TIDMTEK
RNS Number : 7611W
Tekcapital plc
21 August 2020
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
21 August 2020
Tekcapital plc
("Tekcapital", "the Company" or "the Group")
Unaudited Half-Yearly Report for the period ending 31 May
2020
Continued Progress with Portfolio Companies & Record Net
Assets
Tekcapital plc (AIM: TEK) a UK intellectual property (IP)
investment group focused on creating marketplace value from
investing and commercializing university technology announces its
results for the six-month period ended 31 May 2020.
Financial highlights
-- Net Assets increased 16% to US$26.18m (30 Nov 2019: US$22.53m)
-- NAV per share US$0.30 (30 Nov 2019: US$0.35)
-- Total Revenue of US$2,859,647 (H1 2019: US$5,401,568)
o Net increase of US$2,422,949 in fair value of portfolio
companies
-- Revenue from services US$557,684 (H1 2019: $614,394)
-- Reduction of operating expenses by 4% to US$711,300 (H1 2019: US$740,947).
o Service revenue cover appx. 58% of current cost base (H1 2019:
63%)
-- Profit before tax of US$1,897,629 (H1 2019: US$4,421,279)
-- Placements of 14,800,000 new ordinary shares of 0.4 pence
each in the Company ("new ordinary shares") to raise gross proceeds
of US$962,000 in February 2020 and 9,250,000 new ordinary shares to
raise gross proceeds of US$1,115,000 in May 2020.
Operational highlights: Portfolio Companies
Salarius(R) (91.7% ownership) www.salarius.co
-- On 12 December 2019, Salarius Ltd secured a national food
ingredient broker for Microsalt(R). Accurate Ingredients provides
network of experienced sales representatives on the east and west
coast of the United States.
-- On 24 January 2020, Salarius Ltd secured an additional food
ingredient broker partner for sales of Microsalt(R). The agreement
with Hanks Brokerage Inc. covers primarily snack food companies in
the southwestern United States
-- On 2 March 2020, Salarius Ltd announced a North American
distribution agreement for launch of SaltMe!(R) snacks. This
agreement with UNFI represents an important milestone for Salarius'
new potato chip snack line, enabling unprecedented reach of
SaltMe!(R) products into consumer outlets of every size in North
America.
-- On 4 March 2020, SaltMe!(R) announced sales partnership
agreement with iLevel Brands Inc. as part of its launch of North
America sales of its full-flavour-low sodium potato chips. This
agreement, combined with their previously announced distribution
agreement on 2 March 2020, will expand SaltMe!(R) market
penetration and brand awareness for its products with retail brand
placements across the entire East Coast, Midwest and Southwest
geographic areas of the United States.
-- On 24 March 2020, Salarius Ltd announced it had received an
order from its distribution partner to launch sales of its new
SaltMe!(R) full flavor-low sodium snacks in 71 stores beginning in
May 2020.
Lucyd(R) (100% ownership) www.lucyd.co
-- On 26 March 2020, Lucyd Ltd announced it had filed patent and
trademark on its forthcoming Vyrb(TM) app. Vyrb users will be able
to listen and produce social media posts with their voice, without
having to look at their smartphones or type messages. The app is
designed to improve utility of Lucyd Bluetooth(R) glasses and other
wireless hearables like AirPods(R)
-- On 24 April 2020, Lucyd Ltd announced the launch of its
Bluetooth(R) enabled glasses on the website of US superstore
Walmart.com.
Guident (100% ownership) www.guident.co
-- On 8 April 2020, Guident Ltd announced significant management
additions including appointment of Harald Braun as Company's CEO
and appointment of Daniel Grossman as the company's Chief Revenue
Officer. The company also appointed Michael Trank as VP Software
Development and Dr. Gabriel Castenada as Lead Architect, Artificial
Intelligence Software. Guident has also announced that it has
received a Notice of Allowance from the United States Patent and
Trademark Office for its U.S. patent # 10,699,580 entitled "
Methods and Systems for Emergency Handoff of an Autonomous Vehicle
" and has filed an additional patent entitled, "Intelligent Remote
Monitoring and Control of Autonomous Vehicles". These patent teach
new methods to improve the safety of autonomous vehicles and
land-based delivery drones.
