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.

06 May 2020

Tekcapital PLC

("Tekcapital", the Company" or the "Group")

Final Results for the year-ended 30 November 2019

Record Net Assets and Revenue for the Period

Tekcapital plc (AIM: TEK), the UK intellectual property (IP) investment group focused on creating marketplace value from university technology, announces its audited results for the year ended 30 November 2019.

Financial highlights

  • Net Assets increased 40% to US$22.25m, a record level (2018: US$16.13m)
  • NAV per share US$0.35 (2018: US$0.30)
  • Portfolio valuation increased 48% to US$20.3m (2018: US$13.70m)
  • Total revenue US$7.72m (2018: US$6.83m)
    • Revenue from services increased 15% to US$1.20m (2018: US$1.04m)
    • Net increase of US$6.52m in fair value of portfolio companies (2018: US$5.79m)
  • Profit before tax: US$5.52m (2018: US$4.55m)
  • Reduction of operating expenses by 7% to US$1.59m (2018: US$1.72m).
  • Service revenues cover approximately 55% of cost base (cost of sales and operating expenses)
  • Placing to raise US$0.9m completed in July 2019.

Operational highlights: Material Portfolio Companies

Salarius® (91.7% ownership) www.salarius.co

  • Successfully launched MicroSalt® with the first three commercial accounts secured.
  • Approximately 25 companies are testing MicroSalt® for inclusion in their snack food products.
  • Appointed Mike Marrotte, V.P. Sales. Top performing sales leader and revenue growth strategist
  • Appointed Javier Contreras as COO to further its commercialization efforts (formerly of The Clorox Company).
  • Completed development and consumer packaging of its SaltMe!® line of full flavour, reduced sodium potato chips in 4 flavours.
  • Engaged a leading natural food wholesaler & food broker for retail placement of SaltMe!®
  • Engaged two leading food ingredient brokers, Accurate Ingredients, Inc. and Hanks Brokerage Inc., to sell MicroSalt® to snack food companies throughout the U.S.
  • Filed additional patent on coverage of MicroSalt® directed to improve low-sodium salt.

Lucyd® (100% ownership) www.lucyd.co

  • Launched sales of Lucyd Loud 3.0 audio glasses, proper prescription glasses that can be used to listen to music, answer your mobile phone or talk to Siri®.
  • On track to launch Lucyd Loud Lyte in the H2 2020. Lucyd Lyte is the first prescription Bluetooth glasses that looks like traditional glasses in terms of style and form factor.
  • Filed additional patent protection on Lucyd modular eyewear and trademark protection on Glasses as a Service (GaaS).

Guident (100% ownership) www.guident.co

  • Filed a new patent application for controlling autonomous vehicles after an accident (patent was allowed by the USPTO post period end)
  • Guident exclusively licensed a patent application from Michigan State University for an AV communication and safety network.
  • Guident exclusively licensed patent # 9,964,948 from FIU which enables remote control of an AV by a human operator when necessary
  • Begun its B2B marketing program to develop partnerships with vehicle OEM's to provide remote tele- monitoring and control centre IP & technology for autonomous vehicles and land-based delivery drones.

Belluscura® (18.9% ownership) www.belluscura.com

  • Continued progress with its patented portable oxygen concentrator programme
  • Belluscura raised US $2.7m in 2019 at 15p/share to continue with its FDA clearance and go to market strategy equating to a post money valuation of ~US $9m.
  • Belluscura anticipates receiving 510(K) clearance from the US FDA in H1 2020
  • Post end of period, Belluscura filed an additional patent application covering devices and systems for treating people suffering from acute respiratory distress caused by the Coronavirus.

Operational highlights: Corporate

  • Strengthened the board of directors with the appointments of Lord David Willets and Mr. Louis Castro as independent non-executive directors

Dr. Clifford Gross, Executive Chairman said: "I'm glad to report that through the collective efforts of our dedicated and capable team we have achieved record results in 2019. The continued development of our portfolio companies combined with improved service revenues has resulted in solid financial performance, whilst we simultaneously reduced our operating expenses by 7%."

Post period end portfolio company highlights

  • On December 12, 2019, Salarius Ltd secured national food ingredient broker for Microsalt®. Accurate Ingredients provides network of experienced sales representatives on east and west coast of the United States.
  • On 24 January 2020, Salarius Ltd secured additional food ingredient broker partner for sales of Microsalt®. The agreement with Hanks Brokerage Inc. covers primarily snack food companies in the southwestern United States.
  • On 10 February 2020, Belluscura has 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.
  • In February 2020, Salarius Ltd's executives exercised stock options resulting in Tekcapital's ownership being reduced from 97.5% to 91.7%.
  • On 2 March 2020, Salarius Ltd announced North American distribution agreement for launch of SaltMe!® snacks. This agreement represents an important milestone for Salarius' new potato chip snack line, enabling unprecedented reach of SaltMe!® products into consumer outlets of every size in North America.
  • On 4 March 2020, Salarius Ltd announced sales partnership agreement with iLevel Brands Inc as part of its launch of North America sales of SaltMe!®. This agreement, combined with their previously announced distribution agreement on 2 March 2020, will expand Salarius' market penetration and brand awareness for its new potato chip snack line with retail brand placements across the entire East Coast, Midwest and Southwest geographic areas of the United States.
  • On 16 March 2020, Belluscura plc announced the filing of a patent application on a modular, portable oxygen enrichment ventilation system for treating patients suffering from COPD and ARDS brought on by such diseases as COVID-19.
  • On 24 March 2020, Salarius Ltd announced it has received an order from its distribution partner to launch sales of its new SaltMe!® full flavor-low sodium snacks in 71 stores beginning in May 2020.
  • On 26 March 2020, Lucyd Ltd announced it has filed patent and trademark on its forthcoming Vyrb(TM) app. Vyrb users will be able to active a world of smartphone actions with their voice in just moments, including social media posting. The app is designed to improve utility of Lucyd Bluetooth® glasses and wireless hearables.
  • 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 patent application # 16/386,530 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".
  • On 24 April 2020, Lucyd Ltd announced launch of its Bluetooth(R)-enabled glasses on the website of US superstore chain Walmart Inc.

Posting of Annual Report and Accounts

The Company's annual report and accounts for the year ended 30 November 2019 will be posted to shareholders in due course and will be available on the Company's website www.tekcapital.comshortly.

For further information, please contact:

Tekcapital Plc

Via Flagstaff

Clifford M. Gross, Ph.D.

SP Angel Corporate Finance LLP

+44 (0) 20 3470 0470

(Nominated Adviser and Broker)

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

Chairman's statement

Tekcapital brings innovations from lab to market that enhance safety and health and improve the quality of life. In 2019, all our active portfolio companies have made significant progress and portfolio holdings value increased by 48%. We have also grown our service revenues by 15%, including portfolio company management fees and R&D related tax credits. As a result, our profits and net assets ended the year at record levels.

Key portfolio companies

Using our proprietary global university network, we provide services to universities and companies to help them commercialize their innovations. Over the past four years, using these services, we have built a compelling group of 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, vibrant companies will emerge, net assets will grow, returns on invested capital will outperform the sector and exits will occur faster. When we realise exits through trade sales or IPO's, the Group's goal is to distribute a portion of the proceeds as a special dividend to our shareholders.

Salarius is a food tech business that owns a patented process to produce nanoparticle sized salt. These small crystals dissolve faster on the tongue, so you need to use less salt, while still having the same salty taste. Less salt means about 50% less sodium. Less sodium means a reduced likelihood of developing heart disease, the world's number one killer. Post-period, Salarius has added additional senior management with Fortune 500 company manufacturing experience and is expected to begin selling Salarius salt and snacks in Q4. According to Future Market Insights, the low sodium ingredient market is estimated to reach US$1.76bn1 by 2025. Tekcapital owns 91.7% of Salarius.

Key Investment Rationale: Whilst consumers continue to crave salted snacks, there is a significant trend for better for you, health conscious foods that taste good. As heart disease continues to rise and represents the leading cause of premature death in the world, reducing sodium in the foods we eat is of paramount and continuing importance.

Lucyd has built a new, online eyeglass business that combines technology with traditional eyewear. Recently they introduced Lucyd Loud 3.0 upgraded Bluetooth® eyewear. This product combines proper prescription glasses with Bluetooth technology that you can use to answer your phone, listen to music, and talk with Siri®. The product has been well received and the company is focused on expanding its sales with retail distribution through sporting goods and other specialty stores in 2020. Lucyd has also developed and filed approximately 20 patents on modular Bluetooth eyewear that enables the consumer to quickly and inexpensively change the look of their glasses. The company anticipates launching this new product in 2020 along with Lucy Lyte, the first Bluetooth prescription eyewear, that look like regular glasses in terms of their streamlined form factor. According to Statista2, the current online market for eyewear is $3.8b per year. Tekcapital owns 100% of Lucyd.

Key Investment Rationale: Digital assistants have gained significant prominence amongst consumers of all ages. Individuals want to stay connected to their digital lives throughout the day. Lucyd's Bluetooth® enabled glasses facilitate seamless connectivity whilst providing glasses that correct vision and protect the eyes with fashion forward frames at an affordable price. Additionally, the pedestrian accidents and deaths are on the rise partially from distractions caused by mobile devices. Lucyd can help deal with this problem.

Guident owns or holds the exclusive licence to a group of patents that together we believe improve the safety of autonomous vehicles and land-based autonomous delivery drones. Guident has significantly increased its intellectual capital in 2019 with several additional patent acquisitions and one in-house developed property. Guident has begun its B2B marketing program and seeks to develop partnerships with vehicle OEM's to provide remote tele monitoring and control centres for autonomous vehicles amongst other services. Such monitoring has recently been required by law in the State of Florida and other jurisdictions. According to Statista, the US market for Autonomous vehicles is projected to reach $6 billion by 2025. Tekcapital owns 100% of Guident.

