nala Digital it owned in the amount of approximately £ 266,000.

 

Post Period - In accordance with the provisions of the Combined Transaction, and following the approval of the SGM on August 9, 2021, the Company performed the following actions:

 

· Mr. Alon Shany (Executive Chairman), Mr. Jacques Abitbol (Non-Executive Director), Ms. Eva Abittan (Non-Executive Director) have been appointed to the Board. Michael Rosenberg, David Nachshon, Gershon Frenkel, Zvi Nemeth, James Campbell and Natan Drukman have stepped down from the Board.  Mr. Yossef Taub remains on the board as a Non-Executive Director, and Ms. Nathalie Schwarz remains on the board as an independent Non-Executive Director.

· Ms. Irit Ben Ami, who was appointed to serve as an Independent Director on the Company's Board (subject to shareholders approval), has a BA in Economy and Accounting from the Haifa University in Israeli and an LLM in Law from the IDC Herzliya in Israel.  She is qualified under the Israeli Companies Law as an expert director and possesses financial and accounting expertise.  She serves as an external director in two Israeli publicly traded companies in the fields of clean energy and medical cannabis, Medivie Therapeutic Ltd. and Together Pharma Ltd.  Until 2019, she also served as a director in Nano Dimension, a public company in the field of 3D printing.

· Mr. Avi Levin, who was appointed to serve as an Independent Director on the Company's Board (subject to shareholders approval), has a BA in Economy and Accounting from the Ben Gurion University in Israeli and an MBA in Finance and Global Business from the New York University. He holds a chartered accountant license in Israel and a CPA in the U.S.  In addition to his appointment in the Company, he also serves as a CFO in Blackswan Technologies, a company in the field of cloud computing and artificial intelligence.  He is qualified under the Israeli Companies Law as an expert director and possesses financial and accounting expertise.

· On September 6, 2021, the Company announced the conclusion of the equity subscription of 2,123,543,065 new ordinary shares of the Company at a price of USD 0.0005 per share raising a total of USD 1,050,000 ("Investment Funds") by new investors. The Company is aware of its obligation to publish a prospectus in connection with the foregoing equity subscription and is progressing it.

 

· Out of the Investment Funds, USD 700,000 was used to pay liabilities related to the exploration assets. As a result, the Company has no further liabilities in relation to the mining activity (except for share-related liabilities). The balance of USD 350,000 will be used by the Company to finance the limited activity (excluding mining activity) until the implementation of the acquisition strategy in the web technology and software space (See Note 4H to the IFR).

 

· The Company intends shortly to apply to the Israeli Registrar of Companies to approve to change of its name to "Alef Bet Advanced Technologies (2021)". The purpose of the name change is to more closely reflect the Company's strategy to make an acquisition in the web technology and software space. Subject to the approval of the Israeli Registrar of Companies to the change of name, the Company will make application to the London Stock Exchange to change its TDIM symbol from "SEFA" to "ALEF". Shareholders should note that their shareholdings will be unaffected by the change of name, although new share certificates will be issued to Shareholders following the name change.  The Company will notify the market of when the change of name and TIDM will be effective. 

 

· In accordance with Israeli law, the Company has appointed attorney Natan Drukman as a trustee to hold the shares of the Subsidiary (the owner of the mining business) - and will be progressing with the disposal of the mining business by way of a dividend in specie to existing shareholders.  This is expected to be completed subject to the schedule to be determined by the court in Israel. On the basis of the attached IFR and the independent valuation of the transferred assets (for tax purposes) - an application for approval of the dividend in specie process will be submitted in the coming days. The trustee will update on the schedule and progress of the process and any matter concerning the disposal of the mining business - through the RNS reporting system.

 

 

Alon Shany, Executive Chairman of Shefa Gems, said:

 

"We are excited about the new direction the Company is taking and are pleased to welcome new shareholders to the Company.

We believe that this Company as a cash shell is exceptional for itself, in terms that allow a common ground between Israel and London - so we expect interesting opportunities in the future, in the web technology and software space, and aim for acquiring a company with a strong potential for profitability and benefit for the Company and its shareholders. We are working hard to find the best company for the future of the Company as we see it.

We hope and know that all of new and existing shareholders will be excited as we are."

