23 February 2024

Vela Technologies plc

("Vela" or "the Company")

Quarterly Investment Update

The Board of Vela (AIM:VELA), an AIM-quoted investing company focused on early-stage and pre-IPO disruptive technology investments, is pleased to report an update for the quarter ended 31 December 2023.

Key numbers as at 31 December 2023*

· The value of Vela's total assets (including cash) decreased during the quarter by £639,000 (9%) to £6,180,000 (quarter to 30 September 2023 - increase of £942,000 to £6,819,000 (16%)).

· Vela's portfolio comprised a total of 15 active investments (30 September 2023 - 15). Two of these investments were unquoted, thirteen were quoted.

· The investment in St George's Street Capital Limited, which was sold during the quarter under review to Conduit Pharmaceuticals Inc. ("Conduit") in exchange for 1,015,760 Conduit shares, was previously held in the balance sheet as a financial asset in prior quarters and is now held as an asset held for resale in line with other investments already held.

· The fair value of the investment portfolio was £6,174,000 (30 September 2023 - £6,789,000).

· The change in the value of the investment portfolio reflects the disposal of investments valued at c.£40,000 at 30 September 2023 (generating a realised loss of £3,000) and a net unrealised decrease in the fair value of the investment portfolio of £575,000 (quarter to 30 September 2023 - an unrealised gain of £1,043,000).

· Vela's cash balance stood at £6,000 as at 31 December 2023 (30 September 2023 - £30,000). Vela's cash balance as at today's date is c. £60,000.

\* The figures contained within this quarterly investment update are taken from unaudited management information.

Investments traded on a recognised stock market are valued using the accounting policies outlined in the notes to the annual financial statements. Unlisted investments and other financial assets are stated at the values attributed to them in the audited balance sheet as at 31 March 2023, unless there has been a transaction since that date which suggests a materially different valuation.

Key developments in the quarter

· The 2023 Annual General Meeting was held on 11 December 2023 at the Company's registered office. The financial statements for the year ended 31 March 2023 were approved and all other resolutions passed.

· 50,000 shares in EnSilica plc ("EnSilica") were sold, generating gross proceeds of £33,000.

· 300,000 shares in Kanabo Group plc ("Kanabo") were sold, generating gross proceeds of £4,000.

· On 30 November 2023 Vela exercised its put option to sell its economic interest in AZD1656 to Conduit in exchange for 1,015,760 Conduit shares.

· The Company announced its interim results for the half year ended 30 September 2023 on 22 December 2023.

Events since the end of the quarter

· The Company has sold 85,902 shares in Cornerstone FS plc ("Cornerstone"), generating net proceeds of £27,000.

· The Company has sold 45,000 shares in EnSilica generating net proceeds of £22,000.

· The Company sold its remaining 357,692 shares held in Kanabo generating net proceeds of £9,000.

Investment portfolio

At 31 December 2023 the Company's portfolio of investments was valued at £6,174,000 and comprised equity interests in the following 15 companies:

· Aeristech Limited

· Community Social Investment Limited

· Conduit Pharmaceuticals Inc.

· Cornerstone FS PLC

· Ethernity Networks Ltd

· EnSilica plc

· Igraine PLC

· Kanabo Group Plc

· MTI Wireless Edge Ltd.

· Northcoders Group plc

· R8 Capital Investments PLC (formerly Mode Global Holdings plc)

· Rural Broadband Solutions PLC

· Skillcast Group plc

· Tribe Technology Group PLC

· TruSpine Technologies plc

Key developments in investee companies in the quarter

· Cornerstone reported strong trading momentum and adjusted EBITDA ahead of board expectations.

· Tribe Technology Group PLC entered into a £3 million secured term loan facility with Beach Point Capital.

· TruSpine Technologies Plc reported that the company's intellectual property had been successfully registered, on the back of which it hoped to secure a 'substantial fundraise'.

· Kanabo announced it had entered a partnership with British Cannabis to supply CBD to patients via a prescription service.

· MTI Wireless Edge Ltd. reported a contract win with orders worth approximately US$1 million, to be supplied over the following 14 months; and third quarter results showing improvements in all key performance indicators, notwithstanding events in Israel.

· The shares of R8 Capital Investments PLC (formerly Mode Global Holdings plc) were suspended from trading on the announcement of a proposed reverse takeover of Redwood Financial Partners Limited. The parties have set a target date for completion of 1 July 2024.

· EnSilica published its results for the year ended 31 May 2023. These showed improved numbers compared to the previous year, a trend repeated in its trading update for the subsequent half year. EnSilica also announced a placing of £1.56 million which was prompted by the need to finance ever-increasing new business opportunities.

Other activities

· Since the publication of the last quarterly update in December 2023, the Board of Vela has spoken or met with representatives of the following investee companies:

o Community Social Investment Limited

o Conduit Pharmaceuticals Inc.

o TruSpine Technologies plc

· In May 2023 Vela's Board was approached by a third party with a proposal to inject additional equity capital of up to £15 million, which were on terms acceptable to the Board, and to amend the Company's investing policy so as to concentrate on the life sciences sector. Such a transaction would have been transformative for Vela. The Board accordingly expended considerable time and effort in pursuing this proposal; incurring costs in excess of £50,000 with its professional advisers. Unfortunately, despite numerous discussions and meetings spread over many months, the third party was unable to secure the minimum funds necessary to complete the proposed investment. Discussions were terminated in early January 2024. The intention of the Board is to settle £50,000 of costs incurred in relation to the aborted transaction through the issue of new ordinary shares in the Company in due course. The Company continues to appraise investment proposals in accordance with its current investing policy.

Executive Director, James Normand, commented:

"Much of the £900,000+ leap forward in the value of Vela's investment portfolio in the September quarter has been reversed in the December quarter. Vela's investment in EnSilica, a highly rated business, perversely fell in value by a third (though it has since recovered a good part of that drop), while Conduit's value is similarly a fraction of the price at which it listed in September. Vela's performance and position remains impeded by the continued lack of confidence in the public markets generally, particularly in the small cap markets in which Vela is largely invested. Although Vela's investments are for the most part in listed stocks, there is little activity in these stocks and so their market values do not reflect our opinion of their true worth."

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About Vela Technologies

Vela Technologies plc (AIM: VELA) is an investing company focused on early stage and pre-IPO long term disruptive technology investments.?Vela's investee companies have either developed ways of utilising technology or are developing technology with a view to disrupting the businesses or sector in which they operate. Vela Technologies will also invest in already-listed companies where valuations offer additional opportunities.