Seraphim Space Investment Trust : Interim Report

INTERIM REPORT

F O R T H E

S I X M O N T H S E N D E D 3 1 D E C E M B E R

2023

CONTENTS

INTERIM MANAGEMENT REPORT

About the Company	01
Key Highlights	02
Portfolio Snapshot	03
Portfolio Key Developments	04
Chair's Statement	08
Investment Manager's Report	14
Portfolio	28
Principal and Emerging Risks and Uncertainties	34
Directors' Responsibility Statement	35

FINANCIAL STATEMENTS

Condensed Statement of Comprehensive Income	38
Condensed Statement of Financial Position	39
Condensed Statement of Changes in Equity	40
Condensed Statement of Cash Flows	41
Notes to the Financial Statements	42

FURTHER INFORMATION

Alternative Performance Measures	54
Glossary	56
Corporate Information	58

Please note that the Glossary on pages 56 and 57 provides definitions for defined terms used through the report.

I N T E R I M M A N A G E M E N T R E P O R T

ABOUT THE COMPANY

Seraphim Space Investment Trust PLC (the "Company" or "SSIT") is the world's first listed SpaceTech fund. It is an externally managed closed-ended investment company that was launched in July 2021. SSIT seeks to generate capital growth over the long term through investment in a diversified, international portfolio of predominantly early and growth stage privately financed SpaceTech businesses that have the potential to dominate globally and are category leaders with first mover advantages in areas such as global security, cybersecurity, food security, climate change and sustainability . The Company's shares are traded on the London Stock Exchange's main market.

Find us online: investors.seraphim.vc

INVESTMENT MANAGER

The Company is managed by Seraphim Space Manager LLP (the "Investment Manager" or "Seraphim Space"), one of the world's leading SpaceTech investment groups. The Investment Manager's team consists of seasoned venture capitalists and some of the space sector's most successful entrepreneurs who scaled their businesses to multi-billion Dollar outcomes.

The Investment Manager has supported more than 100 SpaceTech companies across its fund management and accelerator activities since 2016 and has a proven track record of delivering value.

Positioned at the heart of the global SpaceTech ecosystem, the Investment Manager has a differentiated model, using information asymmetry generated from its global deal flow, partnerships with leading industry players and primary research to back the most notable emerging SpaceTech companies shaping a new industrial revolution.

The Investment Manager is a signatory to the UN Principles for Responsible Investment ("UN PRI"). Its first UN PRI report is due in 2024.

Interim Report and Unaudited Condensed Interim Financial Statements

01

I N T E R I M M A N A G E M E N T R E P O R T

KEY HIGHLIGHTS

As at 31 December 2023

KEY PERFORMANCE INDICATORS

For the period from 1 July 2023 to 31 December 2023

N A V P E R S H A R E M O V E M E N T ( 1 )	S H A R E P R I C E M O V E M E N T ( 1 )
1.8%	27.4%
D I S C O U N T ( A S A T 3 1 D E C E M B E R 2 0 2 3 ) ( 1 )	O N G O I N G C H A R G E S ( 1 )
-63.6%	1.90%

I N T E R I M M A N A G E M E N T R E P O R T

PORTFOLIO SNAPSHOT

As at 31 December 2023

F A I R V A L U E	T O P 1 0 I N V E S T M E N T S
A S % O F F A I R V A L U E
£198.0M	85.4%
( 3 0 J U N E 2 0 2 3 : £ 1 8 7 . 4 M )	( 3 0 J U N E 2 0 2 3 : 8 5 . 7 % )

P R I V A T E P O R T F O L I O	L I S T E D P O R T F O L I O
F A I R V A L U E V S . C O S T	F A I R V A L U E V S . C O S T

F A I R V A L U E V S . C O S T

( A S A T 3 1 D E C E M B E R 2 0 2 3 ) ( 1 )

