TekCapital Regulatory News (TEK)

The information contained within this announcement is deemed by the Company (Companies House registration number 08873361) to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR")s. With the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

Tekcapital PLC

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

Final Results for the year-ended 31 December 2022

Tekcapital plc (AIM: TEK), the UK intellectual property (IP) investment group focused on creating valuable companies from investing in university technologies that can improve people's lives, announces its audited results for the year ended 31 December 2022.

Financial highlights

Our investment objective is to achieve long-term growth of net assets and returns on invested capital through the commercialisation of university discoveries that can make a positive impact on people's lives. In 2022 we had a productive year for long-term value creation. Our portfolio companies achieved significant milestones, however due to unrealized reductions in the end of period valuations of Lucyd and Belluscura, our profitability, net assets and net assets per share were commensurately impacted.

• Net Assets US$57.8m (2021: US$68.1m)

• NAV per share US$0.38 (2021: US$0.48)

• Portfolio valuation US$54.9m (2021: US$62.5m)

• Total loss after tax: US$12.7m, resulting primarily from net unrealised fair value reduction of US$11.0m (2021: profit of US$26.4m),

• Share placings totalling US$2.5m completed during the period (2021: US$9.7m).

The Annual General Meeting ("AGM") of Tekcapital Plc will be held at the offices of Bird & Bird LLP, 12 New Fetter Lane, London EC4A 1JP on 22 June 2023 at 9.00 a.m. (British Summer Time). The annual report and the formal notice of the 2023 AGM will be posted to shareholders on the 26 May 2023.

The notice of AGM will be available to review on the Company's website at: www.tekcapital.com.

Investment Portfolio

MicroSalt® Ltd (97.1%) www.microsaltinc.com

MicroSalt Ltd ("Microsalt") manufactures MicroSalt®, a new, patented, all natural, non-GMO, Kosher, low-sodium salt, that tastes great and has approximately half of the sodium of regular table salt.

Investment Rationale:

The snack food industry is focused on developing and providing better-for-you products that both taste good and help reduce sodium intake. Excess sodium consumption contributes to cardiovascular disease, a leading cause of premature death globally. In a recent report¹, the World Health Organization has indicated that reducing sodium consumption is one of the world's leading health imperatives. To help address this problem, MicroSalt has developed a patented process for producing micron sized salt crystals. Microsalt® has all the flavour of salt with roughly half the sodium for topical applications such as crisps, pretzels, nuts, popcorn and other salty snacks. Additionally, MicroSalt can be used in bakery products and precooked meals.

Microsalt's patented, low-sodium salt delivers natural salt with approximately 50% less sodium.Tekcapital owns 78% of Microsalt Ltd.

2022 developments:

• MicroSalt executed its first bulk order of MicroSalt® through FXM, a Mexican distribution partner.

• MicroSalt received an equity investment of US$400,000 from a Spanish food-tech venture fund.

• Expanded sales of its SaltMe!® full flavour, low sodium crisps in more than 1,000 supermarkets and other stores in the U.S., as proof of concept of the use of MicroSalt on snack foods.

• MicroSalt® named the 2022 Sodium Reduction Technology Provider of the Year by Global Health & Pharma.

• MicroSalt announced a partnership with Presty! Foods for the development and roll-out of low-sodium solutions across Presty's line for plate-ready meals. Presty! Manufactures its products in its facility in France where it specialises in developing innovative and delicious options to supply the booming Heat and Eat category.

• Launched MicroSalt shakers in both 2-ounce and 6-ounce sizes. Hannaford Brothers one of the most respected food retailers in the north-eastern United States (185 stores) agreed to stock both sizes of MicroSalt's new table-top shakers. Subsequent to the end of period, the new shakers have been on-boarded in more than 500 supermarkets in the US.

• Judith Batchelar OBE joined the board of MicroSalt. Judith currently serves as President of the U.K. Nutrition Foundation. She has worked in the food and drink industry for over 35 years. Previously she served as a director for Sainsbury's with responsibility for all aspects of Sainsbury's product offer. Prior to Sainsbury, Judith held a similar role at Safeway, and spent twelve years in the Food Division at Marks & Spencer Group plc.

• Zeus Capital Limited appointed by MicroSalt as its Nominated Adviser and Broker for its proposed IPO on the AIM Market targeted for 2023.

Lucyd® Limited ("Lucyd") (100% ownership) www.lucyd.co

Lucyd® Limited ("Lucyd") Lucyd is seeking to Upgrade Your Eyewear® by developing and selling designer smart eyewear at affordable prices. Innovative Eyewear, Inc ("Innovative Eyewear"), Lucyd's ~67% owned U.S. operating subsidiary, was the first Company to deliver prescription glasses with Bluetooth® technology in 2019. Their eyeglass frames help you stay connected safely and conveniently, by enabling many common smartphone tasks to be performed handsfree with Bluetooth® and voice assistants.

Investment Rationale:

Drivers struck and killed an estimated 7,485 people on foot in 2021 - the most pedestrian deaths in a single year in four decades and an average of 20 deaths every day¹, according to a new estimate by the Governors Highway Safety Association. Open ear audio found in Lucyd smart glasses can help pedestrians maintain situational awareness whilst walking running and cycling. According to the Vision Institute², approximately 75% of the adult population need corrective lenses, and advancements in Bluetooth technology have enabled it to be incorporated into traditional eyeglass form factors. This combination created a new type of eyewear with built-in speakers, microphones and touch controls. Lucyd smart eyewear allows the wearer to forego headphones and use their glasses to listen to audio content and talk to others and digital assistant. Since the speakers are open-ear, Lucyd smart glasses enables the wearer to stay connected to their digital life whilst maintaining situational and social awareness.

Lucyd's vision is to Upgrade your eyewear® by providing tech-enhanced eyewear that makes it easier and safer than ever to stay connected. Lucyd has just introduced the world's first smart eyewear with ChatGPT.

2022 Developments:

· Innovative Eyewear has been onboarded 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.

· Appointed Olivia "Dibby" Bartlett as a non-executive director. Dibby, an optical industry expert, has served more than 30 years in the eyewear industry and is the immediate past president of the Opticians Association of America.

· Appointed Kristen McLaughlin to its board as a non-executive director. Kristen has had a distinguished career in the optical industry where she has served as director of marketing for Silhouette International and brand manager for Daniel Swarovski Crystal Eyewear.

· Innovative Eyewear launched the Vyrb app, a voice social medial program designed for Lucyd Lyte smart glasses and other hearables, on both IOS and Android.

· Innovative Eyewear raised US$7.35 Million in an Initial Public Offering ("IPO") of shares of its common stock on the NASDAQ market on August 14, 2022, and trades under ticker LUCY.

· Announced it has completed initial production of its second-generation product, Lucyd Lyte 2.0, which subsequently launched in Q1 2023. The Lyte 2.0 carries several new features including high-end styling from Innovative Eyewear's new design team, a four-speaker array for immersive audio, and the longest playback time of any smart eyewear device, with 12 hours of music playback and talk time per charge. The battery life of the Lyte 2.0 surpasses the vast majority of true wireless audio devices in any form factor.

· Introduced the first smart eyewear, digital try-on display. A Lucyd-branded digital retail fixture that provides a virtual try-on experience for in-store clients at Lucyd partner retail stores. The proprietary software that operates the kiosk was designed and created in house and is able to remotely update the displays with new brand content and smart eyewear styles, and the tablet can also be scanned to download Innovative Eyewear's Vyrb mobile app, making it a comprehensive Lucyd brand experience in all deployed locations. 

· Introduced the first cordless charging dock for smart eyewear. This patent-pending accessory was developed by Innovative Eyewear in house. It allows the customer to charge their Lucyd glasses simply by dropping them on their nightstand. The Dock includes three additional USB ports to enable the user to charge their phone, smartwatch, tablet and smartglasses simultaneously with one device.

· Innovative Eyewear was granted six additional US design patents and one additional US utility patent in 2022, as well as one Chinese patent to protect its eyewear designs and software utilities. Innovative Eyewear also filed new patents in 2022 in the US, Canada and/or China to protect its recently released Lucyd Dock and several pending products. Innovative Eyewear 's total number of pending and issued patents now stands at 62.

· In late 2022, Innovative Eyewear acquired a multi-year, global license to the Nautica brand for smart eyewear and related accessories. Innovative Eyewear designed the initial line of Nautica Smart Eyewear and expects to launch the line in H2 2023. In addition, the Company also acquired a multi-year, global license to the storied Eddie Bauer brand for smart eyewear and related accessories.

· Lucyd products have also been on-boarded on Academy Sports + Outdoors's main site, the second largest sporting goods retailer in the US.

· Lucyd partnered with Everest.com, a new sporting goods marketplace, to offer Lucyd Lyte glasses to their rapidly growing customer base.