  1. https://www.futuremarketinsights.com/reports/sodium-reduction-ingredient-market
  2. https://www.statista.com/outlook/12000000/109/eyewear/united-states#market-onlineRevenueShare

Key Investment rationale: Autonomous vehicles and ground based delivery drones are about to make their entrance on the world's roads. They hold the potential to significantly reduce accidents and transportation costs. We believe that ensuring the safety of these vehicles with software apps for primary use cases including accident remediation coupled with remote monitoring and control centres, will be required for rapid consumer adoption.

Belluscura has developed an improved portable oxygen concentrator to provide on-the-go supplemental O2, with user replaceable filter cartridges. When a patient's disease progresses, they now can upgrade the filter cartridge to provide more liters of O2 per minute, rather than having to replace an expensive medical device. This cost savings will be beneficial to patients and insurance companies and should help make healthcare more affordable as per Belluscura's mission. Belluscura raised US $2.7m in 2019 at 15p/share to continue with its FDA clearance and go to market strategy. Post money valuation ~US $9m for the entire business. Belluscura anticipates receiving 510(K) clearance from the US FDA in H1 2020. Upon receipt of clearance from the FDA, the Directors believe that Belluscura's value should significantly increase. According to Global Market Insights, the medical portable O2 market is currently $1.4bn3 a year and growing by more than $100m/year1. Post end of period, Belluscura has 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. The latest patent application covers devices and systems for treating people suffering from ARDS including patients suffering from the coronavirus. Belluscura and Separation Design are designing and developing next generation, cost-effective, portable ECMO technology to treat ARDS patients. Tekcapital owns 18.9% of Belluscura.

Key Investment rationale: Chronic obstructive pulmonary disease ("COPD") afflicts more than 250 million individuals worldwide and is growing due to the aging population, smoking and air pollution. Further, as a result of the COVID-19 pandemic, individuals who recover may have residual lung damage. Many of these individuals could benefit from the supplemental oxygen provided by portable oxygen concentrators. Belluscura's patented approach to enable users to upgrade their portable oxygen concentrators as their disease progresses rather than purchase a new unit will make healthcare more affordable for these patients and their insurance providers.

Corporate

Tekcapital has strengthened the board of directors with the appointments of Lord David Willetts and Mr. Louis Castro.

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.

Louis Castro is a highly experienced and well qualified Director and Chartered Accountant with some thirty years spent 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 US$150m. Louis is a Fellow of the Institute of Chartered Accountants of England & Wales.

We are seeing continued growth of technology transfer services and have released a new version of the Invention Evaluator tri-lingual website for expansion of its service offerings throughout Latin America. Consulting sales are up approximately 15% Y-O-Y and currently cover approximately 55% of our administrative costs. One of our goals is to have all of our administrative costs covered by our service revenue in future periods.

Principal Risks and Uncertainties

The specific financial risks are discussed in the notes to the financial statements. Other risks are as follows:

  • the principal financial risks of the business relate to the value of the Group's portfolio companies. We believe that the fair value of each portfolio company is a time dependent valuation that may be impaired if the business does not achieve it milestones, growth trajectory, product development, capital raises or other key performance metrics. Individually and as a group our portfolio companies have a material impact on our financial performance. This risk of individual portfolio company negative performance may be ameliorated as our portfolio becomes more diverse and increases in value.

3 https://www.gminsights.com/industry-analysis/medical-oxygen-concentrators-market-report

  • the principal operational risk of the business is management's ability to assist our portfolio companies in achieving their goals and ultimate exits whilst increasing our service revenues.
  • the Group is dependent on its executive team and directors for its operations and ultimate success and there can be no assurance that it will be able to retain the services of these key personnel in the future.
  • the COVID-19 epidemic may produce negative economic activities which could reduce the Group's economic performance Further, until the Group covers all of its operating costs from service revenue and or exits it will seek to raise additional capital to fund operations and follow-on investments in portfolio companies.

Post Period End Fundraisings

Post end of period, the Company announced that it had completed a fundraising of $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 share. The issue of the new shares and receipt of the proceeds from the fundraising were received during February 2020.

Post end of period, the Company announced that it had raised US$1.15 million (before expenses) by means of a conditional fundraise through the issue of, in aggregate 9,250,000 placing shares at 10 pence per share. The placing will be subject to Tekcapital's shareholders approval at a general meeting on 19 May 2020.

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 early stage venture 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 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.

Dr Clifford M Gross

Chairman and CEO

05 May 2020

Tekcapital Plc

Consolidated Statement of comprehensive income

For the year ended 30 November 2019

Year ended

Year ended

Group

Note

30 November

30 November

2019

2018

US $

US $

Continuing Operations

Revenue from services

6

1,200,551

1,040,830

Unrealised profit on the revaluation of

12

6,516,813

5,792,264

investments

Total Revenue

7,717,364

6,833,094

Cost of sales

(606,166)

(559,630)

Gross Profit

7,111,198

6,273,464

Administrative expenses

7

(1,590,563)

(1,717,570)

Operating Profit

5,520,635

4,555,894

Profit on ordinary activities before income

tax

5,520,635

4,555,894

Income tax expense

9

(2,345)

(1,269)

Profit after tax for the year

5,518,290

4,554,625

Other comprehensive income

Foreign exchange (loss)/profit

31,855

(135,342)

Total other comprehensive (loss)/income

31,855

(135,342)

Total comprehensive profit for the year

5,550,145

4,419,283

Profit per share

Basic earnings per share

10

0.095

0.103

Diluted earnings per share

10

0.095

0.103

-

-

The Group has used the exemption under S408 CA 2006 not to disclose the Company income statement.

Items in the statement above are disclosed net of tax.

Tekcapital Plc

Consolidated Statement of financial position

At 30 November 2019

As at

As at

Group

Note

30 November

30 November

2019

2018

US $

US $

Assets

Non-current assets

Intangible assets

13

838,770

838,769

Financial assets at fair value through profit and

12

20,335,925

13,704,354

loss

Convertible loan notes

15

476,122

250,000

Property, plant and equipment

14

17,353

33,489

21,668,170

14,826,612

Current assets

Trade and other receivables

15

815,866

429,373

Cash and cash equivalents

16

472,899

1,165,442

1,288,765

1,594,815

Total assets

22,956,935

16,421,427

Current liabilities

Trade and other payables

20

310,160

285,957

Current income tax liabilities

500

500

Deferred Revenue

118,595

-

429,255

286,457

Total liabilities

429,255

286,457

Net assets

22,527,680

16,134,970

Equity attributable to the owners of the Parent

Ordinary shares

18

372,984

326,036

Share premium

18

10,993,546

10,218,805

Retained earnings

19

11,055,821

5,516,655

Translation Reserve

19

177,498

145,643

Merger Reserve

19

(72,169)

(72,169)

Total Equity

22,527,680

16,134,970

Tekcapital Plc

Company Statement of financial position

At 30 November 2019

As at

As at

Company

Note

30 November

30 November

2019

2018

US $

US $

Assets

Non-current assets

Intangible assets

13

-

-

Investment in subsidiaries

11

1,959,003

1,955,013

Financial assets at fair value through

12

1,804,120

1,126,315

profit and loss

Convertible Loan Notes

15

476,122

250,000

4,239,245

3,331,328

Current assets

Trade and other receivables

15

2,321,731

1,752,385

Cash and cash equivalents

16

112,114

698,694

2,433,845

2,451,079

Total assets

6,673,090

5,782,407

Current Liabilities

Trade and other payables

20

484,375

470,808

484,375

470,808

Total liabilities

484,375

470,808

Net assets

6,188,715

5,311,599

Equity attributable to the owners of the

parent

Ordinary shares

18

372,984

326,036

Share Premium

18

10,993,546

10,218,805

Retained Earnings

19

(5,079,729)

(5,131,273)

Translation Reserve

19

(98,086)

(101,969)

Total Equity

6,188,715

5,311,599

The Company's profit before tax for the year ended 30 November 2019 was $30,688.

Tekcapital Plc

Consolidated Statement of changes in equity

For the year ended 30 November 2019

Attributable to equity holders of the parent company

Ordinary

Share

Translation

Merger

Profit and

Total Equity

Group

Note

Shares

Premium

Reserve

reserve

loss

US $

US $

US $

US $

US $

account

US $

Balance at 30 November 2017

264,221

9,271,098

280,985

(72,169)

931,826

10,675,961

Share issue

18

61,815

1,097,216

1,159,031

Cost of share issue

18

-

(149,509)

-

-

-

(149,509)

Profit for the year

19

-

-

-

-

4,554,625

4,554,625

Other comprehensive income

19

-

-

(135,342)

-

-

(135,342)

Share based payments

26

-

-

-

-

30,204

30,204

Balance at 30 November 2018

326,036

10,218,805

145,643

(72,169)

5,516,655

16,134,970

Share issue

18

46,948

892,018

938,966

Cost of share issue

18

-

(117,277)

-

-

-

(117,277)

Profit for the year

19

-

-

-

-

5,518,290

5,518,290

Other comprehensive income

19

-

-

31,855

-

-

31,855

Share based payments

26

-

-

-

-

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 premium - amount subscribed for share capital in excess of nominal value, net of directly attributable costs.

Translation reserve - amount subscribed for foreign exchange differences recognised in Other Comprehensive Income.

Merger reserve - amount subscribed for share capital in excess of nominal value in relation to the qualifying acquisition of subsidiary undertakings.

Profit and loss account - cumulative net gains and losses recognised in the consolidated statement of comprehensive income.

