Company Announcements

Final Results year ended 31 December 2023

Source: RNS
RNS Number : 3758P
Tekcapital plc
22 May 2024
 

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The information contained within this announcement is deemed by the Company (Companies House registration number 08873361) to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR")s. With the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

 

Tekcapital PLC

("Tekcapital", "the Company" or the "Group")

Final Results for the year-ended 31 December 2023

 

 

Tekcapital plc (AIM: TEK), the UK intellectual property (IP) investment group focused on creating valuable companies from investing in university technologies that can improve people's lives, announces its audited results for the year ended 31 December 2023.

 

Highlights

 

In 2023 we had a productive year for long-term value creation, setting the foundation for meaningful growth in 2024 as evidenced by the successful floatation of Microsalt plc post year end. Our portfolio companies achieved significant milestones, however due to unrealized reductions in the end of period quoted valuations of Lucyd and Belluscura, our profitability, net assets and net assets per share were commensurately negatively impacted.

 

·      Net Assets US$47.9m (2022: US$57.8m)

·      NAV per share US$0.27 (2022: US$0.38)

·      Portfolio valuation US$41.1m (2022: US$54.9m)

·      Total loss after tax: US$15.7m, resulting primarily from unrealised fair value reduction of portfolio valuation US$14.2m (2022: loss of US$12.7m)

·      Share placings totalling US$5m completed during the period (2022: US$2.5m)

However, post end of period on 20 May 2024 our estimated portfolio valuation was approximately US$75m, recovering the entire fair value losses of 2023 and exceeding the $55m valuation reported in 2022 by ~36%.

 

The Annual General Meeting ("AGM") of Tekcapital Plc will be held at the offices of Bird & Bird LLP, 12 New Fetter Lane, London EC4A 1JP on 21 June 2024 at 2.30 p.m. (British Summer Time). The annual report and the formal notice of the 2023 AGM will be posted to shareholders on the 23 May 2024.

 

The notice of AGM will be available to review on the Company's website at: www.tekcapital.com.

 

 

 


 

 

INVESTMENT PORTFOLIO

 

MicroSalt plc ("Microsalt") manufactures MicroSalt®, a new, patented, all natural, non-GMO, Kosher, low-sodium salt, that tastes great and has approximately half of the sodium of regular table salt.

 

Rounded Rectangle: MicroSalt plc 87% ownership at 31 December 2023 www.microsalt.co

 

INVESTMENT RATIONALE:

The snack food industry is focused on developing and providing better-for-you products that both taste good and help reduce sodium intake. Excess sodium consumption contributes to cardiovascular disease, a leading cause of premature death globally. The World Health Organization has indicated that reducing sodium consumption to 2,300 mg/day can save upwards of 2m lives per year. To help address this problem, MicroSalt provides a patented, low-sodium salt has all the flavour of salt with roughly half the sodium for topical applications such as crisps, pretzels, nuts, popcorn and other salty snacks, bakery products and precooked meals.

 

2023 DEVELOPMENTS:

 

•     Announced partnership with a Fortune 500 national retailer for the development and execution of low-sodium solutions across the retailer's extensive line of private branded snack offerings. This will lead to placement of several of their snacks using MicroSalt® in lieu of traditional salt, beginning with 800 stores in Q4 2023 and likely expanding across more than 7,000 store locations thereafter.

•     Executed agreement with supermarket chain, Giant Food of Maryland LLC, ("Giant") one of the most respected food retailers in the mid-Atlantic United States, to carry MicroSalt's new saltshakers in its 160 stores.

•     Continued its successful sales expansion of both its SaltMe! crisps and MicroSalt saltshakers with new placements in over 400 additional U.S. retail stores.

•     Executed successful launch of its new Microsalt® shakers, placing the product in over 500 stores since Q4 2022.

•     Executed an agreement with US Salt LLC ("US Salt") for the distribution and delivery of MicroSalt's low-sodium solutions.

 

 

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 "OUR MICROSCOPIC SALT CRYSTAL TECHNOLOGY IS CREATING NEW OPPORTUNITIES FOR CONSUMERS TO LOWER THEIR SODIUM INTAKE WITHOUT SACRIFICING FLAVOR."


 

 

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 Rick Guiney
 CEO of MicroSalt Inc.



 

 

 

 

 

 

 

 

 

Lucyd's vision is to Upgrade your eyewear® by providing tech-enhanced eyewear that makes it easier to stay connected to your digital life. Lucyd introduced the world's first smart eyewear with ChatGPT.

 

As of 31 December 2023, Tekcapital owned 100% of Lucyd Ltd, and  Lucyd Ltd owned ~40% of NASDAQ quoted Innovative Eyewear Inc.

 

 

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Lucyd® Limited ("Lucyd") is the developer of ChatGPT enabled smart eyewear under the Lucyd®, Nautica®, Eddie Bauer® and Reebok® brands. Innovative Eyewear, Inc ("Innovative Eyewear"), Lucyd's ~40% owned U.S. operating subsidiary, was the first Company to deliver prescription glasses with Bluetooth® technology in 2019. Their eyeglass frames help you stay connected safely and conveniently, by enabling many common smartphone tasks to be performed handsfree with Bluetooth® and voice assistants.

 

 

 

 

 

 



SOURCE: ¹https://www.ghsa.org/resources/news-releases/GHSA/Ped-Spotlight-Full-Report22#:~:text=WASHINGTON%2C%20D.C.%20%E2%80%93%20Drivers%20struck%20and,Highway%20Safety%20Association%20(GHSA).

²https://www.essilorusa.com/newsroom/vision-impact-institute-releases-study-on-corrective-lens-wearers-in-the-u-s

 

 
 

 

 

 

 


INVESTMENT RATIONALE:

In 2022, the National Highway Traffic Safety Administration (NHTSA) estimates that 7,522 pedestrians died in traffic crashes on public roads, which is a historic high. Open ear audio found in Lucyd smart glasses can help pedestrians maintain situational awareness whilst walking running and cycling. According to the Vision Institute², approximately 75% of the adult population need corrective lenses, and advancements in Bluetooth technology have enabled it to be incorporated into traditional eyeglass form factors. This combination created a new type of eyewear with built-in speakers, microphones and touch controls. Lucyd smart eyewear allows the wearer to forego headphones and use their glasses to listen to audio content and talk to others and digital assistant. Since the speakers are open-ear, Lucyd smart glasses enables the wearer to stay connected to their digital life whilst maintaining situational and social awareness.

 

2023 DEVELOPMENTS:

 

·      Licensed sports culture brand, Reebok® for smart eyewear through an agreement with Authentic Brands Group.

·      Launched Nautica Smart Eyewear Powered by Lucyd® and commenced go to market efforts with assistance from ABG's extensive distribution network.

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·      Released Lucyd App, an iOS/Android app that enables voice interface for ChatGPT on their smart eyewear.

·      Launched Lucyd Lyte 2.0, a major upgrade to its flagship Lucyd Lyte audio eyewear platform that brings several advances to the company's core product, including:

-     Four speaker array

-     Improved audio input

-     Improved battery life with 12 hours of playback

-     The introduction of Bluetooth 5.2 amongst other innovations introduced by the company.

·      Continued preparation for launches of its licensed brand products: Eddie Bauer and Reebok.

·      Filed a patent application for a software system that focuses on one or more smart devices, which may include smart glasses that operate with chatbots such as ChatGPT. The invention accomplishes this by using an innovative technique for choosing from and prioritizing data that may be drawn simultaneously from several different chatbots or AI language models.

·      Innovative Eyewear has filed a patent on a key product innovation, flexible spring hinges for smart eyewear, with the Company's belief that it will enable each style to be worn by a wider array of users and will also increase the durability of the frames by reducing stress points on the temples caused by extended wear.

·      Continued its sales growth as exhibited by 77% increase in revenue in 2023 compared to 2022.

 

Guident Limited ("Guident") has developed and deployed remote monitoring and control software to improve safety of autonomous vehicles and land-based delivery devices. Guident's software will incorporate artificial intelligence and advanced network technologies to minimize signal latency and improve the safety of autonomous vehicles.

 

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Guident developed state of the art, first fully functional remote monitoring and control software to improve the safety of autonomous vehicles and land-based delivery devices.

 

As at 31 December 2023, Tekcapital owned 100% of Guident Ltd, ~and 91% of Guident Corp, its US operating subsidiary.

 

INVESTMENT RATIONALE:

Vehicles of all types are rapidly becoming electric and autonomous. Whilst Autonomous Vehicles  ("AVs") are projected to be significantly safer than traditional vehicles, there will still be mishaps and in many instances there will be no vehicle operator present to help resolve these problems. Guident believes remote human interaction will be needed to address these mishaps. Guident's remote monitoring and control centre monitors vehicles and when necessary provide additional support such as calling first responders, taking over control of the vehicle to move it out of harm's way and can provide real-time communication with passengers and pedestrians. Over time, Guident believes remote monitoring centres will be required in most jurisdictions where AV's operate.

In addition to safety, a key variable in affecting the adoption of electric vehicles is the travel range between charges.

 

All commercial electric cars utilise regenerative braking to help extend the range by capturing the heat energy from braking and utilising it to power the vehicle or help charge the battery. Regenerative brakes work by reversing the electric motors that propel the vehicle. This works like a generator and directs energy back into the electric system to help extend the range and over time improve efficiency. Guident believes that in the next few years all electric vehicles will also have regenerative shock absorbers as these are also "green" and will extend the range the vehicle can be driven between charges. Guident's regenerative shock absorbers have the potential to assist electric vehicle manufacturers to improve the efficiency and range of their vehicles.

 

2023 DEVELOPMENTS:

·      Secured and fulfilled its first purchase order from Jacksonville Transportation Authority (JTA) for JTA project to provide remote monitoring and control services.

·  Received Space Florida grant for a groundbreaking project under the Florida-Israel Innovation Partnership program, together with its valued Israeli partner, NOVELSAT. This integration of NOVELSAT's satellite-based space connectivity technologies and Guident's human-in-the-loop AI technologies will provide the first LEO satellite back-up monitoring and control of an autonomous vehicle with reliable and high-speed bi-directional connectivity.

·      Executed letter of intent with Auve Tech OÜ ("Auve Tech") to provide remote monitoring  and control services for Auve Tech's autonomous vehicles. By combining Auve Tech's advanced Level 4 autonomous vehicles with Guident's RMCC software, the two companies will bring an enhanced level of safety to self-driving technology. Guident's patented software provides human-in-the-loop supervision, adding an extra layer of security to Auve Tech's new autonomous shuttle..

·              Received Notice of Allowance from USPTO for patent for "Systems and Methods for Remote Monitoring of a Vehicle, Robot or Drone", which reinforces its DNA of innovation, it also significantly expands its patent portfolio in the secure and safe operation of autonomous vehicles with the human-in-the-loop concept.

·              Additionally, Guident has announced progress with their regenerative shock absorbers (RSA). Guident has produced its first generation or prototype regenerative shock absorbers and is currently testing these new shocks with Tier-1 automotive companies.  This technology will enable EVs to increase their range and have more available power for telemetric connection with the RMCC. The goal of this technology is to manufacture electromagnetic regenerative shock absorbers with energy densities that can recover a vehicle's vibration energy which is otherwise lost as heat, and in doing so extend their range between charges. In addition, this unique design utilising rotary mechanical motion rectifiers can be tuned to achieve better damping characteristics than existing shock absorbers. In a significant step forward, Guident secured a paid proof of concept agreement with a tier-1 tyre manufacturer for their regenerative shock absorber. This collaboration resulted in successful tests and detailed reports regarding the performance of the regenerative shock absorber. Subsequently, Guident incorporated a new subsidiary, Revive Energy Solutions Ltd, to commercialise its regenerative shock absorber technology. Guident believes that in the next few years all electric vehicles will have both regenerative braking and regenerative shock absorbers to enhance range and comfort.

 

 



 
Rounded Rectangle: Belluscura plc 10% ownership at 31 December 2023 www.belluscura.com



Belluscura plc ("Belluscura") is a respiratory medical Device company that has developed and launched an improvedportable oxygen concentrator (POC) to provide on-the-go  supplemental O2. Belluscura believes

its product is  the first FDA cleared, modular POC with a user-replaceable filter cartridge.  Belluscura aims to

make POC's more affordable to those who need them.

 

 

INVESTMENT RATIONALE:

Worldwide, approximately 300m individuals suffer from COPD (chronic obstructive pulmonary disease). COPD is a progressive lung disease that includes emphysema and chronic bronchitis. POC's are also used to treat:

Interstitial lung disease (ILD): This is a group of lung diseases that cause scarring of the lungs.

Cystic fibrosis: This is a genetic disease that causes thick, sticky mucus to build up in the lungs, making it hard to breathe.

Sleep Apnea: This is a sleep disorder that causes breathing to repeatedly stop and start.

Pulmonary hypertension: This is high blood pressure in the lungs.

Heart failure: This is a condition that makes it hard for the heart to pump blood effectively.

 

Many patients suffering from the above disorders require supplemental oxygen. As there is no cure for COPD, over time patients require greater amounts of oxygen, and if they use a portable oxygen concentrator, they must often replace their devices with greater capacity models as their disease progresses. With Belluscura's new patented device, users can swap out the filter cartridges to enable higher capacity oxygen flow without having to buy a new device, like upgrading memory on a laptop. The result is more affordable oxygen therapy which increases the number of people who can avail themselves of these life-extending and life saving devices.

 

 

2023 DEVELOPMENTS:

·      Belluscura announced it received orders for 6,500 of its next-generation DISCOV-R portable oxygen concentrator. This represents approximately US$15 million of potential revenue to the Company, with initial production of the DISCOV-R expected to begin by the end of this year.      

·      Belluscura announced it has entered into an Exclusive License, Marketing and Distribution Agreement ("Agreement") with its global manufacturing partner InnoMax Medical Technology Ltd. Minimum cumulative royalties over the term of the Agreement will therefore range from US$27.5m if the license is converted to non-exclusive from year 6 and up to US$55m in cumulative royalties if the license remains exclusive for the entire term.

·      Signed a distribution agreement with McKesson Medical-Surgical, a division of McKesson. McKesson delivers a third of all pharmaceuticals used in North America and operates the fourth-largest pharmacy chain in North America.

·      Announced that Robert ("Bob") Fary has joined the Company as Senior Vice President of Global Sales. Bob has thirty years of experience in the respiratory industry where he has held leadership roles at major oxygen concentrator manufacturers and durable medical equipment companies. During the past two decades, Bob's industry leading team was directly responsible for or contributed to the sale of over one million portable oxygen concentrators ("POCs"), generating revenues in excess of US$1 billion.