· In 2022, Innovative Eyewear grew its retail presence to 200+ locations carrying Lucyd Lyte products in-store.

Guident Limited ("Guident") (100% ownership) www.guident.co

Guident Limited ("Guident") is developing remote monitoring and control software to improve the safety of autonomous vehicles and land-based delivery devices. Guident's software will incorporate artificial intelligence and advanced network technologies to minimize signal latency and improve the safety of autonomous vehicles.

Investment Rationale:

Vehicles of all types are rapidly becoming electric and autonomous. Whilst Autonomous Vehicles ("AVs") are projected to be significantly safer than traditional vehicles, there will still be mishaps and in many instances, there will be no vehicle operator present to help resolve these problems. Guident believes remote human interaction will be needed to address these mishaps. Guident's remote monitoring and control centre will monitor vehicles and when necessary, provide additional support such as calling first responders, taking over control of the vehicle to move it out of harm's way and providing real-time communication with passengers and pedestrians. Over time, Guident believes remote monitoring centres will be required in most jurisdictions where AVs operate.

In addition to safety, a key variable in affecting the adoption of electric vehicles is the travel range between charges.

All commercial electric cars utilise regenerative braking to help extend the range by capturing the heat energy from braking and utilising it to power the vehicle or help charge the battery. Regenerative brakes work by reversing the electric motors that propel the vehicle. This works like a generator and directs energy back into the electric system to help extend the range and over time improve efficiency. Guident believes that in the next few years all electric vehicles will also have regenerative shock absorbers as these are also "green" and will extend the range the vehicle can be driven between charges. Guident's regenerative shock absorbers have the potential to assist electric vehicle manufacturers to improve the efficiency and range of their vehicles.

Guident is developing remote monitoring and control software to improve the safety of autonomous vehicles and land-based delivery devices.

2022 Developments:

· Guident has executed a strategic alliance with Perrone Robotics, Inc.

· Guident is working with Airspan Networks to provide customers with connectivity and software solutions for autonomous vehicles for smart city applications, using CBRS (Citizens Broadband Radio Service) spectrum.

· Guident announced that they have filed their 8th patent application covering improvements to their remote monitoring and control centre for AVs. U.S. patent application #17/579,203 entitled: "Near Real-Time Data and Video Streaming System for a Vehicle, Robot or Drone".

· Guident was selected as a vendor by JTA's Procurement Review Committee for JTA Proposal No. P-22-010 entitled "JTA Test Environment" to provide remote monitoring and control services for phase I of the Ultimate Urban Circulator (U²C) Project in the Jacksonville urban core area. Jacksonville is the largest city by area in the contiguous United States as of 2020. The Jacksonville Transportation Authority is the independent agency responsible for public transit in the city of Jacksonville, Florida, and roadway infrastructure that connects northeast Florida.

· Guident has been selected by Boca Raton Innovation Campus (BRiC) to provide an autonomous shuttle service for a 2.1-mile fixed route with eleven stops within BRiC and connecting to the Boca Raton Tri Rail station, the most frequented station in South Florida.

· Additionally, Guident has announced progress with their regenerative shock absorbers (RSA). Guident has produced its first generation regenerative shock absorbers and is currently testing these new shocks with Tier-1 automotive companies. This technology will enable EVs to increase their range and have more available power for telemetric connection with the RMCC. The goal of this technology is to manufacture electromagnetic regenerative shock absorbers with energy densities that can recover a vehicle's vibration energy which is otherwise lost as heat. In addition, this unique design utilising rotary mechanical motion rectifiers can be tuned to achieve better damping characteristics than existing shock absorbers. Guident's shock absorber technology could potentially be utilised by a significant number of electric vehicle makers.

Belluscura® Plc (~12% ownership) www.belluscura.com

Belluscura plc ("Belluscura") is a respiratory medical device company that has developed and launched an improved portable oxygen concentrator (POC) to provide on-the-go supplemental O2. The company believes its product is the first FDA cleared, modular POC with a user-replaceable filter cartridge. Belluscura aims to make POC's more affordable to those who need them.

Investment Rationale:

Worldwide, approximately 300m individuals suffer from COPD (chronic obstructive pulmonary disease). Many of these patients require supplemental oxygen. As there is no cure for COPD, over time patients require greater amounts of oxygen, and if they use a portable oxygen concentrator, they must often replace their devices with greater capacity models as their disease progresses. With Belluscura's new patented device, users can swap out the filter cartridges to enable higher capacity oxygen flow without having to buy a new device, like upgrading memory on a laptop. The result is more affordable oxygen therapy which increases the number of people who can avail themselves of these life-extending and life saving devices.

Belluscura's X-PLOR oxygen concentrator

2022 Developments:

· Belluscura announced it has entered into its first international distribution agreement with MedHealth Supplies of South Africa and has signed a distribution agreement with a leading Durable Medical Equipment ("DME") provider and distributor in the US.

· Belluscura announced that it has won two 2022 HME Business New Product Awards for its X-PLOR® portable oxygen concentrator and Nomad Biometric™ App.

· Belluscura has been certified as compliant with ISO standards for Quality Management (ISO 13485:2016).

· Belluscura announced its half year report reporting Group revenue of US$0.6 million (H1 2021: US$nil); a 34% increase over H2 2021, Adjusted EBITDA of US$5.1 million loss (H1 2021: US$1.2 million loss), basic loss per share of US$0.04 (H1 2021: US$0.03) and Net cash at 30 June 2022 of US$11.3 million.

· Belluscura announced that it has entered into a Group Purchasing Organization Product Supply Agreement (the "Agreement") for the supply of portable oxygen concentrators with VGM Group, Inc ("VGM"). VGM is the largest and most comprehensive Member Service Organization ("MSO") in the US for post-acute healthcare, which provides a range of support to its members including with the purchasing of medical equipment in the respiratory field. Over 2,500 healthcare providers with nearly 7,000 locations across the US rely on VGM to connect them to valuable resources every single day.

· Belluscura announced that it has commenced selling its X-PLOR oxygen concentrators direct to consumers ("DTC") from the following website: www.xploroxygen.com.

· Belluscura announced the launch of its Bluetooth® enabled, next generation X-PLOR® portable oxygen concentrator (previously described as the X-PLOR CX). 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. Patients will be able to track their oxygen usage, breathing rates, blood oxygen saturation levels, heart rate, sleep and other important biometric and environmental data. The patient can then share this important healthcare data with their provider.

· Belluscura announced that three additional US patents have recently been granted, increasing the number of issued and pending patent applications the Company owns or exclusively licenses to 30. The technology covered by the patents, includes, extracorporeal membrane oxygenation (ECMO) innovations for when people who are very ill with conditions of the heart and lungs, or who are waiting for or recovering from a heart transplant, require a portable artificial lung; continuous Positive Airway Pressure (CPAP) innovations, a type of non-invasive ventilation (NIV) or breathing support, and consumer replaceable molecular sieve technology, used to remove Nitrogen from ordinary air to produce medical grade supplemental oxygen.

· Belluscura raised approximately £6.0 million by way of the issue of 7,058,824 Placing Shares at an issue price of 85 pence per ordinary share.

· Belluscura announced that Brian Brown has joined as Vice President of Engineering. Brian has over 25 years of experience in commercializing breakthrough new products in hardware, software, and service delivery industries. In addition to degrees in electrical engineering, he is a registered professional engineer and is a named inventor on 17 US patents. Belluscura also announced Jim Clement has joined the Company as Head of Commercial Strategy. Jim has over 30 years' experience in the durable medical equipment industry, including previously holding the title of General Manager of a portable oxygen concentrator Company.

· Belluscura announced that X-PLOR portable oxygen concentrator has been awarded a Distribution and Pricing Agreement ("DAPA") code from the U.S. Defense Logistics Agency ("DLA") through our distribution partner, Lovell Government Services Inc ("Lovell"). DLA procures items from manufacturers and suppliers and provides them to the Department of Defense and other federal/state customers throughout the US and globally.

· Belluscura announced it has signed a manufacturing Master Supply Agreement ("MSA") with InnoMax Medical Technology, Ltd ("InnoMax") to manufacture the X-PLO2R® portable oxygen concentrator in the People's Republic of China.

Operational highlights: Corporate

Company provided the following webinars, conference presentations and delivered analytic reports as follows:

· Webinar series entitled "Technology Transfer: The Development of New Commercialization Paradigms." The webinar was delivered to more than 60 participants from USA, Canada and South Africa.

· Webinar series entitled "The Development of New Commercialization Paradigms In LATAM." The webinar was delivered to more than 80 participants from Colombia, Chile, Mexico and Peru.

· Tekcapital was invited to participate at the 2022 Red TTO (Technology Transfer Offices) Mexico event. This annual congress is where the innovation ecosystem of Mexico converges.