Tekcapital PLC

Company Statement of changes in equity

For the year ended 30 November 2019

Attributable to owners of the parent company

Ordinary

Share

Translation

Retained

Total Equity

Company

Note

Shares

Premium

Reserve

earnings

US $

US $

US $

US $

US $

Balance at 30 November 2017

264,221

9,271,098

77,277

(4,241,264)

5,371,332

Share issue

18

61,815

1,097,216

-

-

1,159,031

Cost of share issue

18

-

(149,509)

-

-

(149,509)

Profit for the year

19

-

-

-

(920,213)

(920,213)

Other comprehensive income

19

-

-

(179,246)

-

(179,246)

Share based payments

26

-

-

-

30,204

30,204

Balance at 30 November 2018

326,036

10,218,805

(101,969)

(5,131,273)

5,311,599

Share issue

18

46,948

892,018

-

-

938,966

Cost of share issue

18

-

(117,277)

-

-

(117,277)

Profit for the year

19

-

-

-

30,668

30,668

Other comprehensive loss

19

-

-

3,883

-

3,883

Share based payments

26

-

-

-

20,876

20,876

Balance at 30 November 2019

372,984

10,993,546

(98,086)

(5,079,729)

6,188,715

Share premium - amount subscribed for share capital in excess of nominal value, net of directly attributable issue costs. Translation reserve - amount subscribed for foreign exchange differences recognized in Other Comprehensive Income.

Profit and loss account - cumulative net gains and losses recognised in the consolidated financial statements of comprehensive income.

Tekcapital Plc

Consolidated Statement of cash flows

For the year ended 30 November 2019

For the year

For the year

ended

ended

Group

Note

30 November

30 November

2019

2018

US $

US $

Cash flows from operating activities

Cash outflows from operations

24

(1,397,294)

(866,377)

Tax paid

(2,345)

(1,269)

Net cash outflows from operating

activities

(1,399,639)

(867,646)

Cash flows from investing activities

Purchase of financial assets at fair value

12

(111,810)

(693,413)

through profit and loss*

Purchases of property, plant and

14

(862)

(45,841)

equipment

Proceeds from sale of property, plant and

-

80

equipment

Net cash outflows from investing

(112,672)

(739,174)

activities

Cash flows from financing activities

Proceeds from issuance of ordinary

18

938,966

1,159,031

shares

Costs of raising finance

18

(117,277)

(149,508)

Net cash outflows from financing

821,689

1,009,523

activities

Net (decrease) in cash and cash

equivalents

(690,622)

(597,297)

Cash and cash equivalents at beginning of

15

year

1,165,442

1,797,729

Exchange (losses)/gains on cash and cash

(1,921)

(34,990)

equivalents

Cash and cash equivalents at end of year

15

472,899

1,165,442

* No significant non-cash transaction occurred during the period.

Notes

  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 detailed on page 1 of these financial statements. The Company is a public limited company, which listed on the AIM market of the London Stock Exchange in 2014. The principal activity of the parent company is that of an investment entity and that of the Group is to provide universities and corporate clients with a wide range of technology transfer services. The Group and the parent company also acquire exclusive licences for disruptive technologies it has acquired for its own portfolio, for subsequent commercialisation.
    The principal accounting policies applied in the preparation of these consolidated and parent company financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
    Amounts presented in this report are rounded to nearest US$1.
  2. Accounting policies

2.1 Statement of compliance

The consolidated 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 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 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.

The consolidated financial statements of the parent company have been prepared in accordance with Financial Reporting Standard 101 "Reduced disclosure framework" ('FRS 101'). The company will continue to prepare its financial statements in accordance with FRS101 on an ongoing basis until such time as it notifies shareholders of any change to its chosen accounting framework.

The Company financial statements have been prepared using the historical cost convention except where other measurement basis are required to be applied and in accordance with IFRS under FRS 101. In accordance with FRS101, the company has taken advantage of the following exemptions:

  • IAS 7, 'Statement of Cash Flows'
  • Requirements of IAS 24, 'Related Party Disclosures' to disclose related party transactions entered into between two or more members of a group.

2.1.1 Going concern

The Group and the Company meets its day to day working capital requirements through its service offerings and monies raised through the issues of equity. The Group's forecasts and projections indicate that the Group and the Company have sufficient cash reserves to operate within the level of its current facilities. Whilst it is the Group's and the Company's intention to rely on the available cash reserves, future income generated from its growing service offerings and reductions in its cost base, a negative variance in the forecasts and projections would make the Group's ability to continue as a going concern dependent on an additional fund raise. If the Group's forecasts are not achieved, the Directors would seek to raise the additional funds through equity issues.

Whilst the COVID-19 epidemic is contributing to uncertainty in the markets and the full impact is difficult to measure, at the time of approving the accounts after making enquiries, the Directors have a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence for

the foreseeable future. The Group and the Company therefore continue to adopt the going concern basis in preparing both its consolidated financial statements and for its own financial statements.

2.1.2 Changes in accounting policy and disclosures

New standards and interpretations not yet adopted by the Group

IFRS 16 Leases

IFRS 16 was issued in January 2016 and is effective for accounting periods beginning on or after 1 January 2019. The Group has not chosen to early adopt this standard and will adopt it for the accounting period beginning 1 December 2019. Directors do not expect any material impact on the consolidated financial statements, as most of its operating lease commitment disclosed in Note 25 (US$61,925) will be satisfied by 1 December 2019.

No other issued but not endorsed amendments to IFRS will have a material impact on the Group's financial statements once they become endorsed and effective.

New standards and interpretations adopted by the Group: IFRS 9

IFRS 9 was issued in July 2014 and is effective for accounting periods on or after 1 January 2018. The Group has adopted the full retrospective method of adoption; however, the adoption of this standard has not had an impact on the financial performance or position of the Group for the year or comparative period.

IFRS 15 Revenue from contracts with customers

IFRS 15 was issued in September 2015 and is effective for accounting periods beginning on or after 1 January 2018.

The Group has adopted IFRS 15 on 1 December 2018, effectively replacing IAS 18 used by the Group previously. The Group has adopted the full retrospective method of adoption; however, the adoption of this standard has not had an impact on the financial performance or position of the Group for the year or comparative period.

Additional disclosures were included in Note 6 to satisfy the IFRS disclosure requirements.

  1. Business combinations
    Tekcapital PLC was incorporated on 3 February 2014 and on 18 February 2014 entered into an agreement to acquire the issued share capital of Tekcapital Europe Limited by way of share issue. On 19 February 2014 it acquired the issued share capital of Tekcapital LLC also by share issue. This has been accounted for as a common control transaction under IFRS 3 using the pooling of interest method by using the nominal value of shares exchanged in the business combination and no fair value adjustment. The consolidated financial statements comprise the financial statements of Tekcapital PLC and all subsidiaries controlled by it. 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. Inter-company 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. Foreign currencies

(a) Functional and presentation currency

These consolidated financial statements are presented in US Dollars which is the presentation currency of the Group. This is because the majority of the Group's transactions are undertaken in US Dollars. Each subsidiary within the Group has its own functional currency which is dependent on the primary economic environment in

which that subsidiary operates. Effective 1 December 2014 Tekcapital PLC and Tekcapital Europe Limited changed their functional currency to UK Sterling. This is because, the primary economic activity of these entities is undertaken in the UK.

(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 borrowings and cash and cash equivalents are presented in the income statement within 'finance income or costs'.

(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:

  1. assets and liabilities for each balance sheet presented are translated at the closing exchange rates at the date of that balance sheet.
  2. 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)
  3. all resulting exchange differences are recognised in other comprehensive income.

2.4 Investment in subsidiaries

Investments in subsidiaries including Tekcapital Europe Ltd and Tekcapital LLC are recognised initially at cost. The cost of the investment includes transactions costs. The carrying amounts are reviewed at each reporting dated to determine whether there is any indication of impairment.

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 30 November 2019:

  • 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 2.9.

2.5 Non-controlling interests

Losses applicable to non-controlling interests in a subsidiary are allocated to the non-controlling interests, even if doing so causes the non-controlling interests to have a deficit balance. Adjustments to non-controlling interests arising from transactions that do not involve the loss of control are based on a proportionate amount of the net assets of the subsidiary. Upon the loss of control the assets and liabilities of the subsidiary, any non- controlling interests and other components of equity related to the subsidiary are derecognised. Any resulting gain or loss is recognised in the profit and loss.

2.6 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. An 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 'Other gains / (losses) - net' in the income statement. When re-valued assets are sold, the amounts are included in other reserves are transferred to retained earnings.

2.7 Intangible assets

(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 and is shown at original cost of purchase less impairment losses.

Under IAS38, this asset is regarded by the Directors as being an intangible asset with an indefinite useful life. The Directors believe that the asset is unique in that no competitor offering currently exists, the service appeals globally to many types of clients including Fortune 100 companies, there is no expectation of obsolescence in the foreseeable future, and the service provided by the asset generates sufficient ongoing revenue streams.

Consequently, no write down in the value of this asset either by way of amortisation or impairment has occurred in this financial year. In the Directors' opinion this asset has an indefinite useful life.

(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:

  1. it is technically feasible to complete the software product so that it will be available for use;
  2. management intends to complete the software product and use or sell it;
  1. there is an ability to use or sell the software product;
  2. it can be demonstrated how the software product will generate probable future economic benefits;
  3. adequate technical, financial and other resources to complete the development and to use or sell the software product are available; and
  4. 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) Licences

Costs associated with the acquisition of Licences for technologies with the express purpose of developing them further for a commercial market are recognised as an intangible asset when they meet the criteria for capitalisation. That is, they are separately identifiable and measurable and it is probable that economic benefit will flow to the entity.

Further development costs attributable to the Licenced technology and recognised as an intangible asset when the following criteria are met:

  1. it is technically feasible to complete the technology for commercialisation so that it will be available for use;
  2. management intends to complete the technology and use or sell it;
  3. there is an ability to use or sell the technology;
  4. it can be demonstrated how the technology will generate probable future economic benefits;
  5. adequate technical, financial and other resources to complete the development and to use or sell the technology are available; and
  6. the expenditure attributable to the technology during its development can be reliably measured.

Licences and their associated development costs are amortised over the life of the licence or the underlying patents, whichever is shorter.

(d) Vortechs Group

This is an intangible asset acquired for use by one of the subsidiaries of the Group and is valued at original cost of purchase.

