TIDMTEK
RNS Number : 7396A
Tekcapital plc
26 May 2023
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 2022
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
2022.
Financial highlights
Our investment objective is to achieve long-term growth of net
assets and returns on invested capital through the
commercialisation of university discoveries that can make a
positive impact on people's lives. In 2022 we had a productive year
for long-term value creation. Our portfolio companies achieved
significant milestones, however due to unrealized reductions in the
end of period valuations of Lucyd and Belluscura, our
profitability, net assets and net assets per share were
commensurately impacted.
-- Net Assets US$57.8m (2021: US$68.1m)
-- NAV per share US$0.38 (2021: US$0.48)
-- Portfolio valuation US$54.9m (2021: US$62.5m)
-- Total loss after tax: US$12.7m, resulting primarily from net
unrealised fair value reduction of US$11.0m (2021: profit of
US$26.4m),
-- Share placings totalling US$2.5m completed during the period (2021: US$9.7m).
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 22 June 2023 at 9.00 a.m. (British Summer Time).
The annual report and the formal notice of the 2023 AGM will be
posted to shareholders on the 26 May 2023.
The notice of AGM will be available to review on the Company's
website at: www.tekcapital.com.
Investment Portfolio
MicroSalt (R) Ltd (97.1%) www.microsaltinc.com
MicroSalt Ltd ("Microsalt") manufactures MicroSalt(R), 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.
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. In a recent
report(1), the World Health Organization has indicated that
reducing sodium consumption is one of the world's leading health
imperatives. To help address this problem, MicroSalt has developed
a patented process for producing micron sized salt crystals.
Microsalt(R) has all the flavour of salt with roughly half the
sodium for topical applications such as crisps, pretzels, nuts,
popcorn and other salty snacks. Additionally, MicroSalt can be used
in bakery products and precooked meals.
Microsalt's patented, low-sodium salt delivers natural salt with
approximately 50% less sodium.
Tekcapital owns 78% of Microsalt Ltd.
2022 developments:
-- MicroSalt executed its first bulk order of MicroSalt(R)
through FXM, a Mexican distribution partner.
-- MicroSalt received an equity investment of US$400,000 from a Spanish food-tech venture fund.
-- Expanded sales of its SaltMe!(R) full flavour, low sodium
crisps in more than 1,000 supermarkets and other stores in the
U.S., as proof of concept of the use of MicroSalt on snack
foods.
-- MicroSalt(R) named the 2022 Sodium Reduction Technology
Provider of the Year by Global Health & Pharma .
-- MicroSalt announced a partnership with Presty! Foods for the
development and roll-out of low-sodium solutions across Presty's
line for plate-ready meals. Presty! Manufactures its products in
its facility in France where it specialises in developing
innovative and delicious options to supply the booming Heat and Eat
category.
-- Launched MicroSalt shakers in both 2-ounce and 6-ounce sizes.
Hannaford Brothers one of the most respected food retailers in the
north-eastern United States (185 stores) agreed to stock both sizes
of MicroSalt's new table-top shakers. Subsequent to the end of
period, the new shakers have been on-boarded in more than 500
supermarkets in the US.
-- Judith Batchelar OBE joined the board of MicroSalt. Judith
currently serves as President of the U.K. Nutrition Foundation. She
has worked in the food and drink industry for over 35 years.
Previously she served as a director for Sainsbury's with
responsibility for all aspects of Sainsbury's product offer. Prior
to Sainsbury, Judith held a similar role at Safeway, and spent
twelve years in the Food Division at Marks & Spencer Group
plc.
-- Zeus Capital Limited appointed by MicroSalt as its Nominated
Adviser and Broker for its proposed IPO on the AIM Market targeted
for 2023.
Lucyd(R) Limited ("Lucyd") (100% ownership) www.lucyd.co
Lucyd(R) Limited ("Lucyd") Lucyd is seeking to Upgrade Your
Eyewear(R) by developing and selling designer smart eyewear at
affordable prices. Innovative Eyewear, Inc ("Innovative Eyewear"),
Lucyd's 67% owned U.S. operating subsidiary, was the first Company
to deliver prescription glasses with Bluetooth(R) 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(R) and voice assistants.
Investment Rationale:
Drivers struck and killed an estimated 7,485 people on foot in
2021 - the most pedestrian deaths in a single year in four decades
and an average of 20 deaths every day(1), according to a new
estimate by the Governors Highway Safety Association. Open ear
audio found in Lucyd smart glasses can help pedestrians maintain
situational awareness whilst walking running and cycling. According
to the Vision Institute(2), 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.
Lucyd's vision is to Upgrade your eyewear(R) by providing
tech-enhanced eyewear that makes it easier and safer than ever to
stay connected. Lucyd has just introduced the world's first smart
eyewear with ChatGPT.
2022 Developments:
-- Innovative Eyewear has been onboarded by DICK's Sporting
Goods(R) to provide its Lucyd Lyte(R) smart eyewear on
dickssportinggoods.com and by BestBuy.ca to place its products on
Best Buy's Canadian ecommerce site.
-- Appointed Olivia "Dibby" Bartlett as a non-executive
director. Dibby, an optical industry expert, has served more than
30 years in the eyewear industry and is the immediate past
president of the Opticians Association of America.
-- Appointed Kristen McLaughlin to its board as a non-executive
director. Kristen has had a distinguished career in the optical
industry where she has served as director of marketing for
Silhouette International and brand manager for Daniel Swarovski
Crystal Eyewear.
-- Innovative Eyewear launched the Vyrb app, a voice social
medial program designed for Lucyd Lyte smart glasses and other
hearables, on both IOS and Android.
-- Innovative Eyewear raised US$7.35 Million in an Initial
Public Offering ("IPO") of shares of its common stock on the NASDAQ
market on August 14, 2022, and trades under ticker LUCY.
-- Announced it has completed initial production of its
second-generation product, Lucyd Lyte 2.0, which subsequently
launched in Q1 2023. The Lyte 2.0 carries several new features
including high-end styling from Innovative Eyewear's new design
team, a four-speaker array for immersive audio, and the longest
playback time of any smart eyewear device, with 12 hours of music
playback and talk time per charge. The battery life of the Lyte 2.0
surpasses the vast majority of true wireless audio devices in any
form factor.
-- Introduced the first smart eyewear, digital try-on display. A
Lucyd-branded digital retail fixture that provides a virtual try-on
experience for in-store clients at Lucyd partner retail stores. The
proprietary software that operates the kiosk was designed and
created in house and is able to remotely update the displays with
new brand content and smart eyewear styles, and the tablet can also
be scanned to download Innovative Eyewear's Vyrb mobile app, making
it a comprehensive Lucyd brand experience in all deployed
locations.
-- Introduced the first cordless charging dock for smart
eyewear. This patent-pending accessory was developed by Innovative
Eyewear in house. It allows the customer to charge their Lucyd
glasses simply by dropping them on their nightstand. The Dock
includes three additional USB ports to enable the user to charge
their phone, smartwatch, tablet and smartglasses simultaneously
with one device.
-- Innovative Eyewear was granted six additional US design
patents and one additional US utility patent in 2022, as well as
one Chinese patent to protect its eyewear designs and software
utilities. Innovative Eyewear also filed new patents in 2022 in the
US, Canada and/or China to protect its recently released Lucyd Dock
and several pending products. Innovative Eyewear 's total number of
pending and issued patents now stands at 62.
-- In late 2022, Innovative Eyewear acquired a multi-year,
global license to the Nautica brand for smart eyewear and related
accessories. Innovative Eyewear designed the initial line of
Nautica Smart Eyewear and expects to launch the line in H2 2023. In
addition, the Company also acquired a multi-year, global license to
the storied Eddie Bauer brand for smart eyewear and related
accessories.
-- Lucyd products have also been on-boarded on Academy Sports +
Outdoors's main site, the second largest sporting goods retailer in
the US.
-- Lucyd partnered with Everest.com , a new sporting goods
marketplace, to offer Lucyd Lyte glasses to their rapidly growing
customer base.
-- In 2022, Innovative Eyewear grew its retail presence to 200+
locations carrying Lucyd Lyte products in-store.
Guident Limited ("Guident") (100% ownership) www.guident.co
Guident Limited ("Guident") is developing remote monitoring and
control software to improve the 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.
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 will monitor
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 providing real-time communication
with passengers and pedestrians. Over time, Guident believes remote
monitoring centres will be required in most jurisdictions where AVs
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.
Guident is developing remote monitoring and control software to
improve the safety of autonomous vehicles and land-based delivery
devices.
2022 Developments:
-- Guident has executed a strategic alliance with Perrone Robotics, Inc.
-- Guident is working with Airspan Networks to provide customers
with connectivity and software solutions for autonomous vehicles
for smart city applications, using CBRS (Citizens Broadband Radio
Service) spectrum.
-- Guident announced that they have filed their 8th patent
application covering improvements to their remote monitoring and
control centre for AVs. U.S. patent application #17/579,203
entitled: "Near Real-Time Data and Video Streaming System for a
Vehicle, Robot or Drone".
-- Guident was selected as a vendor by JTA's Procurement Review
Committee for JTA Proposal No. P-22-010 entitled "JTA Test
Environment" to provide remote monitoring and control services for
phase I of the Ultimate Urban Circulator (U(2)C) Project in the
Jacksonville urban core area. Jacksonville is the largest city by
area in the contiguous United States as of 2020. The Jacksonville
Transportation Authority is the independent agency responsible for
public transit in the city of Jacksonville, Florida, and roadway
infrastructure that connects northeast Florida.
-- Guident has been selected by Boca Raton Innovation Campus
(BRiC) to provide an autonomous shuttle service for a 2.1-mile
fixed route with eleven stops within BRiC and connecting to the
Boca Raton Tri Rail station, the most frequented station in South
Florida.
-- Additionally, Guident has announced progress with their
regenerative shock absorbers (RSA). Guident has produced its first
generation 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. In addition, this
unique design utilising rotary mechanical motion rectifiers can be
tuned to achieve better damping characteristics than existing shock
absorbers. Guident's shock absorber technology could potentially be
utilised by a significant number of electric vehicle makers.
Belluscura(R) Plc (12% ownership) www.belluscura.com
Belluscura plc ("Belluscura") is a respiratory medical device
company that has developed and launched an improved portable oxygen
concentrator (POC) to provide on-the-go supplemental O2. The
company 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). Many of these patients
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.
Belluscura's X-PLOR oxygen concentrator
2022 Developments:
-- Belluscura announced it has entered into its first
international distribution agreement with MedHealth Supplies of
South Africa and has signed a distribution agreement with a leading
Durable Medical Equipment ("DME") provider and distributor in the
US.
-- Belluscura announced that it has won two 2022 HME Business
New Product Awards for its X-PLOR(R) portable oxygen concentrator
and Nomad Biometric(TM) App.
-- Belluscura has been certified as compliant with ISO standards
for Quality Management (ISO 13485:2016).
-- Belluscura announced its half year report reporting Group
revenue of US$0.6 million (H1 2021: US$nil); a 34% increase over H2
2021, Adjusted EBITDA of US$5.1 million loss (H1 2021: US$1.2
million loss), basic loss per share of US$0.04 (H1 2021: US$0.03)
and Net cash at 30 June 2022 of US$11.3 million.
