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Annual Report &
Accounts 2024
31 December 2024
www.tekcapital.com
© 2025 Tekcapital plc, all rights reserved.
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CONTENTS
PAGE
STRATEGIC REPORT
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Overview & Highlights
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Portfolio Review
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Chairman’s Summary
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Financial Review & Key Performance Indicators Board of Directors
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Board of Directors
DIRECTORS' REPORT
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Directors’ Report
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Corporate Governance
OUR FINANCIALS
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Independent auditor’s report
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Consolidated Statement of Comprehensive Income
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Consolidated Statement of Financial Position
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Consolidated Statement of Changes in Equity
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Consolidated Statement of Cash Flows
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Notes to the Financial Statements
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Company Statement of Financial Position
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Company Statement of Changes in Equity
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Notes to Company Financial Statements
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OVERVIEW & HIGHLIGHTS
TEKCAPITAL TRANSFORMS UNIVERSITY DISCOVERIES
INTO VALUABLE NEW PRODUCTS
We find and invest in exciting new discoveries from our global university network that can
enhance people’s lives. We believe that when you couple commercial ready, strong
university IP with star power management, vibrant companies can emerge. When we
realise material exits, the Group’s goal is to distribute a portion of the proceeds as a special
dividend to our shareholders.
EXCEPTIONAL FINANCIAL PERFORMANCE
In 2024, Tekcapital plc (the “Company”) and subsidiaries (the “Group” or “Tekcapital”)
delivered strong performance, placing the Group at the front of the UK-listed IP
commercialization and technology investment sector during a challenging year in the
markets. Portfolio return and revenue surged in 2024 to US $21.2 million from a US $13.0
million loss recorded in 2023.
Profit after tax in 2024 rose to US $19.2m from a loss of US $15.7m in 2023, driven by an
increase in total income coupled with a reduction of expenses. Overall, there was a
~US $35m positive swing in profit after tax – underscoring the effectiveness of Tekcapital's
strategic direction and the inherent value of its portfolio companies.
Consistent with this, Net assets expanded from US $47.9m to US $70.1m, reflecting a
46% year-over-year increase.
• Net Assets US$70.1m (2023: US$47.9m)
• NAV per share US$0.33 (2023: US$0.27)
• Portfolio valuation US$61.5m (2023: US$41.1m)
• Profit after tax: US$19.2m, resulting primarily from unrealised increase in the fair
value of the portfolio (2023: loss of US$15.7m).
The Group’s Net Assets are higher by approximately US $4.8m as compared to our 2024
unaudited year-end portfolio update provided on 17 February 2025 due to the addition of
a fair value of control premium attributed to Tekcapital’s majority stakes in Microsalt plc
and GenIP plc.
PORTFOLIO COMPANIES: IPOs, GROWING SALES & STRONG COMMERCIAL
PROGRESS
Demonstrating Tekcapital’s ability to successfully commercialise technologies, even in
adverse markets, two of our Investment Portfolio companies (MicroSalt plc & GenIP plc)
floated on AIM in 2024. As a result, four out of five portfolio companies are now public. In
2024 only 10 companies completed IPO’s on AIM1.
1 https://www.uhy-uk.com/insights/aim-shrinks-61-companies-202425-companies-left-aim-lowest-level-2001
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Notable commercial success was achieved at the Investment Portfolio level driven by their
strategic positioning and relevance to addressing pressing global needs with compelling
new technologies. Our portfolio companies achieved many milestones during 2024, some
of which included:
• MicroSalt plc (“Microsalt”) secured recurring bulk purchases of its full-flavour,
low-sodium salt, for multiple product lines from one of the world's largest food
manufacturers. The Company also anticipates additional purchase orders for
MicroSalt® from the same customer for additional product lines in 2025, and
significant increases more broadly in its B2B sales volumes.
• Innovative Eyewear Inc (“Innovative Eyewear”) continued to grow their sales in
2024 and strengthened their balance sheet. They set the foundation for more
growth with strong relationships with big box stores throughout the U.S. consistent
with their focus on product placement with large national retailers. The well received
launch of world's first smart safety eyewear, Lucyd Armor®, expanded Innovative
Eyewear’s sales further.
• Guident Ltd (“Guident”) progressed the integration of its remote monitoring and
control software with several autonomous vehicle (“AV”) shuttle partners, and
commenced a sales program to deliver security robots that will leverage its existing
Remote Monitor and Control Centre (“RMCC”) in the future. This work has resulted
in several new contracts in 2025 and a strong sales pipeline.
• GenIP plc (“GenIP”) announced it has signed a commercial agreement with a
leading Saudi Arabian research institution, GenIP's first client in the Kingdom. In
addition, GenIP has received significant orders from organisations in the U.S., Latin
America, South Africa, and Singapore for its GenAI analytic services.
• Belluscura plc (“Belluscura”) continued its revenue growth in 2024. The
Company also received Pricing Data Analysis and Coding ("PDAC") codes that
allow Durable Medical Equipment distributers to claim reimbursement from
Medicare for sales of DISCOV-R to patients. We believe that this is an important
catalyst for future sales growth, and greatly contributes to the enterprise value of
the business, when added to its previously received FDA clearance and deep
patent portfolio rights.
Tekcapital’s Portfolio Companies 2024
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OUTPERFORMING THE SECTOR
Tekcapital plc's exceptional 2024 performance represents a compelling narrative of
innovation and strategic foresight. The Company's ~46% increase in net assets to
US$70.1m demonstrates its ability to execute effectively under challenging market
conditions. Our 2024 share price performance is particularly noteworthy when compared
with other listed U.K. IP commercialization companies, technology investment companies
and relevant indices as follows*:
*includes data for 12 month period ended 31 December 2024
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Tekcapital plc: +27% (London Stock Exchange)
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AIM All-Share Index: -5.5% (London Stock Exchange)
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FTSE 250: +5.69% (London Stock Exchange)
This performance validates Tekcapital's differentiated approach of carefully identifying and
nurturing groundbreaking university technologies that have the potential to improve the
quality of life of the customers we serve. Our sector focus requires both mitigation of
adverse selection and patience, two complementary characteristics that are somewhat
uncommon in the small cap markets.
In our view, Tekcapital’s year-end share price discount to NAV of ~66% appears
unwarranted, given the company's strong execution and portfolio maturation. According to
Morningstar, the average market cap discount to NAV for UK closed-end funds (a close
analogue) in 2024 was 16.6%. By peer comparison:
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Molten Ventures plc trades at a 52% discount to NAV (Molten Ventures plc, 2024)
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IP Group plc trades at a 45% discount to NAV (IP Group plc, 2024)
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Frontier IP Group plc trades at a 35% discount to NAV (Frontier IP Group plc, 2024)
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Mercia Asset Management plc trades at a 25% discount to NAV (Mercia Asset
Management plc, 2024).
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With four of five portfolio companies now publicly listed and demonstrating commercial
traction, we believe there is a probability that Tekcapital's valuation gap may narrow, if its
fifth portfolio company achieves a public listing or if one of the other portfolio companies
achieves noteworthy commercial milestones.
Share placings totalling US$3.6m, net of share issue costs, were completed during the
period (2023: US$5m). Tekcapital's strengthened financial position, combined with its
strategic portfolio of companies operating in high-growth, globally relevant sectors like
sodium reduction (MicroSalt), respiratory care (Belluscura), autonomous vehicle safety
(Guident), smart eyewear (Innovative Eyewear) and GenAI analytic services (GenIP),
positions the company for continued growth in the value of our investment portfolio.
We envision the continued growth of existing portfolio companies to be aided by new
investments in the Generative Artificial Intelligence sector. Our portfolio company address
critical market needs and have demonstrated meaningful commercial progress in 2024.
Tekcapital's future outlook is supported by:
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A proven ability to identify, select and commercialize university technologies
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Strong portfolio company execution and public market validation
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Operating leverage from our efficient, low-cost corporate structure
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Multiple potential catalysts for further value creation in 2025 & beyond
Dr. Benjamin Franklin famously stated in Poor Richard's Almanack: “A penny saved is two
pence clear.” Following this inspiration, Tekcapital is glad to report it has the lowest
operating cost structure amongst its listed peers in the U.K., with 2024 administrative
expenses of just US $2.0m, compared to IP Group plc, Molten Ventures plc, Mercia Asset
Management plc or Frontier IP Group plc. We believe that this is partly due to our
selectivity and the concentrated nature of our portfolio. As Warren Buffett has sagaciously
demonstrated, value creation is not dependent on diversification but rather on carefully
investing for the long-term in the right assets.
We are thankful to our steadfast shareholders for their unwavering support and to our
portfolio company management teams that have punched significantly above their weight.
DR. CLIFFORD GROSS, EXECUTIVE CHAIRMAN SAID:
“We are excited to provide this 2024 summary report which describes a few of our
portfolio company achievements and their contribution to our profitability and growth. In
2024 our net assets reached US $70.1m, an increase of ~46%, over the previous year,
an annual record since the Company’s inception. NAV per share was US $0.33.
Our performance reflects strong commercial progress through the completion of two AIM
listings (MicroSalt plc & GenIP plc), and as a result, four of our five portfolio companies
are now listed. Additionally, we observed significant commercial traction for Innovative
Eyewear Inc. as they achieved several new product and go-to-market milestones. We
were also pleased to note MicroSalt has received new and follow-on B2B orders from a
major snack food manufacturer. Further, we believe that Guident Corp’s commercial
advancements coupled with improving performance and market traction in the
autonomous vehicle industry, have created a fertile opportunity for Tekcapital to
potentially further crystalise its balance sheet in 2025.
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We believe that Tekcapital's success in 2024 is a testament to its portfolio companies’
strategic positioning and relevance. Our core long-term financial objective is to grow net
assets and returns on invested capital. Once material levels of capital are monetized from
our portfolio companies, we will seek to provide a special dividend. We remain committed
to this long-term objective, and our portfolio companies’ progress in 2024 is a good step
in that direction.”
PORTFOLIO REVIEW
Our investment portfolio consists of the following companies:
MicroSalt’s patented, low-sodium salt delivers full flavoured natural salt with
approximately 50% less sodium.
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. The
World Health Organization has indicated that reducing sodium consumption to 2,300
mg/day can save upwards of 2m lives per year. To help address this problem, MicroSalt
provides a patented, low-sodium salt has all the flavour of salt with roughly half the sodium
for topical applications such as crisps, pretzels, nuts, popcorn and other salty snacks,
bakery products and precooked meals.
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2024 DEVELOPMENTS:
• Successfully completed its Initial Public Offering with listing price of 43p per share
and commenced trading on the AIM market of the London Stock Exchange on
February 1st, 2024. MicroSalt’s share price as of 31 December 2024 increased to
£0.77.
• Secured large volume purchase commitments of MicroSalt® with a leading food
manufacturer as well as placements of its salt shakers across multiple retail
locations, and large volume commitments into 2025
• Has been granted an important additional patent #11,992,034 protecting the IP of
its micron-sized salt. This patent, entitled Low Sodium Salt Composition, is focused
on how MicroSalt’s low-sodium salt adheres to food particles vs traditional table
salt. MicroSalt also has counterpart patent applications with claims directed to
similar subject matter pending in countries including China, Chile, Australia, Brazil,
Europe, Canada, Japan, Russia, Mexico, India and Hong Kong., many of which
have been granted as of the date of this report.
• Introduced MicroSalt® shakers on Amazon UK and laid the foundation for the UK
expansion of MicroSalt’s bulk business with local distribution and storage via
Reliable Express
• Announced multiple placements of its products including placement of SaltMe!
Crisps on Thrive Market, a US-based healthy snack marketplace with 1.2 million
members, and Carma Hospital Group, marking the Company’s entrance into the
food service market.
• Developed additional B2B bulk product for Quick Service Restaurant after receiving
indicators of demand for MicroSalt from the fast-food sector.
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Innovative Eyewear Inc’s vision is to Upgrade your Eyewear® by providing tech-
enhanced eyewear that makes it easier to stay connected to your digital life. Lucyd
introduced the world’s first prescription ready smart eyewear with ChatGPT.
As of 31 December 2024, Tekcapital owned 100% of Lucyd Ltd which holds ~10% of
NASDAQ quoted Innovative Eyewear Inc.
Photo courtesy of Innovative Eyewear, Inc.
Innovative Eyewear Inc. is the first developer of ChatGPT enabled smart eyewear
under the Lucyd®, Nautica®, Eddie Bauer® and Reebok® brands. Innovative
Eyewear, Inc (“Innovative Eyewear”), Lucyd’s ~10% 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®, voice assistants and GenAI.
INVESTMENT RATIONALE:
In the first 9 months of 2024, the National Highway Traffic Safety Administration (NHTSA)
estimates that 29,135 people died in traffic crashes on public roads.2 We believe that open
ear audio found in Lucyd smart glasses can help pedestrians maintain situational
awareness whilst walking running and cycling as there is nothing in the ear canal blocking
the sounds of adjacent traffic. 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
2 https://www.nhtsa.gov/press-releases/nhtsa-estimates-traffic-fatalities-declined-44-first-nine-months-2024
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listen to audio content and talk to others and digital assistants. 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.
2024 DEVELOPMENTS:
• Announced a partnership with New Look Vision Group to distribute its smart
eyewear in Canada. New Look Vision Group is one of the largest optical groups in
Canada and has been rapidly expanding in the United States.
• Launched major products under its licensed branded smart eyewear products:
Nautica and Eddie Bauer.
• Appointed Micah Richards as a brand ambassador. Micah is a former Olympic
athlete and English footballer, turned successful broadcaster. He is currently
working for several sport networks whilst he is also a co-host of "The Rest is
Football" - a top ten UK podcast.
• Expanded its sales prospects by launching the world's first smart safety eyewear in
a lightweight, affordable and prescription-ready form factor, and meeting the ANSI
Z87.1 standard for workplace safety use. The Company is already in discussion
with several notable retailers about launching the Lucyd Armor™ product in brick
and mortar locations in addition to online sales.
Photo courtesy of Innovative Eyewear, Inc.
• Innovative Eyewear Inc also announced its Lucyd Lyte frames are now available
on Target.com.
• Reported second quarter revenue growth of 82% compared to the second quarter
of 2023, also noting improvement in gross margins. Innovative Eyewear anticipates
the potential for additional growth in the fourth quarter of 2024 as the new Lucyd
ArmorTM and Reebok® Powered by Lucyd lines are launched, as the unit cost of
these new products are estimated to be significantly lower than current Lucyd Lyte
models.
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Guident Limited (“Guident”) has developed and deployed remote monitoring and
control software to improve safety of autonomous vehicles and land-based delivery
devices. Guident’s software incorporates artificial intelligence and advanced
network technologies to minimize signal latency and improve the safety of
autonomous vehicles.
Guident RMCC- Photo courtesy of Guident Corp.
Guident developed a state of the art, fully functional remote monitoring and control
software to improve the safety of autonomous vehicles and land-based delivery devices.
As at 31 December 2024, Tekcapital owned 100% of Guident Ltd, ~and 90% of Guident
Corp, its US operating subsidiary.
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 many of these mishaps. Guident’s remote monitoring and control centre monitors
vehicles and when necessary, can provide additional support such as calling first
responders, taking over control of the vehicle to move it out of harm’s way as well as
provide real-time communication with passengers and pedestrians. Over time, Guident
believes remote monitoring centres will be required in most jurisdictions where AVs
operate.