-- On 22 May 2020, Guident Ltd announced it had won the Florida
Atlantic University (FAU) competition as one of the most promising
startups in South Florida, defeating over 200 contestants. The
judges were convinced that the company creating a Remote Monitoring
and Control Center in Florida for autonomous vehicles applying
artificial intelligence, and their first use-case for 'zero-touch'
ground-based delivery of groceries and medicines, would be the
right choice to create significant value in South Florida and
Nationwide.
Belluscura(R) (18% ownership) www.belluscura.com
-- Continued progress with its unique and patented portable
oxygen concentrator (POC) programme and is anticipating FDA 510K
clearance in H2 2020.
-- On 10 February 2020, Belluscura filed an additional patent
application (17 patents filed or licensed to-date) entitled
"Improved Extracorporeal Membrane Oxygenation Device, System and
Related Methods," covering devices and systems for treating people
suffering from acute respiratory distress caused by the
Coronavirus.
Operational highlights: Corporate
As part of continuing to expand our services in Latin
America:
-- Tekcapital delivered a webinar on commercialising university
IP with the Creativity and Innovation Center 4.0 of the Universidad
Tecnológica de Querétaro. This resulted in the formation of a
strategic alliance with Universidad Tecnológica de Querétaro for
providing Tekcapital's services in Mexico.
-- Tekcapital was invited to the Petrobras facilities to present
new global opportunities and collaborations in the context of
intellectual property licensing.
-- Executed a strategic alliance agreement with LicenciArte
Colombia, a consultancy firm that offers services for institutional
strengthening, protection and commercialization of technologies
from universities and research labs
-- Delivered a successful webinar in Brazil titled "Agritech
Startups", which gathered more than 60 key players from the
Brazilian technology and innovations ecosystem.
Post period end highlights:
-- On 16 June 2020, Guident Ltd announced appointments of
Professor Naphtali Rishe, Professor Hayder Radha and Dr. Marielle
S. Gross to its Science Advisory Board
-- On 17 June 2020, Belluscura plc announced it is making good
progress with its 510K submission though it has been impacted by
COVID-19 associated external supply chain issues which has
increased the scarcity of certain key components, increased lead
times, and reduced capacity at part manufacturers and testing
facilities. Belluscura is in the process of completing the final
surety tests and anticipates it will receive 510K clearance within
H2 2020.
-- On 1 July 2020, Innovative Eyewear, Inc, a new, fully owned
subsidiary of Lucyd Ltd, commenced its Regulation Crowdfunding
program on StartEngine , where it is seeking to raise approximately
US $400K at a $3.75m pre-money valuation. The purpose of the
fundraise is to provide additional capital for the further
development and launch of its new Lucyd Lyte(TM) smart glasses and
Vyrb(TM) voice controlled, social media app.
-- On 13 July, 2020 Lucyd Ltd received Notice of Allowance from
the United States Patent and Trademark Office for 13 of its
previously filed smart glass design patents.
-- On 22 July, 2020, Lucyd Ltd filed two design patents on their
upcoming Lucyd Lyte(TM) smart glasses.
-- On 27 July 2020, Tekcapital announced that Mr. Malcolm Groat
has stepped down from the Board of Directors at the end of his term
with immediate effect. Konrad Dabrowski, who for the past three
years has served as the Group's Financial Controller, has been
promoted to non-board CFO.
Dr. Clifford M. Gross, Chairman said : 'We are pleased to report
a successful half-year performance for the Group, which has noted
record net assets for the period and the achievement of important
development milestones for most of its portfolio companies. We
believe our approach of acquiring and commercialising university
innovations is demonstrating good progress towards our goal of
improving the quality of life for customers whilst delivering
significant returns on invested capital.'
For further information, please contact:
Tekcapital Plc Via Flagstaff
Clifford M. Gross, Ph.D.
SP Angel Corporate Finance LLP
(Nominated Adviser and Broker) +44 (0) 20 3470 0470
Richard Morrison/Charlie Bouverat (Corporate
Finance)
Abigail Wayne / Rob Rees (Corporate Broking)
Flagstaff Strategic and Investor Communications +44 (0) 20 7129 1474
Tim Thompson/Andrea Seymour/Fergus Mellon
About Tekcapital plc
Tekcapital creates value from investing in new,
university-developed intellectual properties and provides a range
of IP investment services to make it easy for organisations to
commercialise university-developed technology. Tekcapital is quoted
on the AIM market of the London Stock Exchange (AIM: symbol TEK)
and is headquartered in Oxford, in the UK. For more information,
please visit www.tekcapital.com
LEI: 213800GOJTOV19FIFZ85
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
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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
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indirectly, into or within any such jurisdictions.