Under IAS38, the Group's Vortechs Group asset is regarded by the Directors as being an intangible asset with an indefinite useful life. The Directors believe that this asset is unique as it operates in a niche market, it generates an ongoing revenue stream, and there is no expectation of obsolescence. This asset meets the requirements of IAS38 as it is separately identifiable, controlled by the Group, the cost can be measured reliably, and as a result of owning this asset future economic benefits in the form of service revenue are generated for the Group.

In the opinion of the Directors this asset as an indefinite useful life and there has been no amortisation or impairment provided in the current year.

2.8 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 recognised 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 (other than goodwill) are reviewed for possible reversal at each reporting date.

2.9 Financial assets 2.9.1 Classification

The Group and the Company classify their 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 and the Company held investments into portfolio companies classified as equity investments. They are included in current assets and are measured at fair value through profit and loss in accordance with IFRS 9.

The Company also has loans, convertible loan notes and receivables that are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities that are greater than 12 months after the end of the reporting year. These are classified as non-current assets. The Group's loans and receivables comprise 'trade and other receivables' in the balance sheet. The Group also has cash and cash equivalents.

All short-term liabilities are measured at cost, the Group does not hold any long-term financial liabilities.

  1. Recognition and measurement
    The Company's investments into the portfolio companies are recognised on the acquisition or formation date and measured at fair value through profit or loss in accordance with IFRS 9.
    Loans and receivables are recognised on the trade date in which the transaction took place and are recognised at their fair value (which equates to cost) with transaction costs expensed in the income statement. 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. Short term financial liabilities are initially measured at fair value and subsequently measured at amortised cost using the effective interest rate method.
  2. 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 borrowings. 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 18 months we will value our ownership in the portfolio company at this observed valuation, taking account of any observed material changes during the period.
    • 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 technique used fall under Level 2 - Observable techniques other than 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. The fair value of borrowings equals their carrying amounts, as the impact of discounts is not significant.

  1. 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. Impairment of financial assets
    The Group assesses at the end of each reporting year whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that have occurred after the initial recognition of the asset (a 'loss event') and the loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
    Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
    For the loans and receivables category, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated income statement. If a loan or held-to maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the Group may measure impairment on the basis of an instrument's fair value using an observable market price.
    If, in a subsequent year, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as the improvement in the debtor's credit rating), the reversal of the previously recognised impairment loss is recognised in the consolidated income statement.
  3. Trade receivables
    Trade receivables are amounts due from customers for the provision of services performed in the ordinary course of business. Collection is normally expected within three months or less (in the normal operating cycle of the business) and is classified as current assets. In the rare circumstances that they exceed a period of greater than one year they are presented as non-current assets. In some instances, the Group accepts convertible loan notes for trade debts these are held separately on the statement of financial position until maturity or disposal on the open market. Any value received which is greater or less than the value of the original debt is taken to the consolidated statement of comprehensive income.
    Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment.
  4. Cash and cash equivalents
    In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with other banks, other short term highly liquid investments with maturities of three months or less and bank overdrafts. In the consolidated statement of financial position, bank overdrafts are shown within borrowings in current liabilities.
  5. 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.

Merger Reserve

The consolidated financial statements are accounted for using the 'pooling of interests' method', which treats the Group as if it had been combined throughout the current and comparative accounting periods. Pooling of interests principles for this combination gave rise to a merger reserve in the consolidated statement of financial position, being the difference between the nominal value of new shares issued by the Company for the acquisition of the shares of the subsidiary and the subsidiary's own share capital.

Non-controlling interest

Non-controlling interest is the portion of equity ownership in a subsidiary not attributable to the parent company.

  1. 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. 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); and
    • 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 originally 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.

  1. 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 timing 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. Provisions
    Provisions and any other anticipated foreseen liabilities are recognised: when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Restructuring provisions comprise lease termination penalties, and employee termination payments. Provisions are not recognised for future operating losses.
    Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering a class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre- tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as an interest expense.
  1. Leases

  2. Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
    Rentals payable under the operating leases are charged to income on a straight-line basis over the term of the relevant lease.
  3. 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 is determined and allocated to performance obligation in accordance with IFRS 15.
      The Group also recognises an unrealised profit/loss on the revaluation of investments in share of portfolio companies in accordance with the fair value policy outlined in Note 2.9.
      Provision of services
      The Group provides following lines of services:
    • Invention Evaluator services: provision of reports assessing potential of any new technology. Revenue is recognized upon delivery of a complete report
    • IP Acquisition Opportunities services: provision of reports identifying attractive university developed IP. Revenue is recognised upon delivery of a complete report
    • Tech transfer recruitment services: recruitment services specialising in technology transfer executives. Revenue is recognised when the placement is successfully completed
    • Training services: custom solutions for new tech transfer offices, spin out companies and accelerators delivered via in person trainings. Revenue is recognised over time based on completion stage of each session.

Interest income

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

3. Financial Risk Management

3.1 Financial risk factors

  1. Portfolio Risk/Investments Risk 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

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 Group's maximum exposure to credit risk for the components of financial position at 30 November 2019 and 2018 is the carrying amount of its current trade and other receivables as illustrated in Note 15.

The Group monitors credit risk related to performance of portfolio companies, including considerations related to recoverability of convertible loan notes issued. Progress is monitored and regular discussions are held with

management of portfolio companies to assess commercial progress and financial information provided. The Group also monitors credit risk related to creditor amounts due from portfolio companies.

(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. At the reporting date the Group held bank balances of US $472,899. Post period end, the Group completed a post period end placement for US$0.9m and a conditional placing for US$1.15m. All amounts shown in the consolidated statement of financial position under current assets and current liabilities mature for payment within one year, with Trade and Other Receivables exceeding Trade and Other Payables by US$ 505,706.

(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

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. If the exchange rate weakened by 10 percent then the effect on the gain before tax would decrease by US$33,177 and equity would decrease by US$37,788.

(g) Impact of the COVID-19 pandemic

The current Coronavirus epidemic 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 recession in the markets in which the Group operates, reduce the Group's net asset values, revenue, cash flow, access to investment capital and other factors which could negatively impact the Group.

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 has no external borrowings and this has no impact on the gearing levels of the Group as at 30 November 2019.

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 monetize 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

Key assumption

Potential

Potential

Note reference

estimate/judgment

impact

impact in

for sensitivity

area

within the

the

analysis

next

longer

financial

term

year

Valuation of

In applying valuation techniques to

Note 12

unquoted equity

determine the fair value of unquoted

investments

equity investments the Group and the

Company

make

estimates

and

assumptions

regarding the

future

potential of the investments. The policy of

the Group and the Company 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

the fair value of the Guident's net assets.

This value is primarily based on its IP

portfolio detailed in Note 12, valued using

the royalty relief method. The estimates

used in this valuation include market size

market penetration used to determine

projected sales, the royalty relief rate and

the discount factor. These estimates are

key to calculation of the net present value

of future cashflows associated with the

patent. The fair value calculation assumes

Guident Limited obtains sufficient funding

to execute their strategy.

The fair value of Salarius Limited reflects

the fair value of the Salarius' net assets.

This value is primarily based on the US

patent 8,900,650 valued using the royalty

relief method. The estimates used in this

valuation include market size market

penetration used to determine projected

sales, the royalty relief rate and the

discount factor. These estimates are key

to calculation of the net present value of

future cashflows associated with the

patent. The fair value calculation assumes

Salarius Limited obtains sufficient funding

to execute their strategy.

The fair value of Lucyd Limited reflects:

- Lucyd's ecommerce platform valued by

estimating the net present value of future

cashflows associated with the e-shop. Key

assumptions used in estimating future

cash flows are projected profits including

market size and market penetration used

to determine projected sales, and a

discount factor applied for the net present

value of future cashflows from the

platform.

- Lucyd's trademark value based on the

Net book value stated at cost.

Useful life of

The Directors have considered the useful

Note 13

Invention

life of the Invention Evaluator website to

Evaluator website

be indefinite because of the uniqueness of

the service it provides and that there is no

competitor in the market in which the

Group operates who is able to provide a

similar service. The Directors undertake

an annual review that considers an

appropriateness of the use of an indefinite

useful life in addition to impairment

review and if required make a provision in

the financial statements.

Useful

life

of

The Directors have considered the useful

Note 13

Vortechs Group

life of Vortechs Group to be indefinite

because of the ongoing service revenue

that is being generated. The business

operates in a specialised market, with few

competitors. The Directors undertake an

annual review that considers an

appropriateness of the use of an indefinite

useful life in addition to impairment

review and if required make a provision in

the financial statements.

Deferred Taxes

Deferred tax is the tax expected to be

Note 22

payable or recoverable on differences

between the carrying amounts of assets

and liabilities in the financial statements

and the corresponding tax bases used in

the computation of taxable profit, and is

accounted for using the balance sheet

liability method. Deferred tax assets are

recognised to the extent that it is probable

that taxable profits will be available

against which

deductible

temporary

differences can be utilised. The carrying

amount of deferred tax assets is reviewed

at each balance sheet date and reduced to

the extent that it is no longer probable

that sufficient taxable profits will be

available to allow all or part of the asset to

be recovered. Deferred tax is calculated at

the tax rates that are expected to apply in

the period when the liability is settled or

the asset is realised based on tax laws and

rates that have been enacted or

substantively enacted at the balance

sheet date. The Group did not recognize

deferred tax liability on fair value gains

associated with the revaluation of shares

in its portfolio companies due to

availability

of

the

substantial

shareholdings

exemption.

This is

considered a permanent difference and

not a temporary difference.

5. Segmental reporting

The Directors consider the business to have three segments for reporting purposes under IFRS 8 which are:

  • professional services, including the provision of recruitment services via Vortechs Group, provision of reports and services provided to locate and transfer technologies to customers, 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;
  • 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.