-- Belluscura announced that it has entered into a Group
Purchasing Organization Product Supply Agreement (the "Agreement")
for the supply of portable oxygen concentrators with VGM Group, Inc
("VGM"). VGM is the largest and most comprehensive Member Service
Organization ("MSO") in the US for post-acute healthcare, which
provides a range of support to its members including with the
purchasing of medical equipment in the respiratory field. Over
2,500 healthcare providers with nearly 7,000 locations across the
US rely on VGM to connect them to valuable resources every single
day.
-- Belluscura announced that it has commenced selling its X-PLOR
oxygen concentrators direct to consumers ("DTC") from the following
website: www.xploroxygen.com .
-- Belluscura announced the launch of its Bluetooth(R) enabled,
next generation X-PLOR(R) portable oxygen concentrator (previously
described as the X-PLOR CX). The next generation X-PLOR provides
more oxygen by weight than any portable oxygen concentrator in its
class and with its new Nomad Health(TM) App, patients can connect
other Bluetooth(R) devices such as their iPhone(R) or Android
phone, Nonin(R) or Masimo(R) pulse oximeters, and Fitbit(R)
wearables. Patients will be able to track their oxygen usage,
breathing rates, blood oxygen saturation levels, heart rate, sleep
and other important biometric and environmental data. The patient
can then share this important healthcare data with their
provider.
-- Belluscura announced that three additional US patents have
recently been granted, increasing the number of issued and pending
patent applications the Company owns or exclusively licenses to 30.
The technology covered by the patents, includes, extracorporeal
membrane oxygenation (ECMO) innovations for when people who are
very ill with conditions of the heart and lungs, or who are waiting
for or recovering from a heart transplant, require a portable
artificial lung; continuous Positive Airway Pressure (CPAP)
innovations, a type of non-invasive ventilation (NIV) or breathing
support, and consumer replaceable molecular sieve technology, used
to remove Nitrogen from ordinary air to produce medical grade
supplemental oxygen.
-- Belluscura raised approximately GBP6.0 million by way of the
issue of 7,058,824 Placing Shares at an issue price of 85 pence per
ordinary share.
-- Belluscura announced that Brian Brown has joined as Vice
President of Engineering. Brian has over 25 years of experience in
commercializing breakthrough new products in hardware, software,
and service delivery industries. In addition to degrees in
electrical engineering, he is a registered professional engineer
and is a named inventor on 17 US patents. Belluscura also announced
Jim Clement has joined the Company as Head of Commercial Strategy.
Jim has over 30 years' experience in the durable medical equipment
industry, including previously holding the title of General Manager
of a portable oxygen concentrator Company.
-- Belluscura announced that X-PLOR portable oxygen concentrator
has been awarded a Distribution and Pricing Agreement ("DAPA") code
from the U.S. Defense Logistics Agency ("DLA") through our
distribution partner, Lovell Government Services Inc ("Lovell").
DLA procures items from manufacturers and suppliers and provides
them to the Department of Defense and other federal/state customers
throughout the US and globally.
-- Belluscura announced it has signed a manufacturing Master
Supply Agreement ("MSA") with InnoMax Medical Technology, Ltd
("InnoMax") to manufacture the X-PLO2R(R) portable oxygen
concentrator in the People's Republic of China.
Operational highlights: Corporate
Company provided the following webinars, conference
presentations and delivered analytic reports as follows:
-- Webinar series entitled "Technology Transfer: The Development
of New Commercialization Paradigms." The webinar was delivered to
more than 60 participants from USA, Canada and South Africa.
-- Webinar series entitled "The Development of New
Commercialization Paradigms In LATAM." The webinar was delivered to
more than 80 participants from Colombia, Chile, Mexico and
Peru.
-- Tekcapital was invited to participate at the 2022 Red TTO
(Technology Transfer Offices) Mexico event. This annual congress is
where the innovation ecosystem of Mexico converges.
-- In the U.S., Tekcapital participated as a sponsor and
exhibitor at the 2022 Eastern, Central, Western and Canadian Region
Meetings hosted by the Association of University Technology
Managers.
-- In Brazil, Tekcapital participated at the National Forum of
Innovation and Technology Transfer Managers. This event hosted more
than 100 key players in the technology transfer industry in Latin
America.
-- Tekcapital delivered more than 260 Invention Evaluator
reports to universities, research institutions and corporations
worldwide, to help them assess the market potential of their new
technologies.
-- Additionally, the Vortechs Group, Tekcapital's executive
search firm won numerous executive search assignments in 2022 for
both external customers and portfolio Company clients.
Dr. Clifford Gross, Executive Chairman said:
" The Group has made good progress during 2022. Our portfolio
companies have demonstrated solid growth and we believe they should
achieve additional significant milestones by the end of 2023.
Of note, Lucyd's Innovative Eyewear Inc. subsidiary completed
its flotation on the NASDAQ and raised US$7.3m in gross proceeds,
in spite of a choppy year in the capital markets. Guident secured
its first customer, the Jacksonville Transportation Authority for
its remote monitoring and control (RMCC) service and has signed a
letter of intent with its second customer, the Boca Raton
Innovation Campus, to provide remote monitoring for its campus
shuttle. Additionally, Guident has made significant progress
improving and fabricating its latest regenerative shock absorbers
and has begun testing them with several Tier-1 companies. 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 to an increasing number of
supermarkets and engaging its advisory team for a prospective AIM
IPO during 2023.
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. These were partially offset by the approximate
doubling of the share value of MicroSalt.
We remain steadfast and excited about the commercial progress of
our portfolio companies in 2022 and for their future prospects for
the remainder of 2023. 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 mid to long term."
Post period end portfolio company highlights
Belluscura plc
-- Belluscura announces that it has made considerable progress
year to date. Since the launch of the 1st generation X-PLOR in
September 2021, the Group is now distributing products throughout
the US through multiple sales channels: Distributors and Durable
Medical Equipment Providers both online, Bricks and Mortar, Medical
Supply Warehouses, Medical Device Intermediaries, Hospitals and
Direct to Consumer.
-- Belluscura 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 1 million portable oxygen
concentrators ("POCs"), generating revenues in excess of $1
billion.
-- Belluscura announced in January 2023 it has raised under a
Placing and Broker Option approximately US$5.8 million (GBP4.7
million), before expenses through placing of unsecured convertible
loan notes ("Loan Notes"). The Placing and Broker Option when
combined will, assuming all interest on the Loan Notes is
capitalised, result in the issue, upon conversion of the Loan
Notes, of up to 12,462,281 new ordinary shares of 1 penny each in
the Company, representing approximately 9.20% of the enlarged
issued share capital of Belluscura.
-- Belluscura announced its X-PLOR portable oxygen concentrator
("POC") is now marketed in the US through GoodRx, Inc.
www.goodrx.com . GoodRx, Inc (Nasdaq: GDRX) is a leading digital
healthcare platform that makes healthcare affordable and convenient
for all Americans.
-- Belluscura announced proposed placing and subscriptions to
raise GBP 3.0 million and retail offer to raise up to GBP 0.5m on
25 May 2023.
Salarius & Microsalt Inc, its US subsidiary:
-- MicroSalt announced that supermarket chain, Giant Food of
Maryland LLC, ("Giant") one of the most respected food retailers in
the mid-Atlantic United States, has agreed to partner with
Microsalt Inc to provide low-sodium solutions for consumers and has
agreed to carry MicroSalt's new saltshakers in its stores. Giant
has over 160 stores spanning across the Delaware, Washington, D.C.,
Maryland, and Virginia region.
-- MicroSalt announced it had entered into an agreement with US
Salt LLC ("US Salt") for the distribution and delivery of
MicroSalt's low-sodium solutions. "US Salt is looking forward to
working with MicroSalt(R) to help with our low-sodium initiatives.
Sodium is a worldwide concern in the food industry, and we believe
Rick and his team are the industry leaders that can help propel our
future growth." Said Bob Jordan, Vice President of Sales &
Marketing of US Salt. US Salt is currently responsible for
producing and distributing over 90% of the private label, round can
salt business in the United States. To learn more about US Salt,
visit www.ussaltllc.com.
-- MicroSalt announced that both sizes of its new line of low
sodium saltshakers are now available through UNFI and KeHE Foods,
two of the U.S.'s largest retail food distributors. United Natural
Foods, Inc. (NYSE: UNFI) is the largest publicly traded wholesale
distributor delivering healthier food options to people throughout
the United States and Canada. KeHE Distributors is one of the
nation's top wholesale food distributors with 16 distribution
centres across North America. Additionally, as a result of its
recent trade show attendance, MicroSalt has received orders from
Pete Markets in Illinois and Busch's Market in Michigan for the new
MicroSalt low sodium saltshakers. Delivery will be executed through
KeHE Foods. Pete's Market currently has 17 upscale stores in
Chicago and its suburbs and Busch has 16 stores in south-eastern
Michigan with headquarters in Ann Arbor.
-- MicroSalt also announced Hanahreum Group ("H Mart") has
agreed to carry MicroSalt's SaltMe(R) branded crisps. H Mart is
recognized as one of the fastest growing retailers by the National
Retail and Supermarket News and has listed H Mart as one of the Top
50 Small Chains and Independents in the United States &
Canada.
-- On 18 May 2023 MicroSalt(R) appointed U.K. Celebrity Chef
Jack Steinh as as Brand Ambassador. Chef Stein is a well-respected
and high-profile chef, restaurateur, entrepreneur, TV personality,
author , and educator. Jack serves as the Chef Director for Rick
Stein overseeing their restaurant menus and Stein's at Home
ecommerce store. Jack Stein received the 'Best Chef' accolade from
Food Magazine Reader Awards for 2023 .
"I am absolutely delighted to be working with MicroSalt to show
how a true low-sodium salt can produce the same taste while
providing significant benefits to health. As a chef, salt is the
most important ingredient, and this product is game changing." -
Jack Stein, Chef Director for Rick Stein, and Microsalt's brand
ambassador.
Lucyd & Innovative Eyewear Inc, its US subsidiary:
-- Innovative Eyewear the developer and retailer of smart
eyewear under the Lucyd(R), Nautica(R) and Eddie Bauer(R) brands
announced major developments in its Vyrb social audio app, which is
in open beta on iOS and Android. the Company has just completed a
powerful new live broadcasting feature called "On Air", which
enables users to create real-time audio chatrooms with up to 100
visitors and multiple active speakers. The Company believes this
feature will be a useful tool for audio content creators and
collaborative work.
-- Innovative Eyewear announced the launch of Lucyd Lyte 2.0,
("Lyte 2.0") a major upgrade to its flagship Lucyd Lyte audio
eyewear platform. The new Lucyd Lyte 2.0 line brings several
advances to the company's core product and is available now, in any
optical prescription, at Lucyd.co. Innovative Eyewear intends to
introduce the product to optical and specialty retail chains
worldwide. The Lyte 2.0 marks the culmination of years of R&D
to realise the Company's mission to make smart eyewear more
accessible, useful and stylish for the optical and sunglass
markets.
-- Innovative Eyewear also announced that five new styles of
Lucyd Lyte 2.0 audio eyewear are now available in titanium. These
new styles are an addition to the 10 styles of Lyte 2.0 introduced
in early February and offer 12 hours playback per charge: the
longest battery life in the smart eyewear industry.
-- Innovative Eyewear announced it has launched the first
ChatGPT enabled Smart Eyewear. ChatGPT is a language model
developed by OpenAI, designed to respond to text-based queries and
generate natural language responses. It is part of the broader
field of artificial intelligence known as natural language
processing, which seeks to teach computers to understand and
interpret human language.