·      Announced its X-PLOR portable oxygen concentrator ("POC") is now marketed in the US through GoodRx, Inc.  www.goodrx.com

·      Raised total of GBP 7.1m through combination of convertible loan notes and new placings

 

 


 

 

CORPORATE FINANCIAL PERFORMANCE

Our investment objective is to achieve long-term growth of net assets and deliver returns on invested capital through the commercialisation of university and other new discoveries that can make a positive impact on people's lives. In 2023 we had a productive year for long-term value creation, setting the foundation for meaningful growth in 2024 as evidenced by the successful floatation of Microsalt plc post year end. Our portfolio companies achieved significant milestones, however due to unrealized reductions in the end of period quoted valuations of Lucyd and Belluscura, our profitability, net assets and net assets per share were commensurately negatively impacted.

 

•  Net Assets US$47.9m (2022: US$57.8m)

•  NAV per share US$0.27 (2022: US$0.38)

•  Portfolio valuation US$41.1m (2022: US$54.9m)

•  Total loss after tax: US$15.7m, resulting primarily from unrealised fair value reduction of   portfolio valuation US$14.2m (2022: loss of US$12.7m)

•  Share placings totalling US$5m completed during the period (2022: US$2.5m)

 

 

However,  post end of period, using 20 May 2024 closing market prices, our estimated portfolio valuation was approximately US$75m (appx. US$0.37 per share), recovering the entire fair value losses of 2023 and exceeding the $55m valuation reported in 2022 by ~36%.

 

CORPORATE SERVICES ACTIVITY

·      In 2023 our corporate services revenue from Invention Evaluator and Vortechs Group increased ~43%.

·      Tekcapital delivered over 290 Invention Evaluator (IE) reports, a significant increase from the previous year. These reports help organizations worldwide evaluate the market potential of their technologies, indicating the company's growing influence and expertise in this field.

·      Notably, Tekcapital expanded its client base to include industry giants such as Vale S.A., the world's largest producer of iron ore and nickel. Tekcapital also added well known academic clients such as the University of Johannesburg, one of the largest, multi-campus, residential universities in South Africa.

·      Vortechs, Tekcapital's executive search firm, secured more than 12 executive search assignments in 2023, demonstrating substantial growth compared to the previous year. Additionally, it expanded its list of academic clients to include prestigious institutions such as the Massachusetts Institute of Technology (MIT), indicating the firm's increasing reputation in talent acquisition within academia and beyond.

·      Tekcapital played a significant role in sponsoring the 'Innovation for Sustainable Water USA-MEX' open innovation hub in collaboration with Grupo Rotoplas, the Tijuana Development Council, and the United States-Mexico Foundation for Science. This initiative aimed to promote sustainable water solutions, showcasing Tekcapital's commitment to societal and environmental impact through innovation.

 

DR. CLIFFORD GROSS, EXECUTIVE CHAIRMAN SAID:

 

"The Group has made good progress during 2023. Our portfolio companies have demonstrated solid business growth, and we believe they should achieve additional significant milestones by the end of 2024. 

Notably during the year, Innovative Eyewear Inc. launched the world's first ChatGPT enabled eyewear.

 

Key 2023 milestones included:

 

Guident signed re-seller agreements with both Auvetech a leading Estonia autonomous minibus manufacturer and Adastec a leading AV software provider.  Guident's RMCC software will be included in all Auvetech MiCa vehicles and as part of Adastec's autonomous software stack for future deployments.

 

Additionally, Guident has continued to improve and rigorously test its regenerative shock absorbers. Numerous Tier-1 companies are evaluating the shocks for potential inclusion in their electric vehicles.  

 

We are also pleased to highlight Microsalt's strong progress ending the year by growing its revenues, signing up additional customers and launching its low sodium saltshakers in approximately 400 supermarkets and engaging its advisory team for their AIM IPO which was completed on 1 Feb 2024.

 

Our financial results were negatively impacted by the reduction in the observable, closing share prices of both innovative Eyewear and Belluscura at the end of the period, which we believe were in large measure the result of exogenous macro-economic and capital market factors.

 

We remain steadfast and excited about the commercial progress of our portfolio companies in 2023 and for their future prospects for the remainder of 2024. As per our mission and investment objective, we believe that all of our key portfolio companies have the potential to make a positive impact on the lives of the customers they serve, as well as produce meaningful returns on invested capital for our shareholders over the long term." 

 

 

 

POST PERIOD END HIGHLIGHTS

Following Microsalt plc's introduction of its low-sodium saltshakers in the United Kingdom, the Company successfully completed its Initial Public Offering and commenced trading on the AIM market of the London Stock Exchange on February 1st, 2024. Tekcapital holds a 77.24% interest in MicroSalt after the IPO (at 1 February 2024), which at the listing price of 43p per ordinary share, was valued at approximately £14.3m on Admission.

Also following our year end, Guident announced that it will integrate its industry-leading AV remote monitoring, control, assistance, and passenger support services with the world's most compact and flexible level 4 autonomous shuttle, MiCa from Auve Tech.  By working together, the groundbreaking MiCa shuttle will now incorporate Guident's teleoperation solution, further enhancing its safety and Auve Tech's leading, self-driving technology. For each vehicle outfitted with Guident's technology there will be a hardware fee and a recurring license fee.

On 15 May 2024 Microsalt has announced it has been granted an important patent protecting the IP of its micron-sized salt. This particular patent, entitled Low Sodium Salt Composition, is focused on how Microsalt's low-sodium salt adheres to food particles in a different way than traditional table salt. "We believe the grant of patent 11,992,034 is an important milestone for the Company as it further strengthens our IP position in the global low sodium market," said Rick Guiney, CEO of Microsalt.

On 19 Feb 2024 Guident hosted a grand opening for the first U.S. commercial Remote Monitor and Control Centre (depicted below) for enhancing AV safety.

Innovative Eyewear Inc announced a new partnership with Windsor Eyes, a leading eyewear manufacturing and distribution firm. Over the last 50 years, Windsor has become a leading manufacturer and supplier of fashion eyewear under the Bruno Magli, Sanctuary, Pier Martino, Adolfo, Eyecroxx, as well as private label options. Windsor Eyes products are distributed nationwide in leading optical chains and prominent optical shops. The partnership aims to forge a robust collaboration between Innovative Eyewear's unique, cutting-edge smart eyewear products and Windsor Eyes' well-established distribution network within the optical retail sector. Together, Innovative and Windsor intend to work closely to ensure extensive distribution of smart eyewear across the United States, targeting key large optical retail outlets.

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Innovative Eyewear also announced a partnership with New Look Vision Group to distribute its smart eyewear in Canada. New Look Vision Group is the largest optical group in the eye care industry in Canada and has been rapidly expanding in the United States since its acquisition of Edward Beiner in March 2020, its partnership with Black Optical in 2021, and the acquisition of LOH in December 2021. New Look Vision Group has a network of 489 locations operating mainly under the Iris, New Look Eyewear, Vogue Optical, Greiche & Scaff and Edward Beiner banners and a laboratory facility using state-of-the-art technologies.  

Innovative Eyewear Inc. also appointed Micah Richards as a brand ambassador. Micah is a former England International footballer, turned successful broadcaster, currently working for Sky Sports, CBS Sports and BBC Sport whilst he is also a co-host of "The Rest is Football" - a top ten UK podcast.

 

 

 

 

 

 

 

 

For further information, please contact: 

 

Tekcapital Plc 


Via Flagstaff

Clifford M. Gross, Ph.D. 






SP Angel Corporate Finance LLP

(Nominated Adviser and Broker)


+44 (0) 20 3470 0470 

Richard Morrison/Charlie Bouverat (Corporate Finance)

Abigail Wayne / Rob Rees (Corporate Broking)






Flagstaff Strategic and Investor Communications

           

+44 (0) 20 7129 1474

Tim Thompson/Andrea Seymour/Fergus Mellon

 


 

 

About Tekcapital plc

Tekcapital creates value from investing in new, university-developed discoveries that can enhance people's lives and provides a range of technology transfer services to help organisations evaluate and commercialise new technologies. Tekcapital is quoted on the AIM market of the London Stock Exchange (AIM: symbol TEK) and is headquartered in the UK. For more information, please visit www.tekcapital.com

 

General Risk Factors and Forward-Looking Statements

The information contained in this document has been prepared and distributed by the Company and is subject to material updating, completion, revision, verification and further amendment. This Report is directed only at Relevant Persons and must not be acted on or relied upon by persons who are not Relevant Persons. Any other person who receives this Report should not rely or act upon it. By accepting this Report, the recipient is deemed to represent and warrant that: (i) they are a person who falls within the above descrip-tion of persons entitled to receive the Report; (ii) they have read, agree and will comply with the contents of this notice. The securities mentioned herein have not been and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or under any U.S. State securities laws, and may not be offered or sold in the United States of America or its territories or possessions (the "United States") unless they are registered under the Securities Act or pursuant to an exemption from or in a transaction not subject to the registration requirements of the Securities Act. This Report is not being made available to persons in Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa or any other jurisdiction in which it may be unlawful to do so and it should not be delivered or distributed, directly or indirectly, into or within any such jurisdictions.

Investors must rely on their own examination of the legal, taxation, financial and other consequences of an investment in the Com-pany, including the merits of investing and the risks involved. Prospective investors should not treat the contents of this Report as advice relating to legal, taxation or investment matters and are advised to consult their own professional advisers concerning any acquisition of shares in the Company. Certain information contained in this Report has been obtained from published sources prepared by other parties. Certain other information has been extracted from unpublished sources prepared by other parties which have been made available to the Company. The Company has not carried out an independent investigation to verify the accuracy and completeness of such third-party information. No responsibility is accepted by the Company or any of its directors, officers, em-ployees or agents for the accuracy or completeness of such information.

All statements of opinion and/or belief contained in this Report and all views expressed represent the directors' own current as-sessment and interpretation of information available to them as at the date of this Report. In addition, this Report contains certain "forward-looking statements", including but not limited to, the statements regarding the Company's overall objectives and strategic plans, timetables and capital expenditures. Forward-looking statements express, as at the date of this Report, the Company's plans, estimates, valuations, forecasts, projections, opinions, expectations or beliefs as to future events, results or performance. Forward-looking statements involve a number of risks and uncertainties, many of which are beyond the Company's control, and there can be no assurance that such statements will prove to be accurate. No assurance is given that such forward looking statements or views are correct or that the objectives of the Company will be achieved. Further, valuations of the Company's portfolio investments and net asset value can and will fluctuate over time due to a wide variety of factors both company specific and macro-economic. Changes in net asset values can have a significant impact on revenue and earnings of the Company and its future prospects. As a result, the reader is cautioned not to place reliance on these statements or views and no responsibility is accepted by the Company or any of its directors, officers, employees or agents in respect thereof. The Company does not undertake to update any forward-looking statement or other information that is contained in this Report. Neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the information contained in this Report or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Report. Neither the issue of this Report nor any part of its contents is to be taken as any form of contract, commitment or recommendation on the part of the Company or the directors of the Company. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal, analysis or investigation of the Company. This Report should not be considered a recommendation by the Company or any of its affiliates in relation to any prospective acquisition or disposition of shares in the Company. No undertaking, Report, warranty or other assurance, express or implied, is made or given by or on behalf of the Company or any of its affiliates, any of its directors, of-ficers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this Report and no responsibility or liability is accepted for any such information or opinions or for any errors or omissions.

Intellectual Property Risk Factors

Tekcapital mission is to create valuable products from university intellectual property that can improve people's lives.  Therefore, our ability to compete in the market may negatively affected if our portfolio companies lose some or all of their intellectual property rights. If patent rights that they rely on are invalidated, or if they are unable to obtain other intellectual property rights. Our success will depend on the ability of our portfolio companies to obtain and protect patents on their technology and products, to protect their trade secrets, and for them to maintain their rights to licensed intellectual property or technologies. Their patent applications or those of our licensors may not result in the issue of patents in the United States or other countries. Their patents or those of their licensors may not afford meaningful protection for our technology and products. Others may challenge their patents or those of their licensors by proceedings such as interference, oppositions and re-examinations or in litigation seeking to establish the invalidity of their patents. In the event that one or more of their patents are challenged, a court may invalidate the patent(s) or determine that the patent(s) is not enforceable, which could harm their competitive position and ours. If one or more of our portfolio company patents are invalidated or found to be unenforceable, or if the scope of the claims in any of these patents is limited by a court decision, our portfolio companies could lose certain market exclusivity afforded by patents owned or in-licensed by us and potential competitors could more easily bring products to the market that directly compete with our own. The uncertainties and costs surrounding the prosecution of their patent applications and the cost of enforcement or defence of their issued patents could have a material adverse effect on our business and financial condition.

 

To protect or enforce their patent rights, our portfolio companies may initiate interference proceedings, oppositions, re-examinations or litigation against others. However, these activities are expensive, take significant time and divert management's attention from other business concerns. They may not prevail in these activities. If they are not successful in these activities, the prevailing party may obtain superior rights to our claimed inventions and technology, which could adversely affect their ability of our portfolio companies to successfully market and commercialize their products and services. Claims by other companies may infringe the intellectual property rights on which our portfolio companies rely, and if such rights are deemed to be invalid it could adversely affect our portfolio companies and ourselves as investors in these companies.

 

From time to time, companies may assert, patent, copyright and other intellectual proprietary rights against our portfolio company's products or technologies. These claims can result in the future in lawsuits being brought against our portfolio companies or their holding company. They and we may not prevail in any lawsuits alleging patent infringement given the complex technical issues and inherent uncertainties in intellectual property litigation. If any of our portfolio company products, technologies or activities, from which our portfolio companies derive or expect to derive a substantial portion of their revenues and were found to infringe on another company's intellectual property rights, they could be subject to an injunction that would force the removal of such product from the market or they could be required to redesign such product, which could be costly. They could also be ordered to pay damages or other compensation, including punitive damages and attorneys' fees to such other company. A negative outcome in any such litigation could also severely disrupt the sales of their marketed products to their customers which in turn could harm their relationships with their customers, their market share and their product revenues. Even if they are ultimately successful in defending any intellectual property litigation, such litigation is expensive and time consuming to address, will divert our management's attention from their business and may harm their reputation and ours.

 

Several of our portfolio companies may be subject to complex and costly regulation and if government regulations are interpreted or enforced in a manner adverse to them, they may be subject to enforcement actions, penalties, exclusion, and other material limitations on their operations and have a negative impact on their financial performance. All of the above listed risks can have a material, negative affect on our net asset value, revenue, performance and the success of our business and the portfolio companies we invested in.



