REG - Tekcapital plc - Final Results Year Ended 31 December 2024
23/05/2025 07:00
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RNS Number : 8815J Tekcapital plc 23 May 2025
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23 May 2025
Tekcapital PLC
("Tekcapital", "the Company" or the "Group")
Final results for the year-ended 31 December 2024
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 2024.
Dr. Clifford Gross, Executive Chairman, commented:
"We are excited to provide this 2024 summary report which describes a few of
our portfolio company achievements and their contribution to our profitability
and growth. In 2024 our net assets reached US $70.1m, an increase of ~46%,
over the previous year, an annual record since the Company's inception. NAV
per share was US $0.33.
"Our performance reflects strong commercial progress through the completion of
two AIM listings (MicroSalt plc & GenIP plc), and as a result, four of our
five portfolio companies are now listed. Additionally, we observed significant
commercial traction for Innovative Eyewear Inc. as they achieved several new
product and go-to-market milestones. We were also pleased to note MicroSalt
has received new and follow-on B2B orders from a major snack food
manufacturer. Further, we believe that Guident Corp's commercial advancements,
coupled with improving performance and market traction in the autonomous
vehicle industry, have created a fertile opportunity for Tekcapital to
potentially further crystallise its balance sheet in 2025.
"We believe that Tekcapital's success in 2024 is a testament to its portfolio
companies' strategic positioning and relevance. Our core long-term financial
objective is to grow net assets and returns on invested capital. Once material
levels of capital are monetized from our portfolio companies, we will seek to
provide a special dividend. We remain committed to this long-term objective,
and our portfolio companies' progress in 2024 is a good step in that
direction."
Financial Highlights:
· Net Assets increased 46.3% to US$70.1m (2023: US$47.9m)
· NAV per share increased 22.2% to US$0.33 (2023: US$0.27)
· Portfolio valuation increased 49.6% to US$61.5m (2023: US$41.1m)
· Profit after tax increased to US$19.2m (2023: loss of US$15.7m)
· Administrative expenses decreased 26% to US$2.0m (2023: US2.7m)
· Cash and equivalents increased 33.3% to US$0.8m (2023: US0.6m).
Operational Highlights:
· Successful listing of MicroSalt on London's AIM, securing growth
capital for the company of £3.1m
· Successful listing of GenIP on London's AIM, securing growth
capital for the company of £1.75m
· Crystallised a combined £18.3m of portfolio value on IPO through
the listings of GenIP and MicroSalt
· Preparation of Guident for proposed NASDAQ IPO in 2025
· Developed an artificial intelligence focused investment strategy,
establishing a base for future portfolio growth
· Structural cost management reduced operating expenses by 20.8%.
EXCEPTIONAL FINANCIAL PERFORMANCE
In 2024, Tekcapital plc (the "Company") and subsidiaries (the "Group" or
"Tekcapital") delivered strong performance, placing the Group at the front of
the UK-listed IP commercialization and technology investment sector during a
challenging year in the markets. Portfolio return and revenue surged in 2024
to US $21.2 million from a US $13.0 million loss recorded in 2023.
Profit after tax in 2024 rose to US$19.2m from a loss of US$15.7m in 2023,
driven by an increase in total income coupled with a reduction of expenses.
Overall, there was a ~US $35m positive swing in Profit after tax -
underscoring the effectiveness of Tekcapital's strategic direction and the
inherent value of its portfolio companies.
Consistent with this, Net assets expanded from US$47.9m to US$70.1m,
reflecting a 46% year-over-year increase.
· Net Assets US$70.1m (2023: US$47.9m)
· NAV per share US$0.33 (2023: US$0.27)
· Portfolio valuation US$61.5m (2023: US$41.1m)
· Profit after tax: US$19.2m, resulting primarily from unrealised increase
in the fair value of the portfolio (2023: loss of US$15.7m).
The Group's Net Assets are higher by approximately US$4.8m as compared to our
2024 unaudited year-end portfolio update provided on 17 February 2025 due to
the addition of a fair value control premium attributed to Tekcapital's
majority stakes in Microsalt plc and GenIP plc.
PORTFOLIO COMPANIES: IPOs, GROWING SALES & STRONG COMMERCIAL PROGRESS
Demonstrating Tekcapital's ability to successfully commercialise technologies,
even in adverse markets, two of our Investment Portfolio companies (MicroSalt
plc & GenIP plc) floated on AIM in 2024. As a result, four out of five
portfolio companies are now public. In 2024 only 10 companies completed IPO's
on AIM 1 .
Notable commercial success was achieved at the Investment Portfolio level
driven by their strategic positioning and relevance to addressing pressing
global needs with compelling new technologies. Our portfolio companies
achieved many milestones during 2024, some of which included:
· MicroSalt plc ("Microsalt") secured recurring bulk purchases of
its full-flavour, low-sodium salt, for multiple product lines from one of the
world's largest food manufacturers. The Company also anticipates additional
purchase orders for MicroSalt® from the same customer for additional product
lines in 2025, and significant increases more broadly in its B2B sales
volumes.
· Innovative Eyewear Inc ("Innovative Eyewear") continued to grow
their sales in 2024 and strengthened their balance sheet. They set the
foundation for more growth with strong relationships with big box stores
throughout the U.S. consistent with their focus on product placement with
large national retailers. The well received launch of world's first smart
safety eyewear, Lucyd Armor®, expanded Innovative Eyewear's sales further.
· Guident CORP ("Guident") progressed the integration of its remote
monitoring and control software with several autonomous vehicle ("AV") shuttle
partners, and commenced a sales program to deliver security robots that will
leverage its existing Remote Monitor and Control Centre ("RMCC") in the
future. This work has resulted in several new contracts in 2025 and a strong
sales pipeline.
· GenIP plc ("GenIP") announced it has signed a commercial
agreement with a leading Saudi Arabian research institution, GenIP's first
client in the Kingdom. In addition, GenIP has received significant orders from
organisations in the U.S., Latin America, South Africa, and Singapore for its
GenAI analytic services.
· Belluscura plc ("Belluscura") continued its revenue growth in
2024. The Company also received Pricing Data Analysis and Coding ("PDAC")
codes that allow Durable Medical Equipment distributers to claim reimbursement
from Medicare for sales of DISCOV-R to patients. We believe that this is an
important catalyst for future sales growth, and greatly contributes to the
enterprise value of the business, when added to its previously received FDA
clearance and deep patent portfolio rights.
Tekcapital's Portfolio Companies 2024
OUTPERFORMING THE SECTOR
Tekcapital plc's exceptional 2024 performance represents a compelling
narrative of innovation and strategic foresight. The Company's ~46% increase
in net assets to US$70.1m demonstrates its ability to execute effectively
under challenging market conditions. Our 2024 share price performance is
particularly noteworthy when compared with other listed U.K. IP
commercialization companies, technology investment companies and relevant
indices as follows*:
**includes data for 12 month period ended 31 December 2024
· Tekcapital plc: +27% (London Stock Exchange)
· AIM All-Share Index: -5.5% (London Stock Exchange)
· FTSE 250: +5.69% (London Stock Exchange)
This performance validates Tekcapital's differentiated approach of carefully
identifying and nurturing groundbreaking university technologies that have the
potential to improve the quality of life of the customers we serve. Our sector
focus requires both mitigation of adverse selection and patience, two
complementary characteristics that are somewhat uncommon in the small cap
markets.
In our view, Tekcapital's year-end share price discount to NAV of ~66% appears
unwarranted, given the company's strong execution and portfolio maturation.
According to Morningstar, the average market cap discount to NAV for UK
closed-end funds (a close analogue) in 2024 was 16.6%. By peer comparison:
· Molten Ventures plc trades at a 52% discount to NAV (Molten
Ventures plc, 2024)
· IP Group plc trades at a 45% discount to NAV (IP Group plc, 2024)
· Frontier IP Group plc trades at a 35% discount to NAV (Frontier
IP Group plc, 2024)
· Mercia Asset Management plc trades at a 25% discount to NAV
(Mercia Asset Management plc, 2024).
With four of five portfolio companies now publicly listed and demonstrating
commercial traction, we believe there is a probability that Tekcapital's
valuation gap may narrow, if its fifth portfolio company achieves a public
listing or if one of the other portfolio companies achieves noteworthy
commercial milestones.
Share placings totalling US$3.6m, net of share issue costs, were completed
during the period (2023: US$5m). Tekcapital's strengthened financial position,
combined with its strategic portfolio of companies operating in high-growth,
globally relevant sectors like sodium reduction (MicroSalt), respiratory care
(Belluscura), autonomous vehicle safety (Guident), smart eyewear (Innovative
Eyewear) and GenAI analytic services (GenIP), positions the company for
continued growth in the value of our investment portfolio.
We envision the continued growth of existing portfolio companies to be aided
by new investments in the Generative Artificial Intelligence sector. Our
portfolio companies address critical market needs and have demonstrated
meaningful commercial progress in 2024.
Tekcapital's future outlook is supported by:
· A proven ability to identify, select and commercialize university
technologies
· Strong portfolio company execution and public market validation
· Operating leverage from our efficient, low-cost corporate
structure
· Multiple potential catalysts for further value creation in 2025
& beyond
Dr. Benjamin Franklin famously stated in Poor Richard's Almanack: "A penny
saved is two pence clear." Following this inspiration, Tekcapital is glad to
report it has the lowest operating cost structure amongst its listed peers in
the UK, with 2024 administrative expenses of just US$2.0m, compared to IP
Group plc, Molten Ventures plc, Mercia Asset Management plc or Frontier IP
Group plc. We believe that this is partly due to our selectivity and the
concentrated nature of our portfolio. As Warren Buffet has sagaciously
demonstrated, value creation is not dependent on diversification but rather on
carefully investing for the long-term in the right assets.
We are thankful to our steadfast shareholders for their unwavering support and
to our portfolio company management teams that have punched significantly
above their weight.
PORTFOLIO REVIEW
Our investment portfolio consists of the following companies:
MicroSalt's patented, low-sodium salt delivers full-flavoured natural salt
with approximately 50% less sodium.
INVESTMENT RATIONALE:
The snack food industry is focused on developing and providing better-for-you
products that both taste good and help reduce sodium intake. Excess sodium
consumption contributes to cardiovascular disease, a leading cause of
premature death globally. The World Health Organization has indicated that
reducing sodium consumption to 2,300 mg/day can save upwards of 2m lives per
year. To help address this problem, MicroSalt provides a patented, low-sodium
salt has all the flavour of salt with roughly half the sodium for topical
applications such as crisps, pretzels, nuts, popcorn and other salty snacks,
bakery products and precooked meals.
2024 DEVELOPMENTS:
· Successfully completed its Initial Public Offering with listing
price of 43p per share and commenced trading on the AIM market of the London
Stock Exchange on February 1st, 2024. MicroSalt's share price as of 31
December 2024 increased to 77p.
· Secured large volume purchase commitments of MicroSalt® with a
leading food manufacturer as well as placements of its salt shakers across
multiple retail locations, and large volume commitments into 2025
· Has been granted an important additional patent #11,992,034
protecting the IP of its micron-sized salt. This patent, entitled Low Sodium
Salt Composition, is focused on how MicroSalt's low-sodium salt adheres to
food particles vs traditional table salt. MicroSalt also has counterpart
patent applications with claims directed to similar subject matter pending in
countries including China, Chile, Australia, Brazil, Europe, Canada, Japan,
Russia, Mexico, India and Hong Kong., many of which have been granted as of
the date of this report.
· Introduced MicroSalt® shakers on Amazon UK and laid the
foundation for the UK expansion of MicroSalt's bulk business with local
distribution and storage via Reliable Express.
· Announced multiple placements of its products including placement
of SaltMe! Crisps on Thrive Market, a US-based healthy snack marketplace with
1.2 million members, and Carma Hospital Group, marking the Company's entrance
into the food service market.
· Developed additional B2B bulk product for Quick Service
Restaurant after receiving indicators of demand for MicroSalt from the
fast-food sector.
Innovative Eyewear Inc's vision is to Upgrade your Eyewear® by providing
tech-enhanced eyewear that makes it easier to stay connected to your digital
life. Lucyd introduced the world's first prescription ready, smart eyewear
with ChatGPT.
Photo courtesy of Innovative Eyewear, Inc.