· In the U.S., Tekcapital participated as a sponsor and exhibitor at the 2022 Eastern, Central, Western and Canadian Region Meetings hosted by the Association of University Technology Managers.

· In Brazil, Tekcapital participated at the National Forum of Innovation and Technology Transfer Managers. This event hosted more than 100 key players in the technology transfer industry in Latin America.

· Tekcapital delivered more than 260 Invention Evaluator reports to universities, research institutions and corporations worldwide, to help them assess the market potential of their new technologies.

· Additionally, the Vortechs Group, Tekcapital's executive search firm won numerous executive search assignments in 2022 for both external customers and portfolio Company clients.

Dr. Clifford Gross, Executive Chairman said:

"The Group has made good progress during 2022. Our portfolio companies have demonstrated solid growth and we believe they should achieve additional significant milestones by the end of 2023. 

Of note, Lucyd's Innovative Eyewear Inc. subsidiary completed its flotation on the NASDAQ and raised US$7.3m in gross proceeds, in spite of a choppy year in the capital markets. Guident secured its first customer, the Jacksonville Transportation Authority for its remote monitoring and control (RMCC) service and has signed a letter of intent with its second customer, the Boca Raton Innovation Campus, to provide remote monitoring for its campus shuttle. Additionally, Guident has made significant progress improving and fabricating its latest regenerative shock absorbers and has begun testing them with several Tier-1 companies. We are also pleased to highlight MicroSalt's strong progress ending the year by growing its revenues, signing up additional customers and launching its low sodium saltshakers to an increasing number of supermarkets and engaging its advisory team for a prospective AIM IPO during 2023. 

Our financial results were negatively impacted by the reduction in the observable, closing share prices of both innovative Eyewear and Belluscura at the end of the period, which we believe were in large measure the result of exogenous macro-economic and capital market factors. These were partially offset by the approximate doubling of the share value of MicroSalt.

We remain steadfast and excited about the commercial progress of our portfolio companies in 2022 and for their future prospects for the remainder of 2023. As per our mission and investment objective, we believe that all of our key portfolio companies have the potential to make a positive impact on the lives of the customers they serve as well as produce meaningful returns on invested capital for our shareholders over the mid to long term." 

Post period end portfolio company highlights

Belluscura plc

· Belluscura announces that it has made considerable progress year to date. Since the launch of the 1st generation X-PLOR in September 2021, the Group is now distributing products throughout the US through multiple sales channels: Distributors and Durable Medical Equipment Providers both online, Bricks and Mortar, Medical Supply Warehouses, Medical Device Intermediaries, Hospitals and Direct to Consumer.

· Belluscura announced that Robert ("Bob") Fary has joined the Company as Senior Vice President of Global Sales. Bob has thirty years of experience in the respiratory industry where he has held leadership roles at major oxygen concentrator manufacturers and durable medical equipment companies. During the past two decades, Bob's industry leading team was directly responsible for or contributed to the sale of over 1 million portable oxygen concentrators ("POCs"), generating revenues in excess of $1 billion.

· Belluscura announced in January 2023 it has raised under a Placing and Broker Option approximately US$5.8 million (£4.7 million), before expenses through placing of unsecured convertible loan notes ("Loan Notes"). The Placing and Broker Option when combined will, assuming all interest on the Loan Notes is capitalised, result in the issue, upon conversion of the Loan Notes, of up to 12,462,281 new ordinary shares of 1 penny each in the Company, representing approximately 9.20% of the enlarged issued share capital of Belluscura.

· Belluscura announced its X-PLOR portable oxygen concentrator ("POC") is now marketed in the US through GoodRx, Inc. www.goodrx.com. GoodRx, Inc (Nasdaq: GDRX) is a leading digital healthcare platform that makes healthcare affordable and convenient for all Americans.

· Belluscura announced proposed placing and subscriptions to raise GBP 3.0 million and retail offer to raise up to GBP 0.5m on 25 May 2023.

Salarius & Microsalt Inc, its US subsidiary:

· MicroSalt announced that supermarket chain, Giant Food of Maryland LLC, ("Giant") one of the most respected food retailers in the mid-Atlantic United States, has agreed to partner with Microsalt Inc to provide low-sodium solutions for consumers and has agreed to carry MicroSalt's new saltshakers in its stores. Giant has over 160 stores spanning across the Delaware, Washington, D.C., Maryland, and Virginia region.

· MicroSalt announced it had entered into an agreement with US Salt LLC ("US Salt") for the distribution and delivery of MicroSalt's low-sodium solutions. "US Salt is looking forward to working with MicroSalt® to help with our low-sodium initiatives. Sodium is a worldwide concern in the food industry, and we believe Rick and his team are the industry leaders that can help propel our future growth." Said Bob Jordan, Vice President of Sales & Marketing of US Salt. US Salt is currently responsible for producing and distributing over 90% of the private label, round can salt business in the United States. To learn more about US Salt, visit www.ussaltllc.com.

· MicroSalt announced that both sizes of its new line of low sodium saltshakers are now available through UNFI and KeHE Foods, two of the U.S.'s largest retail food distributors. United Natural Foods, Inc. (NYSE: UNFI) is the largest publicly traded wholesale distributor delivering healthier food options to people throughout the United States and Canada. KeHE Distributors is one of the nation's top wholesale food distributors with 16 distribution centres across North America. Additionally, as a result of its recent trade show attendance, MicroSalt has received orders from Pete Markets in Illinois and Busch's Market in Michigan for the new MicroSalt low sodium saltshakers. Delivery will be executed through KeHE Foods. Pete's Market currently has 17 upscale stores in Chicago and its suburbs and Busch has 16 stores in south-eastern Michigan with headquarters in Ann Arbor.

· MicroSalt also announced Hanahreum Group ("H Mart") has agreed to carry MicroSalt's SaltMe® branded crisps. H Mart is recognized as one of the fastest growing retailers by the National Retail and Supermarket News and has listed H Mart as one of the Top 50 Small Chains and Independents in the United States & Canada.

· On 18 May 2023 MicroSalt® appointed U.K. Celebrity Chef Jack Steinh as as Brand Ambassador.  Chef Stein is a well-respected and high-profile chef, restaurateur, entrepreneur, TV personality, author, and educator. Jack serves as the Chef Director for Rick Stein overseeing their restaurant menus and Stein's at Home ecommerce store. Jack Stein received the 'Best Chef' accolade from Food Magazine Reader Awards for 2023.

"I am absolutely delighted to be working with MicroSalt to show how a true low-sodium salt can produce the same taste while providing significant benefits to health. As a chef, salt is the most important ingredient, and this product is game changing." - Jack Stein, Chef Director for Rick Stein, and Microsalt's brand ambassador.

Lucyd & Innovative Eyewear Inc, its US subsidiary:

· Innovative Eyewear the developer and retailer of smart eyewear under the Lucyd®, Nautica® and Eddie Bauer® brands announced major developments in its Vyrb social audio app, which is in open beta on iOS and Android. the Company has just completed a powerful new live broadcasting feature called "On Air", which enables users to create real-time audio chatrooms with up to 100 visitors and multiple active speakers. The Company believes this feature will be a useful tool for audio content creators and collaborative work.

· Innovative Eyewear announced the launch of Lucyd Lyte 2.0, ("Lyte 2.0") a major upgrade to its flagship Lucyd Lyte audio eyewear platform. The new Lucyd Lyte 2.0 line brings several advances to the company's core product and is available now, in any optical prescription, at Lucyd.co. Innovative Eyewear intends to introduce the product to optical and specialty retail chains worldwide. The Lyte 2.0 marks the culmination of years of R&D to realise the Company's mission to make smart eyewear more accessible, useful and stylish for the optical and sunglass markets.

· Innovative Eyewear also announced that five new styles of Lucyd Lyte 2.0 audio eyewear are now available in titanium. These new styles are an addition to the 10 styles of Lyte 2.0 introduced in early February and offer 12 hours playback per charge: the longest battery life in the smart eyewear industry.

· Innovative Eyewear announced it has launched the first ChatGPT enabled Smart Eyewear. ChatGPT is a language model developed by OpenAI, designed to respond to text-based queries and generate natural language responses. It is part of the broader field of artificial intelligence known as natural language processing, which seeks to teach computers to understand and interpret human language.

· Lucyd Lyte 2.0 eyewear is now available in 15 distinct styles, the most of any smart eyewear on the US market. All of these frames are able to access ChatGPT, enabling the entire Lucyd collection to provide on-the-go, ergonomic access to the world's leading digital assistant, another eyewear industry first for Innovative Eyewear.