STRATEGIC REPORT

 

CHAIRMAN'S SUMMARY

 

Tekcapital plc and subsidiaries ('Tekcapital') brings new scientific innovations from lab to market to enhance safety and health and improve the quality of life of the customers we serve. In the past year, thankfully, all of our portfolio companies have made significant advancements. Belluscura expanded production, distribution and sales of its portable O2 concentrator, Innovative Eyewear launched the first ChatGPT enabled smart eyewear, and had record annual sales growth MicroSalt on-boarded two Fortune 500 B2B clients to use MicroSalt in their products and have expanded sales of their saltshakers to >400 retail locations throughout the US.  Additionally, Guident has begun providing RMCC services to its first customer, the Jacksonville Transportation Authority, for its remote monitoring and control service and has built and continues to test their regenerative shock absorbers with Tier 1 companies for use with electric vehicles.

 

As a result, consistent with our mission, Tekcapital's portfolio companies are making a positive impact on the lives of the customers they serve.

 

CURRENT TRADING AND OUTLOOK

 

We are enthusiastic about the development of Tekcapital's portfolio companies, their performance to-date and their prospects to significantly expand in 2024. The Board is confident that continued investment in our non-quoted portfolio companies remains the right approach for potential long-term value creation. Additionally, we are currently exploring adding a fifth portfolio company focused on the commercialisation of generative artificial intelligence.

 

Whilst Tekcapital Group is progressing well, investors should note that net asset values will fluctuate from period to period due to individual portfolio company performance, valuations and changes in market conditions and macro-economic financial conditions, and that material changes in the value of our portfolio companies can have a significant impact on our NAV, operating result and future prospects.

 

KEY PORTFOLIO COMPANIES

 

Leveraging our proprietary global university network, we provide services to universities and companies to help them assess and commercialise their innovations. Utilising these services, we have built a valuable group of portfolio companies to commercialise select intellectual properties that if successfully commercialised could make a positive impact on people's lives. Our model is simple, we seek to couple commercialisation ready, compelling university IP with visionary management. We then invest our own capital and introduce exogenous sources of capital to help these companies grow. When we realise exits through trade sales or IPOs, the Group's goal is to distribute a portion of the proceeds as a special dividend to our shareholders.

 

Our current portfolio companies were all started by Tekcapital. Whilst few in number, they are diverse and span multiple sectors including food tech, autonomous vehicles, smart eyewear and respiratory medical devices. All of our portfolio companies have in our view, compelling intellectual properties, capable and inspired management and address $Billion+, fast growing markets. The entire team at Tekcapital is committed to helping these companies grow to achieve their full potential and value.

 

Microsalt is a food tech business that owns a patented process to produce micron sized salt.

 

Microsalt has made significant progress in 2023, including receipt of purchase orders from two Fortune 500 customers for Mirosalt as an ingredient. In addition to its focus on B2B sales of MicroSalt® to snack food companies where the Company has made substantial progress, Microsalt has launched its own snack food brand called SaltMe!™. Additionally, MicroSalt has launched its low sodium salt in saltshakers during 2023. Approximately 400 supermarkets now carry theses better-for-you saltshakers.

 

Tekcapital owned approximately 87% of MicroSalt Ltd as of 31 December 2023.

 

Guident Ltd seeks to improve the safety and efficiency of autonomous vehicles and land-based delivery drones with a SaaS software platform that enables the remote monitoring and control of these vehicles to serve rapidly resolve the situation.

 

In 2023, Guident Secured and fulfilled its first purchase order from Jacksonville Transportation Authority (JTA) for JTA a project to provide remote monitoring and control services. The company also received Space Florida grant for a groundbreaking project under the Florida-Israel Innovation Partnership program, together with its valued Israeli partner, NOVELSAT. This integration of NOVELSAT's satellite-based space connectivity technologies and Guident's human-in-the-loop AI technologies will provide the first satellite back-up monitoring and control of an autonomous vehicle with reliable and high-speed bi-directional connectivity.

In a significant step forward, Guident secured a paid proof of concept agreement with a tier-1 tyre manufacturer for their regenerative shock absorber. This collaboration resulted in successful tests and detailed reports regarding the performance of the regenerative shock absorber. Subsequently, Guident incorporated a new subsidiary, Revive Energy Solutions Ltd, to commercialise its regenerative shock absorber technology. Guident believes that in the next few years all electric vehicles will have both regenerative braking and regenerative shock absorbers to enhance range and comfort.

 

Tekcapital owned 100% of Guident Ltd and 90% of its U.S. subsidiary Guident Corporation as of 31 December 2023.

 

Lucyd has built a smart eyewear business that combines technology with traditional eyewear.

 

In 2023, the Company licensed sports culture brand, Reebok® for smart eyewear through an agreement with Authentic Brands Group. The Company demonstrated quarterly sales growth in 2023 while also continuing preparation for launch of its remaining branded products including Nautica and Eddie Bauer. In another milestone achievement, the Company released Lucyd App, an iOS/Android app that enables voice interface for ChatGPT on their smart eyewear.

 

As at 31 December 2023, Tekcapital owns, via it's 100% interest in Lucyd Limited, 40% of the share capital of Innovative Eyewear, Inc.  Innovative Eyewear shares are listed on the NASDAQ under ticker: LUCY.

 

Belluscura has developed and sells an improved portable oxygen concentrator to provide on-the-go supplemental O2 (oxygen), with user replaceable filter cartridges.

 

When a patient's disease progresses, they now can upgrade the filter cartridge to provide more liters of O2 per minute, like adding memory on a laptop, rather than having to replace an expensive medical device. These cost savings will be beneficial to patients and insurance companies and should help make portable respiratory devices more affordable which is core to Belluscura's mission. Belluscura filed for and received clearance from the Hong Kong Department of Health has received approval for the distribution of the X-PLOR® portable oxygen concentrators. China has almost 100 million people living with chronic obstructive pulmonary disease (COPD) and accounts for almost 25% of all COPD cases globally[1].

 

Financial performance

 

•  Net Assets US$47.89m (2022: US$57.8m)

•  NAV per share US$0.27 (2022: US$0.38)

•  Portfolio valuation US$41.1m (2022: US$54.9m)

•  Total loss after tax: US$15.7m, resulting primarily from net unrealised fair value reduction of US$14.23m (2022: loss of US$12.7m).

 

Fundraisings during the period

 

In 2023 we closed share placements totaling US$ 5.2m. (2022: US$ 2.5m), excluding expenses. Proceeds were used primarily to accelerate the commercial progress and IPO readiness of Microsalt and fuel the further fabrication and testing of Guident's regenerative shock absorbers coupled with building Guident's new remote monitoring and control centre in Boca Raton, Florida.

 

PRINCIPAL RISKS AND UNCERTAINTIES

 

The specific financial risks are discussed in the notes to the financial statements. Other risks are as follows:

 

We believe the principal financial risks and benefits of the business relate to the value and performance of the Group's portfolio companies. We believe that the fair value of each portfolio Company is a time dependent valuation that may become impaired if the business does not achieve it milestones, growth trajectory, product development goals, market acceptance, capital raises or other key performance metrics. Individually and as a group our portfolio companies have a material impact on our financial performance.

 

•     The risk of individual portfolio company negative performance, in the future, may be ameliorated, as our portfolio becomes more mature, and when our portfolio companies develop significant capital reserves, predictable revenues and have demonstrated significant increases in value. Management's strategy of early detection and remediation includes continuous monitoring of sales performance, expenses and capital requirements as well as ongoing assistance in strategic planning and fundraising activities, amongst others.

•     The principal operational risk of the business is management's ability to assist our portfolio companies in achieving their goals and ultimate exits whilst having a small team and an additional goal of increasing our service revenues. Management's strategy of early detection and remediation includes continuous monitoring of sales performance and expenses, intellectual property position and strategic direction, as well as ongoing assistance in executive and board recruitment, IP acquisition and fundraising activities, amongst others.

•     The current barbaric and senseless Russian invasion of Ukraine, as well as Israel/Gaza conflict over time may contribute to inflation of energy costs and supply chain disruption which could increase the cost and complexity of sourcing components for some of our portfolio companies. Additionally, due to the conflict and the uncertainty it has introduced to the capital markets, whilst large cap stocks have progressed well, small cap stocks worldwide are still feeling the pinch, and this can be seen in Belluscura's and Innovative Eyewear's share prices at the end of the period.

 

We are grateful for the patience and support of our shareholders. We are also sincerely appreciative of our dedicated, creative and incredibly hardworking teams at portfolio companies and our corporate team, without whom, none of the results reported herein would be possible.

 

SECTION 172 (1) STATEMENT

 

Our Board (please also see Board of Directors page for information on Directors) ensures that all decisions are taken for the long term, and collectively and individually aims to always uphold the highest standard of conduct. Similarly, our Board acknowledges that the business can only grow and prosper over the long-term if it understands and respects the views and needs of the Company's investors, customers, employees, suppliers and other stakeholders to whom we are accountable, as well as the environment we operate within. When making decisions, each director ensures that they act in the way that would most likely promote the Company's success for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to the following matters:

 

a)     The likely consequences of any decision in the long term

In line with our strategy, Tekcapital plc's purpose is to find and invest in exciting new discoveries from our global university network that can enhance people's lives. We believe that when you couple commercialisation ready, compelling university IP with strong senior management, vibrant companies will likely emerge. When we realise exits the Group's goal is to distribute a portion of the proceeds as a special dividend to our shareholders.

 

With this in mind, we apply the same high standards of responsible stewardship to our businesses as if we were to own them forever, and it is this approach to decision making that requires the Directors to have regard to the likely consequences of decisions in the long-term.

The long term decision making and strategy also considers consequences of climate change, such as changes in extreme and unpredictable weather. The Board considers the potential impacts of the climate change related disruptions on business operations of Tekcapital Group and its portfolio companies as they relate to supply chain, customer demand and business operations as these risks may affect future investment decisions.

                                                                                       

b)      The interests of the Group's employees

The Board strives to maintain and develop a culture where everyone feels valued and included. The Board also considers the health, safety and wellbeing of all Tekcapital employees in every day decisions.  Feedback from employees is actively encouraged and is considered a key driver in developing our business activities, processes and workplace environment. Initiatives to encourage wellbeing are well established and continue to evolve and are strongly influenced by the workforce. Professional and personal development of employees is viewed as fundamental to the continued success of the Company.

 

c)      The need to foster the Group's business relationships with suppliers, customers and others

The Board ensures that the Group's mission is focused on improving the world with university discoveries, and focuses on innovations that, if successful, can improve the quality of life of customers we serve.  The Board recognises that it is crucial that we deliver a reliable service to our customers and maintain excellent relationships with suppliers.

 

d)      The impact of the Group's operations on the community and the environment

In their decision making, the Directors need to have regard the impact of the Company's operations on the community and environment. The Board plays a constructive role in tackling issues through engagement and making sure the Group's investments focus on improving quality of life and attempt to solve significant health and safety problems facing communities. The Board also considers impact of Group's investment decisions on the environment as part of screening process.

 

e)     The desirability of the Group maintaining a reputation for high standards of business conduct

The Board recognises that culture, values, and standards are key contributors to how the Group creates and sustains value over the longer term, and to enable it to maintain a reputation for high standards of business conduct. High standards of business conduct guide and assist in the Board's decision making, and in doing so, help promote the Group's success, recognising, amongst other things, the likely consequences of any decision in the long-term and wider stakeholder considerations. The standards set by the Board mandate certain requirements and behaviour with regards to the activities of the Directors, the Group's employees and others associated with the Group.

 

f)     The need to act fairly as between members of the Group

The Company has one class of ordinary shares, which have the same rights as regards voting, distributions and on a liquidation. Management are also significant shareholders in the Group, holding approximately 6% of the register, together putting them in the top 3 shareholders of the Group. On this basis the Board feels that the executive Directors are fully aligned with shareholders.

 

g)    MicroSalt Ltd ('Microsalt') listing

As at 31 December 2023, we had initiated the process for listing of Microsalt Ltd's shares to enhance its ability to raise capital and compete effectively in the sodium reduction market. The listing, if successful, will enhance the Microsalt's ability to recruit experienced managers by being able to offer associates stock options grants with a near-term path towards monetisation.

 

h)    Fundraising activities

During the course of the year, Tekcapital plc consummated two fundraises for dual reason of continued investment in our portfolio companies and to increase our available working capital. The former reason is consistent with board policies mentioned in our current report.

 

We are enthusiastic about the development of Tekcapital's portfolio companies, their performance to-date and their prospects to significantly expand in 2024. The Board is confident that continued investment in our portfolio companies remains the right approach for potential long-term value creation. Additionally, we are currently exploring early-stage venture funding for Guident to accelerate growth further.

 

 

Clifford M. Gross, Ph.D.

Chairman and CEO

 

21 May 2024

 

DIRECTORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2023

 

PRINCIPAL ACTIVITIES

 

The principal activity of the Group and the parent Company is that of an investment entity.

 

RESULTS AND DIVIDENDS

 

The results for the period are set out in the consolidated statement of comprehensive income on page 29. No dividend was declared or paid during the period ended 31 December 2023 (2022: $nil).

 

DIRECTORS

The following Directors held office during the period:

Clifford M Gross, Ph.D. 

Robert Miller, M.D.

Louis Castro, FCA

The RT Hon Lord David Willetts FRS

 

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the financial statements in accordance with applicable laws and regulations.

Under that law the Directors are required to prepare the Group financial statements in accordance with International Financial Reporting Standards as adopted in the United Kingdom ("UK adopted IFRS") and have also chosen to prepare the Company financial statements in accordance with the United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 Reduced Disclosure Framework, and applicable law). 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 Group and the Parent Company and of their profit or loss for that period.

.In preparing those financial statements, the Directors are required to:

·    select suitable accounting policies and then apply them consistently;

·    make judgments and estimates that are reasonable;

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

·    prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

 

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's and the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. The Directors are also responsible for safeguarding the assets of the Group and the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

DIRECTORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2023

 

Each of the current Directors, whose names are listed in the Directors' report on this page of the financial statements confirm that, to the best of each person's knowledge and belief:

 

·    the Group financial statements, prepared in accordance with UK-adopted IFRS, give a true and fair view of the assets, liabilities, financial position and profit (or loss) of the Group;

·    the Company financial statements, which have been prepared in accordance with United Kingdom Accounting Standards, comprising FRS 101 Reduced Disclosure Framework, give a true and fair view of the Company's assets, liabilities and financial position of the Company; and

·    the chairman's statement contained in the annual financial statements includes a fair review of the development and performance of the business and the position of the Group and Company, together with a description of the principal risks and uncertainties that they face.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group's website www.tekcapital.com. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

GOING CONCERN

 

The Group meets its day-to-day working capital requirements through its service offerings, cash at bank, monies raised in follow-on offerings and realisation of its investments. The Group's forecasts and projections indicate that the Group has sufficient cash reserves to operate within the level of its current facilities.

 

The Group has access to equity markets if it seeks additional funds. At the time of approving the accounts after making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.

 

See Note 2.1.1 for additional information on Going Concern.

 

FUTURE DEVELOPMENTS

 

No changes in the nature of the business is expected in the foreseeable future.

