
The information contained within this announcement is deemed by the Company (Companies House registration number 08873361) to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.
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).
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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:
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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.
· 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 ArmorTM 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 CenterTM, 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:
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About Tekcapital plc
Tekcapital creates value from investing in new, university-developed discoveries that can enhance people's lives and provides a range of technology transfer services to help organisations evaluate and commercialise new technologies. Tekcapital is quoted on the AIM market of the London Stock Exchange (AIM: symbol TEK) and is headquartered in the UK. For more information, please visit www.tekcapital.com
General Risk Factors and Forward-Looking Statements
The information contained in this document has been prepared and distributed by the Company and is subject to material updating, completion, revision, verification and further amendment. This Report is directed only at Relevant Persons and must not be acted on or relied upon by persons who are not Relevant Persons. Any other person who receives this Report should not rely or act upon it. By accepting this Report, the recipient is deemed to represent and warrant that: (i) they are a person who falls within the above descrip-tion of persons entitled to receive the Report; (ii) they have read, agree and will comply with the contents of this notice. The securities mentioned herein have not been and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or under any U.S. State securities laws, and may not be offered or sold in the United States of America or its territories or possessions (the "United States") unless they are registered under the Securities Act or pursuant to an exemption from or in a transaction not subject to the registration requirements of the Securities Act. This Report is not being made available to persons in Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa or any other jurisdiction in which it may be unlawful to do so and it should not be delivered or distributed, directly or indirectly, into or within any such jurisdictions.
Investors must rely on their own examination of the legal, taxation, financial and other consequences of an investment in the Com-pany, including the merits of investing and the risks involved. Prospective investors should not treat the contents of this Report as advice relating to legal, taxation or investment matters and are advised to consult their own professional advisers concerning any acquisition of shares in the Company. Certain information contained in this Report has been obtained from published sources prepared by other parties. Certain other information has been extracted from unpublished sources prepared by other parties which have been made available to the Company. The Company has not carried out an independent investigation to verify the accuracy and completeness of such third-party information. No responsibility is accepted by the Company or any of its directors, officers, em-ployees or agents for the accuracy or completeness of such information.
All statements of opinion and/or belief contained in this Report and all views expressed represent the directors' own current as-sessment and interpretation of information available to them as at the date of this Report. In addition, this Report contains certain "forward-looking statements", including but not limited to, the statements regarding the Company's overall objectives and strategic plans, timetables and capital expenditures. Forward-looking statements express, as at the date of this Report, the Company's plans, estimates, valuations, forecasts, projections, opinions, expectations or beliefs as to future events, results or performance. Forward-looking statements involve a number of risks and uncertainties, many of which are beyond the Company's control, and there can be no assurance that such statements will prove to be accurate. No assurance is given that such forward looking statements or views are correct or that the objectives of the Company will be achieved. Further, valuations of the Company's portfolio investments and net asset value can and will fluctuate over time due to a wide variety of factors both company specific and macro-economic. Changes in net asset values can have a significant impact on revenue and earnings of the Company and its future prospects. Additionally, the current Coronavirus pandemic may produce negative economic activities which could reduce the company's economic performance and the performance of its portfolio companies in ways that are difficult to quantify at this juncture. It may cause a downturn in the markets in which the Company operates, reduce the Company's net asset values, revenue, cash flow, access to investment capital and other factors which could negatively impact the Company. As a result, the reader is cautioned not to place reliance on these statements or views and no responsibility is accepted by the Company or any of its directors, officers, employees or agents in respect thereof. The Company does not undertake to update any forward-looking statement or other information that is contained in this Report. Neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the information contained in this Report or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Report. Neither the issue of this Report nor any part of its contents is to be taken as any form of contract, commitment or recommendation on the part of the Company or the directors of the Company. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal, analysis or investigation of the Company. This Report should not be considered a recommendation by the Company or any of its affiliates in relation to any prospective acquisition or disposition of shares in the Company. No undertaking, Report, warranty or other assurance, express or implied, is made or given by or on behalf of the Company or any of its affiliates, any of its directors, of-ficers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this Report and no responsibility or liability is accepted for any such information or opinions or for any errors or omissions.
Intellectual Property Risk Factors
Tekcapital mission is to create valuable products from university intellectual property that can improve people's lives. Therefore, our ability to compete in the market may negatively affected if our portfolio companies lose some or all of their intellectual property rights. If patent rights that they rely on are invalidated, or if they are unable to obtain other intellectual property rights. Our success will depend on the ability of our portfolio companies to obtain and protect patents on their technology and products, to protect their trade secrets, and for them to maintain their rights to licensed intellectual property or technologies. Their patent applications or those of our licensors may not result in the issue of patents in the United States or other countries. Their patents or those of their licensors may not afford meaningful protection for our technology and products. Others may challenge their patents or those of their licensors by proceedings such as interference, oppositions and re-examinations or in litigation seeking to establish the invalidity of their patents. In the event that one or more of their patents are challenged, a court may invalidate the patent(s) or determine that the patent(s) is not enforceable, which could harm their competitive position and ours. If one or more of our portfolio company patents are invalidated or found to be unenforceable, or if the scope of the claims in any of these patents is limited by a court decision, our portfolio companies could lose certain market exclusivity afforded by patents owned or in-licensed by us and potential competitors could more easily bring products to the market that directly compete with our own. The uncertainties and costs surrounding the prosecution of their patent applications and the cost of enforcement or defence of their issued patents could have a material adverse effect on our business and financial condition.