Innovative Eyewear Inc. is the first developer of ChatGPT enabled smart
eyewear under the Lucyd®, Nautica®, Eddie Bauer® and Reebok® brands.
Innovative Eyewear, Inc ("Innovative Eyewear"), Lucyd's ~10% owned U.S.
operating subsidiary, was the first Company to deliver prescription glasses
with Bluetooth® technology in 2019. Their eyeglass frames help you stay
connected safely and conveniently, by enabling many common smartphone tasks to
be performed handsfree with Bluetooth®, voice assistants and GenAI.
INVESTMENT RATIONALE:
In the first 9 months of 2024, the National Highway Traffic Safety
Administration (NHTSA) estimates that 29,135 people died in traffic crashes on
public roads. 2 We believe that open ear audio found in Lucyd smart glasses
can help pedestrians maintain situational awareness whilst walking running and
cycling as there is nothing in the ear canal blocking the sounds of adjacent
traffic. According to the Vision Institute², approximately 75% of the adult
population need corrective lenses, and advancements in Bluetooth technology
have enabled it to be incorporated into traditional eyeglass form factors.
This combination created a new type of eyewear with built-in speakers,
microphones and touch controls. Lucyd smart eyewear allows the wearer to
forego headphones and use their glasses to listen to audio content and talk to
others and digital assistants. 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.
2024 DEVELOPMENTS:
· Announced a partnership with New Look Vision Group to distribute
its smart eyewear in Canada. New Look Vision Group is one of the largest
optical groups in Canada and has been rapidly expanding in the United States.
· Launched major products under its licensed branded smart eyewear
products: Nautica and Eddie Bauer.
· Appointed Micah Richards as a brand ambassador. Micah is a former
Olympic athlete and English footballer, turned successful broadcaster. He is
currently working for several sport networks whilst he is also a co-host of
"The Rest is Football" - a top ten UK podcast.
· Expanded its sales prospects by launching the world's first smart
safety eyewear in a lightweight, affordable and prescription-ready form
factor, and meeting the ANSI Z87.1 standard for workplace safety use. The
Company is already in discussion with several notable retailers about
launching the Lucyd Armor™ product in their brick and mortar locations and
online sales channels.
Photo courtesy of Innovative Eyewear, Inc.
· Innovative Eyewear Inc also announced its Lucyd Lyte frames are
now available on Target.com (http://target.com/) .
· Reported second quarter revenue growth of 82% compared to the
second quarter of 2023, also noting improvement in gross margins. Innovative
Eyewear anticipates the potential for additional growth in the fourth quarter
of 2024 as the new Lucyd Armor(TM) and Reebok® Powered by Lucyd lines are
launched, as the unit cost of these new products are estimated to be
significantly lower than current Lucyd Lyte models.
Guident Limited ("Guident") has developed and deployed remote monitoring and
control software to improve safety of autonomous vehicles and land-based
delivery devices. Guident's software incorporates artificial intelligence and
advanced network technologies to minimize signal latency and improve the
safety of autonomous vehicles.
Guident RMCC- Photo courtesy of Guident Corp.
Guident developed a state of the art, fully functional remote monitoring and
control software to improve the safety of autonomous vehicles and land-based
delivery devices.
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 many of these
mishaps. Guident's remote monitoring and control centre monitors vehicles and
when necessary, can provide additional support such as calling first
responders, taking over control of the vehicle to move it out of harm's way as
well as provide real-time communication with passengers and pedestrians. Over
time, Guident believes remote monitoring centres will be required in most
jurisdictions where AVs operate.
2024 DEVELOPMENTS:
· Hosted the grand opening of its first U.S. commercial Remote
Monitor and Control Centre (RMCC) for enhancing AV safety. Guident's new
best-in-class RMCC including video wall displays and visualisation system, is
now commercially available. This deployment is strategically located at the
Boca Raton Innovation Campus (BRiC), the largest office complex in Florida
(1.7m sq ft), and the Southeast's premier technology and life-sciences hub.
· Entered into a Strategic Partnership agreement with Star
Robotics, a leading Spanish security robotics company. The Strategic
Partnership will aim to integrate Guident's teleoperation solution into
Star Robotics' products and provide an autonomous security surveillance
solution with a human-in-the-loop capability. The partnership enables both
companies to work on a combined go to market strategy and roll out in North
America.
· Incorporated its RMCC technology into AuVe Tech OÜ ("Auve Tech")
Level 4 MiCa autonomous shuttles. The MiCa vehicle offers turnkey autonomous
transportation solutions tailored to diverse environments and simple
integration into existing transport networks.
· Received a second grant from Space Florida to add low earth
orbit, low-latency satellite connectivity to its AV remote monitoring service.
This Space Florida-Israel Innovation grant supports the development and
implementation of a leading-edge system architecture, leveraging
non-geostationary satellite technology to provide monitoring redundancy in the
event of mobile network outages.
Image courtesy of GenIP plc
GenIP Ltd ("GenIP") was incorporated on 23 February 2024 with a goal of
building a unique GenAI B2B analytics service business. Subsequently,
Tekcapital's Invention Evaluator® and VortechsTM business services were
developed into new services with the introduction of Generative AI large
language models (LLMs) into their workstreams. GenIP uses generative
artificial intelligence aimed at empowering companies to better evaluate and
commercialise technological discoveries through its services. GenIP represents
Tekcapital's fifth portfolio company. GenIP plc listed on the AIM in October
2025.
INVESTMENT RATIONALE
The GenAI market is currently experiencing exponential growth. In 2023, 426
start-ups received total funding in excess of US$21 billion. GenIP provides
Services to evaluate new technologies and identify capable individuals to
market these technologies. We believe the incorporation of GenAI LLM's into
these services will help companies, research institutions and venture funds
mitigate adverse selection, improve returns on invested capital and more
efficiently deploy capital to produce useful businesses that can become
financially successful and contribute to the quality of life of the customers
they serve. The initial performance appears quite promising.
2024 DEVELOPMENTS:
· Effective 4 June 2024, GenIP acquired certain assets and
liabilities from Tekcapital related to Invention Evaluator and Vortechs
business service lines. These assets and liabilities, disclosed in the Related
Parties note to the financial information below, were transferred to GenIP Ltd
as part of a US$191,564 capital contribution by Tekcapital plc. GenIP's new
products were launched in September 2024.
· Signed a commercial agreement with a leading Saudi Arabian
research institution, GenIP's first client in the Kingdom.
· Initiated negotiations with over 50 potential new clients,
including research institutions, corporations, and venture capital firms,
following recent engagements at global technology transfer events.
· Following the launch of GenIP's GenAI services, 195 orders for IE
Reports and 8 orders for Vortechs placement assignments were secured prior to
year end 2024.
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. Belluscura believes its product is the
first FDA cleared, modular POC with a user-replaceable filter cartridge.
Belluscura aims to make POC's more affordable to those who need them.
INVESTMENT RATIONALE:
Worldwide, approximately 300m individuals suffer from COPD (chronic
obstructive pulmonary disease). COPD is a progressive lung disease that
includes emphysema and chronic bronchitis and is the fourth leading cause of
death worldwide, causing 3.5 million deaths in 2021, approximately 5% of all
global deaths. 3
POC's are also used to treat the following maladies:
Interstitial lung disease (ILD): This is a group of lung diseases that cause
scarring of the lungs.
Cystic fibrosis: This is a genetic disease that causes thick, sticky mucus to
build up in the lungs, making it hard to breathe.
Sleep Apnea: This is a sleep disorder that causes breathing to repeatedly stop
and start.
Pulmonary hypertension: This is high blood pressure in the lungs.
Heart failure: This is a condition that makes it hard for the heart to pump
blood effectively.
Many patients suffering from the above disorders require supplemental oxygen.
As there is no cure for COPD, over time patients require greater amounts of
oxygen, and if they use a portable oxygen concentrator, many individuals must
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 POC's to improve both the duration and quality of life.
2024 DEVELOPMENTS:
· Belluscura announced their prospects were enhanced by the
forthcoming release of the new DISCOV-R device.
· The company announced its revenue continued to grow through 2024,
with revenue of ~$3.3m in the first nine months of 2024.
· Belluscura was also able to complete the acquisition of TMT
Acquisition plc and raised US$ 7.3m through combination of convertible loan
notes and new placings, enabling the company to deliver on the demand for its
products.
Photo courtesy of Belluscura plc
POST PERIOD END HIGHLIGHTS
Following successful deployments of its Remote Monitor and Control Center,
Guident has confidentially submitted a draft registration statement on Form
S-1 with the Securities and Exchange Commission (the "SEC") relating to the
proposed initial public offering. The initial public offering is expected to
take place after the SEC completes its review process, subject to market and
other conditions. Guident has also received significant additional patent
coverage:
· Guident has successfully validated its European Patent Grant No.
4097550, entitled Artificial Intelligence Method and Apparatus for Remote
Monitoring and Control of Autonomous Vehicles, and has obtained patent
protection in 20 European countries.
The validated European patent is directed to an autonomous vehicle remote
monitoring and control center (RMCC) employing distributed sensor fusion and
artificial intelligence techniques that is configured to receive sensor data
across multiple independently governed autonomous vehicles, including sensor
data from vehicles not operating under RMCC control, determine incident risk
levels, implement safety measures and take control of one or more of the
autonomous vehicles when operating at an unsafe incident risk level, and
return control when the risk level is safe.
· In addition, Guident is pleased to announce it has received a
Notice of Allowance from the United States Patent and Trademark Office for
its U.S. Patent Application No. 17/579,203, entitled Near Real-Time Data
and Video Streaming System for a Vehicle, Robot or Drone. The
allowed U.S. patent application is directed to methods and systems for using
a remote monitoring control device to receive video and image data from and
communicate with collection devices of autonomous vehicles, robots, or drones
(such as camera sensors) to improve the safety of their
operation. Guident anticipates the United States Patent will issue in due
course after it pays the required issue fee.
· Guident, in collaboration with the Related Companies, Circuit
Transit and Auve Tech, announced the launch of a pilot program with the City
of West Palm Beach to demonstrate the future of urban public transportation.
The MiCa, a fully electric SAE Level 4 autonomous shuttle, has been operating
autonomously within the CityPlace area of West Palm Beach since mid-February,
successfully navigating the dense urban area occupied by cars, trucks,
bicycles and pedestrians. With six stops between Brightline Station and the
Publix supermarket plaza, the project offers 0.9 miles of clean, quiet and
convenient public transportation within the heart of West Palm Beach.
MiCa Shuttle in West Palm Beach, Florida - Photo courtesy of Guident Corp.
· Guident also announced it secured its first contract for its
Autonomous Surveillance & Inspection Robot service with the Boca Raton
Innovation Campus (BRiC), a 1.7-million-square-foot multi-tenant office campus
and IBM's former R&D facility.
· In addition to the above Guident has a strong pipeline of customers
it is seeking to close in H1.
Innovative Eyewear Inc announced that it has partnered with Micro Center(TM),
one of the leading tech retailers in the United States, to expand its retail
reach and bring Lucyd smart eyewear in stores nationwide and online.
Additionally, post period end Innovative Eyewear announced the launch of its
Reebok smart eyewear powered by Lucyd and the inking of a partnership deal
with Eye Recommend, expanding their smart eyewear across 600+ independent
optometry stores in Canada.
Reebok smart eyewear - Photo courtesy of Innovative Eyewear Inc.
Also, post period-end, MicroSalt plc completed a successful, oversubscribed
fundraising of £2.3 million. The proceeds of the Subscription will be mainly
used to support inventory to satisfy expected B2B customer demand in 2025 from
leading snack manufacturers, as well as general working capital purposes.
MicroSalt has received commitments for an additional 290 metric tonnes ("mT")
in bulk orders for 2025 and expects this to further increase as MicroSalt is
rolled out over new product lines. Based on existing orders for Q1 2025 and
expected orders for the rest of 2025 for existing product lines, B2B volumes
are projected to increase more than 10X the quantity manufactured in 2024.
MicroSalt also announced they launched a new Quick Service restaurant ("QSR")
product, initially targeting the "French fry" market where the Company sees a
tremendous opportunity for growth. At the same time, significant new FDA
guidance was released indicating the near-term requirement for front of
package nutrition labels, providing another catalyst for MicroSalt's product.