 

 

 

 

 

-Ends -

 

Enquiries

Shefa Gems Ltd

 

Alon Shany - Executive Chairman 

www.shefagems.com

+972 52 586 8616

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B"H

 

 

 

 

 

 

 

 

 

SHEFA GEMS LTD.

 

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

 

 

AS OF   JUNE 30, 2021

 

 

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SHEFA GEMS LTD.

 

 

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

 

 

AS OF JUNE 30, 2021

 

(Unaudited)

 

 

INDEX

 

 

 

 

Page

 

 

Review Report of Independent Auditors

2

 

 

Condensed Interim Consolidated Financial Statements:

 

 

 

Condensed Interim Consolidated Statements of Financial Position

3

 

 

Condensed Interim Consolidated Statements of Comprehensive Loss

4

 

 

Condensed Interim Consolidated  Statements of Changes in Shareholders' Equity

5

 

 

Condensed Interim Consolidated Statements of Cash Flows

6 - 7

 

 

Notes to the Condensed Interim Consolidated Financial Statements

8 - 13

 

 

 

 

 

 

Jerusalem, September 2, 2021

 

REVIEW REPORT OF INDEPENDENT AUDITORS

To the Shareholders of

SHEFA GEMS LTD.

Introduction

We have reviewed the accompanying condensed interim consolidated financial statements of SHEFA GEMS LTD. (hereinafter - "the Company") comprising the condensed interim consolidated statements of financial position as of June 30, 2021 and the related condensed interim consolidated statements of comprehensive loss, consolidated changes in shareholders' equity and consolidated cash flows for the six month period then ended. The board of directors and management are responsible for the preparation and presentation of these condensed interim consolidated financial statements in accordance with IAS 34, "Interim Financial Reporting". Our responsibility is to express a conclusion on these interim consolidated financial statements based on our review.

 

Scope of the Review

We conducted our review in accordance with the Israeli Review Standard (Israel) 2410, "Review of Financial Information for Interim Periods Performed by the Independent Auditor of the Entity" of the Association of Certified Public Accountants in Israel. A review of financial information for interim periods consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Auditing Standards accepted in Israel. Consequently, it does not enable us to obtain assurance that we would become aware of all the significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Basis for the Qualified Conclusion

We were not satisfied in regard to the NIS 29 million amount of impairment of the exploration assets that is included in other expenses in the Company statements of comprehensive loss, and in accordance in regard to the amount that is shown for the assets held for distribution to shareholders. See Note 3 in regard to uncertainty in the value estimation of the exploration assets.

 

Conclusion

Based on our review, except for the abovementioned item, nothing has come to our attention that causes us to suspect that the financial information abovementioned was not prepared, from all significant aspects, in accordance with International Accounting Standard 34.

 

 

 

We draw attention as follows:

1. Note 1d of the condensed interim financial statements - the Company has accumulated losses since its inception and does not have any operations that yield revenues. Financing of its operations has, until now, been performed by infusions of capital and/ or loans and the continued operations are dependent on further mobilizations. The Company plans to continue the existing operations is by distributing a dividend in kind and to introduce new operations, but this is uncertain. These facts raise significant doubt as to the continued existence of the Company as a "going concern."

 

These condensed interim financial statements do not include any adjustments to the value of the assets and liabilities and their classifications that would possibly be necessary in the event that the Company cannot continue as a "going concern."

2. We draw attention to Note 3 of the condensed interim financial statements in regard to a transaction for realization of the exploration assets by declaring a dividend in kind to its shareholders, subsequent to authorization by the Court, that will reduce the Company capital in the amount of approximately NIS 35 million and will introduce new operations.

   

 

Barzily & Co.

