THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

12 November 2024

Microsaic Systems plc

("Microsaic", "Microsaic Systems" or the "Company")

Interim Results for the six months ended 30 June 2024

Change of Registered Office

Proposed change of name

Microsaic Systems plc (AIM: MSYS), an international developer and provider of testing solutions for unique and underserved public health and environmental markets, is pleased to announce its unaudited interim results for the six months ended 30 June 2024 ("H1 24").

 Bob Moore, Acting Executive Chairman of Microsaic Systems plc, commented:

"2023 was an extremely challenging year for the Company resulting in a complete restructure of the organisation in 2024.The first six months of 2024 has seen a transformational re-focus of the Microsaic Group following the equity fund raise and acquisition of the assets of Modern Water. A total reset of the business has been achieved as a result. After initial restructuring, new setup costs and investment to integrate the acquisition of the assets of Modern Water with Microsaic Systems, the Company is now well positioned to move forward with its comprehensive portfolio of testing and analytical technologies particularly in the water quality, safety, public health and environment protection sectors. As a purpose driven newly integrated business, we plan to be a market leader in these critically important fields for human wellbeing and our natural world."

H1 24 Financial Highlights

·    Unaudited Group revenues of £255k: an increase of 83% on (H1 23:  £139k)

•     Modern Water subsidiary revenues of £185k

•     Microsaic subsidiary revenues of £70k (H1 23: £139k)

·    Group gross profit was £122k (H1 23: loss £6k)

·    Group Adj.* EBITDA loss of £477k, a reduction of 53% compared to H1 23 Adj. EBITDA loss (£1,022k)

·    Group total comprehensive loss of £536k, a reduction of 50% compared to H1 23 loss (£1,078k)

·    Cash at 30 June 2024 was £982k (H1 23: £587k) and Company is debt free

*Loss of earnings before interest, tax, depreciation, amortisation and other items such as share-based payments and exceptional one-off expenditure.

Operational highlights

·     Completion of a net £1.8m equity funding round in January 2024

·     Completion and integration of the business assets of Modern Water, purchased for £100,000

·     The Company received £262k in a research and development tax reclaim from HMRC

·     Fit-out and validation of new 1,800 sq ft facility in York, new production, sales and support teams hired

·     Secured UK based supply chain for production of equipment, consumables and reagents

·     Passed ISO9001 audit and implemented comprehensive Quality Management System (QMS) including electronic document management systems to integrate Modern Water processes

·     Re-established distribution and sales network for Modern Water with revenues commencing in May 2024

·     An agreement was signed to provide water monitoring analysis systems for Doha, Qatar. During the first six months period revenues of over £143k have been booked to Modern Water from this ongoing project

·     The Company's technologies were showcased at the Singapore International Water week in June 2024 sponsored by the UK Department of Business and Trade

Post Period Events

·    Appointment of Graham Mullis as Strategic Advisor to the Board of Directors

·    Completion of installation of 27 Continuous Toxic Monitoring (CTM) devices in Doha, Qatar with potential to install additional CTM's in early 2025

·    The Company's technologies were showcased at WEFTEC in October, the largest water quality event in the US

·    Change of name of Microsaic Systems plc to Metir plc with retention of product names in trading subsidiaries (subject to shareholder approval)

·    Production at our York laboratory of bio-reagents for all our MicroTox® devices (CTM, LX and FX) fully operational with increasing sales pipeline to exisiting and new Modern Water customers

·    Redesign of laboratory based MicroTox® LX devices completed with manufacturing starting and shipping in December 2024 to meet overseas customer confirmed sales and enquiries

·    Starting trial partnership with Siemens and CAD-IT to incorporate machine learning data analysis software (AI) on our CTM's and other devices

·    Multi Pathogen Detector for in-line real time data (including viruses) detection based on Company's exisiting prototype developed to detect Covid-19 in water to be introduced in 2025

Current Trading & Outlook

The first six months of 2024 saw management direct its time with investment in infrastructure and re-establishing customer relationships with a focus on the Modern Water subsidiary. The Board is pleased with the response from customers and suppliers and the early revenues generated from this operating subsidiary. This revenue progress and financial performance improvement is expected to continue during the second half of this year with a growing order book from existing and new customers. The Company is also focused on supply-chain management and as revenues, the Board is also targeting an improvement in gross margins through product mix and economies of scale. The Company has many developments currently underway, as listed under 'Post Period Events' above and plans to provide a more detailed operational update shortly.   

A copy of these interim results is being made available on the Company's website at https://www.microsaic.com/investors/, and hard copies will be sent to shareholders who have requested communications in that format. Furthermore, the Company confirms that the annual report and audited financial results for the year ended 31 December 2023 was posted to shareholders who have requested communications in that format following publication on 11 October 2024.

Enquiries:

About Microsaic Systems

Microsaic is highly experienced in the development, manufacture and supply of microelectronics instrumentation for markets requiring analytical testing in public and environmental health markets. The Company has recently acquired and integrated the assets of Modern Water with Microsaic Systems' technologies resulting in comprehensive water testing and other toxic testing capabilities.

Microsaic's products and solutions are commercially available through global markets via a network of regional and country specific distributors and partners.

Chairman's Statement

First, I would like to apologise for the late filing of the 2023 accounts and consequent late filing of our 2024 interim accounts. 2023 was an extremely challenging year for the Company caused primarily by the collapse of DeepVerge plc, the main debtor to the Company resulting in major directorate and management changes and the suspension of trading of the Company's shares on AIM.

The decision in Q4 2023 to raise new equity on AIM for the Company to remain as a going concern and to acquire the Modern Water business, which completed in January 2024, has enabled the Company to totally reset and reinvent its business model. The Company has become a leading water security, monitoring and analysis business combining the early warning technologies supplied by Modern Water technologies with the gold standard mass spectrometer detailed analysis capabilities of Microsaic. 

The Company has deployed the necessary financing to upgrade the acquired Modern Water assets and provide capital to invest in and develop the enlarged business. The acquired assets are complementary to the existing Microsaic business model. Following acquisition of the Modern Water business the Company set out to engage with previous customers to re-establish relationships and to instigate a new sales pipeline. Using the acquired assets, we restarted the manufacture of the MicroTox® bio-reagents (the consumables for our Modern Water testing devices) late in Q2 2024 at our new laboratory near York, England.

Microsaic's overall cost base has been substantially reduced and we now operate a leaner, more efficient business model for our acquired water testing technologies and manufacturing of our mini-mass spectrometer devices. We have reset and redesigned the Company around a new and much more efficient model based on the integration of the enlarged business to optimise growth of sales, solutions and services income to be generated by the combined entities.

Business Strategy

Following the total business reset and acquisition of the Modern Water business in January 2024, the Company's objective is to become a leading international business offering testing solutions for unique and under-served markets. The Company has an initial strategic focus to provide and develop proprietary technologies for testing and monitoring toxins in water and industrial effluents. By owning the assets of Modern Water, the Company has gained the right to manufacture and supply a wide range of proprietary technology devices for detecting toxins in water and liquids using MicroTox® bio-reagent consumables. The Company will operate in a water testing market which is worth USD 4.45 billion in 2022 and growing at 6.1% compound rate per annum from 2023-2030 (ref Grand View Research report GVR-68040-069-5) and has unique products that are immediately able to generate revenues and therefore generate cash-flow.  In the near term, most of the company's income is expected to come from the Modern Water part of the business.

The unique and proprietary mini mass spectrometers developed and supplied by the Microsaic Systems subsidiary complements the Modern Water devices. The Company is becoming a leading water security, monitoring and analysis business combining the early warning technologies supplied by Modern Water technologies with its gold standard mass spectrometer detailed analysis capabilities. 

By integrating the businesses and combining the detailed analysis only available through mass spectrometry techniques, the company now offers a unique and comprehensive suite of devices and capabilities for detecting and identifying toxins in water and effluents. We have collectively named this the 'Tethys Purity® solution'.

As the financial performance of the Company grows and subject to resources, the Company will evaluate new markets that its current technologies can provide unique testing solutions for and either pursue this organically, inorganically or through other means such as partnerships and licensing.

Proposed change of name

Microsaic plans to rebrand to reflect the broader number of market opportunities its suite of technologies can now serve by changing its name to Metir plc (subject to shareholder approval) as part of the reset strategy. The branding in its operating subsidiary companies of Modern Water and Microsaic Systems are, however, well established and recognised trading brand names and will be maintained. It is expected that shareholder approval will be sought at the Company's upcoming AGM.

Appointment of adviser

We are pleased to announce that Graham Mullis has agreed to become an adviser to the Board to assist the company with its business strategy, development and growth plans. Graham is a seasoned healthcare entrepreneur with a track record of leading and growing multiple companies, creating close to £1 Billion in shareholder value during his 25-year executive career. As the former CEO of Biocompatibles Eyecare, ClearLab International, Optivue, Lab21 and Novacyt, he brings extensive strategic, commercial, and corporate experience whilst operating across London AIM, Paris Euronext and NASDAQ financial markets. With the last fifteen years dedicated to the diagnostics testing markets, including human, research, animal, water and environmental sectors, Graham is well positioned to offer invaluable guidance and experience to support the planning of Microsaic's strategic growth and performance.

Cash Position

Within its FY23 Final Results Announcement released on 11 October 2024, the Company provided a detailed update on its cash flow projections together with a sensitivity analysis exploring a severe but plausible downside scenario. The Directors confirm that this assessment remains as accurate as at today's date and remind readers that, under the reverse stress test performed, a minimum sales level of approximately £84k per month, in addition to the Qatar contract, is required to enable the Company to remain liquid and with positive cash headroom over the next twelve months. While the directors consider this to be an achievable target, it is acknowledged that this exceeds the level of turnover experienced in the year ending 31 December 2023 or in 2024 to date.

The Company had net cash as at 11 November 2024 of £257k. It is expecting to receive VAT repayments totalling approximately £75k across November 2024 and December 2024 and approximately £194k from a customer based in the Middle East in November 2024. These payments will materially improve the Company's cash position.

STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
FOR THE SIX MONTHS ENDED 30 JUNE 2024

Note that the above revenues in the 6 months to 20 June 2024 include £144,000 in respect of an ongoing contract with Avanceon for installation of Continuous Toxic Monitoring (CTM) equipment in Doha, Qatar.