101.0%

FINANCIAL SUMMARY

	31 DECEMBER	30 JUNE		31 DECEMBER
	2023	2023	CHANGE	2022	CHANGE
NAV	£224.3m	£222.4m	0.9%	£222.0m	1.0%
NAV per share(1)	94.57p	92.90p	1.8%	92.74p	2.0%
Portfolio valuation	£198.0m	£187.4m	5.6%	£181.2m	9.2%
Fair value vs. cost(1)	101.0%	98.5%		97.2%
Liquid resources	£26.8m	£35.3m		£40.9m
Market capitalisation	£81.6m	£64.6m	26.2%	£108.2m	-24.6%

121.5%

( 3 0 J U N E 2 0 2 3 : 1 1 9 . 2 % )

M O N E Y R A I S E D B Y

P O R T F O L I O C O M P A N I E S ( 1 ) ( 2 )

$185M

N U M B E R O F P O R T F O L I O C O M P A N I E S T H A T A R E F U L L Y F U N D E D O R

H A V E 1 2 M O N T H S O R M O R E O F C A S H R U N W A Y ( 1 )

13.2%

( 3 0 J U N E 2 0 2 3 : 1 3 . 0 % )

P E R C E N T A G E O F P O R T F O L I O B Y F A I R V A L U E T H A T I S F U L L Y F U N D E D ( 1 )

60.1%

A V E R A G E C A S H R U N W A Y O F

P O R T F O L I O T H A T I S N O T F U L L Y

F U N D E D F R O M 3 1 D E C E M B E R 2 0 2 3 ( 1 ) ( 3 )

Share price(1)	34.4p	27.0p	27.4%	45.2p	-23.9%
-Discount/+premium(1)	-63.6%	-70.9%		-51.3%
Ongoing charges(1)	1.90%	1.89%		1.88%
Number of shares in issue	237.2m	239.4m	-0.9%	239.4m	-0.9%

1. Alternative performance measure - see Alternative Performance Measures on pages 54 and 55.

02 Seraphim Space Investment Trust PLC

23

12 MONTHS

1. Source: Portfolio company data.
2. Between 1 July 2023 and 31 December 2023.
3. Fairvalueweightedaverage(asdefinedintheGlossaryonpage 56)numberofmonthsofcashrunwayfrom31December2023fortheportfoliocompaniesthat are not fully funded, representing 39.7% of the portfolio fair value.

Interim Report and Unaudited Condensed Interim Financial Statements 03

I N T E R I M M A N A G E M E N T R E P O R T

PORTFOLIO KEY DEVELOPMENTS

ICEYE continued growth of both its data and missions businesses with four new satellites deployed, adding to its own SAR constellation, and key customer Bayanat ordering an additional two SAR satellites. The company has now achieved profitability at EBTIDA level.

Tomorrow.io completed the second close of its Series E funding round, bringing total proceeds to $99m. Published peer reviewed research shows that precipitation data from its two pathfinder satellites is roughly on par with the leading ground-based weather radars, offering a more cost-effective solution and enabling global coverage.

D-Orbit successfully launched its 12th and 13th ION Satellite Carrier missions, making the company the clear global leader in orbital transfer vehicles.

I N T E R I M M A N A G E M E N T R E P O R T

PORTFOLIO KEY DEVELOPMENTS

(continued)

HawkEye 360 announced the second and final close of the company's Series D-1 funding round, bringing the total Series D-1 to $68m. The company used part of the proceeds to acquire RF Solutions, a provider of secure, precise, geospatial intelligence from Maxar Intelligence.

Voyager entered a joint venture with Airbus to develop the Starlab space station, significantly expanding its access to the European market. Northrop Grumman's termination of its independent space station program and its subsequent partnership with Voyager has had several benefits, bringing increased NASA funding, improving the competitive landscape and strengthening Voyager's Starlab space station.

SatVu successfully commissioned its first satellite and entered commercial operations. However, the satellite experienced an anomaly after around six months of operations which led to a failure of the satellite that will impact commercial operations until another satellite can be launched. The company is working on the matter with its suppliers and in parallel is progressing development of its second satellite.