Guident & Guident Corp, its US subsidiary:

· Guident Ltd. has executed a letter of intent with Auve Tech OÜ ("Auve Tech") to provide remote monitoring and control ("RMCC") services for Auve Tech's autonomous vehicles. By combining Auve Tech's advanced Level 4 autonomous vehicles with Guident's RMCC software, the two companies will bring an enhanced level of safety to self-driving technology. Guident's patented software provides human-in-the-loop supervision, adding an extra layer of security to the Auve Tech's new MiCa autonomous shuttle. The Auve Tech next-generation vehicle is capable of autonomous driving in a variety of traffic and weather conditions, making it an ideal solution for safe, reliable, and sustainable transportation in geofenced areas and mixed-traffic environments. The companies' plan to launch the Auve Tech MiCa autonomous vehicle combined with Guident's RMCC software to customers in North America during the second half of 2023.

· Guident Ltd. also announced that it has partnered with Novelsat Ltd. (NOVELSAT), a global leader in content connectivity, to develop an innovative always-on, ubiquitous remote monitor and control solution for autonomous vehicles and devices. The solution combines space communications using low earth orbit satellites, and smart software to ensure optimal safety and security for autonomous vehicles and devices, by enabling remote monitoring and operation at any time and place and providing a further layer of monitoring in addition to 5G & GPS. This integration of NOVELSAT's satellite-based space connectivity technologies and Guident's human-in-the-loop AI technologies will provide a reliable and high-speed bi-directional connectivity. This connectivity enables continuous, high-quality video streaming to remotely monitor autonomous systems and, when necessary, to enable remote control of the vehicles and devices to resolve various edge cases. Additionally, the connectivity will provide real-time audio and video communication with passengers, pedestrians, or first responders, ensuring the highest level of safety for autonomous systems, which is a crucial factor in the deployment and management of such systems.

Posting of Annual Report and Accounts

The Company's annual report and accounts for the year ended 31 December 2022 will be available on the Company's website www.tekcapital.com shortly and will be posted to shareholders on 26 May 2022.

For further information, please contact: 

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

General 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 descrip-tion 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. 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 Com-pany, 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 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, em-ployees 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 as-sessment 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 the 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, of-ficers 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.

Intellectual Property Risk Factors

Tekcapital 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 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 defence 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 commercialize 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 our portfolio company's products or technologies. These claims can result in the future in lawsuits being brought against our portfolio companies or their holding company. They and we may not prevail in any lawsuits alleging patent infringement given the complex technical issues and inherent uncertainties in intellectual property litigation. If any of our portfolio company products, technologies or activities, from which our portfolio companies derive or expect to derive a substantial portion of their revenues and were found to infringe on another company's intellectual property rights, they could be subject to an injunction that would force the removal of such product from the market or they could be required to redesign such product, which could be costly. They could also be ordered to pay damages or other compensation, including punitive damages and attorneys' fees to such other company. A negative outcome in any such litigation could also severely disrupt the sales of their marketed products to their customers which in turn could harm their relationships with their customers, their market share and their product revenues. Even if they are ultimately successful in defending any intellectual property litigation, such litigation is expensive and time consuming to address, will divert our management's attention from their business and may harm their reputation and ours.

Several of our portfolio companies may be subject to complex and costly regulation and if government regulations are interpreted or enforced in a manner adverse to them, they may be subject to enforcement actions, penalties, exclusion, and other material limitations on their operations and have a negative impact on their financial performance. All of the above listed risks can have a material, negative affect on our net asset value, revenue, performance and the success of our business and the portfolio companies we invested in.

STRATEGIC REPORT

Chairman's statement

Tekcapital brings new scientific innovations from lab to market to enhance safety and health and improve the quality of life of the customers we serve. In the past year, thankfully, all of our portfolio companies have made significant advancements. Belluscura expanded production, distribution and sales of its portable O2 concentrator, Innovative Eyewear completed an IPO on the Nasdaq and licensed the Nautica and Eddie Bauer brands for smart eyewear, MicroSalt expanded sales of its SalMe crisps to >1,000 retail locations throughout the US and they have launched the first full-flavour, low-sodium saltshakers, which have been on-boarded in more than 500 stores in the US. Additionally, Guident has landed its first customer, the Jacksonville Transportation Authority, for its remote monitoring and control service and has built and continues to test with Tier 1 companies its new regenerative shock absorbers for electric vehicles.

Working with purpose and drive, Tekcapital's portfolio companies are making a positive impact on the lives of the customers they serve.

Key portfolio companies 

Leveraging our proprietary global university network, we provide services to universities and companies to help them assess and commercialise their innovations. Utilising these services, we have built a valuable group of portfolio companies to commercialise select intellectual properties that if successfully commercialised could have a positive impact on people's lives. Our model is simple, we seek to couple commercialisation ready, compelling university IP with visionary management. We then invest our own capital and introduce exogenous sources of capital to help these companies grow. When we realise exits through trade sales or IPOs, the Group's goal is to distribute a portion of the proceeds as a special dividend to our shareholders.

Our current portfolio companies were all started by Tekcapital. Whilst few in number, they are diverse and span multiple sectors including food tech, autonomous vehicles, smart eyewear and respiratory medical devices. All of our portfolio companies have in our view, compelling intellectual properties, capable and inspired management and address $Billion+, fast growing markets. The entire team at Tekcapital is committed to helping these companies grow to achieve their full potential and value.

Microsalt is a food tech business that owns a patented process to produce micron sized salt. These small crystals dissolve faster on the tongue, so you need to use less salt, whilst still having the same salty taste. Less salt means about 50% less sodium for most applications. Less sodium means a reduced likelihood of developing high blood pressure and heart disease, the world's number one cause of premature death.

In addition to its focus on B2B sales of MicroSalt® to snack food companies where the Company has made substantial progress, Microsalt has launched its own snack food brand called SaltMe! ™. Additionally, MicroSalt has launched its low sodium salt in saltshakers during 2022. Approximately 500 supermarkets now carry theses better-for-you saltshakers.

Tekcapital owns approximately 97% of MicroSalt ltd which owns ~78% of MicroSalt Inc, its U.S. based subsidiary as of the date of this report.

Lucyd has built a smart eyewear business that combines technology with traditional eyewear.

In January 2021, Lucyd's US subsidiary Innovative Eyewear Inc launched Lucyd Lyte®, their most advanced and compelling Bluetooth® eyewear. This product combines proper prescription, designer glasses with Bluetooth technology that you can use to answer your phone, listen to music, and talk with Siri® or Alexa® or Google Voice. The product has initially been very well received and is available on multiple ecommerce sites and in >200 retail optical stores in 2022. Lucyd has developed and filed 62 U.S. utility and design patents covering their products. Innovative Eyewear Inc., a U.S. subsidiary of its portfolio Company Lucyd Ltd. Tekcapital owns 71% of the share capital of Innovative Eyewear, Inc. Innovative Eyewear shares are listed on the NASDAQ under ticker: LUCY.

Guident owns or holds the exclusive licence to eight patents and applications that we believe can improve the safety and efficiency of autonomous vehicles and land-based delivery devices.

Guident has demonstrated its beta remote monitoring and control system (RMCC) with ~38 msec latency which is believed to be amongst the lowest in the industry.

Guident has progressed with its B2B marketing program and seeks to develop partnerships with smart city operators, vehicle OEM's and fleet operators to provide remote tele-monitoring and control centres for autonomous vehicles and fleet operators. To this end it has secured its first contract to provide the RMCC service with the Jacksonville Transportation Authority and has signed a letter of intent to provide its RMCC service to the Boca Raton Innovation Campus, a 1.7m sq. ft real estate campus on 123 acres in Boca Raton, Florida.

According to Research and Markets¹, the global market for autonomous last mile delivery is projected to reach US$5.9 billion by 2030 at CAGR of 23.5%.

Additionally, Guident has acquired an exciting, new regenerative shock absorber technology, to help extend the range of electric vehicles. Guident has fabricated prototypes of these regenerative shocks for and is testing them with several Tier 1 companies. Tekcapital owns 100% of Guident and 91% of its U.S. subsidiary Guident Corporation as of 31 December 2022.

Belluscura has developed and sells an improved portable oxygen concentrator to provide on-the-go supplemental O² (oxygen), 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, like adding memory on a laptop, rather than having to replace an expensive medical device. These cost savings will be beneficial to patients and insurance companies and should help make portable respiratory devices more affordable which is core to Belluscura's mission. Belluscura filed for and received 510(K) clearance from the US FDA in March 2021.

Financial Performance

• Net Assets US$57.8m (2021: US$68.1m)

• NAV per share US$0.38 (2021: US$0.48)

• Portfolio valuation US$54.9m (2021: US$62.5m)

• Total loss after tax: US$12.7m (2021: profit of US$26.4m), resulting primarily from net unrealised fair value reduction of US$11.0m

• Share placing totalling US$2.5m completed during the period (2021: US$9.7m).