-- Lucyd Lyte 2.0 eyewear is now available in 15 distinct
styles, the most of any smart eyewear on the US market. All of
these frames are able to access ChatGPT, enabling the entire Lucyd
collection to provide on-the-go, ergonomic access to the world's
leading digital assistant, another eyewear industry first for
Innovative Eyewear.
Guident & Guident Corp, its US subsidiary:
-- Guident Ltd. has executed a letter of intent with Auve Tech
OÜ ("Auve Tech") to provide remote monitoring and control ("RMCC")
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
the Auve Tech's new MiCa autonomous shuttle. The Auve Tech
next-generation vehicle is capable of autonomous driving in a
variety of traffic and weather conditions, making it an ideal
solution for safe, reliable, and sustainable transportation in
geofenced areas and mixed-traffic environments. The companies' plan
to launch the Auve Tech MiCa autonomous vehicle combined with
Guident's RMCC software to customers in North America during the
second half of 2023.
-- Guident Ltd. also announced that it has partnered with
Novelsat Ltd. (NOVELSAT), a global leader in content connectivity,
to develop an innovative always-on, ubiquitous remote monitor and
control solution for autonomous vehicles and devices. The solution
combines space communications using low earth orbit satellites, and
smart software to ensure optimal safety and security for autonomous
vehicles and devices, by enabling remote monitoring and operation
at any time and place and providing a further layer of monitoring
in addition to 5G & GPS. This integration of NOVELSAT's
satellite-based space connectivity technologies and Guident's
human-in-the-loop AI technologies will provide a reliable and
high-speed bi-directional connectivity. This connectivity enables
continuous, high-quality video streaming to remotely monitor
autonomous systems and, when necessary, to enable remote control of
the vehicles and devices to resolve various edge cases.
Additionally, the connectivity will provide real-time audio and
video communication with passengers, pedestrians, or first
responders, ensuring the highest level of safety for autonomous
systems, which is a crucial factor in the deployment and management
of such systems.
Posting of Annual Report and Accounts
The Company's annual report and accounts for the year ended 31
December 2022 will be available on the Company's website
www.tekcapital.com shortly and will be posted to shareholders on 26
May 2022.
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. Additionally, the current Coronavirus pandemic
may produce negative economic activities which could reduce the
company's economic performance and the performance of its portfolio
companies in ways that are difficult to quantify at this juncture.
It may cause a downturn in the markets in which the Company
operates, reduce the Company's net asset values, revenue, cash
flow, access to investment capital and other factors which could
negatively impact the Company. 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 statem ent
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 completed an IPO on the Nasdaq and
licensed the Nautica and Eddie Bauer brands for smart eyewear,
MicroSalt expanded sales of its SalMe crisps to >1,000 retail
locations throughout the US and they have launched the first
full-flavour, low-sodium saltshakers, which have been on-boarded in
more than 500 stores in the US. Additionally, Guident has landed
its first customer, the Jacksonville Transportation Authority, for
its remote monitoring and control service and has built and
continues to test with Tier 1 companies its new regenerative shock
absorbers for electric vehicles.
Working with purpose and drive, Tekcapital's portfolio companies
are making a positive impact on the lives of the customers they
serve.
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 have 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. These small crystals dissolve faster
on the tongue, so you need to use less salt, whilst still having
the same salty taste. Less salt means about 50% less sodium for
most applications. Less sodium means a reduced likelihood of
developing high blood pressure and heart disease, the world's
number one cause of premature death.
In addition to its focus on B2B sales of MicroSalt(R) to snack
food companies where the Company has made substantial progress,
Microsalt has launched its own snack food brand called SaltMe!
(TM). Additionally, MicroSalt has launched its low sodium salt in
saltshakers during 2022. Approximately 500 supermarkets now carry
theses better-for-you saltshakers.
Tekcapital owns approximately 97% of MicroSalt ltd which owns
78% of MicroSalt Inc, its U.S. based subsidiary as of the date of
this report.
Lucyd has built a smart eyewear business that combines
technology with traditional eyewear.
In January 2021, Lucyd's US subsidiary Innovative Eyewear Inc
launched Lucyd Lyte(R), their most advanced and compelling
Bluetooth(R) eyewear. This product combines proper prescription,
designer glasses with Bluetooth technology that you can use to
answer your phone, listen to music, and talk with Siri(R) or
Alexa(R) or Google Voice. The product has initially been very well
received and is available on multiple ecommerce sites and in
>200 retail optical stores in 2022. Lucyd has developed and
filed 62 U.S. utility and design patents covering their products.
Innovative Eyewear Inc., a U.S. subsidiary of its portfolio Company
Lucyd Ltd. Tekcapital owns 71% of the share capital of Innovative
Eyewear, Inc. Innovative Eyewear shares are listed on the NASDAQ
under ticker: LUCY.
Guident owns or holds the exclusive licence to eight patents and
applications that we believe can improve the safety and efficiency
of autonomous vehicles and land-based delivery devices.
Guident has demonstrated its beta remote monitoring and control
system (RMCC) with 38 msec latency which is believed to be amongst
the lowest in the industry.
Guident has progressed with its B2B marketing program and seeks
to develop partnerships with smart city operators, vehicle OEM's
and fleet operators to provide remote tele-monitoring and control
centres for autonomous vehicles and fleet operators. To this end it
has secured its first contract to provide the RMCC service with the
Jacksonville Transportation Authority and has signed a letter of
intent to provide its RMCC service to the Boca Raton Innovation
Campus, a 1.7m sq. ft real estate campus on 123 acres in Boca
Raton, Florida.
According to Research and Markets(1), the global market for
autonomous last mile delivery is projected to reach US$5.9 billion
by 2030 at CAGR of 23.5%.
Additionally, Guident has acquired an exciting, new regenerative
shock absorber technology, to help extend the range of electric
vehicles. Guident has fabricated prototypes of these regenerative
shocks for and is testing them with several Tier 1 companies.
Tekcapital owns 100% of Guident and 91% of its U.S. subsidiary
Guident Corporation as of 31 December 2022.
Belluscura has developed and sells an improved portable oxygen
concentrator to provide on-the-go supplemental O(2) (oxygen), with
user replaceable filter cartridges.
When a patient's disease progresses, they now can upgrade the
filter cartridge to provide more liters of O(2) 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 510(K) clearance from
the US FDA in March 2021.
Financial Performance
-- Net Assets US$57.8m (2021: US$68.1m)
-- NAV per share US$0.38 (2021: US$0.48)
-- Portfolio valuation US$54.9m (2021: US$62.5m)
-- Total loss after tax: US$12.7m (2021: profit of US$26.4m),
resulting primarily from net unrealised fair value reduction of
US$11.0m
-- Share placing totalling US$2.5m completed during the period (2021: US$9.7m).
Historical Net Assets (US$m)
Fundraisings during the period
Early-stage businesses facing large market opportunities need
talent, technology and capital to succeed. To help address this we
completed the following fundraises in 2022.
On 25 May 2022 Tekcapital announced that it has raised a total
of GBP2 million (c.US$2.5m) before expenses, in an oversubscribed
placing from existing and new shareholders, by way of the issue of,
in aggregate, 8,000,000 new ordinary shares of 0.4 pence each in
the Company at 25 pence per share.
The net proceeds of the Placing were primarily used to
accelerate the growth of the Company's portfolio companies. The
Placing was undertaken by the Company's broker SP Angel Corporate
Finance LLP.
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 Group is dependent on its executive team and directors
for its operations and ultimate success and there can be no
assurance that it will be able to retain the services of these key
personnel in the future. Management's strategy includes regular
review of performance and compensation strategy to help improve
retention of talent along with executive requirement to expand the
depth of our management bench.
-- The current barbaric and senseless Russian invasion of
Ukraine has not had a material impact on our business to-date, as
far as we can discern, as we do not have direct business exposure
to either Russia or the Ukraine. However, over time the conflict
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, small cap stocks worldwide have felt the pinch,
and this can be seen in Belluscura's and Innovative Eyewear's share
prices at the end of the period.
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 2023. 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 additional funding for our
non-quoted, portfolio companies, to accelerate growth for these
companies.
Whilst the Company is progressing very 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, revenue, income and future
prospects.
We are grateful for the patience and support of our
shareholders. We are also sincerely appreciative of our dedicated,
creative and incredibly hardworking portfolio companies and our
corporate team, without whom, none of the results reported herein
would be possible.
Section 172 (1) statement
Our Board 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 Company'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
everyday 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 Company's business relationships with suppliers, customers and others.
The Board ensures that the Company'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 Company'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 Company'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 Company's investment decisions on the
environment as part of screening process.
e) The desirability of the Company maintaining a reputation for
high standards of business conduct.
The Board recognises that culture, values and standards are key
contributors to how a Company 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 Company'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 Company.
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 Company,
holding approximately 6% of the register, together putting them in
the top 3 shareholders of the Company. On this basis the Board
feels that the executive Directors are fully aligned with
shareholders.
g) Innovative Eyewear Inc listing.
Consistent with the Board's policy to seek exits, when
practicable, for our portfolio companies either through trade sales
or public listings we supported Innovative' s listing and converted
the majority of our convertible loan note at the time of the
offering.
h) Microsalt Ltd listing.
We have 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 Company's ability to recruit
experienced managers by being able to offer associates stock
options grants with a near-term path towards monetisation.
i) Fundraising activities.
During the course of the period, Tekcapital plc consummated one
fundraise 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 2021
report.
We are enthusiastic about the development of Tekcapital's
portfolio companies, their performance to-date and their prospects
to significantly expand in 2023. 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.
j) Greenhouse Gas Emissions.
The 2018 Regulations introduced requirements under Part 15 of
the Companies Act 2006 for an enhanced group of companies, which
are defined as large by the Companies Act 2006, to disclose their
annual energy use and greenhouse gas emissions, and related
information. The Group is not currently defined as large, but it
has chosen to apply the 2018 Regulations. Tekcapital plc itself
consumes less than 40MWh and therefore is a low energy user, which
negates the need to make detailed disclosures of its energy and
carbon information. Furthermore, and taking account of this, it has
applied the option permitted by the 2018 Regulations to exclude any
energy and carbon information relating to its subsidiaries where
the subsidiary would not itself be obliged to include if reporting
on its own account; this applies to all subsidiaries within the
Group.
On the basis of the above, the members of the Board consider,
both individually and together, that they have acted in the way
they consider, in good faith, would be most likely to promote the
success of the Company for the benefit of its members as a whole
(having regard to the stakeholders and matters set out in
s172(1)(a-f) of the Companies Act 2006) in the decisions taken
during the period ended 31 December 2022.
Dr Clifford M Gross
Chairman and CEO
25 May 2023
Directors Report
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 28. No dividend was
declared or paid during the period ended 31 December 2022 (2021:
$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 Willets FRS
Statement of Directors' responsibilities
The Directors are responsible for preparing the financial
statements in accordance with applicable laws and regulations.