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2024 DEVELOPMENTS:
• Hosted the grand opening of its first U.S. commercial Remote Monitor and Control
Centre (RMCC) for enhancing AV safety. Guident's new best-in-class RMCC
including video wall displays and visualisation system, is now commercially
available. This deployment is strategically located at the Boca Raton Innovation
Campus (BRiC), the largest office complex in Florida (1.7m sq ft), and the
Southeast's premier technology and life-sciences hub.
• Entered into a Strategic Partnership agreement with Star Robotics, a leading
Spanish security robotics company. The Strategic Partnership will aim to
integrate Guident's teleoperation solution into Star Robotics' products and provide
an autonomous security surveillance solution with a human-in-the-loop capability.
The partnership enables both companies to work on a combined go to market
strategy and roll out in North America.
• Incorporated its RMCC technology into AuVe Tech OÜ ("Auve Tech") Level 4 MiCa
autonomous shuttles. The MiCa vehicle offers turnkey autonomous transportation
solutions tailored to diverse environments and simple integration into existing
transport networks.
• Received a second grant from Space Florida to add low earth orbit, low-latency
satellite connectivity to its AV remote monitoring service. This Space Florida-Israel
Innovation grant supports the development and implementation of a leading-edge
system architecture, leveraging non-geostationary satellite technology to provide
monitoring redundancy in the event of mobile network outages.
Image courtesy of GenIP plc
GenIP Ltd (“GenIP”) was incorporated on 23 February 2024 with a goal of building
a unique GenAI B2B analytics service business. Subsequently, Tekcapital’s
Invention Evaluator® and VortechsTM business services were developed into new
services with the introduction of Generative AI large language models (LLMs) into
their workstreams. GenIP uses generative artificial intelligence aimed at
empowering companies to better evaluate and commercialise technological
discoveries through its services. GenIP represents Tekcapital’s fifth portfolio
company. GenIP plc listed on the AIM in October 2025.
As of 31 December 2024, Tekcapital owned 63% of GENIP plc.
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INVESTMENT RATIONALE
The GenAI market is currently experiencing exponential growth. In 2023, 426 start-ups
received total funding in excess of US$21 billion. GenIP provides Services to evaluate new
technologies and identify capable individuals to market these technologies. We believe
the incorporation of GenAI LLM’s into these services will help companies, research
institutions and venture funds mitigate adverse selection, improve returns on invested
capital and more efficiently deploy capital to produce useful businesses that can become
financially successful and contribute to the quality of life of the customers they serve. The
initial performance appears quite promising.
2024 DEVELOPMENTS:
• Effective 4 June 2024, GenIP acquired certain assets and liabilities from Tekcapital
related to Invention Evaluator and Vortechs business service lines. These assets
and liabilities, disclosed in the Related Parties note to the financial information
below, were transferred to GenIP Ltd as part of a US$191,564 capital contribution
by Tekcapital plc. GenIP’s new products were launched in September 2024.
• Signed a commercial agreement with a leading Saudi Arabian research institution,
GenIP's first client in the Kingdom.
• Initiated negotiations with over 50 potential new clients, including research
institutions, corporations, and venture capital firms, following recent engagements
at global technology transfer events.
• Following the launch of GenIP's GenAI services, 195 orders for IE Reports and 8
orders for Vortechs placement assignments were secured prior to year end 2024.
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. Belluscura 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). COPD is a progressive lung disease that includes emphysema and
chronic bronchitis and is the fourth leading cause of death worldwide, causing 3.5 million
deaths in 2021, approximately 5% of all global deaths.3
POC’s are also used to treat:
Interstitial lung disease (ILD): This is a group of lung diseases that cause scarring of the
lungs.
Cystic fibrosis: This is a genetic disease that causes thick, sticky mucus to build up in
the lungs, making it hard to breathe.
Sleep Apnea: This is a sleep disorder that causes breathing to repeatedly stop and start.
3 https://www.who.int/news-room/fact-sheets/detail/chronic-obstructive-pulmonary-disease-(copd)
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Pulmonary hypertension: This is high blood pressure in the lungs.
Heart failure: This is a condition that makes it hard for the heart to pump blood effectively.
Many patients suffering from the above disorders 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, many individuals must 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 POC’s to improve both the duration and quality of life.
2024 DEVELOPMENTS:
• Belluscura announced their prospects were enhanced by the forthcoming release
of the new DISCOV-R device.
• The company announced its revenue continued to grow through 2024, with revenue
of ~$3.3m in the first nine months of 2024.
• Belluscura was also able to complete the acquisition of TMT Acquisition plc and
raised US$ 7.3m through combination of convertible loan notes and new placings,
enabling the company to deliver on the demand for its products.
Photo courtesy of Belluscura plc
POST PERIOD END HIGHLIGHTS
Following successful deployments of its Remote Monitor and Control Center, Guident has
confidentially submitted a draft registration statement on Form S-1 with the Securities and
Exchange Commission (the "SEC") relating to the proposed initial public offering. The
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initial public offering is expected to take place after the SEC completes its review process,
subject to market and other conditions. Guident has also received significant additional
patent coverage:
• Guident has successfully validated its European Patent Grant No. 4097550,
entitled Artificial Intelligence Method and Apparatus for Remote Monitoring and
Control of Autonomous Vehicles, and has obtained patent protection in 20
European countries.
The validated European patent is directed to an autonomous vehicle remote
monitoring and control center (RMCC) employing distributed sensor fusion and
artificial intelligence techniques that is configured to receive sensor data across
multiple independently governed autonomous vehicles, including sensor data from
vehicles not operating under RMCC control, determine incident risk levels,
implement safety measures and take control of one or more of the autonomous
vehicles when operating at an unsafe incident risk level, and return control when
the risk level is safe.
• In addition, Guident is pleased to announce it has received a Notice of Allowance
from the United States Patent and Trademark Office for its U.S. Patent Application
No. 17/579,203, entitled Near Real-Time Data and Video Streaming System for a
Vehicle, Robot or Drone. The allowed U.S. patent application is directed to methods
and systems for using a remote monitoring control device to receive video and
image data from and communicate with collection devices of autonomous vehicles,
robots, or drones (such as camera sensors) to improve the safety of their
operation. Guident anticipates the United States Patent will issue in due course
after it pays the required issue fee.
• Guident, in collaboration with the Related Companies, Circuit Transit and Auve
Tech, announced the launch of a pilot program with the City of West Palm Beach
to demonstrate the future of urban public transportation. The MiCa, a fully electric
SAE Level 4 autonomous shuttle, has been operating autonomously within the
CityPlace area of West Palm Beach since mid-February, successfully navigating
the dense urban area occupied by cars, trucks, bicycles and pedestrians. With six
stops between Brightline Station and the Publix supermarket plaza, the project
offers 0.9 miles of clean, quiet and convenient public transportation within the heart
of West Palm Beach.
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MiCa Shuttle in West Palm Beach, Florida - Photo courtesy of Guident Corp.
• Guident also announced it secured its first contract for its Autonomous
Surveillance & Inspection Robot service with the Boca Raton Innovation
Campus (BRiC), a 1.7-million-square-foot multi-tenant office campus and IBM's
former R&D facility.
• In addition to the above Guident has a strong pipeline of customers it is seeking
to close in H1.
Innovative Eyewear Inc announced that it has partnered with Micro CenterTM, one of the
leading tech retailers in the United States, to expand its retail reach and bring Lucyd smart
eyewear in stores nationwide and online.
Additionally, post period end Innovative Eyewear announced the launch of its Reebok
smart eyewear powered by Lucyd and the inking of a partnership deal with Eye
Recommend, expanding their smart eyewear across 600+ independent optometry stores
in Canada.
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Reebok smart eyewear - Photo courtesy of Innovative Eyewear Inc.
Also, post period-end, MicroSalt plc completed a successful, oversubscribed fundraising
of £2.3 million. The proceeds of the Subscription will be mainly used to support inventory
to satisfy expected B2B customer demand in 2025 from leading snack manufacturers, as
well as general working capital purposes. MicroSalt has received commitments for an
additional 290 metric tonnes ("mT") in bulk orders for 2025 and expects this to further
increase as MicroSalt is rolled out over new product lines. Based on existing orders for Q1
2025 and expected orders for the rest of 2025 for existing product lines, B2B volumes are
projected to increase more than 10X the quantity manufactured in 2024.
MicroSalt also announced they launched a new Quick Service restaurant ("QSR") product,
initially targeting the "French fry" market where the Company sees a tremendous
opportunity for growth. At the same time, significant new FDA guidance was released
indicating the near-term requirement for front of package nutrition labels, providing another
catalyst for MicroSalt’s product.
MicroSalt has been recognized by Fast Company in their 2025 list of the World’s Most
Innovative Companies. The company, known for its patented full-flavor salt with
approximately 50% less sodium, earned the ninth position in the "Small but Mighty"
category, which highlights businesses with fewer than 50 employees that are making
significant impacts in their industries.4
4 https://www.investing.com/news/company-news/microsalt-secures-spot-on-innovative-companies-list-93CH-
3935929
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Image courtesy of MicroSalt plc
GenIP plc provided a significant corporate update, noting since the launch of its GenAI
enhanced services in September 2024, they have secured Invention Evaluator orders for
over 450 analytical assessments.
Additionally, GenIP Plc announced it secured a significant contract worth $0.35m with a
new client, a research organisation in Saudi Arabia (the "Client"). The contract commences
immediately and covers the delivery of 400 GenAI-enhanced analytical assessments and
additional technology commercialisation consulting services.
Post end-of-period Belluscura announced on 6 February 2025, the Company has raised
gross proceeds of approximately $5.0 million through the placing of 199,151,375 new
ordinary shares. Additionally on 16 April 2025 Belluscura announced its Q1 2025 sales
were $912,000 (Q1 2024: $166,000), and that it has launched the X-PLOR 5, the first FDA
cleared five-level portable oxygen concentrator weighing under four pounds. In May 2025,
Belluscura also announced that it initiated a strategic review aimed at supporting both the
Company's short-term cash requirements and its longer-term growth and accelerating its
path to sustainable profitability. The Company also confirmed, as of 9 May 2025, the US
import tariff on its portable oxygen containers remains at zero and that April 2025 marked
their best sales month with US$ 0.52m in revenue booked. On 9 May 2025 Belluscura
announced it has initiated a strategic review, which will evaluate a range of options to
substantially strengthen its capital position, including potential strategic investment,
partnerships, alternative funding structures and other corporate initiatives. The review is
aimed at supporting both the Company's short-term cash requirements and its longer-term
growth and accelerating its path to sustainable profitability.
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STRATEGIC REPORT
CHAIRMAN’S SUMMARY
Tekcapital Performance Update
Tekcapital delivered exceptional financial performance in 2024, transitioning from a loss
in 2023 to significant profitability. The company's portfolio return and revenue surged to
US ~$21 million from a US ~$13 million loss in 2023. Profit after tax rose substantially to
US ~$19.2 million from a loss of US ~$15.7 million the previous year, driven by increased
total income and reduced expenses. This represents an impressive US ~$35 million
positive swing in Net Income, demonstrating the effectiveness of Tekcapital's strategic
direction and the inherent value of its portfolio companies.
Net assets expanded from US $47.9 million to an annual record of US $70.1 million,
reflecting a 46% year-over-year increase.
The company's portfolio valuation reached US $61.5 million (up from US $41.1 million in
2023), with NAV per share growing to US $0.33 (from US $0.27).
Tekcapital completed share placings totaling US $3.6 million during the period.
Portfolio Company Achievements
Demonstrating Tekcapital's ability to successfully commercialize technologies even in
adverse markets, two Investment Portfolio companies (MicroSalt plc and GenIP) floated
on AIM in early 2024, bringing the total number of public portfolio companies to four out of
five. A few of the achievements across the portfolio included:
•
MicroSalt secured recurring bulk purchases for multiple product lines from one of
the world's largest food, soft drink, and snack manufacturers, with additional
purchase orders anticipated for 2025 and a significant projected increase in B2B
volume.
•
Innovative Eyewear continued sales growth and strengthened its balance sheet,
and launched the first smart safety eyewear line under the Lucyd ArmorTM brand.
The Lucyd Armor product is certified to comply with the American National
Standards Institute.
•
Guident progressed the integration of its remote monitor and control software with
several AV shuttle partners and launched a sales program targeting the security
robot market, resulting in multiple contracts announced in early H1 2025.
•
GenIP signed a commercial agreement with a leading Saudi Arabian research
institution, its first client in the Kingdom
•
Belluscura continued revenue growth and received important Pricing Data Analysis
and Coding ("PDAC") codes allowing medical equipment distributors to claim
Medicare reimbursement
Following the period end, Guident appointed an investment bank to assist with a potential
Nasdaq IPO in 2025. MicroSalt completed an oversubscribed fundraising of £2.3 million
and secured commitments for significantly increased bulk orders in 2025. Belluscura has
also recently completed a fundraise of gross proceeds of ~£4.7 million.
21
Outlook
Tekcapital has demonstrated a proven ability to identify and commercialize university
technologies, with strong portfolio company execution and public market validation. Its
efficient corporate structure provides operating leverage, with administrative expenses of
just US $2.0 million in 2024, the lowest amongst all of its peers in the United Kingdom.
The Company has multiple potential catalysts for value creation in 2025, particularly if its
fifth portfolio company achieves a public listing or if existing portfolio companies reach
noteworthy commercial milestones. Tekcapital's strategic positioning in high-growth,
globally relevant sectors including sodium reduction (MicroSalt), respiratory care
(Belluscura), autonomous vehicle safety (Guident), smart eyewear (Innovative Eyewear),
and AI-driven innovation (GenIP) positions the company for continued growth.
We intend to aggressively pursue further investments in pre-existing generative artificial
intelligence companies (GenAI). Our potential targets are expected to include companies
that are focused on the transformative impact of GenAI on business workflows across a
number of sectors. Having witnessed GenAI’s positive impact on a few of our portfolio
companies, we believe its potential to accelerate value creation, mitigate risk and reduce
administrative overhead may provide significant investment opportunities for the Group.
Tekcapital’s long-term objective is to grow both its net assets and returns on invested
capital. Once material levels of capital are monetized from its portfolio companies, the
Group plans to provide a special dividend to shareholders. Management believes that
Tekcapital's 2024 performance is a testament to its portfolio companies' strategic
positioning and relevance, and represents a good step towards achieving its long-term
objective.
Financial performance
Net Assets US$70.1m (2023: US$47.9m)
NAV per share US$0.33 (2023: US$0.27)
Portfolio valuation US$61.5m (2023: US$41.1m)
Profit after tax: US$19.2m, resulting primarily from unrealised fair value increase
of portfolio valuation (2023: loss of US$15.7m).
Fundraisings during the period
In 2024 we completed share placements totaling US$ 3.6m (2023: US$ 5m), excluding
expenses. Proceeds were used primarily to accelerate commercial progress of select
portfolio companies and provide additional working capital for the Group.
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
22
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 current Russian invasion of Ukraine, the Israel/Gaza conflict and the recent US
imposed global tariffs may over time may contribute to inflation of energy costs,
goods and supply chain disruptions which could increase the cost and complexity
of sourcing components and selling products for some of our portfolio companies.
Additionally, the uncertainty that has been introduced to the capital markets have
resulted in small cap stocks worldwide feeling the pinch. This can be seen in
Belluscura’s and Innovative Eyewear’s share prices at the end of the period,
although other non-macro-economic factors may play a role as well.
We are grateful for the patience and support of our shareholders. We are also sincerely
appreciative of our dedicated, creative and incredibly hardworking portfolio company
management teams as well as our corporate team, without whom, none of the results
reported herein would be possible.