MicroSalt has been recognized by Fast Company in their 2025 list of the
World's Most Innovative Companies. The company, known for its patented
full-flavor salt with approximately 50% less sodium, earned the ninth position
in the "Small but Mighty" category, which highlights businesses with fewer
than 50 employees that are making significant impacts in their industries. 4
Image courtesy of MicroSalt plc
GenIP plc provided a significant corporate update, noting since the launch of
its GenAI enhanced services in September 2024, they have secured Invention
Evaluator orders for over 450 analytical assessments.
Additionally, GenIP Plc announced it secured a significant contract worth
$0.35m with a new client, a research organisation in Saudi Arabia (the
"Client"). The contract commences immediately and covers the delivery of 400
GenAI-enhanced analytical assessments and additional technology
commercialisation consulting services.
Post end-of-period Belluscura announced on 6 February 2025, the Company has
raised gross proceeds of approximately US$5.0 million through the placing of
199,151,375 new ordinary shares. Additionally on 16 April 2025 Belluscura
announced its Q1 2025 sales were US$912,000 (Q1 2024: US$166,000), and that it
has launched the X-PLOR 5, the first FDA cleared five-level portable oxygen
concentrator weighing under four pounds. In May 2025, Belluscura also
announced that it initiated a strategic review aimed at supporting both the
Company's short-term cash requirements and its longer-term growth and
accelerating its path to sustainable profitability. The Company also
confirmed, as of 9 May 2025, the US import tariff on its portable oxygen
containers remains at zero and that April 2025 marked their best sales month
with US$0.52m in revenue booked. On 9 May 2025 Belluscura announced it has
initiated a strategic review, which will evaluate a range of options to
substantially strengthen its capital position, including potential strategic
investment, partnerships, alternative funding structures and other corporate
initiatives. The review is aimed at supporting both the Company's short-term
cash requirements and its longer-term growth and accelerating its path to
sustainable profitability.
For further information, please contact:
Tekcapital Plc Via Flagstaff
Clifford M. Gross, Ph.D.
SP Angel Corporate Finance LLP +44 (0) 20 3470 0470
(Nominated Adviser and Broker)
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 (http://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
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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 SUMMARY
Tekcapital Performance Update
Tekcapital delivered exceptional financial performance in 2024, transitioning
from a loss in 2023 to significant profitability. The company's portfolio
return and revenue surged to US ~$21 million from a US ~$13 million loss in
2023. Profit after tax rose substantially to US ~$19.2 million from a loss of
US ~$15.7 million the previous year, driven by increased total income and
reduced expenses. This represents an impressive US ~$35 million positive swing
in Net Income, demonstrating the effectiveness of Tekcapital's strategic
direction and the inherent value of its portfolio companies.
Net assets expanded from US$47.9 million to an annual record of US$70.1
million, reflecting a 46% year-over-year increase.
The company's portfolio valuation reached US $61.5 million (up from US $41.1
million in 2023), with NAV per share growing to US $0.33 (from US $0.27).
Tekcapital completed share placings totaling US $3.6 million during the
period.
Portfolio Company Achievements
Demonstrating Tekcapital's ability to successfully commercialize technologies
even in adverse markets, two Investment Portfolio companies (MicroSalt plc and
GenIP) floated on AIM in early 2024, bringing the total number of public
portfolio companies to four out of five. A few of the many achievements across
the portfolio included:
· MicroSalt secured recurring bulk purchases for multiple product
lines from one of the world's largest food, soft drink, and snack
manufacturers, with additional purchase orders anticipated for 2025 and a
significant projected increase in B2B volume.
· Innovative Eyewear continued sales growth and strengthened its
balance sheet, and launched the first smart safety eyewear line under the
Lucyd Armor(TM) brand. The Lucyd Armor product is certified to comply with
the American National Standards Institute.
· Guident progressed the integration of its remote monitor and
control software with several AV shuttle partners and launched a sales program
targeting the security robot market, resulting in multiple contracts announced
in early H1 2025.
· GenIP signed a commercial agreement with a leading Saudi Arabian
research institution, its first client in the Kingdom
· Belluscura continued revenue growth and received important
Pricing Data Analysis and Coding ("PDAC") codes allowing medical equipment
distributors to claim Medicare reimbursement
Following the period end, Guident appointed an investment bank to assist with
a potential Nasdaq IPO in 2025. MicroSalt completed an oversubscribed
fundraising of £2.3 million and secured commitments for significantly
increased bulk orders in 2025. Belluscura has also recently completed a
fundraise of gross proceeds of ~£4.7 million.
Outlook
Tekcapital has demonstrated a proven ability to identify and commercialize
university technologies, with strong portfolio company execution and public
market validation. Its efficient corporate structure provides operating
leverage, with administrative expenses of just US $2.0 million in 2024, the
lowest amongst all of its peers in the United Kingdom.
The Company has multiple potential catalysts for value creation in 2025,
particularly if its fifth portfolio company achieves a public listing or if
existing portfolio companies reach noteworthy commercial milestones.
Tekcapital's strategic positioning in high-growth, globally relevant sectors
including sodium reduction (MicroSalt), respiratory care (Belluscura),
autonomous vehicle safety (Guident), smart eyewear (Innovative Eyewear), and
AI-driven innovation (GenIP) positions the company for continued growth.
We intend to aggressively pursue further investments in pre-existing
generative artificial intelligence companies (GenAI). Our potential targets
are expected to include companies that are focused on the transformative
impact of GenAI on business workflows across a number of sectors. Having
witnessed GenAI's positive impact on a few of our portfolio companies, we
believe its potential to accelerate value creation, mitigate risk and reduce
administrative overhead may provide significant investment opportunities for
the Group.
Tekcapital's long-term objective is to grow both its net assets and returns on
invested capital. Once material levels of capital are monetized from its
portfolio companies, the Group plans to provide a special dividend to
shareholders. Management believes that Tekcapital's 2024 performance is a
testament to its portfolio companies' strategic positioning and relevance, and
represents a good step towards achieving its long-term objective.
Financial performance
Net Assets US$70.1m (2023: US$47.9m)
NAV per share US$0.33 (2023: US$0.27)
Portfolio valuation US$61.5m (2023: US$41.1m)
Profit after tax: US$19.2m, resulting primarily from unrealised fair value
increase of portfolio valuation (2023: loss of US$15.7m)
Fundraisings during the period
In 2024 we completed share placements totaling US$ 3.6m (2023: US$ 5m),
excluding expenses. Proceeds were used primarily to accelerate commercial
progress of select portfolio companies and provide additional working capital
for the Group.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER
2024
Year ended Year ended
Group Note 31 December 31 December
2024 2023
US $ US $
Portfolio return and revenue
Changes in fair value on financial assets at fair value though profit or loss 12 20,016,771 (14,229,009)
Revenue from services 6 425,986 735,265
Interest from financial assets at fair value through profit or loss* 6 743,205 455,096
Other income** 6.1 - 20,384
21,185,962 (13,018,264)
Administrative expenses and other expenses
Cost of sales 7 (147,203) (314,083)
Operating expenses 7 (1,879,773) (2,353,704)
Operating profit/(loss) before tax 19,158,986 (12,743,794)
9 (2,961) (2,266)
Income tax expense
Profit/(loss) after tax for the year 19,156,025 (12,745,508)
Other comprehensive income*
Translation of foreign operations (589,195) (212,803)
Total other comprehensive loss (589,195) (212,803)
Total comprehensive income/(loss) for the year 18,566,830 (14,787,595)
Earnings per share
Basic earnings per share 10 0.10 (0.09)
Diluted earnings per share 10 0.10 (0.09)
* May be reclassified to profit or loss in future years.
All comprehensive income as presented above belongs to the owners of the
Group.
The notes on pages 28 to 59 are an integral part of these consolidated
financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2024
As at 31 December As at 31 December
Group Note 2024 2023
US$ US$
Assets
Non-current assets
Intangible assets 13 - 218,158
Financial assets at fair value through profit and loss 12 69,201,744 46,653,995
Property, plant and equipment 14 7,152 14,271
69,208,896 46,886,424
Current assets
Trade and other receivables 15 644,365 1,114,753
Cash and cash equivalents 16 786,290 620,248
1,430,655 1,735,001
Total assets 70,639,551 48,621,425
Current liabilities
Trade and other payables 19 548,725 517,154
Deferred revenue 20 22,844 217,391
571,569 734,545
Total liabilities 571,569 734,545
Net assets 70,067,982 47,886,880
Equity attributable to owners of the Parent
Ordinary shares 18 1,142,071 973,329
Share premium 32,297,956 28,937,011
Retained earnings 36,314,227 17,073,617
Translation reserve 385,897 975,092
Other reserve (72,169) (72,169)
Total equity 70,067,982 47,886,880
The notes on pages 28 to 59 are an integral part of these financial
statements.
The financial statements on pages 23 to 59 were approved and authorised for
issue by the Board of Directors on 22 May 2025 and were signed on its behalf.
Louis Castro
Director
Tekcapital PLC
registered number 08873361
Dr Clifford M Gross
Chairman and CEO
Dr Clifford M Gross
Chairman and CEO
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED 31 DECEMBER 2024
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 31 December 2022 839,723 24,240,930 74,370 (72,169) 32,682,276 57,765,130
Loss for the period (15,688,317) (15,688,317)
Other comprehensive loss - - 900,722 - 900,722
Total comprehensive loss for the year - - 900,722 - - (14,787,595)
Transactions with owners, recorded
directly in equity
Share issue 18 133,606 5,045,893 - - - 5,179,499
Cost of share issue - (349,812) - - - (349,812)
Share issue in share option exercise 18 - - - - - -
Share based payments 24 - - - - 79,658 79,658
Total transactions with owners 133,606 4,696,081 - - 79,658 4,909,345
At 31 December 2023 973,329 28,937,011 975,092 (72,169) 17,073,617 47,886,880
Profit for the year 19,156,025 19,156,025
Other comprehensive loss (589,195) (589,195)
Total comprehensive profit for the year - - (589,195) - 19,156,025 18,566,830
Transactions with owners, recorded -
directly in equity
Share issue 18 168,742 3,626,796 - - - 3,795,538
Cost of share issue - (265,851) - - - (265,851)
Share issue in share option exercise 18 - - - - - -
Share based payments 24 - - - - 84,585 84,585
Total transactions with owners 168,742 3,360,945 - - 84,585 3,614,272
At 31 December 2024 1,142,071 32,297,956 385,897 (72,169) 36,314,227 70,067,982
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 28 to 59 are an integral part of these financial
statements.
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2024
Note Year ended 31 December 2024 Year ended 31 December 2023
US $ US $
Cash flows from operating activities
Income/(Loss) after income tax 19,156,025 (15,688,317)
Adjustments for
- Depreciation 7,120 2,523
- Amortisation 34,911 83,786
- Share based payment expense 84,585 79,658
- Management services income (326,144) (455,777)
- Interest from financial assets at FVTP&L (743,205) (455,096)
- Unrealised (gains)/losses on foreign exchange (8,473) 620,843
- Fair value (gain)/losses on financial assets at FVTP&L (20,016,772) 14,229,009
Movement in working capital:
- Movement in trade and other receivables 470,388 (26,710)
- Deferred revenue movement (194,548) 44,781
- Movement in trade and other payables 31,568 301,156
Net cash outflows from operating activities (1,504,545) (1,264,144)
Cash flows from investing activities
Additions to financial assets at fair value through profit and loss 12 (3,200,305) (3,999,072)
Proceeds from disposals of financial assets at fair value through profit and 12 1,381,440 478,008
loss
Purchases of intangibles 13 - (59,004)
Purchases of property, plant and equipment 14 - (6,825)
Net cash outflows investing activities (1,818,865) (3,586,893)
Cash flows from financing activities
Proceeds from issuance of ordinary shares 18 3,795,538 5,179,498
Costs of raising finance 18 (265,851) (349,812)
Net cash inflows from financing activities 3,529,687 4,829,686
Net (decrease)/increase in cash and cash equivalents 206,277 271,543
Cash and cash equivalents at beginning of year 16 620,248 638,640
Exchange gains/(losses) on cash and cash equivalents (40,235) 12,961
Cash and cash equivalents at end of period/year 16 786,290 620,248
NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Tekcapital PLC (Companies House registration number: 08873361) is a Company
incorporated in England and Wales and domiciled in the UK. The address of the
registered office is detailed on page 36 of the 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.