Historical Net Assets (US$m)

Fundraisings during the period

Early-stage businesses facing large market opportunities need talent, technology and capital to succeed. To help address this we completed the following fundraises in 2022.

On 25 May 2022 Tekcapital announced that it has raised a total of £2 million (c.US$2.5m) before expenses, in an oversubscribed placing from existing and new shareholders, by way of the issue of, in aggregate, 8,000,000 new ordinary shares of 0.4 pence each in the Company at 25 pence per share.

The net proceeds of the Placing were primarily used to accelerate the growth of the Company's portfolio companies. The Placing was undertaken by the Company's broker SP Angel Corporate Finance LLP.

Principal Risks and Uncertainties

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

We believe the principal financial risks and benefits of the business relate to the value and performance of the Group's portfolio companies. We believe that the fair value of each portfolio Company is a time dependent valuation that may become impaired if the business does not achieve it milestones, growth trajectory, product development goals, market acceptance, capital raises or other key performance metrics. Individually and as a group our portfolio companies have a material impact on our financial performance.

• The risk of individual portfolio Company negative performance, in the future, may be ameliorated, as our portfolio becomes more mature, and when our portfolio companies develop significant capital reserves, predictable revenues and have demonstrated significant increases in value. Management's strategy of early detection and remediation includes continuous monitoring of sales performance, expenses and capital requirements as well as ongoing assistance in strategic planning and fundraising activities, amongst others.

• The principal operational risk of the business is management's ability to assist our portfolio companies in achieving their goals and ultimate exits whilst having a small team and an additional goal of increasing our service revenues. Management's strategy of early detection and remediation includes continuous monitoring of sales performance and expenses, intellectual property position and strategic direction, as well as ongoing assistance in executive and board recruitment, IP acquisition and fundraising activities, amongst others.

• 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. Management's strategy includes regular review of performance and compensation strategy to help improve retention of talent along with executive requirement to expand the depth of our management bench.

• The current barbaric and senseless Russian invasion of Ukraine has not had a material impact on our business to-date, as far as we can discern, as we do not have direct business exposure to either Russia or the Ukraine. However, over time the conflict may contribute to inflation of energy costs and supply chain disruption which could increase the cost and complexity of sourcing components for some of our portfolio companies. Additionally, due to the conflict and the uncertainty it has introduced to the capital markets, small cap stocks worldwide have felt the pinch, and this can be seen in Belluscura's and Innovative Eyewear's share prices at the end of the period.

Current Trading and Outlook

We are enthusiastic about the development of Tekcapital's portfolio companies, their performance to-date and their prospects to significantly expand in 2023. The Board is confident that continued investment in our non-quoted portfolio companies remains the right approach for potential long-term value creation. Additionally, we are currently exploring additional funding for our non-quoted, portfolio companies, to accelerate growth for these companies.

Whilst the Company is progressing very well, investors should note that 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, and that material changes in the value of our portfolio companies can have a significant impact on our NAV, revenue, income and future prospects.

We are grateful for the patience and support of our shareholders. We are also sincerely appreciative of our dedicated, creative and incredibly hardworking portfolio companies and our corporate team, without whom, none of the results reported herein would be possible.

Section 172 (1) statement

Our Board ensures that all decisions are taken for the long term, and collectively and individually aims to always uphold the highest standard of conduct. Similarly, our Board acknowledges that the business can only grow and prosper over the long-term if it understands and respects the views and needs of the Company's investors, customers, employees, suppliers and other stakeholders to whom we are accountable, as well as the environment we operate within. When making decisions, each director ensures that they act in the way that would most likely promote the Company's success for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to the following matters:

a) The likely consequences of any decision in the long term.

In line with our strategy, Tekcapital plc's purpose is to find and invest in exciting new discoveries from our global university network that can enhance people's lives. We believe that when you couple commercialisation ready, compelling university IP with strong senior management, vibrant companies will likely emerge. When we realise exits the Group's goal is to distribute a portion of the proceeds as a special dividend to our shareholders.

With this in mind, we apply the same high standards of responsible stewardship to our businesses as if we were to own them forever, and it is this approach to decision making that requires the Directors to have regard to the likely consequences of decisions in the long-term.

The long-term decision making, and strategy also considers consequences of climate change, such as changes in extreme and unpredictable weather. The Board considers the potential impacts of the climate change related disruptions on business operations of Tekcapital Group and its portfolio companies as they relate to supply chain, customer demand and business operations as these risks may affect future investment decisions.

b) The interests of the Company's employees.

The Board strives to maintain and develop a culture where everyone feels valued and included. The Board also considers the health, safety and wellbeing of all Tekcapital employees in everyday decisions. Feedback from employees is actively encouraged and is considered a key driver in developing our business activities, processes and workplace environment. Initiatives to encourage wellbeing are well established and continue to evolve and are strongly influenced by the workforce. Professional and personal development of employees is viewed as fundamental to the continued success of the Company.

c) The need to foster the Company's business relationships with suppliers, customers and others.

The Board ensures that the Company's mission is focused on improving the world with university discoveries, and focuses on innovations that, if successful, can improve the quality of life of customers we serve.

The Board recognises that it is crucial that we deliver a reliable service to our customers and maintain excellent relationships with suppliers.

d) The impact of the Company's operations on the community and the environment.

In their decision making, the Directors need to have regard the impact of the Company's operations on the community and environment. The Board plays a constructive role in tackling issues through engagement and making sure the Company's investments focus on improving quality of life and attempt to solve significant health and safety problems facing communities. The Board also considers impact of Company's investment decisions on the environment as part of screening process.

e) The desirability of the Company maintaining a reputation for high standards of business conduct.

The Board recognises that culture, values and standards are key contributors to how a Company creates and sustains value over the longer term, and to enable it to maintain a reputation for high standards of business conduct. High standards of business conduct guide and assist in the Board's decision making, and in doing so, help promote the Company's success, recognising, amongst other things, the likely consequences of any decision in the long-term and wider stakeholder considerations. The standards set by the Board mandate certain requirements and behaviour with regards to the activities of the Directors, the Group's employees and others associated with the Group.

f) The need to act fairly as between members of the Company.

The Company has one class of ordinary shares, which have the same rights as regards voting, distributions and on a liquidation. Management are also significant shareholders in the Company, holding approximately 6% of the register, together putting them in the top 3 shareholders of the Company. On this basis the Board feels that the executive Directors are fully aligned with shareholders.

g) Innovative Eyewear Inc listing.

Consistent with the Board's policy to seek exits, when practicable, for our portfolio companies either through trade sales or public listings we supported Innovative' s listing and converted the majority of our convertible loan note at the time of the offering.

h) Microsalt Ltd listing.

We have initiated the process for listing of Microsalt Ltd's shares to enhance its ability to raise capital and compete effectively in the sodium reduction market. The listing, if successful, will enhance the Company's ability to recruit experienced managers by being able to offer associates stock options grants with a near-term path towards monetisation.

i) Fundraising activities.

During the course of the period, Tekcapital plc consummated one fundraise for dual reason of continued investment in our portfolio companies and to increase our available working capital. The former reason is consistent with board policies mentioned in our 2021 report.

We are enthusiastic about the development of Tekcapital's portfolio companies, their performance to-date and their prospects to significantly expand in 2023. The Board is confident that continued investment in our portfolio companies remains the right approach for potential long-term value creation. Additionally, we are currently exploring early-stage venture funding for Guident to accelerate growth further.

j) Greenhouse Gas Emissions.

The 2018 Regulations introduced requirements under Part 15 of the Companies Act 2006 for an enhanced group of companies, which are defined as large by the Companies Act 2006, to disclose their annual energy use and greenhouse gas emissions, and related information. The Group is not currently defined as large, but it has chosen to apply the 2018 Regulations. Tekcapital plc itself consumes less than 40MWh and therefore is a low energy user, which negates the need to make detailed disclosures of its energy and carbon information. Furthermore, and taking account of this, it has applied the option permitted by the 2018 Regulations to exclude any energy and carbon information relating to its subsidiaries where the subsidiary would not itself be obliged to include if reporting on its own account; this applies to all subsidiaries within the Group.

On the basis of the above, the members of the Board consider, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172(1)(a-f) of the Companies Act 2006) in the decisions taken during the period ended 31 December 2022.

Dr Clifford M Gross

Chairman and CEO

25 May 2023

Directors Report

Principal activities 

The principal activity of the Group and the parent Company is that of an investment entity.

 Results and dividends 

The results for the period are set out in the consolidated statement of comprehensive income on page 28. No dividend was declared or paid during the period ended 31 December 2022 (2021: $nil).

Directors

The following Directors held office during the period:

Clifford M Gross, Ph.D. 

Robert Miller, M.D.

Louis Castro FCA

The RT Hon Lord David Willets FRS

Statement of Directors' responsibilities

The Directors are responsible for preparing the financial statements in accordance with applicable laws and regulations.