SECTION 172 (1) STATEMENT
Our Board (please also see Board of Directors page for information on Directors) 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.
23
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 Group’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 Group's business relationships with suppliers,
customers and others
The Board ensures that the Group’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 Group’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 that all of the Group’s investments
focus on improving quality of life and attempt to solve significant health, safety or
productivity problems facing communities. The Board also considers impact of Group’s
investment decisions on the environment as part of screening process.
e) The desirability of the Group maintaining a reputation for high standards of
business conduct
The Board recognises that culture, values, and standards are key contributors to how the
Group 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 Group’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 Group
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 Group, holding approximately 6% of the register, together putting them in the top 3
24
shareholders of the Group. On this basis the Board feels that the executive Directors are
fully aligned with shareholders.
g) Fundraising activities
During the course of the year, Tekcapital plc consummated two fundraises for the 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
current report.
We are enthusiastic about the development of Tekcapital’s portfolio companies, their
performance to-date and their prospects to significantly expand in 2025. The Board is
confident that continued investment in Guident, the sagacious stewardship of our equity
holdings and additional investments in later-staged, GenAI businesses remains the right
approach for potential long-term value creation.
25
STRATEGIC REPORT: FINANCIAL REVIEW
& KEY PERFORMANCE INDICATORS
THE KEY PERFORMANCE INDICATORS (KPIs) FOR THE GROUP
The Key Performance Indicators (KPIs) listed below represent those that are typically
applied to companies that seek to commercialise university technologies and serve as a
starting point for evaluating the Group’s performance:
KPI
DESCRIPTION
2024
2023
FAIR VALUE OF
THE PORTFOLIO
Updated value of portfolio companies
using costs, independent valuations or
observed third party investments
$61.5m
$41.1m
TOTAL INCOME
Total income including revenue from
services, fair value gains, and other
income
$21.2m
($13.0m)
PROFIT/(LOSS)
After tax profit/(loss)
$19.2m
($15.7m)
NET ASSETS
PER SHARE
Total assets minus total liabilities per
share
$0.33
$0. 27
Key Performance Indicators showed significant improvement in 2024, with a significant
portion of the changes attributable to the listing of MicroSalt, and their performance since
then. The company's ~46% increase in net assets to US $70.1m and dramatic swing to
US $19m net income demonstrates its ability to execute effectively in challenging market
conditions.
The Group’s cash position at the end of the period was US$0.8m (2023: US$0.6m) with
modest liabilities as costs have been settled without delay using available funds and post
period fundraise of GBP 0.5m completed in January 2025. The Group had no debt as of
31 December 2024 (2023: US$nil) and has a very significant amount of marketable
securities on the balance sheet.
Directors do not believe there are any material environmental issues that need to be
reflected in our KPIs for 2024.
The Strategic Report was approved by the Board of Directors on 22 May 2025.
Clifford M. Gross, Ph.D.
Chairman and CEO
22 May 2025
26
BOARD OF DIRECTORS
Clifford M. Gross, Ph.D. is a successful executive with more than 25 years of leadership
experience in academia and business. He is passionate about commercialisation of
university discoveries to improve the quality of life. He founded three companies
(Biomechanics Corp., UTEK & Tekcapital) which subsequently listed, where he served as
CEO and Chairman and co-founded or founded numerous private companies including
HumanCAD, MicroSalt (which has subsequently listed), Belluscura (which has
subsequently listed), GenIP (which has subsequently listed) and Guident. Previously he
was President and CEO of Innovacorp, the provincial venture capital fund of Nova Scotia.
Cliff was Acting Director of the graduate program in Biomechanics and Ergonomics at New
York University, Chairman of the Nelson Rockefeller Department of Biomechanics at the
New York Institute of Technology and Research Professor at the University of South
Florida. He has authored or co-authored several books including “Too Good to Fail:
Creating Marketplace Value from the World’s Brightest Minds,” and is a named inventor
on more than 50 issued or pending patents. A number of the ergonomic products he has
developed became significant commercial successes, including the DeWalt Cordless Drill
for Black & Decker, The Parachute Chair for Knoll, the ergonomic mouse for Logitech,
HumanCAD, the first PC based human CAD software and the flexible back belt, which is
used to help reduce back stress for individuals worldwide. Several of the products he
helped to develop were included in a Smithsonian exhibit on ergonomic design. Cliff is a
Fellow of the National Academy of Inventors. He received his MA and Ph.D. from New
York University and an Executive MBA from Oxford University.
Robert practiced at the Mayo Clinic for twenty-five years, serving as a Physician-Executive
before retiring as an Emeritus Professor in 2019. He served as Vice Chair of the national
Mayo Clinic Cancer Center Practice Committee, overseeing cancer care delivery at all of
Mayo’s national sites, and was Medical Director Particle Therapy at Mayo Clinic Florida
where America’s first carbon ion radiotherapy facility is being built. He also previously
served as Vice Chairman of the Board of Trustees of the Mayo Clinic Health System –
Albert Lea and Austin. He is the author of over 200 peer-reviewed papers. Robert has
successfully led a series of national, NIH funded Phase III clinical trials searching for new
pharmaceutical solutions to reduce symptoms of cancer therapy. Robert began his
scientific career as a medical physicist at the University of Kentucky, before going on to
graduate from medical school at the University of Kentucky. Robert also received an MBA
from Oxford University.
The Rt Hon Lord Willetts FRS is Chair of the UK Space Agency's Board, President of the
Resolution Foundation and former Minister for Universities and Science. He served as the
Member of Parliament for Havant (1992-2015) and previously worked at HM Treasury and
the No. 10 Policy Unit. Lord Willetts is a visiting Professor at King’s College London,
Governor of the Ditchley Foundation, former Chair of the British Science Association and
member of the Council of the Institute for Fiscal Studies. He is also an Honorary Fellow of
Nuffield College, Oxford. Lord Willetts has written widely on economic and social policy.
One of his books, ‘The Pinch’, which focused on intergenerational equity, was published
in 2010, and he recently published ‘A University Education’. Lord Willetts is a graduate of
Oxford University and has been awarded numerous honorary doctorates.
Louis Castro has over 30 years’ experience in investment banking and broking both in the
UK and overseas. He is currently Executive Chairman of Orosur Mining Inc, an AIM and
27
TSXV listed exploration company. Previously he was Chief Executive of Northland Capital
Partners in London and before this was Head of Corporate Finance at Matrix Corporate
Capital and at Insinger de Beaufort. He started his career by qualifying as a Chartered
Accountant with Coopers & Lybrand (now PWC). Louis chairs the Audit Committee and is
a member of the Remuneration Committee. He is a Fellow of the Institute of Chartered
Accountants In England and Wales and has a Double Degree in Engineering Production
& Economics from Birmingham University.
28
DIRECTORS’ REPORT FOR THE YEAR ENDED 31
DECEMBER 2024
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 46. No dividend was declared or paid during the period ended 31
December 2024 (2023: $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 Willetts FRS
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the financial statements in accordance with
applicable laws and regulations.
Under that law the Directors are required to prepare the Group financial statements in
accordance with International Financial Reporting Standards as adopted in the United
Kingdom (“UK adopted IFRS”) and have also chosen to prepare the Company financial
statements in accordance with the United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, comprising FRS 101 Reduced
Disclosure Framework, and applicable law). 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 Group and the Parent Company and of their profit or loss
for that period.
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 Group’s and the Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the Group and 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 Group and the
Company and hence for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
29
DIRECTORS’ REPORT FOR THE YEAR ENDED 31
DECEMBER 2024
Each of the current Directors, whose names are listed in the Directors’ report on this page
of the financial statements confirm that, to the best of each person’s knowledge and belief:
• the Group financial statements, prepared in accordance with UK-adopted IFRS,
give a true and fair view of the assets, liabilities, financial position and profit (or loss)
of the Group;
• the Company financial statements, which have been prepared in accordance with
United Kingdom Accounting Standards, comprising FRS 101 Reduced Disclosure
Framework, give a true and fair view of the Company’s assets, liabilities and
financial position of the 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 bank, monies raised in follow-on offerings and realisation 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
Whilst no material changes in the nature of the business is expected in the foreseeable
future we will make course corrections as needed, to adapt to our evolving business
needs, resources and the current geopolitical uncertainty. Information has been included
in the strategic report in relation to disclosures under S414C(11) of the Companies Act
2006.
30
DIRECTORS’ REPORT FOR THE YEAR ENDED
31 DECEMBER 2024
AUDIT COMMITTEE REPORT
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. The audit committee met 3 times during
the period.
DIRECTORS’ EMOLUMENTS
Salary &
Benefits
Bonus
2024
2023
fees
in kind
Total
Total
US $
US $
US $
US $
US $
Clifford M Gross
261,976
24,475
264,727
551,178
281,942
Robert Miller
21,600
-
-
21,600
23,261
Louis Castro
46,002
-
-
46,002
44,779
Lord David Willetts
38,335
-
-
38,335
36,694
367,912
24,475
264,727
657,114
386,676
The Director’s proportion of the share option expense was US$1,400 (2023: US$1,362).
The Group did not make any contributions to a pension scheme in the period ended 31
December 2024 (2023: Nil). The Directors’ beneficial interests in shares is set out below:
2024
2023
2024
2023
No of Shares
No of Shares
No of Options
No of Options
Clifford M Gross
9,000,000
8,657,500
3,000,000
3,000,000
Lord David Willetts
-
-
200,000
200,000
Robert Miller
2,664
2,664
200,000
200,000
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 the Article
3(1)(26) of the UK Market Abuse Regulation.
The details of the options held by each director at 31 December 2024 are as follows:
No of
Options
Exercise
Price
Grant
Date
Date from which
exercisable
Life
Clifford M Gross
3,000,000
£0.12
27-Aug-20
Special Conditions*
5 Years
Robert Miller
100,000
£0.19
16-Jun-21
Special Conditions**
5 Years
Lord David
Willetts
100,000
£0.0525
6-Jan-20
Special Conditions**
5 Years
100,000
£0.19
16-Jun-21
Special Conditions**
5 Years
31
DIRECTORS’ REPORT FOR THE YEAR ENDED
31 DECEMBER 2024
DIRECTORS’ EMOLUMENTS (CONTINUED)
* 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.
Total of key management personnel compensation including short term benefits and share
based payments is disclosed in Note 8 of the accounts below.
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 & UNCERTAINTIES
Please refer to strategic report.
RESEARCH & DEVELOPMENT ACTIVITIES
The Group conducted research and development related to generative AI technology. This
was pertinent to the incorporation of GenIP ltd prior to its acquisition of our Invention
Evaluator and Vortechs assets.
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 financial instruments risks, please refer to Note 3.1 of the Notes to the Financial
Statements.
32
DIRECTORS’ REPORT FOR THE YEAR ENDED 31
DECEMBER 2024 ON CORPORATE
GOVERNANCE
The Tekcapital board is committed to maintaining high standards of corporate governance.
In accordance with AIM Rule 26, AIM quoted companies are required to adopt and give
details of the corporate governance code which they have adopted and to show how they
are following it. The board has adopted the Quoted Companies Alliance’s (QCA) Corporate
Governance Code for small and mid-size quoted companies (the “QCA Code”). In 2025
we will report under the 2023 code for small and mid-size quoted companies.
Of the recognized codes generally adhered to by AIM companies, the QCA Code has been
drafted with smaller businesses in mind, with a pragmatic and principles-based approach.
It was therefore deemed by the board to be the most suitable.
Solid corporate governance is the foundation on which the business is managed, and this
is supported by the range of talents of the directors. Biographies of the directors appear
on page 26 and demonstrate a range of experience and caliber to bring the right level of
independent judgment to Tekcapital’s business. Ensuring financial strength alongside the
growth of portfolio businesses are key guiding principles, supported by an effort to ensure
solid communication with shareholders.
The chairman is responsible for leading the board and for its overall effectiveness in
directing the group. They ensure that the board implements, maintains and communicates
effective corporate governance processes and promotes a culture of openness and debate
designed to foster a positive governance culture throughout the group.
The board is responsible for the group’s system of internal control and for reviewing its
effectiveness. Such a system can only provide reasonable, but not absolute, assurance
against material misstatement or loss. The board believes that the group has internal
control systems in place appropriate to the size and nature of its business. The board is
satisfied that the scale of the group’s activities does not warrant the establishment of an
internal audit function.
The board is also responsible for identifying the major business risks faced by the group
and for determining the appropriate course of action to manage those risks. Formal
meetings are held quarterly to review strategy, management and performance of the
group, with additional meetings between those dates convened as necessary. During
2024, there were 6 Board meetings. The QCA Code identifies ten principles that focus on
the pursuit of medium- to long-term value for shareholders without stifling entrepreneurial
spirit. Tekcapital’s adoption of the QCA principles is summarized in the table below.
Further
details
are
made
available
on
our
website
at
https://www.tekcapital.com/investors/#section-ecc78d7-5.
No
QCA principle
Tekcapital adoption
1
Establish a strategy and
business model which
Tekcapital’s mission is to transform university
discoveries into valuable products. Our
investment objective is to achieve long-term
33
promote long-term value
for shareholders
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. We believe the
combination of these factors will maximize long-
term value for shareholders.
The Board also considers long term impact of
climate change and related violent climate
events’ impact on different business verticals
during investment decision process.
The Board also considers factors such as
impact of supply chain, manufacturing, CO2
emission, health implications of each potential
investee’s product/service on the environment
and society as a whole as part of investment
screening process.
2
Seek to understand and
meet shareholder needs
and expectations
The board engages with shareholders and the
broader investment community via a variety of
channels and activities including the annual
general meeting, updates to shareholders via
reporting and the regulatory news service, and
institutional presentations. The Chairman and
CEO are the primary contacts for investor
interaction alongside SP Angel.
3
Take into account wider
stakeholder and social
responsibilities and their
implications for long-term
success
Tekcapital’s culture is very open and this
includes reaching out and seeking feedback
and insights from our various stakeholders. In
addition to the investor outreach described
above, key practical elements of this philosophy
for other stakeholders include having a flat
organization with few tiers of management,
meeting regularly; all-hands communications
via web-meetings; engagement with portfolio
companies through regular meetings,
satisfaction surveys.
4
Embed effective risk
management, considering
both opportunities and
threats, throughout the
organization
The board is responsible for identifying the
major business risks faced by the group and for
determining the appropriate course of action to
manage those risks. The board has adopted a
framework for the effective identification,
assessment, and management of risks to the
achievement of corporate objectives. The risks
that the board consider to be principal risks to
the group’s business and how they are
mitigated are set out on page 21 of the
Strategic Report.
34
5
Maintain the board as a
well-functioning, balanced
team led by the chair
The QCA Code requires that boards have an
appropriate balance between executive and
non-executive directors and that each board
should have at least two independent directors.
The board is made up of one executive director
and three non-executive directors. The non-
executive directors are mature, experienced
and independent persons who have each
succeeded in their own businesses and are not
dependent upon income from the group, and
they include: Louis Castro, FCA (attended 9
Board meetings during 2024), Lt Hon Lord
David Willets (8) and Robert Miller (8). They
have developed a strong and detailed
understanding of the business, and are
prepared and able to intervene and challenge
the executive director. Clifford Gross attended 9
Board of Directors meetings in 2024.