The material 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. The
amounts presented in the consolidated financial statements are comparable to
consolidated financial statements for the year ended 31 December 2023. While
the financial information included in this preliminary announcement has been
prepared in accordance with the recognition and measurement criteria of
International Financial Reporting Standards, this announcement does not itself
contain sufficient information to comply with those standards. The Company
expects to publish full financial statements that comply with International
Financial Reporting Standards in June 2024
Amounts presented in this report are rounded to nearest US$1.
2. MATERIAL ACCOUNTING POLICIES
2.1 STATEMENT OF COMPLIANCE
The consolidated financial statements of Tekcapital have been prepared in
accordance with the UK-adopted International Financial Reporting Standard ("UK
adopted IFRS") and those parts of the Companies Act 2006 that are relevant to
companies which report in accordance with UK adopted IFRS. The consolidated
financial statements have been prepared under the historical cost
convention. The consolidated financial statements comprise the financial
statements of Tekcapital plc and its subsidiaries, Tekcapital Europe Ltd and
Tekcapital LLC.
The preparation of financial statements in accordance with UK-adopted
International Financial Reporting Standards requires the use of certain
critical accounting estimates. It requires management to exercise its
judgement in the process of applying the Group's accounting policies. The
areas involving a higher degree of judgment or complexity, or areas where
assumptions and estimates are significant to the consolidated financial
statements are disclosed in note 4.
2.1.1 GOING CONCERN
The financial statements have been prepared on a going concern basis.
The Group and Company meet their day to day working capital requirements
through service offerings, monetisation of quoted equity stakes and monies
raised through issues of equity. As disclosed in note 26, the Group announced
a placing to raise £500,000 in February 2025. This has resulted in an
increase in the Group's cash balance since the year end.
The Group's forecasts and projections indicate that the Group and Company have
sufficient cash reserves to operate within the level of its current funds. The
forecasts and projections included assumptions and estimation uncertainties
related to Group's service revenues, cost of goods sold and operating
expenses, as determined by impact to the cash runway of the Group and the
Company. Most material significant assumptions include Company's payroll,
which is limited to a handful of employees, and Company's investing cash flows
related to its portfolio companies. The Group has no third party debt
facilities.
The Directors have prepared detailed cash flow projections for the period to
31 May 2026 ("going concern assessment period"). The cash flow projections
have been subjected to sensitivity analysis which demonstrate that the Group
and Company will maintain a positive cash balance through the going concern
assessment period.
The Directors have also considered the geo-political environment, including
rising inflation, and whilst the impact on the Group is currently deemed
minimal, the Directors remain vigilant.
On this basis, the Directors have therefore concluded that it is appropriate
to prepare the financial statements on a going concern basis.
2.1.2 CHANGES IN ACCOUNTING POLICY AND DISCLOSURES
Standards and Interpretations not yet effective
The Group has applied the following standards and amendments for the first
time for its annual reporting period commencing 1 January 2024:
• IFRS 17 Insurance Contracts;
• Definition of Accounting Estimates - amendments to IAS 8;
• International Tax Reform - Pillar Tow Model Rules - amendments to IAS
12;
• Deferred Tax related to Assets and Liabilities arising from a Single
Transaction - amendments to IAS 12; and
• Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice
Statement 2.
The amendments listed above did not have any impact on the amounts recognised
in prior periods and are not expected to significantly affect the current or
future periods.
There are a number of standards, amendments to standards, and interpretations
which have been issued that are effective in future accounting periods that
the Group has decided not to adopt early as they will not have a significant
impact on the presentation of the Group financial statements.
2.2 CONSOLIDATION
The consolidated financial statements comprise the financial statements of
Tekcapital PLC and all subsidiaries controlled by it, except for indirect
subsidiaries. These indirect subsidiaries are classified as equity investments
based on their purpose, as those subsidiaries represent investment assets for
the Group.
Subsidiaries are entities that are controlled by the Group. Control is
achieved when the Group has the power to govern the financial and operating
policies of an entity so as to obtain economic benefit from its activities.
Intercompany transactions, balances and unrealised gains on transactions
between Group companies are eliminated. Unrealised losses are also eliminated
when necessary amounts reported by subsidiaries have been adjusted to conform
to the Group's accounting policies.
2.3 FOREIGN CURRENCIES
(a) Functional and presentation currency
These consolidated financial statements are presented in US Dollars which is
the presentation currency of the Group. The Directors consider this to be the
most appropriate presentational currency. Each subsidiary within the Group has
its own functional currency which is dependent on the primary economic
environment in which that subsidiary operates. The functional currency of
Tekcapital Plc is UK sterling as this is the currency the entity undertakes
its primary economic activity.
(b) Transactions and Balances
Foreign currency transactions are translated into functional currency using
the exchange rates prevailing at the dates of the transactions or valuation
where items are re-measured.
Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at the year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies are
recognised in the income statement. Foreign exchange gains and losses that
relate to cash and cash equivalents are presented in the consolidated
statement of comprehensive income statement within 'operating expenses'.
(c) Group companies
The results and financial position of all Group entities (none of which has
the currency of a hyper-inflationary economy) that have a functional currency
different from the presentation currency are translated into the presentation
currency as follows:
(i) Monetary assets and liabilities for each balance sheet presented are
translated at the closing exchange rates at the date of that balance sheet.
(ii) Income and expense for each income statement are translated at the
average rates of exchange during the period (unless this average is not a
reasonable approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are translated at the
rate on the dates of the transactions)
(iii) All resulting exchange differences are recognized in other comprehensive
income.
2.4 INVESTMENT IN PORTFOLIO COMPANIES
Investments in portfolio companies are held at fair value through the profit
and loss. Directors' judgment was exercised in determination that the Group
meets the following criteria and should be recognized as an investment entity
under IFRS 10 par. 27. Directors re-evaluated the below criteria and concluded
they were met as at 31 December 2024:
· Obtains funds from one or more investors for the purpose of
providing clients with investment management services
· Commits to its investors that its business purpose is to invest
funds solely for return from capital appreciation, investment income or both
· Measures and evaluate the performance of substantially all of its
investments on a fair value basis.
Tekcapital's IP search and technology transfer investment services represent
investment advisory services, and therefore Tekcapital Europe Limited and
Tekcapital LLC continue to be treated as subsidiaries and are consolidated in
the Group financial statements. These services may be provided to investors,
clients and third parties. The Board considers that the criteria are met in
the group's current circumstances.
The Board envisages that Tekcapital's shareholder returns will derive
primarily from mid to long-term capital appreciation of a portion of its
intellectual property investments, as well as from providing IP investment
services to clients. Consequently, the Group's portfolio companies are
measured at fair value in accordance with IFRS 9 as disclosed in Note 2.8.3.
2.5 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at historical cost less accumulated
depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items. Subsequent costs are included in
the asset's carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the
item will flow to the Group and the cost of the item can be measured reliably.
All other repairs and maintenance are charged to the income statement during
the financial period in which they are incurred. Depreciation of assets are
calculated to write off the cost less the estimated residual value of tangible
fixed assets by equal instalments over the estimated useful economic lives as
follows:
Furniture 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 assets carrying
value is greater than its estimated recoverable amount. Gains and losses on
disposals are determined by comparing proceeds with the carrying amount and
are recognised within 'Operating expenses' in the income statement.
2.6 INTANGIBLE ASSETS
Intangible assets that are acquired by the Group are stated at cost less
accumulated amortisation and accumulated impairment losses. Amortisation is
charged to the administrative expenses in the Statement of Comprehensive
Income on a straight-line basis over the estimated useful lives of intangible
assets unless such lives are indefinite.
(a) INVENTION EVALUATOR
This is an intangible asset and a piece of computer software acquired for use
by one of the subsidiaries of the Group.
The estimated useful life of the Invention Evaluator intangible asset is 10
years. The useful life is estimated based upon management's best estimate of
the expected life of the asset. The useful life is reconsidered if
circumstances relating to the asset change or if there is an indication that
the initial estimate requires revision.
The intangible asset has a finite life of 10 years over which amortisation is
charged on a straight line basis.
On June 4, 2024, Tekcapital LLC entered into an agreement with its newly
formed subsidiary, GenIP Ltd, to sell Invention Evaluator at the Net Book
Value of the intangible asset at the transaction date. As such, disposal of
gross cost of US$397,773 and accumulated amortization of US$318,879 was
recorded.
(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 thesoftware product is available; and
(vi) the expenditure attributable to the software product during its
development can be reliably measured.
Computer software development costs recognised as assets are amortised over
their estimated useful lives, which do not exceed four years.
(c) VORTECHS GROUP
This is an intangible asset acquired for use by one of the subsidiaries of the
Group. The estimated useful life of the Vortechs Group intangible asset is 10
years over which amoritsation is charged on a straightline basis. The useful
life is estimated based upon management's best estimate of the expected life
of the asset. The useful life is reconsidered if circumstances relating to the
asset change or if there is an indication that the initial estimate requires
revision.
On June 4, 2024, Tekcapital LLC entered into an agreement with its newly
formed subsidiary, GenIP Ltd, to sell Vortechs at the Net Book Value of the
intangible asset at the transaction date. As such, disposal of gross cost of
US$500,000 and accumulated amortization of US$395,646 was recorded.
2.7 IMPAIRMENT OF NON-FINANCIAL ASSETS
Intangible assets that have an indefinite useful life or intangible assets not
ready to use are not subject to amortisation and are tested annually for
impairment. Assets that are subject to amortisation are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognized for
the amount by which the asset's carrying value exceeds its recoverable amount.
The recoverable amount is the higher of an asset's fair value less costs of
disposal and value in use. For the purposes of assessing impairment, assets
are grouped at the lowest levels for which there are largely independent cash
inflows, (CGUs). Prior impairments of non-financial assets are reviewed for
possible reversal at each reporting date.
2.8 FINANCIAL INSTRUMENTS
2.8.1 CLASSIFICATION AND MEASUREMENT
The Group classifies its financial assets depending on the purpose for which
the asset was acquired. Management determines the classification of its
financial assets at initial recognition.
During the financial year the Group held investments in portfolio companies
classified as equity investments. They are included in non-current assets
and are measured at fair value through profit and loss in accordance with IFRS
9.
The Group has convertible loan note receivables. These financial assets are
classified and measured at fair value through profit and loss in accordance
with IFRS 9.
The Group also has receivables carried at amortised cost. They are included in
current assets. The Group's service income receivables comprise 'trade and
other receivables' in the balance sheet, also held at amortised cost. The
Group also has cash and cash equivalents.
All short-term liabilities are measured at amortised cost, the Group does not
hold any long-term financial liabilities.
2.8.2 DERECOGNITION
Loans and receivables are recognised and carried at amortised cost. Financial
assets are derecognised when the rights to receive cash flows from the loans
or receivables have been collected, expired or transferred and the Group has
subsequently transferred substantially all risks and rewards of ownership.
2.8.3 FAIR VALUE
Financial instruments are measured at fair value including investments in
portfolio companies, cash and cash equivalents, trade and other receivables,
trade and other payables, and convertible loan note receivables. This
measurement policy does not apply to subsequent measurement at amortised
cost of short term financial liabilities and trade receivables.
The Group measures portfolio companies using valuation techniques appropriate
in the circumstances and for which sufficient data are available to measure
fair value, maximising the use of relevant observable inputs and minimising
the use of unobservable inputs. Our fair value valuation policy is as follows:
The fair value of new portfolio companies is estimated at the cost of the
acquired IP or equity plus associated expenses to facilitate the acquisition.
Existing portfolio companies are valued as follows:
· If a market transaction such as third-party funding has occurred
during the past 12 months, we will value our ownership in the portfolio
Company at this observed valuation, taking account of any observed material
changes during the period, including quoted prices in active markets (Level 1
input).
· In the absence of a recent market transaction, fair value will be
estimated by alternative methods and where appropriate by an external,
qualified valuation expert. The valuation techniques fall under Level 2 -
Observable techniques other quoted prices and Level 3 - other techniques as
defined by IFRS 13.