All statements of opinion and/or belief contained in this Report
and all views expressed represent the directors' own current
assessment 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,
including those associated with COVID-19, 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 Company's portfolio investments and net
asset value can and will fluctuate over time due to a variety of
factors. The Company does not undertake to update any
forward-looking statement or other information that is contained in
this Report.
Chairman's statem ent
Tekcapital brings innovations from lab to market. In the first
half of 2020, many of our key portfolio companies have made
significant progress and as a result, our net assets ended the
period at record levels.
Key portfolio companies
Tekcapital Plc commercialises university intellectual property,
a process known as technology transfer, both for its own portfolio
and as a service for client companies.
Over the past four years we have built a compelling group of
diversified portfolio companies to commercialize high value
properties we have uncovered. We believe that when you couple
commercialization ready, compelling university IP with strong
senior management, you increase the probability that vibrant
companies will emerge, net assets will grow, returns on invested
capital are likely to increase and exits should occur faster. When
we realise exits, the Group's goal is to distribute the portion of
proceeds as a special dividend to our shareholders.
The Company believes that there is considerable value to be
realised from its portfolio companies and is continuing to further
assist and invest in these operations. A common theme across our
portfolio companies is that they have proprietary intellectual
property, capable management and if successful, will improve the
quality of life for the customers they serve. The Company's
portfolio of key investments includes:
-- Salarius ltd (www.salarius.co), of which Tekcapital owns
91.7%, owns a patented process for producing nano-particle sized
salt crystals ("MicroSalt(R)"), which can reduce sodium consumption
in snack foods by up to 50.0%, yet provide the same level of salty
flavour found in traditional snacks. Salarius' goal is to make
snack foods healthier. According to the World Health Organization,
cardiovascular disease takes the lives of 17.9 million people per
year and is responsible for 31% of global deaths and as such the
low sodium ingredient market is estimated to reach US$1.76 billion
by 2025 [1] .
-- Lucyd ltd (www.lucyd.co), which is wholly owned by
Tekcapital, sells innovative Bluetooth enabled glasses, regular
spectacles and owns 13 design patents and two utility patent
applications for its Bluetooth(R) enabled sound glasses. We believe
Lucyd is the first company to offer proper prescription glasses
online that allow the wearer to connect to their smartphones and
digital assistants. Their mission is to Upgrade your Eyewear(R)
with useful hands-free technology. 2019 witnessed the largest
number of pedestrian injuries in the last 30 years [2] and every
seven minutes a pedestrian is struck by a car due primarily to both
drivers and pedestrian alike being distracted with their smart
phones. Lucyd's glasses have speakers built into the arms of the
glasses which allows users to make calls and listen to music,
whilst maintaining situational awareness of the traffic around them
having nothing placed in the ears. Additionally, Lucyd is
developing a voice controlled app called Vyrb(TM) which will allow
eyeglass wearers to respond to posts on Facebook and Twitter with
their voice, obviating the need to look at their phones or type
responses. Lucyd is positioned at the intersection of the online
eyewear and digital assistant markets. Online eyewear sales in the
U.K. are projected to reach $824m [3] in 2019. The U.S. online
eyewear market is projected to reach US$3.5bn in 2019 and expected
to grow annually by 1.3% [4] .
-- Guident, ltd (www.guident.co), which is wholly owned by
Tekcapital, was established to commercialise new technology to
enhance the utility, safety and enjoyment of autonomous vehicles
("AVs") and drones. Using its proprietary IP, Guident seeks to
develop software Apps and IP that allow users of AV's and drones to
dispatch their vehicles to join ridesharing fleets, find available
parking spots and charging stations and report and respond to
accidents as well as provide remote, tele-monitoring and control
for AV's and land-based delivery drones. Remote monitoring and
control is a legal requirement for AV operation in the State of
Florida and other jurisdictions. The autonomous vehicle market is
expected to reach US $65.3 billion by 2027 [5] .
