Tekcapital : H1 2019 Results

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.

22 August 2019

Tekcapital plc

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

Unaudited Half-Yearly Report for the period ending 31 May 2019

Record Total Revenue, Profits and Net Assets for the Period

Tekcapital plc (AIM: TEK) a UK intellectual property (IP) investment group focused on creating marketplace value from investing and commercializing university technology announces its results for the six-month period ended 31 May 2019.

Financial highlights

• Net Assets increased 27% to US$20.53m (30 Nov 2018: US$16.13m)
• NAV per share US$0.38 (30 Nov 2018: US$0.30)
• Total Revenue of US$5,401,568 (H1 2018: US$1,278,413)
  o Net increase of US$4,787,174 in fair value of portfolio companies
• Revenue from services US$614,394 (H1 2018: $639,561)
• Reduction of cost of sales by 36% to US$239,342 (H1 2018: US$371,774)
• Reduction of operating expenses by 7% to US$740,947 (H1 2018: US$800,643).
  o Service revenue cover appx. 63% of current cost base (H1 2018: 55%)
• Profit before tax of US$4,421,279 (H1 2018: US$105,996)
• Post end of period placement of 9,375,000 shares to raise gross proceeds of $940,000.

Operational highlights: Portfolio Companies

Salarius® (97.5% ownership) www.salarius.co

• Appointed Javier Contreras as COO to further its commercialization efforts. Javier has significant experience in developing supply chains with Clorox and other leading companies
• Launched industrial production of MicroSalt®
• Secured first snack food customer (California packaged nut manufacturer).
• Conducted focus group testing and finalized consumer packaging for SaltMe!® Snacks
• Manufactured sample production run of four different crisps flavoured with MicroSalt®.

Lucyd® (100% ownership) www.lucyd.co

• Lucyd signed Richard Sherman, cornerback of the San Francisco 49ers, as its Chief Brand Officer
• Launched Loud 2.0 Bluetooth® designer glasses in ten styles/colours
• Launched social media influencer program

• Filed 13 design patents for Loud 2.0 and one utility patent for integration of Lucyd Loud with a smart watch.

Guident (100% ownership) www.guident.co

• Appointed Johan De Nysschen and Daniel Grossman as directors. Mr. De Nysschen recently served as Executive Vice President of General Motors and President of Cadillac Division. Daniel Grossman helped create General Motors' mobility division, "Maven", and led all operations as COO, was a Vice
  President at Zipcar, which was sold to Avis Budget for ~$500m
• Guident ltd has launched its commercial website and finalized its go-to-market plan
• Filed a new U.S. patent application (No. 16/386,530) entitled: Methods and Systems for Emergency Handoff of an Autonomous Vehicle. This patent application deals with the operation and control of an autonomous vehicle in the event of an accident.

Belluscura® (21.7% ownership) www.belluscura.com

• Continued progress with its unique and patented portable oxygen concentrator (POC) programme
• On 24 April 2019, Belluscura raised £500,000 with a crowdfunding program which Tekcapital participated approximately 10%
• Belluscura filed an additional patent application entitled "Improved Extracorporeal Membrane Oxygenation Device, System and Related Methods," which involves incorporating and expanding their existing oxygen enrichment patent portfolio into an innovative, next generation portable artificial lung and a novel wound care treatment device
• The company indicated it may receive FDA clearance later this year to be followed by commercial launch in H1 2020.

Operational highlights: Corporate

As part of continuing to expand our services in Latin America;

• Tekcapital delivered a webinar on commercialising university IP with the Creativity and Innovation Center 4.0 of the Universidad Tecnológica de Querétaro. This resulted in the formation of a strategic alliance with Universidad Tecnológica de Querétaro for providing Tekcapital's services in Mexico, post end of period
• Executed a strategic alliance agreement with Emprende UP, the incubator & accelerator platform of Universidad del Pacífico for providing Tekcapital's services in Perú.