Due to their short-term nature, the carrying value of cash and cash
equivalents, trade and other receivables, and trade and other payables
approximate their fair value.
2.9 OFFSETTING FINANCIAL INSTRUMENTS
Financial assets and liabilities are offset and the net amount reported in the
balance sheet when there is a legally enforceable right to offset the
recognised amounts and there is the intention to settle on a net basis or
realise the asset and settle the liability simultaneously.
2.10 IMPAIRMENT OF FINANCIAL ASSETS
Impairment provisions for trade receivables are recognized based on the
simplified approach within IFRS 9 using the lifetime expected credit losses.
During this process the probability of the non-payment of the trade
receivables is assessed, including forward-looking information on customers
standing and macroeconomic information including sector specific circumstances
This probability is then multiplied by the amount of the expected loss arising
from default to determine the lifetime expected credit loss for the trade
receivables. For trade receivables, which are reported net, such provisions
are recorded in a separate provision account with the loss being recognized
within operating expenses in the consolidated statement of comprehensive
income. On confirmation that the trade receivable will not be collectable, the
gross carrying value of the asset is written off against the associated
provision.
Financial assets held at amortised cost comprise trade and other receivables,
and cash and cash equivalents in the consolidated statements of financial
position.
2.11 CASH AND CASH EQUIVALENTS
In the consolidated statement of cash flows, cash and cash equivalents
includes cash in hand, deposits held at call with banks and other financial
institutions, and other short term highly liquid investments with maturities
of three months or less from inception. These amounts are subject to
insignificant risk of changes in value and are held to meet short-term cash
needs.
2.12 SHARE CAPITAL
Ordinary Shares
Ordinary Shares are classified as equity.
Share premium
The share premium account has been established to represent the excess of
proceeds over the nominal value for all share issues, including the excess of
the exercise share price over the nominal value of the shares on the exercise
of share options as and when they occur. Incremental costs directly
attributable to the issue of new ordinary shares and new shares options are
shown in equity as a deduction, net of tax, from the proceeds.
2.13 TRADE PAYABLES
Trade payables are obligations to pay for goods and services that have been
acquired in the ordinary course of business from suppliers. Accounts payable
are classified as current liabilities if payment is due within one year or
less (or in the normal operating cycle of business if longer). If not, they
are presented as non-current liabilities.
Trade payables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest rate method.
2.14 SHARE BASED PAYMENTS
The Group operates a number of equity-settled, share-based compensation plans,
under which the entity receives services from employees as consideration for
equity instruments (options) of the Group. The fair value of the employee
services received in exchange for the grant of options is recognised as an
expense. The total amount to be expensed is determined by reference to the
fair value of the options granted:
• Including any market performance conditions;
• excluding the impact of any service and non-market performance
vesting conditions (for example, profitability, sales growth targets and
remaining an employee of the entity over a specified time period);
• excluding the impact of any non-vesting conditions (for example
the requirement of the employees to save).
Assumptions about the number of options that are expected to vest include
consideration of non-market vesting conditions. The total expense is
recognised over the vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied. At the end of each
reporting period, the entity revises its estimates of the number of options
that are expected to vest based on the non-market vesting conditions. It
recognises the impact of the revision to the original estimates, if any, in
the income statement, with a corresponding adjustment to equity.
When the options are exercised, the Group issues new shares. The proceeds
received net of any directly attributable transactions costs are credited to
share capital (nominal value) and share premium when the options are
exercised.
2.15 CURRENT AND DEFERRED TAX
The tax expense for the year comprises current and deferred tax. Tax is
recognised in the consolidated income statement, except to the extent that it
relates to items recognised in other comprehensive income or directly in
equity. In this case, the tax is also recognised in other comprehensive income
or directly in equity, respectively.
The current income tax charge is calculated on the basis of tax laws enacted
or substantively enacted at the balance sheet date in the countries where the
Company and its subsidiaries operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis of amounts expected to
be paid to the tax authorities.
Deferred income tax is recognised on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the
consolidated financial statements. However, deferred tax liabilities are not
recognised if they arise from the initial recognition of goodwill; deferred
income tax is not accounted for if it arises from initial recognition of an
asset or liability in a transaction other than a business combination that at
the time of the transaction affects neither accounting nor taxable profit or
loss.
Deferred income tax is determined using tax rates (and laws) that have been
enacted or substantively enacted by the balance sheet date and are expected to
apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is
probable that future taxable profit will be available against which the
temporary differences can be utilised.
Deferred income tax liabilities are provided on taxable temporary differences
arising from investments in subsidiaries except for deferred income tax
liability where the timing of the reversal of the temporary difference is
controlled by the Group and it is probable that the temporary difference will
not reverse in the foreseeable future.
Deferred income tax assets are recognised on deductible temporary differences
arising from investments in subsidiaries only to the extent that it is
probable the temporary difference will reverse in full in the future and there
is sufficient taxable profit available against which the temporary difference
can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and when the deferred income tax assets and liabilities relate to income taxes
levied by the same taxation authority on either the same taxable entity or
different taxable entities where there is an intention to settle balances on a
net basis.
2.16 REVENUE RECOGNITION
Revenue is measured at the fair value of the consideration received or
receivable, and represents amounts receivable for the services supplied,
stated net of discounts, and value added taxes. The Group recognises revenue
when the contract is identified, performance obligation is determined,
transaction price (as defined for each service below) is determined and
allocated to performance obligation in accordance with IFRS 15.
Provision of services
The Group provided following lines of services during the period:
Through 4 June 2024 (date of the asset sale agreement with GenIP Ltd):
• Invention Evaluator services: provision of reports assessing
potential of any new technology. Revenue is recognised upon delivery of a
complete report, when the report is made available to each customer. Upon
access to the report delivered via online portal, customers consume the
benefits of the contractual obligation, and the performance obligation is met.
Directors consider transaction price to be clearly determined upon payment of
fixed fee for each report prior to report's delivery. Directors considered
uncertainty of cash flows from sales to be limited, considering prepayment is
made for each report prior to report's delivery.
• Tech transfer recruitment services (Vortechs Group): recruitment
services specialising in technology transfer executives. Revenue is recognised
upon placement of an executive, when hire is made by Tekcapital's customer and
the performance obligation is met. Directors consider transaction price to be
clearly determined when both parties agree to placement fee for each
successful hire. Directors considered uncertainty of cash flows from sales to
be limited, considering payments are made by universities with excellent track
record of payments and clear definition of performance obligation upon which
such payment is made. The timing of satisfaction of the performance
obligation (hiring of a candidate) corresponds to timing of payment that's due
upon a candidate time of hire.
Through 31 December 2024:
• Management services: accounting, tax, legal and other services
provided to portfolio companies. Revenue is recognized upon delivery of
services to each portfolio Company and performance obligation is met as
defined in the management service contract. Directors considering transaction
price to be clearly determined by amounts specified in the management service
agreements. Directors considered uncertainty of cash flows from sales to be
limited, considering payments are made by companies with excellent track
record of payments and clear definition of performance obligation upon which
such payment is made.
For breakdown of revenue from services recognised over time and at point of
time, please refer to Note 6 to Financial Statements.
2.17 OTHER INCOME
The Group recognises research and development (R&D) relief under other
income.
2.18 INTEREST INCOME
Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable (10%).
3. FINANCIAL RISK MANAGEMENT
3.1 FINANCIAL RISK FACTORS
(a) Portfolio risk/investment management
Investment into portfolio companies held by the Group requires long-term
commitment with no certainty of return.
The fair value of each portfolio Company represents the best estimate at a
point in time and may be impaired if the business does not perform as well as
expected, directly impacting the Group's value and profitability. This risk is
mitigated as the size of the portfolio increases. The Group performed
sensitivity analysis with regards to assumptions used in determination of fair
value of the portfolio in Note 12.
The Group also regularly monitors portfolio companies' liquidity required for
returns to occur.
(b) Credit risk management
Credit risk is managed on a Group basis. In order to minimise this risk, the
Group endeavours to only deal with companies that are demonstrable
creditworthy, and the Directors continuously monitor the exposure. The
Directors determine the default as lack of payment after more than 180 days
and or counter party's bankruptcy filings. The Group's maximum exposure to
credit risk for the components of financial position at 31 December 2024 and
31 December 2023 is the carrying amount of its current trade and other
receivables as illustrated in Note 15.
While IFRS 9 does not require expected credit loss allowance on assets held at
fair value through profit and loss, the Group monitors credit risk related to
performance of portfolio companies, including considerations related to
recoverability of convertible loan notes held as carrying amount of notes
represent the maximum exposure to credit risk. Progress is monitored and
regular discussions are held with management of portfolio companies to assess
commercial progress and financial information provided.
IFRS9 requires the Company to assess expected credit losses on assets
classified as held at amortised cost, under a forward-looking model approach.
For the Group accounts this includes Receivables from related parties and
other immaterial receivables. For the Company accounts this includes
Receivables from Group Companies.
The Group also monitors credit risk from balances with banks and institutions.
(c) Liquidity risk management
Cash flow forecasting is performed on a Group basis. The Directors monitor
rolling forecasts of the Group's liquidity requirements to ensure it has
sufficient cash to meet operational needs. Post period end, the Group
announced placing to raise GBP 500,000 in February 2025. At the reporting date
the Group held bank balances of approximately US$400,000. All amounts shown in
the consolidated statement of financial position under current assets and
current liabilities mature for payment within one year, with Trade and Other
Receivables exceeding Trade and Other Payables by US$ 95,642. Additionally,
the Group's investment portfolio includes significant amount of liquid
investments available as an alternative funding strategy.
(d) Financial risk management
The Company's Directors review the financial risk of the Group. Due to the
early stage of its operations the Group has not entered into any form of
financial instruments to assist in the management of risk during the period
under review.
(e) Market risk management
Due to low value and number of financial transactions that involve foreign
currency and the fact that the Group has no borrowings to manage, the
Directors have not entered into any arrangements, adopted or approved the use
of derivative financial instruments to assist in the management of the
exposure of these risks. It is their view that any exchange risks on such
transactions are negligible.
The Group also regularly monitors risk related to fair value of financial
instruments held such as convertible loan notes held.
(f) Foreign exchange risk management
Foreign exchange risk arises when individual Group entities enter into
transactions denominated in a currency other than their functional currency.
The Group's policy is, where possible, to allow Group entities to settle
liabilities denominated in their functional currency, with the cash generated
from their own operations in that currency. Where Group entities have
liabilities denominated in a currency other than their functional currency
(and have insufficient reserves of that currency to settle them), cash already
denominated in that currency will, where possible, be transferred from
elsewhere within the Group.
A sensitivity analysis has been performed to assess the exposure of the Group
to foreign exchange movements. The Group only has exposure to movements of the
US dollar against UK Sterling. As at 31 December 2024, the Group's UK Sterling
net exposure relating to cash, receivables and payables denominated in UK
Sterling totals US$528,063. A 10% strengthening or weakening of the US dollar
against the UK Sterling would have result in the increase/decrease of Group's
net profit by US$2,082,517.
(g) Interest rate risk management
The Group has no borrowings as of 31 December 2024.
3.2 CAPITAL MANAGEMENT
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern in order to provide returns for
shareholders, benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.
In order to adjust or maintain the capital structure, the Group may adjust the
level of dividends paid to its shareholders, return capital to shareholders,
issue new shares or sell assets to reduce borrowings. The Group has no
external borrowings. This policy is periodically reviewed by the Directors,
and the Group's strategy remains unchanged for the foreseeable future.
The capital structure of the Group consists of cash and bank balances and
equity consisting of issued share capital, reserves and retained losses of the
Group. The Directors regularly review the capital structure of the Company and
consider the cost of capital and the associated risks with each class of
capital.
The Company's historic cost of capital has been the cost of securing equity
financings, which have averaged around 10%. the Company's long-term financial
goal is to optimise its returns on invested capital (ROIC) in excess of our
weighted average cost of capital (WACC) and as such create value for our
shareholders. The method the Company seeks to employ for achieving this is to
utilise its structural intellectual capital developed through its Discovery
Search Network, its Invention Evaluator service and its Vortechs Group Service
to mitigate selection bias and improve returns on invested capital.
Ultimately, management will seek to monetise these returns with exits from its
investments in portfolio companies.