6
Ensure that between them
the directors have the
necessary up-to-date
experience, skills and
capabilities
Details of the background and experience of the
directors of the Company are set out on page
26 of this report. These demonstrate that our
team collectively has the necessary skills and
experiences, as well as the required calibre, to
carry out the group’s strategy and business
model effectively. The non-executive directors
comprise an investment specialist, a professor
and pharmaceuticals specialist, and a former
minister for universities and science. All three
have experience of working in a public
Company environment. Each Director maintains
his skillset by participating in industry events,
online trainings as well as experience on other
boards seats they occupy.
7
Evaluate board
performance based on
clear and relevant
objectives, seeking
continuous improvement
A board self-evaluation process led by the
chairman takes place every three years, using a
QCA-sponsored questionnaire and process.
Low scoring or divergent scoring responses are
discussed, with gaps and actions for
improvement identified.
8
Promote a corporate
culture that is based on
ethical values and
behaviours
Tekcapital’s core values statement and guiding
principles, developed by the extended
management team, support the group’s culture
with a strong footing in ethical values. These
are reinforced in the staff handbook and the
staff appraisal and development process, which
formally embeds cultural and ethical
considerations as part of each employee’s self-
evaluation.
35
9
Maintain governance
structures and processes
that are fit for purpose and
support good decision-
making by the board
Formal board meetings are held quarterly to
review strategy, management and performance
of the group, with additional meetings between
those dates convened as necessary. We have
two board committees, the Audit Committee
and the Remuneration Committee.
10
Communicate how the
Company is governed
and is performing by
maintaining a dialog with
shareholders and other
relevant stakeholders
The group’s approach to investor and
shareholder engagement is described under
Principle 2 above. Annual reports, Annual
General Meeting notices, regulatory
announcements, trading updates and other
governance-related are available from the
group’s website.
Directors’ Remuneration report
The Board has delegated to its Remuneration Committee, chaired by 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 meets at least 2 times during the calendar year.
INDEPENDENT AUDITORS
The auditor, MHA, previously traded through the legal entity MacIntyre Hudson LLP. In
response to regulatory changes, MacIntyre Hudson LLP ceased to hold an audit
registration with the engagement transitioning to MHA Audit Services LLP. MHA will be
proposed for reappointment in accordance with section 485 of the Companies Act 2006.
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
22 May 2025
36
37
INDEPENDENT AUDITOR’S REPORT TO THE
MEMBERS OF TEKCAPITAL PLC
For the purpose of this report, the terms “we” and “our” denote MHA in relation to UK legal,
professional and regulatory responsibilities and reporting obligations to the members of
Tekcapital plc. For the purposes of the table on pages 38 to 39 that sets out the key audit
matters and how our audit addressed the key audit matters, the terms “we” and “our” refer
to MHA. The Group financial statements, as defined below, consolidate the accounts of
Tekcapital plc and its subsidiaries (the “Group”). The “Parent Company” is defined as
Tekcapital plc, as an individual entity. The relevant legislation governing the Parent
Company is the United Kingdom Companies Act 2006 (“Companies Act 2006”).
Opinion
We have audited the financial statements of Tekcapital plc for the year ended 31
December 2024.
The financial statements that we have audited comprise:
• the Consolidated Statement of Comprehensive Income
• the Consolidated Statement of Financial Position
• the Consolidated Statement of Changes in Equity
• the Consolidated Statement of Cash Flows
• Notes to the Consolidated Financial Statements, including significant accounting
policies
• the Company Statement of Financial Position
• the Company Statement of Changes in Equity and
• Notes to the Company Financial Statements, including significant accounting
policies.
The financial reporting framework that has been applied in the preparation of the Group
financial statements is applicable law and UK-adopted International Financial Reporting
Standards (UK adopted IFRS). The financial reporting framework that has been applied in
the preparation of the Parent Company financial statements is applicable law and United
Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced
Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• give a true and fair view of the state of the Group’s and of the Parent Company’s
affairs as at 31 December 2024 and of the Group’s profit for the year then ended;
• of the Group have been properly prepared in accordance with UK-adopted IFRS;
• of the Parent Company have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of the Companies Act
2006.
Our opinion is consistent with our reporting to the Audit Committee.
38
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities under those standards are further described
in the Auditor Responsibilities for the Audit of the Financial Statements section of our
report. We are independent of the Group in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed entities, and we have fulfilled our ethical responsibilities in
accordance with those requirements. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors' use of the going
concern basis of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Group’s and the Parent Company’s
ability to continue to adopt the going concern basis of accounting included:
• The consideration of inherent risks to the Group and Parent Company’s operations
and specifically its business model and the evaluation of how those risks might
impact on the Group and Parent Company’s available financial resources.
• Evaluating the directors’ assessment of the Group’s ability to continue as a going
concern, including an examination of cash flow forecasts, challenging the
underlying data and key assumptions in those forecasts, being the operating
expenses and planned funding for investments, used to make the assessment and
comparing these to historical performance and post year-end information.
• Examining management’s budgets and forecasts and their basis of preparation,
including review and assessment of the model’s appropriateness and mechanical
accuracy.
• We assessed the reasonableness of management’s assumptions included within
the forecasts, including considering the impact of the current macro-economic
environment. We evaluated the effects on the group’s solvency and liquidity
position, and performed sensitivity analysis on key cash changes.
• Consideration of availability of funds (including fund-raising post year-end) required
to settle obligations, as they fall due, during the going concern review period.
Consideration of the Group’s cash balance at the date of signing of the auditor’s
report, in addition to assessing amounts available in the group's listed investments,
including consideration of lock-in periods. Assessing the reasonableness and
practicality of the mitigation measures identified by management in their
conservative case scenario and considered by them in arriving at their conclusions
about the existence of any uncertainties in respect of going concern.
Based on the work we have performed, we have not identified any material uncertainties
relating to events or conditions that, individually or collectively, may cast significant doubt
on the Group’s and Parent Company’s ability to continue as a going concern for a period
of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern
are described in the relevant sections of this report.
39
Overview of our audit approach
Scope
Our audit was scoped by obtaining an understanding of the Group,
including the Parent Company, and its environment, including the
Group’s system of internal control, and assessing the risks of
material misstatement in the financial statements. We also
addressed the risk of management override of internal controls,
including assessing whether there was evidence of bias by the
directors that may have represented a risk of material
misstatement.
Materiality
2024
2023
Group
£600k
£400k
0.8% (2023: 0.8%) of gross assets
Parent Company
£236k
£200k
1% (2023: 0.9%) of gross assets
Key audit matters
Recurring
• Valuation of investments in unquoted companies
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial statements of the current period and include the
most significant assessed risks of material misstatement (whether or not due to fraud) that
we identified. These matters included those matters which had the greatest effect on: the
overall audit strategy; the allocation of resources in the audit; and directing the efforts of
the engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Valuation of investments in unquoted companies
Key audit
matter description
Refer to Note 2 – Accounting policies and Note 12 – Financial
Assets at fair value through profit and loss.
As at 31 December 2024, the Group held a significant
unquoted investment in Guident Limited, representing
approximately 26% of the Group’s total assets.
Guident is an early-stage technology business with no active
market for its shares.
The investment was valued using a combination of the most
recent third-party funding round and an internally developed
discounted cash flow (DCF) model. Due to the subjectivity
involved in estimating future cash flows, the absence of a
terminal value in the model, and sensitivity to the discount
rate applied, we determined this to be a key audit matter.
40
How the scope of our
audit responded to
the key audit matter
Our audit work included, but was not restricted to the
following:
•
We assessed the appropriateness of the directors’
accounting policy in respect of unquoted investments,
in line with the requirements of the applicable
accounting standards.
•
We reconciled management’s valuation methodology
to the accounting policies and to the requirements of
IFRS 13 ‘Fair Value Measurement’.
•
We involved third party valuation experts to critically
assess management’s valuation methodology.
•
We audited management’s valuation, assessing the
assumptions used, the valuation methodology, and
the mechanics of the model.
•
We performed a review of the valuations sensitivity to
the discount rates and other key areas of estimation
and reviewed the sensitivity disclosure calculations.
•
We reviewed documentation related to the raising of
capital of the relevant investment entities, to ascertain
existence of any observable transactions and
understand their relevance to the valuations.
•
We reconciled the fair value movements to the
financial statements.
•
We reviewed the appropriateness of the Group’s
financial statement disclosures in relation to the
valuation of investments in unquoted companies,
including;
critical
accounting
judgements
and
estimates, valuation methodology, key valuation
inputs and valuation uncertainty.
Key
observations
communicated to the
Audit Committee
Based on our audit work detailed above, nothing has come
to our attention that indicates that the Group’s valuation
methodology in regard to unquoted investments is not in line
with the requirements of IFRS 13.
Our application of materiality
Our definition of materiality considers the value of error or omission on the financial
statements that, individually or in aggregate, would change or influence the economic
decision
of
a
reasonably
knowledgeable
user
of
those
financial
statements. Misstatements below these levels will not necessarily be evaluated as
immaterial as we also take account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their effect on the financial
statements as a whole. Materiality is used in planning the scope of our work, executing
that work and evaluating the results.
Group
Overall
Materiality
$600,000 (2023:
$400,000)
0.8%
(2023:
0.8%)
of
the
Group’s
gross
assets
Total assets were deemed to be the most
appropriate benchmark to set materiality.
The Group’s assets are principally made
up of investments in portfolio companies.
41
The potential future earnings of the
investee entities is best reflected in the fair
value of the portfolio, which is a KPI for the
Group and, in our view, the primary metric
of interest to users of the financial
statements. we deem to be the primary
metric that the users of the financial
statements are interested in.
Performance
Materiality
$420,000 (2023:
$280,000)
70%
(2023:
70%)
of
the
above
materiality
levels
Performance materiality is the application
of materiality at the individual account or
balance level, set at an amount to reduce,
to
an
appropriately
low
level,
the
probability
that
the
aggregate
of
uncorrected
and
undetected
misstatements exceeds materiality for the
financial statements as a whole.
The
determination
of
performance
materiality reflects our assessment of the
risk of undetected errors existing, the
nature of the systems and controls and the
level of misstatements arising in previous
audits.
De
Minimis
reporting
threshold
$30,000 (2023:
$20,000)
5% of Overall
Materiality
We agreed to report any corrected or
uncorrected adjustments exceeding this
threshold to the Audit Committee as well
as differences below that in our view
warranted
reporting
on
qualitative
grounds.
Parent Company
Overall
Materiality
$236,000 (2023:
$200,000)
1%
(2023:
0.9%)
of
the
Parent
Company’s
gross assets
Gross assets were deemed to be the most
appropriate benchmark to set materiality
as the parent primarily holds investments
in the group’s subsidiaries. The materiality
applied to the Parent Company was
capped at below group materiality to
mitigate the aggregated risk of material
error on consolidation.
Performance
Materiality
$165,200 (2023:
$140,000)
70%
(2023:
70%)
of
the
above
materiality
levels
Performance materiality is the application
of materiality at the individual account or
balance level, set at an amount to reduce,
to
an
appropriately
low
level,
the
probability
that
the
aggregate
of
uncorrected
and
undetected
misstatements exceeds materiality for the
financial statements as a whole.
The
determination
of
performance
materiality reflects our assessment of the
risk of undetected errors existing, the
nature of the systems and controls and the
42
level of misstatements arising in previous
audits. The determination of performance
materiality reflects our assessment of the
risk of undetected errors existing, the
nature of the systems and controls and the
level of misstatements arising in previous
audits.
De
Minimis
reporting
threshold
$11,800 (2023:
$10,000)
5% of Overall
Materiality
We agreed to report any corrected or
uncorrected adjustments exceeding this
threshold to the Audit Committee as well
as differences below that in our view
warranted
reporting
on
qualitative
grounds.
Overview of the scope of the Group and Parent Company audits
Our assessment of audit risk, evaluation of materiality and our determination of
performance materiality sets our audit scope for each company within the Group. Taken
together, this enables us to form an opinion on the consolidated financial statements. This
assessment takes into account the size, risk profile, organisation / distribution and
effectiveness of group-wide controls, changes in the business environment and other
factors such as recent internal audit results when assessing the level of work to be
performed at each component.
In assessing the risk of material misstatement to the consolidated financial statements,
and to ensure we had adequate quantitative and qualitative coverage of significant
accounts in the consolidated financial statements we identified all 3 components, two in
the UK and one in the USA, as representing the principal business units within the Group.
Full scope audits - Full scope audits of the complete financial information for each of the
3 components (Tekcapital plc, Tekcapital Europe Limited and Tekcapital LLC) were
undertaken. The procedures cover 100% of the group’s revenue, loss before tax and total
assets.
The control environment
We evaluated the design and implementation of those internal controls of the Group,
including the Parent Company, which are relevant to our audit, such as those relating to
the financial reporting cycle.
Reporting on other information
The other information comprises the information included in the annual report other than
the financial statements and our auditor’s report thereon. The directors are responsible
for the other information contained within the annual report. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information,
we are required to report that fact.
43
We have nothing to report in this regard.
Strategic report and directors report
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the strategic report and the directors’ report for the financial
year for which the financial statements are prepared is consistent with the financial
statements; and
•
the strategic report and the directors’ report have been prepared in accordance with
applicable legal requirements.
In the light of the knowledge and understanding of the Group and the Parent Company
and their environment obtained in the course of the audit, we have not identified material
misstatements in the strategic report or the directors’ report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the
Companies Act 2006 requires us to report to you if, in our opinion:
•
adequate accounting records have not been kept by the parent company, or returns
adequate for our audit have not been received by branches not visited by us; or
•
the parent company financial statements are not in agreement with the accounting
records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
•
the part of the directors’ remuneration report to be audited is not in agreement with
the accounting records and returns; or
•
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are
responsible for the preparation of the financial statements and for being satisfied that they
give a true and fair view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the
Group’s and the Parent Company’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or Parent Company or
to cease operations, or have no realistic alternative but to do so.
Auditor responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue
an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK)
will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or
in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements.
44
A further description of our responsibilities for the financial statements is located on the
FRC’s website at: www.frc.org.uk/auditorsresponsibilities . This description forms part of
our auditor’s report.
Extent to which the audit was considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations.
We design procedures in line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud.
These audit procedures were designed to provide reasonable assurance that the financial
statements were free from fraud or error. The risk of not detecting a material misstatement
due to fraud is higher than the risk of not detecting one resulting from error and detecting
irregularities that result from fraud is inherently more difficult than detecting those that
result from error, as fraud may involve collusion, deliberate concealment, forgery or
intentional misrepresentations. Also, the further removed non-compliance with laws and
regulations is from events and transactions reflected in the financial statements, the less
likely we would become aware of it.
Identifying and assessing potential risks arising from irregularities, including fraud
The extent of the procedures undertaken to identify and assess the risks of material
misstatement in respect of irregularities, including fraud, included the following:
• We considered the nature of the industry and sector the control environment,
business performance including remuneration policies and the Group’s, including
the Parent Company’s, own risk assessment that irregularities might occur as a
result of fraud or error. From our sector experience and through discussion with the
directors, we obtained an understanding of the legal and regulatory frameworks
applicable to the Group focusing on laws and regulations that could reasonably be
expected to have a direct material effect on the financial statements, such as
provisions of the Companies Act 2006, AIM listing rules and tax legislation.
• We enquired of the directors and management concerning the Group’s and the
Parent Company’s policies and procedures relating to:
-
identifying, evaluating and complying with the laws and regulations and
whether they were aware of any instances of non-compliance;
-
detecting and responding to the risks of fraud and whether they had any
knowledge of actual or suspected fraud; and
-
the internal controls established to mitigate risks related to fraud or non-
compliance with laws and regulations.