The Directors are responsible for preparing the financial
statements in accordance with applicable laws and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have elected to prepare the financial statements in accordance with
UK-adopted International Financial Reporting Standards adopted by
the Companies Act 2006 ("UK-adopted IFRS") and those parts of the
Companies Act 2006 relevant to companies which apply IFRS. Under
Company law, the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Company and of the profit or
loss of the Company for that year. In preparing 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 Company's
transactions and disclose with reasonable accuracy at any time the
financial position of 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
Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
Each of the current Directors, whose names are listed in the
Directors' report on page 24 of the financial statements confirm
that, to the best of each person's knowledge and belief:
-- the financial statements, prepared in accordance with
UK-adopted international accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit (or
loss) of the Group and 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 the bank, monies raised in
follow-on offerings and realization 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 2.1.2 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
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. During the
period. The audit committee met 3 times during the period.
Remuneration committee
The board has delegated to its remuneration committee, chaired
by Dr. 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 met 3 times during the
period.
Directors Emoluments
Salary
& Benefits Bonus 2022 2021
Fees* in kind Total Total
US $ US $ US $ US $ US $
--------------------- -------- --------- -------- -------- --------
Clifford M Gross 250,889 29,833 250,000 530,722 404,923
Robert Miller 23,261 - - 23,261 25,183
Louis Castro 44,804 - - 44,804 41,312
Lord David Willetts 36,714 - - 36,714 33,049
355,668 29,833 250,000 635,501 504,467
--------------------- -------- --------- -------- -------- --------
*Excludes Directors National Insurance of US$26,551.
The Director's proportion of the share option expense was
US$62,747 (2021: US$20,000). The Group did not make any
contributions to a pension scheme in the period ended 31 December
2022 (2021: Nil). The Directors' beneficial interests in shares is
set out below:
2022 2021 2022 2021
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 - - 100,000 100,000
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 Article 3(1)(26) of the
UK Market Abuse Regulation.
The details of the options held by each director at 31 December
2022 are as follows:
Exercise Grant Date from which
No of Options Price Date exercisable Life
--------------- -------------- ---------- ---------- --------------------- --------
Clifford M 3,000,000 GBP0.12 28-Aug-20 Special Conditions* 5 Years
Gross
Robert Miller 100,000 GBP0.081 30-Aug-19 Special Conditions** 5 Years
100,000 GBP0.19 16-Jun-21 Special Conditions** 5 Years
Lord David 100,000 GBP0.0525 6-Jan-20 Special Conditions** 5 Years
Willetts
100,000 0.19 16-Jun-21 Special Conditions** 5 Years
* 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.
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 and Uncertainties
Please refer to strategic report.
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 activities in the field of research and development, please
refer to Strategic report.
For financial instruments risks, please refer to Note 3.1 of the
Notes to the Financial Statements.
Independent auditors
MHA was appointed as auditor to the Group and the Company and in
accordance with section 485 of the Companies Act 2006. 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
25 May 2023
Tekcapital Plc
Consolidated Statement of comprehensive income
For the year ended 31 December 2022
Group Note 31 December 30 November
2022 2021
US $ US $
--------------------------------------------- ----- ------------------- -------------------
Continuing operations
Revenue from services 6 615,214 815,989
Cost of sales (222,361) (263,923)
Changes in fair value on financial
assets at fair value though profit
or loss 12 (10,978,372) 28,096,340
Interest from financial assets at fair
value through profit or loss 12.3 286,583 142,399
Operating expenses 7 (2,524,496) (2,581,416)
Other income 6.1 79,638 161,094
Operating (loss)/profit and (loss)/profit
before tax (12,743,794) 26,370,483
--------------------------------------------- ----- ------------------- -------------------
Income tax expense 9 (1,714) (1,813)
(Loss)/profit after tax for the period/year (12,745,508) 26,368,670
--------------------------------------------- ----- ------------------- -------------------
Other comprehensive income*
Translation of foreign operations (212,803) 16,726
Total other comprehensive loss (212,803) 16,726
--------------------------------------------- ----- ------------------- -------------------
Total comprehensive (loss)/income for the
period/year (12,958,311) 26,385,396
---------------------------------------------------- ------------------- -------------------
Earnings per share
Basic earnings per share 10 (0.09) 0.22
Diluted earnings per share 10 (0.08) 0.21
*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 33 to 65 are an integral part of these
consolidated financial statements.
Tekcapital Plc
Consolidated Statement of financial position
At 31 December 2022
As at 31 December As at 30 November
Group Note 2022 2021
US$ US$
-------------------------------- ----- --------------------------- ------------------------
Assets
Non-current assets
Intangible assets 13 242,940 364,401
Financial assets at fair value
through profit and loss 12 56,184,146 63,865,432
Property, plant and equipment 14 9,969 6,603
56,437,055 64,236,436
-------------------------------- ----- --------------------------- ------------------------
Current assets
Trade and other receivables 15 1,088,043 689,003
Cash and cash equivalents 16 628,640 3,543,762
1,716,683 4,232,765
-------------------------------- ----- --------------------------- ------------------------
Total assets 58,153,738 68,469,201
-------------------------------- ----- --------------------------- ------------------------
Current liabilities
Trade and other payables 19 215,998 237,651
Deferred revenue 20 172,610 169,283
388,608 406,934
-------------------------------- ----- --------------------------- ------------------------
Total liabilities 388,608 406,934
-------------------------------- ----- --------------------------- ------------------------
Net assets 57,765,130 68,062,267
-------------------------------- ----- --------------------------- ------------------------
Equity attributable to owners
of the Parent
Ordinary shares 18 839,723 793,792
Share premium 24,240,930 21,793,644
Retained earnings 32,682,276 45,259,827
Translation reserve 74,370 287,173
Other Reserve (72,169) (72,169)
Total equity 57,765,130 68,062,267
-------------------------------- ----- --------------------------- ------------------------
Net Asset per Share 0.38 0.48
-------------------------------- ----- --------------------------- ------------------------
The notes on pages 33 to 65 are an integral part of these
financial statements.
The financial statements on pages 28 to 65 were approved and
authorised for issue by the Board of Directors on 25 May 2023 and
were signed on its behalf.
Louis Castro Dr Clifford Gross
Director Chairman and CEO
Tekcapital Plc
Consolidated Statement of changes in equity
For the year ended 31 December 2022
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
2020 521,830 13,211,344 270,447 (72,169) 18,780,012 32,711,464
--------------- ----- ------------------- ------------------------ -------------------- ----------------- ----------------------- -----------------------
Profit for the
year 26,368,670 26,368,670
Other
comprehensive
income 16,726 16,726
Total comprehensive
income for
the year - - 16,726 - 26,368,670 26,385,396
Transactions
with owners,
recorded
directly in
equity
Share issue 18 271,962 9,144,593 9,416,555
Cost of share
issue (562,293) (562,293)
Share based
payments 24 111,145 111,145
Total
transactions
with
owners 271,962 8,582,300 - - 111,145 8,965,407
--------------- ----- ------------------- ------------------------ -------------------- ----------------- ----------------------- -----------------------
At 30 November
2021 793,792 21,793,644 287,173 (72,169) 45,259,827 68,062,267
--------------- ----- ------------------- ------------------------ -------------------- ----------------- ----------------------- -----------------------
Loss for the
period (12,745,508) (12,745,508)
Other
comprehensive
loss (212,803) (212,803)
Total
comprehensive
loss
for the
period - - (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
--------------- ----- ------------------- ------------------------ -------------------- ----------------- ----------------------- -----------------------
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 33 to 65 are an integral part of these
financial statements.
Tekcapital Plc
Consolidated Statement of cash flows
For the year ended 31 December 2022
As restated*
For the period For the year
Group ended ended
31 December 30 November
Note 2022 2021
US $ US $
---------------------------------------- ----- -------------------- --------------------------
Cash flows from operating activities
(Loss)/profit before income
tax (12,743,794) 26,370,483
Adjustments for
- Impairment Loss 37,584 37,229
- Depreciation 6,553 8,843
- Amortisation 83,877 437,139
- Share based payment expense 167,957 111,145
- Movement in foreign exchange (220,080) 77,435
- Movement in trade and other
receivables (399,040) (41,565)
- Movement in financial assets
at FVTP&L 11,014,609 (28,817,268)
- Management services (419,697) (372,679)
- Interest from financial assets
at FVTP&L (286,583) (142,399)
- Deferred revenue movement 3,326 14,562
- Movement in trade and other
payables (21,653) (10,291)
- Income tax paid (1,714) (1,813)
Net cash outflows from operating
activities (2,778,655) (2,329,179)
----------------------------------------- ----- -------------------- --------------------------
Cash flows from investing activities
Additions to financial assets
at fair value through profit
and loss 12 (3,970,900) (3,453,260)
Proceeds from disposals of financial
assets at fair value through
profit and loss 12 1,073,792 -
Purchases of property, plant
and equipment 14 (9,919) (2,389)
Net cash outflows investing
activities (2,907,027) (3,455,649)
----------------------------------------- ----- -------------------- --------------------------
Cash flows from financing activities
Proceeds from issuance of ordinary
shares 2,636,056 9,416,593
Costs of raising finance (142,839) (562,293)
Net cash inflows from financing
activities 2,493,217 8,854,300
----------------------------------------- ----- -------------------- --------------------------
Net (decrease)/increase in
cash and cash equivalents (3,192,465) 3,069,472
Cash and cash equivalents at beginning
of year 16 3,543,762 538,473
Exchange gains/(losses) on cash and cash
equivalents 277,343 (64,183)
Cash and cash equivalents at
end of period/year 16 628,640 3,543,762
----------------------------------------- ----- -------------------- --------------------------
*The prior year cash flow statement has been restated to reflect
the reclassification between additions to financial assets at fair
value through profit and loss to management services and interest
from financial assets at FVTPL within operating cashflows. The
total value of the reclassification was US$515,078.
Notes
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 detailed on page 54 of
these financial statements. 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.
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 2023
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 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 13-month period to 31
December 2022. Comparative amounts presented in the Group and
Company financial statements are for the 12 months ended 30
November 2021, and as such the amounts presented are not entirely
comparable.
The amounts presented in this report are rounded to nearest
US$1.
2. Accounting Policies
2.1 Statement of compliance
The consolidated financial statements of Tekcapital PLC have
been prepared in accordance with UK-adopted International Financial
Reporting Standards. 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 conformity with IFRS
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 its day to day working capital
requirements through its service offerings, monetisation of quoted
equity stakes and monies raised through issues of equity. As
disclosed in note 26, the Group announced placings to raise
GBP2,250,000 and GBP2,000,000 in February 2023 and April 2023
respectively. 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 Group has no third party debt
facilities.
The Directors have prepared detailed cash flow projections for
the period to 30 May 2024 ("going concern assessment period"). The
cash flow projections have been subjected to sensitivity analysis
which demonstrates 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
New standards, interpretations and amendments adopted.
No new accounting standards became effective for annual
reporting periods commencing on or after 1 Jan 2021.
The Group adopted early the following amendments to standards
which are not yet effective:
Amendments to IFRS 1 First -time Adoption of International
Financial Reporting Standards - Subsidiary as First-time
Adopter
The amendment is effective for financial years beginning on or
after 1 January 2022 and has been endorsed for use in UK adopted
IFRS under Companies Act 2006. The amendment to IFRS 1 simplifies
the application of IFRS 1 by a subsidiary that becomes a first-time
adopter after its parent in relation to the measurement of
cumulative translation differences. No material impact on its
consolidated financial statements from these amendments determined
by the Group.
