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The majority of these non-Israeli financial investors are predominantly from the United States who, in leveraging well established US-Israeli connections, have made numerous investments into the Israeli technology market, with a considerable degree of success. However, European/UK investors have had less exposure and have not necessarily had the right connections to participate in this segment to this date. 

The Company seeks to bridge that gap by using the experience, connections and local knowhow of the Directors, in particular that of the CEO.

Market Opportunities

Israel has a large number of innovative, later stage, technology companies offering foreign investors a wide selection of investment opportunities.  Moreover, there may be opportunities to acquire controlling stakes in companies that have not taken advantage of technology that could help transition a traditional business model to drive further growth. 

Sivota Plc

Strategic report for the year ended 31 December 2023 (continued)

The Directors believe that sectors such as logistics, retail and finance which predominantly remain offline businesses in Israel could produce potential target companies which could greatly benefit from Sivota's approach and ability to introduce them to potential technology solutions.

There may also be opportunities to acquire a controlling interest in non-Israeli founded or related companies that are seeking to benefit from the technology solutions that Sivota may be able to offer. The Directors will consider such opportunities on a case-by-case basis and Investors should note that the Company may therefore acquire controlling stakes in businesses which are not non-Israeli founded or related.

The Company believes there will be an opportunity to invest in businesses that have stalled in the current more challenging global financial and pollical environment, which under new leadership and with available fundings can rebuild their valuation.  The Directors also expect to see an increase in M&A activities, mainly by companies looking to acquire competitors to increase their market share, create economies of scale or add new products and services to their existing offerings. 

Acquisition Targets, Sourcing and Execution

Sivota, through the Directors, has a strong local presence and a significant business network in Israel. The Company believes these networks, relationships, and partnerships are all essential for identifying future investments and developing a robust investment pipeline. 

The Company looks to acquire companies with strong fundamentals that the Directors believe will reward Investors over time.  The general investment strategy is to acquire controlling stakes in underperforming, later stage Israeli-related technology companies to ensure fast, ambitious and sustainable scale. The Directors intend to function as a key partner to the target companies during both the acquisition process, and in the implementation of the growth plan post-acquisition.  

Although the Company evaluates a range of technology companies, a particular areas of focus is in relation to companies already involved in data (artificial intelligence, machine learning, Big Data), digital marketing, and eCommerce.

The Directors believe that they have a competitive advantage in the Israeli market, both in terms of deal flow and the ability to overcome the culture gap which foreign investors can face while working with Israeli founders and management teams.

Sivota Plc

Strategic report for the year ended 31 December 2023 (continued)

Sivota's strategy is 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

·    target opportunities where management execution and a focused strategy will deliver significant valuation uplift.

Turning around an underperforming company and regaining the trust of every stakeholder is a job that requires decisive action. In order to achieve this, Sivota will roll out a methodology based on enhanced transparency and involvement within each target company. Sivota starts with the preparation of an objective and uncompromising diagnostic plan (which will be capable of being amended from time to time to take into account any changing circumstances). This strategic, operational and financial diagnostic is the basis of the turnaround plan, which sets the goals and changes required to be executed in order to achieve these goals.

Any company in which Sivota acquires controlling stakes will regularly communicate the progress of its turnaround to all its stakeholders.

In putting the diagnostic plan into practice, Sivota seeks to:

·    build a growth plan with the Company's management to leverage opportunity, securing the financing of investments

·    communicate the strategy, plan and its progress on a regular and clear basis

·    be thorough with its analysis and due diligence, and present a pragmatic approach to the implementation

·    implement the plan with transparency including engaging in discussions with employee representatives

·    help to grow the organisational culture through leadership

The Directors all have hands-on operational as well as investment and M&A experience in various jurisdictions, having worked for small and medium-sized businesses, both as managers and as owners.  The management team has therefore experienced the financial and operational issues frequently encountered by companies, and knows where to go and how to find, clear unbiased advice for specific business needs.

Sivota Plc

Strategic report for the year ended 31 December 2023 (continued)

Strategy execution during 2023

Since Apester's acquisition, Sivota has been implementing strategic and operational changes within Apester. This includes appointing a new CEO, board members and key executives, developing product infrastructure stability and a profitability-oriented business model. These changes reflect the Company's commitment to driving growth and enhancing value for its stakeholders. This has been further explained in the relevant sections of this report.

 Apester's strategy

Overview

Apester is an innovative digital experience software platform that enables brands, publishers and e-commerce businesses to create and distribute interactive digital experiences and collect the resultant first party data to better understand their customers and accelerate their business performance.

Apester provides publishers with interactive engagement with their users. Apester's software platform enables a number of engagement tools, including polls, quizzes, stories, surveys, mobile dynamic landing pages, and onboarding forms. Publishers use Apester's platform to create an authentic, visual, interactive experience to engage with their customers.

Apester's technology optimises customer experiences across platforms: desktop, mobile and in-app, allowing customers to publish engaging experiences and distribute them across multiple digital assets in a consistent format.

Apester's platform is based on three major components:

-     Interaction content editor: an intuitive user interface that allows to create and customise the interaction units;

-     Embeddable units: interactive units that are easily embedded within websites and domains, seamlessly integrating with existing content. This ensures a cohesive and immersive user experience, promoting higher engagement rates and longer user sessions;

-     Data Analytics:  Data Management layer that allows customers to collect, store and 'own' Zero-Party and First-Party engagement data generated from experiences and applications created by Apester. Artificial Intelligence (AI) driven analytics deliver valuable insight into customer segmentations - trends, sentiments and preferences, empowering brands and publishers to personalise their offering, target their messaging, and convert engagement into sales.