 

Certified Public Accountants

A Member of MSI Worldwide

 

 

SHEFA GEMS LTD.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(In NIS in thousands)

 

 

 

 

June 30,

 

December 31,

 

 

 

 

2021

 

2020

 

2020

 

 

 

Note

 

(Unaudited)

 

(Audited)

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Current Assets:

 

 

 

 

 

 

 

 

 

Fixed assets

 

 

-

 

1,244

 

1,007

 

 

Assets in regard to usage rights

 

 

-

 

1,569

 

1,645

 

 

Assets for exploration and evaluation of precious stones

 

 

-

 

62,270

 

63,098

 

 

Total non-current assets

 

 

-

 

65,083

 

65,750

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

 

Cash in foreign currency

 

 

11

 

1,034

 

483

 

 

Securities

 

 

-

 

- . -

 

926

 

 

Trade receivables

 

 

-

 

33

 

-

 

 

Interested party

 

 

-

 

77

 

-

 

 

Other accounts receivable

 

 

109

 

78

 

220

 

 

Loans to the past parent company

 

 

-

 

1,055

 

-

 

 

Total current assets

 

 

120

 

2,277

 

1,629

 

 

 

 

 

 

 

 

 

 

 

 

Assets for distribution to shareholders

3(c)

 

41,620

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

 

41,740

 

67,360

 

67,379

 

 

 

 

 

 

 

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity attributed to Company shareholders

 

 

23,421

 

57,447

 

55,609

 

 

 

 

 

 

 

 

 

 

 

 

Non-current Liabilities:

 

 

 

 

 

 

 

 

 

Long-term loans from interested parties and others

 

 

-

 

-

 

433

 

 

Long-term liability at fair value

 

 

-

 

5,550

 

6,187

 

 

Liability in regard to usage rights

 

 

-

 

1,305

 

1,302

 

 

Liability for severance pay

 

 

-

 

139

 

154

 

 

Warrants convertible to shares

 

 

8

 

195

 

6

 

 

Total Non-current Liabilities

 

 

8

 

7,189

 

8,082

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 Short-term credit from bank and others

 

 

358

 

591

 

1,789

 

 

 Trade payables

 

 

310

 

536

 

681

 

 

 Interested parties

 

 

-

 

148

 

88

 

 

 Other accounts payable

 

 

507

 

1,016

 

670

 

 

 Loans convertible to shares

 

 

181

 

162

 

181

 

 

 Liabilities at fair value

 

 

7,570

 

271

 

279

 

 

 Total current liabilities

 

 

8,926

 

2,724

 

3,688

 

 

 

 

 

 

 

 

 

 

 

 

Liability for distribution to shareholders

3(d)

 

9,385

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

Total Equity and Liabilities

 

 

41,740

 

67,360

 

67,379

 

 

 

 

 

 

 

  The accompanying notes to these condensed interim consolidated financial statements are an integral part thereof.

 

 

 

 

 

 

 

 

 

 

 

Date of Approval of the Financial Statements

 

Tali Shalem,

CEO

 

David Ben David,

CFO

 

Josef Yitzchak Taub

Director

                       

 

SHEFA GEMS LTD.   [Formerly Shefa Yamim (A.T.M.) LTD.]

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

In NIS in thousands [except for loss per share]

 

 

 

 

 

 

 

For the Period of Six Months Ended

 

 

For the Year Ended

 

 

 

June 30

 

December 31

 

 

 

2021

 

2020

 

2020

 

Note

 

  (Unaudited)

 

(Audited)

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

(1,412)

 

(407)

 

(1,915)

 

 

 

 

 

 

 

 

Operating loss

 

 

(1,412)

 

(407)

 

(1,915)

Other income (expenses), net

3(b)

 

(29,047)

 

(28)

 

1,195

Loss prior to financing

 

 

(30,459)

 

(435)

 

(720)

 

 

 

 

 

 

 

 

Financial income

 

 

64

 

  - . -

 

  1,114

Financial expenses

 

 

(1,793)

 

(1,694)

 

  (4,382)

 

 

 

 

 

Financial costs, net

 

 

(1,729)

 

(1,694)

 

  (3,268)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss for the period

 

 

(32,188)

 

(2,129)

 

(3,988)

 

 

 

 

 

 

 

 

Basic and diluted loss per share (in NIS)

 

 

(0.160)

 

(0.012)

 

(0.021)

 

 

 

 

 

 

 

 

                     

 

 

The accompanying notes to these condensed interim consolidated financial statements are an integral part thereof.

 

 

 

SHEFA GEMS LTD.

