Netscientific Regulatory News (NSCI)

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NetScientific plc

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

Q-Bot Limited ("Q-Bot") secures £1.6m of investment to fund growth

NetScientific plc (AIM: NSCI), the international life sciences and sustainability technology investment and commercialisation Group announces that portfolio company Q-Bot has successfully closed a £1.62m investment round to fund the next stage of its growth. The additional funds will allow Q-Bot to accelerate the rollout of its unique patented solution of using robots to apply underfloor home insulation across the UK, and meet growing overseas demand for Q-Bot's solution.

Q-Bot is a London-based award-winning robotics and AI company that has pioneered cutting edge technology and digital solutions for the inspection, maintenance, insulation and upgrade of buildings and homes. In the year ended 31 March 2022, Q-Bot generated sales of £2.2m, and expects significant growth in sales as market deployment accelerates.

With this funding, Q-Bot will continue its strong growth to meet the rapidly increasing market demand for its offering to UK social and private landlords in the context of rising energy bills and move to decarbonisation of UK housing. Q-Bot's growth is through an expansion of its network of Accredited Installation Partners, industrialising robot manufacturing at scale, growing sales into the UK and international markets.

This transaction follows a £2.8m deal in December 2021, which included the setup of a Convertible Loan Facility, and the purchase of equity interests from early Q-Bot investors and a departing founder of Q-Bot. During the period there were also several changes to the Q-Bot Board and management team, and a Board led strategy review process. Since then the Q-Bot team has worked hard to reposition the business to capture the opportunities and made progress in all areas during the first half of 2022.

This round, which comprised conversion of £762,000 of loan notes (of which £500,000 was provided by NetScientific as announced on 21 December 2021) and £900,000 of new equity, results in the direct equity holding in Q-Bot by NetScientific increasing from 18.3% to 20.6%, in addition to EMVC's Capital Under Advisory representing 16.7%. NetScientific's 20.6% Q-Bot direct stake is valued at £2.77m based on this funding round- a gain of approximately £1.45m in less than one year.

John Clarkson, Chairman of NetScientific commented: "We are delighted to have an active role in Q-Bot, which continues to make excellent progress in developing and applying its robotics technology, generating revenue and meeting important market needs. NetScientific has made a significant direct investment, secured substantial syndicated funding and provided management support, to enhance the growth of this enterprising UK company. We look forward to participating in its planned scale-up and further commercialisation, with exciting prospects in the broader application of robotics and AI. This follows NetScientific's stated strategy of deeper involvement in selected portfolio companies, with strong prospect for both UK and international expansion, offering the potential for greater shareholder returns"

Dr. Ilian Iliev, CEO of NetScientific and Board member at Q-Bot commented: "Q-Bot's robotics as a service offering is at the right place and right time, providing a massively scalable solution not only to the transition to a low-carbon economy, but to the current crisis in growing households energy bills and energy security. This investment exemplifies NetScientific's capital light investment model into exciting technology companies, leveraging EMVC syndication alongside our direct funding, helping our portfolio companies accelerate growth - with significant upside possible as the company accelerates market traction."

The full text of the announcement from Q-Bot is reproduced below.

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Q-Bot secures £1.6m of investment to accelerate sales of its robotics-as-a-service solution for insulation retrofit of housing in the UK and internationally

Tuesday 14th June 2022 - Q-Bot, the UK's leading developer of robots for use in the construction and retrofit industry, has successfully closed a £1.62m investment round to fund the next stage of its growth, primarily from existing investors. The additional funds will allow Q-Bot to accelerate the rollout of its unique solution of remotely applying underfloor insulation across the UK and engage with growing overseas demand for Q-Bot's solution. Deeptech VC specialist EMV Capital led the round, with participation of their parent company NetScientific PLC.

Using robotics and AI, Q-Bot develops innovative solutions that can survey, maintain, and upgrade existing buildings. Q-Bot created intelligent robots to apply underfloor insulation underneath suspended floors. This unique method improves the energy efficiency of properties and households' comfort with minimal disruption to their daily life. Q-Bot's solution is critically important in helping UK and other nations' households face the unprecedented rise of heating cost for this winter. Retrofitting a suspended floor has many benefits: it saves money on energy bills, improves daily comfort, reduces carbon footprint, and increases the value of a property. This also means a healthier and warmer home to live in, contributing to tackling fuel poverty and working towards net zero carbon.