Apester serves businesses such as The Telegraph, RTL, Sport 1 DE, BCN, and La Gazette.

Sivota Plc

Strategic report for the year ended 31 December 2023 (continued)

Market positioning

Apester's consolidated, all-inclusive, digital engagement & monetisation platform provides a genuine 'one-stop shop' for publishers supporting desktop, mobile and apps with a streamlined creation, distribution and analysis benefiting its customers with community engagement growth and audience segmentation at a granular level with the information provided by actual users' indications and actions.

Customers who have implemented Apester's engagement solutions on desktop, mobile or app reported significantly improved engagement of their users, measured through multiple KPIs such as time on site, click-through rate (CTR), registrations, and more. 

Apester's platform provides a unique competitive advantage by leveraging both the engagement capabilities along monetisation, this allows the publishers to onboard Apester with no expensive commitment while benefiting from the collected and stored 'own' Zero-Party and First-Party engagement data which is generated from experiences and applications created on Apester. This gives Apester's customers' valuable insights into customer segmentations such as trends, sentiment and preferences, empowering brands and publishers to engage audiences in scale with a personalised offering, target their messaging, and convert engagement into sales.

In summary, Apester's platform is a simple, cost-effective and scalable technology, built for the next phase of digital business. Code free, it allows untrained users to create interactive experiences in a matter of minutes through Apester Studio. This personalised content can then be distributed across multiple digital media channels, at scale and through a single cloud-based, self-serve platform, and later gather data and analyse to improve performance.

Revenue Model

Apester operates a blended engagement product and performance revenue model based on subscription fees, usage, self-serve and pre-packaged models. Apester also operates revenue share models allowing Apester to grow with its top-tier publishers, applying its own demand stack capabilities to support revenue-oriented monetisation strategies.

Market overview

Apester operates at the intersection of the thriving market for interactive content creation and the rapidly expanding advertising technology (ad tech) industry, offering publishers and brands innovative solutions to monetise their content while enhancing audience engagement.

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Strategic report for the year ended 31 December 2023 (continued)

Sivota Plc

Strategic report for the year ended 31 December 2023 (continued)

The promise of data

In the post-cookie era, where 3rd party and user level data is less available, the advertising world will have to find new methodologies to interact with the end user to practise more reliable targeting and personalisation. Entered First-party data puts publishers and App owners back in control. Interactive Advertising Bureau (IAB) reports that around 71% of brands, agencies and publishers are increasing their first-party datasets as a result of new legislations entered in 2024, and expected to enter into force over the near term[v]. The ability to provide insights based on publishers' own data while complying with the new legislations is Apester's major competitive advantage.

Growth strategy

Online customer engagement is now a necessity for brands and publishers in what is a highly crowded digital space. Generating high-quality and sustained users interaction across the user journey is central to driving performance and ensuring publisher's enable content based monetisation strategies to stay competitive. Apester's end-to-end platform facilitates conversational marketing, providing an open stream of communication between customers and marketers that results in brand uplift and higher conversion rates.

Apester's strategy is to focus on publishers, across some verticals such as sports, news and entertainment, which are looking to engage their users in a competitive marketplace. Apester's platform enables businesses to better engage with their audience simultaneously via different platforms, creating an improved experience for customers. Apester's platform further enables businesses to analyse engagement and performance for business optimisation.

In order to accelerate growth in this sector, Apester plans to invest in the following areas:

●    Automated content creation at scale.

●    Data analytics based on the collected first-party data, and analysis of customer insights and preference, along the ability to enhance audience segmentation being processed within the publisher's DMP.

●     Improving and enhancing the platform capabilities while focusing on publishers operational needs.

Sivota Plc

Strategic report for the year ended 31 December 2023 (continued)

An important technological competitive advantage is Apester's data layer which allows customers to collect, store, and 'own' Zero-Party and First-Party engagement data generated from experiences and applications created on Apester. This highly benefits Apester's customers and offers valuable insights into customer segmentations such as trends, sentiment and preferences, empowering brands and publishers to personalise their offering, target their messaging, and convert engagement into sales. Apester's data capabilities are a key competitive factor, allowing customers to use publishers' own data without any reliance on cookies, which is in accordance with the latest evolution of online data collection methods and privacy regulations.

Apester plans to continue developing these capabilities to integrate with complementary data collection tools which will provide customers a full suite of data capabilities that will provide Apester's customers with tools for improving their performance and enabling them to better interact with their own customers.

Apester's strategy is to focus on the publishers and performance marketing sectors, while enabling brands to run effective campaigns on its platform. Apester's platform also enables e-commerce businesses to better engage with their audience simultaneously via different platforms, creating an improved experience for customers.

Key performance indicators (KPIs) of the Group

At this stage in its development, the Group is focusing on financing and operating KPI's.

Financing

As a result of a negotiation and due-diligence process in 2023, in January 2024 the Company entered into a non-binding term sheet (the 'Term Sheet') with a leading online technology platform operating across the travel sector (the 'Target'). The Company intends to raise up to $3.2 million through the issue of up to 2,515,741 new ordinary shares of one pence each (the New Shares) in order to provide the Target with a convertible loan to fund its working capital commitments for the short term.  As of the date if this report, the Company is in the process of finalising investment agreements.

Pursuant to the Term Sheet, Sivota also has the ability to acquire up to 51% of the share capital of the Target for a consideration of $15 million, subject to the satisfaction of certain conditions, which will be funded by additional fundraising.

