Supply@ME Capital : 1105KB

29 September 2022

Supply@ME Capital plc

(the "Company" or "SYME"

and together with its operating subsidiaries, the "Group")

Unaudited interim results for the six months ended 30 June 2022

SYME, the fintech business which provides an innovative fintech platform (the "Platform") for use by manufacturing and trading companies to access Inventory Monetisation© ("IM") solutions enabling their businesses to generate cashflow, announces its unaudited results for the six months ended 30 June 2022:

Highlights

• Operating loss before acquisition related costs and impairment charges of £2.52m (2021: £1.46m) primarily as a result of increased headcount, higher cost base due to the acquisition of TradeFlow Capital Management Pte. Limited ("TradeFlow") in July 2021, and continued investment in operations to satisfy Inventory Funders requirements.
• Revenue of £0.2m fully generated by the investment advisory segment (2021: £0.3m fully generated by the inventory monetisation segment).
• Good progress in the Group's Operational KPIs including:
• • Growth in the warehoused goods monetisation pipeline to £329.8m as at 23 September 2022; and
  • Increase in the Asset Under Management ("AUM") referred to the Funds advised by TradeFlow (+75% in 6 months).
• Following the execution of the inaugural IM transaction post 30 June 2022, the Group expects to start the process of building a track record of financial performance, from its inventory monetisation segment, as it delivers new IM transactions and completes due diligence activities.

Financial summary

	6 months to 30 June 2022	6 months to 30 June 2021
	Unaudited	Unaudited
	£000	£000
Total revenue	209	271
Operating loss before acquisition related
costs and impairment charges	(2,518)	(1,462)
Loss before tax	(6,259)	(1,693)
Loss per share (pence)	(0.02)	(0.01)
	As at 30 June 2022	31 December 2021
	Unaudited	Audited
	£000	£000
Total assets	8,257	10,535
Net liabilities	(4,038)	(1,425)

The unaudited interim results for the period ended 30 June 2021 do not incorporate the acquisition by the Company of TradeFlow, which completed in July 2021.

Alessandro Zamboni, CEO, Supply@ME Capital plc, said:

"The Group's focus so far this year has been on securing the first binding commitment to deploy our inaugural IM transaction, and it's fair to say that the numbers don't tell the full story.

The SYME board believes that the first IM transaction de-risks the investments made by our existing shareholder base, creates a clearer path to profitability, and advances our equity story, such that the door is now open for institutional investors to consider SYME as an attractive investment opportunity.

Additionally, the inventory "in-transit" business model operated by the Group's subsidiary, TradeFlow, has successfully navigated the risks and uncertainties of the external environment, proving the resilience of Funds advised.

The SYME team continues to work tirelessly to manage and develop our pipeline of corporate clients, and engage with potential third-party Inventory Funders that have expressed an interest in the IM asset class, through the Group's innovative Platform.

We are excited about the future for the Group following the successful execution of our first IM transaction, and look forward to providing further business updates to the market in due course."

Enquiries

Investors & analysts

Alessandro Zamboni, CEO, Supply@ME Capital plc, [e-mail]

Paul Vann, Walbrook PR Limited, [phone]; [e-mail]

Media:

Nicole Louis, MHP, [e-mail]

Legal advisers

Orrick, Herrington & Sutcliffe (UK) LLP

Notes

SYME and its operating subsidiaries provide its Platform for use by manufacturing and trading companies to access inventory trade solutions enabling their businesses to generate cashflow, via a non-credit approach and without incurring debt.  This is achieved by their existing eligible inventory being added to the Platform and then monetised via purchase by third party Inventory Funders.  The inventory to be monetised can include warehouse goods waiting to be sold to end-customers or goods/commodities that are part of a typical import/export transaction. SYME announced in August 2021 the launch of a global Inventory Monetisation programme which will be focused on both inventory in transit monetisation and warehoused goods monetisation. This programme will be focused on creditworthy companies and not those in distress or otherwise seeking to monetise illiquid inventories.

SUPPLY@ME CAPITAL PLC

UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE 6 MONTH PERIOD ENDED 30 JUNE 2022

Chief Executive's Report

Business model summary

Supply@ME Capital PLC (the "Company" or "SYME") and its operating subsidiaries (together, the "Group") provide its innovative fintech platform (the "Platform") for use by manufacturing and trading companies to access Inventory Monetisation© ("IM") solutions enabling their businesses to generate cashflow, via a non- credit approach and without incurring debt. This is achieved by their existing eligible inventory being added to the Platform and then monetised via purchase by third party Inventory Funders ("IM Transactions"). The inventory to be monetised can include warehoused goods waiting to be sold to end-customers or goods that are part of a typical import/export transaction. SYME announced in August 2021 the launch of a global IM programme which will be focused on both inventory in transit monetisation and warehoused goods monetisation. This programme will be focused on creditworthy companies and not those in distress or otherwise seeking to monetise illiquid inventories.

The Business Model Canvas: a unique Inventory Monetisation business model

The Group's Business Model Canvas ("BMC") envisages the unique value proposition to be "IM specialists", promoting, via a dedicated regulated structure (see below), an innovative service model which allows corporates (our clients) across the globe to improve their IM activities, freeing up extra-value from the goods handled. Hence, this value proposition includes the objective of the Group to be inventory analysis tech-champions for both in-transit and warehoused goods, supporting the investments in IM Transactions, through the Platform (as specified below).