Post period end highlights:

• On 25 June 2019, Guident Ltd exclusively licensed patent application PCT US19 14 547 entitled:
  "Visual sensor fusion and data sharing across connected vehicles for active safety" from Michigan State University. This patent application describes methods for enhancing the safety of AV's by enabling them to share information with other AV's and drones regarding objects detected by their sensors. This proprietary method may improve safety by providing a more robust, real-time system for detecting pedestrians, traffic conditions and potential hazards.
• On 27 June 2019, Guident Ltd exclusively licensed U.S. patent # 9,964,948 B2 entitled: "Remote Control and Concierge Service for an Autonomous Transit Vehicle Fleet" from Florida International
  University. This patent describes methods for assisting autonomous vehicles and drones by using their sensor inputs in coordination with a remote control centre with the ability to take over operation of a vehicle or drone from anywhere in the world, enabling it to navigate in a variety of difficult situations such as heavy weather, crowded and dangerous traffic scenarios, accident prevention and remediation, and off-grid and last mile package delivery.

• On 24 June 2019, Salarius Ltd secured a second customer (a Mexican seafood company) and shipped its first order for use with salted dried shrimp snacks.
• On 26 June 2019 and August 6, 2019 Belluscura secured £725,000 and £750,000 respectively in additional equity funding, both at 15 pence per share. The funds will be used to complete regulatory clearance and launch its innovative XPLOR portable oxygen concentrator. This brings the total amount raised by Belluscura in 2019 to £2.15m. The Company did not participate in the last two rounds but did participate in several earlier rounds.
• On 10 July 2019, the Company announced that it had completed a fundraising of $0.94 million in gross revenues through the placing of 9,375,000 new ordinary shares with new and existing investors at a price of 8 pence per share.
• On 22 July 2019, Tekcapital signed strategic alliance with Technological University of Queretaro for expanding its services in Mexico.
• On 12 August 2019, Salarius Ltd announced that it has filed an additional patent application
  #16/535,703 for Microsalt entitled "Improved Low Sodium Salt Composition". The application is directed to an improved low-sodium salt that attaches to a bulk carrier with enhanced electrostatic force, to help increase adhesion to a variety of food surfaces.
• On 15 August 2019, Lucyd Ltd announced launch of its new product, Sherman Shades by Lucyd: Official Sunglasses of Richard Sherman.

Dr. Clifford M. Gross, Chairman said: 'We are pleased to report successful half-year performance for the Group, which has noted record total revenue, profits and net assets for the period whilst reporting important development milestones for its portfolio companies. We believe our unique approach of acquiring and commercialising university IP innovations, coupled with providing a range of IP services continues to deliver strong returns on invested capital.'

For further information, please contact:
Tekcapital Plc	Via Yellow Jersey PR
Clifford M. Gross, Ph.D.
finnCap Ltd (Nominated Adviser and Joint Broker)	[phone]
Geoff Nash/ Max Bullen-Smith (Corporate Finance)
Camille Gochez (ECM)
	[phone]
Novum Securities Limited (Joint Broker)
Colin Rowbury (Corporate Broking)
	[phone]
Yellow Jersey Limited
Tim Thompson / Annabel Atkins	[e-mail]

About Tekcapital plc

Tekcapital creates value from investing in new, university-developed intellectual properties and provides a range of IP investment services to make it easy for organisations to commercialise university-developed

technology. Tekcapital is quoted on the AIM market of the London Stock Exchange (AIM: symbol TEK) and is headquartered in Oxford, in the UK. For more information, please visit www.tekcapital.com

LEI: 213800GOJTOV19FIFZ85

Risk Factors and Forward-Looking Statements

The information contained in this document has been prepared and distributed by the Company and is subject to material updating, completion, revision, verification and further amendment. This Report is directed only at Relevant Persons and must not be acted on or relied upon by persons who are not Relevant Persons. Any other person who receives this Report should not rely or act upon it. By accepting this Report the recipient is deemed to represent and warrant that: (i) they are a person who falls within the above description of persons entitled to receive the Report; (ii) they have read, agree and will comply with the contents of this notice. The securities mentioned herein have not been and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or under any U.S. State securities laws, and may not be offered or sold in the United States of America or its territories or possessions (the "United States") unless they are registered under the Securities Act or pursuant to an exemption from or in a transaction not subject to the registration requirements of the Securities Act. Neither this Report nor any copy of it may be taken or transmitted into the United States, or distributed, directly or indirectly, in the United States, or to any "US person" as defined in Regulation S under the Securities Act of 1933, including US resident corporations or other entities organised under the laws of the United States or any state thereof or non-U.S. branches or agencies of such corporations or entities. This Report is not being made available to persons in Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa or any other jurisdiction in which it may be unlawful to do so and it should not be delivered or distributed, directly or indirectly, into or within any such jurisdictions.

