Supply@me Cap Regulatory News (SYME)

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 2014/596/EU, WHICH IS PART OF UNITED KINGDOM DOMESTIC LAW PURSUANT TO THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

21 December 2022

Supply@ME Capital plc

(the "Company" or "SYME")

Strategic Alliance with VeChain Foundation

Web3 stream updates

SYME, the fintech business which provides an innovative fintech platform (the "Platform") for use by manufacturing and trading companies to access Inventory Monetisation© ("IM") solutions enabling their businesses to generate cashflow, is pleased to update the market regarding the strategic alliance (the "Agreement") with the VeChain Foundation[1] ("VeChain"), a blockchain enterprise service provider focused on supply chain and sustainability, and the "Web3"[2] stream.

Background

On 28 June 2022, the Company announced its entry into the Agreement with VeChain, pursuant to which the parties began to create the Web3 stream with the intention of funding up to US$10 million of IM transactions, leveraging the minting of dedicated non-fungible tokens ("NFTs") to be directly subscribed for by VeChain.

The Agreement has two phases, both in terms of investment opportunities and technology development.

Phase One comprised the inaugural IM transaction, providing a proof-of-concept, which was successfully executed on 12 September 2022.

Following the completion of the inaugural IM transaction, the Agreement envisaged the commencement of Phase Two including an assessment of the innovative process designed to link digital assets to the real economy.

Inaugural IM transaction: update

The total value of the initial warehoused goods monetised was approximately €1.6 million.

The counterparty in the inaugural IM transaction is a well-established business with significant market presence in Europe (predominantly in Italy), Africa and the United States (the "Client Company"). The Client Company is involved in the design and manufacture of industrial and specialised vehicles as well as electronic systems, electrical wiring and other components.

As announced on 12 September 2022, the total expected average annual fees to be invoiced by the Company's fully owned subsidiaries over the duration of the inaugural IM transaction equates to approximately 3% of the gross value of the inventory to be monetised by the Stock (trading) Company. This is the upper range the Company expected could be achievable for the "Captive" Platform servicing fees as set out in the revenue model previously disclosed by the Company.

The Company is pleased to confirm that the inaugural IM transaction continues to produce the expected returns for both SYME and the Stock Company, with no foreseeable operational issues. The Client Company is also transferring inventory data from its Enterprise Resource Planning system to the Platform, enabling continuous monitoring of inventory movements and for the Stock Company to forecast inventory buy-backs and manage potential remarketing strategies.

Phase Two

Phase Two involves the creation of an "Inventory Monetisation Platform 3.0" with an expected roadmap of Web3 features, including the issuance of NFTs, digital ownership and business-to-business (B2B) marketplaces, decentralised finance ("DeFi") and, overall, a governance protocol.

Phase Two comprises:

- the assessment of an innovative process designed to link digital assets to the real economy. The Company is working with VeChain to improve automation between the Platform and the VeChainThor blockchain services;

- the opportunity to involve multiple liquidity providers to deploy new IM transactions (crypto asset managers and direct investors through liquidity pools partnerships). In this regard, SYME is compiling, from its global pipeline, a portfolio of potential Client Companies up to approximately US$50 million of inventory to be monetised, reflecting the commitment budgeted by VeChain and, the opportunity to raise additional capital from the VeChain community and other crypto/ digital assets investors. SYME has also approached the market-leading Centrifuge[3] and MakerDAO[4] communities to explore potential funding of IM transactions through the Centrifuge protocol and to access liquidity through DeFi; and

- the creation of a governance protocol. The Company produced, with the support of its blockchain advisers, a strategic paper regarding the launch of governance and utility token which is expected to boost the investments into IM transactions performed via the Web3 route.

SYME and VeChain intend to make further announcements regarding the progress of Phase Two in due course.

For the purposes of UK MAR, the person responsible for arranging release of this announcement on behalf of SYME is Alessandro Zamboni, CEO.

Contact information

Alessandro Zamboni, CEO, Supply@ME Capital plc, investors@supplymecapital.com

MHP Group, SupplyME@mhpgroup.com

Notes

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