The Directors are responsible for preparing the financial statements in accordance with applicable laws and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with UK-adopted International Financial Reporting Standards adopted by the Companies Act 2006 ("UK-adopted IFRS") and those parts of the Companies Act 2006 relevant to companies which apply IFRS. Under Company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that year. In preparing those financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently.

· make judgments and estimates that are reasonable.

· state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. The Directors are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Each of the current Directors, whose names are listed in the Directors' report on page 24 of the financial statements confirm that, to the best of each person's knowledge and belief:

• the financial statements, prepared in accordance with UK-adopted international accounting standards, give a true and fair view of the assets, liabilities, financial position and profit (or loss) of the Group and Company; and

• the chairman's statement contained in the annual financial statements includes a fair review of the development and performance of the business and the position of the Group and Company, together with a description of the principal risks and uncertainties that they face.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group's website www.tekcapital.com. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Going Concern

The Group meets its day-to-day working capital requirements through its service offerings, cash at the bank, monies raised in follow-on offerings and realization of its investments. The Group's forecasts and projections indicate that the Group has sufficient cash reserves to operate within the level of its current facilities.

The Group has access to equity markets if it seeks additional funds. At the time of approving the accounts after making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.

See Note 2.1.2 for additional information on Going Concern.

Future developments

No changes in the nature of the business is expected in the foreseeable future.

Information has been included in the strategic report in relation to disclosures under S414C (11) of the Companies Act 2006.

Audit Committee

The board operates an audit committee, chaired by Louis Castro. This committee carries out duties as set out in the aim admission document, supervising the financial and reporting arrangements of the Group. During the period, no issues arose that the directors consider appropriate to disclose in their report. During the period. The audit committee met 3 times during the period.

Remuneration committee

The board has delegated to its remuneration committee, chaired by Dr. Robert Miller, certain responsibilities in respect of the remuneration of senior executives. During the period, no issues arose that the directors consider appropriate to disclose in their report. The remuneration committee met 3 times during the period.

Directors Emoluments

*Excludes Directors National Insurance of US$26,551.

The Director's proportion of the share option expense was US$62,747 (2021: US$20,000). The Group did not make any contributions to a pension scheme in the period ended 31 December 2022 (2021: Nil). The Directors' beneficial interests in shares is set out below:

Please note the above figure for Clifford M Gross does not include 100,000 shares held by both of Dr. Gross's adult children who are not considered a PCA as defined in Article 3(1)(26) of the UK Market Abuse Regulation.

The details of the options held by each director at 31 December 2022 are as follows:

* The options vest in three equal annual instalments from the date of grant and there is a special condition which means the options will vest when the closing price for a share has been traded at more than 50 pence (sterling) for ten consecutive trading days.

** The options shall vest when the net asset value, as stated in the annual consolidated accounts, meets, or exceeds USD$20.53m during the 36 months after the grant date. The threshold shall be re-tested when each set of accounts published during the 36 months are finalised.

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

Directors' Indemnity Arrangements

 The Group has made qualifying third-party indemnity provisions for the benefit of the Directors, which were made during the period and remain in force at the date of this report.

 The Group has purchased and maintained throughout the period Directors & Officers liability insurance in respect of itself and its Directors.

Principal Risks and Uncertainties

Please refer to strategic report.

Post Balance Sheet Events

For further details, please refer to note 26 in the notes to the accounts. Information has been included in the strategic report under S414C(11).

For activities in the field of research and development, please refer to Strategic report.

For financial instruments risks, please refer to Note 3.1 of the Notes to the Financial Statements.

Independent auditors

MHA was appointed as auditor to the Group and the Company and in accordance with section 485 of the Companies Act 2006. MHA were appointed as auditor to the Group and the Company and in accordance with section 485 of the Companies Act 2006. Following a rebranding exercise on 15 May 2023 the trading name of the company's independent auditor changed from MHA MacIntyre Hudson to MHA. A resolution to reappoint MHA as independent auditor will be proposed at the next Annual General Meeting.

Statement of disclosure of information to auditors

Each of the persons who was a director at the date of approval of this report confirms that:

• so far as the Director is aware, there is no relevant audit information of which the Company's auditor is unaware; and the Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.

By order of the Board of Directors and signed on behalf of the Board.

Louis Castro

Director

25 May 2023

Tekcapital Plc

Consolidated Statement of comprehensive income

For the year ended 31 December 2022

*May be reclassified to profit or loss in future years.

All comprehensive income as presented above belongs to the owners of the Group.

The notes on pages 33 to 65 are an integral part of these consolidated financial statements.

Tekcapital Plc

Consolidated Statement of financial position

At 31 December 2022

The notes on pages 33 to 65 are an integral part of these financial statements.

The financial statements on pages 28 to 65 were approved and authorised for issue by the Board of Directors on 25 May 2023 and were signed on its behalf.

Louis Castro Dr Clifford Gross

Director Chairman and CEO

Tekcapital Plc

Consolidated Statement of changes in equity

For the year ended 31 December 2022

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

Translation reserve - foreign exchange differences recognized in other comprehensive income.

Other reserve - historic other reserve outside of share premium, translation reserve and share premium. 

Retained earnings - cumulative net gains and losses recognised in the consolidated statement of comprehensive income; net of dividends paid.

The notes on pages 33 to 65 are an integral part of these financial statements.

Tekcapital Plc

Consolidated Statement of cash flows

For the year ended 31 December 2022

\* The prior year cash flow statement has been restated to reflect the reclassification between additions to financial assets at fair value through profit and loss to management services and interest from financial assets at FVTPL within operating cashflows. The total value of the reclassification was US$515,078.

Notes

1. General Information

Tekcapital PLC (Companies House registration number: 08873361 is a Company incorporated in England and Wales and domiciled in the UK. The address of the registered office is detailed on page 54 of these financial statements. the Company is a public limited Company limited by shares, which listed on the AIM market of the London Stock Exchange in 2014. The principal activity of the Group is to provide universities and corporate clients with valuable technology transfer services. the Group also acquires exclusive licences to university technologies that it believes can positively impact people's lives, for subsequent commercialisation.

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards, this announcement does not itself contain sufficient information to comply with those standards. The Company expects to publish full financial statements that comply with International Financial Reporting Standards in June 2023

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. During the period, the Group and the Company changed their accounting reference date from 30 November to 31 December to follow the accounting periods of portfolio companies. As a result, the consolidated financial statements of Tekcapital PLC have been prepared for the 13-month period to 31 December 2022. Comparative amounts presented in the Group and Company financial statements are for the 12 months ended 30 November 2021, and as such the amounts presented are not entirely comparable.

The 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 have been prepared in accordance with UK-adopted International Financial Reporting Standards. 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.

2.1.1 Going concern.

The financial statements have been prepared on a going concern basis.

The Group and Company meet its day to day working capital requirements through its service offerings, monetisation of quoted equity stakes and monies raised through issues of equity. As disclosed in note 26, the Group announced placings to raise £2,250,000 and £2,000,000 in February 2023 and April 2023 respectively. This has resulted in an increase in the Group's cash balance since the year end.

The Group's forecasts and projections indicate that the Group and Company have sufficient cash reserves to operate within the level of its current funds. The Group has no third party debt facilities. 

The Directors have prepared detailed cash flow projections for the period to 30 May 2024 ("going concern assessment period"). The cash flow projections have been subjected to sensitivity analysis which demonstrates that the Group and Company will maintain a positive cash balance through the going concern assessment period.

The Directors have also considered the geo-political environment, including rising inflation, and whilst the impact on the Group is currently deemed minimal, the Directors remain vigilant.

On this basis, the Directors have therefore concluded that it is appropriate to prepare the financial statements on a going concern basis.

2.1.2 Changes in accounting policy and disclosures

New standards, interpretations and amendments adopted.

No new accounting standards became effective for annual reporting periods commencing on or after 1 Jan 2021.

The Group adopted early the following amendments to standards which are not yet effective:

Amendments to IFRS 1 First -time Adoption of International Financial Reporting Standards - Subsidiary as First-time Adopter

The amendment is effective for financial years beginning on or after 1 January 2022 and has been endorsed for use in UK adopted IFRS under Companies Act 2006. The amendment to IFRS 1 simplifies the application of IFRS 1 by a subsidiary that becomes a first-time adopter after its parent in relation to the measurement of cumulative translation differences. No material impact on its consolidated financial statements from these amendments determined by the Group.

Amendments to IFRS 9 Financial Instruments - Fees in the '10 per cent' Test for Derecognition of Financial Liabilities

The amendment is effective for financial years beginning on or after 1 January 2022 and has been endorsed for use in UK adopted IFRS under Companies Act 2006. The amendment to IFRS 9 clarifies the fees a Company includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. No material impact on its consolidated financial statements from these amendments determined by the Group.