-- Belluscura plc (www.belluscura.com), of which Tekcapital now
owns approximately 18%, has developed an improved portable oxygen
concentrator (POC) to provide on-the-go supplemental O(2) . They
have continued to report progress in their advanced POC program,
which they believe will be smaller, lighter and quieter then
competitive products and will have a replaceable filter cartridge
that will allow the user to upgrade the unit as their disease
progresses. As a result of the global prevalence of COPD, the
medical portable oxygen market is expected to grow from $1.4bn in
2018 to $2.4bn by 2024 [6] . A recent report by Grand V iew
Research indicates an increasing demand for portable oxygen
concentrators, and anticipates unit sales to grow from 405k units
per year in 2019 to 581k units per year in 2026 for a total value
of $1.4bn. This anticipated growth may have a positive impact on
portfolio company Belluscura.
Corporate
In H1 2020 we continued with the expansion of our consulting
services into Latin America. Whilst service revenues were modestly
reduced for the period, they still covered approximately 58% of our
administrative expenses. This was made possible with the steadfast
control of administrative and marketing expenses coupled with the
judicious use of consultants to minimize fixed costs.
During the period, we have enhanced the Board with the
appointments of Louis Castro who is Chair of our audit committee
and also serves on our remuneration committee and Lord David
Willetts who also serves on the nomination committee.
Louis is highly experienced director and chartered accountant
with thirty years experience in industry and in financial services,
including positions as Chief Executive, Finance Director and
Non-Executive Director of several AIM listed companies. He was
previously the CFO at Eland Oil & Gas plc where he had full
executive responsibility for finance, legal, corporate finance and
a budget of over $150m. Louis currently serves as a non-executive
director of Stanley Gibbons Group plc, Predator Oil & Gas
Holdings plc and Orosur Mining Inc. Louis is a Fellow of the
Institute of Chartered Accountants of England & Wales.
The Rt Hon Lord Willetts, FRS, is President of the Resolution
Foundation and former U.K. Minister for Universities and Science.
He served as the Member of Parliament for Havant (1992-2015), and
previously worked at HM Treasury and the No. 10 Policy Unit. Lord
Willetts is a visiting Professor at King's College London, former
Chair of the British Science Association and a member of the
Council of the Institute for Fiscal Studies. He is also an Honorary
Fellow of Nuffield College, Oxford. Lord Willetts is a graduate of
Oxford University and has been awarded numerous honorary
doctorates.
Post end of period we are glad to announce that Konrad Dabrowski
has been promoted to CFO. Konrad has served as Group Financial
Controller for Tekcapital over the past three years. He has
extensive experience in accounting and finance obtained through
more than a decade of exposure to public accounting and the private
sector. He began his career with Deloitte and continued as an audit
manager in the Deloitte Washington, DC office. Konrad also held the
global accounting manager role in Restaurant Brands International
(NYSE:QSR). Konrad is a CPA and holds a Master of Science degree in
finance and accounting from the Warsaw School of Economics. Konrad
replaces Malcolm Groat our Finance Director, to whom we are
thankful for six years of dedicated service to the Company.
In addition, post end of period we are pleased to announce the
promotion Mellissa Cruz to Director of Client Services. Melissa
helps our global university and corporate clients create
marketplace value from IP. She has collaborated with a diverse set
of organizations in Latin America and Europe, to facilitate the
evaluation and transfer of university discoveries to the
marketplace. Melissa has a marketing and sales background with
companies such as Newmark Grubb Caribbean and has contributed
significantly to Tekcapital's development of new business in Latam
countries. She received her B.A. in International Business and an
M.S. in Marketing from Florida International University and is
fluent in Spanish and English. Melissa replaces Amy Shim to whom we
are also thankful for six years of dedicated service.
Financial performance
In spite of the significant headwinds resulting from COVID-19
and an economic recession in the U.K. and the U.S, H1 2020 saw
another period for continued value creation for the Group as
evidenced by a 16% increase in net assets. The Group was able to
accomplish this whilst simultaneously reducing administrative costs
by 4%. The Group has now demonstrated 3.5 years of consistent
growth of Net Assets. Due to the quickening pace of innovation,
patented, exogenously developed university technologies are a
valuable currency, and as a result, we are bullish on the market
opportunity for the Group which we believe will continue to grow
apace in lock-step with the progress of our portfolio
companies.
Fundraisings
On 6 February 2020, the Group announced that it had completed a
fundraising of US$0.96 million gross through the placing of
14,800,000 new Ordinary Shares with new and existing investors at a
price of 5 pence per new Ordinary Share. On 1 May 2020, the Group
announced it had completed a second fundraising of US$1.15m through
placing of 9,250,000 new Ordinary Shares with new and existing
investors at a price of 10 pence per new Ordinary Share. The new
funds are being utilized for accelerating portfolio company growth
and for working capital.
Current Trading and Outlook
Having continued to develop and expand Tekcapital's existing
business, the Board is confident that continued investment in our
portfolio companies remains the right approach for long-term value
creation. Additionally, we are currently exploring external,
early-stage funding for a number of our portfolio companies.
Further, we believe that we are executing on our strategy and this
should result in further increases in returns on invested capital
as our portfolio companies continue to mature towards meaningful
inflection points and exits.
Whilst it is clear that the Company is progressing very well,
net asset values will fluctuate from period to period due to
individual portfolio company performance, valuations and changes in
market conditions and macro-economic financial conditions including
the recent Coronavirus epidemic. We are grateful for the patience
and support of our shareholders. We are also sincerely appreciative
of our dedicated, creative and incredibly hardworking team without
which, none of the results reported herein would be possible. In
particular I would like to thank our portfolio company leadership
including Robert Rauker (Belluscura), Harald Braun (Guident),
Victor Manzanilla (Salarius) and Harrison Gross (Lucyd) who
collectively have punched above their weight and as a result their
businesses are rapidly approaching material inflection points.
Dr Clifford M Gross
Chairman and CEO
21 August 2020
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 May 2020
Notes Six months Six months Year ended
ended 31 May ended 31 May 30 November
2020 2019 2019
Unaudited Unaudited Audited
US$ US$ US$
Continuing Operations
Revenue from services 557,684 614,394 1,200,551
Unrealised profit on the
revaluation of investments 7 2,301,963 4,787,174 6,516,813
--------------------------------- ------
Total Revenue 2,859,647 5,401,568 7,717,364
--------------------------------- ------ -------------------------- ----------------------------- --------------
Cost of sales (248,900) (239,342) (606,166)
--------------------------------- ------ -------------------------- ----------------------------- --------------
Gross Profit 2,610,747 5,162,226 7,111,198
--------------------------------- ------ -------------------------- ----------------------------- --------------
Administrative expenses (711,300) (740,947) (1,590,563)
--------------------------------- ------ --------------------------
Operating Profit 1,899,447 4,421,279 5,520,635
--------------------------------- ------ --------------------------
Profit on ordinary activities
before income tax
Income tax expense (1,818) (2,090) (2,345)
--------------------------------- ------ -------------------------- ----------------------------- --------------
Profit after tax for the
period 1,897,629 4,419,189 5,518,290
--------------------------------- ------ -------------------------- ----------------------------- --------------
Other comprehensive income
Foreign exchange profit/(loss) (182,115) (33,779) 31,855
--------------------------------- ------ -------------------------- ----------------------------- --------------
Total other comprehensive
income/(loss) (182,115) (33,779) 31,855
--------------------------------- ------ -------------------------- ----------------------------- --------------
Total comprehensive profit
for the period 1,715,514 4,385,410 5,550,145
--------------------------------- ------ -------------------------- ----------------------------- --------------
Earnings per share 6
Basic earnings per share 0.026 0.081 0.095
Diluted earnings per share 0.025 0.081 0.095
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 May 2020
Notes As at 31 As at 31 As at 30 November
May 2020 May 2019 2019
Unaudited Unaudited Audited
US$ US$ US$
Assets
Non-current assets
Intangible assets 838,770 838,769 838,770
Financial assets at
fair value through
profit and loss 7 22,758,873 18,577,365 20,335,925
Convertible Loan
Notes 735,978 294,720 476,122
Property, plant and
equipment 13,475 25,167 17,353
----------------------------- -------------------------------- -------------------
24,347,096 19,736,021 21,668,170
----------------------------- -------------------------------- -------------------
Current Assets
Trade and other
receivables 1,038,395 410,770 815,866
Cash and cash
equivalents 1,034,348 492,983 472,899
----------------------------- -------------------------------- -------------------
2,072,743 903,753 1,288,765
Total A ssets 26,419,839 20,639,774 22,956,935
============================= ================================ ===================
Liabilities
Current liabilities
Trade and other
payables 127,635 114,124 310,160
Current income tax
liabilities 500 500 500
Deferred Revenue 110,474 - 118,595
----------------------------- -------------------------------- -------------------
Total liabilities 238,609 114,624 429,255
============================= ================================ ===================
Net Assets 26,181,230 20,525,150 22,527,680
Equity
Ordinary shares 8 494,861 326,036 372,984
Share premium 8 12,786,361 10,218,805 10,993,546
Retained earnings 12,976,794 9,940,614 11,055,821
Translation reserve (4,617) 111,864 177,498
Merger reserve (72,169) (72,169) (72,169)
Total E quity 26,181,230 20,525,150 22,527,680
============================= ================================ ===================
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 May 2020
Attributable to equity holders of the parent
---------------------------------------------
Ordinary Share Premium Translation Merger Reserve Retained Total Equity
shares Reserve Earnings
US$ US$ US$ US$ US$ US$
Unaudited
Balance at 1
December 2019 372,984 10,993,546 177,498 (72,169) 11,055,821 22,527,680
Share issue 121,877 1,967,235 2,089,112
Cost of share
issue (174,420) (174,420)
Profit for the
period 1,897,629 1,897,629
Other
comprehensive
income (182,115) (182,115)
Share based
payments 23,346 23,345
Balance at 31
May 2020 494,861 12,786,361 (4,617) (72,169) 12,976,794 26,181,231
=============== ============== =============== =============== =============== =============
Unaudited
Balance at 1
December 2018 326,036 10,218,805 145,643 (72,169) 5,516,655 16,134,970
Profit for the
period - - 4,419,189 4,419,189
Other
comprehensive
income - - (33,779) (33,779)
Share based
payments - - 4,770 4,770
Balance at 31
May 2019 326,036 10,218,805 111,864 (72,169) 9,940,614 20,525,150
--------------- -------------- --------------- --------------- --------------- -------------
Audited
Balance at 1 December 2018 326,036 10,218,805 145,643 (72,169) 5,516,655 16,134,970
Share issue 46,948 892,018 938,966
Cost of share issue - (117,277) - - - (117,277)
Profit for the period - - - - 5,518,290 5,518,290
Other comprehensive income - - 31,855 - - 31,855
Share based payments - - - - 20,876 20,876
Balance at 30 November 2019 372,984 10,993,546 177,498 (72,169) 11,055,821 22,527,680
======== =========== ======== ========= =========== ===========
Share capital represents the amount subscribed for share capital
at nominal value.
Share premium represents the amount subscribed for share capital
in excess of nominal value and net of any directly attributable
issue costs.
The merger reserve arose on the share for share exchange
undertaken by the Company with Tekcapital Europe Limited on 18
February 2014.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 31 May 2020
Six months Six months For the year
ended ended ended
Group Note 31 May 2020 31 May 30 Nov 2019
2019
US $ US $ US $
---------------------------------- -------- ------------- ----------- -------------
Cash flows from operating
activities
Cash outflows from operations (1,149,198) (553,436) (1,397,294)
Taxation paid (1,818) (2,090) (2,345)
Net cash outflows from operating
activities (1,151,016) (555,526) (1,399,639)
-------------------------------------------- ------------- ----------- -------------
Cash flows from investing
activities
Purchase of financial assets
at fair value through profit
and loss (219,584) (109,643) (111,810)
Purchases of property, plant
and equipment (96) (862)
Net cash outflows from investing
activities (219,584) (109,739) (112,672)
Cash flows from financing
activities
Proceeds from issuance of
ordinary shares 2,089,112 - 938,966
Costs of raising finance (174,420) - (117,277)
Net cash inflows from financing
activities 1,914,692 - 821,689
-------------------------------------------- ------------- ----------- -------------
Net decrease in cash and
cash equivalents 544,092 (665,266) (690,622)
Cash and cash equivalents
at beginning of year 472,899 1,165,442 1,165,442
Exchange gain/(loss) on cash
and cash equivalents 17,357 (7,193) (1,921)
Cash and cash equivalents
at end of the period 1,034,348 492,983 472,899
-------------------------------------------- ------------- ----------- -------------
Notes to the financial information
1. General information
Tekcapital PLC is a company incorporated in England and Wales
and domiciled in the UK. The address of the registered office is 12
New Fetter Lane, London, United Kingdom, EC4A 1JP. The Company is a
public limited company, which is quoted on the AIM market of the
London Stock Exchange in 2014.
The principal accounting policies applied in the preparation of
these consolidated financial statements are set out below. These
policies have been consistently applied to all the periods
presented, unless otherwise stated.
2. Basis of preparation
The financial information for the six months ended 31 May 2020
set out in this interim financial information is unaudited and does
not constitute statutory financial statements. The interim
condensed financial information has been presented in US Dollars
("$").