Segmental revenues and results

2019

Professional

Licensing &

TOTAL

Consolidated income statement

Services

Investment

US $

US $

US $

Net Revenue

1,170,733

6,516,813

7,687,546

Interest Income

29,818

29,818

Cost of Sales

(606,166)

(606,166)

Administrative Expenses

(503,840)

(1,069,725)

(1,573,565)

Depreciation and Amortisation

(4,249)

(12,749)

(16,998)

Group operating profit

56,478

5,464,157

5,520,635

Profit on ordinary activities before

income tax

56,478

5,464,157

5,520,635

Profit tax expense

(586)

(1,759)

(2,345)

Profit after tax

55,892

5,462,398

5,518,290

2018

Professional

Licensing &

TOTAL

Consolidated income statement

Services

Investment

US $

US $

US $

Net revenue

1,040,830

5,792,264

6,833,094

Cost of sales

(559,630)

-

(559,630)

Administrative expenses

(629,483)

(1,070,017)

(1,699,500)

Depreciation and amortisation

(4,517)

(13,553)

(18,070)

Group operating profit/(loss)

(152,800)

4,708,694

4,555,894

Profit/(Loss) on ordinary activities

before income tax

(152,800)

4,708,694

4,555,894

Income tax expense

(317)

(952)

(1,269)

Profit/(Loss) after tax

(153,117)

4,707,742

4,554,625

Segment assets and liabilities

2019

Professional

Licensing

TOTAL

Consolidated statement of financial

Services

and

position

US $

Investment

US $

US $

Assets

1,614,014

21,342,921

22,956,935

Liabilities

(429,255)

(429,255)

Net assets

1,184,759

21,342,921

22,527,680

2018

Professional

Licensing

Other

TOTAL

Consolidated statement of

Services

Activities

financial position

US $

US $

US $

US $

Assets

1,901,195

14,386,512

133,720

16,421,427

Liabilities

(214,842)

(42,969)

(28,646)

(286,457)

Net assets

1,686,353

14,343,543

(105,074)

16,134,970

Geographical information

2019

2018

US $

US $

United Kingdom

6,516,813

6,068,109

United States

1,200,551

764,985

Total revenue

7,717,364

6,833,094

Geographical information

2019

2018

US $

US $

United Kingdom

Assets

21,342,921

14,386,512

Liabilities

-

(42,969)

United States

Assets

1,614,014

2,034,915

Liabilities

(429,255)

(243,488)

Total Net Assets

22,527,680

16,134,970

The Group's operations are now strictly divided between those of professional services or licensing and investment, therefore no amounts are presented under "Other" compared to previous years.

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 Unrealized profit on the revaluation of investments.

Group

Transferred

Transferred

Total 2019

Transferred

Transferred

Total 2018

at a point in

over time

US$

at a point in

over time

US$

time

time

Major service lines:

Sales of Invention

199,184

-

199,184

247,593

-

247,593

Evaluator

Tech transfer

454,452

-

454,452

381,380

-

381,380

recruitment services

Technology reports

45,800

-

45,800

44,000

-

44,000

Training services

-

-

-

-

90,000

90,000

Management

-

-

services

-

413,278

413,278

-

181,474

181,474

R & D relief income*

-

58,019

58,019

-

94,371

94,371

Loan convertible

interest income

-

29,818

29,818

-

-

-

Other

-

-

-

-

2,012

2,012

Total Revenue

from Services

699,436

501,115

1,200,551

672,973

367,857

1,040,830

* The Group received an R&D tax relief, the directors consider this to be income.

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 satisfied in the current period.

7. Expenses

7.1 Expenses by nature

Group

2019

2018

US $

US $

Depreciation of property plant and

16,998

18,070

equipment

Research and development expenses

173,947

204,968

Other administration expenses

1,463,289

1,564,320

Foreign exchange movements

(63,671)

(69,788)

Total expenses

1,590,563

1,717,570

Included in the Other administration expenses is the amount of US$ 65,848 related to payments under operating lease for the office rental agreement also referenced in Note 25.

7.2 Auditor remuneration

Group

2019

2018

US $

US $

Fees payable to the Group's auditor and its

associated for the audit of the Group and Company

financial statements

95,313

77,912

Fees payable to the Company's auditor and its

associates for other

The audit of company's subsidiaries

15,920

16,277

111,233

94,189

8. Employees

8.1 Directors' emoluments

Group

2019

2018

US $

US $

Directors emoluments

264,799

264,938

Total

264,799

264,938

The highest paid Director received a salary of $187,760 (2018: $191,865) and benefits of $21,050 (2018:

$15,253). The highest paid Director received a bonus of $0 (2018: $0). The highest paid Director did not exercise any share options or receive any shares from the Company during the current year. No termination benefits, post-employment benefits were provided to Directors. Total of short-term benefits in kind of US$21,050 were provided during the year. The amounts in the table above do not include Employers NI in the amount of US$14,447.

Key management personnel (including Directors and Group Financial Controller) received salary of US$368,042, excluding Stock Base Compensation disclosed in Directors Remuneration Report. Please also refer to Director's Report.

8.2 Employee benefit expense

Group

2019

2018

US $

US $

Wages and salaries including restructuring costs and

other termination benefits

275,765

296,751

Social security costs

40,644

43,453

Share options granted to directors and employees

20,876

32,775

Total

337,285

372,979

8.3 Average number of people employed

Group

2019

2018

Average number of people (including executive

directors) employed

Operations

4

4

Management

2

2

Total average headcount

6

6

Average number of employees with the Company in 2019 and 2019 was two (Management).

To enhance flexibility and improve cost control, the Group utilizes consultants for scientific review, administrative and operations support, software development and other knowledge-intensive services.

9.

Income tax expense

Group

2019

2018

US $

US $

Current tax

Current tax on profits for the year

2,345

1,269

Total current tax

2,345

1,269

Income tax expense

2,345

1,269

Group

2019

2018

US $

US $

Profit before tax

5,520,635

4,555,894

Tax calculated at domestic tax rates applicable to

profits

1,048,921

774,502

Tax effects of:

Expenses not deductible for tax purposes

19,155

15,444

Income not taxable

(1,238,195)

(1,057,017)

Capital allowances in excess of depreciation

3,230

2,150

Unrelieved tax losses and other deductions

169,235

266,190

Total corporation tax

2,345

1,269

The weighted average applicable tax rate was 19% (2018: 17%). The Group applied 17% tax rate in FY 2018 based on expectation of corporation tax rate adjustment that did not materialise.

Unused tax losses for which no deferred tax assets have been recognised is attributable to the uncertainty over the recoverability of those losses through future profits.

10. 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) any dilutive potential Ordinary Shares outstanding at 30 November 2019.

2019

2018

Earnings attributable to equity holders of the Group

5,518,290

4,554,625

(US$)

Weighted average number of Ordinary Shares in issue:

Basic

58,010,322

44,100,930

Diluted

58,918,289

44,120,817

Basic earning per share

0.095

0.103

Diluted earning per share

0.095

0.103

The effect of 2.9m share options granted in August 2019 contributed to the difference between basic weighted average number of shares and diluted weighted average number of shares.

Post period end, the Group completed a placement of 14,800,000 new ordinary shares and a conditional placement of 9,250,00 new ordinary shares.

11. Investments in subsidiaries

Company

Shares in

Loans to

Total

subsidiaries

subsidiaries

US$

US$

US $

Cost and net book value

As at 1 December 2018

79,265

1,875,748

1,955,013

Additions during the year

-

-

-

Disposal during the year

-

-

-

Foreign currency translation differences

161

3,829

3,990

Balance at 30 November 2019

79,426

1,879,577

1,959,003

Subsidiaries name

Proportion of

Nature

Capital

Net Profit/

(consolidated)

ordinary

of business

and reserves

(Loss)

shares

directly held

Direct

Tekcapital Europe Limited

England

100%

Provision of

16,835,932

5,949,752

and Wales

Intellectual

property

research

services

Tekcapital LLC

USA

100%

Provision of

(3,167,902)

(373,561)

Intellectual

property

research

services

Indirect

The following are directly owed by Tekcapital Europe Limited

Lucyd Limited

England

100.00%

Provider of high-tech

(4,329,230)

(258,466)

and Wales

eyewear

Salarius Limited

England

91.7%

Developer of low

(545,780)

(453,039)

and Wales

sodium salt and

snack foods

Guident Limited

England

100.00%

Developer of

(276,465)

(192,687)

and Wales

autonomous vehicle

valet system

Smart Food Tek

England

100.00%

Developer for baked

35,589

(3,271)

Limited

and Wales

food coating to

reduce fat

  • As at the year end, the Company 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 12000 Biscayne Boulevard, Suite 222, Miami, Florida, 33133, United States) are consolidated by Tekcapital plc because they continue to provide advisory services in IP search and technology transfer.
    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, Salarius Limited and Guident Limited, as well as has provided working capital assistance to Salarius Limited through convertible loan note financing (see also Note 15). The Group also assists the entities with their fundraising activities.
    Registered office of all four 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

Group's investments in portfolio companies in the years ended 30 November 2019 and 30 November 2018 are listed below and classified as equity instruments. The principal place of business for portfolio companies listed below is England and Wales.