Information has been included in the strategic report in relation to disclosures under S414C(11) of the Companies Act 2006.

 

AUDIT COMMITTEE REPORT

 

The Board operates an Audit Committee, chaired by Louis Castro. This Committee carries out duties as set out in the AIM Admission Document, supervising the financial and reporting arrangements of the Group. During the period, no issues arose that the Directors consider appropriate to disclose in their Report. The audit committee met 3 times during the period.

 

 

 

DIRECTORS' REPORT FOR THE YEAR ENDED
31 DECEMBER 2023

 

DIRECTORS' EMOLUMENTS

 


Salary & 

Benefits

Bonus

2023

2022

 

fees

in kind

 

Total

Total


US $

US $

US $

US $

US $

Clifford M Gross

254,096

27,846

-

281,942

530,722

Robert Miller

23,261

-

-

23,261

23,261

Louis Castro

44,779

-

-

44,779

44,804

Lord David Willetts

36,694

-

-

36,694

36,714


358,830

27,846

-

386,676

635,501

 

 

The Director's proportion of the share option expense was US$1,362 (2022: US$62,747). The Group did not make any contributions to a pension scheme in the year ended 31 December 2023 (2022: Nil).  The Directors' beneficial interests in shares is set out below:

 

 

2023

2022

2023

2022

 

No of Shares

No of Shares

No of Options

No of Options

Clifford M Gross

8,657,500

8,657,500

3,000,000

3,000,000

Lord David Willetts

-

-

200,000

200,000

Robert Miller

2,664

2,664

200,000

200,000

 

Please note the above figure for Clifford M Gross does not include 100,000 shares held by both of Dr. Gross's adult children who are not considered a PCA as defined in the Article  3(1)(26) of the UK Market Abuse Regulation.

 

The details of the options held by each director at 31 December 2023 are as follows:

 


No of Options

Exercise Price

Grant Date

Date from which exercisable

Life

Clifford M Gross

3,000,000

£0.12

27-Aug-20

Special Conditions*

5 Years

Robert Miller

100,000

£0.081

30-Aug-19

Special Conditions**

5 Years


100,000

£0.19

16-Jun-21

Special Conditions**

5 Years

Lord David Willetts

100,000

£0.0525

6-Jan-20

Special Conditions**

5 Years


100,000

0.19

16-Jun-21

Special Conditions**

5 Years

 

 

 

 

 

DIRECTORS' REPORT FOR THE YEAR ENDED
31 DECEMBER 2023

 

DIRECTORS' EMOLUMENTS (CONTINUED)

 

* The options vest in three equal annual instalments from the date of grant and there is a special condition which means the options will vest when the closing price for a share has been traded at more than 50 pence (sterling) for ten consecutive trading days.

** The options shall vest when the net asset value, as stated in the annual consolidated accounts, meets, or exceeds USD$20.53m during the 36 months after the grant date. The threshold shall be re-tested when each set of accounts published during the 36 months are finalised.

An additional 525,000 options were held by Harrison Gross, family member of Dr. Clifford Gross.

 

Total of key management personnel compensation including short term benefits and share based payments is disclosed in Note 8 of the accounts below.

 

DIRECTORS' INDEMNITY ARRANGEMENTS

 

The Group has made qualifying third-party indemnity provisions for the benefit of the Directors, which were made during the period and remain in force at the date of this report.

 

The Group has purchased and maintained throughout the period Directors & Officers liability insurance in respect of itself and its Directors.

 

PRINCIPAL RISKS & UNCERTAINTIES

 

Please refer to strategic report.

 

RESEARCH & DEVELOPMENT ACTIVITIES

 

The Group conducted research and development activities pertinent to incorporation of Generative AI technology to Invention Evaluator and Vortechs services.

 

POST BALANCE SHEET EVENTS

 

For further details, please refer to note 26 in the notes to the accounts. Information has been included in the strategic report under S414C(11).

 

For financial instruments risks, please refer to Note 3.1 of the Notes to the Financial Statements.

 

 

 

 

 

 

Directors' Remuneration report

The Board has delegated to its Remuneration Committee, chaired by Robert Miller, certain responsibilities in respect of the remuneration of senior executives. During the period, no issues arose that the Directors consider appropriate to disclose in their Report. The remuneration committee meets at least 2 times during the calendar year.

 

INDEPENDENT AUDITORS

MHA were appointed as auditor to the Group and the Company and in accordance with section 485 of the Companies Act 2006. Following a rebranding exercise on 15 May 2023 the trading name of the company's independent auditor changed from MHA MacIntyre Hudson to MHA. A resolution to reappoint MHA as independent auditor will be proposed at the next Annual General Meeting.

 

Statement of disclosure of information to auditors

Each of the persons who was a Director at the date of approval of this report confirms that:

•     so far as the Director is aware, there is no relevant audit information of which the Company's auditor is unaware; and the Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

 

This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.

 

By order of the Board of Directors and signed on behalf of the Board

 

Louis Castro

Director

21 May 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2023

 

 


 

Year ended

Period ended

Group

Note

 

31 December

31 December

 

 

 

2023

2022


 

 

US $

US $

Continuing operations


 

 


 

 




Revenue from services

6

 

735,265           

         615,214 

Cost of sales


 

        (314,083)

        (222,361)

Changes in fair value on financial assets at fair value though profit or loss

12

 

   (14,229,009)

   (10,978,372)

Interest from financial assets at fair value through profit or loss

12

 

          455,096 

         286,583 

Operating expenses

7

 

     (2,353,704)

     (2,524,496)

Other income

6.1

 

            20,384 

           79,638 






Operating loss and loss before tax


 

   (15,686,051)

   (12,743,794)

 

 




Income tax expense

9

 

            (2,266)

            (1,714)






Loss after tax for the year/period


 

   (15,688,317)

   (12,745,507)

 

 




Other comprehensive income*

 




Translation of foreign operations


 

          900,722 

        (212,803)

Total other comprehensive income/(expense)


 

          900,722 

        (212,803)

 

 




Total comprehensive loss for the year/period


 

   (14,787,595)

   (12,958,311)

 

 




Earnings per share

 




Basic losses per share

10

 

(0.09)

(0.09)

Diluted losses per share

10

 

(0.09)

(0.09)

 

 

 

* May be reclassified to profit or loss in future years.

All comprehensive income as presented above belongs to the owners of the Group.

The notes on pages 34 to 64 are an integral part of these consolidated financial statements.

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2023

 

 

 

 


As at 31 December

As at 31 December

Group

Note

2023

2022

 

 

US$

US$

Assets

 



Non-current assets

 



Intangible assets

13

                  218,158 

                242,940 

Financial assets at fair value through profit and loss

12

             46,653,995

           56,184,146 

Property, plant and equipment

14

                    14,271 

                    9,969 



             46,886,424 

           56,437,055 





Current assets

 



Trade and other receivables

15

               1,114,753 

             1,088,043 

Cash and cash equivalents

16

                  620,248 

                628,640 



               1,735,001 

             1,716,683 





Total assets


             48,621,425 

           58,153,738 





Current liabilities

 



Trade and other payables

19

                  517,154 

                215,998 

Deferred revenue

20

                  217,391 

                172,610 



                  734,545 

                388,608 



 


Total liabilities


                  734,545 

                388,608 

Net assets


             47,886,880 

           57,765,130 





Equity attributable to owners of the Parent

 



Ordinary shares

18

                  973,329 

                839,723 

Share premium


             28,937,011 

           24,240,930 

Retained earnings


             17,073,617 

           32,682,276 

Translation reserve


               975,092 

                  74,370 

Other reserve


                  (72,169)

                 (72,169)

Total equity


             47,886,880 

           57,765,130 

 

The notes on pages 34 to 64 are an integral part of these financial statements.

 

The financial statements on pages 29 to 64 were approved and authorised for issue by the Board of Directors on 21 May 2024 and were signed on its behalf.

 

 

 






Louis Castro

Director

 

Tekcapital PLC

registered number 08873361

 

 

 

 


Dr Clifford M Gross

Chairman and CEO

 

 

 

 

 

 



STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED 31 DECEMBER     2023

 

                          

 


Attributable to equity holders of the parent company

 

 


Ordinary

Share

Translation

Other

Retained

Total

 

Group

Note

Shares

Premium

Reserve

Reserve

Earnings

Equity

 

 

 

US $

US $

US $

US $

 US $

US $

 

 








 

At 30 November 2021

 

           793,792 

           21,793,644 

       287,173 

    (72,169)

                     45,259,827 

           68,062,267 

 

 








 

Profit for the year


                  -  

                       -  

                   -  

                -  

                  (12,745,508)

           (12,745,508)

 

Other comprehensive income


                  -  

                       -  

      (212,803)

                -  


                (212,803)

 

Total comprehensive income for the year

                  -  

                       -  

     (212,803)

                -  

        (12,745,508)

  (12,958,311)

Transactions with owners, recorded
   directly in equity

 







 

Share issue

18

              40,486 

              2,489,878 

                   -  

                -  

                            -  

               2,530,364 

 

Cost of share issue


                  -  

               (142,839)

                   -  

                -  

                            -  

               (142,839)

 

Share issue in share option exercise

18

                5,445 

             100,247 




                 105,692 

 

Share based payments

24

                  -  

                       -  

                   -  

                -  

                          167,957 

         167,957 

 

Total transactions with owners


        45,931 

       2,447,286 

                   -  

                -  

                167,957 

      2,661,174 

 

At 31 December 2022

 

             839,723 

             24,240,930 

         74,370 

    (72,169)

                      32,682,276 

             57,765,130 

 

 








 

Loss for the period






                    (15,688,317)

  (15,688,317)

 

Other comprehensive loss




       900,722 



         900,722 

 

Total comprehensive loss for the period


                  -  

                       -  

       900,722 

                -  

        (15,688,317)

   (14,787,595)

 

Transactions with owners, recorded
   directly in equity

 






                      -  

 

Share issue

18

           133,606 

           5,045,893 

                   -  

                -  

                            -  

             5,179,499 

 

Cost of share issue


                  -  

          (349,812)

                   -  

                -  

                            -  

               (349,812)

 

Share issue in share option exercise

18

                  -  

                       -  

                   -  

                -  

                            -  

                         -  

 

Share based payments

24

                  -  

                       -  

                   -  

                -  

                  79,658 

                  79,658 

 

Total transactions with owners


     133,606 

       4,696,081 

                   -  

                -  

                  79,658 

      4,909,345 

 

At 31 December 2023

 

             973,329 

              28,937,011 

       975,092 

    (72,169)

                      17,073,617 

             47,886,880 

 


















Share premium - amount subscribed for share capital in excess of nominal value, net of directly attributable costs.

 

Translation reserve - foreign exchange differences recognized in other comprehensive income.

 

Other reserve - historic other reserve outside of share premium, translation reserve and share premium. 

 

Retained earnings - cumulative net gains and losses recognised in the consolidated statement of comprehensive income, net of dividends paid.

 

The notes on pages 34 to 64 are an integral part of these financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023

 



Note

31 December 2023

Period ended 31 December 2022



 

US $

US $

Cash flows from operating activities

 




Loss after income tax



   (15,688,317)

   (12,745,508)

Adjustments for





 - Impairment Loss



                       -  

            37,584 

 - Depreciation



               2,523 

               6,553 

 - Amortisation



            83,786 

            83,877 

 - Share based payment expense



            79,658 

          167,957 

 - Management services income



        (455,777)

         (419,697)

 - Interest from financial assets at FVTP&L



        (455,096)

         (286,583)

 - Unrealised (gains)/losses on foreign exchange



          620,843 

         (220,080)

 - Fair value (gain)/losses on financial assets at   FVTP&L



    14,229,009 

    11,014,609 

Movement in working capital:



 


 - Movement in trade and other receivables



        (26,710)

         (399,040)

-  Deferred revenue movement



            44,781 

               3,326 

 - Movement in trade and other payables



          301,156 

           (21,653)

Net cash outflows from operating activities



     (1,264,144)

      (2,778,655)

Cash flows from investing activities

 




Additions to financial assets at fair value through profit and loss


12

     (3,999,072)

      (3,970,900)

Proceeds from disposals of financial assets at fair value through profit and loss


12

          478,008 

       1,073,792 

Purchases of intangibles

              

13

(59,004)

-

Purchases of property, plant and equipment


14

             (6,825)

              (9,919)

Net cash outflows investing activities



     (3,586,893)

      (2,907,027)

Cash flows from financing activities

 




Proceeds from issuance of ordinary shares


     18

       5,179,498 

       2,636,056 

Costs of raising finance


 18

        (349,812)

         (142,839)

Net cash inflows from financing activities



       4,829,686 

       2,493,217 

Net (decrease)/increase in cash and cash equivalents

 


               271,543 

      (3,192,465)

Cash and cash equivalents at beginning of year

16

          628,640 

       3,543,762 

Exchange gains/(losses) on cash and cash equivalents

           12,961

          277,343 

Cash and cash equivalents at end of period/year


16

          620,248 

          628,640 

 

 

 

 

 

 

 

 

 

 

NOTES TO THE FINANCIAL STATEMENTS

 

1.     GENERAL INFORMATION

 

Tekcapital PLC (Companies House registration number: 08873361) is a Company incorporated in England and Wales and domiciled in the UK. The address of the registered office is 12 New Fetter Lane, London, United Kingdom, EC4A 1JP. The Company is a public limited company limited by shares, which listed on the AIM market of the London Stock Exchange in 2014. The principal activity of the Group is to provide universities and corporate clients with valuable technology transfer services. The Group also acquires exclusive licences to university technologies that it believes can positively impact people's lives, for subsequent commercialisation.

 

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. During the previous period, the Group and the Company changed their accounting reference date from 30 November to 31 December to follow the accounting periods of portfolio companies. As a result, the consolidated financial statements of Tekcapital PLC have been prepared for the 12 month period to 31 December 2023. Comparative amounts presented in the Group and Company financial statements are for the 13 months ended 31 December 2022, and as such the amounts presented are not entirely comparable.

 

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards, this announcement does not itself contain sufficient information to comply with those standards. The Company expects to publish full financial statements that comply with International Financial Reporting Standards in June 2024.

 

Amounts presented in this report are rounded to nearest US$1.

 

2. MATERIAL ACCOUNTING POLICIES 

2.1 STATEMENT OF COMPLIANCE

 

The consolidated financial statements of Tekcapital  have been prepared in accordance with International Financial Reporting Standards as adopted in the United Kingdom ("UK adopted IFRS") UK-adopted International Financial Reporting Standard ("UK adopted IFRS") and those parts of the Companies Act 2006 that are relevant to companies which report in accordance with UK adopted IFRS. The consolidated financial statements have been prepared under the historical cost convention.  The consolidated financial statements comprise the financial statements of Tekcapital plc and its subsidiaries, Tekcapital Europe Ltd and Tekcapital LLC.