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that
are believed to be reasonable under the circumstances. The Directors made the
following judgements:
- determination as to the classification of the Group as an investment
entity as discussed in Note 2.4
- determination of operating segments as disclosed in Note 5
- determination of reliance of the Group's portfolio companies on
funding to achieve their fair values discussed in Note 12.
The Directors also make estimates and assumptions concerning the future. The
resulting accounting estimates will by definition, seldom equal the related
actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying value of the assets and
liabilities within the next financial year are detailed below.
Key estimate/ judgment area Key assumption Potential impact within the next financial year Potential impact in the longer term Note reference for sensitivity analysis
Valuation of unquoted equity investments In applying valuation techniques to determine the fair value of unquoted Yes Yes Note 12
equity investments the Group makes estimates and assumptions regarding the
future potential of the investments. The policy of the Group is to value new
portfolio companies at cost of the acquired IP or equity plus associated
expenses to facilitate the acquisition. Existing portfolio companies are
valued using either a market transaction such as third-party funding or, in
the absence of a recent market transaction, by alternative methods and where
appropriate by an external, qualified valuation expert.
The fair value of Guident Limited reflects input in the form of value of
Guident Ltd's shares in its US subsidiary (Guident Corp) as determined by
recent market transactions of these shares.
Valuation This input was corroborated by Guident's enterprise valuation by estimating Yes Yes Note 12
the net present value of future cashflows associated with its business. Key
of assumptions used in estimating future cash flows are projected profits
including remote monitor sales and a discount factor applied for the net
unquoted equity investments present value of future cashflows from the platform.
Valuation of convertible loan notes In applying valuation techniques to determine the fair value of convertible Yes Yes Note 12
loan notes the Group and Company make estimates and assumptions regarding the
future potential of the investments, including discount factor applied for the
net present value of future cashflows from the loan.
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. Following the sale of Vortechs and Invention Evaluator
assets in 2024, the Group expects this segment to include primarily management
services provided to its portfolio companies only.
· licensing and investment activities, including acquiring licences for
technologies, portfolio Company investment, development and commercialisation.
The activities share the goal of increasing the fair value of investments made
into portfolio companies by the Group.
Year ended 31 December 2024 Professional Licensing and TOTAL
Consolidated income statement Services Investment
US $ US $ US $
Revenue from Services 425,986 - 425,986
Changes in fair value on financial assets at fair value though profit or loss - 20,016,771 20,016,771
Cost of Sales (147,203) - (147,203)
Interest Income - 743,205 743,205
Administrative Expenses (446,854) (1,390,889) (1,837,743)
Depreciation and Amortization (10,508) (31,522) (42,030)
Group operating (loss)/income (178,579) 19,337,565 19,158,986
(Loss)/income on ordinary activities before income tax (178,579) 19,337,565 19,158,986
(Loss)/income tax expense (740) (2,221) (2,961)
(Loss)/income after tax (179,319) 19,335,345 19,156,025
Professional Licensing and TOTAL
Period ended 31 December 2023
Consolidated income statement Services Investment
US $ US $ US $
Revenue from Services 735,265 - 735,265
Changes in fair value on financial assets at fair value though profit or loss - (14,229,009) (14,229,009)
Cost of Sales (314,083) - (314,083)
Interest Income - 455,096 455,096
Administrative Expenses (592,315) (1,675,081) (2,267,396)
Depreciation and Amortization (21,577) (64,732) (86,309)
Other Income 20,384 - 20,384
Group operating loss (172,326) (15,513,726) (15,686,051)
Loss on ordinary activities before income tax (172,326) (15,513,726) (15,686,051)
Income tax expense (566) (1,700) (2,266)
Loss after tax (172,892) (15,515,425) (15,688,317)
Segment assets and liabilities
2024 Professional Licensing and TOTAL
Consolidated statement of Services Investment
financial position US $ US $ US $
Assets 1,437,807 69,201,744 70,639,551
Liabilities (571,568) - (571,568)
Net Assets 866,239 69,201,744 70,067,983
2023 Professional Licensing and TOTAL
Consolidated statement of Services Investment
financial position US $ US $ US $
Assets 1,967,430 46,653,995 48,621,425
Liabilities (734,545) - (734,545)
Net Assets 1,232,885 46,653,995 47,886,880
Year ended 31 December 2024 Period ended 31 December 2023
US $ US $
United Kingdom
Changes in fair value on financial assets at fair value though profit or loss 21,086,120 (13,753,529)
Revenue from Services 326,143 455,777
United States
Revenue from Services 99,842 279,488
Portfolio return and revenue 21,185,962 (13,018,264)
2024 2023
US $ US $
United Kingdom
Assets 69,201,744 46,653,995
Liabilities (125,213) (145,236)
United States
Assets 1,437,807 1,967,430
Liabilities (446,355) (589,309)
Total Net Assets 70,067,983 47,886,880
6. REVENUE FROM SERVICES
The below table discloses disaggregated revenue from services by their
nature/categories as well as timing of the revenue. Please refer to Note 12
for disaggregation of Group's Unrealised profit on the revaluation of
investments.
Group Transferred at a point in time Transferred over time Total 2024 Transferred at a point in time Transferred over time Total 2023
US $ US $
Major service lines:
- Sales of Invention Evaluator reports - (59,509) (178,488) - 178,488
(59,509)
- Tech transfer recruitment services - - 101,000
(40,333) (40,333) (101,000)
- Management services - (326,144) (326,144) - (455,777) (455,777)
Total Revenue from Services (326,144) (425,986) (279,488) (455,777) (735,265)
(99,842)
All of the Group's major service lines are sold directly to consumers and not
through intermediaries. All revenue recognised in the reporting period
represent performance obligations satisified in the current period. For
services transferred over time, output method was used as measure of
fulfillment of the performance obligation. Considering the nature of the
accounting, tax, legal and other services being provided under the agreements,
this method most faithfully depicts the transfer of the services to the
customer. Payment is typically due on a Net 30 days basis.
6.1 OTHER INCOME
Total 2024 Total 2023
US $ US $
Other - 2,781
Dividends earned - 17,603
- 20,384
7. OPERATING EXPENSES AND COST OF GOODS SOLD
Group 2024 2023
US $ US $
Cost of goods related to services 147,203 314,083
Depreciation of property plant and equipment 2,523
7,120
Research and development expenses - 155,094
Amortisation of intangible assets 34,911 83,786
Marketing and PR 47,157 96,575
IT & Software 82,817 26,925
Audit and accounting 157,765 182,145
Share based payments 84,584 79,658
Nominated Advisor and other exchange listing expenses 126,376 139,261
Director emoluments 691,993 409,681
Employee salaries 717,807 405,898
Other administration expenses 257,893 233,477
Foreign exchange movements (328,651) 538,682
Total expenses 2,026,975 2,667,788
7.2 AUDITOR REMUNERATION
Group 2024 2023
US $ US $
Fees payable to the group's auditor and its associates for the audit of the 124,022 107,335
Group and Company financial statements
Audit of company's subsidiaries 32,306 37,316
156,328 144,651
8. EMPLOYEES
8.1 DIRECTOR'S EMOLUMENTS
Group 2024 2023
US $ US $
Directors emoluments 661,013* 386,677*
Directors portion of Share Based Payments 1,400 1,362
Total 662,413 388,039
*excludes Directors NI of US$30,980 (2023:US$23,004).
The highest paid Director received a salary of US$261,976 (2023: $254,096) and
benefits of US$24,475 (2023: US$27,846). The highest paid Director received a
bonus of US$ 264,727 (2023: US$ Nil). The highest paid Director did not
exercise any share options. The share-based payments associated with the
highest paid Director amounted to US$1,400 (2023: US$1,362). The highest paid
Director also received 100,000 shares in GenIP Ltd following incorporation of
the entity in 2024.
Key management personnel (including Directors and Group Chief Financial
Officer) received salary of US$736,538 (2023: US$509,681), excluding Employers
National Insurance, Benefits in Kind and Share Base Compensation disclosed in
Directors Remuneration Report. Please also refer to Director's Report. No
Directors exercised their share options during the year. No post- employment
benefits or other long-term benefits are applicable for Directors.
8.2 EMPLOYEE BENEFIT EXPENSES
Group 2024 2023
US $ US $
Wages and salaries 656,149 405,898
Directors' remuneration 661,013 386,677
Social security costs 92,638 62,338
Share options granted to directors and employees 84,584 79,658
1,494,384 934,571
8.3 AVERAGE NUMBER OF PEOPLE EMPLOYED
To enhance flexibility and improve cost control, the Group utilises
consultants for scientific review, administrative and operations support,
software development and other knowledge-intensive services.
Group 2024 2023
Number of employees
Average number of people (including executive directors) employed
Operations 4 4
Management 2 2
Total average headcount 6 6
9. INCOME TAX EXPENSE
Group 2024 2023
US $ US $
Current tax
Current tax on profits for the year 2,961 2,265
Total current tax 2,961 2,265
Income tax expense 2,961 2,265
Group 2024 2023
US $ US $
Profit before tax 19,158,986 (15,686,051)
Tax calculated at domestic tax rates applicable to profits 4,789,746 (2,980,350)
Tax effects of:
- Expenses not deductible for tax purposes 28,596 19,604
- Income not taxable (5,004,193) 2,703,512
- Capital allowances in excess of depreciation 10,508 16,413
- Unrelieved tax losses and other deductions 178,304 243,086
Total income tax expense 2,961 2,266
The weighted average applicable tax rate was 25% (2024: 19%).
Unused tax losses of $2,301,814 (FY23: US $2,132,376) of which a deferred tax
asset of US$0 (FY23: US $0) has not been recognised due to uncertainty over
the recoverability of those losses through future profits.
The UK Government announced in the 2021 budget that from 1 April 2023, the
rate of corporation tax in the United Kingdom will increase from 19% to 25%.
Companies with profits of £50,000 or less will continue to be taxed at 19%,
which is a new small profits rate. As such, the higher 25% rate was applied to
the Group.
10. EARNINGS PER SHARE (EPS)
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of Ordinary Shares
outstanding during the period. The Group has only issued ordinary shares in
issue, as such no profit reconciliation was disclosed.
2024 2023
US $ US $
Earnings attributable to equity holders of the Group (US$) 19,156,025 (15,688,317)
Weighted average number of ordinary shares in issue:
Basic 196,539,893 172,214,589
Effect of employee share options 100,000 4,466,666
Diluted 196,639,893 176,681,255
Basic earnings per share 0.10 (0.09)
Diluted earnings per share 0.10 (0.09)
Diluted earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the sum of weighted average number of (1) Ordinary
Shares outstanding during the period and (2) any dilutive potential Ordinary
Shares outstanding at 31 December 2024.
Diluted EPS includes impact of vested Employees Share Option Awards whose
strike price was below Tekcapital's share price as quoted on the AIM market,
which would have dilutive impact of 100,000 shares.
The Group completed placements of total of 33,331,709 new ordinary shares
during the financial year.
11. INVESTMENTS OF THE GROUP
Entity name Country of incorporation Proportion of ordinary shares directly and indirectly held Nature of business Capital and reserves as at 31 Dec 2024 Net Profit/(Loss) for year ended 31 Dec 2024
The following are under ownership of Tekcapital Europe Limited US$ US$
Lucyd Limited England and Wales 100% Provider of high-tech eyewear (1,801,339) (906,192)
Innovative Eyewear Inc(1) United States of America 40% Provider of high-tech eyewear 9,095,141 (7,766,515)
MicroSalt plc England and Wales 87% Developer of low sodium salt and snack foods N/A* N/A*
MicroSalt Inc(2*) United States of America 92% Developer of low sodium salt and snack foods N/A* N/A*
Guident Limited England and Wales 100% Developer of autonomous vehicle software safety solutions 17,387,274 -
Guident CORP(3*) United States of America 90% Developer of autonomous vehicle software safety solutions N/A* N/A*
Smart Food Tek Limited England and Wales 100% Developer for baked food coating to reduce fat (116,114) -
Belluscura plc England and Wales 5% Portable oxygen concentrator producer N/A* N/A*
(1) owned by Lucyd Limited
(2) owned by MicroSalt Limited
(3) owned by Guident Limited
*not available as of date of this report
As at the year end, the Group has no interest in the ownership of any other
entities or exerts any significant influence over or provides funding which
constitutes an "unconsolidated structured entity".