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Strategic report for the year ended 31 December 2023 (continued)

Revenues and Expenditure  

In 2023 the Group generated revenues of $5.6 million compared to revenues of $5.9 million generated in the period from Apester's acquisition in May 2022 to 31 December 2022.

The gross profit in 2023 was $1.3 million or 22% of the revenues, compared to the gross profit of $1.6 million or 26% of the revenues, in the period from Apester's acquisition in May 2022 to 31 December 2022.

The Group's operating loss before impairment for 2023 was $4.9 million compared to $4.8 million for 2022, when Apester's financial results in 2022 were included from the date of its acquisition.

The International Accounting Standards (IAS) require that a company ensures that its assets are carried at no more than their recoverable value. Under IAS 36, when the carrying amount of the assets exceeds its recoverable amount an impairment loss is recorded. Following review of recorded intangible asset values at year end, the Group booked an impairment loss of $7.1 million in its 2023 accounts. The impairment loss was mainly due to Apester's losses and the decrease in Apester's revenues as a result of Apester's change in strategy which led to terminating customer accounts that did not meet minimal profitability conditions as well as changes to growth strategy and customer accounts.

Since Apester's acquisition, the Company has been implementing a number of strategic and operational changes within Apester, including the appointment of a new CEO, new board members and key executives. The directors believe the new management team will lead the business to fully exploit a number of near-term growth initiatives.

Financial position

At 31 December 2023 the Group had a cash balance of $1.0 million compared to $4.4 million as at 31 December 2022. The change in the cash balance is explained by cash used for the operating activities.

As at 31 December 2023 trade receivables of the Group were $1.1 million compared to $2.5 million as at 31 December 2022. The trade receivables have decreased as a result of the decrease in the revenues that partly explained by Apester's change in strategy which led to terminating customer accounts which did not meet minimal profitability conditions.

The trade and other payables of the Group as at 31 December were $1.8 million compared to $3.5 million as at 31 December 2022. The decrease is explained by the decrease in the revenues and costs' cut off in 2023.

The debt as at 31 December 2023 was $1.6 million compared to $1.4 million as at 31 December 2022.

Sivota Plc

Strategic report for the year ended 31 December 2023 (continued)

Apester

Apester's management team is mainly focusing on gross margin and monthly EBITDA at this stage of its development. The gross margin and the EBITDA in the year 2023 and the period from the date of Apester's acquisition to the end 2022 were as follows:

Gross margin

Given the indirect operational expenses are relatively not variable during short periods of time, the management uses gross margin indicator to maximise the profitability of Apester.

EBITDA

The management regularly reviews the EBITDA of Apester with the goal to minimise operating costs when possible and prudently manage its cash resources.

Employees

With the exception of the Directors, the Group has 15 employees.

All current members of the Board, including the Chief Executive Officer, are key management personnel. For more information about the Company's directors see the director's remuneration report and Note 10 to the financial statements. For more information about key management personnel other than directors of the Company see Note 11 to the financial statements.  The average number of persons of each sex who were directors and employees of the Group during the reported period:

The Group is still at an early stage of development and does not yet have the scale of board that would facilitate it being able to effectively meet Disclosure Guidance and Transparency Rules (DTR) rules on board diversity.

Sivota Plc

Strategic report for the year ended 31 December 2023 (continued)

Social, Community and Human Rights Issues

As the Group 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 and risk management

The Group operates in an uncertain environment and is subject to a number of risk factors. The Directors have carried out an assessment of the principal risks facing the Group, including those that threaten its business model, future performance, solvency or liquidity.

The Group continues to monitor the principal risks and uncertainties to ensure that any emerging risks are identified, managed, and mitigated.

Keeping pace with technological developments

Apester's ability to attract new customers and increase revenue from existing customers largely depends on its ability to enhance and improve its existing solutions and introduce compelling new technology products. The success of any enhancement to its solutions depends on several factors, including timely completion and delivery, competitive pricing, adequate quality testing, integration with other technologies and the Apester platform, and overall market acceptance. Apester seeks to mitigate this risk by continuing to improve its solutions and products.

Changes to the digital advertising landscape

Apester's current revenues are derived partly from revenue sharing agreements for advertising space sold through its platform. Such revenues are dependent on the worldwide demand and ask prices for advertising, which are mainly controlled by large market participants, such as search engines.  If a search engine decides to reduce its pricing or demand for advertising space is depressed, this will adversely affect Apester's revenues.

Financing 

Although the Directors have confidence in the future revenue earning potential of the Group from its interests in Apester, there can be no certainty that the Group will achieve or sustain profitability or positive cash flow from its operating activities. If Apester does not meet its targets the Group may not be able to obtain additional external financing and also the resultant credit risk associated with the loan advanced to Apester. The board regularly reviews the revenues, KPIs and expenditures of Apester and continues to prudently manage its cash resources and has minimised ongoing operating costs.

Additionally, if the Group intends to acquire further businesses the Company will likely need to raise further funds.

Further, the war in Israel as described below may have an adverse effect on the ability of the Group to raise additional funds.   

Sivota Plc

Strategic report for the year ended 31 December 2023 (continued)

Difficulties in acquiring suitable targets

The Company's strategy and future success are 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 execute any such transactions successfully, this will have an adverse effect on its financial and operational performance.