Amendments to IFRS 9 Financial Instruments - Fees in the '10 per
cent' Test for Derecognition of Financial Liabilities
The amendment is effective for financial years beginning on or
after 1 January 2022 and has been endorsed for use in UK adopted
IFRS under Companies Act 2006. The amendment to IFRS 9 clarifies
the fees a Company includes when assessing whether the terms of a
new or modified financial liability are substantially different
from the terms of the original financial liability. No material
impact on its consolidated financial statements from these
amendments determined by the Group.
Amendments to IAS 41 Agriculture - Taxation in Fair Value
Measurements
The amendment is effective for financial years beginning on or
after 1 January 2022 and has been endorsed for use in UK adopted
IFRS under Companies Act 2006. The amendment to IAS 41 removed a
requirement to exclude cash flows from taxation when measuring fair
value thereby aligning the fair value measurement requirements in
IAS 41 with those in other IFRS Standards. No material impact on
its consolidated financial statements from these amendments
determined by the Group.
Onerous Contracts - Cost of Fulfilling a Contract (Amendments to
IAS 37)
The amendment is effective for financial years beginning on or
after 1 January 2022 and has been endorsed for use in UK adopted
IFRS under Companies Act 2006. The amendments specify which costs
an entity includes in determining the cost of fulfilling a contract
for the purpose of assessing whether the contract is onerous. No
material impact on its consolidated financial statements from these
amendments determined by the Group.
Amendments to IAS 16 Property, Plant and Equipment (issued in
May 2020)
The amendments require any proceeds from selling items produced
(and related production costs) in the course of bringing an item
property, plant and equipment into operation to be recognised in
profit or loss clarifying that such items are not reflected in the
cost of the asset.
The amendment is effective for financial years beginning on or
after 1 January 2022 and has been endorsed for use in UK adopted
IFRS under Companies Act 2006.
2.1.2 Changes in accounting policy and disclosures
(continued)
No material impact on its consolidated financial statements from
these amendments determined by the Group.
Reference to the Conceptual Framework (Amendments to IFRS 3)
The amendments are intended to replace a reference to the
Framework for the Preparation and Presentation of Financial
Statements, issued in 1989 (Framework), with a reference to the
Conceptual Framework for Financial Reporting issued in March 2018
(2018 Conceptual Framework) without significantly changing its
requirements.
The amendment is effective for financial years beginning on or
after 1 January 2022 and has been endorsed for use in UK adopted
IFRS under Companies Act 2006.
No material impact on its consolidated financial statements from
these amendments determined by the Group.
2.2 Consolidations
The consolidated financial statements comprise the financial
statements of Tekcapital plc and all subsidiaries controlled by
it.
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 recognised 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 2022:
-- 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 evaluates 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 - 3 years
Computer equipment - 3 years
Leasehold improvements - 5 years
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 asset's 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 are
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 straight-line 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 recognised 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 purpose 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
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 convertible loan note includes a conversion feature allowing
the holder to convert the note into equity on a financing event,
sale or listing at market price at the date of the event. The
directors have assessed the conversion feature and are satisfied
the fair value of this feature is not material.
The Group also has receivables carried at amortized 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 cost, the Group does
not hold any long-term financial liabilities.
2.8.2 Recognition and measurement
IFRS 13 defines fair value as the price that would be received
to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement
date.
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. Short-term
financial liabilities are measured at cost.
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 newly adopted 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
non-payment of the trade receivables is assessed. 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 include 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); and
-- 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 as 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 Provisions
Provisions and any other anticipated foreseen liabilities are
recognised: when the Group has a present legal or constructive
obligation as a result of past events; it is probable that an
outflow of resources will be required to settle the obligation; and
the amount has been reliably estimated. Restructuring provisions
comprise lease termination penalties, and employee termination
payments. Provisions are not recognised for future operating
losses.
Where there are a number of similar obligations, the likelihood
that an outflow will be required in settlement is determined by
considering a class of obligations as a whole. A provision is
recognised even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be small.
Provisions are measured at the present value of the expenditures
expected to be required to settle the obligation using a pre-tax
rate that reflects current market assessments of the time value of
money and the risks specific to the obligation. The increase in the
provision due to the passage of time is recognised as an interest
expense.
2.17 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
the 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
obligations are met as defined in the management service contract.
Directors consider transaction price to be clearly determined by
amounts specified in the management service agreements. Directors
considered the uncertainty of cash flows from sales to be limited,
considering payments are made by companies with an 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.
2.18 Other income
The Group recognises R&D relief under other income.
2.19 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/Investments Risk 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 Group's maximum exposure to credit risk
for the components of financial position at 31 December 2022 and 30
November 2021 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. At the reporting date the Group held bank balances of
US$628,640. Post period end, the Group announced placing to raise
GBP2,000,000 before expenses on 17 April 2023 and GBP2,250,000
before expenses on 20 February 2023. 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$827,045.
(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 the 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. If the exchange rate of
GBP into USD weakened by 10 percent, then the effect on the loss
before tax would decrease by US$943,684 and equity would decrease
by US$5,586,145.
(g) Interest rate risk
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 has no external borrowings.
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 monetize
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 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 Key assumption Potential Potential Note
estimate/judgment impact impact reference
area within in the for
the next longer sensitivity
financial term analysis
year
Valuation of In applying ü ü Note 12
unquoted equity valuation
investments techniques to
determine
the fair value
of unquoted
equity
investments
the
Group and the
Company
make estimates
and
assumptions
regarding the
future
potential
of the
investments.
The
policy of the
Group and
the Company 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.
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
Limited
reflects input
in the form of
value of
Microsalt
Ltd's shares
in its US
subsidiary
(Microsalt
Inc) as
determined by
recent market
transactions
of these
shares. 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(R)
and a discount
factor
applied for
the net
present
value of
future
cashflows
from the
platform.
-------------------------- --------------------- --------------------- -----------------------
Deferred Taxes Deferred tax ü ü Note 21
is the tax
expected to be
payable
or recoverable
on differences
between the
carrying
amounts
of assets and
liabilities
in the
financial
statements
and the
corresponding
tax bases used
in the
computation of
taxable
profit and is
accounted
for using the
balance
sheet
liability
method.
Deferred tax
assets are
recognised to
the extent
that it is
probable that
taxable
profits will
be
available
against which
deductible
temporary
differences
can be
utilised. The
carrying
amount of
deferred tax
assets is
reviewed at
each balance
sheet date
and reduced to
the extent
that it is no
longer
probable
that
sufficient
taxable
profits will
be available
to allow all
or part of
the asset to
be recovered.
Deferred tax
is calculated
at the tax
rates that
are expected
to apply
in the period
when the
liability is
settled,
or the asset
is realised
based on tax
laws and
rates that
have been
enacted
or
substantively
enacted
at the balance
sheet date.
The Group did
not recognize
deferred tax
liability
on fair value
gains
associated
with the
revaluation of
shares in its
portfolio
companies due
to
availability
of the
substantial
shareholdings'
exemption.
This is
considered
a permanent
difference
and not a
temporary
difference.
-------------------------- --------------------- --------------------- -----------------------
Share based The estimate ü ü Note 24
payment of share-based
payment
requires the
Director
to select an
appropriate
valuation
model and make
decisions
about various
inputs into
the model
including the
volatility
of its own
share price,
the probable
life of
options
and the
risk-free
interest
rate.
share price,
the probable
life of
options and
the
risk-free
interest rate.
-------------------------- --------------------- --------------------- -----------------------
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.
--
Segmental revenues and results
Period ended 31 December 2022 Licensing
Professional 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 (424,664) (12,319,130) (12,743,794)
------------------------------------- ----------------------- ---------------------- ------------------
Loss on ordinary activities before
income tax (424,664) (12,319,130) (12,743,794)
Income tax expense (429) (1,285) (1,714)
Loss after tax (425,093) (12,320,415) (12,745,508)
------------------------------------- ----------------------- ---------------------- ------------------
Year ended 30 November 2021 Licensing
Professional and TOTAL
Consolidated income statement Services Investment
US $ US $ US $
Revenue from Services 815,989 - 815,989
Changes in fair value on financial
assets at fair value though profit
or loss - 28,096,340 28,096,340
Cost of Sales (263,923) - (263,923)
Interest Income - 142,399 142,399
Administrative Expenses (1,069,355) (1,503,217) (2,572,572)
Depreciation and Amortization (2,211) (6,633) (8,844)
Other Income 161,094 - 161,094
Group operating (loss)/profit (358,406) 26,728,889 26,370,483
-------------------------------------- ----------------------- ---------------------- ------------------
(Loss)/profit on ordinary activities
before income tax (358,406) 26,728,889 26,370,483
Income tax expense (453) (1,360) (1,813)
(Loss)/profit after tax (358,859) 26,727,529 26,368,670
-------------------------------------- ----------------------- ---------------------- ------------------
Segment assets and liabilities
2022 Licensing
Professional 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
--------------------------- ------------- ----------- -----------
2021 Licensing
Professional and TOTAL
Consolidated statement of Services Investment
financial position US $ US $ US $
Assets 4,603,769 63,865,432 68,469,201
Liabilities (406,934) (406,934)
Net Assets 4,196,835 63,865,432 68,062,267
--------------------------- ------------- ----------- -----------
Geographical information
Period ended Year ended
31 December 30 November
2022 2021
US $ US $
United Kingdom
Changes in fair value on financial
assets at fair value though profit
or loss (10,612,151) 28,329,667
United States
Revenue from Services 615,214 886,155
Total revenue (9,996,937) 29,215,822
------------------------------------- ----------------------- -----------------------
2022 2021
US $ US $
United Kingdom
Assets 56,184,146 63,865,432
Liabilities - -
United States
Assets 1,969,592 4,603,769
Liabilities (388,608) (406,934)
Total Net Assets 57,765,130 68,062,267
------------------------------------- ----------------------- -----------------------
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 the Group's Unrealised
profit on the revaluation of investments.
Transferred Transferred Transferred Transferred
at a point over time Total at a point over time Total
Group in time 2022 in time 2021
------------ ------------ ------------ ------------
US
US $ $
------------------------ ------------ ------------ -------- ------------ ------------ --------
Major service lines:
- Sales of Invention
Evaluator reports 156,517 - 156,517 78,196 - 78,196
- Tech transfer
recruitment services 39,000 - 39,000 365,114 - 365,114
- Management services - 419,697 419,697 - 372,679 372,679
Total Revenue from
Services 195,517 419,697 615,214 443,310 372,679 815,989
------------------------ ------------ ------------ -------- ------------ ------------ --------
All of the Group's major service lines are sold directly to
consumers and not through intermediaries. All revenue recognised in
the reporting period represents performance obligations satisfied
in the current period. For services transferred over time, the
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.