All UK subsidiaries are exempt from the requirement to file audited accounts
by virtue of section 479A of the Companies Act 2006.
Tekcapital Europe Ltd (registered address 12 New Fetter Lane, London, United
Kingdom, EC4A 1JP) and Tekcapital LLC (registered address 11900 Biscayne Blvd,
Suite 630, Miami, Florida, 33181, United States) are consolidated by
Tekcapital plc because they continue to provide advisory services in IP search
and technology transfer. Tekcapital plc owns 100% of both entities.
All other entities are measured at fair value through profit and loss based in
IFRS 10 as referenced in Note 2.4. The Group provides management service
support to Lucyd Limited, MicroSalt plc and Guident Limited, as well as has
provided working capital assistance to MicroSalt Limited and Guident Limited
through convertible loan note financing (see also Note 12). The Group also
assists the entities with their fundraising activities.
Registered office of all four directly owned subsidiaries owned by Tekcapital
Europe Limited: Acre House, 11-15 William Road, London, England, NW1 3ER.
12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS
The Group's financial assets at fair value through profit and loss consist of
equity investments (2024:US $61,454,673, 2023:US $41,125,568) and convertible
loan notes (2024:US$7,747,071, 2023:US $5,528,427) totalling US $69,201,744
(2023:US $46,653,995).
12.1 EQUITY INVESTMENTS
The Group's investments in portfolio companies in the years ended 31 December
2024 and 31 December 2023 are listed below. The principal place of business
for portfolio companies listed below is the UK and in the U.S.
Group Proportion of ordinary shares as at 31 Dec 2024 1 Jan 2024 Additions Disposal Foreign Exchange movement Fair Value change 31 Dec 2024
US $ US $ US $ US $ US $ US $
Guident Limited 100% 18,083,264 - - - - 18,083,264
Lucyd Limited 100% 2,189,794 (892,519) 1,297,275
MicroSalt plc 69% 16,671,147 1,397,557 (306,412) 19,165,798 36,928,090
Belluscura Plc 5% 4,142,941 (1,047,122) (42,968) (2,082,489) 970,362
Smart Food Tek Limited 100% 38,422 - - - - 38,422
GEN IP plc 63% - 319,133 - (7,855) 3,825,982 4,137,260
Total Balance 41,125,568 1,716,690 (1,047,122) (357,235) 20,016,772 61,454,673
Other adjustments relate primarily to foreign exchange movements on
translation of investments into the Group's presentational currency.
Group Proportion of ordinary shares as at 31 Dec 2023 1 Jan 2023 Additions Disposal Foreign Exchange movement Fair Value change 31 Dec 2023
US $ US $ US $ US $ US $ US $
Guident Limited 100.00% 18,083,264 - - - - 18,083,264
Lucyd Limited 100.00% 8,175,403 - - - (5,985,609) 2,189,794
MicroSalt Limited 97.15% 16,508,694 500,000 - 882,546 (1,220,093) 16,671,147
Belluscura Plc 12.31% 12,072,826 - (272,514) (634,065) (7,023,307) 4,142,940
Smart Food Tek Limited 100.00% 38,422 - - - - 38,422
Total Balance 54,878,609 500,000 (272,514) 248,481 (14,229,009) 41,125,568
The valuation techniques used fall under, Level 1 - Observable inputs that
reflect quoted prices (unadjusted) for identical assets or liabilities in
active markets, Level 2 - inputs other than quoted prices included in Level
1 that are observable for the asset or liability either directly or
indirectly, and Level 3- Other techniques as defined by IFRS 13. These
techniques were deemed to be the best evidence of fair values considering the
early stage of portfolio companies.
Microsalt plc and GenIP plc both commenced trading on the AIM market of the
London Stock Exchange during the year ended 31 December 2024. Due to the Group
being a majority shareholder for both companies as of 31 December 2024, the
control premium of 15% was applied respectively and the Group's investment in
both companies was classified under Level 3, unchanged from 31 December 2024
classification. Fair value measurement hierarchy for financial assets as at 31
December 2024 with comparative amounts as of 31 December 2023:
Total Level 1 Level 2 Level 3
31 December 2024 US$ US$ US$ US$
Belluscura Plc 970,362 970,362 - -
Lucyd Limited 1,297,275 - 1,297,275 -
Guident Limited 18,083,264 - - 18,083,264
Microsalt plc 36,928,090 - - 36,928,090
Smart Food Tek Limited 38,422 - - 38,422
GEN IP plc 4,137,260 4,137,260
Total Balance 61,454,673 970,362 1,297,275 59,187,036
31 December 2023 Total Level 1 Level 2 Level 3
US$ US$ US$ US$
Belluscura Plc 4,142,940 4,142,940 - -
Lucyd Limited 2,189,794 - 2,189,794 -
Guident Limited 18,083,264 - - 18,083,264
Microsalt Limited 16,671,147 - - 16,671,147
Smart Food Tek Limited 38,422 - - 38,422
Total Balance 41,125,567 4,142,940 2,189,794 34,792,833
BELLUSCURA PLC (US $2.1M LOSS)
The fair value of the holding decreased by US$ 2,082,489m during the year due
to market movement in Company's shares listed at AIM market of London Stock
Exchange, and closing price of 0.0925p as of 31 December 2024. The Company
also disposed of 5,760,710 shares during the period for the total of US$
1,047,121, and recorded a foreign exchange adjustment of ($42,968). With
8,378,057 shares held by Tekcapital plc, a fair value of US$970,362 was
arrived at as of 31 December 2024.
LUCYD (US $.9M LOSS)
The fair value of the holding decreased by US$ 892,519 during the year due to
the movement in the Company's share price at NASDAQ market, and closing price
of US$5 as of 31 December 2024, compared to $8.4 as of 31 December 2023. With
259,455 shares held by the Group, a fair value of US$ 1,297,275 was arrived
at as of 31 December 2024. This investment is classified as Level 2 on the
basis of the fact that the direct shareholding is in Lucyd Ltd, whose primary
asset is the listed investment in Innovative Eyewear Inc.
GUIDENT LTD (NIL GAIN / NIL LOSS)
The fair value of Guident remain unchanged compared to previous period as the
Company continued to receive investment at US$1 per share as specified in
the 2021 Private Placement Memorandum offering.
In August 2021, Guident CORP entered into Private Placement Memorandum
outlining offering of securities at US$1 per unit, with each unit consisting
of one share of Class A Convertible Preferred Stock and a Warrant to acquire a
share of common stock (also at US$1 per unit). While Guident has not received
funding from the offering until after the reporting date, the management
considers the exit price (of securities offered in the private placement)
negotiated with the investment bank as "privately negotiated acquisition of
the equity instruments" as defined under IFRS 13. The Offering was facilitated
by Dawson James Securities Inc. Dawson James is a broker-dealer registered
with the SEC as a broker dealer and is a member of FINRA. FINRA is currently
the only such registered national securities association in the U.S.
This input was corroborated by Guident CORP's enterprise valuation by
estimating the net present value of future cashflows associated with its
business as of 31 December 2024.
Key assumptions used in management's discounted cash flow valuation are:
- Compound annual growth rates over a 5 year forecast period of 122%
- 24% discount rate used to discount forecasted free cash flows
The discounted cash-flow method did not provide an indication that the
valuation at year end was materially misstated.
MICROSALT (US$19.2M GAIN)
The fair value of the holding increased by US$19,165,798 during the year due
to:
- movement in the Company's share price at AIM market of London
Stock Exchange, and closing price of 76.50p as of 31 December 2024 compared to
opening price of 43p.
- fair value of the control premium given Tekcapital's majority
shareholding of US$4,816,707, calculated as 15% of Company's shareholding in
Microsalt.
The Company acquired 2,558,140 shares of Microsalt plc at its Initial Public
Offering in February 2024 for US$1,397,557 and recorded a foreign exchange
adjustment of ($306,412). With total of 33,305,749 shares held by Tekcapital
Europe Ltd, a fair value of US$36,928,090 was arrived at as of 31 December
2024.
GENIP PLC
The fair value of the holding increased by US$3.8m during the year due to:
- movement in the Company's share price at AIM market of London
Stock Exchange, and closing price of 0.26p as of 31 December 2024.
- fair value of the control premium given Tekcapital's majority
shareholding of US$539,643, calculated as 15% of Company's shareholding in
GenIP.
The Company acquired 211,764 shares of GenIP plc at its Initial Public
Offering for US$127,569.
With total of 11,050,769 shares held by Tekcapital Europe Ltd, a fair value of
US$3.6m was arrived at as of 31 December 2024. Combined with fair value of
control premium of $0.5m, total fair value of $4.1m was calculated as of 31
December 2024.
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 2024 are shown as below.
No sensitivities have been disclosed on immaterial, non-listed investments
as the fair value equates to cost.
Investment Valuation Significant Estimate Sensitivity of the input
Technique unobservable applied to fair value
input
Guident Income Approach Royalty Relief Method Discount to Future Cash Flows 19% 5% increase in the discount factor would decrease the Guident valuation by
US$6.8m, a 5% decrease in the discount factor would increase the value by
US$14.5m.
CAGR 122% A 50% increase in the compound annual growth rate of sales projections would
increase the Guident valuation by US$42.3m. A 50% decrease in the compound
annual growth rate of sales projections would decrease the Guident valuation
by US$18m.
Microsalt Share price per LSE including control premium Control premium 15% A 5% increase in the control premium applied to valuation of Microsalt plc
shares held by increase the Microsalt plc valuation by US$1.6m. A 5% decrease
in the control premium applied to valuation of Microsalt plc shares would
decrease the Microsalt valuation by US$1.6m.
GenIP Share price per LSE including control premium Control premium 15% A 5% increase in the control premium applied to valuation of GENIP plc shares
held by increase the Microsalt plc valuation by US$0.2m. A 5% decrease in the
control premium applied to valuation of GenIP plc shares would decrease the
GenIP valuation by US$0.2m.
12.2 CONVERTIBLE LOAN NOTES
During the year, the Group also held multiple convertible loans issued by its
portfolio companies, including:
• Convertible note issued by Guident Ltd for the total of
US$5,000,000, issued at 10% coupon rate including option to convert the debt
into shares at market price (no discount against future equity placements
offered). The note can be converted into Guident's equity upon occurrence of
certain conversion events including future share placements. The US$3,000,000
note originated in September 2023 or can be converted into Guident's equity
upon occurrence of certain conversion events. No conversions occurred during
the period. As of 31 December 2024, US$5,000,000 was outstanding.
• Convertible loan note instruments in favour of MicroSalt Inc were
constituted on 21 September 2020 (2020 CLN) and 1 June 2022 (2022 CLN). The
principal amounts of convertible loan notes under the 2020 CLN and the 2022
CLN was each limited to US$2,000,000. The convertible loan notes under the
2020 CLN and the 2022 CLN each carry interest at the rate of 10 per cent. per
annum. As of 31 December 2024, US$2,000,000 was outstanding on the convertible
loan notes.
• A convertible loan note instrument in favour of Tek Europe was
constituted by the Company on 1 March 2023. The principal amount of
convertible loan notes was limited to sUS$2,000,000. The convertible loan
notes carry interest at the rate of 10 per cent. per annum. A convertible loan
note instrument in favour of Tek Europe, as assignee of Tekcapital, was
constituted by the Company on 7 November 2023. The principal amount of
convertible loan notes was limited to US$2,000,000. The convertible loan notes
carry interest at the rate of 10 per cent. per annum. As of 31 December 2024,
US$747,072 was outstanding on the convertible loan notes.
The Group's investments in convertible notes in the years ended 31 December
2024 and 31 December 2023, as well as their fair value hierarchy, are listed
in tables below:
Group 31 Dec 2023 Additions Disposal FX reval Fair Value change 31 Dec 2024
US $ US $ US $ US $ US $ US $
Innovative Eyewear, Inc - - - - - 0
Guident Corp 3,000,000 2,000,000 - - - 5,000,000
Microsalt plc 2,528,427 552,964 (334,319) - - 2,747,072
Total Balance 5,528,427 2,552,964 (334,319) - - 7,747,072
Included in additions are non-cash movements, in relation to management
services income of US$326,144 and interest income of US$743,113.