We assessed the susceptibility of the financial statements to material misstatement,
including how fraud might occur by evaluating management’s incentives and opportunities
for manipulation of the financial statements. This included utilising the spectrum of inherent
risk and an evaluation of the risk of management override of controls. We determined that
the principal risks related to management bias in accounting estimates, particularly in
determining the valuation of investments in unquoted companies, or posting inappropriate
journal entries to increase revenue or reduce costs.
Audit response to risks identified
In respect of the above procedures:
45
• we corroborated the results of our enquiries through our review of the minutes of
the Group’s and the Parent Company’s board and audit committee meetings;
• audit procedures performed by the engagement team in connection with the risks
identified included:
-
reviewing financial statement disclosures and testing to supporting
documentation to assess compliance with applicable laws and regulations
expected to have a direct impact on the financial statements.
-
testing journal entries, including those processed late for financial
statements preparation, those posted by infrequent or unexpected users,
those posted to unusual account combinations;
-
evaluating the business rationale of significant transactions outside the
normal course of business, and reviewing accounting estimates for bias;
-
enquiry of management around actual and potential litigation and claims.
-
challenging the assumptions and judgements made by management in its
significant accounting estimates, in particular those relating to the valuation
of investments in unquoted companies as reported in the key audit matter
section of our report; and
-
obtaining confirmations from third parties to confirm existence of balances.
• the Senior Statutory Auditor considered the experience and expertise of the
engagement team to ensure that the team had the appropriate competence and
capabilities; and
• we communicated relevant laws and regulations and potential fraud risks to all
engagement team members, including experts, and remained alert to any
indications of fraud or non-compliance with laws and regulations throughout the
audit.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken
so that we might state to the Parent Company’s members those matters we are required
to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the
Parent Company and the Parent Company’s members as a body, for our audit work, for
this report, or for the opinions we have formed.
Andrew Gandell FCA (Senior Statutory Auditor)
for and on behalf of MHA, Statutory Auditor
London, United Kingdom
22 May 2025
MHA is the trading name of MHA Audit Services LLP, a limited liability partnership in
England and Wales (registered number OC455542)
46
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME FOR THE YEAR
ENDED 31 DECEMBER 2024
Year ended
Year ended
Group
Note
31 December
31 December
2024
2023
US $
US $
Portfolio return and revenue
Changes in fair value on financial assets at fair
value though profit or loss
12
20,016,771
(14,229,009)
Revenue from services
6
425,986
735,265
Interest from financial assets at fair value through
profit or loss
6
743,205
455,096
Other income
6.1
-
20,384
21,185,962 (13,018,264)
Administrative expenses and other expenses
Cost of sales
7
(147,203) (314,083)
Operating expenses
7
(1,879,773)
(2,353,704)
Operating profit/(loss) before tax
19,158,986
(15,686,051)
Income tax expense
9
(2,961) (2,266)
Profit/(loss) after tax for the year
19,156,025 (15,688,317)
Other comprehensive income*
Translation of foreign operations
(589,195)
900,722
Total other comprehensive loss
(589,195)
900,722
Total comprehensive income/(loss) for the year
18,566,830
(14,787,595)
Earnings per share
Basic earnings per share
10
0.10
(0.09)
Diluted earnings per share
10
0.10
(0.09)
* 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 51 to 82 are an integral part of these consolidated financial
statements.
47
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION AT 31 DECEMBER 2024
As at 31
December
As at 31
December
Group
Note
2024
2023
US$
US$
Assets
Non-current assets
Intangible assets
13
-
218,158
Financial assets at fair value through profit and loss
12
69,201,744
46,653,995
Property, plant and equipment
14
7,152
14,271
69,208,896
46,886,424
Current assets
Trade and other receivables
15
644,365
1,114,753
Cash and cash equivalents
16
786,290
620,248
1,430,655
1,735,001
Total assets
70,639,551
48,621,425
Current liabilities
Trade and other payables
19
548,725
517,154
Deferred revenue
20
22,844
217,391
571,569
734,545
Total liabilities
571,569
734,545
Net assets
70,067,982
47,886,880
Equity attributable to owners of the Parent
Ordinary shares
18
1,142,071
973,329
Share premium
32,297,956
28,937,011
Retained earnings
36,314,227
17,073,617
Translation reserve
385,897
975,092
Other reserve
(72,169)
(72,169)
Total equity
70,067,982
47,886,880
The notes on pages 51 to 82 are an integral part of these financial statements.
The financial statements on pages 46 to 82 were approved and authorised for issue by
the Board of Directors on 22 May 2025 and were signed on its behalf.
Louis Castro
Director
Tekcapital PLC
registered number
08873361
Dr Clifford M Gross
Chairman and CEO
48
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR YEAR
ENDED 31 DECEMBER 2024
Attributable to equity holders of the parent company
Ordinary
Share
Translation
Other
Retained
Total
Group
Note
Shares
Premium
Reserve
Reserve
Earnings
Equity
US $
US $
US $
US $
US $
US $
At 31 December 2022
839,723
24,240,930
74,370 (72,169)
32,682,276
57,765,130
Loss for the period
-
-
-
-
(15,688,317) (15,688,317)
Other comprehensive loss
-
-
900,722
-
900,722
Total comprehensive loss for the year
- 900,722
-
(15,688,317)
(14,787,595)
Transactions with owners, recorded
directly in equity
Share issue
18
133,606
5,045,893
-
-
-
5,179,499
Cost of share issue
-
(349,812)
-
-
-
(349,812)
Share issue in share option exercise
18
- - -
-
-
-
Share based payments
24
-
-
-
- 79,658
79,658
Total transactions with owners
133,606
4,696,081
-
-
79,658
4,909,345
At 31 December 2023
973,329
28,937,011
975,092
(72,169)
17,073,617
47,886,880
Profit for the year
19,156,025
19,156,025
Other comprehensive loss
(589,195)
(589,195)
Total comprehensive profit for the year
-
-
(589,195)
-
19,156,025
18,566,830
Transactions with owners, recorded
directly in equity
-
Share issue
18
168,742
3,626,796
-
-
-
3,795,538
Cost of share issue
-
(265,851)
-
-
- (265,851)
Share issue in share option exercise
18
-
-
-
-
-
-
Share based payments
24
-
-
-
-
84,585
84,585
Total transactions with owners
168,742
3,360,945
-
-
84,585
3,614,272
At 31 December 2024
1,142,071 32,297,956 385,897
(72,169)
36,314,227 70,067,982
49
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 51 to 82 are an integral part of these financial statements.
50
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
Note
Year ended 31
December 2024
Year ended 31
December 2023
US $
US $
Cash flows from operating activities
Income/(Loss) after income tax
19,156,025
(15,688,317)
Adjustments for
- Depreciation
7,120
2,523
- Amortisation
34,911
83,786
- Share based payment expense
84,585
79,658
- Management services income
(326,144)
(455,777)
- Interest from financial assets at FVTP&L
(743,205)
(455,096)
- Unrealised (gains)/losses on foreign
exchange
(8,473)
620,843
- Fair value (gain)/losses on financial
assets at FVTP&L
(20,016,772)
14,229,009
Movement in working capital:
- Movement in trade and other receivables
470,388
(26,710)
- Deferred revenue movement
(194,548)
44,781
- Movement in trade and other payables
31,568
301,156
Net cash outflows from operating
activities
(1,504,545)
(1,264,144)
Cash flows from investing activities
Additions to financial assets at fair value
through profit and loss
12
(3,200,305)
(3,999,072)
Proceeds from disposals of financial assets
at fair value through profit and loss
12
1,381,440
478,008
Purchases of intangibles
13
-
(59,004)
Purchases of property, plant and equipment
14
-
(6,825)
Net cash outflows investing activities
(1,818,865)
(3,586,893)
Cash flows from financing activities
Proceeds from issuance of ordinary shares
18
3,795,538
5,179,498
Costs of raising finance
18
(265,851)
(349,812)
Net cash inflows from financing
activities
3,529,687
4,829,686
Net (decrease)/increase in cash and
cash equivalents
206,277
271,543
Cash and cash equivalents at beginning of year
16
620,248
628,640
Exchange gains/(losses) on cash and cash equivalents
(40,235)
12,961
Cash and cash equivalents at end of
period/year
16
786,290
620,248
51
NOTES TO THE FINANCIAL STATEMENTS
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 36 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.
The material 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. The amounts presented in the consolidated
financial statements are comparable to consolidated financial statements for the year
ended 31 December 2023.
Amounts presented in this report are rounded to nearest US$1.
2. MATERIAL ACCOUNTING POLICIES
2.1 STATEMENT OF COMPLIANCE
The consolidated financial statements of Tekcapital have been prepared in accordance
with the UK-adopted International Financial Reporting Standard ("UK adopted IFRS")
and those parts of the Companies Act 2006 that are relevant to companies which report
in accordance with UK adopted IFRS. 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 accordance with UK-adopted International
Financial Reporting Standards 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 their day to day working capital requirements through
service offerings, monetisation of quoted equity stakes and monies raised through issues
of equity. As disclosed in note 26, the Group announced a placing to raise £500,000 in
February 2025. This has resulted in an increase in the Group’s cash balance since the
year end.
52
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 forecasts and
projections included assumptions and estimation uncertainties related to Group’s service
revenues, cost of goods sold and operating expenses, as determined by impact to the
cash runway of the Group and the Company. Most material significant assumptions
include Company’s payroll, which is limited to a handful of employees, and Company’s
investing cash flows related to its portfolio companies. The Group has no third party debt
facilities.
The Directors have prepared detailed cash flow projections for the period to 31 May 2026
(“going concern assessment period”). The cash flow projections have been subjected to
sensitivity analysis which demonstrate 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
Standards and Interpretations not yet effective
The Group has applied the following standards and amendments for the first time for its
annual reporting period commencing 1 January 2024:
• IFRS 17 Insurance Contracts;
• Definition of Accounting Estimates – amendments to IAS 8;
• International Tax Reform – Pillar Tow Model Rules – amendments to IAS 12;
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction –
amendments to IAS 12; and
• Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice
Statement 2.
The amendments listed above did not have any impact on the amounts recognised in
prior periods and are not expected to significantly affect the current or future periods.
There are a number of standards, amendments to standards, and interpretations which
have been issued that are effective in future accounting periods that the Group has
decided not to adopt early as they will not have a significant impact on the presentation of
the Group financial statements.
2.2 CONSOLIDATION
The consolidated financial statements comprise the financial statements of Tekcapital PLC
and all subsidiaries controlled by it, except for indirect subsidiaries. These indirect
53
subsidiaries are classified as equity investments based on their purpose, as those
subsidiaries represent investment assets for the Group.
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 recognized 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 2024:
• 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
54
• Measures and evaluate 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 assets 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.
55
The intangible asset has a finite life of 10 years over which amortisation is charged on a
straight line basis.
On June 4, 2024, Tekcapital LLC entered into an agreement with its newly formed
subsidiary, GenIP Ltd, to sell Invention Evaluator at the Net Book Value of the intangible
asset at the transaction date. As such, disposal of gross cost of US$397,773 and
accumulated amortization of US$318,879 was recorded.
(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 thesoftware product is 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 straightline 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.
On June 4, 2024, Tekcapital LLC entered into an agreement with its newly formed
subsidiary, GenIP Ltd, to sell Vortechs at the Net Book Value of the intangible asset at
the transaction date. As such, disposal of gross cost of US$500,000 and accumulated
amortization of US$395,646 was recorded.
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
56
circumstances indicate that the carrying amount may not be recoverable. An impairment
loss is recognized 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 purposes 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 AND MEASUREMENT
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 Group also has receivables carried at amortised 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 amortised cost, the Group does not hold any long-
term financial liabilities.
2.8.2 DERECOGNITION
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.
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
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.
57
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 the non-payment of the trade receivables is assessed, including forward-
looking information on customers standing and macroeconomic information including
sector specific circumstances 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 includes cash in
hand, deposits held at call with banks and other financial institutions, and other short term
highly liquid investments with maturities of three months or less from inception. These
amounts are subject to insignificant risk of changes in value and are held to meet short-
term cash needs.
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
58
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);
•
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 on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the consolidated financial statements.
59
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 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 provided following lines of services during the period:
Through 4 June 2024 (date of the asset sale agreement with GenIP Ltd):
•
Invention Evaluator services: provision of reports assessing 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.
60
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. The
timing of satisfaction of the performance obligation (hiring of a candidate)
corresponds to timing of payment that’s due upon a candidate time of hire.
Through 31 December 2024:
•
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 obligation is met as defined in the
management service contract. Directors considering transaction price to be clearly
determined by amounts specified in the management service agreements.
Directors considered uncertainty of cash flows from sales to be limited, considering
payments are made by companies with 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.
2.17 OTHER INCOME
The Group recognises research and development (R&D) relief under other income.
2.18 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/investment 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 Directors determine the default as lack
of payment after more than 180 days and or counter party’s bankruptcy filings. The
Group’s maximum exposure to credit risk for the components of financial position at 31
December 2024 and 31 December 2023 is the carrying amount of its current trade and
other receivables as illustrated in Note 15.
61
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. Post period end, the Group announced placing to raise GBP 500,000
in February 2025. At the reporting date the Group held bank balances of approximately
US$400,000. All amounts shown in the consolidated statement of financial position under
current assets and current liabilities mature for payment within one year, with Trade and
Other Receivables exceeding Trade and Other Payables by US$ 95,642. Additionally, the
Group’s investment portfolio includes significant amount of liquid investments available as
an alternative funding strategy.
(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 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. The Group only has exposure to movements of the US dollar
62
against UK Sterling. As at 31 December 2024, the Group’s UK Sterling net exposure
relating to cash, receivables and payables denominated in UK Sterling totals $528,063. A
10% strengthening or weakening of the US dollar against the UK Sterling would have result
in the increase/decrease of Group’s net profit by US$2,082,517.
(g) Interest rate risk management
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’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 monetise 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 by definition, 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.
63
Key
estimate/
judgment area
Key assumption
Potential
impact
within
the next
financial
year
Potential
impact
in the
longer
term
Note
reference
for
sensitivity
analysis
Valuation
of
unquoted equity
investments
In applying valuation techniques
to determine the fair value of
unquoted equity investments the
Group makes estimates and
assumptions regarding the future
potential of the investments. The
policy of the Group is to value
new portfolio companies at cost
of the acquired IP or equity plus
associated expenses to facilitate
the acquisition. Existing portfolio
companies are valued using
either a market transaction such
as third-party funding or, in the
absence of a recent market
transaction,
by
alternative
methods and where appropriate
by an external, qualified valuation
expert.
The fair value of Guident Limited
reflects input in the form of value
of Guident Ltd’s shares in its US
subsidiary (Guident Corp) as
determined by recent market
transactions of these shares.
Yes
Yes
Note 12
Valuation
of
unquoted
equity
investments
This input was corroborated by
Guident’s enterprise valuation by
estimating the net present value
of future cashflows associated
with
its
business.
Key
assumptions used in estimating
future cash flows are projected
profits including remote monitor
sales and a discount factor
applied for the net present value
of future cashflows from the
platform.
Yes
Yes
Note 12
64
Valuation
of
convertible
loan
notes
In applying valuation techniques
to determine the fair value of
convertible loan notes the Group
and Company make estimates
and assumptions regarding the
future
potential
of
the
investments, including discount
factor applied for the net present
value of future cashflows from the
loan.
Yes
Yes
Note 12
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. Following the sale of Vortechs
and Invention Evaluator assets in 2024, the Group expects this segment to include
primarily management services provided to its portfolio companies only.