With this funding, Q-Bot will continue its rapid growth to meet the increasing demand for its offering in the UK and overseas. As the UK's de facto leader in construction and retrofit robotics, Q-Bot works with both social and private landlords, as well as homeowners, having now insulated more than 3,000 properties.

Q-Bot's growth is through an expansion of its network of Accredited Installation Partners, industrialising robot manufacturing at scale. The company offers a 'Robot as a Service', a scalable model, to locally successful, high quality Accredited Installation Partners. There are tens of millions of homes worldwide that need Q-Bot's underfloor insulation robots. Collaborative and creative partnering is crucial to delivery at scale. Over the past two years, Q-Bot has successfully developed several partnerships in the UK, with additional partners going through training. Since October 2021, Q-Bot is working overseas, and has partnered with a large national insulation company and a local installer in France. This is a major achievement for the company, opening its service to even more properties in need of underfloor insulation that would be impossible otherwise to insulate and meet retrofit energy standards.

"We are pleased that following the strategy review and changes to the company launched by the Board in 2021, we are now seeing accelerated growth for the business in terms of sales, the on-boarding of a series of key partners and continued investor support. We recognise the challenges associated with rising energy bills and are fortunate to be part of worthwhile solutions to reducing energy demands and associated emissions and costs. We are looking forward to being able to offer our quality assured underfloor thermal insulation to even more homes in the coming year." - Peter Childs FREng, Chair Q-Bot Ltd and Professor, Imperial College London

Dr. Ilian Iliev, Managing Director of EMV Capital said: "Q-Bot's robotics as a service offering is at the right place and right time, providing a massively scalable solution not only to the transition to a low-carbon economy, but to the current crisis in growing households energy bills and energy security. We're pleased also with growing international interest in the technology, which can see a further step-change in growth in future years."

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About NetScientific

NetScientific plc (AIM: NSCI) is a holding company, that invests in, develops, commercialises and realises shareholder value in life sciences/healthcare, sustainability and technology companies, which offer significant growth potential in the UK, Europe and USA, as well as globally. 

Since the adoption of the New Strategy in 2020, the Group has nearly trebled its portfolio from 8 to 22 companies, either through subsidiary, direct balance sheet investment or capital under advisory.

NetScientific delivers shareholder returns through a proactive and hands-on management approach to their portfolio companies; identifying, investing in, and helping to build game-changing companies. The Group targets value inflection points and the release of value through partial or full exits from trade sales, public listings, or equity sales. The Company has a strong transatlantic and growing international presence, providing attractive expansion prospects. 

NSCI can deploy a capital-light investment structure; utilising the power of the PLC Brand, and the NetScientific balance sheet to anchor future investments and achieve a multiplier effect by attracting third party investment for the portfolio companies. 

NetScientific is headquartered in London, United Kingdom, and was admitted to trading on AIM, a market operated by the London Stock Exchange, in 2013 (website: www.netscientific.net).

About Q-Bot (www.q-bot.co):

Q-Bot Limited, was formed in 2012 by the multi-award-winning architect Tom Lipinski and Professor Peter Childs FReng from Imperial College London, with the goal of using robotics and AI to transform the construction industry. Q-Bot's solutions enable the delivery of innovative new services for the inspection, maintenance and upgrade of buildings which empower workers, improve safety, are cost-effective, and efficient. Q-Bot is revolutionising the construction industry by connecting the built environment with robotics and AI, to rethink processes that have remained unchanged for hundreds of years. The company is backed by Net Scientific PLC, EMV Capital, EIS investment platform Wealth Club, and other investors.

Q-Bot has already brought to market a unique retrofit solution, using a robotic device to apply insulation under suspended floors of existing homes, insulating over 2,500 homes in the process. The solution is cheaper, performs better, and has none of the disruption of more traditional methods. Through its work with local councils and housing authorities, for whom it is increasingly becoming the de facto standard, Q-Bot's solution has been proven to reduce fuel poverty by improving the energy efficiency of homes, whilst substantially reducing their carbon footprint- cementing the company's strong ESG credentials. Q-Bot has also grown to work with private customers, and developed a scalable and successful model offering the service to Accredited Installation Partners ('Robot as a Service'). The solution is TrustMark certified and fully accredited by the BBA.