04 Seraphim Space Investment Trust PLC

Interim Report and Unaudited Condensed Interim Financial Statements 05

CHAIR'S STATEMENT

I N T E R I M M A N A G E M E N T R E P O R T

CHAIR'S STATEMENT

• With the existential challenges posed by heightened geopolitical tensions and climate change, the counter-cyclical nature of the space sector continues to result in its outperformance of the wider market. This trend is reflected in SSIT's portfolio, which continues to exhibit both a healthy growth trajectory and an ongoing ability to attract fresh investment from public and private capital markets alike.
  The portfolio overall remains well capitalised, with multiple key holdings now indicating that they have sufficient cash reserves to operate through to cashflow breakeven. We are also
  encouraged that several of our more mature holdings are now either already, or are projected to become during 2024, EBITDA positive, including our largest holding, ICEYE.'

Will Whitehorn

Chair

I N T E R I M M A N A G E M E N T R E P O R T

CHAIR'S STATEMENT

(continued)

SHARE PRICE

As at 31 December 2023, the Company's share price was 34.4p, an increase of 27.4% from 27.0p at 30 June 2023. However, the share price remained depressed, at a discount of 63.6% vs. the NAV per share at the Period end, due to the general global macroeconomic environment and the volatility experienced by growth and smaller technology stocks and alternative investment vehicles.

Given the discrepancy of performance between NAV and share price, the Board announced a share repurchase programme on 13 July 2023. During the Period, the Company bought back a total of 2,186,344 shares (0.9% of the shares in issue on 12 July 2023) at an aggregate cost of £1.0m, increasing the NAV per share by 0.44p. The shares bought back are being held in treasury.

CAPITAL ALLOCATION POLICY

As explained above, the Company continues to trade on a substantial discount to NAV, in common with other peers in the market. Each year, the Company seeks shareholder approval at the AGM to have the ability to repurchase shares. A buy-back of shares is usually in the interests of all shareholders as it helps to stabilise the share price, and, when trading at a substantial discount to NAV, it also increases NAV per share. Despite this positive impact, it also reduces the liquid resources of the Company as the capital used for buy-backs can no longer be used for investments.

The Board regularly considers multiple factors to determine the best use of the Company's capital, including the positive impact on NAV per share from buy-backs, the opportunity cost of using capital for buy-backs, potential returns from investments and the need to support portfolio companies through follow- on investment.

I am pleased to present the third Interim Report of Seraphim Space Investment Trust PLC, covering the period from 1 July 2023 to 31 December 2023 (the "Period").

The macroeconomic climate in the second half of 2023 continued to be challenging, and I would like to thank all shareholders for their ongoing support.

PROGRESS IN THE PERIOD

During the Period, the Company invested £5.7m in three new portfolio companies and three existing portfolio companies, leading to a portfolio of 33 active SpaceTech companies valued at £198.0m at 31 December 2023. In addition, the Company had £26.8m of cash reserves at the Period end.

As outlined in my reports for previous periods, the Company has deliberately slowed the pace of deployment due to the difficult global macroeconomic environment in order to reserve cash to follow its rights in existing portfolio companies whilst continuing to actively seek to invest smaller amounts in new target companies. As explained in the Investment Manager's Report, overall, the portfolio continues to be well- capitalised. In addition, the Investment Manager's Report includes a detailed review of the performance of the portfolio companies.

NAV

Over the Period, the Company's net assets increased by 0.9%, from £222.4m to £224.3m at 31 December 2023, driven by an increase in the fair value of the portfolio, which was partially offset by running costs and buying back shares. The NAV per share increased by 1.8%, from 92.90p to 94.57p at the Period end, driven by the fair value increase and the impact of the share buy-backs.

The private companies in the portfolio continue to account for the majority of the portfolio (88.2% by number and 97.5% by fair value). The fair value of the private portfolio increased over the Period, reaching 121.5% vs. cost (121.4% excluding FX impact) at the Period end.

The listed element of the portfolio remained depressed (13.2% fair value vs. cost) as performance continued to suffer broadly in line with the overall SPAC market (three of the four listed companies listed as part of SPAC mergers in 2021).

There was minimal impact from foreign exchange variations (+£0.2m, +0.08p per share) in the Period.

Image of SpaceX Transporter rocket launch.

08 Seraphim Space Investment Trust PLC

Interim Report and Unaudited Condensed Interim Financial Statements 09

I N T E R I M M A N A G E M E N T R E P O R T

CHAIR'S STATEMENT

(continued)

EARNINGS AND DIVIDEND

The Company made a revenue loss after tax of £1.9m for the Period, equal to (0.80)p per share.

The Company is focused on achieving capital growth over the long term. Given the nature of the Company's investments, we do not anticipate recommending to pay a dividend in the foreseeable future.

RESPONSIBLE INVESTMENT

During the Period, the Investment Manager continued to use its proprietary due diligence tool in order to assess sustainability opportunities and ESG risks associated with each potential investment. In addition, the Investment Manager has started a process to measure its carbon emissions, with the aim of considering reduction targets and offsets on the back of this measurement.

EVENTS AFTER THE PERIOD END

In January 2024, D-Orbit secured €100m in the first close of its Series C funding round, cementing its global leadership position in space logistics and advancing its global expansion.

AST SpaceMobile, one of our listed holdings, closed over $200m in funding from AT&T, Google and Vodafone in January 2024.

The Company's share price has experienced some recovery post the Period end, closing at 51.7p on 11 March 2024, equivalent to a discount of 45.3% to the 31 December 2023 NAV per share.

OUTLOOK

The overall prospects for both the SSIT portfolio and the space sector as a whole would appear to be robust. The secular tail winds relating to heightened geopolitical tensions and urgent challenges posed by climate change are expected to continue to drive demand for SpaceTech's unique capabilities.

We are cautiously optimistic about improving macroeconomic conditions and continued positive momentum within the SpaceTech investment market.

Indications of inflation being tamed and interest rates having peaked has resulted in some evidence of improved sentiment in both the private and public markets. We note that these developments may have contributed to the recovery in SSIT's share price post the period end, albeit the share price remains at a substantial discount to NAV.

We believe that 2024 could be a pivotal year for much of the portfolio. For those portfolio companies that are well capitalised, we anticipate strong growth prospects at the expense of their less well capitalised peers. For those that are less well capitalised and not performing as strongly, fundraising may continue to be a challenge, potentially leading to painful belt-tightening being required to extend cash runways through to the end of the year as they seek recovery.

Given limited cash reserves, we will continue to be judicious in selecting which companies to provide additional capital to, whilst also remaining open to well capitalised, compelling new investment opportunities. We continue to believe that SSIT's current cash reserves are sufficient to meet the near-term capital needs of the portfolio.

WILL WHITEHORN

Chair

12 March 2024

10

Seraphim Space Investment Trust PLC

Interim Report and Unaudited Condensed Interim Financial Statements

11

INVESTMENT MANAGER'S REPORT

I N T E R I M M A N A G E M E N T R E P O R T

INVESTMENT MANAGER'S REPORT

' The Period was marked by continued strong performance for SSIT's portfolio, as well as the

wider SpaceTech ecosystem. SpaceTech investment activity continues to outperform the

wider VC market, reflecting the strong fundamentals that are driving ever-growing traction for

top-performing SpaceTech companies. Record numbers of SpaceTech VC investments have

been closed during recent quarters, with the last six months having seen a notable recovery in

levels of growth funding rounds - an encouraging sign for prospects in 2024.

These trends are reflected in SSIT's portfolio, which has continued the positive cadence of

fundraising. Eight companies closed new funding rounds during the Period, once again with

the majority of these rounds being led by new investors - a healthy indicator given generalist

investors are spoilt for choice in terms of investment opportunities given the wider downturn in

the VC market.