All statements of opinion and/or belief contained in this Report and all views expressed represent the directors' own current assessment and interpretation of information available to them as at the date of this Report. In addition, this Report contains certain "forward-looking statements", including but not limited to, the statements regarding the Company's overall objectives and strategic plans, timetables and capital expenditures. Forward-looking statements express, as at the date of this Report, the Company's plans, estimates, valuations, forecasts, projections, opinions, expectations or beliefs as to future events, results or performance. Forward-looking statements involve a number of risks and uncertainties, many of which are beyond the Company's control, and there can be no assurance that such statements will prove to be accurate. No assurance is given that such forward looking statements or views are correct or that the objectives of the Company will be achieved. Further, valuations of Company's portfolio investments and net asset value can and will fluctuate over time due to a variety of factors. The Company does not undertake to update any forward-looking statement or other information that is contained in this Report.

Chairman's statement

Tekcapital brings innovations from lab to market. In the first half of 2019, many of our key portfolio companies have made significant progress and as a result, our net assets ended the period at record levels.

Key portfolio companies

Tekcapital Plc commercialises university intellectual property, a process known as technology transfer, both for its own portfolio and as a service for client companies.

Over the past three years 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, you increase the probability that vibrant companies will emerge, net assets will grow, returns on invested capital are likely to increase and exits should occur faster. When we realise exits, the Group's goal is to distribute the majority of proceeds as a special dividend to our shareholders.

The Company believes that there is considerable value to be realised from its portfolio companies and is continuing to further commercialise these operations. A common theme across our portfolio companies is that they have proprietary intellectual property, capable management and if successful, will improve the quality of life for the customers they serve. The Company's portfolio of investments includes:

• Salarius ltd (www.salarius.co), of which Tekcapital owns 97.5%, owns a patented process for producing nano-particle sized salt crystals ("MicroSalt®"), which can reduce sodium consumption in snack foods by up to 50.0%, yet provide the same level of salty flavour found in traditional snacks. Salarius' goal is to make snack foods healthier. According to the World Health Organization, cardiovascular disease takes the lives of 17.9 million people per year and is responsible for 31% of global deaths and as such the low sodium ingredient market is estimated to reach US$1.76 billion by 20251.
• Lucyd ltd (www.lucyd.co), which is wholly owned by Tekcapital, sells innovative Bluetooth enabled glasses, regular spectacles and owns 13 design patent applications and one utility patent application for its augmented sound glasses. We believe Lucyd is the first company to offer proper prescription glasses online that allow the wearer to connect to their digital assistants. Their mission is to Upgrade your EyewearTM. Lucyd is positioned at the intersection of the online eyewear and digital assistant markets. Online eyewear sales in the U.K. are projected to reach $824m2 in 2019. The U.S. online eyewear market is projected to reach US$3.5b in 2019 and expected to grow annually by 1.3%.3
• Guident, ltd (www.guident.co), which is wholly owned by Tekcapital, was established to commercialise new technology to enhance the utility, safety and enjoyment of autonomous vehicles ("AVs") and drones. Using its proprietary IP, Guident seeks to develop software Apps and IP that allow users of AV's and drones to dispatch their vehicles to join ridesharing fleets, find available parking spots and charging stations and report and respond to accidents as well as park themselves and make deliveries. The autonomous vehicle market is expected to reach US $65.3 billion by 20274.

1. https://www.futuremarketinsights.com/reports/sodium-reduction-ingredient-market
2. https://www.statista.com/outlook/12000000/156/eyewear/united-kingdom
3. https://www.statista.com/outlook/12000000/109/eyewear/united-states#market-onlineRevenueShare
4. https://www.statista.com/statistics/428692/projected-size-of-global-autonomous-vehicle-market-by-vehicle-type/