Total Level 1 Level 2 Level 3
31 December 2024 US $ US $ US $ US $
Guident Corp 5,000,000 - - 5,000,000
Microsalt Inc 2,747.072 - - 2,747,072
Total Balance 7,747,072 - - 7,747,072
31 December 2023 Total Level 1 Level 2 Level 3
US $ US $ US $ US $
Guident Corp 3,000,000 - - 3,000,000
Microsalt Inc 2,528,427 - - 2,528,427
Total Balance 5,528,427 - - 5,528,427
The fair value of the convertible loans issued by Guident Corp and MicroSalt
has been calculated using a Discounted Cash Flow Analysis. The unobservable
input used in the fair value assessment is the discount rate of 10%.
Increasing or decreasing the discount rate by 2% used would not result in
material changes in the fair value of the assets for Guident and Microsalt.
12.3 INTEREST FROM FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS
The Group earned following interest income from its portfolio companies during
the period:
31/12/2024 31/12/2023
Innovative Eyewear Inc - 12,281
Microsalt Inc 303,900 139,421
Guident Corp 439,068 303,394
Gen IP plc 237 -
Total Balance 743,205 455,096
13. INTANGIBLE ASSETS
On June 4, 2024, Tekcapital LLC entered into an agreement with its newly
formed subsidiary, GenIP Ltd, to sell Invention Evaluator and Vortechs assets
at the Net Book Value of the intangible asset at the transaction date. As
such, disposal of gross cost and accumulated amortization of both assets has
been recorded by the Group.
Group Vortechs Website Invention Evaluator Total
US $ US $ US $ US $
Cost
As at 31 December 2022 500,000 28,121 338,770 866,891
As at 31 December 2023 500,000 28,121 397,774 925,895
Addition - - - -
Disposal (500,000) - (397,774) (897,774)
As at 31 December 2024 - 28,121 - 28,121
Accumulated amortisation and impairment
As at 31 December 2022 (324,813) (28,121) (271,016) (623,950)
As at 31 December 2023 (374,813) (28,121) (304,802) (707,736)
Amortisation (20,833) - (14,077) (34,910)
Disposal 395,646 - 318,879 714,525
As at 31 December 2024 - (28,121) - (28,121)
Net Book Value
As at 31 December 2024 - - - -
As at 31 December 2023 125,187 - 92,972 218,159
14. PROPERTY, PLANT AND EQUIPMENT
GROUP Leasehold Improvements Office equipment Computer Equipment Total
US $ US $ US $ US $
Opening cost 1 December 2023 17,541 30,980 30,530 79,051
Additions 6,087 738 6,825
Closing cost 31 December 2023 17,541 37,067 31,268 85,876
Additions
Closing cost 31 December 2024 17,541 37,066 31,268 85,876
Accumulated depreciation and impairment
Accumulated depreciation at 30 November 2022 (13,775) (25,795) (29,512) (69,082)
Depreciation charge (1,687) (836) (2,523)
Accumulated depreciation at 31 December 2023 (13,775) (27,482) (30,348) (71,605)
Depreciation charge (3,766) (2,556) (797) (7,119)
Accumulated depreciation at 31 December 2024 (17,541) (30,038) (31,145) (78,724)
Closing net book value 31 December 2024 - 7,027 124 7,151
Closing net book value 31 December 2023 3,766 9,585 920 14,271
15. TRADE AND OTHER RECEIVABLES
2024 2023
US $ US $
Trade receivables - 101,608
Trade receivables - net - 101,608
Vat recoverable 47,848 36,675
Prepayments and other debtors 25,121 25,817
Receivables from related parties 571,396 950,653
Total trade and other receivables 644,365 1,114,753
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 2024 and there was no increase/decrease in the expected credit
loss allowance (2023: $nil). Group's exposure to credit risk related to trade
receivables is detailed in Note 3 to the consolidated financial statements.
The Group had outstanding receivables from its portfolio companies as at 31
December 2024 in the amount of:
- (US$62,127) due to Lucyd Ltd (2023:US$ 74,170)
- US$66,429 due from Smart Food Tek Ltd (2023: US$63,418)
- US$ 444,651 due from Guident Ltd (2023: US$887,570)
- (US$11,585) due to Innovative Eyewear Inc (2023: US$6,039)
- US$3,912 due from MicroSalt plc (2023: US$629,000)
- US$11,887 due from Genip plc (2023: US$0).
16. CASH AND CASH EQUIVALENTS
GROUP 2024 2023
US $ US $
Cash at bank and in hand 786,290 620,248
Total cash and cash equivalents 786,290 620,248
17. CATEGORIES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
GROUP 2024 2023
US $ US $
Financial assets at fair value through profit and loss 69,201,744 46,653,995
Financial assets at amortised cost 571,396 1,052,261
Cash and equivalents at amortised cost 786,290 620,248
70,559,430 48,326,504
Financial liabilities
Trade and other payables at amortised cost 538,800 504,784
18. SHARE CAPITAL
Number Ordinary Total
Group and Company of shares Share US$ US $
Issued and fully paid up
As at 31 December 2022 150,692,328 839,723 839,723
Shares issued in further public offering 27,395,934 133,606 133,606
As at 31 December 2023 178,088,262 973,329 973,329
Shares issued in further public offering 33,331,709 168,742 168,742
As at 31 December 2024 211,419,971 1,142,071 1,142,071
The shares have full voting, dividend and capital distribution (including on
winding up) rights; they do not confer any rights of redemption. The following
shares were issued during the year:
• February 2024: 20,000,000 shares were issued in the placing of new
ordinary shares at £0.10p. Total proceeds of US$2,525,696 were netted against
cost of raising finance in the amount of US$181,643
• November 2024: 13,331,709 shares issued in the placing of new
ordinary shares at £0.075p. Total proceeds of US$1,269,842 were netted
against cost of raising finance in the amount of US$84,208.
The Company has authorised share capital of 211,419,871 with a nominal value
of £0.004. Of these shares, 211,419,871 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.
2024 2023
Group US $ US $
Trade creditors 105,530 250,218
Amounts due to related parties 307,556 109,344
Social security and other taxes 10,423 12,371
Accruals and other creditors 125,216 145,221
548,725 517,154
20. DEFERRED REVENUE
The Group's deferred revenue balance of US$217,391 as of 31 December 2023 was
adjusted for:
- transfer of US$50,045 related to reports purchases that were
prepaid in 2023 and 2024 but remained to be delivered as of 31 December 2024
- an adjustment for US$123,297 to remove the previously included
value of reports not prepaid or delivered, arriving at total of US$43,131 as
of 31 December 2024.
- Adjustment of US$21,205 related to credits on the platform but
not showing on deferred income schedule.
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 and do not expire. A tax rate of 25% has been used to
calculate the potential deferred tax.
2024 2023
Deferred tax US $ US $
Depreciation in excess of capital allowances (10,508) (16,413)
Short term timing difference
Tax losses (2,291,306) (2,115,963)
Unprovided deferred tax asset 2,301,814 2,132,376
- -
22. DIVIDENDS
No dividend has been recommended for the period ended 31 December 2024 (2023:
Nil) and no dividend was paid during the year (2023: Nil).
23. COMMITMENTS
Capital commitments
The Group entered into multiple convertible loan note agreements with its
portfolio companies. Please see note 15 for details regarding outstanding
commitments.
Lease commitments
The Group did not have any material contracts withing the scope of IFRS 16.
Consequently, the Group did not recognise any right-of-use assets and lease
liabilities during the period.
24. SHARE BASED PAYMENTS
The Group operates an approved Enterprise management scheme and an unapproved
share option scheme.
The fair value of the equity settled options granted is expensed over the
vesting period and is arrived at using the Black-Scholes model. The
assumptions inherent in the use of this model are as follows:
The weighted average fair value of options outstanding was £0.06p. Volatility
was calculated using Group's historical share price performance since 2017.
The share-based payment expense for the year was $84,585 (2023: $79,658).
Details of the number of share options and the weighted average exercise price
outstanding during the year as follows:
Av. Exercise Options Av. Exercise Options
price per (Number) price per (Number)
Group and Company share £ share £
As at 1 January 2024 0.2746 8,865,000 0.2746 8,865,000
Granted 0.111 2,400,000 - -
Exercised - - - -
Forfeited/expired 0.0783 (1,480,000) - -
As at 31 December 2024 0.26 9,785,000 0.2746 8,865,000
Exercisable as at period end 6,696,667 5,900,000
*The weighted average exercise price for the options exercisable as at 31
December 2024 and 31 December 2023 was £0.17p and £0.11p respectively.
The weighted average remaining contractual life is 2.0 years (2023: 3.0
years). The weighted average fair value of options granted during the year was
£0.03p (2023: £0.06p). The range of exercise prices for options outstanding
at the end of the year was £0.052p - £0.325p (2022: £0.052p - £0.325p).
25. RELATED PARTY TRANSACTIONS
Details of Directors' remuneration and grant of options are given in the
Directors' report. Please also refer to Note 8.1 for payments related to key
management personnel.
500,000 options were held by Harrison Gross, family member of Dr. Clifford
Gross (2023: 525,000), which expired in August 2024.
Please refer to tables below for detail of relationships and transactions
between The Group and its subsidiaries.
Convertible note receivable
2024 2023
Group US $ US $
Guident Corp 5,000,000 3,000,000
MicroSalt Inc 2,747,072 2,528,427
7,747,072 5,528,427
Balances with related parties
2024 2023
Group US $ US $
Guident Corp 444,651 209,184
Smart Food TEK 66,429 66,681
Lucyd Ltd (62,127) (74,170)
Innovative Eyewear Inc (11,585) 6,039
MicroSalt plc (188,862) 629,000
GenIP plc 11,887 -
Other 3,447 3,573
263,840 840,307
Management fees
2024 2023
Group US $ US $
Guident Corp 139,842 176,301
MicroSalt Inc - 139,788
GenIP plc - -
Innovative Eyewear Inc 147,475 139,687
326,144 455,776
Interest Income
2024 2023
Group US $ US $
Guident Corp 439,068 303,394
MicroSalt Inc 303,900 139,421
GenIP plc 237 12,281
743,205 455,096
Asset Purchase Agreement:
On 5 September 2024, the Company entered into an Asset Purchase Agreement with
Tekcapital plc and Tekcapital LLC. In accordance with the terms of the
Agreement, effective 4 June 2024, the Company acquired certain assets and
liabilities related to Invention Evaluator and Vortechs business. The
following assets and liabilities were transferred to the Company as part of
capital contribution of US$191,564 by Tekcapital plc, for the consideration of
US$1.
Related party transactions were made on terms equivalent to those that prevail
in arm's length transactions and are made only if such terms can be
substantiated.
26. EVENTS AFTER THE REPORTING PERIOD
Post period end, Group announced placings to raise GBP500,000 before expenses
in February 2025 through issuance of 5,128,205 new ordinary shares in the
Company.
After the balance sheet date, Tekcapital PLC concluded negotiations ongoing
since 2024 with GenIP plc for reimbursement of US $100,000 of the US $119,665
IT development costs incurred in 2024. This agreement constitutes an adjusting
post balance sheet event, as the costs were incurred before the balance sheet
date and the subsequent reimbursement clarifies the financial position. The
reimbursement will be recognised as Other Expense in the accounts.
1
https://www.uhy-uk.com/insights/aim-shrinks-61-companies-202425-companies-left-aim-lowest-level-2001
(https://www.uhy-uk.com/insights/aim-shrinks-61-companies-202425-companies-left-aim-lowest-level-2001)
2
https://www.nhtsa.gov/press-releases/nhtsa-estimates-traffic-fatalities-declined-44-first-nine-months-2024
(https://www.nhtsa.gov/press-releases/nhtsa-estimates-traffic-fatalities-declined-44-first-nine-months-2024)
3
https://www.who.int/news-room/fact-sheets/detail/chronic-obstructive-pulmonary-disease-(copd)
(https://www.who.int/news-room/fact-sheets/detail/chronic-obstructive-pulmonary-disease-(copd))
4
https://www.investing.com/news/company-news/microsalt-secures-spot-on-innovative-companies-list-93CH-3935929
(https://www.investing.com/news/company-news/microsalt-secures-spot-on-innovative-companies-list-93CH-3935929)
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