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

(In NIS in thousands)

 

 

 

 

 

Share

Capital

 

 

 

 

 

Additional Paid-in Capital

 

 

 

 

Receivables on Account of Shares

 

 

 

 

Capital Reserve for Payment on Account of Shares

 

Capital Reserve for Transactions with Interested Parties

 

 

 

 

 

Accumulated

Deficit

 

Total

Equity Attributed to Company Shareholders

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of January 1, 2021

20,120

 

96,377

 

- . -

 

5,762

 

6,312

 

(72,962)

 

55,609

Comprehensive Loss for the period

- . -

 

- . -

 

- . -

 

- . -

 

 

 

(32,188)

 

(32,188)

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of June 30, 2021

20,120

 

96,377

 

- . -

 

5,762

 

6,312

 

(105,150)

 

23,421

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of January 1, 2020

17,230

 

96,297

 

(205)

 

5,762

 

6,312

 

(68,974)

 

56,422

Comprehensive Loss for the period

- . -

 

- . -

 

- . -

 

- . -

 

- . -

 

(2,129)

 

(2,129)

Issuance of shares

289

 

2,679

 

186

 

- . -

 

- . -

 

  - . -

 

3,154

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of June 30, 2020

17,519

 

98,976

 

(19)

 

5,762

 

6,312

 

(71,103)

 

57,447

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Audited

  Balance as of January 1, 2020

17,230

 

96,297

 

(205)

 

5,762

 

6,312

 

(68,974)

 

56,422

Comprehensive loss for the Year

- . -

 

- . -

 

- . -

 

- . -

 

- . -

 

(3,988)

 

  (3,988)

Issuance of shares

2,890

 

80

 

205

 

- . -

 

- . -

 

- . -

 

3,175

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2020

20,120

 

96,377

 

- . -

 

5,762

 

6,312

 

(72,962)

 

55,609

 

 

 

The accompanying notes to these condensed interim consolidated financial statements are an integral part thereof.

 

 

SHEFA GEMS LTD.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(In NIS in thousands)

 

 

 

 

 

 

For the period of Six Months Ended

June 30,

 

 

 

 

For the Year Ended December 31,

 

 

 2021

 

2020

 

 2020

 

  (Unaudited)

 

 (Audited)

Cash Flows for Operating Activities:

 

 

 

 

 

 

Loss for the period

 

(32,188)

 

(2,129)

 

  (3,988)

Adjustments Required to Show Cash Flows

Used in Operating Activities (Appendix A):

 

 

 

31,065

 

 

  (2,457)

 

 

 

  767

Net Cash Used in Operating Activities

 

(1,123)

 

(4,586)

 

  (3,221)

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

Deposits, net

 

- . -

 

14

 

14

Sale of fixed assets

 

- . -

 

- . -

 

111

Redemption of shares held for trading

 

1,200

 

- . -

 

- . -

Acquisition of fixed assets

 

(5)

 

- . -

 

(8)

Investment in exploration and evaluation of precious stones

 

 

(1,006)

 

(106)

 

(1,361)

Receipts, net from the past parent company

 

 

- . -

 

 

  - . -

 

 

330

Net Cash Provided by (Used in) Investing Activities

 

 

189

 

 

(92)

 

 

(914)

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

Proceeds from share and option issue (includes premium), net

 

 

- . -

 

 

  2,170

 

 

205

Receipt (Repayment) of loans from banks and others, net

 

 

182

 

 

- . -

 

 

(130)

Loans received (repaid) from interested parties, net

 

4,443

 

(211)

 

1,431

Repayment of a loan from a related party

 

(31)

 

- . -

 

- . -

Repayment of fund in regard to leasing

 

(254)

 

(147)

 

(393)

Receipts on account of loans convertible to shares

 

- . -

 

  3,894

 

3,804

Interest received (paid)

 

(103)

 

  72

 

(226)

Net Cash Provided by Financing Activities

 

4,237

 

  5,778

 

  4,691

 

Cash for distribution to shareholders

 

 

(3,775)

 

 

- . -

 

 

- . -

 

Exchange rate differences in regard to cash and cash equivalents

 

 

 

- . -

 

 

 

  (72)

 

 

 

  (79)

 

 

 

 

 

 

 

Increase (Decrease) in Cash and Cash Equivalents

 

(472)

 

  1,028

 

477

Cash and cash equivalents at the beginning

of the period

 

 

483

 

 

  6

 

 

6

 

Cash and cash equivalents at the end of the period 

 

 

11

 

 

  1,034

 

 

483

                 

 

 

The accompanying notes to these condensed interim consolidated financial statements are an integral part thereof.