Group

Proportion

Additions

Disposal

FX reval

Fair Value

30 Nov

of ordinary

1 Dec

change

2019

shares held

2018

US $

US $

US $

US $

US $

US $

Guident Limited

100.00%

8,545,103

-

-

-

6,981,092

15,526,195

Lucyd Limited

100.00%

3,040,616

-

-

500

(1,912,094)

1,129,022

Salarius Limited

97.50%

923,830

633

-

22

908,941

1,833,426

Belluscura Limited

18.90%

1,126,315

111,177

-

2,338

564,291

1,804,121

Smart Food Tek Limited

100.00%

43,073

-

-

89

-

43,162

eSoma Limited

100.00%

24,750

-

-

-

(24,750)

-

Non Invasive Glucose

100.00%

667

-

-

-

(667)

-

Tek Limited

Total Balance

13,704,354

111,810

-

2,949

6,516,813

20,335,925

Company

Proportion of

Additions

Disposal

FX reval

Fair Value

30 Nov

ordinary

change

2019

shares held

1 Dec 2018

US $

US $

US $

US $

US $

Belluscura Limited

18.90%

1,126,315

111,177

-

2,338

564,291

1,804,121

Total Balance

1,126,315

111,177

-

2,338

564,291

1,804,121

30 November 2018:

Group

Proportion

Additions

Dispos

FX reval

Fair Value

30 Nov

of ordinary

al

change

2018

shares held

1 Dec 2017

US $

US $

US $

US $

US $

Guident Limited

100.00%

-

23,494

-

(7)

8,521,616

8,545,103

Lucyd Limited

100.00%

6,023,954

15,760

(16,757)

(2,982,341)

3,040,616

Salarius Limited

100.00%

15,128

27,466

-

(708)

881,944

923,830

Belluscura Limited

29.22%

981,762

560,090

-

(60,839)

(354,698)

1,126,315

Smart Food Tek Limited

100.00%

44,167

972

-

(2,066)

-

43,073

eSoma Limited

100.00%

10,983

13,768

-

(1)

-

24,750

Non Invasive GlucoseTek Limited

100.00%

24,199

425

-

(981)

(22,976)

667

eGravitas Limited

100.00%

154,535

43,955

-

(5,807)

(192,683)

-

Frigidus Limited

100.00%

52,968

7,483

-

(1,853)

(58,598)

-

Total Balance

693,413

-

(89,019)

5,792,264

13,704,35

7,307,696

4

Company

Proportion

Additions

Disposal

FX reval

Fair Value

30 Nov

of ordinary

change

2018

shares

1 Dec

held

2017

US $

US $

US $

US $

US $

Belluscura Limited

29.22%

981,762

560,090

(60,839)

354,698

1,126,315

Total Balance

981,762

560,090

-

(60,839)

354,698

1,126,315

Total fair value gain of $6.5m for the year reflects uplift in value of shares of Guident and Salarius, offset mostly by reduction in valuation of Lucyd Limited. Considering early stage of commercialisation, fair value of remaining portfolio companies was recorded based on the cost of acquired IP, as their carrying amounts represent a reasonable approximation of fair value.

The valuation techniques used fall under, Level 2 - Observable techniques, other than quoted prices, and Level 3- Other techniques as defined by IFRS 13. These techniques were deemed to be the best evidence of fair values considering early stage of portfolio companies. There has been no transfer between levels during the period. Fair value measurement hierarchy for financial assets as at 30 November 2019 with comparative amounts as of

30 November 2018:

Date of Valuation

Significant

Significant

observable inputs

unobservable

Total

(Level 2)

inputs (Level 3)

US $

US $

US $

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

30 November 2019

20,335,925

1,804,121

18,531,804

Guident and others

30 November 2018

12,578,039

12,578,039

Belluscura Limited

30 November 2018

1,126,315

1,126,315

Total Balance

13,704,354

1,126,315

12,578,039

Guident ($7.0m gain)

An external valuation by an independent patent valuation expert was prepared for Guident' s IP portfolio including:

  1. US patent 9,429, 943 ("FAMU 943")
  2. International Patent Filing WO2019/147569: Visual Sensor Fusion and Data Sharing Across Connected Vehicles (MSU 569) -added this period
  3. US Patent No. 9,964,948 (FIU 948) - added this reporting period

The total fair value of $15.5m reflects the fair value of Guident' s net assets as determined by:

  • Valuation of FAMU 943 of US$16.2m (2018:US$10.3m) conducted by an external, qualified valuation expert using the Income Approach, Royalty Relief Method. Following valuation inputs were applied by the valuation expert:
    • Total US market size of US$35b for autonomous vehicles and drones (as the patent applies to both) for the 11 years period ended 30 December 2033. 1% market penetration of Guident' s patent starting in
      2022 with annual increase of 1% leading to a 12% market penetration by 2033, resulting in projected US$3b in sales of drones/vehicles underlying licensing revenue between 2022 and 2033. This market penetration assumption is based on a number of factors:

o Broad protection and claims included in the IP

  1. The protection given to the product by its US patent, which effectively gives Guident a barrier to entry in the US through 2033
  1. The strength and experience of the management team, whose proven expertise is in the exact areas required to bring the product to market and build the brand;
  1. There are no foreseeable software development barriers in the commercialisation process o Other foreseeable challenges for directors to deliver successful commercialisation appear to be well within the abilities of directors to handle.
  1. Innovative nature of Guident's IP and the fact that the AV market is dependent on innovators.
  1. Improving regulatory environment with more states in the United States legalizing autonomous vehicles operation in 2019 including large states such as Florida and California.

The increase in FV of FAMU 943 compared to 2018 was driven by reduction in discount factor from 18% to 17% and increase in in the royalty rate from 5.375% to 6%.

  • Valuation of MSU 569 of US$2.8m conducted by an external, qualified valuation expert using the Income Approach, Royalty Relief Method. Following valuation inputs were applied by the valuation expert:
    • In January 2024, Guident also expects to introduce an additional, complementary component featuring the MSU 569 technology (Sensory Fusion Component). This component would enable sensory data sharing between the vehicles, providing for new safety standard. Guident expects the Sensor Fusion Component to be sold to customers of the Standard Initial Component when 5G is available so as to further generate an additional $500 of revenue for each sale of the Sensor Fusion.
      For the estimate of the US market derived revenue, using the units of underlying Autonomous Vehicles from FAMU 943, the management assumed 10% of FAMU customers would choose to pay for this additional safety improving capability, starting with 10% of them in 2024 with the share growing to 40% in 2027.

For the estimate of the international market derived revenue, the management applied comparative share of countries included in the international filing based on authoritative literature from the Allied Market Research report.

These market penetration assumptions are based on assumptions similar to those considered for the patent FAMU 943.

  • Valuation of FIU 948 of US$0.3m conducted by an external, qualified valuation expert using the Income Approach, Royalty Relief Method. Following valuation inputs were applied by the valuation expert:
    • US sidewalk delivery drone market size of US$1.27b between 2022 and 2036. 1% market penetration starting in2022 with annual increase leading to 25% in 2027. This market penetration rate assumptions is based on factors analogous to those listed for FAMU 943, with additional legislative/regulatory requirements included as well. Recent regulatory developments in United States make it mandatory to have back-up human control operators taking control of an AV in the event of an accident or mishap,
  • Assumptions applied to valuations of all three patents above:
    • Total 6% license royalty rate, with 3% royalty attributable to the university and 3% comprising
      Guident's licencing revenue based on comparable market transactions, with the exception of 30% for
      FIU 48 (whereby 2.5% is due to the university)
    • Corporate income tax rate of 19% applied to projected licensing costs saved 17% discount rate used to discount proceeds as determined by opportunity cost (10%), inflation rate (2%) and technology risk (5%)
    • The deferred tax liability of (US$ 3.6m) recorded by Guident based on UK corporate tax rate of 19% applied to the fair value gain associated with the patent
    • Net book value of other assets and liabilities of <(US$0.2m).
    • Guident Ltd obtains sufficient funding to execute their strategy.

Salarius (US$ 0.9m gain)

An external valuation by an independent patent valuation expert was prepared for US patent 8,900,650.

The fair value of US$ 1.8m recorded by the Group reflects the fair value of Group's 97.5% stake in Salarius' net assets valued at US$ 1.9m as determined by:

  • Valuation of US patent 8,900,650 of US$ 3m (2018: US$ 1.1m) conducted by an external, qualified valuation expert using the Income Approach, Royalty Relief Method. Following valuation inputs were applied by the valuation expert:
    • Sales of low sodium salt to snack food manufacturers ("B2B") of US$ 44m for the 10-year period ended 2030. Market penetration of 0.5% in 2020 growing to 10% in 2030. These market penetration assumptions are based on a number of factors. This market penetration assumption is based on a number of factors:
      o Microsalt is a unique product substantially in advance of alternative, developed, and tested in terms of market acceptability and ready to market;
      o The protection given to the product by its US patent, which effectively gives Salarius a barrier to entry in the US for 11 more years;
      o The strength and experience of the management team, whose proven expertise is in the exact areas required to bring the product to market and build the brand;
      o There are no foreseeable manufacturing barriers in the commercialisation process. Manufacturing has been established and outsourced in 2019;
      o Post period end, the company secured two food ingredient brokerage agreements for sales of Microsalt covering multiple geographical areas of the United States; First customers were secured
    1. Other foreseeable challenges for management to deliver successful commercialisation appear to be well within the abilities of management to handle.
  • Sales of salty snacks ("B2C") estimated at $106m for the 10 year period ended in 2030. The projections assume Salarius chips being sold in 300 individual stores by the end of 2020 growing annually to the total of 16,400. This assumption is based on factors analogous to the B2B segment, with the addition of following factors:
    1. Post year-end, the company secured distribution agreement with one of North America's largest natural food distributors for the launch of SaltMe snacks in all 4 flavors; the distributor supplies thousands of stores on a daily basis
      1. Post year-end, the company secured sales contract brokerage agreement for sales of SaltMe snacks in all 4 flavors;
    • Licence royalty rate of 8.2% with 3% royalty attributable to the university and 5.2% comprising
      Salarius' licencing revenue based on comparable market transactions
  • 12% discount rate used to discount proceeds as determined by opportunity cost (10%) and inflation rate (2%). Technology risk was determined at 0%, as the patent describes easily manufactured salt compositions, maybe manufactured in many production facilities without extensive modifications. The end product has already been manufactured and used to conduct consumer acceptance tests. Sales and distribution channels have been established.

The increase in the fair value of US patent 8,900,650 was driven by addition of B2C sales projections in the forecast used in the valuation, increase in license royalty rate from 7.8% to 8.2% as well as reduction in discount rate used from 13% to 12%.