To protect or enforce their patent rights, our portfolio companies may initiate interference proceedings, oppositions, re-examinations or litigation against others. However, these activities are expensive, take significant time and divert management's attention from other business concerns. They may not prevail in these activities. If they are not successful in these activities, the prevailing party may obtain superior rights to our claimed inventions and technology, which could adversely affect their ability of our portfolio companies to successfully market and commercialize their products and services. Claims by other companies may infringe the intellectual property rights on which our portfolio companies rely, and if such rights are deemed to be invalid it could adversely affect our portfolio companies and ourselves as investors in these companies.
From time to time, companies may assert, patent, copyright and other intellectual proprietary rights against our portfolio company's products or technologies. These claims can result in the future in lawsuits being brought against our portfolio companies or their holding company. They and we may not prevail in any lawsuits alleging patent infringement given the complex technical issues and inherent uncertainties in intellectual property litigation. If any of our portfolio company products, technologies or activities, from which our portfolio companies derive or expect to derive a substantial portion of their revenues and were found to infringe on another company's intellectual property rights, they could be subject to an injunction that would force the removal of such product from the market or they could be required to redesign such product, which could be costly. They could also be ordered to pay damages or other compensation, including punitive damages and attorneys' fees to such other company. A negative outcome in any such litigation could also severely disrupt the sales of their marketed products to their customers which in turn could harm their relationships with their customers, their market share and their product revenues. Even if they are ultimately successful in defending any intellectual property litigation, such litigation is expensive and time consuming to address, will divert our management's attention from their business and may harm their reputation and ours.
Several of our portfolio companies may be subject to complex and costly regulation and if government regulations are interpreted or enforced in a manner adverse to them, they may be subject to enforcement actions, penalties, exclusion, and other material limitations on their operations and have a negative impact on their financial performance. All of the above listed risks can have a material, negative affect on our net asset value, revenue, performance and the success of our business and the portfolio companies we invested in.
STRATEGIC REPORT
CHAIRMAN'S 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 ArmorTM 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) |
Income tax expense | 9 | (2,961) | (2,266) |
| | | |
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.
| |||
| |||
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 |
| | | | | | | |||||
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 |
| | | | | | - | |||||
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 loss | | 12 | 1,381,440 | 478,008 |
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 equity investments the Group makes estimates and assumptions regarding the future potential of the investments. The policy of the Group is to value new portfolio companies at cost of the acquired IP or equity plus associated expenses to facilitate the acquisition. Existing portfolio companies are valued using either a market transaction such as third-party funding or, in the absence of a recent market transaction, by alternative methods and where appropriate by an external, qualified valuation expert. The fair value of Guident Limited reflects input in the form of value of Guident Ltd's shares in its US subsidiary (Guident Corp) as determined by recent market transactions of these shares. | Yes | Yes | Note 12 |
Valuation of unquoted equity investments | This input was corroborated by Guident's enterprise valuation by estimating the net present value of future cashflows associated with its business. Key assumptions used in estimating future cash flows are projected profits including remote monitor sales and a discount factor applied for the net present value of future cashflows from the platform.
| Yes | Yes | Note 12 |
Valuation of convertible loan notes
| In applying valuation techniques to determine the fair value of convertible loan notes the Group and Company make estimates and assumptions regarding the future potential of the investments, including discount factor applied for the net present value of future cashflows from the loan.
| Yes | Yes | Note 12
|
5. SEGMENTAL REPORTING
The Directors consider the business to have two segments for reporting purposes under IFRS 8 which are:
· professional services, including the provision of recruitment services via Vortechs Group, provision of invention evaluator services, as well as R&D tax relief credits and provision of management services to its portfolio companies. The activities grouped under this segment share similar economic characteristics of provision of intellectual property services to third party services. 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 |
| | | |
Period ended 31 December 2023 | Professional | Licensing and | TOTAL |
Consolidated income statement | Services | Investment |
|
| US $ | US $ | US $ |
Revenue from Services | 735,265 | - | 735,265 |
Changes in fair value on financial assets at fair value though profit or loss | - | (14,229,009) | (14,229,009) |
Cost of Sales | (314,083) | - | (314,083) |
Interest Income | - | 455,096 | 455,096 |
Administrative Expenses | (592,315) | (1,675,081) | (2,267,396) |
Depreciation and Amortization | (21,577) | (64,732) | (86,309) |
Other Income | 20,384 | - | 20,384 |
Group operating loss | (172,326) | (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) | - | (59,509) | (178,488) | - | 178,488 |
- Tech transfer recruitment services |
(40,333) | - |
(40,333) |
(101,000) | - | 101,000 |
- Management services | - | (326,144) | (326,144) | - | (455,777) | (455,777) |
Total Revenue from Services |
(99,842)
| (326,144)
| (425,986)
| (279,488)
| (455,777)
| (735,265)
|
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 | | | | | |
7,120 | | 2,523 |
| ||||||
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 Group and Company financial statements | 124,022 | | 107,335 | |||||||
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 Inc1 | 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 Inc2* | 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 CORP3* | 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 | |
Cost | |
|
| US $ |
| US $ | | US $ |
| US $ |
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.
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