 

 

SHEFA GEMS LTD. [Formerly Shefa Yamim (A.T.M.) LTD.]

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(In NIS in thousands)

 

 

 

 

Appendix A

 

 

 

For the period of Six Months Ended

June 30,

 

 

 

 

For the Year Ended December 31,

 

 

 2021

 

 2020

 

 2020

 

 

(Unaudited)

 

(Audited)

Adjustments Required to Show Cash Flows

Provided by (Used in) Operating Activities:

 

 

 

 

 

 

Expenses (income) not involving cash flows:

 

 

 

 

 

 

Depreciation *

 

15

 

24

 

48

Capital gains

 

(274)

 

- . -

 

(75)

Amortization of assets for exploration and evaluation of precious stones

 

 

29,150

 


- . -

 

 

- . -

Amortization of a loan to an interested party

 

- . -

 

61

 

(1,091)

Financing expenses (income), net

 

1,729

 

(1,197)

 

3,268

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in Assets and Liabilities:

 

 

 

 

 

 

Decrease in trade receivables

 

- . -

 

18

 

51

Decrease (Increase) in other accounts receivable

 

(2)

 

67

 

(75)

Increase (Decrease) in trade payables 

 

167

 

(512)

 

(391)

Decrease in liability to an interested party

 

- . -

 

(332)

 

(316)

Increase (Decrease) in other accounts payable

 

280

 

(586)

 

(652)

 

 

 

31,065

 

 

(2,457)

 

 

767

 

* Net of depreciation encumbered on the exploration and evaluation for precious stones assets.

 

 

 

Appendix B

 

 

For the Period of Six Months Ended

June 30,

 

 

For the Year Ended December 31,

 

 

2021

 

 2020

 

 2020

 

(Unaudited)

 

 (Audited)

Significant Operations Not Involving Cash Flows:

 

 

 

 

 

 

Payables in regard to exploration and evaluation of precious stones assets

 

 

- . -

 

 

676

 

 

248

Fixed assets in regard to exploration and evaluation of precious stones assets

 

 

166

 

 

226

 

 

413

Usage rights assets in regard to exploration and evaluation of precious stones assets

 

 

269

 

 

182

 

 

450

Liability for severance pay in regard to exploration and evaluation of precious stones assets

 

 

136

 

 

- . -

 

 

- . -

Loans assigned to capital

 

- . -

 

1,125

 

3,381

 

The accompanying notes to these condensed interim consolidated financial statements are an integral part thereof.

 

SHEFA GEMS LTD.  

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In NIS in thousands)

 

  NOTE 1:- GENERAL

 

 

 

A.

1.

The reported entity -

 

 

Shefa Gems Ltd. [previously: Shefa Yamim (A.T.M.) LTD.] (hereinafter - "the Company") is an Israeli company engaged in exploration for diamond, gold and precious stones in the northern area of Israel.

 

 

As of December 31, 2020 the controlling interest in the Company is Nela Digital Ltd. (previously known as Shefa Yamim LTD.) that held 33.77%. During April 2020 as part of an arrangement of a debt owed by Nela Digital LTD., its holdings in the Company were transferred to a trustee who was appointed by the Court and the two companies did not consolidate their financial statements.

 

 

The shareholders of Nela Digital were given an option to directly hold these shares, as detailed in the agreement.

 

 

 

 

 

2.

These condensed interim consolidated financial statements are to be viewed together with the annual financial statements of the Company as of December 31, 2020 and their accompanying Notes.

 

 

 

 

 

B.

During November 2020 the Company's board of directors decided to make organizational changes within the Company. In the framework of these changes, the prospecting and exploration operations in search for precious stones and gold, performed by the Company from its inception until March 2021, would be transferred to its subsidiary (Shefa in Israel (G.M) Ltd., hereinafter - "the subsidiary"). We note that the financial statements include adjustments in regard to the value of the assets and liabilities in view of the transfer of the exploration assets to the subsidiary. As of the date of approval of the consolidated financial statements, the subsidiary is continuing to perform the exploration and prospecting operations in accordance with the valid permits (see note 3(a)).