Security, political and economic instability in Israel and the Middle East

Apester is incorporated under the laws of the State of Israel, and its principal offices and research and development facilities are located in Israel. In addition, Sivota seeks additional target companies based in Israel. Therefore, security, political and economic conditions in the Middle East, particularly in Israel, may affect Group's business directly. 

In October 2023, Hamas, an Islamist terrorist group infiltrated Israel's southern border and carried out a series of attacks against civilian and military targets. Shortly following the attack, Israel's security cabinet declared war against Hamas. The intensity and duration of Israel's ongoing war against Hamas is difficult to predict. While our operations and business have not been materially impacted by the ongoing war to date, future disruptions could materially adversely affect our business as a direct result of employees located in Israel called for reserve duty or of third parties boycotting business with Israeli companies as a political step.

 Taxation

The Group will be subject to taxation in several different jurisdictions, and adverse changes to the taxation laws of such jurisdictions could have an adverse effect on its profitability.

Financial risk management

The Group's principal financial instruments comprise mainly cash, trade receivables, trade and other payables and convertible loans. It is, and has been throughout the year under review, the Group's policy that no trading in financial instruments shall be undertaken. The main risks arising from the Group's financial instruments are credit risk, liquidity risk and foreign exchange risk. The board reviews and agrees on policies for managing each of these risks and they are summarised below.

Credit risk

The Group usually extends 30-60-day term to its customers. The Group regularly monitors the credit extended to its customers and their general financial condition but does not require collateral as security for these receivables. Given the payment history of the Group's customers, the risk is not material.

Sivota Plc

Strategic report for the year ended 31 December 2023 (continued)

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash reserves to fund the Group's operating activities. Management prepares and monitors forecasts of the Group's cash flows and cash balances monthly and ensures the Group maintains sufficient liquid funds to meet its expected future liabilities.

Foreign exchange risk

The Group operates in a number of overseas jurisdictions and carries out transactions in a number of currencies. Part of the Group's revenues is received in GBP, EURO and in New Israeli Shekels ("NIS"). A significant portion of the Group's expenses is paid NIS and GBP. Therefore, the Group is exposed to fluctuations in the foreign exchange rates in USD against the GBP, EURO and NIS. The Group does not have a policy of using hedging instruments but will continue to keep this under review. The Group operates foreign currency bank accounts to help mitigate the foreign currency risk.

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:

·    the likely consequences of any decision in the long term;

·    the interests of the Company's employees;

·    the need to foster the Company's business relationships with suppliers, customers and others;

·    the impact of the Company's operations on the community and the environment;

·    the desirability of the Company's maintaining a reputation for high standards of business conduct; and

·    the need to act fairly between members of the Company.

Sivota Plc

Strategic report for the year ended 31 December 2023 (continued)

The following table acts as Sivota's 172(1) statement by setting out the key stakeholder groups, their interests and how the Company has engaged with them over the reporting period.

Tim Weller, Non-Executive Chairman               30 April 2024

Sivota Plc

Corporate governance statement for the year ended 31 December 2023

The Company is not required to comply with the UK Corporate Governance Code, which is applicable to all companies whose securities are admitted to trading to the premium segment of the Official List. Nevertheless, the Directors are committed to maintaining high standards of corporate governance and propose, so far as is practicable given the Company's size and nature, to voluntarily adopt and comply with the certain aspects of the Quoted Companies Alliance (QCA) Code.

The Board considers that, due to the size and current activities of the Company, its current composition and structure is appropriate to maintain effective oversight of the Company's activities. The structure of the Board will be reviewed as and when the activities of the Company progress to a sufficient size and complexity to require additional independent oversight. It is intended that additional Directors will be appointed in the near future once prospective acquisitions have been identified and that independence will be one of the factors taken into account at such time.

Subject to the Companies Act 2006, the Company's Articles and to any directions given by special resolution of the Company, the business of the Company will be managed by the Board, which may exercise all the powers of the Company, whether relating to the management of the business or not. No alteration of the Company's Articles and no such direction given by the Company shall invalidate any prior act of the Board which would have been valid if such alteration had not been made or such direction had not been given.

The Board meets regularly to review, formulate and approve the Group's strategy, budgets, and corporate actions and oversee the Group's progress toward its goals.

The Directors shall devote as much time as is necessary for the proper performance of their duties.

The Chairman's main responsibility is the leadership and management of the Board's business and its governance. The Chairman meets regularly and separately with the CEO and the Directors to discuss matters for the Board.

Detail of Directors remuneration is given in the Directors' remuneration report.

Sivota Plc

Corporate governance statement for the year ended 31 December 2023 (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:

Tim Weller - Non-Executive Chairman

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. In 2006 he led the £275 million 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 $1.4 billion 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.

Sivota Plc

Corporate governance statement for the year ended 31 December 2023 (continued)

Ziv Ben-Barouch - CEO

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 $70 million 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

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.

Role of the Board

The Board sets the Group's strategy, ensuring 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 Group's affairs within a framework of control which enables risk to be reviewed and managed effectively.

Sivota Plc

Corporate governance statement for the year ended 31 December 2023 (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 Group's operations. There were 12 Board meetings held during the year, except for 1 meeting all the other meetings were attended by all the Directors. .

Directors' indemnities

To the extent permitted by law and the Articles, the Company has made qualifying third-party indemnity provisions for the benefit of its directors during the year, which remain in force at the date of this report.

Policy for new appointments and amendments to articles

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. Pursuant to the Companies Act 2006, the Company may amend its Articles of Association via special resolution, achieved by way of a vote at a General Meeting of the shareholders.

Board Committees

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 the completion of readmission in September 2022 the Board established a risk committee that monitors the financial and commercial performance of investments.

Audit Committee

The Audit Committee consists of Neil Jones and Tim Weller, each of whom has 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.

Sivota Plc

Corporate governance statement for the year ended 31 December 2023 (continued)

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.

In addition, the Audit Committee considers the nature and extent of the non-audit services provided by the auditors. During the reported period the non-audit services were provided to support the admission and readmission processes.

During the reporting period the Audit Committee held meetings on 27 April and 26 September 2023 which were chaired by Tim Weller and were attended by all its members.

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 has   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, recommending and monitoring the level and structure of remuneration for senior management, and the implementation of share option, or other performance-related, schemes. No remuneration consultants provided advice or services about directors' remuneration during the course of the latest reporting period.

The Remuneration and Nomination Committee is also be responsible for considering and making recommendations to the Board with 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, taking into account the Company's commitment to developing a diverse pipeline of directors 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.

Sivota Plc

Corporate governance statement for the year ended 31 December 2023 (continued)

The first Remuneration and Nomination Committee meeting was held in January 2023 and was attended by all its members.

Acquisitions Committee

The Acquisitions Committee consists of all Independent Directors, in the event of a potential acquisition target being introduced to the Group 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. 

Risk Committee

The Risk Committee consists of Tim Weller and Neil Jones. The Risk Committee plans to meet at least once a year. It monitors Group compliance with statutory obligations and its internal policies, and confirms that the Group's management has appropriate controls in place to identify, prepares for and implement legislative and regulatory changes which affect its operations.

The Risk Committee also is responsible for reviewing the significant identified risks (principal risks) of the Group and ensuring that there is the risk management process in place that measure, monitor, manage and mitigate the Group's principal risk exposures.

The Risk Committee held meetings relating to 2022 on 19 December 2022, and relating to 2023 which was postponed to and held on 9 April 2024. Both the meetings were chaired by Tim Weller and attended by all the Directors. 

Internal auditors

The internal auditors of the Company are Chaikin Cohen Rubin & Co, appointed by the Company in December 2022. The internal auditors provide their audit based on an audit plan. Each year specific topics will be identified by the Audit Committee for audit during that year. Each report of the internal auditors will be discussed by the Audit Committee and if necessary by the Board and its results will be learned from and implemented as required.

By Order of the Board

Tim Weller 

Chairman

30 April 2024

Sivota Plc

Directors' report for the year ended 31 December 2023

The Directors submit their report with the audited Financial Statements for the year ended 31 December 2023.

General information

Sivota was incorporated as a public Limited Company under the laws of England and Wales with registered number 12897590 on 22 September 2020.

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.

In July 2021 the Company completed a placing of 1,085,000 ordinary shares for a consideration of $1.4 million (gross) and was listed on the Main Market (Standard Segment) of the London Stock Exchange (LSE).

In December 2021, the Company announced that it had entered into non-binding term sheet with Apester. As a result, the Company's shares were suspended pending the completion of the transaction and the publication of the prospectus in relation to its enlarged group.

In May 2022, the Company completed the fundraising by placing and direct subscription of 11,500,000 of its new ordinary shares for a consideration of $14.2 million (gross) followed by completing the acquisition of a majority stake in Apester, an Israeli-incorporated business which operates an innovative digital experience software platform that enables brands, publishers and creators to publish and monetise new interactive digital experiences on their sites and apps.

In September 2022, the Company published the prospectus and completed its readmission to the LSE.

Since Apester's acquisition, Sivota has been implementing a number of strategic and operational changes within Apester, including the appointment of a new CEO, new board members and key executives. The directors believe the new management team will lead the business to fully exploit a number of near-term growth initiatives.

In January 2024, Sivota entered into a non-binding term sheet with a leading online technology platform operating across the travel sector as described in the Company's strategic report.

The Company continues to seek additional investment opportunities. Raising additional funds by the Company for new investments is challenging due to the current market and political situation. However, the directors believe with the broader macroeconomic environment weakening, seed investment will become harder to source for potential investees, creating more opportunities for the Company's team.

Sivota Plc

Directors' report for the year ended 31 December 2023 (continued)

Results for the year and distributions

The Group results are set out in the consolidated statement of comprehensive income.

In 2023 the Group generated revenues of $5.6 million, with a gross profit of $1.3 million.

The total comprehensive loss for the year 2023 was $11.0 million. The total comprehensive loss for the year 2023 before impairment loss was $5.2 million.

The Board regularly reviews the revenues, KPIs and expenditures of the Group and continues to prudently manage its cash resources and to minimise its ongoing operating costs.

The Company has paid no distribution or dividends since its incorporation.

The Company made no political donations in 2023 (2022: Nil)

Post Balance Sheet Events

In January 2024, Sivota entered into a non-binding term sheet with a leading online technology platform operating across the travel sector (the "Target"). Sivota intends to raise up to $3.2 million through the issue of new ordinary shares in order to provide the Target with a convertible loan to fund its working capital commitments for the short term. Pursuant to the term sheet, Sivota also has the ability to acquire up to 51% of the share capital of the Target for a consideration of $15 million, subject to the satisfaction of certain conditions.

In March 2024 the Company and the additional Apester's shareholder, that lent Apester convertible loans, signed an amendment to the convertible loan agreements to defer the loan repayments by one year.  For more information see Note 4(d) and (f) to the Financial Statements.

Employees and greenhouse gas (GHG) emissions

The Company currently has no trade or employees located in the UK. 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.