  • The deferred tax liability of US$ 0.5m recorded by Salarius based on UK corporate tax rate of 19% applied to the fair value gain associated with the patent
  • Net book value of liquid assets, creditors and debtors of < $0.6m.

The value of the IP is dependent on Salarius Ltd obtaining sufficient funding to execute their strategy.

Lucyd Ltd (US $1.9m loss)

The fair value of US$ 1.1m reflects the fair value of Lucyd's net asset as determined by:

    • Valuation of Lucyd's significant assets performed by an external, qualified valuation expert:
      • Lucyd's e-commerce platform selling advanced and fashionable eyewear valued at US$ 1.2m as determined by applying an 18% discount rate on $2.2m of gross profit projected through 2023. The 17% discount rate was calculated as a total of 10% opportunity cost, 2% inflation rate and 3% technology risk. The projections of gross profit were reduced compared to 30 November 2018 valuation considering more R&D and product development focus in the past year.
      • Lucyd's trademarks valued at US$ 0.2m, assessed using Cost Approach Reproduction Method. Through cost analysis, the fair value approximates cost recognized in Lucyd's balance sheet
  • The deferred tax liability of US$ 0.3m recorded by Lucyd based on UK corporate tax rate of 19% applied to the fair value gain associated with the ecommerce platform.

Lucyd will be re-valuated in subsequent reporting periods. The future value of Lucyd could fluctuate significantly, either up or down, based on the performance of the business and the achievement of product development milestones.

Belluscura (US $0.6m gain)

The fair value of the holding increased by US$ 0.6m due to the most recent private placement held at 15 pence per share in April 2019, compared to preceding placement at 10 pence per share in December 2018 used by the Group to value its holding in Belluscura as of 30 November 2018. The Group contributed US$ 110,000 during this placement.

eSoma (US$ 0.02m loss)

The Group closed eSoma Limited resulting in recognition of a US$ 0.02m fair value loss.

Smart Food Tek (Nil Gain / Nil loss)

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.

Description of significant unobservable inputs to valuation:

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 30 November 2019 are shown as below. No sensitivities have been included on the other investments not listed in the table below as their fair value equates to cost.

Investment

Valuation

Significant

Estimate

Sensitivity of the input to fair value

Technique

unobservable

applied

input

Lucyd

Income

Discount to

17%

5% increase in the discount factor

Approach

Future Cash

would decrease the Lucyd valuation

Flows from

by $123,000, a 5% decrease in the

Eshop Sales

discount factor would increase the

Lucyd valuation by $149,000

Eshop adjusted

$1.9m

A 20% increase in net profit would

net profit

increase the Lucyd valuation by

through

$239,000. A 20% decrease in gross

December

profit would decrease the Lucyd

valuation by 239,000.

Guident

Income

Discount to

17%

2% increase in the discount factor

Approach

Future Cash

would decrease the Guident

Royalty

Flows from

valuation by $2,300,000, a 2%

Relief

licensing

decrease in the discount factor

Method

would increase the value by

$3,000,000

Royalty Relief

6%(FAMU,

A 1% increase in the royalty relief

Rate

MSU US,

rate would increase the Guident

MSU OUS)

valuation by $5,300,000, a 1%

and 30%

decrease in the royalty relief rate

(FIU 948)

would decrease the valuation by

$4,700,000

Gross licensing

$3.0b

A 20% increase in the gross licensing

proceeds & gross

(FAMU),

proceeds and gross revenue would

revenue

$286m

increase the Guident valuation by

(MSU US),

$3,500,000. A 20% decrease would

$189m

decrease the Guident valuation by

(MSU OUS),

$2,800,000.

$8.8m

(FIU948)

Salarius

Income

Discount to

12%

5% increase in the discount factor

Approach

Future Cash

would decrease the Salarius

Royalty

Flows from

valuation by $644,000, a 5%

Relief

licensing

decrease in the discount factor

Method

would increase the value by

$1,004,000

Licence Royalty

8.2%

A 2% increase in the royalty rate

Rate

would increase the Salarius

valuation by $918,000 a 2%

decrease in the royalty rate would

decrease the Salarius valuation by

$918,000.

Projected sales

$150m

A 20% increase in the projected

sales would increase the Salarius

valuation by $477,000. A 20%

decrease in the projected sales

would decrease the Salarius

valuation by $477,000.

13.

Intangible assets

Group

Vortechs

Website

Invention

Group

development

Evaluator

Total

US $

US $

US $

US $

At 30 November 2018

500,000

28,121

338,769

866,890

At 30 November 2019

500,000

28,121

338,770

866,891

Accumulated amortisation and

impairment

At 30 November 2018

-

(28,121)

-

(28,121)

At 30 November 2019

-

(28,121)

-

(28,121)

Net book value

At 30 November 2019

500,000

-

338,770

338,770

At 30 November 2018

500,000

-

338,769

338,769

The intangible assets presented above are included within Professional Services segment under Note 5 disclosure. Costs of the Group's website development have been fully amortized as of 30 November 2018.

Under IAS38, the Group's Invention Evaluator is regarded by the Directors as being an intangible asset with an indefinite useful life. The Directors believe that the asset is unique in that no competitor offering currently exists, the service is already proven to have appealed globally to many types of clients including Fortune 100 companies, there is no expectation of obsolescence in the foreseeable future, and the service from the use of the asset generates sufficient ongoing revenue streams. The Directors have carried out an impairment review and believe that the value in use is significantly greater than book value.

The Directors have considered the recoverable amount by assessing the value in use by considering the future cash flow projections of the revenue generated by the Invention Evaluator intangible, cash flows were based on the past revenue generation. The projections were assessed for a three year period in order to determine

no impairment. The projections are based off revenue generation at US$300k less cost of sales at the 2018 gross profit margin, no growth has been applied forecasts. A discount factor at 10% (consistent with Group's cost of capital) was used to determine no impairment. The revenue projections are based on company's historical performance and existing pipeline of sales orders. The Invention Evaluator intangible's recoverable amount exceeds its carrying amount by US$ 34,257.

Under IAS38, the Group's Vortechs asset is regarded by the Directors as being an intangible asset with an indefinite useful life. The Directors believe that this asset is unique as it operates in a niche market, it generates an ongoing revenue stream, and there is no expectation of obsolescence. This asset meets the requirements of IAS38 as it is:

  • Separately identifiable
  • The Group controls this asset
  • Future economic benefits flow to the Group in the form of service revenues from this asset
  • The cost of this asset can be measured reliably

The Directors have carried out an impairment review and consider the value in use to be greater than the book value.

The Directors have considered the recoverable amount by assessing the value in use by considering the future cash flow projections of the revenue generated by the Vortechs intangible, cash flows were based on the past revenue generation plus expected growth. The projections were assessed over a period in excess of 5 years on the basis the directors consider the projections can be reasonably forecast. The projections are based off revenue generation at US$400,000 per annum for 2020 and 2021 (approximating actual revenue from 2018), reducing to US$ 300,000 for 2022, US$ 350,000 for 2023 and back to US$ 400,000 until 2028. The cost of sales element for 2020 and 2021 was determined at 90% in line with the agreement, thereafter it drops to US$ 120,000 p.a. plus inflation at 5%. The reduction in cost of sale is due to the end of a term in the purchase agreement. A discount factor at 10% (consistent with Group's cost of capital) was used to determine no impairment. Vortech's intangible's recoverable amount exceeds its carrying amount by US$ 518,258.

The tech-transfer recruiting is viewed by directors as permanent part of the Group's business and its offering. This together with the high turnover in this industry leading to continuous hiring needs leads Directors to apply projections of over 5 years in the impairment determination.

14.

Fixed Assets

Group

Leasehold

Office

Computer

Improvements

Equipment

Equipment

Total

US$

US $

US $

US $

Closing cost 30 November 2017

-

2,042

17,306

19,348

Exchange differences

-

3

34

37

Additions

13,775

22,241

9,825

45,841

Disposals

-

(309)

(309)

Closing cost 30 November 2018

13,775

24,286

26,856

64,917

Exchange differences

14

14

Additions

-

-

862

862

Closing cost 30 November 2019

13,775

24,286

27,732

65,793

Accumulated depreciation and impairment

At 30 November 2017

-

(1,284)

(12,059)

(13,344)

Depreciation charge

(6,888)

(4,860)

(6,631)

(18,379)

Disposals

-

-

308

308

Exchange differences

-

2

(16)

(14)

At 30 November 2018

(6,888)

(6,142)

(18,398)

(31,428)

Depreciation charge

(6,888)

(4,839)

(5,271)

(16,998)

Exchange differences

-

(14)

(14)

At 30 November 2019

(13,775)

(10,981)

(23,683)

(48,440)

Closing net book value

At 30 November 2018

6,888

18,143

8,458

33,489

At 30 November 2019

-

13,304

4,049

17,353

15.

Trade and other receivables

Group

2019

2018

US $

US $

Trade receivables

144,944

59,655

Less provision for impairment of trade receivables

-

-

Trade receivables - net

144,944

59,655

VAT recoverable

14,333

40,329

Prepayments and debtors

125,715

97,769

Receivables from related parties

530,874

231,620

Total trade and other receivables

815,866

429,373

Non-current: convertible loan notes*

476,122

250,000

Company

2019

201

US $

US $

Receivables from Group companies

2,277,783

1,697,545

VAT

9,025

30,057

Prepayments

34,923

24,783

Total trade and other receivables

2,321,731

1,752,385

Non-current: convertible loans notes

476,122

250,000

The fair value of trade and other receivables are not materially different to those disclosed above. The Group's exposure to credit risk related to trade receivables is detailed in Note 3 to the consolidated financial statements.

*The Group and the Company hold three convertible loans issued by its portfolio company, Salarius Ltd for the total of US$ 600,000, of which US$440,000 was drawn. The notes were issued at 10% coupon rate and included option to convert the debt into shares at market price (no discount against future equity placements offered). Market rate of 10% was applied in determination of the present value of cash flows related to both notes. The US$ 50,000 note originated in September 2018 is payable on demand, however Directors do not anticipate the repayment before or after November 2020. The US$ 300,000 note originated in October 2018 is payable by Salarius on 29 October 2021 (term extended during the period) or can be converted into Salarius' equity upon occurrence of certain conversion events. The US$ 250,000 note originated in August 2019 is payable on 01 August 2021 or can be converted into Salarius' equity upon occurrence of certain conversion events.