 

 

 

 

C.

On August 9, 2021 the special meeting of shareholders approved the joint transaction signed between the Company and the third party. Please see Note 4.

 

 

 

 

D.

The Company has suffered losses since its inception and, does not have any revenues from operations. Financing of its operations has been performed until now by infusions of capital and/ or by loans received by a shareholding company and its continued operation is contingent upon further infusions of capital. In view of the agreement signed between the Company and a third party, as detailed in Note 4, the company's management believes that it can mobilize the money resources in order to complete the explorations, but there remains uncertainty in this regard since the mobilizations are dependent on other parties. These factors create significant doubts in regard to continued operation of the Company as a "going concern."

 

 

These condensed interim consolidated financial statements do not contain any adjustments for valuation of assets and liabilities or their classifications that would likely be necessary in the event that the Company is unable to continue its operation as a "going concern."

 

 

 

 

 

SHEFA GEMS LTD. 

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In NIS in thousands)

 

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES

 

a.  Declaration in regard to Implementation of International Financial Reporting Standards (IFRS)

 

 

 

 

The condensed interim financial statements have been prepared in accordance with IAS 34, "Interim Financial Reporting." The financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Company's annual financial statements as at and for the year ended December 31, 2020 (hereinafter: "the Annual Financial Statements"). However, selected explanatory notes are included to explain events and transactions that are significant for an understanding of the changes in the Company's financial position and performance since the Annual Financial Statements.

 

 

 

These financial statements were authorized by the Company's board of directors on September 9, 2021.

 

 

b.  Foreign Currency and Linkage Basis

 

 

 

 

 

 

 

Detail in regard to the change in the Consumer Price Index and the exchange rate of the foreign currency:

 

 

 

 

 

 

For the Period of Six Months Ended June 30,

 

 

For the Year Ended December 31,

 

 

 

 

2021

 

2020

 

2020

Change in CPI (applicable)

 

 

 

1.59%

 

(0.79%)

 

(0.7%)

Change in CPI (known)

 

 

 

1.41%

 

(0.69%)

 

(0.6%)

Change in rate of exchange - U.S. $

 

 

 

1.4%

 

0.29%

 

(7.0%)

Change in rate of exchange - GBP  £

 

2.9%

 

  (6.7%)

 

(3.7%)

 

 

c.

Judgments and Estimates

 

 

In preparing these Interim Financial Statements in accordance with the IFRS, management is required to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities as well as income and expenses. We clarify that actual results may differ from these estimates.

The significant judgments made by management in applying the Company's accounting policies and the key sources of estimation that served for estimates that are bound up with uncertainty were consistent with those that were applied in the Annual Financial Statements.

 

 

SHEFA GEMS LTD.  

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In NIS in thousands)

 

 NOTE 3:- COMPOSITION OF ASSETS FOR DISRIBUTION TO SHAREHOLDERS

 

 

a.

Agreement between the Company and its subsidiary for transfer of ownership in regard to exploration assets

 

 

On November 29, 2020 an agreement was signed between the Company and the subsidiary, in the framework of which the Company obligated to transfer to the subsidiary the ownership of all exploration assets by January 1, 2021. Concurrently, all business operations that are related to exploration assets, including officers, employees, agreements, advisors, suppliers, etc. were transferred to the subsidiary. In addition, it was agreed that, commencing March 1, 2021, all expenses in regard to operations related to the exploration assets will belong to the subsidiary.

 

 

In accordance with the aforementioned, all exploration assets were actually transferred, including: the Discovery permit for the Kishon area, the exploration permit for the Carmel, the search permit for the Carmel and the exploration license for Bat Shlomo. We note that this transfer of ownership received final validation also from the Mining Inspector and from the Legal Department of the Energy Ministry as of August 9, 2021. Concurrently, the transfer includes all the agreements, trademarks, machinery and professional equipment, goodwill and all the related information accumulated during exploration operations performed until now.

 

 

Commencing March 1, 2021, the subsidiary started to bear the operating expenses related to exploratory assets, as agreed, by loans from interested parties that were rendered to the subsidiary.

 

 

Commencing June 1, 2021 all the professional employees, (including professional management, but not the Company directors) ,were transferred for direct employment by the subsidiary, including the continuity of their rights. All exploratory operations are performed currently by the subsidiary using the same professional management and standards that were utilized beforehand.

 

 

As consideration for transfer of the abovementioned assets, the subsidiary allocated to the Company during the half years an amount of 201,347,822 Ordinary shares and with this adjustment the Company now owns 100% of the subsidiary.

 

 

As of the date of the financial statements and commencing with August, the subsidiary's shares that were allocated to the Company are held in trust, until the process of new operations will be completed (see Note 4).

 

 

 

 

b.

Impairment of the exploration assets

 

 

Further to the Company's intention to transfer its exploration and evaluation assets to its shareholders, the Company examined the exploration and evaluation assets for precious stones to determine whether there are signs that determine a decrement. In the framework of this examination, the Company received an evaluation from an independent assessor. The pitfalls that were confronting the assessor in this regard included the uncertainty from a regulatory viewpoint, as well as the uncertainty in regard to the actual market value of precious stones  (including exclusive precious stones in Israel that as yet do not have an open market), uncertainty in regard to assets that have not as yet been determined as a discovery, whether because the exploration in certain areas has not been completed or whether there is not complete certainty in regard to their economic feasibility.

 

 

The amount of amortization in regard to exploration assets was approximately NIS 29 million and is included in other expenses in the Company's statements of operations.

 

 

SHEFA GEMS LTD. 

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In NIS in thousands)

 

  NOTE 3:- COMPOSITION OF ASSETS FOR DISRIBUTION TO SHAREHOLDERS (cont.)

 

 

b.

Impairment of the exploration assets  (cont.)

 

 

As of June 30, as a result of the Company's decision to realize the operations of the exploration assets by a dividend in kind to its shareholders (see details in Note 4), the Company showed in its financial statements the abovementioned operations as operations for distribution to shareholders in accordance with its fair value, net of sale costs.

 

 

 

 

c.

Composition of assets for distribution to shareholders

 

 

 

 

 

 

 

For the Period of Six Months Ended

June 30,

 

 

For the Year Ended December 31,

 

 

 

 

 2021

 

2020

 

 2020

 

 

 

  (Unaudited)

 

 (Audited)

 

 

Cash

 

  3,775

 

 

 

 

 

 

Accounts receivables

 

  113

 

  -

 

-

 

 

Discovery and exploration assets *

 

35,525

 

-

 

-

 

 

Fixed assets

 

831

 

-

 

-

 

 

Assets in regard to usage rights

 

1,376

 

-

 

-

 

 

 

 

41,620

 

-

 

-

 

 

 

 

 

* Includes inventory of precious stones of approximately NIS 4 million.

 

           

 

 

d.

Composition of liabilities for distribution to shareholders

 

 

 

 

 

 

For the Period of Six Months Ended

June 30,

 

 

 

 

For the Year Ended December 31,

 

 

 2021

 

2020

 

 2020

 

  (Unaudited)

 

 (Audited)

Suppliers

 

475

 

-

 

-

Credit from a bank and others

 

979

 

 

 

 

Accounts payable

 

531

 

-

 

-

Loans from interested parties

 

5,598

 

 

 

 

Liability in regard to usage rights

 

1,512

 

-

 

-

Liability in regard to severance pay

 

290

 

-

 

-

 

 

9,385

 

-

 

-

 

 

 

 

 

 

 

          

 

 

SHEFA GEMS LTD. 

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In NIS in thousands)

 

NOTE 4:- SIGNIFICANT EVENTS SUBSEQUENT TO BALANCE SHEET DATE

 

 

On August 9, 2021 the special meeting of the Company shareholders approved the joint transaction signed between the Company and a third party (The Shani Group), and accordingly the Company commenced actualization of the terms of the transaction, that include:

 

 

 

 

a.