Amendments to IAS 41 Agriculture - Taxation in Fair Value Measurements

The amendment is effective for financial years beginning on or after 1 January 2022 and has been endorsed for use in UK adopted IFRS under Companies Act 2006. The amendment to IAS 41 removed a requirement to exclude cash flows from taxation when measuring fair value thereby aligning the fair value measurement requirements in IAS 41 with those in other IFRS Standards. No material impact on its consolidated financial statements from these amendments determined by the Group.

Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37)

The amendment is effective for financial years beginning on or after 1 January 2022 and has been endorsed for use in UK adopted IFRS under Companies Act 2006. The amendments specify which costs an entity includes in determining the cost of fulfilling a contract for the purpose of assessing whether the contract is onerous. No material impact on its consolidated financial statements from these amendments determined by the Group.

Amendments to IAS 16 Property, Plant and Equipment (issued in May 2020)

The amendments require any proceeds from selling items produced (and related production costs) in the course of bringing an item property, plant and equipment into operation to be recognised in profit or loss clarifying that such items are not reflected in the cost of the asset.

The amendment is effective for financial years beginning on or after 1 January 2022 and has been endorsed for use in UK adopted IFRS under Companies Act 2006.

2.1.2 Changes in accounting policy and disclosures (continued)

No material impact on its consolidated financial statements from these amendments determined by the Group.

Reference to the Conceptual Framework (Amendments to IFRS 3)

The amendments are intended to replace a reference to the Framework for the Preparation and Presentation of Financial Statements, issued in 1989 (Framework), with a reference to the Conceptual Framework for Financial Reporting issued in March 2018 (2018 Conceptual Framework) without significantly changing its requirements.

The amendment is effective for financial years beginning on or after 1 January 2022 and has been endorsed for use in UK adopted IFRS under Companies Act 2006.

No material impact on its consolidated financial statements from these amendments determined by the Group.

2.2 Consolidations

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. Intercompany 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.

2.3 Foreign currencies

(a) Functional and presentation currency

These consolidated financial statements are presented in US Dollars, which is the presentation currency of the Group. The Directors consider this to be the most appropriate presentational currency. Each subsidiary within the Group has its own functional currency which is dependent on the primary economic environment in which that subsidiary operates. The functional currency of Tekcapital Plc is UK sterling as this is the currency the entity undertakes its primary economic activity.

(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 cash and cash equivalents are presented in the consolidated statement of comprehensive income statement within 'operating expenses'.

(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:

i. Monetary assets and liabilities for each balance sheet presented are translated at the closing exchange rates at the date of that balance sheet.

ii. 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)

iii. All resulting exchange differences are recognised in other comprehensive income.

2.4 Investment in portfolio companies

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 31 December 2022:

• 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 evaluates 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 2.8.3.

2.5 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. The asset's carrying amount is written down immediately to its recoverable amount if the asset's 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 'Operating expenses' in the income statement.

2.6 Intangible assets

Intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and accumulated impairment losses. Amortisation is charged to the administrative expenses in the Statement of Comprehensive Income on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite.

(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. The estimated useful life of the Invention Evaluator intangible asset is 10 years. The useful life is estimated based upon management's best estimate of the expected life of the asset. The useful life is reconsidered if circumstances relating to the asset change or if there is an indication that the initial estimate requires revision. The intangible asset has a finite life of 10 years over which amortisation is charged on a straight-line basis.

(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:

i. it is technically feasible to complete the software product so that it will be available for use;

ii. management intends to complete the software product and use or sell it;

iii. there is an ability to use or sell the software product;

iv. it can be demonstrated how the software product will generate probable future economic benefits;

v. adequate technical, financial and other resources to complete the development and to use or sell the software product are available; and

vi. 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) Vortechs Group

This is an intangible asset acquired for use by one of the subsidiaries of the Group. The estimated useful life of the Vortechs Group intangible asset is 10 years over which amoritsation is charged on a straight-line basis. The useful life is estimated based upon management's best estimate of the expected life of the asset. The useful life is reconsidered if circumstances relating to the asset change or if there is an indication that the initial estimate requires revision.

2.7 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 purpose 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 are reviewed for possible reversal at each reporting date.

2.8 Financial instruments

2.8.1 Classification

The Group classifies its 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 held investments in portfolio companies classified as equity investments. They are included in non-current assets and are measured at fair value through profit and loss in accordance with IFRS 9.

The Group has convertible loan note receivables. These financial assets are classified and measured at fair value through profit and loss in accordance with IFRS 9.The convertible loan note includes a conversion feature allowing the holder to convert the note into equity on a financing event, sale or listing at market price at the date of the event. The directors have assessed the conversion feature and are satisfied the fair value of this feature is not material.

The Group also has receivables carried at amortized cost. They are included in current assets. The Group's service income receivables comprise 'trade and other receivables' in the balance sheet, also held at amortised cost. 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.

2.8.2 Recognition and measurement

IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Loans and receivables are recognised and carried at amortised cost. 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 measured at cost.

2.8.3 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 convertible loan note receivables. 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 newly adopted 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 12 months we will value our ownership in the portfolio Company at this observed valuation, taking account of any observed material changes during the period, including quoted prices in active markets (Level 1 input).

• 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 techniques fall under Level 2 - Observable techniques other 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.

2.9 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.

2.10 Impairment of financial assets

Impairment provisions for trade receivables are recognized based on the simplified approach within IFRS 9 using the lifetime expected credit losses. During this process the probability of non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognized within operating expenses in the consolidated statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Financial assets held at amortised cost comprise trade and other receivables, and cash and cash equivalents in the consolidated statements of financial position.

2.11 Cash and cash equivalents

In the consolidated statement of cash flows, cash and cash equivalents include cash in hand, deposits held at call with other banks, other short term highly liquid investments with maturities of three months or less from inception.

2.12 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.

2.13 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.

2.14 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 original 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.

2.15 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 as temporary 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.

2.16 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.

2.17 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 (as defined for each service below) is determined and allocated to performance obligation in accordance with IFRS 15.

Provision of services

The Group provides following lines of services:

• Invention Evaluator services: provision of reports assessing the potential of any new technology. Revenue is recognised upon delivery of a complete report, when the report is made available to each customer. Upon access to the report delivered via online portal, customers consume the benefits of the contractual obligation, and the performance obligation is met. Directors consider transaction price to be clearly determined upon payment of fixed fee for each report prior to report's delivery. Directors considered uncertainty of cash flows from sales to be limited, considering prepayment is made for each report prior to report's delivery.

• Tech transfer recruitment services (Vortechs Group): recruitment services specialising in technology transfer executives. Revenue is recognised upon placement of an executive, when hire is made by Tekcapital's customer, and the performance obligation is met. Directors consider transaction price to be clearly determined when both parties agree to placement fee for each successful hire. Directors considered uncertainty of cash flows from sales to be limited, considering payments are made by universities with excellent track record of payments and clear definition of performance obligation upon which such payment is made.

• Management services: accounting, tax, legal and other services provided to portfolio companies. Revenue is recognized upon delivery of services to each portfolio Company and performance obligations are met as defined in the management service contract. Directors consider transaction price to be clearly determined by amounts specified in the management service agreements. Directors considered the uncertainty of cash flows from sales to be limited, considering payments are made by companies with an excellent track record of payments and clear definition of performance obligation upon which such payment is made.

For breakdown of revenue from services recognised over time and at point of time, please refer to Note 6 to Financial Statements.

2.18 Other income

The Group recognises R&D relief under other income.

2.19 Interest income

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable (10%).

3. Financial Risk Management

3.1 Financial risk factors

(a) 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 Management

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 31 December 2022 and 30 November 2021 is the carrying amount of its current trade and other receivables as illustrated in Note 15. 

While IFRS 9 does not require expected credit loss allowance on assets held at fair value through profit and loss, the Group monitors credit risk related to performance of portfolio companies, including considerations related to recoverability of convertible loan notes held as carrying amount of notes represent the maximum exposure to credit risk. Progress is monitored and regular discussions are held with management of portfolio companies to assess commercial progress and financial information provided.

IFRS9 requires the Company to assess expected credit losses on assets classified as held at amortised cost, under a forward-looking model approach. For the Group accounts this includes Receivables from related parties and other immaterial receivables. For the Company accounts this includes Receivables from Group Companies.

The Group also monitors credit risk from balances with banks and institutions.

(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$628,640. Post period end, the Group announced placing to raise GBP2,000,000 before expenses on 17 April 2023 and GBP2,250,000 before expenses on 20 February 2023. 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$827,045.

(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 the fair value of financial instruments held such as convertible loan notes held.

(f) Foreign exchange risk management

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 of GBP into USD weakened by 10 percent, then the effect on the loss before tax would decrease by US$943,684 and equity would decrease by US$5,586,145.