The preparation of financial statements in accordance with UK-adopted International Financial Reporting Standards requires the use of certain critical accounting estimates. It requires  management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 4.

 

2.1.1 GOING CONCERN

 

The financial statements have been prepared on a going concern basis.

 

The Group and Company meet their day to day working capital requirements through service offerings, monetisation of quoted equity stakes and monies raised through issues of equity. As disclosed in note 26, the Group announced a placing to raise £2,000,000 in February 2024. This has resulted in an increase in the Group's cash balance since the year end.

 

The Group's forecasts and projections indicate that the Group and Company have sufficient cash reserves to operate within the level of its current funds. The forecasts and projections included assumptions and estimation uncertainties related to Group's service revenues, cost of goods sold and operating expenses, as determined by impact to the cash runway of the Group and the Company. The Group has no third party debt facilities. 

 

The Directors have prepared detailed cash flow projections for the period to 30 May 2025 ("going concern assessment period"). The cash flow projections have been subjected to sensitivity analysis which demonstrate that the Group and Company will maintain a positive cash balance through the going concern assessment period.

                                                                                                      

The Directors have also considered the geo-political environment, including rising inflation, and whilst the impact on the Group is currently deemed minimal, the Directors remain vigilant.

 

On this basis, the Directors have therefore concluded that it is appropriate to prepare the financial statements on a going concern basis.

 

2.1.2  CHANGES  IN ACCOUNTING POLICY AND DISCLOSURES

Standards and Interpretations not yet effective

The Group has applied the following standards and amendments for the first time for its annual reporting period commencing 1 January 2023: 

• IFRS 17 Insurance Contracts; 

• Definition of Accounting Estimates - amendments to IAS 8; 

• International Tax Reform - Pillar Tow Model Rules - amendments to IAS 12; 

• Deferred Tax related to Assets and Liabilities arising from a Single Transaction - amendments to IAS 12; and 

• Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2. 

The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods. 

There are a number of standards, amendments to standards, and interpretations which have been issued that are effective in future accounting periods that the Group has decided not to adopt early as they will not have a significant impact on the presentation of the Group financial statements.

 

2.2   CONSOLIDATION

 

The consolidated financial statements comprise the financial statements of Tekcapital PLC and all subsidiaries controlled by it, except from indirect subsidiaries

 

Subsidiaries are entities that are controlled by the Group. Control is achieved when the Group has the power to govern the financial and operating policies of an entity so as to obtain economic benefit from its activities. Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated when necessary amounts reported by subsidiaries have been adjusted to conform to the Group's accounting policies.

 

2.3 FOREIGN CURRENCIES

 

(a)   Functional and presentation currency

These consolidated financial statements are presented in US Dollars which is the presentation currency of the Group. The Directors consider this to be the most appropriate presentational currency. Each subsidiary within the Group has its own functional currency which is dependent on the primary economic environment in which that subsidiary operates. The functional currency of Tekcapital Plc is UK sterling as this is the currency the entity undertakes its primary economic activity.

 

(b) Transactions and Balances

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured.

Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. Foreign exchange gains and losses that relate to cash and cash equivalents are presented in the consolidated statement of comprehensive income statement within 'operating expenses'.

 

(c) Group companies

The results and financial position of all Group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

 

(i) Monetary assets and liabilities for each balance sheet presented are translated at the closing exchange rates at the date of that balance sheet.

(ii) Income and expense for each income statement are translated at the average rates of exchange during the period (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions)

(iii) All resulting exchange differences are recognized in other comprehensive income.

 

2.4 INVESTMENT IN PORTFOLIO COMPANIES

Investments in portfolio companies are held at fair value through the profit and loss. Directors' judgment was exercised in determination that the Group meets the following criteria and should be recognized as an investment entity under IFRS 10 par. 27. Directors re-evaluated the below criteria and concluded they were met as at 31 December 2023:

 

·      Obtains funds from one or more investors for the purpose of providing clients with investment management services

·      Commits to its investors that its business purpose is to invest funds solely for return from capital appreciation, investment income or both

·      Measures and evaluate the performance of substantially all of its investments on a fair value basis.

 

Tekcapital's IP search and technology transfer investment services represent investment advisory services, and therefore Tekcapital Europe Limited and Tekcapital LLC continue to be treated as subsidiaries and are consolidated in the Group financial statements. These services may be provided to investors, clients and third parties. The Board considers that the criteria are met in the group's current circumstances.

 

The Board envisages that Tekcapital's shareholder returns will derive primarily from mid to long-term capital appreciation of a portion of its intellectual property investments, as well as from providing IP investment services to clients. Consequently, the Group's portfolio companies are measured at fair value in accordance with IFRS 9 as disclosed in Note 2.8.3.

 

2.5 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. Depreciation of assets are calculated to write off the cost less the estimated residual value of tangible fixed assets by equal instalments over the estimated useful economic lives as follows:

 

Furniture                                 3years

Computer equipment               3years

Leasehold improvements        5years

 

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. The asset's carrying amount is written down immediately to its recoverable amount if the assets carrying value is greater than its estimated  recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount and are recognised within 'Operating expenses' in the income statement.

 

2.6 INTANGIBLE ASSETS

Intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and accumulated impairment losses. Amortisation is charged to the administrative expenses in the Statement of Comprehensive Income on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite.

 

(a)     INVENTION EVALUATOR

 

This is an intangible asset and a piece of computer software acquired for use by one of the subsidiaries of the Group.


The estimated useful life of the Invention Evaluator intangible asset is 10 years. The useful life is estimated based upon management's best estimate of the expected life of the asset. The useful life is reconsidered if circumstances relating to the asset change or if there is an indication that the initial estimate requires revision.

The intangible asset has a finite life of 10 years over which amortisation is charged on a straight line basis.

 

 

 

(b)    COMPUTER SOFTWARE AND WEBSITE DEVELOPMENT

 

Costs associated with maintaining computer software programmes and the Company website are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets when the following criteria are met:

 

(i)   it is technically feasible to complete the software product so that it will be available for use;

(ii)  management intends to complete the software product and use or sell it;

(iii) there is an ability to use or sell the software product;

(iv) it can be demonstrated how the software product will generate probable future economic benefits;

(v)  adequate technical, financial and other resources to complete the development and to use or sell the

software product is available; and

(vi)  the expenditure attributable to the software product during its development can be reliably measured.

 

Computer software development costs recognised as assets are amortised over their estimated useful lives, which do not exceed four years.

 

(c) VORTECHS GROUP

 

This is an intangible asset acquired for use by one of the subsidiaries of the Group. The estimated useful life of the Vortechs Group intangible asset is 10 years over which amoritsation is charged on a straightline basis. The useful life is estimated based upon management's best estimate of the expected life of the asset. The useful life is reconsidered if circumstances relating to the asset change or if there is an indication that the initial estimate requires revision.

 

2.7 IMPAIRMENT OF NON-FINANCIAL ASSETS

 

Intangible assets that have an indefinite useful life or intangible assets not ready to use are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset's carrying value exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows, (CGUs). Prior impairments of non-financial assets are reviewed for possible reversal at each reporting date.

 

2.8   FINANCIAL INSTRUMENTS

2.8.1  CLASSIFICATION AND MEASUREMENT

 

The Group classifies its financial assets depending on the purpose for which the asset was acquired. Management determines the classification of its financial assets at initial recognition.

 

During the financial year the Group held investments in portfolio companies classified as equity  investments. They are included in non-current assets and are measured at fair value through profit and loss in accordance with IFRS 9.

 

The Group has convertible loan note receivables. These financial assets are classified and measured at fair value through profit and loss in accordance with IFRS 9.

 

The Group also has receivables carried at amortised cost. They are included in current assets. The Group's service income receivables comprise 'trade and other receivables' in the balance sheet, also held at amortised cost. The Group also has cash and cash equivalents.

All short-term liabilities are measured at amortised cost, the Group does not hold any long-term financial liabilities.

 

2.8.2  DERECOGNITION

Loans and receivables are recognised and carried at amortised cost. Financial assets are derecognised when the rights to receive cash flows from the loans or receivables have been collected, expired or transferred and the Group has subsequently transferred substantially all risks and rewards of ownership.

 

2.8.3  FAIR VALUE

 

Financial instruments are measured at fair value including investments in portfolio companies, cash and cash equivalents, trade and other receivables, trade and other payables, and convertible loan note receivables. This measurement policy does not apply to subsequent measurement at  amortised cost of short term financial liabilities and trade receivables.

 

The Group measures portfolio companies using valuation techniques appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. Our fair value valuation policy is as follows:

 

The fair value of new portfolio companies is estimated at the cost of the acquired IP or equity plus associated expenses to facilitate the acquisition.

 

Existing portfolio companies are valued as follows:

 

·      If a market transaction such as third-party funding has occurred during the past 12 months, we will value our ownership in the portfolio Company at this observed valuation, taking account of any observed material changes during the period, including quoted prices in active markets (Level 1 input).

·      In the absence of a recent market transaction, fair value will be estimated by alternative methods and where appropriate by an external, qualified valuation expert. The valuation techniques fall under Level 2 - Observable techniques other quoted prices and Level 3 - other techniques as defined by IFRS 13.

 

Due to their short-term nature, the carrying value of cash and cash equivalents, trade and other receivables, and trade and other payables approximate their fair value.

 

2.9  OFFSETTING FINANCIAL INSTRUMENTS

 

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is the intention to settle on a net basis or realise the asset and settle the liability simultaneously.

 

2.10  IMPAIRMENT OF FINANCIAL ASSETS

 

Impairment provisions for trade receivables are recognized based on the simplified approach within IFRS 9 using the lifetime expected credit losses. During this process the probability of the non-payment of the trade receivables is assessed, including forward-looking information on customers standing and macroeconomic information including sector specific circumstances This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognized within operating expenses in the consolidated statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Financial assets held at amortised cost comprise trade and other receivables, and cash and cash equivalents in the consolidated statements of financial position.

 

2.11 CASH AND CASH EQUIVALENTS

In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with other banks, other short term highly liquid investments with maturities of three months or less from inception.

 

2.12  SHARE CAPITAL

Ordinary Shares

Ordinary Shares are classified as equity.

 

Share premium

The share premium account has been established to represent the excess of proceeds over the nominal value for all share issues, including the excess of the exercise share price over the nominal value of the shares on the exercise of share options as and when they  occur. Incremental costs directly attributable to the issue of new ordinary shares and new shares options are shown in equity as a deduction, net of tax, from the proceeds.

 

2.13       TRADE PAYABLES

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers.  Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of business if longer). If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method.

 

2.14  SHARE BASED PAYMENTS

The Group operates a number of equity-settled, share-based compensation plans, under which the entity receives services from employees as consideration for equity instruments (options) of the Group. The fair value of the employee services received in exchange for the grant of options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted:

 

•     Including any market performance conditions;

•     excluding the impact of any service and non-market performance vesting conditions (for example, profitability, sales growth targets and remaining an employee of the entity over a specified time period);

•     excluding the impact of any non-vesting conditions (for example the requirement of the employees to save).

 

Assumptions about the number of options that are expected to vest include consideration of non-market vesting conditions. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.  At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to the original estimates, if any, in the income statement, with a corresponding adjustment to equity.

When the options are exercised, the Group issues new shares. The proceeds received net of any directly attributable transactions costs are credited to share capital (nominal value) and share premium when the options are exercised.

 

2.15 CURRENT AND DEFERRED TAX

The tax expense for the year comprises current and deferred tax. Tax is recognised in the consolidated income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

 

The current income tax charge is calculated on the basis of tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

 

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.

 

Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

 

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against  which the temporary differences can be utilised.

 

Deferred income tax liabilities are provided on taxable temporary differences arising from investments in subsidiaries except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

 

Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries only to the extent that it is probable the temporary difference will reverse in full in the future and there is sufficient taxable profit available against which the temporary difference can be utilised.

 

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle balances on a net basis.

 

 

2.16  REVENUE RECOGNITION

Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for the services supplied, stated net of discounts, and value added taxes. The Group recognises revenue when the contract is identified, performance obligation is determined, transaction price (as defined for each service below) is determined and allocated to performance obligation in accordance with IFRS 15.

 

Provision of services

 

The Group provides following lines of services:

•     Invention Evaluator services: provision of reports assessing potential of any new technology. Revenue is recognised upon delivery of a complete report, when the report is made available to each customer. Upon access to the report delivered via online portal, customers consume the benefits of the contractual obligation, and the performance obligation is met. Directors consider transaction price to be clearly determined upon payment of fixed fee for each report prior to report's delivery. Directors considered uncertainty of cash flows from sales to be limited, considering prepayment is made for each report prior to report's delivery.

•     Tech transfer recruitment services (Vortechs Group): recruitment services specialising in technology transfer executives. Revenue is recognised upon placement of an executive, when hire is made by Tekcapital's customer and the performance obligation is met. Directors consider transaction price to be clearly determined when both parties agree to placement fee for each successful hire. Directors considered uncertainty of cash flows from sales to be limited, considering payments are made by universities with excellent track record of payments and clear definition of performance obligation upon which such payment is made.

•     Management services: accounting, tax, legal and other services provided to portfolio companies. Revenue is recognized upon delivery of services to each portfolio Company and performance obligation is met as defined in the management service contract. Directors considering transaction price to be clearly determined by amounts specified in the management service agreements. Directors considered uncertainty of cash flows from sales to be limited, considering payments are made by companies with excellent track record of payments and clear definition of performance obligation upon which such payment is made.

 

For breakdown of revenue from services recognised over time and at point of time, please refer to Note 6 to Financial Statements.

 

2.17 OTHER INCOME

The Group recognizes research and development (R&D) relief under other income.

 

2.18 INTEREST INCOME

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable (10%).

 

3. FINANCIAL RISK MANAGEMENT

3.1 FINANCIAL RISK FACTORS

 

(a) Portfolio risk/investment management

 

Investment into portfolio companies held by the Group requires long-term commitment with no certainty of return.

 

The fair value of each portfolio Company represents the best estimate at a point in time and may be impaired if the business does not perform as well as expected, directly impacting the Group's value and profitability. This risk is mitigated as the size of the portfolio increases. The Group performed sensitivity analysis with regards to assumptions used in determination of fair value of the portfolio in Note 12.

 

The Group also regularly monitors portfolio companies' liquidity required for returns to occur.

 

(b)   Credit risk management

 

Credit risk is managed on a Group basis. In order to minimise this risk, the Group endeavours to only deal with companies that are demonstrable creditworthy, and the Directors continuously monitor the exposure. The Directors determine the default as lack of payment after more than 180 days and or counter party's bankruptcy filings. The Group's maximum exposure to credit risk for the components of financial position at 31 December 2023 and 31 December 2022 is the carrying amount of its current trade and other receivables as illustrated in Note 15.

 

While IFRS 9 does not require expected credit loss allowance on assets held at fair value through profit and loss, the Group monitors credit risk related to performance of portfolio companies, including considerations related to recoverability of convertible loan notes held as carrying amount of notes represent the maximum exposure to credit risk. Progress is monitored and regular discussions are held with management of portfolio companies to assess commercial progress and financial information provided. 

 

IFRS9 requires the Company to assess expected credit losses on assets classified as held at amortised cost, under a forward-looking model approach. For the Group accounts this includes Receivables from related parties and other immaterial receivables. For the Company accounts this includes Receivables from Group Companies.

 

The Group also monitors credit risk from balances with banks and institutions.

 

(c) Liquidity risk management

Cash flow forecasting is performed on a Group basis. The Directors monitor rolling forecasts of the Group's liquidity requirements to ensure it has sufficient cash to meet operational needs. Post period end, the Group announced placing to raise GBP 2,000,000 on 29 February 2024. At the reporting date the Group held bank balances of US$620,248. All amounts shown in the consolidated statement of financial position under current assets and current liabilities mature for payment within one year, with Trade and Other Receivables exceeding Trade and Other Payables by US US$1,275,482.  

 

(d) Financial risk management

The Company's Directors review the financial risk of the Group. Due to the early stage of its operations the Group has not entered into any form of financial instruments to assist in the management of risk during the period under review.

 

 

 

(e) Market risk management

Due to low value and number of financial transactions that involve foreign currency and the fact that the Group has no borrowings to  manage, the Directors have not entered into any arrangements, adopted or approved the use of derivative financial instruments to assist in  the management of the exposure of these risks. It is their view that any exchange risks on such transactions are negligible.

 

The Group also regularly monitors risk related to fair value of financial instruments held such as convertible loan notes held.

 

(f) Foreign exchange risk management

Foreign exchange risk arises when individual Group entities enter into transactions denominated in a currency other than their functional currency. The Group's policy is, where possible, to allow Group entities to settle liabilities denominated in their functional currency, with the cash generated from their own operations in that currency. Where Group entities have liabilities denominated in a currency other than their functional currency (and have insufficient reserves of that currency to settle them), cash already denominated in that currency will, where possible, be transferred from elsewhere within the Group.

 

A sensitivity analysis has been performed to assess the exposure of the Group to foreign exchange movements. The Group only has exposure to movements of the US dollar against UK Sterling. As at 31 December 2023, the Group's UK Sterling net exposure relating to cash, receivables and payables denominated in UK Sterling totals $27,279. A 20% strengthening or weakening of the US dollar against the UK Sterling would have an immaterial impact on the consolidated results and equity.

 

(g) Interest rate risk management

 

The Group has no borrowings.

 

3.2 CAPITAL MANAGEMENT

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders, benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

 

In order to adjust or maintain the capital structure, the Group may adjust the level of dividends paid to its shareholders, return capital to shareholders, issue new shares or sell assets to reduce borrowings. The Group has no external borrowings. This policy is periodically reviewed by the Directors, and the Group's strategy remains unchanged for the foreseeable future.

 

The capital structure of the Group consists of cash and bank balances and equity consisting of issued share capital, reserves and retained losses of the Group. The Directors regularly review the capital structure of the Company and consider the cost of capital and the  associated risks with each class of capital.

 

The Company's historic cost of capital has been the cost of securing equity financings, which have averaged around 10%. the Company's long-term financial goal is to optimise its returns on invested capital (ROIC) in excess of our weighted average cost of capital (WACC) and as such create value for our shareholders. The method the Company seeks to employ for achieving this is to utilise its structural intellectual capital developed through its Discovery Search Network, its Invention Evaluator service and its Vortechs Group Service to mitigate selection bias and improve returns on invested capital. Ultimately, management will seek to monetise these returns with exits from its investments in portfolio companies.

 

 

 

 

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of  future events that are believed to be reasonable under the circumstances. The Directors made the following judgements:

-     determination as to the classification of the Group as an investment entity as discussed in Note 2.4

-     determination of operating segments as disclosed in Note 5

-     determination of reliance of the Group's portfolio companies on funding to achieve their fair values discussed in Note 12.

 

The Directors also make estimates and assumptions concerning the future. The resulting accounting estimates will by definition, seldom  equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying value of the assets and liabilities within the next financial year are detailed below.

 

Key estimate/ judgment area

Key assumption

Potential  impact within  the next  financial year

Potential  impact in  the longer  term

Note reference for  sensitivity  analysis

Valuation of  unquoted  equity investments

In applying valuation techniques to determine the fair value of unquoted equity investments the Group makes estimates and assumptions regarding the future potential of the investments. The policy of the Group is to value new portfolio companies at cost of the acquired IP or equity plus associated expenses to facilitate the acquisition. Existing portfolio companies are valued using either a market transaction such as third-party funding or, in the absence of a recent market transaction, by alternative methods and where appropriate by an external, qualified valuation expert.

The fair value of Guident Limited reflects input in the form of value of Guident Ltd's shares in its US subsidiary (Guident Corp) as determined by recent market transactions of these shares.

Yes

Yes

Note 12

Valuation

of

unquoted equity investments

This input was corroborated by Guident's enterprise valuation by estimating the net present value of future cashflows associated with its business. Key assumptions used in estimating future cash flows are projected profits including remote monitor and control centre and shock absorber sales and a discount factor applied for the net present value of future cashflows from the platform.

The fair value of Microsalt plc reflects input in the form of value of Microsalt Ltd's shares in its US subsidiary (Microsalt Inc) as determined by pre money valuation determined by the bankers as part of Company's pre IPO procedures. This input was corroborated by Microsalt's enterprise valuation by estimating the net present value of future cashflows associated with its business. Key assumptions used in estimating future cash flows are projected sales of Microsalt® and a discount factor applied for the net present value of future cashflows from the platform.

Yes

Yes

Note 12

Valuation of convertible loan notes

 

In applying valuation techniques to determine the fair value of convertible loan notes the Group and Company make estimates and assumptions regarding the future potential of the investments, including discount factor applied for the net present value of future cashflows from the loan.

 

Yes

Yes

Note 12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5.      SEGMENTAL REPORTING

 

The Directors consider the business to have two segments for reporting purposes under IFRS 8 which are:

 

·    professional services, including the provision of recruitment services via Vortechs Group, provision of invention evaluator services, as well as R&D tax relief credits and provision of management services to its portfolio companies. The activities grouped under this segment share similar economic characteristics of provision of intellectual property services to third party services;

 

·    licensing and investment activities, including acquiring licences for technologies, portfolio Company investment, development and commercialisation. The activities share the goal of increasing the fair value of investments made into portfolio companies by the Group.

 

 

 

Year ended 31 December 2023

Professional

Licensing and

TOTAL

Consolidated income statement

Services

Investment

 


US $

US $

US $

Revenue from Services

735,265

-

        735,265 

Changes in fair value on financial assets at fair value though profit or loss

                      -  

      (14,229,009)

  (14,229,009)

Cost of Sales

           (314,083)

-

       (314,083)

Interest Income

-

            455,096 

        455,096 

Administrative Expenses

           (592,315)

        (1,675,081)

    (2,267,396)

Depreciation and Amortization

              (21,577)

               (64,732)

           (86,309)

Other Income

              20,384

-

          20,384 

Group operating loss

           (172,325)

      (15,513,726)

                 (15,686,051)

Loss on ordinary activities before income tax

             (172,325)

      (15,513,726)

  (15,686,051)

Income tax expense

                  (566)

               (1,699)

           (2,265)

Loss after tax

             (172,891)

      (15,515,425)

  (15,688,316)





 

 

Period ended 31 December 2022

Professional

Licensing and

TOTAL

Consolidated income statement

Services

Investment

 


US $

US $

US $

Revenue from Services

615,214

-

        615,214 

Changes in fair value on financial assets at fair value though profit or loss

 -

      (10,978,372)

  (10,978,372)

Cost of Sales

           (222,361)

 -

       (222,361)

Interest Income

 -

            286,583 

        286,583 

Administrative Expenses

           (895,517)

        (1,622,426)

    (2,517,943)

Depreciation and Amortization

               (1,638)

               (4,915)

           (6,553)

Other Income

              79,638 

 -

          79,638 

Group operating (loss)/profit

           (424,664)

      (12,319,130)

  (12,743,794)

(Loss)/profit on ordinary activities before income tax

           (424,664)

      (12,319,130)

  (12,743,794)

Income tax expense

                  (429)

               (1,285)

           (1,714)

(Loss)/profit after tax

           (425,093)

      (12,320,415)

  (12,745,508)

 

 

 

 

 

 

 

 

 

Segment assets and liabilities

 



2023

Professional

Licensing and

TOTAL

Consolidated statement of

Services

Investment

 

 financial position

US $

US $

US $

Assets

         1,967,430

       46,653,995 

   48,621,425 

Liabilities

           (734,545)

-

       (734,545)

Net Assets

         1,232,885 

       46,653,995 

   47,886,880 





2022

Professional

Licensing and

TOTAL

Consolidated statement of

Services

Investment

 

 financial position

US $

US $

US $

Assets

         1,969,592 

       56,184,146 

   58,153,738 

Liabilities

           (388,608)

-

       (388,608)

Net Assets

         1,580,984 

       56,184,146 

   57,765,130 

 


Year ended 31 December 2023

Period ended 31 December 2022

 

US $

US $

United Kingdom

 


Changes in fair value on financial assets at fair value though profit or loss

      (13,753,529)

      (10,612,151)

United States

 


Revenue from Services

            735,265 

            615,214 

Total revenue

      (13,018,264)

        (9,996,937)





2023

2022

 

US $

US $

United Kingdom



             Assets

       46,653,995 

       56,184,146 

             Liabilities

                      -  

                      -  

United States



             Assets

         1,967,430 

         1,969,592 

             Liabilities

           (734,545)

           (388,608)

Total Net Assets

       47,886,880 

       57,765,130 

 

 

 

6. REVENUE FROM SERVICES

 

The below table discloses disaggregated revenue from services by their nature/categories as well as timing of the revenue. Please refer to Note 12 for disaggregation of Group's Unrealised profit on the revaluation of investments.

 

Group

Transferred at a point in time

Transferred over time

 Total 2023

Transferred at a point in time

Transferred over time

 Total 2022


US $

US $

Major service lines:

 






 - Sales of Invention Evaluator reports

          178,488

               -

         178,488

          156,517

               -

     156,517

 - Tech transfer recruitment services

          101,000

               -

         101,000

            39,000

               -

       39,000

 - Management services

                 -

    455,777

         455,777

                      -

   419,697

     419,697

Total Revenue from Services

          279,488

    455,777

         735,265

          195,517

   419,697

     615,214

 

 

All of the Group's major service lines are sold directly to consumers and not through intermediaries. All revenue recognised in the reporting period represent performance obligations satisified in the current period. For services transferred over time, output method was used as measure of fulfillment of the performance obligation. Considering the nature of the accounting, tax, legal and other services being provided under the agreements, this method most faithfully depicts the transfer of the services to the customer. Payment is typically due on a Net 30 basis.

 

 

6.1 OTHER INCOME

 

 

 Total 2023

 Total 2022

 

US $

US $

 R&D expenditure credit

                     -

      79,638

 Other

            2,781

                 -

 Dividends earned

            17,603

                 -


          20,384

      79,638

 

 

7. OPERATING EXPENSES AND COST OF GOODS SOLD

 

Group


 


 


 

 

2023


2022

 



 


 


 

 

US $


US $

 

Cost of goods related to services








     314,083

 

      222,361

 

Depreciation of property plant and equipment






         2,523

 

          6,553

 

Research and development expenses







     155,094

 

      433,166

 

Amortisation of intangible assets








       83,786

 

      121,461

 

Marketing and PR








       96,575

 

      149,169

 

IT&Software








       26,925

 

        72,495

 

Audit and accounting








     182,145

 

      216,285

 

Share based payments








       79,658

 

      167,957

 

Nominated Advisor and other exchange listing expenses






     139,261

 

      175,888

 

Director emoluments








     409,681

 

      662,052

 

Other administration expenses including salaries




     639,374

 

      648,646

Foreign exchange movements








     538,682

 

(129,176)

 

Total expenses






 


  2,667,787


   2,746,857

 

















 

 

7.2 AUDITOR REMUNERATION

 

Group

 

 

 

 

 

 

 

2023

 

2022

 

 

 

 

 

 

 

 

US $

 

US $

Fees payable to the group's auditor and its associates for the audit of the Group and Company financial statements

     107,335

 

      121,408

Audit of company's subsidiaries

 

 

 

 

 

 

       37,316

 

        13,379

 

 

 

 

 

 

 

 

     144,651

 

      134,787

 

 

 

8. EMPLOYEES

8.1 DIRECTOR'S EMOLUMENTS

 

Group

 

 

 

2023

2022

 

 

 

 

US $

US $

Directors emoluments

 

     386,677*

     662,052

Directors portion of Share Based Payments

 

         1,362

       62,747

Total

 

 

 

     388,039

     724,799

*excludes Directors NI of US$23,004 (2022:US$26,551).

 

The highest paid Director received a salary of US$254,096 (2022: $250,889) and benefits of US$27,846 (2022: US$29,833). The highest paid Director received a bonus of US$ Nil (2022: US$250,000). The highest paid Director did not exercise any share options. The share-based payments associated with the highest paid Director amounted to US$1,362 (2022: US$60,948).

 

Key management personnel (including Directors and Group Chief Financial Officer) received salary of US$509,681 (2022: US$820,557), excluding Employers National Insurance, Benefits in Kind and Share Base Compensation disclosed in Directors Remuneration Report. Please also refer to Director's Report. No Directors exercised their share options during the year. No post- employment benefits or other long-term benefits are applicable for Directors.

 

8.2  EMPLOYEE BENEFIT EXPENSES

 

Group

 

 

 

2023

2022

 

 

 

 

US $

US $

Wages and salaries including restructuring costs and other termination benefits

     405,898

     459,435

Directors remuneration

 

     358,830

     605,668

Social security costs

 

       62,338

       70,511

Pension costs

 

 

                 -

                -

Share options granted to directors and employees

       79,658

     167,957

 

 

 

 

     906,725

  1,303,571

 

 

8.3  AVERAGE NUMBER OF PEOPLE EMPLOYED

 

To enhance flexibility and improve cost control, the Group utilises consultants for scientific review, administrative and operations support, software development and other knowledge-intensive services.