Climate-related financial disclosures

The Group does not trade or has no employees located in UK and its sole executive director is not located in the UK. The Company therefore not made any disclosures consistent with TCFD recommendations and recommended disclosures.

Sivota Plc

Directors' report for the year ended 31 December 2023 (continued)

Going forward, as the Company grows and if starts or acquires operations in the UK, it will take steps and develop plans to enable the Directors to make consistent disclosures in the future, which will include relevant timeframes for being able to make those disclosers.    

The Company is headquartered in the UK, which has made a commitment to reaching a net-zero economy. The Company has not considered that commitment in developing a transition plan because, as the Company does not trade in the UK nor has any employees located in the UK, it does not contribute any carbon emissions to the economy. The Company's main operating subsidiary, Apester, is based in Israel, which has also made a commitment to reaching a net-zero economy. The Company has not considered that commitment in developing a transition plan in Israel as Apester's carbon emissions are minimal.

Going concern

The Group projects that it will need to raise further debt or equity finance to fund the planned business development. The Group is expected to further generate losses from operations during 2024 which will be expressed in negative cash flows from operating activity. Hence the continuation of the Group's operations depends on raising the required financing resources or reaching profitability, which are not guaranteed at this point.  Whilst the directors are confident they will be able to raise the additional finance required, this is not guaranteed and hence there is a material uncertainty in respect of going concern. However, the directors have, at the time of approving the financial statements, a reasonable expectation that the Group will have adequate resources to continue in operational existence for the period to 30 April 2025 which is twelve months from the signing of this report. For this reason, the directors continue to adopt the going-concern basis of accounting in preparing the financial statements.

External Auditors

So far as the directors are aware, there is no relevant audit information of which the Group'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 Group's auditors are aware of that information.

In January 2024, the Board approved the appointment of Haysmacintyre LLP as the Company's auditor who succeed the previous auditor - Crowe U.K. LLP. The appointment of Haysmacintyre LLP is for the financial year ended 31 December 2023. The re-appointment of Haysmacintyre LLP as auditor for the financial year ending 31 December 2024 will be subject to approval by the Company's shareholders at the next Annual General Meeting of the Company, to be held in June 2024. The previous auditor has deposited with the Company a statement confirming that there are no matters to be brought to the attention of the Company's members or creditors.

Sivota Plc

Directors' report for the year ended 31 December 2023 (continued)

Share capital and substantial shareholders

The issued share capital of the Company consists of 12,585,000 ordinary shares and 4,950,000 deferred shares. The ordinary shares carry one vote per ordinary share and each ordinary share carries an equal right to dividends declared on the ordinary shares. The ordinary shares have equal voting rights and rank pari-passu for the distribution of dividends and repayment of capital. 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 £1,000,000 has been paid on each ordinary share. Further details of the Company's share capital are given in Note 18 to the financial statements.

As far as the Company is aware, there are no agreements between holders of securities that may restrict the transfer of securities or voting rights however the Board may, in its absolute discretion, refuse to register any transfer of a share in certificated form only in certain circumstances which do not prohibit the transfer of a single class of share which is fully paid up. No single person directly or indirectly, individually or collectively, exercises control over the Company and the Company has not issued any class of share carrying special rights regarding control of 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 30 April 2024:

Sivota Plc

Directors' report for the year ended 31 December 2023 (continued)

Responsibility statement

The Directors are responsible for preparing the Strategic Report, Directors' Report and the Financial Statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law, the directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards (''IFRSs''). Under company law, the directors must not approve the financial statements unless they are satisfied that they 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 year.

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;

·      state whether applicable Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

·      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 Group'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 Group's transactions and disclose with reasonable accuracy at any time the financial position of the Group 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 Group and to prevent and detect fraud and other irregularities.

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 Group for the year;

·      the Director's report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that they face;

Sivota Plc

Directors' report for the year ended 31 December 2023 (continued)

·      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 Group's systems of controls and risk management in order to safeguard its assets.

By Order of the Board

Tim Weller, Chairman 

30 April 2024

Sivota Plc

Directors' remuneration report for the year ended 31 December 2023

The Remuneration and Nomination Committee 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.

Directors' remuneration

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 £8,000,000. Following the completion of fundraising by the Company in May 2022 he is paid £22,500 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 was for an initial period of 12 months from admission 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.

In January 2024, Neil Jones and the Company entered into agreement to defer the payments of the director fee until the earlier of 31 December 2024 or the date of the next fundraising.

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 £8,000,000.  Following the completion of fundraising by the Company in May 2022 he is paid £70,000 per annum to act as a non-executive director of the Company.

If the Company's market capitalisation exceeds £100,000,000 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 £100,000 for the Company's issued share capital at the admission in July 2021.

Sivota Plc

Directors' remuneration report for the year ended 31 December 2023 (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 certain circumstances where the Company can terminate the appointment immediately.

In January 2024, Tim Weller and the Company entered into agreement to defer the payments of the director fee until the earlier of 31 December 2024 or the date of the next fundraising.

Ziv Ben-Barouch

According the employment agreement signed in July 2021 Ziv Ben-Barouch was paid a salary of £18,000 per annum to act as chief executive officer. Following the completion of fundraising by the Company in May 2022 he is paid a salary of £70,000 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.

In January 2024, Ziv Ben-Barouch and the Company entered into agreement to defer the payments of the director fee until the earlier of 31 December 2024 or the date of the next fundraising.

Remuneration of the Directors: 

(*) there are no remunerations other than base fee or salary.