(g) Interest rate risk

The Group has no borrowings.

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.

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 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.

5. Segmental reporting

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

· professional services, including the provision of recruitment services via Vortechs Group, provision of invention evaluator services, 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

Segment assets and liabilities

Geographical information

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 the Group's Unrealised profit on the revaluation of investments.

All of the Group's major service lines are sold directly to consumers and not through intermediaries. All revenue recognised in the reporting period represents performance obligations satisfied in the current period. For services transferred over time, the output method was used as measure of fulfillment of the performance obligation. Considering the nature of the accounting, tax, legal and other services being provided under the agreements, this method most faithfully depicts the transfer of the services to the customer.

6.1 Other Income

7. Operating expenses

7.1 Expenses by nature

7.2 Auditor remuneration

8. Employees

 8.1 Directors' emoluments

The highest paid Director received a salary of US$250,889 (2021: $191,825) and benefits of US$29,833 (2021: US$24,098). The highest paid Director received a bonus of US$250,000 (2021: US$191,825). The highest paid Director did not exercise any share options. The share-based payments associated with the highest paid Director amounted to US$60,948 (2021: US$28,117). No termination benefits, post-employment benefits were provided to Directors.

Key management personnel (including Directors and Group Chief Financial Officer) received salary of US$820,557 (2021: US$669,660), excluding Employers National Insurance, Benefits in Kind and Share Base Compensation disclosed in Directors Remuneration Report. Please also refer to Director's Report.

8.2 Employee benefit expense

8.3 Average number of people employed.

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

9. Income tax expense

The weighted average applicable tax rate was 19% (2020: 19%). 

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.

The UK Government announced in the 2021 budget that from 1 April 2023, the rate of corporation tax in the United Kingdom will increase from 19% to 25%. Companies with profits of £50,000 or less will continue to be taxed at 19%, which is a new small profits rate. Where taxable profits are between £50,000 and £250,000, the higher 25% rate will apply but with a marginal relief applying as profits increase.

10. Earnings per share

Basic earnings per share are 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 31 December 2022:

Diluted EPS includes impact of vested employees share option awards whose strike price was below Tekcapital's share price as quoted on the aim market, which would have dilutive impact of 4,466,667 shares.

The Group completed placements of a total of 8,000,000 and 1,150,000 share option exercise related new ordinary shares during the financial year.

11. Investments

As at the year end, the Group 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 11900 Biscayne Blvd, Suite 630, Miami, Florida, 33181, 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 and Guident Limited through convertible loan note financing (see also Note 12). The Group also assists the entities with their fundraising activities.

Registered office of all four directly owned 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

The Group's financial assets at fair value through profit and loss consist of equity investments (2022:US $54,878,609, 2021:US $62,523,658) and convertible loan notes (2022:US$1,305,537, 2021:US $1,341,774) totaling US $56,184,146 (2021:US $63,865,432).

12.1 Equity Investments

The Group's investments in portfolio companies in the years ended 31 December 2022 and 30 November 2021 are listed below. The principal place of business for portfolio companies listed below is the UK and, in the U.S.

Total fair value loss of US$11.0m for the year reflects primarily the decrease in fair value of Lucyd Limited, driven by valuation of its 71% shareholding of its subsidiary Innovative Eyewear Inc that were listed on NASDAQ as at 31 December 2022 (trading commenced on 15 August 2022). Considering early stage of commercialisation, fair value of Smart Food Tek 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 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets, 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.

Fair value measurement hierarchy for financial assets as at 31 December 2022 with comparative amounts as of 30 November 2021:

No transfers between categories of valuation techniques occurred during the period.

Belluscura plc (US $9.5m loss)

The fair value of the holding decreased by US$9.5m during the year due to the movement in Company's share price at AIM market of London Stock Exchange and closing price of 66p as of 31 December 2022. With 15,138,767 shares held by Tekcapital plc, a fair value of US$12,072,827 was arrived at as of 31 December 2022.

 Lucyd (US $11.2m loss)

The fair value of the holding decreased by US$11.2m during the year due to the movement in the Company's share price at NASDAQ market and closing price of US$1.37 as of 31 December 2022. With 5,189,085 shares held by Tekcapital plc, a fair value of US$7,109,046 was arrived at as of 31 December 2022. Control premium of 15% of US$7,109,046 was calculated and included in the fair value in the amount of US$1,066,357, bringing total fair value of Lucyd to US$8,175,403, due to Tekcapital controlling majority of the company.

Microsalt (US $9.7m gain)

The fair value of the holding increased by US$9.7m during the year as a result of:

· Valuation of 5,895,962 shares held in Microsalt Inc, as determined by the price range agreed upon between Company's bankers and the Company as part of its IPO process. valuation, at US$2.75 per share.

In December 2022, Microsalt retained Zeus Capital Limited as its Nominated Adviser and Broker for its proposed IPO on the AIM Market. Following the appointment, multiple discussions outlining Microsalt's business model, forecasts, value proposition and business progress were held between the Company and the bankers. The discussions resulted in Zeus providing an indicative pre-money valuation of the Company of approximately GBP 20,000,000.

This proposed initial valuation of shares to be sold in the Initial Public Offering was compared to Tekcapital's internal discounted cash flow valuation of management's projections, and price per share at which Tekcapital converted its convertible loan note at in November 2022.

Key assumptions used in management's discounted cash flow valuation are:

- Compound annual growth rates over a 5-year forecast period of 129%

- 16% discount rate used to discount forecasted free cash flows

The discounted cash-flow method did not provide an indication that the valuation at year end was materially misstated.

Guident Ltd (US $0m loss/gain)

The fair value of Guident remain unchanged compared to previous period as the Company continued to receive investment at US$1 per share as specified in the 2021 Private Placement Memorandum offering.

In August 2021, Guident CORP entered into Private Placement Memorandum outlining offering of securities at US$1 per unit, with each unit consisting of one share of Class A Convertible Preferred Stock and a Warrant to acquire a share of common stock (also at US$1 per unit). While Guident has not received funding from the offering until after the reporting date, the management considers the exit price (of securities offered in the private placement) negotiated with the investment bank as "privately negotiated acquisition of the equity instruments" as defined under IFRS 13. The Offering was facilitated by Dawson James Securities Inc. Dawson James is a broker-dealer registered with the SEC as a broker dealer and is a member of FINRA. FINRA is currently the only such registered national securities association in the U.S.

This input was corroborated by Guident CORP's enterprise valuation by estimating the net present value of future cashflows associated with its business as of 31 December 2022.

 Key assumptions used in management's discounted cash flow valuation are:

- Compound annual growth rates over a 5-year forecast period of 114%

- 20% discount rate used to discount forecasted free cash flows

The discounted cash-flow method did not provide an indication that the valuation at year end was materially misstated.

Smart Food Tek (Nil Gain / Nil loss)

Considering early commercialisation stage, the Group records its investment in Smart Food Tek at cost. The directors do not consider that any other available information would materially change or give a more reliable representation of the value.

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.

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 31 December 2022 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.

12.2 Convertible loan notes

The Group also held multiple convertible loans issued by its portfolio companies, including:

· Convertible note issued by Innovative Eyewear Inc, for the total of US$2,000,000 that bears interest at 10% per annum, which includes the option to convert the debt into the Company's common stock at market price. The note can be converted into shares of common stock of the Company upon occurrence of certain conversion events including future share placements.

In August 2022, Innovative Eyewear converted Group borrowings totaling US$2,002,225 into 266,970 shares of common stock at US$7.5 each concomitantly with its Initial Public offering. Consequently, the Group presented the amount of US$2,002,225 as an addition to Financial Assets held at Fair Value as presented in the Note 12.1. As of 31 December 2022, US$147,375 was outstanding.

· Convertible note issued by Guident Ltd for the total of US$1,000,000, 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 including future share placements. The US$1,000,000 note originated in March 2020 or can be converted into Guident's equity upon occurrence of certain conversion events. No conversions occurred during the period. As of 31 December 2022, US$1,000,000 was outstanding.

· Convertible note issued by its portfolio Company, Microsalt Inc, for the total of US$2,000,000, 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 Microsalt's equity upon occurrence of certain conversion events. The US$2,000,000 note originated in September 2020 is payable in September 2023 or can be converted into Microsalt's equity upon occurrence of certain conversion events including future share placements.

In January 2022, Microsalt Inc converted Group borrowings totaling US$1,058,317 into 1,058,317 shares of common stock at US$1 each. In November 2022, Microsalt Inc converted related party borrowings totaling US$1,351,262 into 619,845 shares of common stock at US$2.18 each. As of 31 December 2022, US$158,161 was outstanding.

The Group's investments in convertible notes in the years ended 31 December 2022 and 30 November 2021, as well as their fair value hierarchy, are listed in tables below: