Tekcapital : Semi-Annual Report - May 2022 - Tekcapital plc Interim Results Statement

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

28 July 2022

Tekcapital plc

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

Unaudited Half-yearly Report for the period ending 31 May 2022

Company delivered record NAV (US$77m) and NAV/share (US$0.51)

Tekcapital Plc (AIM: TEK), (OTCQB: TEKCF), the UK intellectual property investment group focused on transforming university technologies into valuable products that can improve people's lives, is pleased to announce its results for the six-month period ended 31 May 2022.

Financial highlights

• Net Assets increased 13% to US$76.9m (30 November 2021: US$68.1m).
• NAV per share increased 6% to US$0.51 (30 November 2021: US$0.48).
• Portfolio valuation increased 16% to US$74.3m (30 November 2021:US$63.9m).
• Total income was US$8.0m (H1 2021: US$14.5m), driven primarily by the net increase of US$7.5m in
  the fair value of portfolio companies (H1 2021: US$13.8m).
• Profit after tax: US$6.7m (H1 2021: US$13.0m).
• Completed US$2.5m share placement during the period (H1 2021: US$5.3m).

Operational highlights: Portfolio Companies

Belluscura® Plc ("Belluscura") www.belluscura.com

• Awarded a Distribution and Pricing Agreement ("DAPA") from the United States Defense Logistics Agency ("DLA"), one of the largest buyers in the world, for the X-PLO2R®.
• Executed an agreement with InnoMax Medical Technology to manufacture its X-PLO2R® portable oxygen concentrator in China, which is expected to more than double its manufacturing capacity whilst accelerating its international expansion. Nearly 100 million people in China have chronic obstructive pulmonary disease ("COPD"). This cohort is 4X larger than the U.S. COPD population.
• Following the agreement, Belluscura completed placement for £5.7 million net of placing expenses to fund the purchase of raw material inventory and manufacturing non-recurring engineering costs in connection with the recently announced global manufacturing agreement in China.
• Tekcapital owns 14% of shares of Belluscura plc, valued at US$18.9m as of 31 May 2022.

Lucyd® Ltd ("Lucyd") www.lucyd.co

• Innovative Eyewear has filed an S1 registration statement with the SEC and is seeking to effectuate an IPO to be traded on the NASDAQ under the ticker: LUCY, which it seeks to consummate as soon as practicable depending upon market conditions.
• Announced it has been approved by DICK's Sporting Goods® to provide its Lucyd Lyte® smart eyewear on dickssportinggoods.com and by BestBuy.ca to place its products on Best Buy's Canadian ecommerce site.
• Sales growth of its smart eyewear by over 100% in Q1 2022 compared to Q1 20211.
• Tekcapital owns 100% of shares of Lucyd Ltd, valued at US$27.1m as of 31 May 2022. Lucyd Ltd owns approximately 81% of shares in Innovative Eyewear, Inc. its US operating subsidiary.

Guident Ltd ("Guident") www.guident.co

• Has been selected as a vendor by the Jacksonville Transportation Authority (JTA)'s Procurement
  Review Committee for JTA Proposal No. P-22-010 entitled "JTA Test Environment" to provide remote monitoring and control services for three years. This major project will commence in August 2022.
• Announced it is working with Airspan Networks (NYSE American: MIMO) to provide customers with connectivity and software solutions for autonomous vehicles for smart city applications, using CBRS (Citizens Broadband Radio Service) spectrum.
• Announced that it filed its 8th patent application covering improvements to its remote monitoring and control centre for AVs. The U.S. patent application #17/579,203 is entitled: "Near Real-Time Data and Video Streaming System for a Vehicle, Robot or Drone."
• Announced that its Regenerative Shock Absorber ("RSA") prototypes have been fabricated and are being evaluated by independent test facilities to confirm their performance and capabilities. Guident is currently in discussions with potential customers and strategic partners to potentially manufacture and use their RSA's.
• Tekcapital owns 100% of shares of Guident Ltd, valued at US$18.1m as of 31 May 2022. Guident owns approximately 91% of shares in Guident CORP, its US operating subsidiary.

Salarius® Ltd ("Salarius") www.salarius.co

• Appointed Rick Guiney as CEO. Rick has more than 35 years of experience in the food industry, including 30+ years as President & CEO of Classic Snacks, Inc., where he pioneered the ground-up development of the business and transformed it into a market-leading direct distribution company in the food industry. Classic Snacks quickly became a nationwide snack food packager and distributor to airlines, restaurants, hotels, country clubs, bars, taverns, and retail private label customers.
• Appointed Dan Emery as a non-executive member of its board of directors. Dan has more than 25 years of experience in the food industry, including 15 years as vice president of sales and marketing at Pilgrim's Pride, during which time sales grew from US$970 million to US$8.5 billion, with a balance between retail and food service.
• Successfully completed roll-out of SaltMe! crisps to Kroger Company, the United States largest supermarket by revenue.2 The roll-out has been expanded from 1,800 stores to 2,200 stores.
• Received a VC seed investment of US$400K at $1.29/share, a 29% uplift over its prior period valuation.
• Tekcapital owns 97.2% ownership of Salarius Ltd, valued at US$7.0m as of 31 May 2022. Salarius owns approximately 73% of shares in Microsalt Inc, its US operating subsidiary.

1. https://www.sec.gov/Archives/edgar/data/0001808377/000182912622012073/innovativeeye_s1a.htm
2. https://www.supermarketnews.com/retail-financial/top-25-supermarket-operators-sales

Operational highlights: Corporate

As part of our continuing efforts to develop our team and expand our services:

• Tekcapital delivered the English webinar series " Technology Transfer: The Development of New Commercialization Paradigms". The webinar was delivered to more than 60 participants from USA, Canada and South Africa.
• Tekcapital delivered the Spanish webinar series "The Development of New Commercialization Paradigms In LATAM." The webinar was delivered to more than 80 participants from Colombia, Chile, Mexico and Peru.
• Tekcapital participated as a sponsor and exhibitor at the 2022 U.S. Central Region meeting held by the Association of University Technology Managers (AUTM).
• Tekcapital participated at several networking events held by PraxisAuril and LicenciArte, where key tech-transfer industry players connected.

Post period end highlights:

• MicroSalt® announced that it has executed its first bulk B2B MicroSalt order in the US, placed its SaltMe™ brand of low-sodium potato chips into over 3,000 retail stores nationwide in the U.S., and begun test marketing the first MicroSalt® salt-shakers for food service, restaurants and retail sale.
• Salarius Ltd changed its name to MicroSalt Ltd, consistent with its global strategy to enhance brand recognition for MicroSalt as it accelerates the growth of its business.
• Belluscura announced the launch of its Bluetooth® enabled, next generation XPLOR® portable oxygen concentrator. The next generation X-PLOR provides more oxygen by weight than any portable oxygen concentrator in its class and with its new Nomad Health™ App, patients can connect other Bluetooth® devices such as their iPhone® or Android phone, Nonin® or Masimo® pulse oximeters, and Fitbit® wearables.
• Belluscura announced that in addition to selling its products through distributors it has commenced selling its X-PLOR oxygen concentrators direct to consumers from the following website: www.xploroxygen.com.

Dr. Clifford M. Gross, Chairman said: "We are glad to report solid half-year performance for the Group. Our key portfolio companies are all revenue generating, progressing well, have capable management, and should reach significant additional milestones by the end of 2022. We are excited about what we have achieved in the first half of 2022 and about our potential near-term growth and performance."

For further information, please contact:
Tekcapital Plc	Via Flagstaff
Clifford M. Gross, Ph.D.
SP Angel Corporate Finance LLP	[phone]
(Nominated Adviser and Broker)
Richard Morrison/Charlie Bouverat (Corporate Finance)
Abigail Wayne / Rob Rees (Corporate Broking)
Flagstaff Strategic and Investor Communications	[phone]
Tim Thompson/Andrea Seymour/Fergus Mellon

About Tekcapital plc

Tekcapital creates value from investing in new, university-developed discoveries that can enhance people's lives and provides a range of technology transfer services to help organisations evaluate and commercialise new technologies. Tekcapital is quoted on the AIM market of the London Stock Exchange (AIM: symbol TEK) and is headquartered in the UK. For more information, please visit www.tekcapital.com.