3. Accounting policies
3.1 Statement of compliance
The accounting policies applied by the Group in these unaudited
half year results are consistent with those applied in the annual
financial statements for the year ended 30 November 2019.
The financial statements of Tekcapital PLC Group have been
prepared in accordance with International Financial Reporting
Standards (IFRS) and IFRS Interpretations Committee (IFRS IC) as
adopted by the European Union and the Companies Act 2006 applicable
to companies reporting under IFRS. The financial statements have
been prepared under the historical cost convention.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It
requires management to exercise its judgement in the process of
applying the Group's accounting policies. The areas involving a
higher degree of judgment or complexity, or areas where assumptions
and estimates are significant to the consolidated financial
statements are disclosed in note 4 of the FY 2019 accounts. The
estimates that changed since then are disclosed in Note 7.
4. Going concern
The Group meets its day to day working capital requirements
through its service offerings and monies raised in follow-on
offerings. The Group's forecasts and projections indicate that the
Group has sufficient cash reserves to operate within the level of
its current facilities. If the group forecasts are not achieved the
Directors are confident that additional funds could be raised
through equity issues if required. After making enquiries, the
Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future.
The Company therefore continues to adopt the going concern basis
in preparing both its consolidated financial statements and for its
own financial statements.
5. Taxation
Immaterial charge of $1,818 has arisen in the six-month period
ended 31 May 2020 (31 May 2019: $2,090).
6. Earnings per share
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.
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) Ordinary Shares to be issued assuming exercise
of outstanding stock options with intrinsic value above $0 at 31
May 2020:
Six months ended 31 May 2020 Six months ended 31 May 2019 Year ended 30 November 2019
US$ US$ US$
Profit
attributable
to equity
holders of
the Company 1,897,629 4,419,189 5,518,290
Weighted
average
number of
Ordinary
Shares in
issue:
Basic 72,332,693 54,353,042 58,010,322
Diluted 76,081,339 54,653,042 58,918,289
Basic profit
(loss) per
share ($) 0.026 0.081 0.095
Diluted
profit
(loss) per
share ($) 0.025 0.081 0.095
7. Financial Assets at Fair Value through Profit or Loss
Group's investments in portfolio companies are listed below and
classified as equity instruments. The principal place of business
for portfolio companies listed below is England and Wales.
31 May 1 December Additions Exchange Fair value 31 May
2019 2019 difference gain/(loss) 2020
US $ US $ US $ US $ US $ US $
Guident Limited 12,656,321 15,526,195 (14,561) 15,511,631
Lucyd Ltd 1,394,811 1,129,022 2,301,979 3,431,001
Belluscura
Limited 1,769,162 1,804,121 219,584 (84,053) 1,939,653
Salarius Ltd 2,689,345 1,833,426 1,833,426
Non Invasive 655 - -
Glucose Tek
Limited
Smart Food
Tek Limited 42,328 43,162 43,162
eSoma Limited 24,743 - -
Total Balance 18,577,365 20,335,924 219,584 (98,614) 2,620,978 22,758,873
------------------ ----------- ----------- ---------- ------------ ------------- -----------
The valuation techniques used fall under, Level 2 - Observable
techniques, other than quoted prices, and Level 3- Other techniques
as defined by IFRS 13. There has been a transfer between Level 3
and Level 2 for Group's investment in Lucyd Ltd during the period.
Fair value measurement hierarchy for financial assets as at 31 May
2020 with comparative amounts as of 30 November 2019:
Date of Valuation Significant Significant
observable unobservable
inputs (Level inputs (Level
Total 2) 3)
US $ US $ US $
Guident, Salarius 31 May 2020 17,388,219 17,388,219
Belluscura, Lucyd 31 May 2020 5,370,654 5,370,654
-------------------- ------------------- ----------- --------------- ---------------
Total Balance 31 May 2020 22,758,873 5,370,654 17,388,219
-------------------- ------------------- ----------- --------------- ---------------
Guident and others 30 November 2019 18,531,804 18,531,804
Belluscura Limited 30 November 2019 1,804,121 1,804,121
Total Balance 20,335,925 1,804,121 18,531,804
----------------------------------------- ----------- --------------- ---------------
Guident (Nil Gain / Nil loss)
The total fair value remains unchanged from 30 November 2019
adjusted for adjusted for fluctuation of foreign exchange
differences . The Group relied on the external valuation prepared
by an independent patent valuation expert for Guident's IP
portfolio performed as of 30 November 2019. Upon review of
assumptions used in the 30 November 2019 valuation as well as
business updates in H1 2020, the management noted no material
events necessitating revisions. The management will obtain an
update to the valuation report as of 30 November 2020.