There were no performance measures associated with any aspect of Directors' remuneration during the year.

Sivota Plc

Directors' remuneration report for the year ended 31 December 2023 (continued)

Other matters

The Company currently does not have any annual or long-term incentive schemes in place for any of the Directors and as such there are no disclosures in this respect.

The Company does not have any pension plans for any of the Directors and does not pay pension amounts in relation to their remuneration.

The Company has not paid out any excess retirement benefits to any Directors or past Directors. The Company has not paid any compensation to past Directors.

The Company has not paid any payments for loss of office during the year.

Directors' interests in shares as at 30 April 2024: 

The Company does not currently have in place any requirements or guidelines for any directors to own shares.

The Company is not aware of any changes in the interests of each director that have occurred between the end of the period of review and the date of the AGM notice.

The Company is not aware of any disclosures made to the Company in accordance with DTR 5.

Sivota Plc

Directors' remuneration report for the year ended 31 December 2023 (continued)

Total Shareholder Return

The table above illustrates the total return of Sivota shareholders over the period from the first listening in July 2021 to 31 December 2023 compared to the FTSE 350, when Sivota's shares were suspended from the trading at the London Stock Exchange as a result of the readmission process that began in December 2021 and was completed in September 2022.

The table above illustrates the total return of Sivota shareholders over the period from the readmission completed in September 2022 to 31 December 2023 compared to the FTSE 350.

Sivota Plc

Directors' remuneration report for the year ended 31 December 2023 (continued)

Changes in the Company employees' remuneration 

Neil Jones and Tim Weller did not receive a fee prior to the completion of the fundraise in May 2022. Following the completion of the fundraise, Neil Jones receives fees of £22,500 per annum, and Tim Weller receives fees of £70,000 per annum. There were no changes in the director's remuneration since May 2022.

Similarly, the remuneration paid to the Chief Executive Officer, Ziv Ben-Barouch increased in May 2022 following the completion of the fundraising from £18,000 per annum to £70,000 per annum. There was no change in the CEO's remuneration since May 2022.

The remuneration of the CEO, being the only executive director of the Company, for the year 2024 to which the Remuneration Policy will apply, will be only his salary in accordance with his service agreement. There will be no elements of such remuneration which are subject to any performance measures and so the salary is fixed.

Since its incorporation, the Company has employed one employee outside of the UK, other than the directors, whose employment began in March 2022. There has been no change to this individual's remuneration during the reporting period. However, the Company will ensure any subsequent changes are reflected in ongoing annual reports.

Remuneration policy 

The Remuneration Policy the main aspects of which set out below will be put for approval to Shareholders at the Company's Annual General Meeting to be held in 2024. The effective date of this Policy is the date on which the Policy is approved by shareholders. No remuneration or loss of office payment may be made to a director unless they are consistent with the policy once approved by Shareholders. There are currently no provisions for loss of office payments in any service contract or letter of appointment beyond the relevant contractual notice period.

The Company strives to develop and implement its Remuneration Policy as a fair, consistent, competitive program of financial compensation to the balanced with responsibilities that have been taken.

The Remuneration Policy is designed to reflect remuneration trends and employment conditions across the Company, to support the Company's business strategy and to help the Company promote and attain its objective of long-term success. No remuneration consultants provided advice or services about the Remuneration Policy and the Company did not consult with employees.

The Remuneration Committee intends the Remuneration Policy to apply for one year and will undertake an annual review of the policy to ensure the content continues to reflect the Company's business strategy.

Sivota Plc

Directors' remuneration report for the year ended 31 December 2023 (continued)

If the Company seeks to appoint further directors, it will seek to align any remuneration package with the Company's growth aims for the Group. The Company has no specific policy on the setting of notice periods under directors' service contracts.

Shareholders' views have not been taken into account in relation to the directors' remuneration policy, however as the Company and its Group grow and any changes are required to the policy, the Company will consider doing so.

The remuneration of the CEO, being the only executive director of the Company, for the first year to which the Remuneration Policy will apply, will be only his salary in accordance with his service agreement. There will be no elements of such remuneration which are subject to any performance measures and so the salary is fixed.

Below is a table summarising the main aspects of the remuneration framework for the executive director:

Sivota Plc

Directors' remuneration report for the year ended 31 December 2023 (continued)

The remuneration of the non-executive directors of the Company, for will only their annual fee in accordance with letter of appointment. There will be no elements of such remuneration which are subject to any performance measures and so those fees are fixed. Non-executive directors will not receive any loss of office payments beyond the payment of any contractual notice provision.

By Order of the Board

Tim Weller 

Chairman

30 April 2024

Independent auditor's report

to the members of Sivota PLC

Opinion

We have audited the financial statements of Sivota PLC (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise:

The financial reporting framework that has been applied in their preparation is applicable law and UK adopted International Financial Reporting Standards (IFRSs).

In our opinion, the financial statements:

·      give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2023 and of the group's loss for the period then ended;

·      have been properly prepared in accordance with UK adopted IFRSs; and

·      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 group 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 as applied to listed entities, 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.

An overview of the scope of our audit

As part of our audit planning procedures, we sought to plan the scope of our audit by reviewing the group composition and respective results and position of the components.  As the group comprises a parent holding company, a small standalone cost centre subsidiary and trading subgroup the principal focus of our group audit was on the parent and the trading group in order to provide sufficient appropriate audit evidence in respect of the scope of our work as auditors of the group financial statements.