6.1 Other Income
Total 2022 Total 2021
US $ US $
---------------------- ------------
R&D expenditure credit 79,638 90,928
Government grants - 70,166
79,638 161,094
7. Operating expenses
7.1 Expenses by nature
Group 2022 2021
US $ US $
----------------------------------------- -------------- ---------------
Cost of goods related
to services 222,361 263,923
Depreciation of property plant
and equipment 6,553 8,843
Research and development
expenses 433,166 388,691
Amortisation of intangible
assets 121,461 437,140
Marketing and PR 149,169 129,637
IT & Software 72,495 48,587
Audit and accounting 216,285 227,856
Share based payments 167,957 111,145
NOMAD and other exchange listing
expenses 175,888 161,600
Director emoluments 662,052 519,660
Other administration expenses including
salaries 648,646 85,249
Foreign exchange movements (129,176) 463,009
Total expenses 2,746,857 2,845,339
------------------------------------------------ -------------- ---------------
7.2 Auditor remuneration
Group 2022 2021
US $ US $
------------- --------------
Fees payable to the group's auditor and its
associates for the audit of the Group and
Company financial statements 121,408 97,212
Fees payable to the Company's auditor and
its associates for other services
- The audit of company's subsidiaries 13,379 13,082
134,787 110,294
--------------------------------------------- ------------- --------------
8. Employees
8.1 Directors' emoluments
Group 2022 2021
US $ US $
----------------------------------- ------------- -------------
Directors' emoluments 662,052 519,660
Directors 'portion of Share Based
Payments 62,747 31,493
-------------------------------------
Total 724,799 551,153
-------------------------------------- ------------- -------------
The highest paid Director received a salary of US$250,889 (2021:
$191,825) and benefits of US$29,833 (2021: US$24,098). The highest
paid Director received a bonus of US$250,000 (2021: US$191,825).
The highest paid Director did not exercise any share options. The
share-based payments associated with the highest paid Director
amounted to US$60,948 (2021: US$28,117). No termination benefits,
post-employment benefits were provided to Directors.
Key management personnel (including Directors and Group Chief
Financial Officer) received salary of US$820,557 (2021:
US$669,660), excluding Employers National Insurance, Benefits in
Kind and Share Base Compensation disclosed in Directors
Remuneration Report. Please also refer to Director's Report.
8.2 Employee benefit expense
Group 2022 2021
US $ US $
------------------ -----------------
Wages and salaries including restructuring
costs and other termination benefits 459,435 440,694
Directors' remuneration 605,668 484,459
Social security costs 70,511 62,907
Pension costs - -
Share options granted to directors and
employees 167,957 111,145
1,303,571 1,099,205
-------------------------------------------- ------------------ -----------------
8.3 Average number of people employed.
Group 2022 2021
Number of employees
--------------------------------------- ----------------- ----------------
Average number of people (including
executive directors) employed
Operations 4 4
Management 2 2
Total average headcount 6 6
--------------------------------------- ----------------- ----------------
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.
9. Income tax expense
Group 2022 2021
US $ US $
--------------- ----------------
Current tax
Current tax on profits for the year 1,714 1,813
Total current tax 1,714 1,813
------------------------------------------ --------------- ----------------
Income tax expense 1,714 1,813
------------------------------------------ --------------- ----------------
Group 2022 2021
US $ US $
--------------- ----------------
Profit before tax (12,743,794) 26,370,483
------------------------------------------ --------------- ----------------
Tax calculated at domestic tax rates
applicable to profits (2,421,321) 5,010,392
Tax effects of:
- Expenses not deductible for tax
purposes 39,103 32,864
- Income not taxable 2,085,891 (5,338,305)
- capital allowances in excess of
depreciation 24,323 1,680
- Unrelieved tax losses and other
deductions 273,718 295,192
Total income tax expense 1,714 1,823
------------------------------------------ --------------- ----------------
The weighted average applicable tax rate was 19% (2020:
19%).
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.
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 GBP50,000 or
less will continue to be taxed at 19%, which is a new small profits
rate. Where taxable profits are between GBP50,000 and GBP250,000,
the higher 25% rate will apply but with a marginal relief applying
as profits increase.
10. Earnings per share
Basic earnings per share are calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of Ordinary Shares outstanding during the period.
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 2022:
2022 2021
US $ US $
Earnings attributable to equity holders
of the Group (US$) (12,745,508) 26,368,670
Weighted average number of ordinary shares
in issue:
Basic 146,043,720 120,128,629
Diluted 150,483,172 127,169,725
Basic earning per share (0.09) 0.22
Diluted earning per share (0.08) 0.21
Diluted EPS includes impact of vested employees share option
awards whose strike price was below Tekcapital's share price as
quoted on the aim market, which would have dilutive impact of
4,466,667 shares.
The Group completed placements of a total of 8,000,000 and
1,150,000 share option exercise related new ordinary shares during
the financial year.
11. Investments
Indirect Proportion Nature of business Capital
(not consolidated) of ordinary and reserves Net Profit/(Loss)
shares as at for year
directly 31 Dec ended 31
held 2022 Dec 2022
---------------------- ------------- ------------- --------------------- -------------- ------------------
The following are under ownership
of Tekcapital Europe Limited US$ US$
Subsidiaries
name (consolidated)
---------------------- ------------- -------------- --------------------- ----------------------------------
Provider of
England high-tech
Lucyd Limited and Wales 100% eyewear 5,103,771 (12,238,424)
United Provider of
Innovative States high-tech
Eyewear Inc(1) of America 71% eyewear 4,018,188 (5,688,074)
Developer of
Microsalt England low sodium salt
Limited and Wales 97% and snack foods 14,817,298 9,742,595
United Developer of
Microsalt States low sodium salt
Inc(2) of America 80% and snack foods (265,077) (2,057,852)
Developer of
autonomous vehicle
England software safety
Guident Limited and Wales 100% solutions 17,387,274 -
Developer of
United autonomous vehicle
States software safety
Guident CORP(3) of America 91% solutions (1,520,287) (790,806)
Developer for
Smart Food England baked food coating
Tek Limited and Wales 100% to reduce fat (116,114) -
---------------------- -------------- ------------- --------------------- -------------- ------------------
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.
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, Salarius Limited and
Guident Limited, as well as has provided working capital assistance
to Salarius 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 (2022:US $54,878,609, 2021:US
$62,523,658) and convertible loan notes (2022:US$1,305,537, 2021:US
$1,341,774) totaling US $56,184,146 (2021:US $63,865,432).
12.1 Equity Investments
Proportion 1 Dec Additions Disposal Other Fair 31 Dec
of ordinary 2021 adjustments Value 2022
shares change
as at
31 Dec
Group 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 12.31% 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 Group's investments in portfolio companies in the years
ended 31 December 2022 and 30 November 2021 are listed below. The
principal place of business for portfolio companies listed below is
the UK and, in the U.S.
Proportion 1 Dec Additions Disposal Other Fair Value 30 Nov
of ordinary 2020 adjustments change 2021
Group shares
US $ US $ US $ US $ US $ US $
-------------------- ------------- ----------- ---------- --------- ------------- ------------ -----------
Guident Limited 100.00% 22,029,834 - - (32,678) (3,913,892) 18,083,264
Lucyd Limited 100.00% 2,699,331 2,179,773 - - 12,466,091 17,345,195
Microsalt Limited 97.50% 3,638,303 - - - 718,217 4,356,520
Belluscura Limited 15.13% 2,081,028 1,788,566 - - 18,825,924 22,695,518
Smart Food Tek
Limited 100.00% 43,161 - - - - 43,161
Total Balance 30,491,657 3,968,339 - (32,678) 28,096,340 62,523,658
-------------------- ------------- ----------- ---------- --------- ------------- ------------ -----------
Total fair value loss of US$11.0m for the year reflects
primarily the decrease in fair value of Lucyd Limited, driven by
valuation of its 71% shareholding of its subsidiary Innovative
Eyewear Inc that were listed on NASDAQ as at 31 December 2022
(trading commenced on 15 August 2022). Considering early stage of
commercialisation, fair value of Smart Food Tek was recorded based
on the cost of acquired IP, as their carrying amounts represent a
reasonable approximation of fair value.
The valuation techniques used fall under, Level 1 - Observable
inputs that reflect quoted prices (unadjusted) for identical assets
or liabilities in active markets, and Level 3- Other techniques as
defined by IFRS 13. These techniques were deemed to be the best
evidence of fair values considering early stage of portfolio
companies.
Fair value measurement hierarchy for financial assets as at 31
December 2022 with comparative amounts as of 30 November 2021:
Total Level 1 Level 2 Level 3
31 December 2022 US$ 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
Salarius Limited 16,508,694 - - 16,508,694
Smart Food Tek Limited 38,422 - - 38,422
Total Balance 54,878,609 20,248,229 - 34,630,380
------------------------ ------------------ -------------- ------------------------ -----------------
30 November 2021 Total Level 1 Level 2 Level 3
US$ US$ US$ US$
------------------------ ------------------ -------------- ------------------------ -----------------
Belluscura Plc 22,695,518 22,695,518 - -
Lucyd Limited 17,345,195 - - 17,345,195
Guident Limited 18,083,264 - - 18,083,264
Salarius Limited 4,356,520 - - 4,356,520
Smart Food Tek Limited 43,161 - - 43,161
Total Balance 62,523,658 22,695,518 - 39,828,140
------------------------ ------------------ -------------- ------------------------ -----------------
No transfers between categories of valuation techniques occurred
during the period.
Belluscura plc (US $9.5m loss)
The fair value of the holding decreased by US$9.5m during the
year due to the movement in Company's share price at AIM market of
London Stock Exchange and closing price of 66p as of 31 December
2022. With 15,138,767 shares held by Tekcapital plc, a fair value
of US$12,072,827 was arrived at as of 31 December 2022.
Lucyd (US $11.2m loss)
The fair value of the holding decreased by US$11.2m during the
year due to the movement in the Company's share price at NASDAQ
market and closing price of US$1.37 as of 31 December 2022. With
5,189,085 shares held by Tekcapital plc, a fair value of
US$7,109,046 was arrived at as of 31 December 2022. Control premium
of 15% of US$7,109,046 was calculated and included in the fair
value in the amount of US$1,066,357, bringing total fair value of
Lucyd to US$8,175,403, due to Tekcapital controlling majority of
the company.
Microsalt (US $9.7m gain)
The fair value of the holding increased by US$9.7m during the
year as a result of:
-- Valuation of 5,895,962 shares held in Microsalt Inc, as
determined by the price range agreed upon between Company's bankers
and the Company as part of its IPO process. valuation, at US$2.75
per share.
In December 2022, Microsalt retained Zeus Capital Limited as its
Nominated Adviser and Broker for its proposed IPO on the AIM
Market. Following the appointment, multiple discussions outlining
Microsalt's business model, forecasts, value proposition and
business progress were held between the Company and the bankers.
The discussions resulted in Zeus providing an indicative pre-money
valuation of the Company of approximately GBP 20,000,000.
This proposed initial valuation of shares to be sold in the
Initial Public Offering was compared to Tekcapital's internal
discounted cash flow valuation of management's projections, and
price per share at which Tekcapital converted its convertible loan
note at in November 2022.
Key assumptions used in management's discounted cash flow
valuation are:
- Compound annual growth rates over a 5-year forecast period of
129%
- 16% 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 (US $0m loss/gain)
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 2022.
Key assumptions used in management's discounted cash flow
valuation are:
- Compound annual growth rates over a 5-year forecast period of
114%
- 20% 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
2022 are shown as below. No sensitivities have been included on the
other investments not listed in the table below as their fair value
equates to cost.
Sensitivity of
Investment Valuation Significant Estimate the input
Technique unobservable applied to fair value
input
Guident Income Discount 20% 5% increase in the discount
Approach to Future factor would decrease the Guident
Royalty Cash Flows valuation by $4.7m, a 5% decrease
Relief in the discount factor would
Method increase the value by $7.7m.
CAGR 162% A 50% increase in the compound
annual growth rate of sales
projections would increase
the Guident valuation by US$34.5m.
A 50% decrease in the compound
annual growth rate of sales
projections would decrease
the Guident valuation by US$15.1m.