• 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.
Year ended 31 December 2024
Professional
Licensing and
TOTAL
Consolidated income statement
Services
Investment
US $
US $
US $
Revenue from Services
425,986
-
425,986
Changes in fair value on financial assets at fair
value though profit or loss
-
20,016,771
20,016,771
Cost of Sales
(147,203)
-
(147,203)
Interest Income
-
743,205
743,205
Administrative Expenses
(446,854)
(1,390,889)
(1,837,743)
Depreciation and Amortization
(10,508)
(31,522)
(42,030)
Group operating (loss)/income
(178,579)
19,337,565
19,158,986
(Loss)/income on ordinary activities before
income tax
(178,579)
19,337,565
19,158,986
(Loss)/income tax expense
(740)
(2,221)
(2,961)
(Loss)/income after tax
(179,319)
19,335,345
19,156,025
Professional
Licensing and
TOTAL
65
Period ended 31 December 2023
Consolidated income statement
Services
Investment
US $
US $
US $
Revenue from Services
735,265
-
735,265
Changes in fair value on financial assets at fair
value though profit or loss
-
(14,229,009)
(14,229,009)
Cost of Sales
(314,083)
-
(314,083)
Interest Income
-
455,096
455,096
Administrative Expenses
(592,315)
(1,675,081)
(2,267,396)
Depreciation and Amortization
(21,577)
(64,732)
(86,309)
Other Income
20,384
-
20,384
Group operating loss
(172,326)
(15,513,726)
(15,686,051)
Loss on ordinary activities before income tax
(172,326)
(15,513,726)
(15,686,051)
Income tax expense
(566)
(1,700)
(2,266)
Loss after tax
(172,890)
(15,515,426)
(15,688,317)
Segment assets and liabilities
2024
Professional
Licensing and
TOTAL
Consolidated statement of
Services
Investment
financial position
US $
US $
US $
Assets
1,437,807
69,201,744
70,639,551
Liabilities
(571,568)
-
(571,568)
Net Assets
866,239
69,201,744
70,067,983
2023
Professional
Licensing and
TOTAL
Consolidated statement of
Services
Investment
financial position
US $
US $
US $
Assets
1,967,430
46,653,995
48,621,425
Liabilities
(734,545)
-
(734,545)
Net Assets
1,232,885
46,653,995
47,886,880
Year ended 31
December 2024
Year ended 31
December 2023
US $
US $
United Kingdom
Changes in fair value on financial assets at fair value
though profit or loss
20,759,977
(13,753,529)
Revenue from Services
326,143
455,777
United States
Revenue from Services
99,842
279,488
Portfolio return and revenue
21,185,962
(13,018,264)
2024
2023
US $
US $
United Kingdom
Assets
69,201,744
46,653,995
Liabilities
(125,213) (145,236)
United States
Assets
1,437,807
1,967,430
Liabilities
(446,355)
(589,309)
Total Net Assets
70,067,983
47,886,880
6. REVENUE FROM SERVICES
66
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 Group’s
Unrealised profit on the revaluation of investments.
Group
Transferred
at a point in
time
Transferred
over time
Total
2024
Transferred
at a point in
time
Transferred
over time
Total
2023
US $
US $
Major service lines:
- Sales of Invention
Evaluator reports
(59,509)
-
(59,509)
(178,488)
-
178,488
- Tech transfer recruitment
services
(40,333)
-
(40,333)
(101,000)
-
101,000
- Management services
-
(326,144)
(326,144)
-
(455,777)
(455,777)
Total Revenue from
Services
(99,842)
(326,144)
(425,986)
(279,488)
(455,777)
(735,265)
All of the Group’s major service lines are sold directly to consumers and not through
intermediaries. All revenue recognised in the reporting period represent performance
obligations satisified in the current period. For services transferred over time, 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. Payment is typically due on a Net 30 days basis.
6.1 OTHER INCOME
Total 2024
Total 2023
US $
US $
Other
-
2,781
Dividends earned
-
17,603
-
20,384
7. OPERATING EXPENSES AND COST OF GOODS SOLD
Group
2024
2023
US $
US $
Cost of goods related to services
147,203
314,083
Depreciation of property plant and
equipment
7,120
2,523
Research and development expenses
-
155,094
Amortisation of intangible assets
34,911
83,786
Marketing and PR
47,157
96,575
IT & Software
82,817
26,925
Audit and accounting
157,765
182,145
Share based payments
84,584
79,658
Nominated Advisor and other exchange
listing expenses
126,376
139,261
Director emoluments
691,993
409,681
Employee salaries
717,807
405,898
Other administration expenses
257,893
233,477
Foreign exchange movements
(328,651)
538,682
Total expenses
2,026,975
2,667,788
67
7.2 AUDITOR REMUNERATION
Group
2024
2023
US $
US $
Fees payable to the group's auditor and its associates for the
audit of the Group and Company financial statements
124,022
107,335
Audit of company's subsidiaries
32,306
37,316
156,328
144,651
8. EMPLOYEES
8.1 DIRECTOR’S EMOLUMENTS
Group
2024
2023
US $
US $
Directors emoluments
661,013* 386,677*
Directors portion of Share Based
Payments
1,400 1,362
Total
662,413 388,039
*excludes Directors NI of US$30,980 (2023:US$23,004).
The highest paid Director received a salary of US$261,976 (2023: $254,096) and benefits
of US$24,475 (2023: US$27,846). The highest paid Director received a bonus of US$
264,727 (2023: US$ Nil). The highest paid Director did not exercise any share options.
The share-based payments associated with the highest paid Director amounted to
US$1,400 (2023: US$1,362). The highest paid Director also received 100,000 shares in
GenIP Ltd following incorporation of the entity in 2024.
Key management personnel (including Directors and Group Chief Financial Officer)
received salary of US$736,538 (2023: US$509,681), excluding Employers National
Insurance, Benefits in Kind and Share Base Compensation disclosed in Directors
Remuneration Report. Please also refer to Director’s Report. No Directors exercised their
share options during the year. No post-employment benefits or other long-term benefits
are applicable for Directors.
8.2 EMPLOYEE BENEFIT EXPENSES
Group
2024
2023
US $
US $
Wages and salaries
656,149
405,898
Directors’ remuneration
661,013
386,677
Social security costs
92,638 62,338
Share options granted to directors and employees
84,584 79,658
1,494,384
934,571
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.
68
Group
2024
2023
Number of employees
Average number of people (including executive
directors) employed
Operations
4
4
Management
2
2
Total average headcount
6 6
9. INCOME TAX EXPENSE
Group
2024
2023
US $
US $
Current tax
Current tax on profits for the year
2,961
2,265
Total current tax
2,961
2,265
Income tax expense
2,961
2,265
Group
2024
2023
US $
US $
Profit before tax
19,158,986 (15,686,051)
Tax calculated at domestic tax rates applicable to
profits
4,789,746
(2,980,350)
Tax effects of:
- Expenses not deductible for tax purposes
28,596
19,604
- Income not taxable
(5,004,193)
2,703,512
- Capital allowances in excess of depreciation
10,508
16,413
- Unrelieved tax losses and other deductions
178,304
243,087
Total income tax expense
2,961
2,266
The weighted average applicable tax rate was 25% (2024: 19%).
Unused tax losses of $2,301,814 (FY23: US $2,132,376) of which a deferred tax asset of
US$0 (FY23: US $0) has not been recognised due to 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. As such, the higher 25% rate was applied to the Group.
10. EARNINGS PER SHARE (EPS)
Basic earnings per share is calculated by dividing the earnings attributable to ordinary
shareholders by the weighted average number of Ordinary Shares outstanding during the
period. The Group has only issued ordinary shares in issue, as such no profit reconciliation
was disclosed.
2024
2023
69
US $
US $
Earnings attributable to equity holders of the Group
(US$)
19,156,025
(15,688,317)
Weighted average number of ordinary shares in issue:
Basic
196,539,893
172,214,589
Effect of employee share options
100,000 4,466,666
Diluted
196,639,893 176,681,255
Basic earnings per share
0.10
(0.09)
Diluted earnings per share
0.10
(0.09)
Diluted earnings per share is calculated by dividing the earnings attributable to ordinary
shareholders by the sum of weighted average number of (1) Ordinary Shares outstanding
during the period and (2) any dilutive potential Ordinary Shares outstanding at 31
December 2024.
Diluted EPS includes impact of vested Employees Share Option Awards whose strike price
was below Tekcapital’s share price as quoted on the AIM market, which would have
dilutive impact of 100,000 shares.
The Group completed placements of total of 33,331,709 new ordinary shares during the
financial year.
11. INVESTMENTS OF THE GROUP
Entity name
Country of
incorporation
Proportion
of ordinary
shares
directly and
indirectly
held
Nature of business
Capital and
reserves as at 31
Dec 2024
Net
Profit/(Los
s) for year
ended 31
Dec 2024
The following are under ownership of Tekcapital Europe Limited
US$
US$
Lucyd Limited
England and
Wales
100%
Provider of high-tech
eyewear
(1,801,339)
(906,192)
Innovative Eyewear Inc1
United States
of America
40%
Provider of high-tech
eyewear
9,095,141
(7,766,515)
MicroSalt plc
England and
Wales
87%
Developer of low sodium
salt and snack foods
N/A*
N/A*
MicroSalt Inc2*
United States
of America
92%
Developer of low sodium
salt and snack foods
N/A*
N/A*
Guident Limited
England and
Wales
100%
Developer of
autonomous vehicle
software safety solutions
17,387,274
-
Guident CORP3*
United States
of America
90%
Developer of
autonomous vehicle
software safety solutions
N/A*
N/A*
Smart Food Tek Limited
England and
Wales
100%
Developer for baked
food coating to reduce
fat
(116,114)
-
Belluscura plc
England and
Wales
5%
Portable oxygen
concentrator producer
N/A*
N/A*
(1) owned by Lucyd Limited
(2) owned by MicroSalt Limited
(3) owned by Guident Limited
*not available as of date of this report
70
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. Tekcapital plc
owns 100% of both entities.
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, MicroSalt plc and Guident Limited, as well as has provided working capital
assistance to MicroSalt 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 (2024:US $61,454,673, 2023:US $41,125,568) and convertible loan notes
(2024:US$7,747,071, 2023:US $5,528,427) totalling US $69,201,744 (2023:US
$46,653,995).
12.1 EQUITY INVESTMENTS
The Group’s investments in portfolio companies in the years ended 31 December 2024
and 31 December 2023 are listed below. The principal place of business for portfolio
companies listed below is the UK and in the U.S.
Group
Proportion of
ordinary
shares as at
31 Dec 2024
1 Jan 2024
Additions
Disposal
Foreign
Exchange
movement
Fair Value
change
31 Dec
2024
US $
US $
US $
US $
US $
US $
Guident
Limited
100%
18,083,264
-
-
-
-
18,083,264
Lucyd Limited
100%
2,189,794
(892,519)
1,297,275
MicroSalt plc
69%
16,671,147
1,397,557
(306,412) 19,165,798
36,928,090
Belluscura Plc
5%
4,142,941
(1,047,122)
(42,968)
(2,082,489)
970,362
Smart Food
Tek Limited
100%
38,422
-
-
-
-
38,422
GEN IP plc
63%
-
319,133
-
(7,855)
3,825,982
4,137,260
Total
Balance
41,125,568
1,716,690 (1,047,122)
(357,235)
20,016,772
61,454,673
Other adjustments relate primarily to foreign exchange movements on translation of
investments into the Group’s presentational currency.
71
Group
Proportion
of ordinary
shares as
at 31 Dec
2023
1 Jan
2023
Additions
Disposal
Foreign
Exchange
movement
Fair
Value
change
31 Dec
2023
US $
US $
US $
US $
US $
US $
Guident
Limited
100.00%
18,083,264
-
-
-
-
18,083,264
Lucyd Limited
100.00%
8,175,403
-
-
-
(5,985,609)
2,189,794
MicroSalt
Limited
97.15%
16,508,694
500,000
-
882,546
(1,220,093)
16,671,147
Belluscura Plc
12.31%
12,072,826
-
(272,514)
(634,065)
(7,023,307)
4,142,940
Smart Food
Tek Limited
100.00%
38,422
-
-
-
-
38,422
Total
Balance
54,878,609
500,000
(272,514)
248,481 (14,229,009)
41,125,568
The valuation techniques used fall under, Level 1 – Observable inputs that reflect quoted
prices (unadjusted) for identical assets or liabilities in active markets, Level 2 - inputs other
than quoted prices included in Level 1 that are observable for the asset or liability either
directly or indirectly, and Level 3- Other techniques as defined by IFRS 13. These
techniques were deemed to be the best evidence of fair values considering the early stage
of portfolio companies.
Microsalt plc and GenIP plc both commenced trading on the AIM market of the London
Stock Exchange during the year ended 31 December 2024. Due to the Group being a
majority shareholder for both companies as of 31 December 2024, the control premium of
15% was applied respectively and the Group’s investment in both companies was
classified under Level 3, unchanged from 31 December 2024 classification. Fair value
measurement hierarchy for financial assets as at 31 December 2024 with comparative
amounts as of 31 December 2023:
Total
Level 1
Level 2
Level 3
31 December
2024
US$
US$
US$
US$
Belluscura Plc
970,362
970,362
-
-
Lucyd Limited
1,297,275
-
1,297,275
-
Guident Limited
18,083,264
-
-
18,083,264
Microsalt plc
36,928,090
-
-
36,928,090
Smart Food Tek
Limited
38,422
-
-
38,422
GEN IP plc
4,137,260
4,137,260
Total Balance
61,454,673
970,362 1,297,275
59,187,036
31 December
2023
Total
Level 1
Level 2
Level 3
US$
US$
US$
US$
Belluscura Plc
4,142,940
4,142,940
-
-
Lucyd Limited
2,189,794
-
2,189,794
-
Guident Limited
18,083,264
-
-
18,083,264
Microsalt
Limited
16,671,147
-
-
16,671,147
Smart Food Tek
Limited
38,422
-
-
38,422
Total Balance
41,125,567
4,142,940 2,189,794
34,792,833
72
BELLUSCURA PLC (US $2.1M LOSS)
The fair value of the holding decreased by US$ 2,082,489m during the year due to market
movement in Company’s shares listed at AIM market of London Stock Exchange, and
closing price of 0.0925p as of 31 December 2024. The Company also disposed of
5,760,710 shares during the period for the total of US$ 1,047,121, and recorded a foreign
exchange adjustment of ($42,968). With 8,378,057 shares held by Tekcapital plc, a fair
value of US$970,362 was arrived at as of 31 December 2024.
LUCYD (US $0.9M LOSS)
The fair value of the holding decreased by US$ 892,519 during the year due to the
movement in the Company’s share price at NASDAQ market, and closing price of US$5
as of 31 December 2024, compared to US$8.4 as of 31 December 2023. With 259,455
shares held by the Group, a fair value of US$ 1,297,275 was arrived at as of 31 December
2024. This investment is classified as Level 2 on the basis of the fact that the direct
shareholding is in Lucyd Ltd, whose primary asset is the listed investment in Innovative
Eyewear Inc.
GUIDENT LTD (NIL GAIN / NIL LOSS)
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 2024.
Key assumptions used in management’s discounted cash flow valuation are:
- Compound annual growth rates over a 5 year forecast period of 122%
- 24% 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.
MICROSALT (US$19.2M GAIN)
The fair value of the holding increased by US$19,165,798 during the year due to:
-
movement in the Company’s share price at AIM market of London Stock Exchange,
and closing price of 76.50p as of 31 December 2024 compared to opening price of
43p.