Gains in fair value during the Period relating to some of these funding rounds have been partially

offset by reductions in fair value elsewhere in the portfolio due to a combination of technical

I N T E R I M M A N A G E M E N T R E P O R T

INVESTMENT MANAGER'S REPORT

(continued)

We continued to support our portfolio companies in select investment rounds while balancing the need for cash preservation at the SSIT level. At the same time, we continued looking for well-priced investment opportunities with attractive risk-return profiles for the Company. While the bar for new investments remains very high, we continue to monitor the market for opportunities and are in due diligence with a handful of companies.

Market overview

• SpaceTech venture capital ("VC") investment in 2023 was flat year-on-year while general VC investment was down 35% over the same period.

• SpaceTech VC investment showed signs of accelerating, with two continuous quarters of growth in H2 CY23, following declines between Q1 CY22 and Q2 CY23, compared to seven quarters of decline in general VC investment.
• SpaceTech VC investment continued to show increasing numbers of deals every quarter; Q4 CY23 had the highest number of deals ever as increasing numbers of investment-worthy startups continue to be founded.
• SpaceTech is proving to be highly resilient in an uncertain economic environment driven by increasing interest in defence, global security and climate change mitigation.

setbacks (SatVu) and underperformance (Altitude Angels and Xona Space Systems).

Although mindful of the difficulties some companies may face in accessing additional capital,

overall, we remain positive about the prospects for the portfolio in 2024. With companies

representing 60% of the portfolio by fair value now having indicated that they are projecting to

have sufficient cash to operate through to profitability, and with several key holdings targeting

EBITDA profitability in 2024, we are satisfied that SSIT continues to have the cash reserves

required to meet the near-term funding needs of the portfolio.

This has enabled us to deploy a modest amount of capital into a handful of new investments, capitalising on the current favourable investor conditions.'

Mark Boggett

CEO, Seraphim Space

TRAILING 12 MONTHS SPACETECH VS. GLOBAL TECHNOLOGY VENTURE CAPITAL (REBASED TO 100)

450
400
350
300
250
200
150
100
50

OVERVIEW

Overall, the first half of H1 FY23/24 saw a continuation of our strategy implemented in the previous fiscal year as a reaction to the changing global macroeconomic environment and the resulting effects on the alternative investing sector.

In line with this strategy and against the backdrop of general uncertainty in the market, we continued to focus on cash preservation for SSIT and management of its existing investment portfolio, both in terms of protecting existing value and driving additional value.

We worked with the management teams of our portfolio companies to optimise cash runways, facilitated funding rounds to allow for further value creation and acted as a sounding board for strategic decisions. These activities have proven successful, in that eight of our existing portfolio companies closed financing rounds in H1 FY23/24, including three of our top 10 holdings. It was encouraging to see that most of these rounds were priced equityroundsledbylargeandreputablenewinvestors.We are very pleased that 23 of our private holdings have cash runways of at least 12 months from 31 December 2023.

0

Q2 CY20

Q3 CY20

Q4 CY20

Q2 CY21

Q3 CY21

Q4 CY21

Q1 CY22

Q2 CY22

Q3 CY22

Q4 CY22

Q2 CY23

Q3 CY23

Q4 CY23

Q1CY18

Q2CY18

Q3CY18

Q4CY18

Q1CY19

Q2CY19

Q3CY19

Q4CY19

Q1CY20

Q1CY21

Q1CY23

Global VC Index ($bn)	Global VC Index (no. of deals)
SpaceTech Index ($bn)	SpaceTech Index (no. of deals)

Source: Seraphim Space Index; Pitchbook; Crunchbase

14

Seraphim Space Investment Trust PLC

Interim Report and Unaudited Condensed Interim Financial Statements

15

I N T E R I M M A N A G E M E N T R E P O R T

INVESTMENT MANAGER'S REPORT

(continued)

Valuation policy

In respect of private company valuations, fair value is establishedbyusingrecognisedvaluationmethodologies, in accordance with the International Private Equity and Venture Capital Valuation ("IPEV") Guidelines. The Company has a valuation policy for unquoted securities to provide an objective, consistent and transparent basis for estimating their fair value in accordance with IFRS as well as the IPEV Guidelines. The unquoted securities valuation policy and the associated valuation procedures are subject to review on a regular basis, and updated, as appropriate, in line with industry best practice.