Microsalt Income Discount 16% 5% increase in the discount
Approach to Future factor would decrease the Microsalt
Royalty Cash Flows valuation by US$5.8m, a 5%
Relief decrease in the discount factor
Method would increase the value by
US$11.4m,
CAGR 114% A 50% increase in the compound
annual growth rate of sales
projections would increase
the Microsalt valuation by
US$40.7m. A 50% decrease in
the compound annual growth
rate of sales projections would
decrease the Microsalt valuation
by US$14.3m.
Lucyd Share price Control 15% A 5% increase in the control
per NASDAQ premium premium applied to valuation
including of Innovative Eyewear shares
control held by Lucyd Ltd would increase
premium the Lucyd valuation by US$0.4m.
A 5% decrease in the control
premium applied to valuation
of Innovative Eyewear shares
held by Lucyd Ltd would decrease
the Lucyd valuation by US$0.4m.
12.2 Convertible loan notes
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 can be converted into shares of
common stock of the Company upon occurrence of certain conversion
events including future share placements.
In August 2022, Innovative Eyewear converted Group borrowings
totaling US$2,002,225 into 266,970 shares of common stock at US$7.5
each concomitantly with its Initial Public offering. Consequently,
the Group presented the amount of US$2,002,225 as an addition to
Financial Assets held at Fair Value as presented in the Note 12.1.
As of 31 December 2022, US$147,375 was outstanding.
-- Convertible note issued by Guident Ltd for the total of
US$1,000,000, 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$1,000,000 note originated
in March 2020 or can be converted into Guident's equity upon
occurrence of certain conversion events. No conversions occurred
during the period. As of 31 December 2022, US$1,000,000 was
outstanding.
-- Convertible note issued by its portfolio Company, Microsalt
Inc, for the total of US$2,000,000, 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 Microsalt's equity upon occurrence of certain
conversion events. The US$2,000,000 note originated in September
2020 is payable in September 2023 or can be converted into
Microsalt's equity upon occurrence of certain conversion events
including future share placements.
In January 2022, Microsalt Inc converted Group borrowings
totaling US$1,058,317 into 1,058,317 shares of common stock at US$1
each. In November 2022, Microsalt Inc converted related party
borrowings totaling US$1,351,262 into 619,845 shares of common
stock at US$2.18 each. As of 31 December 2022, US$158,161 was
outstanding.
The Group's investments in convertible notes in the years ended
31 December 2022 and 30 November 2021, as well as their fair value
hierarchy, are listed in tables below:
30 Nov 2021 Additions Disposal FX reval Fair 31 Dec
Value 2022
Group change
US $ US $ US $ US $ US $ US $
Innovative
Eyewear,
Inc 3,643 3,076,168 (2,932,435) - - 147,375
Guident Corp 1,088,131 0 (88,131) - - 1,000,000
Microsalt Inc 250,000 2,325,872 (2,417,710) - - 158,162
Total Balance 1,341,774 5,402,040 (5,438,276) - - 1,305,537
------------------ ------------ ---------- ------------ ----------------------- --------------------- ----------
Total Level 1 Level 2 Level 3
31 December 2022 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
--------------------- ------------------- ------------------------- ------------------------ ------------------
30 November 2021 Total Level 1 Level 2 Level 3
US $ US $ US $ US $
Innovative Eyewear,
Inc 3,643 - - 3,643
Guident Corp 1,088,131 - - 1,088,131
Microsalt Inc 250,000 - - 250,000
Total Balance 1,341,774 - - 1,341,774
--------------------- ------------------- ------------------------- ------------------------ ------------------
The fair value of the convertible loans issued by Guident Corp
has been calculated using a Discounted Cash Flow Analysis. The
significant unobservable input used in the fair value assessment is
the discount rate of 20%. Increasing the discount rate by 5% used
would result in a $34k decrease in the fair value of the asset and
a 5% decrease in the discount rate would result in a $37k increase
in the fair value of the asset. The movement in the discount rate
has a low-level impact as the convertible loan agreement is due to
expire within 12 months of the period end.
The other convertible loans outstanding with Innovative Eyewear,
Inc and Microsalt, Inc are not material and therefore sensitivity
disclosures have not been included.
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.
Interest Income
2022 2021
Group US $ US $
-------------------- ------------- -------------
Guident Corp 73,736 62,385
Microsalt Inc 72,159 35,267
Innovative Eyewear
Inc 140,688 44,747
286,583 142,399
-------------------- ------------- -------------
13. Intangible assets
Website Invention
Group Vortechs development Evaluator Total
US $ US $ US $ US $
---------------------------- ------------- ---------------------- ------------------ ------------
Cost
------------- ---------------------- ------------------ ------------
As at 30 November 2021
and 31 December 2022 500,000 28,121 338,770 866,891
------------------------------ ------------- ---------------------- ------------------ ------------
Accumulated amortisation and impairment
As at 30 November 2021 (237,229) (28,121) (237,140) (502,490)
------------------------------ ------------- ---------------------- ------------------ ------------
Amortisation (50,000) - (33,877) (83,877)
------------------------------ ------------- ---------------------- ------------------ ------------
Impairment loss (37,584) - - (37,584)
------------------------------ ------------- ---------------------- ------------------ ------------
As at 31 December 2022 (324,813) (28,121) (271,017) (623,951)
------------------------------ ------------- ---------------------- ------------------ ------------
Net Book Value
As at 30 November 2021 262,771 - 101,630 364,401
------------------------------ ------------- ---------------------- ------------------ ------------
As at 31 December 2022 175,187 - 67,753 242,940
------------------------------ ------------- ---------------------- ------------------ ------------
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 Us$37,584 lower than the
carrying value and have therefore recorded an impairment.
Remaining amortisation period of each asset with remaining
amortization:
- Vortechs: 5 years
- Invention Evaluator: 2 years
14. Property, plant and equipment
Leasehold Office Computer
GROUP Improvements equipment Equipment Total
US $ US $ US $ US $
----------------------------- ----------------------- -------------- ----------------- ------------
Closing cost 30 November
2020 13,775 24,286 28,682 66,743
-------------------------------- ----------------------- -------------- ----------------- ------------
Additions 1,694 695 2,389
Closing cost 30 November
2021 13,775 25,980 29,377 69,132
-------------------------------- ----------------------- -------------- ----------------- ------------
Additions 3,766 5,000 1,153 9,919
Closing cost 31 December
2022 17,541 30,980 30,530 79,051
-------------------------------- ----------------------- -------------- ----------------- ------------
Accumulated depreciation and impairment
Accumulated depreciation at
30 November 2020 (13,775) (15,431) (27,915) (57,121)
-------------------------------- ----------------------- -------------- ----------------- ------------
Depreciation charge (4,744) (4,099) (8,843)
Exchange differences 3,435 3,435
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)
-------------------------------- ----------------------- -------------- ----------------- ------------
Closing net book value 30
November 2021 - 5,804 798 6,603
------------------------------- ----------------------- -------------- ----------------- ------------
Closing net book value 31
December 2022 3,766 5,184 1,018 9,969
------------------------------- ----------------------- -------------- ----------------- ------------
15. Trade and other receivables
GROUP 2022 2021
US $ US $
---------------------------------------- ------------------------ ----------------------
Trade receivables 9,831 39,976
Less provision for impairment of trade
receivables - -
Trade receivables - net 9,831 39,976
Vat recoverable 21,951 19,228
Prepayments and other
debtors 27,604 43,787
Receivables from related
parties 1,028,657 586,012
------------------------
Total trade and other receivables 1,088,043 689,003
----------------------------------------- ------------------------ ----------------------
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 2022 and there was no
increase/decrease in the expected credit loss allowance (2021:
US$nil).
The Group had outstanding receivables from its portfolio
companies as at 31 December 2022 in the amount of:
- US$54,466 due from Lucyd Ltd (2021:US$ 85,391)
- US$63,418 due from Smart Food Tek Ltd (2021: US$104,912)
- US$ 951,098 due from Guident Ltd (2021: US$392,252)
- US$13,410 due from Innovative Eyewear Inc (2021: US$0)
- US$958 due to Microsalt Ltd (2021: US$0).
16. Cash and cash equivalents.
GROUP 2022 2021
US $ US $
--------------------------------- ------------- ------------
Cash at bank and in hand 628,640 3,543,762
Total cash and cash equivalents 628,640 3,543,762
----------------------------------- ------------- ------------
17. Categories of financial assets and financial liabilities
GROUP 2022 2021
US $ US $
----------------------------------- --------------- ---------------
Financial assets at fair value
through profit and loss 56,184,146 63,865,432
Financial assets at
amortised cost 1,038,488 689,003
Cash and equivalents at amortised
cost 628,640 3,543,762
57,851,274 68,098,197
----------------------------------- --------------- ---------------
Financial liabilities
Trade and other payables at
amortised cost 203,886 237,151
------------------------------------- --------------- ---------------
18. Share capital
Number Ordinary Total
Share
Group and Company of shares US$ US $
--------------------------------- --------------- ----------------- -------------------
Issued and fully paid
up
--------------------------------- --------------- ----------------- -------------------
As at 30 November 2020 92,828,042 521,830 521,830
---------------------------------- --------------- ----------------- -------------------
Shares issued in further public
offering 48,714,286 271,962 271,962
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
---------------------------------- --------------- ----------------- -------------------
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:
-- May 2022: 8,000,000 shares were issued in the placing of new
ordinary shares at GBP0.25p. Total proceeds of US$2,636,056 were
netted against cost of raising finance in the amount of
US$142,839.
-- January 2022 and October 2022 respectively: 50,000 shares and
1,100,000 shares issued in lieu of share options exercises at
GBP0.0650 and GBP0.0783 respectively.
The Company has authorised share capital of 150,692,328 with a
nominal value of GBP0.004. Of these shares, 150,692,328 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.
2022 2021
Group US $ US $
------------------------------ -------------------- ---------------
Trade creditors 77,263 45,473
Social security and other
taxes 12,111 9,054
Accruals and other creditors 126,624 183,124
215,998 237,651
20. Deferred Revenue
The Group's deferred revenue balance of US$169,283 as of 30
November 2021 was adjusted for:
-- Receipt of Invention Evaluator payments in the amount of
US$31,147 to be delivered after 31 December 2022, recognized as
addition to the balance of deferred revenue during the year ended
31 December 2022
-- Recognition of US$27,824 of revenue deferred as of 30
November 2021 for reports delivered during the financial year 2022
bringing the total outstanding balance of Deferred Revenue as at 31
December 2022 to US$172,610.
21. Deferred income tax
Unused tax losses for which no deferred tax assets have been
recognised are attributable to the uncertainty over the
recoverability of those losses through future profits. A tax rate
of 19% has been used to calculate the potential deferred tax.