Salarius (Nil Gain / Nil loss)
The total fair value remains unchanged from 30 November 2019.
The Group relied on the external valuation prepared by an
independent patent valuation expert for the Salarius' IP portfolio
performed as of 30 November 2019. Upon review of assumptions used
in the 30 November 2019 valuation as well as business updates in H1
2020, the management noted no material events necessitating
revisions. The management will obtain an update to the valuation
report as of 30 November 2020.
Lucyd Ltd ($2.3m gain)
On 1 July 2020, Innovative Eyewear, Inc, a fully owned
subsidiary of Lucyd Ltd, commenced its Regulation Crowdfunding
fundraise in the United States at US$3.75m pre-money valuation
seeking approximately US$400K in funding for the further
development and launch of its new Lucyd Lyte(TM) smart glasses and
the Vyrb(TM) voice controlled, social media app. At the date of
this report, the company has raised the minimum threshold required
(US10k). Considering the occurrence of an observable input of
multiple third parties (over 600 participants as of the date of
this report) acquiring shares of the portfolio company at the
US$3.75m pre-money valuation, reduced by the other components of
Lucyd Ltd's Net Book Value of US$0.32m, the Group transferred the
fair value of Lucyd Ltd from Level 3 as at 30 November 2019 to
Level 2 as at 31 May 2020.
Belluscura ($0.1m gain)
The Group contributed $0.2m in a private placement held in May
2020 at 15 pence a share. The fair value of the holding increased
by $0.1m as a result, adjusted for fluctuation of foreign exchange
differences.
Other investments (Nil Gain / Nil loss)
Given early stage of commercialisation, fair value of remaining
Smart Food TEK was recorded based on the cost of acquired IP, as
their carrying amounts represent a reasonable approximation of fair
value.
Under level 3 unobservable inputs. In the absence of observable
inputs, the directors have considered the entities own data to
determine the fair value, which equates to the original funds
invested. They do not consider that any other available information
would materially change or give a more reliable representation of
the value.
This is the only category of financial instruments measured and
re-measured at fair value.
8. Share Capital
The Company's ordinary shares are of GBP0.004 par value.
All of the Company's issued ordinary shares have full voting,
dividend and capital distribution (including winding up) rights;
they do not confer any rights of redemption. The Company does not
hold any ordinary shares in treasury.
Issued and fully paid Shares Share capital Share premium
Number US$ US$
Ordinary shares of
GBP0.004 each
At 1 December 2018 54,353,042 326,036 10,218,806
As at 31 May 2019 54,353,042 326,036 10,218,806
====================== ========================= =========================
At 1 December 2018 54,353,042 326,036 10,218,806
Shares issued in further
public offering 9,375,000 46,948 774,741
As at 30 November 2019 63,728,042 372,984 10,993,546
====================== ========================= =========================
Shares issued in further
public offering 24,050,000 121,876 1,792,815
As at 31 May 2020 87,778,042 494,860 12,786,361
====================== ========================= =========================
9. Related party transactions
The Group has taken advantage of the exemption in IAS 24
"related parties" not to disclose transactions with other Group
companies. During the period the Group did not employ any services
of non-Group companies meeting the definition of related
parties.
10. Interim results
The interim results for the six months ended 31 May 2020 will
not be sent to shareholders but will be available from the
Company's website at http://tekcapital.com/investors/.
- Ends -
[1]
https://www.futuremarketinsights.com/reports/sodium-reduction-ingredient-market
[2] https://www.caranddriver.com/news/a31136893/pedestrian-deaths-increase-2019/
[3]
https://www.statista.com/outlook/12000000/156/eyewear/united-kingdom
[4]
https://www.statista.com/statistics/428692/projected-size-of-global-autonomous-vehicle-market-by-vehicle-type/
[5]
https://www.statista.com/statistics/428692/projected-size-of-global-autonomous-vehicle-market-by-vehicle-type/
[6] Global Market Insights: Oxygen Cylinders Market Size and
Competitive Market Share & Forecast, 2017 -2024
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR SEAFWSESSEFA
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