Group

 

 

 

2023

Number of employees

 

 

 

Average number of people (including executive directors) employed

 

 

Operations

 

 

                4

               4

Management

 

 

                2

               2

Total average headcount

 

                6

               6

 

 

 

 

9.   INCOME TAX EXPENSE

 

Group


 

 

 

2023


2022






US $


US $

Current tax

 



Current tax on profits for the year

          2,265

 

           1,714

Total current tax

 

 



          2,265


           1,714

 

 

 



 



Income tax expense





          2,265


           1,714









Group


 

 

 

2023


2022






US $


US $

Profit before tax

(15,686,051)


(12,743,794)

Tax calculated at domestic tax rates applicable to profits

(2,980,350)

 

(2,421,321)

Tax effects of:








 - Expenses not deductible for tax purposes

        19,604

 

         39,103

 - Income not taxable





   2,703,512

 

    2,085,891

 - Capital allowances in excess of depreciation

        16,413

 

         24,323

 - Unrelieved tax losses and other deductions

      243,086

 

       273,718

Total income tax expense

 

 



          2,265

 

           1,714

 

The weighted average applicable tax rate was 19% (2022: 19%).

 

Unused tax losses of US$2,099,550 for which no deferred tax assets have been recognised is attributable to the uncertainty over the recoverability of those losses through future profits.

 

The UK Government announced in the 2021 budget that from 1 April 2023, the rate of corporation tax in the United Kingdom will increase from 19% to 25%. Companies with profits of £50,000 or less will continue to be taxed at 19%, which is a new small profits rate. Where taxable profits are between £50,000 and £250,000, the higher 25% rate will apply but with a marginal relief applying as profits increase.

 

10. EARNINGS PER SHARE (EPS)

 

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of Ordinary Shares outstanding during the period.

 

 

 

 

 

 

2023

2022

 

 

 

 

 

US $

US $

Earnings attributable to equity holders of the Group (US$)

(15,688,317)

(12,745,508)


 

 

 

 

 

 

Weighted average number of ordinary shares in issue:

 

 

 

 

 

 

 

 

 

Basic

  172,214,589

  146,043,720

Diluted

 

 

 

 

  176,681,255

  150,483,172


 

 

 

 

 

 

Basic earning per share

(0.091)

(0.087)

Diluted earning per share

 

 

 

 

(0.091)

(0.087)

 

Diluted earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the sum of weighted average  number of (1) Ordinary Shares outstanding during the period and (2) any dilutive potential Ordinary Shares outstanding at 31 December  2023.

 

Diluted EPS includes impact of vested Employees Share Option Awards whose strike price was below Tekcapital's share price as quoted on the AIM market, which would have dilutive impact of 4,466,667 shares.

 

The Group completed placements of total of 27,395,934 new ordinary shares during the financial year.

 

 

11. INVESTMENTS OF THE GROUP

Entity name

Country of incorporation


Proportion of ordinary shares directly and indirectly held

 

Nature of business

Capital and reserves as at 31 Dec 2023

Net Profit/(Loss) for year ended 31 Dec 2023

The following are under ownership of Tekcapital Europe Limited





US$

US$

 

 

 

 

 

 

Lucyd Limited

England and Wales


100%


Provider of high-tech eyewear

(895,147)

(5,998,918)

Innovative Eyewear Inc1

United States of America


40%


Provider of high-tech eyewear

5,558,826

(6,663,428)

Microsalt Limited

England and Wales


87%


Developer of low sodium salt and snack foods

(1,996,000)

(3,473,000)

Microsalt Inc2

United States of America


91%


Developer of low sodium salt and snack foods

(265,077)

(2,057,852)

Guident Limited

England and Wales


100%


Developer of autonomous vehicle software safety solutions

17,387,274

-

Guident CORP3

United States of America


90%


Developer of autonomous vehicle software safety solutions

(2,703,683)

(1,183,396)

Smart Food Tek Limited

England and Wales


100%


Developer for baked food coating to reduce fat

(116,114)

-

Belluscura plc

England and Wales


10%


Portable oxygen concentrator producer

N/A

N/A











 

 

(1)   owned by Lucyd Limited

(2)   owned by Microsalt Limited

(3)   owned by Guident Limited

 

As at the year end, the Group has no interest in the ownership of any other entities or exerts any significant influence over or provides funding which constitutes an "unconsolidated structured entity".

 

All UK subsidiaries are exempt from the requirement to file audited accounts by virtue of section 479A of the Companies Act 2006.

 

Tekcapital Europe Ltd (registered address 12 New Fetter Lane, London, United Kingdom, EC4A 1JP) and Tekcapital LLC (registered address 11900 Biscayne Blvd, Suite 630, Miami, Florida, 33181, United States) are consolidated by Tekcapital plc because they continue to provide advisory services in IP search and technology transfer. Tekcapital plc owns 100% of both entities.

 

All other entities are measured at fair value through profit and loss based in IFRS 10 as referenced in Note 2.4. The Group provides management service support to Lucyd Limited, Microsalt Limited and Guident Limited, as well as has provided working capital assistance to Microsalt Limited and Guident Limited through convertible loan note financing (see also Note 12). The Group also assists the entities with their fundraising activities.

 

Registered office of all four directly owned subsidiaries owned by Tekcapital Europe Limited: Acre House, 11-15 William Road, London, England, NW1 3ER.

 

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS

The Group's financial assets at fair value through profit and loss consist of equity investments (2023:US $41,125,568, 2022:US $54,878,609) and convertible loan notes (2023:US$5,528,427, 2022:US $1,305,537) totalling US $46,653,995 (2022:US $56,184,146).

 

12.1 EQUITY INVESTMENTS

The Group's investments in portfolio companies in the years ended 31 December 2023 and 31 December 2022 are listed below. The principal place of business for portfolio companies listed below is the UK and in the U.S.

 

Group

Proportion of ordinary shares as at 31 Dec 2022

1 Jan 2023

Additions

Disposal

Other adjustments

Fair Value change

31 Dec 2023

 


US $

US $

US $

US $

US $

US $

Guident Limited

100.00%

18,083,264

-

-

-

-

18,083,264

Lucyd Limited

100.00%

8,175,403

-

-

-

(5,985,609)

2,189,794

Microsalt Limited

        87.24%

16,508,694

500,000

-

882,546

(1,220,093)

16,671,147

Belluscura Plc

10.28%

12,072,826

-

(272,514)

(634,065)

(7,023,307)

4,142,940

Smart Food Tek Limited

100.00%

38,422

-

-

-

-

38,422

 Total Balance 

 

54,878,609

500,000

(272,514)

248,481

(14,229,009)

41,125,567

 

Other adjustments relate primarily to foreign exchange movements on translation of investments into the Group's presentational currency.

 

Group

Proportion of ordinary shares as at 31 Dec 2022

1 Dec 2021

Additions

Disposal

Other adjustments

Fair Value change

31 Dec 2022

 


US $

US $

US $

US $

US $

US $

Guident Limited

100.00%

18,083,264

-

-

-

-

18,083,264

Lucyd Limited

100.00%

17,345,195

2,002,275

-

-

(11,172,067)

8,175,403

Microsalt Limited

97.15%

4,356,520

2,409,579

-

-

9,742,595

16,508,694

Belluscura Plc

11%

22,695,518

-

(1,073,792)

-

(9,548,900)

12,072,826

Smart Food Tek Limited

100.00%

43,161

-

-

(4,739)

-

38,422

 Total Balance 

 

62,523,658

4,411,854

(1,073,792)

(4,739)

(10,978,372)

54,878,609

 

 

The valuation techniques used fall under, Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets, and Level 3- Other techniques as defined by IFRS 13. These techniques were deemed to be the best evidence of fair values considering the early stage of portfolio companies.

 

Lucyd Ltd's Innovative Eyewear Inc commenced trading on the NASDAQ market in H2 2022. Due to Innovative's secondary offering in June 2023, Lucyd Ltd became a minority shareholder and thus the control premium applied in the Group's valuation of the investment in Lucyd as at 31 December 2022 has been removed. As such, the Group's investment in Lucyd Ltd has been re-classified under Level 2 as of 31 December 2023. Fair value measurement hierarchy for financial assets as at 31 December 2023 with comparative amounts as of 31 December 2022:

 

 


Total

Level 1

Level 2

Level 3

31 December 2023

US$

US$

US$

US$

Belluscura Plc

4,142,940

       4,142,940

-

-

Lucyd Limited

2,189,794

-

2,189,794

-

Guident Limited

18,083,264

-

-

       18,083,264

Microsalt Limited

16,671,147

-

-

       16,671,147

Smart Food Tek Limited

38,422

-

-

               38,422

 Total Balance 

            41,125,567

       4,142,940

    2,189,794                  

       34,792,833

 

 

 

31 December 2022

Total

Level 1

Level 2

Level 3


US$

US$

US$

US$

Belluscura Plc

12,072,826

12,072,826

-

-

Lucyd Limited

8,175,403

-

-

8,175,403

Guident Limited

18,083,264

-

-

18,083,264

Microsalt Limited

16,508,694

-

-

16,508,694

Smart Food Tek Limited

38,422

-

-

               38,422

 Total Balance 

            54,878,609

    12,072,826

                   -

       42,805,783

 

 

BELLUSCURA PLC (US $7.7M LOSS)

The fair value of the holding decreased by US$7.7m during the year due to the movement in Company's share price at AIM market of London Stock Exchange, and closing price of 23p as of 31 December 2023. With 15,138,767 shares held by Tekcapital plc, a fair value of US$4,142,940 was arrived at as of 31 December 2023.

 

LUCYD (US $11.2M LOSS)

The fair value of the holding decreased by US$6.0m during the year due to the movement in the Company's share price at NASDAQ market, and closing price of US$0.42 as of 31 December 2023, compared to $1.37 as of 31 December 2022. With 5,189,085 shares held by Tekcapital plc, a fair value of US$2,189,794 was arrived at as of 31 December 2023.

 

MICROSALT (US$1.2M LOSS)

The total fair value of US$16,671,147 is based on valuation of 30,747,609 shares held in Microsalt Ltd, as determined by the price range agreed upon between Company's bankers and the Company as part of its IPO process. Upon review of business updates in H2 2023, management noted no material events necessitating revisions. Addition of $500,000 was recorded due to conversion of part of the existing convertible loan note in April 2023. This proposed valuation of shares to be sold in the initial public offering was corroborated to management prepared discounted cash flow workings using management projections and the price per share at which Tekcapital converted it's convertible loan note in May 2022.

 

Key assumptions used in management's discounted cash flow valuation are:

-  Compound annual growth rates over a 5 year forecast period of 113%

-  15% discount rate used to discount forecasted free cash flows

The discounted cash-flow method did not provide an indication that the valuation at year end was materially misstated.

 

GUIDENT LTD (NIL GAIN / NIL LOSS)

The fair value of Guident remain unchanged compared to previous period as the Company  continued to receive investment at US$1 per share as specified in the 2021 Private Placement Memorandum offering.

 

In August 2021, Guident CORP entered into Private Placement Memorandum outlining offering of securities at US$1 per unit, with each unit consisting of one share of Class A Convertible Preferred Stock and a Warrant to acquire a share of common stock (also at US$1 per unit). While Guident has not received funding from the offering until after the reporting date, the management considers the exit price (of securities offered in the private placement) negotiated with the investment bank as "privately negotiated acquisition of the equity instruments" as defined under IFRS 13. The Offering was facilitated by Dawson James Securities Inc. Dawson James is a broker-dealer registered with the SEC as a broker dealer and is a member of FINRA. FINRA is currently the only such registered national securities association in the U.S.

 

This input was corroborated by Guident CORP's enterprise valuation by estimating the net present value of future cashflows associated with its business as of 31 December 2023.

Key assumptions used in management's discounted cash flow valuation are:

- Compound annual growth rates over a 5 year forecast period of 122%

- 24% discount rate used to discount forecasted free cash flows

The discounted cash-flow method did not provide an indication that the valuation at year end was materially misstated.

 

SMART FOOD TEK (NIL GAIN / NIL LOSS)

Considering early commercialisation stage, the Group records its investment in Smart Food Tek at cost. The directors do not consider that any other available information would materially change or give a more reliable representation of the value.

 

The Group exercised judgment in determination of sufficiency of portfolio companies' cash reserves, forecasts and ability to raise money to achieve their fair values. Directors reviewed and questioned the forecasts used, standing liquidity and working capital balances, as well as discussed capability and plans to raise money in the future with directors or management of portfolio companies. Based on the review, the Group made a positive determination as to portfolio companies' likely ability to achieve fair values considering liquidity factors.

 

The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy, together with a quantitative sensitivity analysis as at 31 December 2023 are shown as below.  No sensitivities have been disclosed on immaterial, non-listed investments as the fair value equates to cost.as the fair value equates to cost.

 

 

 

 

 

 

 

 

 

 

Investment

Valuation

Significant

Estimate

Sensitivity of the input

 


Technique

unobservable

applied

to fair value

 




input

 




Guident

Income Approach Royalty Relief Method

Discount to Future Cash Flows

24%

5% increase in the discount factor would decrease the Guident valuation by US$4.3m, a 5% decrease in the discount factor would increase the value by US$6.4m.



CAGR

91%

A 50% increase in the compound annual growth rate of sales projections would increase the Guident valuation by US$40.2m. A 50% decrease in the compound annual growth rate of sales projections would decrease the Guident valuation by US$15.8m.

Microsalt

Income Approach Royalty Relief Method

Discount to Future Cash Flows

15%

5% increase in the discount factor would decrease the Microsalt valuation by US$5.1m, a 5% decrease in the discount factor would increase the value by US$10.4m,



CAGR

53%

A 50% increase in the compound annual growth rate of sales projections would increase the Microsalt valuation by US$25.4m. A 50% decrease in the compound annual growth rate of sales projections would decrease the Microsalt valuation by US$12.6m

 

 

12.2 CONVERTIBLE LOAN NOTES

During the year, the Group also held multiple convertible loans issued by its portfolio companies, including:

 

•     Convertible note issued by Innovative Eyewear Inc, for the total of US$2,000,000 that bears interest at 10% per annum, which includes the option to convert the debt into the Company 's common stock at market price. The Note matured on December 1, 2023 with no amounts outstanding.

 

•     Convertible note issued by Guident Ltd for the total of US$3,000,000, issued at 10% coupon rate including option to convert the debt into shares at market price (no discount against future equity placements offered). The note can be converted into Guident's equity upon occurrence of certain conversion events including future share placements. The US$3,000,000 note originated in September 2023 or can be converted into Guident's equity upon occurrence of certain conversion events. No conversions occurred during the period. As of 31 December 2023, US$3,000,000 was outstanding.

 

•     Convertible loan note instruments in favour of Microsalt Inc were constituted on 21 September 2020 (2020 CLN) and 1 June 2022 (2022 CLN). The principal amounts of convertible loan notes under the 2020 CLN and the 2022 CLN was each limited to US$2,000,000. The convertible loan notes under the 2020 CLN and the 2022 CLN each carry interest at the rate of 10 per cent. per annum. As of 31 December 2023, US$2,000,000 was outstanding on the convertible loan notes.