2022 2021
Deferred tax US $ US $
Accelerated capital
allowances (24,323) (1,680)
Short term timing difference
Tax losses (2,356,784) (2,084,779)
Unprovided deferred
tax asset 2,381,107 2,086,459
22. Dividends
No dividend has been recommended for the period ended 31
December 2022 (2021: Nil) and no dividend was paid during the year
(2021: 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:
Attribute Input
No. of options granted 10,690,000
Share price at date
of grant GBP0.052-GBP0.31
Exercise price GBP0.052-GBP0.33
Options life in years 3-5
Risk free rate 0.1%-1.75%
Expected volatility 48%-94%
Expected dividend
yield 0
Fair value of options GBP0.02-GBP0.12
The weighted average fair value of options outstanding was
GBP0.06p. Volatility was calculated using Group's historical share
price performance since 2017. The share-based payment expense for
the year was $167,957 (2021: $111,145). Details of the number of
share options and the weighted average exercise price outstanding
during the year as follows:
2022 2021
Av. Exercise Options Av. Exercise Options
price per (Number) price per (Number)
Group and Company share GBP share GBP
As at 1 December 0.2110 8,200,000 0.2351 7,450,000
Granted 0.3250 1,990,000 0.0781 1,000,000
Exercised 0.0783 (1,100,000) - -
Forfeited/expired 0.3034 (225,000) 0.0783 (250,000)
As at period end 0.2746 8,865,000 0.2110 8,200,000
Exercisable as at
period end 4,750,000* 3,441,667*
*The weighted average exercise price for the options exercisable
as at 31 December 2022 and 30 November 2021 was GBP0.11p and
GBP0.19p respectively.
The weighted average remaining contractual life is 3.0 years
(2021: 2.9 years). The weighted average fair value of options
granted during the year was GBP0.12p (2021: GBP0.03p). The range of
exercise prices for options outstanding at the end of the year was
GBP0.052p - GBP0.325p (2021: GBP0.052p - GBP0.31p).
25. R elated party transactions
Details of Directors' remuneration and grant of options are
given in the Directors' report.
Please also refer to Note 15 for detail of transactions with
portfolio companies.
525,000 options were held by Harrison Gross, family member of
Dr. Clifford Gross.
Please refer to tables below for detail of relationships and
transactions between The Group and its subsidiaries.
Convertible note receivable
2022 2021
Group US $ US $
Guident Corp 1,000,000 660,413
Microsalt Inc 158,161 677,718
Innovative Eyewear Inc 147,375 3,643
1,305,536 1,341,774
Intercompany receivable
2022 2021
Group US $ US $
Guident Corp 951,098 392,252
Smart Food TEK 63,418 104,912
Lucyd Ltd 54,466 85,402
Innovative Eyewear Inc 13,410 -
Salarius Ltd (958) -
Other - 3,446
1,081,434 586,012
Management fees
2022 2021
Group US $ US $
Guident Corp 140,227 139,560
Microsalt Inc 141,332 99,685
Lucyd Ltd - 30,135
Innovative Eyewear Inc 138,138 103,299
419,697 372,679
Interest Income
2022 2021
Group US $ US $
Guident Corp 73,736 62,385
Microsalt Inc 72,159 35,267
Innovative Eyewear Inc 140,688 44,747
286,583 142,399
Related party transactions were made on terms equivalent to
those that prevail in arm's length transactions are made only if
such terms can be substantiated.
27. Events after the reporting period
Post period end, following amounts were drawn/(repaid) for
existing convertible notes:
-- US$1,033,506 for Microsalt Inc
-- US$365,770 for Guident CORP
-- US$(50,348) for Innovative Eyewear Inc
Post period end, the Group announced placings to raise
GBP2,000,000 before expenses on 17 April 2023 and GBP2,250,000
before expenses on 20 February 2023.
Tekcapital Plc
Company Statement of financial position
At 31 December 2022
Company 31 December 30 November
2022 2021
Note US$ US$
Assets
Non-current assets
Investment in subsidiaries C.4 851,665 851,665
Financial assets at fair value through
profit and loss C.5 12,072,827 22,653,494
Non current receivables C.6 9,330,391 5,359,948
22,254,883 28,865,107
Current assets
Trade and other receivables C.7 2,586,963 2,094,825
Cash and cash equivalents C.8 248,869 3,011,916
2,835,832 5,106,741
Total assets 25,090,715 33,971,848
Current liabilities
Trade and other payables C.11 129,874 197,827
129,874 197,827
Total liabilities 129,874 197,827
Net Assets 24,960,841 33,774,021
Equity attributable to the owners
of the parent
Ordinary shares C.10 839,723 793,792
Share premium 24,240,930 21,793,644
Retained earnings 365,728 11,364,445
Translation reserve (485,540) (177,860)
Total equity 24,960,841 33,774,021
The Company's loss after tax for the period ended 31 December
2022 was US$11,166,674 (profit after tax for the year ended 2021:
US$16,604,995).
The Company has used the exemption under S408 CA 2006 not to
disclose the Company income as primary statement.
The notes on pages 68 to 72 are an integral part of these
financial statements.
The financial statements on pages 66 to 72 were approved and
authorised for issue by the Board of Directors on 25 May 2023 and
were signed on its behalf.
Louis Castro Dr Clifford Gross
Director Chairman and CEO
Company Statement of changes in equity for the period ended 31
December 2022
Share premium - amount subscribed for share capital in excess of
nominal value, net of directly attributable issue costs.
Translation reserve - foreign exchange differences recognized in
other comprehensive income.
Retained earnings - cumulative net gains and losses recognized
in the consolidated financial statements of comprehensive
income.
The notes on pages 68 to 72 are an integral part of these
financial statements.
C.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 detailed on page 55 of
these financial statements. 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 Company is
that of investment in portfolio companies. the Company also
acquires exclusive licences to university technologies that it
believes can positively impact people's lives, for subsequent
commercialisation.
The Company had no employees during the period.
C.2 Statement of Compliance
The financial statements of the parent company have been
prepared in accordance with Financial Reporting Standard 101
"Reduced disclosure framework" ('FRS 101'). the Company will
continue to prepare its financial statements in accordance with
FRS101 on an ongoing basis until such time as it notifies
shareholders of any change to its chosen accounting framework.
The principal accounting policies applied in the preparation of
these financial statements are set out in Note 2 of the
consolidated financial statements.
Exemptions
The Company financial statements have been prepared using the
historical cost convention except where other measurement basis is
required to be applied and in accordance with IFRS under FRS 101.
In accordance with FRS101, the Company has taken advantage of the
following exemptions:
-- Statement of Cash Flows
-- Financial instrument disclosures.
-- Capital management disclosures.
-- Additional comparative information.
-- A reconciliation of share options in the year
-- Related party disclosures with wholly owned subsidiaries.
Changes in accounting policy and disclosures
All changes to accounting standards are explained in note 2 to
the consolidated financial statements.
C.3 Profit/(loss) for the year
As permitted by section 408 of the Companies Act 2006, the
Company has elected not to present its own profit and loss account
for the year. The auditor's remuneration for audit and other
services are disclosed in note 7 to the consolidated financial
statements.
C.4 Investment in subsidiaries.
Company Total
Shares in
subsidiaries Loans to Subsidiaries US $
Net Book Value
As at 1 December 2021 79,426 79,427 851,665
Balance at 31 December
2022 79,426 79,427 851,665
The Net Book Value is stated at cost less any adjustment for
impairment. As at 31st December 2022 the total impairment
recognised on investment in subsidiaries was US$1,103,550 (2021:
US$1,103,550).
Capital
Proportion and reserves Net Profit/(Loss)
of ordinary as at for year
Subsidiaries shares directly 31 Dec ended 31
name (consolidated) held Nature of business 2022 Dec 2022
Direct
Provision of
Intellectual
Tekcapital Europe England property research
Limited and Wales 100% services 32,429,234 (1,527,092)
Provision of
Intellectual
property research
Tekcapital LLC USA 100% services (4,223,805) (898,748)
* As at the year end, the Company 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.
C.5 Financial Assets at Fair Value through Profit and Loss
The Company's investment in Belluscura plc in the years ended 30
November 2022 and 30 November 2021 is listed below and classified
as an equity instrument. The principal place of business for
Belluscura plc is England and Wales.
Proportion 1 Dec Additions Disposal Other Fair 31 Dec
of ordinary 2021 adjustments Value 2022
shares change
as at
31 Dec
Company 2022
Belluscura
Plc 12.31% 22,695,518 - (1,073,792) - (9,548,900) 12,072,826
Total
Balance 22,695,518 - (1,073,792) - (9,548,900) 12,072,826
The valuation technique used falls under, Level 1 - Observable
techniques, other than quoted prices.
The fair value of the holding decreased by US$9.5m during the
year due to market movement in Company's shares listed at AIM
market of London Stock Exchange and closing price of 66p as of 31
December 2022. With 15,138,767 shares held by Tekcapital plc, a
fair value of US$12,072,827 was arrived at as of 31 December 2022.
During the year, the Company sold 2,000,000 shares resulting in
sales proceeds of US$1,073,792.
C.6 Noncurrent receivables
As at 31st December 2022, the Company was owed a total of
$13,507,967 (2021: $8,504,274) from one of it's subsidiaries
(Tekcapital LLC), which an IFRS9 Expected Credit Loss provision
totaling $4,177,576 (2021: $3,144,326) has been provided for. The
net receivable due from Tekcapital LLC at 31st December 2022 of
$9,330,391 (2021: $5,359,948) will be recovered in greater than one
year.
C.7 Trade and other receivables
2022 2021
Company US $ US $
Receivables from Group companies 2,540,557 2,055,464
VAT 29,620 24,165
Prepayments 16,786 15,196
Total trade and other
receivables 2,586,963 2,094,825
The credit loss allowance on Trade and Other Receivables was
assessed as at 31 December 2022 and there was no increase/decrease
in the expected credit loss allowance (2021: $nil).
C.8 Cash and cash equivalents
Company 2022 2021
US $ US $
Cash at bank and in hand 248,869 3,011,916
Total cash and cash equivalents 248,869 3,011,916
C.9 Categories of financial assets and financial liabilities
Company 2022 2021
US $ US $
Financial assets at fair value
through profit and loss 12,072,827 22,653,494
Financial asset at amortised
cost 12,904,198 7,454,773
Cash and equivalents at amortised
cost 248,869 3,011,916
Investment in subsidiaries
at amortised cost 851,665 851,665
26,077,559 33,971,848
Financial liabilities
Trade and other payables at
amortised cost 129,874 197,827
C.10 Share capital
Number Ordinary Total
Group and Company of shares Share US$ US $
Issued and fully paid
up
As at 30 November 2020 92,828,042 521,830 521,830
Shares issued in further public
offering 48,714,286 271,962 271,962
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
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:
-- May 2022: 8,000,000 shares were issued in the placing of new
ordinary shares at GBP0.25p. Total proceeds of US$2,530,364 were
netted against cost of raising finance in the amount of
US$127,657.
-- January 2022 and October 2022 respectively: 50,000 shares and
1,100,000 shares issued in lieu of share options exercises at
GBP0.0650 and GBP0.0783 respectively.
The Company has authorised share capital of 150,692,328 with a
nominal value of GBP0.004. Of these shares, 150,692,328 were issued
and fully paid up.
C.11 Trade and other payables
2022 2021
Company US $ US $
Accruals and other creditors 127,902 184,518
Accounts payable 1,972 13,309
129,874 197,827
C.12 Deferred income tax
Unused tax losses for which no deferred tax assets have been
recognised are attributable to the uncertainty over the
recoverability of those losses through future profits. A tax rate
of 19% has been used to calculate the potential deferred tax.
2022 2021
Deferred tax US $ US $
Accelerated capital
allowances (24,323) (1,680)
Short term timing difference
Tax losses (2,356,784) (2,084,779)
Unprovided deferred
tax asset 2,381,106 2,086,459
C.13 Dividends
No dividend has been recommended for the year ended 31 December
2022 (2021: Nil) and no dividend was paid during the year (2021:
Nil).
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