The scope of the audit and our audit strategy was developed by using our audit planning process to obtain an understanding of the Group and its subsidiaries, its activities, its internal control environment, and developments in its business in the year. 

Our audit testing was informed by our understanding of the group and accordingly was designed to focus on areas where we assessed there to be the most significant risks of material misstatement.  The trading subgroup audit was performed by a component audit firm in Israel.  The audit of the parent and its small standalone cost centre subsidiary was performed by Haysmacintyre.

Material uncertainty related to going concern

We draw attention to Note 3a in the financial statements, which indicates that the group and company's ability to continue as a going concern is dependent on future fund raising. As stated in Note 3a, these conditions and uncertain future events, along with other matters as set forth in Note 3a, indicate that a material uncertainty exists that may cast significant doubt on the group's and company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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 group's and company's ability to continue to adopt the going concern basis of accounting included:

·      Discussing management's assessment of the group's ability to remain a going concern;

·      Reviewing and understanding the cash flow forecasts for the period to end of April 2025 which are a key element of management's going concern assessment;

·      Assessing and challenging the inputs and judgements made in the preparation of the cash flow forecasts for the period to end of April 2025; and

·      Performing stress tests including sensitivity analysis to model the effect of changing assumptions made or amending key data used in management's cash flow forecasts and considering the impact on the group's ability to adopt the going concern basis.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on:

·      the overall audit strategy,

·      the allocation of resources in the audit; and

·      directing the efforts of the engagement team.

These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

In determining the key audit matters we considered the:

·      Areas of higher risks of material misstatement or significant risks identified in accordance with ISA (UK) 315

·      Significant audit judgements on financial statement line items that involved significant management judgement such as accounting estimates, and

·      The impact of significant events and transactions during the period covered by the audit.

In addition to the matter described in the material uncertainty related to going concern, the following table summarises the key audit matters we have identified and rationale for their identification together with how we responded to each in our audit and our key observations.

Risk magnitude key (Note - this is our first audit of Sivota PLC)

The table below shows our judgement of the magnitude and likelihood of key audit matter risk:

Our application of materiality

The scope and focus of our audit were influenced by our assessment and application of materiality. We define materiality as the magnitude of misstatement that could reasonably be expected to influence the readers and the economic decisions of the users of the financial statements. We use materiality to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and on the financial statements as a whole.

Performance materiality - Performance materiality was set at 60% of materiality, being $138,000 (31 December 2022 - 70% of materiality being $154,000).  Our performance materiality was reduced from 70% used by the previous auditors because this was our first audit of the group.

Reporting threshold - The reporting threshold to the audit committee was set as 5% of materiality, being $11,500 (31 December 2022 - $11,000). If, in our opinion in differences below this level warranted reporting on qualitative grounds, these would also be reported.

Differences in materiality levels from the previous audit - The prior year audit was performed in a period in which a significant business combination occurred.  The previous auditors therefore used a materiality calculation based on total assets.  In the year ended 31 December 2023 there has been no major business combinations.  Accordingly, our assessment of materiality was principally based on trading performance but made allowance for the importance of group's intangible assets.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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, based on the work undertaken in the course of the audit:

·      the information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and

·      the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

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 parent company, or returns adequate for our audit have not been received from branches not visited by us; or

·      the parent company financial statements 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 directors

As explained more fully in the directors' responsibilities statement, 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 group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.

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 rests with both those charged with governance of the Company and management:

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to compliance with Companies Law and Listing Rules. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as tax laws.

We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to inappropriate revenue recognition and the risk of management bias in accounting estimates. Audit procedures performed by the engagement team included:

·      Discussions with management including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;

·      The evaluation of management's controls designed to prevent and detect irregularities;

·      The identification and review of manual journals, in particular journal entries which shared key risk characteristics; and

·      The review and challenge of assumptions, estimates and judgements made by management in their recognition of accounting estimates.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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 we are required to address

Following the recommendation of the Audit Committee, we were appointed by the Board in January 2024 to audit the financial statements for the year ending 31 December 2023. The period of total uninterrupted engagement is therefore less than 1 year.

The non-audit services prohibited by the FRC's Ethical Standard were not provided to the Company and we remain independent of the group in conducting our audit. No other services in addition to the audit were provided by the firm to the group.

Our audit opinion is consistent with the additional report to the Audit Committee.

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.

Tom Stock FCA (Senior Statutory Auditor)

For and on behalf of Haysmacintyre LLP, Statutory Auditors

10 Queen Street Place

London EC4R 1AG

30 April 2024

SIVOTA PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

U.S. dollars in thousands

The accompanying notes are an integral part of the financial statements.

SIVOTA PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

U.S. dollars in thousands

The accompanying notes are an integral part of the financial statements.

The accompanying notes are an integral part of the financial statements.

The financial statements on page 40 to 78 were authorised for issue by the board of directors on 30 April 2024 and were signed on its behalf by Ziv Ben-Barouch. 

Ziv Ben-Barouch, CEO    

30 April 2024      

Company Registration Number: 12897590

SIVOTA PLC

PARENT STATEMENT OF FINANCIAL POSITION

U.S. dollars in thousands

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The net loss of the Parent Company for the year was $11,259 thousand ($747 thousand for the year ended 31 December 2022).

The accompanying notes are an integral part of the financial statements.

The financial statements on page 40 to 78 were authorised for issue by the board of directors on 30 April 2024 and were signed on its behalf by Ziv Ben-Barouch. 

Ziv Ben-Barouch, CEO    

30 April 2024                              

Company Registration Number: 12897590