 

•     A convertible loan note instrument in favour of Tek Europe was constituted by the Company on 1 March 2023. The principal amount of convertible loan notes was limited to US$2,000,000. The convertible loan notes carry interest at the rate of 10 per cent. per annum. A convertible loan note instrument in favour of Tek Europe, as assignee of Tekcapital, was constituted by the Company on 7 November 2023. The principal amount of convertible loan notes was limited to US$2,000,000. The convertible loan notes carry interest at the rate of 10 per cent. per annum. . As of 31 December 2023, US$528,427 was outstanding on the convertible loan notes.

 

The Group's investments in convertible notes in the years ended 31 December 2023 and 31 December 2022, as well as their fair value hierarchy, are listed in tables below:

 

 

Group

31 Dec 2022

Additions

Disposal

FX reval

Fair Value change

31 Dec 2023

 

US $

US $

US $

US $

US $

US $

Innovative Eyewear

147,375

37,757

(190,983)

5,851

-

-

Guident Corp

1,000,000

1,999,562


438

-

3,000,000

Microsalt Inc

158,162

2,872,626

(514,511)

12,150

-

2,528,427

 Total Balance 

1,305,537

4,909,945

(705,494)

           18,439

                    -

5,528,427

 

Included in additions are non-cash movements, in relation to management services income of US$455,777 and interest income of US$ 455,096.

 


Total

Level 1

Level 2

Level 3

31 December 2023

US $

US $

US $

US $

Innovative Eyewear

-

-

-

-

Guident Corp

3,000,000

-

-

3,000,000

Microsalt Inc

2,528,427

-

-

2,528,427

 Total Balance 

          5,528,427

                        -

                       -

     5,528,427

 





31 December 2022

Total

 Level 1

 Level 2

 Level 3

 

US $

US $

US $

US $

Innovative Eyewear, Inc

147,375

-

-

147,375

Guident Corp

1,000,000

-

-

1,000,000

Microsalt Inc

158,162

-

-

158,162

 Total Balance 

1,305,537

                        -

                       -

1,305,537

 

 

The fair value of the convertible loans issued by Guident Corp and Microsalt has been calculated using a Discounted Cash Flow Analysis. The significant unobservable input used in the fair value assessment is the discount rate of 10%. Increasing the discount rate by 2% used would result in:

-       a $139k decrease in the fair value of the asset for Guident and

-       a $84k decrease in the fair value of the asset for Microsalt

 

A 2% decrease in the discount rate would result in:

-       a $153k increase in the fair value of the asset for Guident

-       a $92k increase in the fair value of the asset for Microsalt.

 

 

12.3 INTEREST FROM FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS

 

The Group earned following interest income from its portfolio companies during the period:

 

 

 

31/12/2023

31/12/2022

Innovative Eyewear Inc

12,281

140,689

Microsalt Inc

139,421

72,159

Guident Corp

303,394

73,736

 Total Balance 

             455,096

          286,583

 

 

13. INTANGIBLE ASSETS

The Directors have undertaken an impairment review based on the future cash flow projections of the Vortechs Group intangible asset and consider the recoverable amount to be higher than the carrying value and have therefore recorded no impairment.

 

Remaining amortisation period of each asset with remaining amortisation:

-     Vortechs: 5 years

-     Invention Evaluator: 2 years

 

Group

 Vortechs

 Website development


Invention Evaluator


Total

 

US $

US $


US $

 

US $

Cost

 

 


 

 

 

As at 31 December 2022

     500,000

          28,121


   338,770


     866,891

Addition

                  -

                     -


     59,004


        59,004

As at 31 December 2023

     500,000

          28,121

 

   397,774

 

     925,895

 







Accumulated amortisation

 





As at 31 December 2022

(324,813)

(28,121)


(271,017)


(623,951)

Amortisation

(50,000)

                     -


(33,786)


(83,786)

As at 31 December 2023

(374,813)

(28,121)

 

(304,803)

 

(707,737)

 







Net Book Value

 






As at 31 December 2022

     175,187

                     -

 

     67,753


     242,940

As at 31 December 2023

     125,187

                     -

 

     92,971

 

     218,158

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14. PROPERTY, PLANT AND EQUIPMENT

 

GROUP

Leasehold Improvements

Office equipment

 Computer Equipment

Total


US $

US $

US $

US $

Closing cost 30 November 2021

           13,775

       25,980

        29,377

     69,132

Additions

         5,000

           1,153

       9,919

Closing cost 31 December 2022

           17,541

       30,980

        30,530

     79,051

Additions

         6,087

              738

       6,825

Closing cost 31 December 2023

           17,541

       37,067

        31,268

     85,876

 




Accumulated depreciation and impairment

 



Accumulated depreciation at 30 November 2021

(13,775)

(20,175)

(28,579)

(62,529)

Depreciation charge

(5,620)

(933)

(6,553)

Accumulated depreciation at 31 December 2022

(13,775)

(25,795)

(29,512)

(69,082)

Depreciation charge

(1,687)

(836)

(2,523)

Accumulated depreciation at 31 December 2023

                      (13,775)

(27,482)

(30,348)

(71,605)

 




Closing net book value 31 December 2022

             3,766

         5,184

           1,018

       9,969

Closing net book value 31 December 2023

           3,766

         9,584

              920

     14,271

 

 

15. TRADE AND OTHER RECEIVABLES

 

 

 

 

 

2023

 

2022

 

 

 

 

US $


US $

Trade receivables

          101,608

 

            9,831

Trade receivables - net

 

 

 

          101,608


            9,831

Vat recoverable

 

 

 

            36,675

 

          21,951

Prepayments and other debtors

 

 

 

            25,817

 

          27,604

Receivables from related parties

 

 

       950,653

 

    1,028,657

Total trade and other receivables

 

 

       1,114,753

 

    1,088,043

 

 

The fair value of trade and other receivables are not materially different to those disclosed above. The credit loss allowance was assessed for the Group as at 31 December 2023 and there was no increase/decrease in the expected credit loss allowance (2022: $nil). Group's exposure to credit risk related to trade receivables is detailed in Note 3 to the consolidated financial statements.

 

The Group had outstanding receivables from its portfolio companies as at 31 December 2023 in the amount of:

    - US$74,170 due to Lucyd Ltd (2022:US$ 54,466)

   - US$63,418 due from Smart Food Tek Ltd (2022: US$63,418)

   - US$259,390 due from Guident Ltd (2022: US$951,098)

   - US$6,039 due from Innovative Eyewear Inc (2022: US$13,410)

   - US$629,000 owed from Microsalt plc (2022: US$958).

 

 

 

 

 

 

16. CASH AND CASH EQUIVALENTS

 

GROUP

 

 

2023

 

2022

 

 

 

US $

 

US $


 

 

 

 

 

Cash at bank and in hand

      620,248

 

      628,640


 

 

 

 

 

Total cash and cash equivalents

      620,248

 

      628,640

 

 

17. CATEGORIES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

 

 

 

GROUP

 

 

 

 

2023

 

2022

 

 

 

 

 

US $

 

US $


 

 

 

 

 

 

 

Financial assets at fair value through profit and loss

   46,653,995

 

   56,184,146

Financial assets at amortised cost

 

 

 

 

     1,052,261

 

     1,088,043

Cash and equivalents at amortised cost

 

 

        620,248

 

        628,640

 

 

 

 

 

   48,326,504

 

   57,851,274

 

 

 

 

 

 

 

 

Financial liabilities

 

 

 

 

 

 

 

Trade and other payables at amortised cost

 

 

        504,784

 

        203,886

 

 

18. SHARE CAPITAL

 

 

 

 

Number

Ordinary

Total

Group and Company

 

of shares

Share US$

US $

Issued and fully paid up

 

 

 

 

As at 30 November 2021

 

 141,542,328

       793,792

         793,792

Shares issued through share option exercise

      1,150,000

            5,445

              5,445

Shares issued in further public offering

      8,000,000

         40,486 

            40,486

As at 31 December 2022

 

 150,692,328

       839,723

         839,723

Shares issued in further public offering

    27,395,934

      133,606 

         133,606

As at 31 December 2023

 

 178,088,262

       973,329

         973,329

 

 

The shares have full voting, dividend and capital distribution (including on winding up) rights; they do not confer any rights of redemption. The following shares were issued during the year:

 

•     February 2023: 14,062,500 shares were issued in the placing of new ordinary shares at £0.16p. Total proceeds of US$2,640,909 were netted against cost of raising finance in the amount of US$179,371

•     April 2023: 13,333,334 shares issued in the placing of new ordinary shares at £0.15p. Total proceeds of US$2,404,984 were netted against cost of raising finance in the amount of US$170,441

  

The Company has authorised share capital of 178,088,162 with a nominal value of £0.004. Of these shares, 178,088,162 were issued and fully paid up.

 

19. TRADE AND OTHER  PAYABLES

The fair values of trade and other payables are not materially different to those disclosed above.

 

The Group's exposure to currency and liquidity risk related to trade and other payables is detailed in note 3 to the accounts.

 

 

 

 

2023

 

2022

Group

 

US $

 

US $

Trade creditors

 

             250,218

 

         77,263

Amounts due to related parties

 

109,344

 

-

Social security and other taxes

 

               12,371

 

         12,111

Accruals and other creditors

 

             145,221

 

       126,624

 

 

             517,154

 

       215,998

 

 

20. DEFERRED REVENUE

 

The Group's deferred revenue balance of US$172,610 as of 31 December 2022 was adjusted for:

•     receipt of Invention Evaluator payments in the amount of US$68,078 to be delivered after 31 December 2023, recognized as addition to the balance of deferred revenue during the year ended 31 December 2023

•     recognition of US$23,297 of revenue deferred as of 31 December 2022 for reports delivered during the financial year 2023 bringing the total outstanding balance of Deferred Revenue as at 31 December 2023 to US$217,391.

 

21. DEFERRED INCOME TAX

 

Unused tax losses for which no deferred tax assets have been recognised is attributable to the uncertainty over the recoverability of  those losses through future profits. A tax rate of 25% has been used to calculate the potential deferred tax.

 

 

 

2023

 

2022

Deferred tax

 

US $

 

US $

 Accelerated capital allowances

 

16,413

 

(24,323)

 Short term timing difference


 

 

 

 Tax losses


(2,115,963)

 

(2,356,784)

 Unprovided deferred tax asset

 

        2,132,376

 

 2,381,107

 

 

                         -

 

                  -

 

22. DIVIDENDS

No dividend has been recommended for the period ended 31 December 2023 (2022: Nil) and no dividend was paid during the year (2022: Nil).

 

23. COMMITMENTS

 

Capital commitments

The Group entered into multiple convertible loan note agreements with its portfolio companies. Please see note 15 for details regarding outstanding commitments.  

 

Lease commitments

The Group did not have any material contracts withing the scope of IFRS 16. Consequently, the Group did not recognise any right-of-use assets and lease liabilities during the period.

 

 

24. SHARE BASED PAYMENTS

 

The Group operates an approved Enterprise management scheme and an unapproved share option scheme.

 

The fair value of the equity settled options granted is expensed over the vesting period and is arrived at using the Black-Scholes model.  The assumptions inherent in the use of this model are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The weighted average fair value of options outstanding was £0.06p. Volatility was calculated using Group's historical share price performance since 2017. The share-based payment expense for the year was $79,658 (2022: $167,957). Details of the number of share options and the weighted average exercise price outstanding during the year as follows:

 

 


 Av. Exercise 

 Options 

 Av. Exercise 

 Options 

 

price per

(Number)

price per

(Number)

Group and Company

share £


share £


As at 1 January 2023

              0.2746

    8,865,000

            0.2110

       8,200,000

Granted



            0.3250

       1,990,000

Exercised



            0.0783

(1,100,000)

Forfeited/expired



            0.3034

(225,000)

As at 31 December 2023

              0.2746

    8,865,000

            0.2746

       8,865,000

Exercisable as at period end

 

    5,900,000

 

 4,750,000*

 

 

*The weighted average exercise price for the options exercisable as at 31 December 2023 and 31 December 2022 was £0.11p and £0.11p respectively.

The weighted average remaining contractual life is 3.0 years (2022: 3.0 years). The weighted average fair value of options granted during the year was £0.06p (2022: £0.12p). The range of exercise prices for options outstanding at the end of the year was £0.052p - £0.325p (2022: £0.052p - £0.325p).

 

25. RELATED PARTY TRANSACTIONS

 

Details of Directors' remuneration and grant of options are given in the Directors' report.  Please also refer to Note 8.1 for payments related to key management personnel.

 

525,000 options were held by Harrison Gross, family member of Dr. Clifford Gross (2022: 525,000).

Please refer to tables below for detail of relationships and transactions between The Group and its subsidiaries. 

 

Convertible note receivable

 

 

 

 

 

 

 

2023

2022

Group

 

 

 

US $

US $

Guident Corp

 

 

  3,000,000

  1,000,000

Microsalt Inc

 

 

  2,528,427

     158,161

Innovative Eyewear Inc

 

 

                 -

     147,375

 

 

 

 

  5,528,427

  1,305,536


 

 

 

 

 

Intercompany receivable

 

 

 

 

 

 

 

2023

2022

Group

 

 

 

US $

US $

Guident Corp

 

 

    209,184

     951,098

Smart Food TEK

 

 

       66,681

       63,418

Lucyd Ltd

 

 

 

(74,170)

       54,466

Innovative Eyewear Inc

 

 

         6,039

       13,410

Microsalt plc

 

 

     629,000

(958)

Other

 

 

 

         3,573

                 -

 

 

 

 

  840,307

  1,081,434


 

 

 

 

 

Management fees

 

 

 

 

 

 

 

 

2023

2022

Group

 

 

 

US $

US $

Guident Corp

 

 

     176,301

     140,227

Microsalt Inc

 

 

     139,788

     141,332

Lucyd Ltd

 

 

 

                 -

                 -

Innovative Eyewear Inc

 

 

     139,687

     138,138

 

 

 

 

     455,776

     419,697

 

 

 

 

 

 

Interest Income

 

 

 

 

 

 

 

 

2022

2022

Group

 

 

 

US $

US $

Guident Corp

 

 

     303,394

       73,736

Microsalt Inc

 

 

     139,421

       72,159

Innovative Eyewear Inc

 

 

       12,281

     140,688

 

 

 

 

     455,096

     286,583

Related party transactions were made on terms equivalent to those that prevail in arm's length transactions and are made only if such terms can be substantiated.

                                                                                                                

 

26.  EVENTS AFTER THE REPORTING PERIOD

Post period end, Microsalt successfully completed its Initial Public Offering and commenced trading on the AIM market of the London Stock Exchange on February 1st, 2024.

 

Post period end, Group announced placings to raise GBP 2,000,000 before expenses on 29 February 2024.

 

 

 

 


 

 

 

 

 

 

 

 

 

 

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