-
Fair value of the control premium given Tekcapital’s majority shareholding of
US$4,816,707, calculated as 15% of Company’s shareholding in Microsalt.
The Company acquired 2,558,140 shares of Microsalt plc at its Initial Public Offering in
February 2024 for US$1,397,557 and recorded a foreign exchange adjustment of
($306,412). With total of 33,305,749 shares held by Tekcapital Europe Ltd, a fair value of
US$36,928,090 was arrived at as of 31 December 2024.
73
GENIP PLC
The fair value of the holding increased by US$3.8m during the year due to:
-
movement in the Company’s share price at AIM market of London Stock Exchange,
and closing price of 0.26p as of 31 December 2024.
-
Fair value of the control premium given Tekcapital’s majority shareholding of
US$539,643, calculated as 15% of Company’s shareholding in GenIP.
The Company acquired 211,764 shares of GenIP plc at its Initial Public Offering for
US$127,569.
With total of 11,050,769 shares held by Tekcapital Europe Ltd, a fair value of US$3.6m
was arrived at as of 31 December 2024. Combined with fair value of control premium of
$0.5m, total fair value of $4.1m was calculated as of 31 December 2024.
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 2024 are shown as below. No sensitivities have been disclosed on immaterial,
non-listed investments as the fair value equates to cost.
Investment
Valuation
Significant
Estimate
Sensitivity of the
input
Technique
unobservable
applied
to fair value
input
Guident
Income
Approach
Royalty Relief
Method
Discount to
Future Cash
Flows
24%
5% increase in the discount factor
would
decrease
the
Guident
valuation by US$6.8m, a 5%
decrease in the discount factor
would
increase
the
value
by
US$14.5m.
CAGR
122%
A 50% increase in the compound
annual
growth
rate
of
sales
projections would increase the
Guident valuation by US$42.3m. A
50% decrease in the compound
annual
growth
rate
of
sales
projections would decrease the
Guident valuation by US$18m.
74
Microsalt
Share price
per LSE
including
control
premium
Control
premium
15%
A 5% increase in the control
premium applied to valuation of
Microsalt plc shares held by
increase
the
Microsalt
plc
valuation by US$1.6m. A 5%
decrease in the control premium
applied to valuation of Microsalt
plc shares would decrease the
Microsalt valuation by US$1.6m
GenIP
Share price
per LSE
including
control
premium
Control
premium
15%
A 5% increase in the control
premium applied to valuation of
GENIP plc shares held by
increase
the
Microsalt
plc
valuation by US$0.2m. A 5%
decrease in the control premium
applied to valuation of GenIP plc
shares
would
decrease
the
GenIP valuation by US$0.2m.
12.2 CONVERTIBLE LOAN NOTES
During the year, the Group also held multiple convertible loans issued by its portfolio
companies, including:
•
Convertible note issued by Guident Ltd for the total of US$5,000,000, 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$3,000,000 note originated in September 2023 or can
be converted into Guident’s equity upon occurrence of certain conversion events.
No conversions occurred during the period. As of 31 December 2024,
US$5,000,000 was outstanding.
•
Convertible loan note instruments in favour of MicroSalt Inc were constituted on 21
September 2020 (2020 CLN) and 1 June 2022 (2022 CLN). The principal amounts
of convertible loan notes under the 2020 CLN and the 2022 CLN was each limited
to US$2,000,000. The convertible loan notes under the 2020 CLN and the 2022
CLN each carry interest at the rate of 10 per cent. per annum. As of 31 December
2024, US$2,000,000 was outstanding on the convertible loan notes.
•
A convertible loan note instrument in favour of Tek Europe was constituted by the
Company on 1 March 2023. The principal amount of convertible loan notes was
limited to sUS$2,000,000. The convertible loan notes carry interest at the rate of 10
per cent. per annum. A convertible loan note instrument in favour of Tek Europe,
as assignee of Tekcapital, was constituted by the Company on 7 November 2023.
The principal amount of convertible loan notes was limited to US$2,000,000. The
convertible loan notes carry interest at the rate of 10 per cent. per annum. As of 31
December 2024, US$747,072 was outstanding on the convertible loan notes.
The Group’s investments in convertible notes in the years ended 31 December 2024 and
31 December 2023, as well as their fair value hierarchy, are listed in tables below:
75
Group
31 Dec 2023
Additions
Disposal
FX reval
Fair
Value
change
31 Dec 2024
US $
US $
US $
US $
US $
US $
Innovative Eyewear, Inc
-
-
-
-
-
0
Guident Corp
3,000,000
2,000,000
-
-
-
5,000,000
Microsalt plc
2,528,427
552,964
(334,319)
-
-
2,747,072
Total Balance
5,528,427
2,552,964
(334,319)
-
-
7,747,072
Included in additions are non-cash movements, in relation to management services
income of US$326,144 and interest income of US$743,113.
Total
Level 1
Level 2
Level 3
31 December 2024
US $
US $
US $
US $
Guident Corp
5,000,000
-
-
5,000,000
Microsalt Inc
2,747.072
-
-
2,747,072
Total Balance
7,747,072
-
-
7,747,072
31 December 2023
Total
Level 1
Level 2
Level 3
US $
US $
US $
US $
Guident Corp
3,000,000
-
-
3,000,000
Microsalt Inc
2,528,427
-
-
2,528,427
Total Balance
5,528,427 -
-
5,528,427
The fair value of the convertible loans issued by Guident Corp and MicroSalt has been
calculated using a Discounted Cash Flow Analysis. The unobservable input used in the
fair value assessment is the discount rate of 10%. Increasing or decreasing the discount
rate by 2% used would not result in material changes in the fair value of the assets for
Guident and Microsalt.
12.3 INTEREST FROM FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND
LOSS
The Group earned following interest income from its portfolio companies during the period:
31/12/2024
31/12/2023
Innovative Eyewear Inc
-
12,281
Microsalt Inc
303,900
139,421
Guident Corp
439,068
303,394
Gen IP plc
237
-
Total Balance
743,205
455,096
13. INTANGIBLE ASSETS
On June 4, 2024, Tekcapital LLC entered into an agreement with its newly formed
subsidiary, GenIP Ltd, to sell Invention Evaluator and Vortechs assets at the Net Book
Value of the intangible asset at the transaction date. As such, disposal of gross cost and
accumulated amortization of both assets has been recorded by the Group.
76
Group
Vortechs
Website
Invention
Evaluator
Total
Cost
US $
US $
US $
US $
As at 31 December 2022
500,000
28,121
338,770
866,891
As at 31 December 2023
500,000
28,121
397,774
925,895
Addition
-
-
-
-
Disposal
(500,000)
-
(397,774)
(897,774)
As at 31 December 2024
-
28,121
-
28,121
Accumulated amortisation and
impairment
As at 31 December 2022
(324,813)
(28,121)
(271,016)
(623,950)
As at 31 December 2023
(374,813)
(28,121)
(304,802)
(707,736)
Amortisation
(20,833)
-
(14,077)
(34,910)
Disposal
395,646 -
318,879
714,525
As at 31 December 2024
-
(28,121)
-
(28,121)
Net Book Value
As at 31 December 2024
-
- -
-
As at 31 December 2023
125,187
-
92,972
218,159
14. PROPERTY, PLANT AND EQUIPMENT
GROUP
Leasehold
Improvements
Office
equipment
Computer
Equipment
Total
US $
US $
US $
US $
Opening cost 1 December 2023
17,541
30,980 30,530 79,051
Additions
6,087 738 6,825
Closing cost 31 December 2023
17,541
37,067 31,268 85,876
Additions
Closing cost 31 December 2024
17,541
37,066 31,268 85,876
Accumulated depreciation and impairment
Accumulated depreciation at 30 November 2022
(13,775)
(25,795)
(29,512)
(69,082)
Depreciation charge
(1,687)
(836)
(2,523)
Accumulated depreciation at 31 December 2023
(13,775)
(27,482)
(30,348)
(71,605)
Depreciation charge
(3,766)
(2,556)
(797)
(7,119)
Accumulated depreciation at 31 December 2024
(17,541)
(30,038)
(31,145)
(78,724)
Closing net book value 31 December 2024
-
7,027 124 7,151
Closing net book value 31 December 2023
3,766
9,585 920 14,271
77
15. TRADE AND OTHER RECEIVABLES
2024
2023
US $
US $
Trade receivables
-
101,608
Trade receivables – net
-
101,608
Vat recoverable
47,848
36,675
Prepayments and other debtors
25,121
25,817
Receivables from related parties
571,396
950,653
Total trade and other receivables
644,365
1,114,753
The fair value of trade and other receivables are not materially different to those disclosed
above. The credit loss allowance was assessed for the Group as at 31 December 2024
and there was no increase/decrease in the expected credit loss allowance (2023: $nil).
Group’s exposure to credit risk related to trade receivables is detailed in Note 3 to the
consolidated financial statements.
16. CASH AND CASH EQUIVALENTS
GROUP
2024
2023
US $
US $
Cash at bank and in hand
786,290
620,248
Total cash and cash equivalents
786,290
620,248
17. CATEGORIES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
GROUP
2024
2023
US $
US $
Financial assets at fair value through profit and loss
69,201,744
46,653,995
Financial assets at amortised
cost
571,396
1,052,261
Cash and equivalents at amortised cost
786,290
620,248
70,559,430
48,326,504
Financial liabilities
Trade and other payables at amortised cost
538,800
504,784
78
18. SHARE CAPITAL
Number
Ordinary
Total
Group and Company
of shares
Share US$
US $
Issued and fully paid up
As at 31 December 2022
150,692,328
839,723
839,723
Shares issued in further public offering
27,395,934 133,606 133,606
As at 31 December 2023
178,088,262 973,329 973,329
Shares issued in further public offering
33,331,709
168,742 168,742
As at 31 December 2024
211,419,971
1,142,071 1,142,071
The shares have full voting, dividend and capital distribution (including on winding up)
rights; they do not confer any rights of redemption. The following shares were issued
during the year:
•
February 2024: 20,000,000 shares were issued in the placing of new ordinary
shares at £0.10p. Total proceeds of US$2,525,696 were netted against cost of
raising finance in the amount of US$181,643
•
November 2024: 13,331,709 shares issued in the placing of new ordinary shares
at £0.075p. Total proceeds of US$1,269,842 were netted against cost of raising
finance in the amount of US$84,208.
The Company has authorised share capital of 211,419,871 with a nominal value of £0.004.
Of these shares, 211,419,871 were issued and fully paid up.
19. TRADE AND OTHER PAYABLES
The fair values of trade and other payables are not materially different to those disclosed
above.
The Group’s exposure to currency and liquidity risk related to trade and other payables is
detailed in note 3 to the accounts.
2024
2023
Group
US $
US $
Trade creditors
105,530
250,218
Amounts due to related parties
307,556
109,344
Social security and other taxes
10,423
12,371
Accruals and other creditors
125,216
145,221
548,725
517,154
20. DEFERRED REVENUE
The Group’s deferred revenue balance of US$217,391 as of 31 December 2023 was
adjusted for:
-
transfer of US$50,045 related to reports purchases that were prepaid in 2023 and
2024 but remained to be delivered as of 31 December 2024
79
-
an adjustment for US$123,297 to remove the previously included value of reports
not prepaid or delivered, arriving at total of US$43,131 as of 31 December 2024.
-
Adjustment of US$21,205 related to credits on the platform but not showing on
deferred income schedule.
21. DEFERRED INCOME TAX
Unused tax losses for which no deferred tax assets have been recognised are attributable
to the uncertainty over the recoverability of those losses through future profits and do not
expire. A tax rate of 25% has been used to calculate the potential deferred tax.
2024
2023
Deferred tax
US $
US $
Depreciation in excess of capital
allowances
(10,508)
(16,413)
Short term timing difference
Tax losses
(2,291,306)
(2,115,963)
Unprovided deferred tax asset
2,301,814
2,132,376
-
-
22. DIVIDENDS
No dividend has been recommended for the period ended 31 December 2024 (2023: Nil)
and no dividend was paid during the year (2023: Nil).
23. COMMITMENTS
Capital commitments
The Group entered into multiple convertible loan note agreements with its portfolio
companies. Please see note 15 for details regarding outstanding commitments.
Lease commitments
The Group did not have any material contracts withing the scope of IFRS 16.
Consequently, the Group did not recognise any right-of-use assets and lease liabilities
during the period.
24. SHARE BASED PAYMENTS
The Group operates an approved Enterprise management scheme and an unapproved
share option scheme.
The fair value of the equity settled options granted is expensed over the vesting period
and is arrived at using the Black-Scholes model. The assumptions inherent in the use of
this model are as follows:
80
The weighted average fair value of options outstanding was £0.06p. Volatility was
calculated using Group’s historical share price performance since 2017. The share-based
payment expense for the year was $84,585 (2023: $79,658). Details of the number of
share options and the weighted average exercise price outstanding during the year as
follows:
Av. Exercise
Options
Av. Exercise Options
price per
(Number)
price per
(Number)
Group and Company
share £
share £
As at 1 January 2024
0.2746
8,865,000
0.2746
8,865,000
Granted
0.111
2,400,000
-
-
Exercised
-
-
-
-
Forfeited/expired
0.0783
(1,480,000)
-
-
As at 31 December 2024
0.26
9,785,000 0.2746
8,865,000
Exercisable as at period end
6,696,667
5,900,000
*The weighted average exercise price for the options exercisable as at 31 December 2024
and 31 December 2023 was £0.17p and £0.11p respectively.
The weighted average remaining contractual life is 2.0 years (2023: 3.0 years). The
weighted average fair value of options granted during the year was £0.03p (2023: £0.06p).
The range of exercise prices for options outstanding at the end of the year was £0.052p -
£0.325p (2022: £0.052p - £0.325p).
25. RELATED PARTY TRANSACTIONS
Details of Directors’ remuneration and grant of options are given in the Directors’ report.
Please also refer to Note 8.1 for payments related to key management personnel.
525,000 options were held by Harrison Gross, family member of Dr. Clifford Gross (2023:
525,000), which expired in August 2024.
Please refer to tables below for detail of relationships and transactions between The Group
and its subsidiaries.
81
Convertible note receivable
2024
2023
Group
US $
US $
Guident Corp
5,000,000 3,000,000
MicroSalt Inc
2,747,072 2,528,427
7,747,072 5,528,427
Balances with related parties
2024
2023
Group
US $
US $
Guident Corp
444,651
209,184
Smart Food TEK
66,429
66,681
Lucyd Ltd
(62,127)
(74,170)
Innovative Eyewear Inc
(11,585)
6,039
MicroSalt plc
(188,862)
629,000
GenIP plc
11,887
-
Other
3,447
3,573
263,840
840,307
Management fees
2024
2023
Group
US $
US $
Guident Corp
139,842
176,301
MicroSalt Inc
- 139,788
GenIP plc
38,827 -
Innovative Eyewear Inc
147,475
139,687
326,144 455,776
Interest Income
2024
2023
Group
US $
US $
Guident Corp
439,068
303,394
MicroSalt Inc
303,900 139,421
GenIP plc
237 12,281
743,205 455,096
Asset Purchase Agreement:
On 5 September 2024, the Company entered into an Asset Purchase Agreement with
Tekcapital plc and Tekcapital LLC. In accordance with the terms of the Agreement,
effective 4 June 2024, the Company acquired certain assets and liabilities related to
Invention Evaluator and Vortechs business. The following assets and liabilities were
transferred to the Company as part of capital contribution of US$191,564 by Tekcapital
plc, for the consideration of US$1.