LEI: 213800GOJTOV19FIFZ85

General Risk Factors and Forward-Looking Statements

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, agreed 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. 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.

Investors must rely on their own examination of the legal, taxation, financial and other consequences of an investment in the Company, including the merits of investing and the risks involved. Prospective investors should not treat the contents of this Report as advice relating to legal, taxation or investment matters and are advised to consult their own professional advisers concerning any acquisition of shares in the Company. Certain of the information contained in this Report has been obtained from published sources prepared by other parties. Certain other information has been extracted from unpublished sources prepared by other parties which have been made available to the Company. The Company has not carried out an independent investigation to verify the accuracy and completeness of such third-party information. No responsibility is accepted by the Company or any of its directors, officers, employees or agents for the accuracy or completeness of such information.

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 wide variety of factors both company specific and macro-economic. Changes in net asset values can have a significant impact on revenue and earnings of the Company and its future prospects. Additionally, the current Coronavirus pandemic 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 downturn 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. As a result, the reader is cautioned not to place reliance on these statements or views and no responsibility is accepted by the Company or any of its directors, officers, employees or agents in respect thereof. The Company does not undertake to update any forward-looking statement or other information that is contained in this Report. Neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the information contained in this Report or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Report. Neither the issue of this Report nor any part of its contents is to be taken as any form of contract, commitment or recommendation on the part of the Company or the directors of the Company. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal, analysis or investigation of the Company. This Report should not be considered a recommendation by the Company or any of its affiliates in relation to any prospective acquisition or disposition of shares in the Company. No undertaking, Report, warranty or other assurance, express or implied, is made or given by or on behalf of the Company or any of its affiliates, any of its directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this Report and no responsibility or liability is accepted for any such information or opinions or for any errors or omissions. or opinions or for any errors or

Intellectual Property Risk Factors

Tekcapital's mission is to create valuable products from university intellectual property that can improve people's lives. Therefore, our ability to compete in the market may be negatively affected if our portfolio companies lose some or all of their intellectual property rights, if patent rights that they rely on are invalidated, or if they are unable to obtain other intellectual property rights. Our success will depend on the ability of our portfolio companies to obtain and protect patents on their technology and products, to protect their trade secrets, and for them to maintain their rights to licensed intellectual property or technologies. Their patent applications or those of our licensors may not result in the issue of patents in the United States or other countries. Their patents or those of their licensors may not afford meaningful protection for our technology and products. Others may challenge their patents or those of their licensors by proceedings such as interference, oppositions and re-examinations or in litigation seeking to establish the invalidity of their patents. In the event that one or more of their patents are challenged, a court may invalidate the patent(s) or determine that the patent(s) is not enforceable, which could harm their competitive position and ours. If one or more of our portfolio company patents are invalidated or found to be unenforceable, or if the scope of the claims in any of these patents is limited by a court decision, our portfolio companies could lose certain market exclusivity afforded by patents owned or in-licensed by us and potential competitors could more easily bring products to the market that directly compete with our own. The uncertainties and costs surrounding the prosecution of their patent applications and the cost of enforcement or defense of their issued patents could have a material adverse effect on our business and financial condition.

To protect or enforce their patent rights, our portfolio companies may initiate interference proceedings, oppositions, re-examinations or litigation against others. However, these activities are expensive, take significant time and divert management's attention from other business concerns. They may not prevail in these activities. If they are not successful in these activities, the prevailing party may obtain superior rights to our claimed inventions and technology, which could adversely affect their ability of our portfolio companies to successfully market and commercialise their products and services. Claims by other companies may infringe the intellectual property rights on which our portfolio companies rely, and if such rights are deemed to be invalid it could adversely affect our portfolio companies and ourselves as investors in these companies.

From time to time, companies may assert, patent, copyright and other intellectual proprietary rights against