23 February
2024
Vela Technologies
plc
("Vela" or "the
Company")
Quarterly Investment
Update
The Board of Vela (AIM:VELA), an
AIM-quoted investing company focused on early-stage and pre-IPO
disruptive technology investments, is pleased to report an update
for the quarter ended 31 December
2023.
Key numbers as at 31 December
2023*
· The
value of Vela's total assets (including cash) decreased during the
quarter by £639,000 (9%) to £6,180,000 (quarter to 30 September
2023 - increase of £942,000 to £6,819,000 (16%)).
· Vela's
portfolio comprised a total of 15 active investments (30 September
2023 - 15). Two of these investments were unquoted, thirteen
were quoted.
· The
investment in St George's Street Capital Limited, which was sold
during the quarter under review to Conduit Pharmaceuticals Inc.
("Conduit") in exchange for 1,015,760 Conduit shares, was
previously held in the balance sheet as a financial asset in prior
quarters and is now held as an asset held for resale in line with
other investments already held.
· The
fair value of the investment portfolio was £6,174,000 (30 September
2023 - £6,789,000).
· The
change in the value of the investment portfolio reflects the
disposal of investments valued at c.£40,000 at 30 September 2023
(generating a realised loss of £3,000) and a net unrealised
decrease in the fair value of the investment portfolio of
£575,000 (quarter to 30 September 2023 - an
unrealised gain of £1,043,000).
· Vela's
cash balance stood at £6,000 as at 31 December 2023 (30 September
2023 - £30,000). Vela's cash balance as at today's date is c.
£60,000.
*The figures contained within this quarterly investment update
are taken from unaudited management information.
Investments traded on a recognised stock market are valued
using the accounting policies outlined in the notes to the annual
financial statements. Unlisted investments and other
financial assets are stated at the values attributed to them in the
audited balance sheet as at 31 March 2023, unless there has been a
transaction since that date which suggests a materially different
valuation.
Key developments in the
quarter
· The
2023 Annual General Meeting was held on 11 December 2023 at the
Company's registered office. The financial statements for the year
ended 31 March 2023 were approved and all other resolutions
passed.
· 50,000
shares in EnSilica plc ("EnSilica") were sold, generating gross
proceeds of £33,000.
· 300,000 shares in Kanabo Group plc ("Kanabo") were sold,
generating gross proceeds of £4,000.
· On 30
November 2023 Vela exercised its put option to sell its economic
interest in AZD1656 to Conduit in exchange for 1,015,760 Conduit
shares.
· The
Company announced its interim results for the half year ended 30
September 2023 on 22 December 2023.
Events since the end of the
quarter
· The
Company has sold 85,902 shares in Cornerstone FS plc
("Cornerstone"), generating net proceeds of £27,000.
· The
Company has sold 45,000 shares in EnSilica generating net proceeds
of £22,000.
· The
Company sold its remaining 357,692 shares held in Kanabo generating
net proceeds of £9,000.
Investment
portfolio
At 31 December 2023 the Company's
portfolio of investments was valued at £6,174,000 and comprised
equity interests in the following 15 companies:
· Aeristech Limited
· Community Social Investment Limited
· Conduit Pharmaceuticals Inc.
· Cornerstone FS PLC
· Ethernity Networks Ltd
· EnSilica plc
· Igraine PLC
· Kanabo
Group Plc
· MTI
Wireless Edge Ltd.
· Northcoders Group plc
· R8
Capital Investments PLC (formerly Mode Global Holdings
plc)
· Rural
Broadband Solutions PLC
· Skillcast Group plc
· Tribe
Technology Group PLC
· TruSpine Technologies plc
Key developments in investee
companies in the quarter
· Cornerstone reported strong trading momentum and adjusted
EBITDA ahead of board expectations.
· Tribe
Technology Group PLC entered into a £3 million secured term loan
facility with Beach Point Capital.
· TruSpine Technologies Plc reported that the company's
intellectual property had been successfully registered, on the back
of which it hoped to secure a 'substantial fundraise'.
· Kanabo
announced it had entered a partnership with British Cannabis to
supply CBD to patients via a prescription service.
· MTI
Wireless Edge Ltd. reported a contract win with orders worth
approximately US$1 million, to be supplied over the following 14
months; and third quarter results showing improvements in all key
performance indicators, notwithstanding events in
Israel.
· The
shares of R8 Capital Investments PLC (formerly Mode Global Holdings
plc) were suspended from trading on the announcement of a proposed
reverse takeover of Redwood Financial Partners Limited. The
parties have set a target date for completion of 1 July
2024.
· EnSilica published its results for the year ended 31 May 2023.
These showed improved numbers compared to the previous year, a
trend repeated in its trading update for the subsequent half
year. EnSilica also announced a placing of £1.56 million
which was prompted by the need to finance ever-increasing new
business opportunities.
Other
activities
· Since
the publication of the last quarterly update in December 2023, the
Board of Vela has spoken or met with representatives of the
following investee companies:
o Community Social Investment Limited
o Conduit Pharmaceuticals Inc.
o TruSpine Technologies plc
· In May
2023 Vela's Board was approached by a third party with a proposal
to inject additional equity capital of up to £15 million, which
were on terms acceptable to the Board, and to amend the Company's
investing policy so as to concentrate on the life sciences sector.
Such a transaction would have been transformative for Vela. The
Board accordingly expended considerable time and effort in pursuing
this proposal; incurring costs in excess of £50,000 with its
professional advisers. Unfortunately, despite numerous discussions
and meetings spread over many months, the third party was unable to
secure the minimum funds necessary to complete the proposed
investment. Discussions were terminated in early January 2024. The
intention of the Board is to settle £50,000 of costs incurred in
relation to the aborted transaction through the issue of new
ordinary shares in the Company in due course. The Company continues
to appraise investment proposals in accordance with its current
investing policy.
Executive Director, James
Normand, commented:
"Much of the £900,000+ leap forward in the value of Vela's
investment portfolio in the September quarter has been reversed in
the December quarter. Vela's investment in EnSilica, a highly rated
business, perversely fell in value by a third (though it has since
recovered a good part of that drop), while Conduit's value is
similarly a fraction of the price at which it listed in
September. Vela's performance and position remains impeded by
the continued lack of confidence in the public markets generally,
particularly in the small cap markets in which Vela is largely
invested. Although Vela's investments are for the most part
in listed stocks, there is little activity in these stocks and so
their market values do not reflect our opinion of their true
worth."
For further information, please
contact:
Vela Technologies plc
Brent Fitzpatrick, Non-Executive
Chairman
James Normand, Executive
Director
|
Tel: +44 (0) 7421 728875
|
Allenby Capital Limited (Nominated Adviser)
|
Tel: +44 (0) 20 3328 5656
|
Nick Athanas / Piers
Shimwell
|
|
Peterhouse Capital Limited (Broker)
|
Tel: +44 (0) 20 7469 0930
|
Lucy Williams / Duncan Vasey / Eran
Zucker
|
|
Novus Communications (PR and IR Adviser)
|
Tel: +44 (0) 20 7448 9839
|
Alan Green / Jacqueline
Briscoe
|
|
About Vela Technologies
Vela Technologies plc (AIM: VELA) is
an investing company focused on early stage and pre-IPO long term
disruptive technology investments. Vela's investee companies have
either developed ways of utilising technology or are developing
technology with a view to disrupting the businesses or sector in
which they operate. Vela Technologies will also invest in
already-listed companies where valuations offer additional
opportunities.