Related party transactions were made on terms equivalent to those that prevail in arm’s
length transactions and are made only if such terms can be substantiated.
82
26. EVENTS AFTER THE REPORTING PERIOD
Post period end, Group announced placings to raise GBP 500,000 before expenses in
February 2025 through issuance of 5,128,205 new ordinary shares in the Company.
After the balance sheet date, Tekcapital PLC concluded negotiations ongoing since 2024
with GenIP plc for reimbursement of US $100,000 of the US $119,665 IT development
costs incurred in 2024. This agreement constitutes an adjusting post balance sheet event,
as the costs were incurred before the balance sheet date and the subsequent
reimbursement clarifies the financial position. The reimbursement will be recognised as
Other Expense in the accounts.
83
COMPANY STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2024
Company
31 December 31 December
2024
2023
Note
US$
US$
Assets
Non-current assets
Investment in subsidiaries
C.4
851,665
851,665
Financial assets at fair value through profit and
loss
C.5
970,584
4,171,972
Non-current receivables
C.6
18,215,711
11,998,392
20,037,960
17,022,029
Current assets
Trade and other receivables
C.7
105,815
3,874,618
Cash and cash equivalents
C.8
656,307
255,440
762,122
4,130,058
Total assets
20,800,082
21,152,087
Current liabilities
Trade and other payables
C.11
200,858
175,966
200,858
175,966
Total liabilities
200,858
175,966
Net assets
20,599,224
20,976,121
Equity attributable to the owners of the parent
Ordinary shares
C.10
1,142,071
973,329
Share premium
32,297,956
28,937,011
Retained earnings
(11,751,916)
(8,128,037)
Translation reserve
(1,088,887)
(806,182)
Total equity
20,599,224
20,976,121
The Company’s loss after tax for the year ended 31 December 2024 was US$3,708,463
(loss after tax for the period ended 31 December 2023: US$8,573,423).
The Company has used the exemption under S408 CA 2006 not to disclose the Company
income as primary statement. The notes on pages 85 to 89 are an integral part of these
financial statements. The financial statements on pages 83 to 89 were approved and
authorised for issue by the Board of Directors on 22 May 2025 and were signed on its
behalf.
Louis Castro
Director
Tekcapital PLC
registered number
08873361
Dr Clifford M Gross
Chairman and CEO
84
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2024
Attributable to owners of the parent company
Ordinary
Share
Translation
Retained
Total
Shares
Premium
Reserve
(Deficit)/Earnings
Equity
Company
Note
US $
US $
US $
US $
US $
Balance as at 31 December 2022
839,723
24,240,930
(485,540)
365,728 24,960,841
Loss for the year
(8,573,423)
(8,573,423)
Other comprehensive loss
(320,642)
(320,642)
Total comprehensive loss for the period
-
- (320,642)
(8,573,423)
(8,894,065)
Transactions with owners, recorded
directly in equity
Share issue
18
133,606 5,045,893
5,179,499
Cost of share issue
(349,812)
(349,812)
Share issue in share option exercise
18
-
Share based payments
24
79,658 79,658
Total transactions with owners
133,606
4,696,081
-
79,658 4,909,345
Balance as at 31 December 2023
973,329
28,937,011
(806,182)
(8,128,037) 20,976,121
Loss for the year
(3,708,463)
(3,708,463)
Other comprehensive loss
(282,705)
(282,705)
Total comprehensive loss for the period
-
- (282,705) (3,708,463)
(3,991,168)
Transactions with owners, recorded
directly in equity
Share issue
18
168,742
3,626,796
3,795,538
Cost of share issue
(265,851)
(265,851)
Share issue in share option exercise
18
-
Share based payments
24
84,585 84,585
Total transactions with owners
168,472 3,360,945
-
84,585 3,614,272
Balance as at 31 December 2024
1,142,071 32,297,956
(1,088,887)
(11,751,915) 20,599,225
Share premium – amount subscribed for share capital in excess of nominal value, net of directly attributable issue costs.
Translation reserve – foreign exchange differences recognized in other comprehensive income.
Retained earnings – cumulative net gains and losses recognized in the consolidated financial statements of comprehensive
income.
The notes on pages 85 to 89 are an integral part of these financial statements.
85
NOTES TO THE COMPANY FINANCIAL STATEMENTS
C.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 36 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 Company is that of investment in portfolio companies.
The Company also acquires exclusive licences to university technologies that it believes
can positively impact people’s lives, for subsequent commercialisation.
The Company had no employees during the period.
C.2 STATEMENT OF COMPLIANCE
The financial statements of the parent company have been prepared in accordance with
United Kingdom Accounting Standards including Financial Reporting Standard 101
Reduced Disclosure Framework (‘FRS 101’). The Company will continue to prepare its
financial statements in accordance with FRS 101 on an ongoing basis until such time as it
notifies shareholders of any change to its chosen accounting framework.
The principal accounting policies applied in the preparation of these financial statements
are set out in Note 2 of the consolidated financial statements.
Exemptions
The Company financial statements have been prepared using the historical cost
convention except where other measurement basis are required to be applied and in
accordance with IFRS under FRS 101. In accordance with FRS 101, the Company has
taken advantage of the following exemptions:
•
Statement of Cash Flows
•
Financial instrument disclosures.
•
Capital management disclosures.
•
Additional comparative information.
•
A reconciliation of share options in the year
•
Related party disclosures with wholly owned subsidiaries.
Changes in accounting policy and disclosures
All changes to accounting standards are explained in note 2 to the consolidated financial
statements.
C.3 LOSS FOR THE YEAR
As permitted by section 408 of the Companies Act 2006, the Company has elected not to
present its own profit and loss account for the year. The auditor’s remuneration for audit
and other services are disclosed in note 7 to the consolidated financial statements.
86
C.4 INVESTMENT IN SUBSIDIARIES
Shares in
subsidiaries
Loans to
Subsidiaries
Total
US $
Net Book Value
As at 1 January 2024
79,426
772,239
851,665
Balance at 31 December
2024
79,426
772,239
851,665
The Net Book Value is stated at cost less any adjustment for impairment. As at 31st
December 2024 the total impairment recognised on investment in subsidiaries was
US$1,103,550 (2023: US$1,103,550).
Subsidiaries
name
(consolidated)
Proportion of
ordinary
shares
directly held
Nature of
business
Capital and
reserves as at 31
Dec 2024
Net Profit/(Loss)
for year ended 31
Dec 2024
Direct
Tekcapital
Europe Limited
England
and
Wales
100%
Provision
of
Intellectual
property
research
services
50,652,337
22,722,065
Tekcapital LLC
USA
100%
Provision
of
Intellectual
property
research
services
(6,443,796)
(1,381,262)
* As at the year end, the Company 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 on the basis that
Tekcapital plc both holds a controlling stake in the subsidiary and exerts strategic and
operational control of Tekcapital Europe Limited.
C.5 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS
The Company’s investment in Belluscura plc in the period ended 31 December 2024 and
31 December 2023 is listed below and classified as equity instruments. The principal place
of business for Belluscura plc is England and Wales.
87
Company
Proportion
of
ordinary
shares as
at 31 Dec
2024
1 Jan
2024
Additions
Disposal
Foreign
exchange
adjustments
Fair Value
change
31 Dec
2024
Belluscura
Plc
5%
4,142,940
-
(1,047,121)
(42,968)
(2,082,489)
970,362
Total
Balance
4,142,940
-
(1,047,121)
(42,968)
(2,082,489)
970,362
The valuation technique used falls under, Level 1 – Observable techniques, other than
quoted prices.
The fair value of the holding decreased by US$2,082,489 during the year due to market
movement in Company’s shares listed at AIM market of London Stock Exchange, and
closing price of 9.25p as of 31 December 2024. The Company also disposed of 5,760,710
shares during the period for the total of US$1,047,121 and recorded a foreign exchange
adjustment of US$42,968. With 8,378,057 shares held by Tekcapital plc, a fair value of
US$970,362 was arrived at as of 31 December 2024.
C.6 NON CURRENT RECEIVABLES
As at 31st December 2024, the Company was owed a total of US$24,596,176 (2023:
US$17,259,355) from its subsidiaries (Tekcapital Europe Ltd Tekcapital LLC) in the
amount of US$19,232,176, which an IFRS9 Expected Credit Loss provision totaling
US$6,381,065 (2023: US$5,265,819) has been provided for. The net receivable due from
two subsidiaries at 31st December 2024 of US$18,215,711 (2023: US$11,998,392) will be
recovered in greater than one year.
C.7 TRADE AND OTHER RECEIVABLES
2024
2023
Company
US $
US $
Receivables from Group companies
-
3,834,888
VAT
101,598
32,678
Prepayments
4,217
7,052
Total trade and other receivables
105,815
3,874,618
The credit loss allowance on Trade and Other Receivables was assessed as at 31
December 2024 and there was no increase/decrease in the expected credit loss allowance
(2023: $nil).
C.8 CASH AND CASH EQUIVALENTS
Company
2024
2023
US $
US $
Cash at bank and in hand
656,307
255,440
Total cash and cash equivalents
656,307
255,440
88
C.9 CATEGORIES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Company
2024
2023
US $
US $
Financial assets at fair value through profit
and loss
970,584
4,171,972
Financial assets at amortised
cost
18,321,526
15,873,010
Cash and equivalents at amortised cost
656,307
255,440
19,948,417
20,300,422
Financial liabilities
Trade and other payables at amortised
cost
200,868
175,966
C.10 SHARE CAPITAL
Number
Ordinary
Total
Group and Company
of shares
Share US$
US $
Issued and fully paid up
As at 31 December 2022
150,692,328
839,723
839,723
Shares issued in further public offering
27,395,934
133,606
133,606
As at 31 December 2023
178,088,262
973,329
973,329
Shares issued in further public offering
33,331,709
168,472
168,472
As at 31 December 2024
211,419,971 1,142,071
1,142,071
The shares have full voting, dividend and capital distribution (including on winding up)
rights; they do not confer any rights of redemption. The following shares were issued
during the year:
•
February 2024: 20,000,000 shares were issued in the placing of new ordinary
shares at £0.10. Total proceeds of US$2,525,696 were netted against cost of
raising finance in the amount of US$181,643
•
November 2024: 13,331,709 shares issued in the placing of new ordinary shares
at £0.075. Total proceeds of US$1,269,842 were netted against cost of raising
finance in the amount of US$84,208.
The Company has authorised share capital of 211,419,871 with a nominal value of £0.004.
Of these shares, 211,419,871 were issued and fully paid up.
89
C.11 TRADE AND OTHER PAYABLES
2024
2023
Company
US $
US $
Accruals and other creditors
125,213
145,236
Accounts payable
75,645
30,729
200,858
175,965
C.12 DEFERRED INCOME TAX
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. A tax rate
of 25% has been used to calculate the potential deferred tax.
C.13 DIVIDENDS
No dividend has been recommended for the year ended 31 December 2024 (2023: Nil)
and no dividend was paid during the year (2022: Nil).
90
RISK FACTORS AND FORWARD-LOOKING STATEMENTS
This Report is directed only at Relevant Persons and must not be acted on or relied upon
by persons who are not Relevant Persons. Any other person who receives this Report
should not rely or act upon it. By accepting this Report the recipient is deemed to represent
and warrant that: (i) they are a person who falls within the above description of persons
entitled to receive the Report; (ii) they have read, 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 Company, including the merits of investing and the
risks involved. Prospective investors should not treat the contents of this Report as advice
relating to legal, taxation or investment matters and are advised to consult their own
professional advisers concerning any acquisition of shares in the Company. Certain
information contained in this Report has been obtained from published sources prepared
by other parties. Certain other information has been extracted from unpublished sources
prepared by other parties which have been made available to the Company. The Company
has not carried out an independent investigation to verify the accuracy and completeness
of such third-party information. No responsibility is accepted by the Company or any of its
directors, officers, employees or agents for the accuracy or completeness of such
information.
All statements of opinion and/or belief contained in this Report and all views expressed
represent the directors’ own current assessment and interpretation of information available
to them as at the date of this Report. In addition, this Report contains certain “forward-
looking statements”, including but not limited to, the statements regarding the Company’s
overall objectives and strategic plans, timetables and capital expenditures. Forward-
looking statements express, as at the date of this Report, the Company ’s plans,
estimates, valuations, forecasts, projections, opinions, expectations or beliefs as to future
events, results or performance. Forward-looking statements involve a number of risks and
uncertainties, many of which are beyond the Company’s control, and there can be no
assurance that such statements will prove to be accurate. No assurance is given that such
forward-looking statements or views are correct or that the objectives of the Company will
be achieved. Further, valuations of 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 macroeconomic. Changes in net asset values can have a significant impact
on revenue and earnings of the Company and its future prospects.
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
91
Company nor any of its shareholders, directors, officers, agents, employees or advisers
take any responsibility for, or will accept any liability whether direct or indirect, express or
implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or
completeness of the information contained in this Report or for any of the opinions
contained herein, or for any errors, omissions or misstatements or for any loss, howsoever
arising, from the use of this Report. Neither the issue of this Report nor any part of its
contents is to be taken as any form of contract, commitment or recommendation on the
part of the Company or the directors of the Company. In no circumstances will the
Company be responsible for any costs, losses or expenses incurred in connection with
any appraisal, analysis or investigation of the Company. This Report should not be
considered a recommendation by the Company or any of its affiliates in relation to any
prospective acquisition or disposition of shares in the Company . No undertaking, Report,
warranty or other assurance, express or implied, is made or given by or on behalf of the
Company or any of its affiliates, any of its directors, officers or employees or any other
person as to the accuracy, completeness or fairness of the information or opinions
contained in this Report and no responsibility or liability is accepted for any such
information or opinions or for any errors or omissions.
Intellectual Property Risk Factors
Tekcapital plc’s mission is to create valuable products from university intellectual property
that can improve people’s lives. Therefore, our ability to compete in the market may be
negatively affected if our portfolio companies lose some or all of their intellectual property
rights, if patent rights that they rely on are invalidated, or if they are unable to obtain other
intellectual property rights. Our success will depend on the ability of our portfolio
companies to obtain and protect patents on their technology and products, to protect their
trade secrets, and for them to maintain their rights to licensed intellectual property or
technologies. Their patent applications or those of our licensors may not result in the issue
of patents in the United States or other countries. Their patents or those of their licensors
may not afford meaningful protection for our technology and products. Others may
challenge their patents or those of their licensors by proceedings such as interference,
oppositions and re-examinations or in litigation seeking to establish the invalidity of their
patents. In the event that one or more of their patents are challenged, a court may
invalidate the patent(s) or determine that the patent(s) is not enforceable, which could
harm their competitive position and ours. If one or more of our portfolio Company patents
are invalidated or found to be unenforceable, or if the scope of the claims in any of these
patents is limited by a court decision, our portfolio companies could lose certain market
exclusivity afforded by patents owned or in-licensed by us, and potential competitors could
more easily bring products to the market that directly compete with our own.
The uncertainties and costs surrounding the prosecution of their patent applications and
the cost of enforcement or 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 the
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
92
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 e in lawsuits being brought against our portfolio companies or their holding
Company in the future. 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 this may have a negative impact on their financial performance.
All of the risks mentioned above 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.
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STAY IN TOUCH
12 New Fetter Lane
London, EC4A 1JP
United Kingdom
Tel: +44 2087207171
E-mail: info@tekcapital.com
www.tekcapital.com