In summary, the Company determines fair value in accordance with the IPEV Guidelines by focusing on updating the enterprise value (either through there being a new funding round or through a valuation calibration exercise or adjustment for milestones) and then applying the implied equity value (based on adjustments for new debt, etc) to the company's capital structure (i.e. preference stack). In the event of commercial (or technical) underperformance of a portfolio company, a write down can then also be applied, typically in increments of 25%, to reduce fair value.

All valuations are considered on a quarterly basis and calibrated against the price of the last funding round. In addition, the Company undertakes a recalibration, across an increased number of datapoints, for the material portfolio companies (i) whose last funding rounds took place more than 12 months earlier or (ii) which had

experienced a significant milestone event or material under- or over-performance (each a "recalibration event"). This process entails assessing the enterprise value following the most recent round against a composite of four elements: observable market data (where possible), recent relevant private investment transactions, public market valuations of comparable companies and the company's internal metrics and performance. This exercise further strengthens the valuation process with the goal of preserving shareholder confidence in the NAV during volatile market conditions and will be conducted when a recalibration event occurs and every quarter thereafter until a new priced funding round is completed.

Top 10 holdings' enterprise value ("EV") recalibrations

The chart below shows, on an anonymised basis, the percentage change in the underlying EV of each of these companies over the Period. Changes in EV relate to eithernewfundingroundsoradjustmentsfromquarterly valuation recalibration exercises. It is worth noting that as a result of the downside protections in place, where there were reductions in underlying EV, these have not necessarily translated directly into commensurate reductions in fair value. Therefore, while the underlying EV of the private companies within the top 10 holdings has increased by 1.8%, the aggregate fair value of the Company's investments in them has increased by 8.5% (both on a fair value weighted average basis), due to the companies experiencing reductions in EV suffering from less of a reduction in their fair value.

I N T E R I M M A N A G E M E N T R E P O R T

INVESTMENT MANAGER'S REPORT

(continued)

TOP 10(1) HOLDINGS' UNDERLYING EV CHANGES 30 JUNE 2023 TO 31 DECEMBER 2023

30%
20%				Illustration to show impact of
			downside protection measures:
					EV(2) +1.8%
10%					Fair value(2)	+8.5%
0%									9
-10%
-20%
-30%	1	2	3	4	5	6	7	8	9	10

Source: Seraphim Space analysis

1. One company in the top 10 is new to the top 10 as at 31 December 2023, replacing an underperforming company.
2. Fair value weighted average (as defined in the Glossary on page 56) half-on-half change for the six months ended 31 December 2023 of the top 10 holdings, representing 85% of fair value (75% of NAV) as at 31 December 2023.

The chart below shows the fair value changes from 30 June 2023 to 31 December 2023.

PORTFOLIO FAIR VALUE ("FV") CHANGES 30 JUNE 2023 TO 31 DECEMBER 2023 (£M)

250

Other

29.2 28.8 198.0

200
																																																																						(0.4)
																																																				4.8		3.9	3.9	3.9				3.9
																																								9.8	9.8	4.8										(0.0)
																																																	(0.0)
																																						14.7			(0.0)
																																								11.0
150																																									(0.0)
																											12.4	0.7		13.1			(3.7)
																							20.6	0.4	21.1
														21.2	2.8	(0.1) 23.9
100
				10.8	32.2
				21.4
50	45.5	45.4
			(0.1)
0
		FV 30-Jun-23		Additions			FV increase			FV decrease			FV 31-Dec-23			Portfolio FV

A cargo ship at sea. Satellites can receive and transmit automatic identification system (AIS) signals, enabling identification and real-time tracking of ships.

16 Seraphim Space Investment Trust PLC

Interim Report and Unaudited Condensed Interim Financial Statements

17