The Group also held a convertible loan issued by Guident Ltd in December 2018 for the total of US$300,000, 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.

The Group had outstanding receivables from its portfolio companies as at 30 November 2019 in the amount of:

  • US$130,912 due from Lucyd Ltd
  • US$141,849 due from Salarius Ltd
  • US$254,667 due from Guident Ltd

The Company recorded a historical US$2,500,000 provision against its receivable from one its subsidiaries, Tekcapital LLC.

16. Cash and cash equivalents

Group

2019

2018

US $

US $

Cash at bank and in hand

472,899

1,165,442

Total cash and cash equivalents

472,899

1,165,442

Company

2019

2018

US $

US $

Cash at bank and in hand

112,114

698,694

Total cash and cash equivalents

112,114

698,694

17. Categories of financial assets and financial liabilities

Group

2019

2018

US $

US $

Financial assets

Financial assets at fair value through profit and loss

20,335,925

13,704,354

Loans and receivables at amortised cost

1,291,988

679,389

Cash and equivalents

472,899

1,165,442

22,100,812

15,549,185

Financial Liabilities

Trade and other payables at amortised cost

303,847

275,601

Company

2019

2018

US $

US $

Financial assets

Financial assets at fair value through profit and loss

1,804,120

1,126,315

Loans and receivables at amortised cost

2,797,853

1,997,602

Cash and equivalents

112,114

698,694

Available for sale

1,959,003

1,955,013

6,673,090

5,777,624

Financial liabilities

Trade and other payables at amortised cost

484,375

470,809

18.

Share capital and premium

Share capital

Group and Company

Number of

Ordinary

Total

shares

Shares US $

US $

Issued and fully paid up

At 30 November 2017

42,654,707

264,221

264,221

Shares issued in further public offering

11,698,335

61,815

61,815

At 30 November 2018

54,353,042

326,036

326,036

Shares issued in further public offering

9,375,000

46,948

46,948

At 30 November 2019

63,728,04

372,984

372,984

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: July 2019 - 9,375,000 shares were issued in the placing of new ordinary shares at £0.08p. Total proceeds of US$938,966 were netted against cost of raising finance in the amount of US$117,277.

The Company has authorised share capital of 81,529,563, with a nominal value of £0.004. Of these shares, 63,728,042 were issued and fully paid up.

Share premium

Group and Company

Share

premium

Total

US $

US $

At 30 November 2017

9,271,098

9,271,098

Shares issued in further public offering

1,097,216

1,097,216

Cost of shares issued

(149,509)

(149,509)

As at 30 November 2018

10,218,805

10,218,805

Shares issued in further public offering

892,018

892,018

Cost of shares issued

(117,277)

(117,277)

As at 30 November 2019

10,993,546

10,993,546

19.

Reserves

Profit and Loss Account

Group

Company

Profit and

Profit and

Loss Account

Loss Account

US $

US $

At 30 November 2017

931,826

(4,241,264)

Profit/(loss) for the year

4,554,625

(920,213)

Share based payments

30,204

30,204

At 30 November 2018

5,516,655

(5,131,273)

Profit/(loss) for the year

5,518,290

30,668

Share based payments

20,876

20,876

At 30 November 2019

11,055,821

(5,079,729)

Merger reserve

Group

Merger

reserve

US $

At 30 November 2018

(72,169)

At 30 November 2019

(72,169)

Translation reserve

Group

Company

Translation

Translation

reserve

reserve

US $

US $

At 30 November 2017

280,985

77,277

Foreign exchange loss

(135,342)

(179,246)

At 30 November 2018

145,643

(101,969)

Foreign exchange gain

31,855

3,883

At 30 November 2019

177,498

(98,086)

20.

Trade and other payables

Group

2019

2018

US $

US $

Trade creditors

116,936

91,303

Social security and other taxes

6,089

10,357

Accruals and other creditors

187,135

184,297

310,160

285,957

Company

2019

2018

US $

US $

Accruals and other creditors

362,863

357,529

Accruals, deferred income and other creditors

121,512

113,279

484,375

470,808

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.

  1. Deferred Revenue
    The Group received a payment in the amount of US$118,595 for Invention Evaluator reports to be delivered after 30 November 2019, therefore the amount was recognized as deferred revenue.
  2. Deferred income tax
    Unused tax losses for which no deferred tax assets have been recognised is attributable to the uncertainty over the recoverability of those losses through future profits. A tax rate of 19% has been used to calculate the potential deferred tax.

Group

Group

Company

Company

2019

2018

2019

2018

Deferred tax

US $

US $

US $

US $

Accelerated capital allowances

(3,230)

(3,072)

-

-

Short term timing difference

-

-

-

-

Tax losses

(1,791,410)

(1,127,294)

(435,092)

(435,092)

Unprovided deferred tax asset

1,794,639

1,130,366

435,092

435,092

-

-

-

-

  1. Dividends
    No dividend has been recommended for the year ended 30 November 2019 (2018: Nil) and no dividend was
    paid during the year (2018: Nil).
  2. Cash used from operations

Group

2019

2018

US $

US $

Profit before income tax

5,520,635

4,555,894

Adjustments for

-

Depreciation

16,998

18,070

- Share based payment expense

20,876

30,204

- Movement in foreign exchange

33,776

(11,127)

- Movement in trade and other receivables

(612,615)

284,536

- Financial assets at fair value through the profit or

(6,519,761)

(5,792,264)

-

loss

118,595

-

Deferred revenue movement

- Trade and other payables

24,202

48,310

Cash used

(1,397,294)

(866,377)

25. Commitments Capital commitments

The Group entered into convertible loan note agreement in September and October 2018 with Salarius Ltd for the total amount of US $ 350,000 (US$ 300,000 drawn by November 2019). Third convertible loan note agreement was signed in August 2019 for the total amount of US$250,000. US$140,000 was provided as part of that agreement by the Group by November 2019.

Operating lease commitments

The Group's subsidiaries have various office rental agreements.

The total un-provided minimum lease commitment under non-cancellable operating lease are:

Group

2019

2018

US $

US $

Arising:

No later than 1 year

61,925

59,847

Later than 1 year and no later than 5 years

61,925

Total

61,925

121,772

26. Share based payments

The Group operates an approved Enterprise management scheme and an unapproved share option scheme. The fair value of the 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:

Attribute

Input

No. of options granted

5,785,000

Share price at date of grant

£0.08-£0.46

Exercise price

£0.08-£0.46

Options life in years

5

Risk free rate

1.50%

Expected volatility

41%-60%

Expected dividend yield

0

Fair value of options

£0.03-£0.09

The weighted average fair value of options outstanding was £0.05p. Volatility was calculated using Group's historical share price performance since 2015. The share-based payment expense for the year was $20,876 (2018: $30,204). Details of the number of share options and the weighted average exercise price outstanding during the year as follows:

2019

2018

Av. Exercise

Options

Av. Exercise

Options

price per

(Number)

price per

(Number)

Group and Company

share £

share £

As at 1 December

0.3164

3,585,000

0.3379

3,285,000

Granted

0.0781

2,900,00

0.0810

300,000

Exercised

-

-

-

-

Forfeited

0.2500

700,000

-

-

As at 30 November

0.2110

5,785,000

0.3164

3,585,000

Exercisable as at 30 November

2,610,000*

2,951,667

*The weighted average exercise price for the options exercisable as at 30 November 2019 and 30 November 2018 was £0.34p and £0.33p respectively

The weighted average remaining contractual life is 2.65 years (2018: 1.82 years). The weighted average fair

value of options granted during the year was £0.05p (2017: £0.07p).The range of exercise prices for options

outstanding at the end of the year was £0.065p - £0.46p (2018: £0.081p - £0.46p).

27. Related party transactions

Details of Directors' remuneration and grant of options are given in the Directors' report. The Group had an outstanding payable balance in the amount of $7,379 payable to Dr Clifford Gross as at 30 November 2019. The

Group has taken advantage of the exemption in IAS 24 "related parties" not to disclose transactions with other

Group companies.

525,000 options were held by Harrison Gross, family member of Dr. Clifford Gross.

28. Events after the reporting period

Tekcapital Group strengthened the board of directors with post period end appointments of Lord David Willetts (7 January 2020) and Mr. Louis Castro (2 December 2019). 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. Louis Castro is a highly experienced and well qualified Director and Chartered Accountant with some thirty years spent 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.

On 6 February 2020, Tekcapital Group completed a placing of 14,800,000 new ordinary shares at 5 pence each to raise US$962,000 before expenses.

On 18 March 2020, the Company signed an extension to Convertible Loan agreement with Salarius Ltd dated 29 October 2018. The extension revised the maturity date to be three years from 29 October 2018.

On 1 May 2020, Tekcapital Group completed a conditional placing of 9,250,000 ordinary shares at 10 pence each to raise US$1,150,000 before expenses. The existing authorities to allot shares and disapply pre-emption rights under section 551 and section 570 of the Companies Act 2006, were insufficient to enable the Company to allot and issue the full amount of the Placing Shares pursuant to the Placing. Accordingly, the Placing will be conditional upon, amongst other things, the passing of certain resolutions at a General Meeting of the Company to allot the Placing Shares and to disapply statutory pre-emption rights which would otherwise apply to such allotment.

Post period end, the coronavirus pandemic emerged that may produce negative economic activities which could reduce Group's economic performance and the performance of its portfolio companies in ways that are difficult to quantify at this juncture. It may cause a recession 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.

Attachments

  • Original document
  • Permalink

Disclaimer

Tekcapital plc published this content on 06 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 May 2020 04:18:04 UTC