Distribution of the shares of the subsidiary, direct to the company's shareholders, as a dividend in kind -

 

 

As noted in Note 3a, the subsidiary received all the exploration assets and the related operations. As consideration, the subsidiary allocated shares to the Company. As part of the terms of the joint transaction with the Shani Group, the subsidiary's shares were transferred to an agreed agent (Mr. Nathan Druckman, Adv.) in order that he will handle the distribution of these shares and pro-rate them accordingly to every shareholder who held shares of the Company on the determined date, August 10, 2021. The distribution will be performed by a dividend in kind subject to and subsequent to approval by the Court in the framework of a request that will be presented subsequent to presentation of the financial statements. This distribution will reduce the Company share capital in the amount of an additional NIS 35 million.

 

 

 

 

b.

Strategic advancement of the acquisition of new operations -

 

 

Subsequent to distribution of the mining transactions shares, the Company will become an envelope of cash that is looking for opportunities to buy, in the field of technology for the internet and the software. In the event that this acquisition will be completed, it will constitute a reverse control, according to the regulations for listing, and the Company will request that its shares be reinstated on the official listing and the main market of the London Stock Exchange. The Company did not identify at the moment a proper acquisition goal but will emphasize especially the key growth areas offered by digital services to clients such as leisure, finance, electronic trade, gaming. Concurrently, the technologies that disturb, such as blockchain and Crypto currency. In addition, the Company is examining potential targets in software. 

 

 

If the Company will identify a proper target, it will publicize, in accordance with all the listing regulations, a prospectus that will contain all the information necessary to approve the reverse acquisition. As of now, we cannot guarantee that the Company will be able to identify a proper acquisition target or that it will be able to complete any transaction that is foreseen. As a result, the trade in Company shares at the main market of the London Stock Exchange for marketable securities might be nullified.

 

 

 

 

c.

Company's change of name -

 

 

The Company will present to the Companies Authority in Israel a request to change its name from Shefa Gems Ltd. to "Aleph Beit Progressive Technologies (2021) Ltd." or to a similar name, as will be approved by the Israeli Companies Authority. The goal of this name change is to reflect closely the Company's strategy for development of its transactions in the fields of Internet technology and related software.

 

 

Subsequent to the name change, the Company will request from the London stock market to change its trading symbol (TDIM) from SEFA to ALEPH. Holdings of the shareholders on the date of the symbol change will not be affected by the change, although new share certificates will be issued to the shareholders as a result of the name change and completion of the proposed joint transaction. The Company will report in regard to approval of the name change and the new TIDM being valid.

 

 

 

 

 

 

 

SHEFA GEMS LTD. 

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In NIS in thousands)

 

NOTE 4:- SIGNIFICANT EVENTS SUBSEQUENT TO BALANCE SHEET DATE (cont.)

 

 

d.

Increase in registered capital

 

 

The Company will present to the Israeli Companies Authority a request to increase the Company's registered share capital to 1,000,000,000,000 Ordinary shares, to nullify the par value of the Ordinary shares and to amend the Company's charter accordingly.

 

 

 

 

e.

Allocation of shares

 

 

The Company will allocate to the Shani Group and other unrelated parties Ordinary shares at a price of $ 0.0005 (£ 0.00031) per Ordinary share, for a consideration in the amount of $ 1,050,000 (£ 756,000).

 

 

For the purpose of this allocation, that will reflect 85% of the issued share capital after allocation and full dilution, the Company will be requested by the London Stock Market to publish a prospectus in regard to those shares. Those allocated shares will be registered for trade on the main London Stock Market only subsequent to publication of the prospectus. The Company intends to advance with the prospectus as soon as possible and not later than 12 months from the date of approval of the meeting of shareholders.

 

 

During August, the Shani Group transferred half of the abovementioned amount to the subsidiary.

 

 

 

 

f.

Change in the composition of the Company directors

 

 

In accordance with the approval of the meeting, the Company agreed to and appointed a new chairman of the board of directors and two directors. The six former directors resigned, as agreed. One director remained on the job and the external directors also remained (hereinafter: "the new directors").

 

 

On August 23, 2021, the new directors appointed two external directors,that will serve on the balance sheet and audit committees of the Company. In accordance with Section 57 (4) of the Israel Companies Law, 1999, the appointment of new external directors is dependent on the approval of the annual meeting of the Company shareholders that is scheduled for October 2021.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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