The Group's BMC considers, within its journey, a key player: the Inventory Funders. By providing, a dedicated, regulated structure aimed at aligning each IM Transaction with corporates, we believe that Inventory Funders are now seeing the investment as a new 'real asset' asset class, complex but investable, considering the projected risk/reward profile. Our prospective Inventory Funders are typically investors with appetite for a new asset class or alternative investment opportunities, such as debt and credit funds, hedge funds or asset-based lenders.

The IM Transactions are delivered - through a global programme sponsored by the Company - via segregated, regulated alternative 'real asset' funds which use fund administration services provided by APEX Group1.

As of today, the Group's global inventory programme has four funds (segregated portfolios, or each, an "SP"):

• In-transit goods transactions:

• • CEMP - US Dollar (USD) Trade Flow Fund SP (in-transit transactions denominated in USD);
  • CEMP - Euro (EUR) Trade Flow Fund SP (in-transit transactions denominated in EUR).
• Warehoused goods transactions2:
• • Global Inventory Fund 1 SP (transactions regulated by the Italian law);
  • Global Inventory Fund 2 SP (transactions regulated by the law of England & Wales and UK tax law).

The other key partners are, effectively, the rest of the eco-system supporting the execution of each IM Transaction (in-transit & warehoused goods). We see an important role for Commercial Banks, considering the potential interest of these type of banks in our White-label proposition (where the bank uses the Platform to deliver inventory-backed financial products, studied and developed by themselves, directly to their clients).

The Platform: the key role of the data ingestion and services and the new Web3 route

• https://www.apexgroup.com/.

• As announced by the Company in the RNS of 6 August 2021.

The Platform comprises, among the two offerings "in-transit goods" and "warehoused goods" monetisation, a unique combination of software modules, exponential technology components (such as Artificial Intelligence ("AI"), Internet of Things and Blockchain), dedicated legal and accounting frameworks and business rules/ methodologies delivered via a hybrid ICT architecture.

Specifically, the ICT architecture adopts two cloud environments (Microsoft Azure for warehoused goods monetisation and Amazon Web Services for the in-transit model delivered by TradeFlow) plus an external integration with distributed ledger frameworks.

The Platform's roadmap envisages that data sources have a key role for the Platform, triggering the value- added service provided by the Group (whether inventory data analysis or IM provided by the Fund). Accordingly, data ingestion services have a critical role in the overall Platform operations and, with reference to the offering of the Group, these cover the key function requested by banks which want to work with SYME via the White- label route.

On 28 June 2022, the Group announced the execution of a strategic alliance agreement (the "VeChain Agreement") with the VeChain Foundation ("VeChain"), a blockchain enterprise service provider focused on supply chain and sustainability, to fund the first inaugural IM transaction and kick off the "Web3"3 stream.

The objective of the VeChain Agreement is to create a sustainable Web3 environment that will allow direct participation in the IM journey combining traditional finance with the blockchain space, linking the digital assets community to the real economy. SYME aims to build up an "IM Platform 3.0" with an expected roadmap of Web3 features, including the issuance of NFTs, digital ownership and B2B marketplaces, decentralised finance (DEFI) and, overall, a governance protocol.

The Revenue Model

The Group has clarified and fine-tuned its overall business model, which is now clearly focused on the pure FinTech element of the business, being the Group's Platform and its supporting infrastructure, including exponential technology components, the legal and accounting framework and structured business rules/ methodologies. In this respect, the Platform has, by definition, an intrinsic value and accordingly can also be used by other operators (such as banks or other debt funders) to improve inventory backed or based facilities. The Company considers it to be an enabler of each transaction. For this reason, the Group officially launched its White-label initiative at the end of August 2020, invested further time in upgrading ICT architecture, selected and started new tech streams, while leveraging and understanding the components used by TradeFlow within its TradeFlow+ system.

The Group also continued to refine the BMC and the revenue model through discussion with potential IM funders over the past year, in particular regarding the introduction of an equity (first loss) line in the capital structure of each IM transaction. This was addressed with the launch of the Fund compartments, which can work as an equity provider and/or on a standalone basis (for example, the Fund also have the option to directly deliver an IM transaction). The Fund leverages the existing fund structuring arrangements and track record of TradeFlow providing a further synergy following the Company's acquisition of the Singapore-based business in July 2021.

As such, the Group is now focused on establishing and growing the following active, and future, revenue streams:

• "Captive" IM platform servicing ("C.IM"): revenue generated through the use of the Platform to facilitate IM transactions performed by the Fund and its IM funders. This revenue is generated by the Group's operating subsidiaries. Revenue is expected to be earned in relation to the following activities:

• According to the Messari report "Crypto theses 2022", "crypto, or the recently en vogue "Web3", is an unstoppable force in the long-term". "Web3 is a good and all-encompassing term that captures cryptocurrencies (digital gold & stablecoins), smart contract computing (Layer 1-2 platforms), decentralized hardware infrastructure (video, storage, sensors, etc), Non- Fungible Tokens (digital ID & property rights), DeFi (financial services to swap and collateralize web3 assets), the Metaverse (the digital commons built in game-like environments), and community governance (DAOs, or decentralized autonomous organizations)".