EIGHT CAPITAL PARTNERS PLC

("Eight Capital", "ECP" or "the Company")

 Annual Report and Financial Statements

For the year ended 31 December 2021

Eight Capital (AQSE: ECP), the investing company whose investment strategy focuses on technology, media, telecoms and financial services businesses, including listed investing companies, is pleased to announce its final results for the year ended 31 December 2021. The Company's audited report and accounts can be found below. A copy of the final results will shortly be available from the Company's website and will be sent to all shareholders.

A separate announcement providing details of the 2021 Annual General Meeting will be made shortly.

The Directors of the Company accept responsibility for the content of this announcement.

For further information, please visit www.eight.capital or contact:

About Eight Capital Partners:

Eight Capital Partners plc is an international financial services operating company focused on owning and operating businesses engaged in "Fintech" operations, from the digitisation of banking services, through to blockchain-backed decentralised finance companies and "crypto banks."

ECP provides equity, debt, and equity-related investment capital to companies seeking capital for growth and development, consolidation or acquisition, or pre-IPO financing. The Company seeks to generate an attractive rate of return for shareholders, predominantly through capital appreciation, by maximising the revenues, profits and value of its operating subsidiaries, and taking advantage of the increasing number of acquisition opportunities within the continuously developing global technology, media, telecoms and financial services sectors.

www.eight.capital

Eight Capital Partners operates two subsidiary businesses:

Epsion Capital:

Epsion Capital is an independent corporate advisory firm based in London with an extensive experience in UK and European capital markets. The team of senior and experienced ECM and M&A professionals is specialised across multiple markets, sectors and geographies and it prides itself on a commercial approach that allows the clients to achieve their growth ambitions. www.epsioncapital.com

Innovative Finance:

Innovative Finance is a corporate finance advisory business that develops mergers and acquisitions and financing solutions across multiple sectors, primarily in Europe, with access to international transactions. It is currently working on transactions in the USA and Europe which are linked to technological developments in the financial services industry, AI, cybersecurity, e-commerce and cannabis. www.innovfinance.com

Chairman's Statement

Dear Shareholder,

I am pleased to report on the Company's financial results for the year ended 31 December 2021 and on a number of far-reaching corporate developments that have occurred during the year, particularly during the second half and which have continued into 2022.

Change of status to an Operating Group

The most important development during the period under review, and announced in an extensive market update on 27 September 2021, was the change in status from being an investing company to becoming an operating Group. This Report, therefore, for the first time, presents Eight Capital Partners Plc's ("ECP" or "Eight Capital") financial statements under IFRS reporting standards, consolidating the results and balance sheets of its wholly owned subsidiaries, Epsion Capital Limited ("Epsion"), and Innovative Finance Srl ("InnFin"), the latter acquired in May 2021 (together "the operating subsidiaries").

ECP has therefore evolved into an international financial services operating Group, whereby Epsion and InnFin source, advise on, finance, and deliver transactions, primarily involving SME businesses within the technology, media, telecoms and financial services sectors and in which ECP itself will potentially invest.

Results

Through its two subsidiaries, the Group recorded revenues for the year under review of £772,000 with a gross margin of over 70%. This income was further supplemented by ECP itself providing management services to certain investees and thereby recovering £128,000 of overhead costs.  Interest income less expense was a net surplus of £41,000 and the net movement in fair value of both realised and unrealised gains and losses on investments at fair value (explained further below) was a gain of £314,000. Overheads were relatively high, at £1.1 million; partly a reflection of the substantial professional support for the change in status outlined in the September update, and the Group result for the year was a loss before tax of £98,000.

Subsidiary activities

Epsion, our wholly owned UK Corporate Finance subsidiary, advised on approximately seven bonds from January through to July, generating approximately £400,000 of revenue.  During the rest of 2021, Epsion concentrated on two related companies, providing advice ahead of potential standard listings.  If these companies are listed, there will be significant fee earnings derived from these clients.

Innovative Finance S.r.l our wholly owned unregulated Italian Corporate Finance subsidiary, acquired in May 2021, has concentrated in the second half of the year on providing advice to investors and companies ahead of listing on the Standard List of the LSE. Approximately €350,000 of the fees are from advising investors and the remaining €50,000 are fees for companies considering a listing.  If these companies are listed InnFin will earn significant future fees.

Eight Capital: update on prior year's investments

ECP's investment portfolio now and as at 31 December 2021 is comprised exclusively of quoted companies. The private investments included in last year's report have either been sold (FPG - see below) or integrated into the Group (Epsion and InnFin).

Finance Partners Group ("FPG"): Financial Services

This investment was disposed of during the year, originally consisting of a receivable of €2 million with an ability to convert into equity acquired for €1.9 million.  The ability to convert was exercised and the resultant holding in FPG of 28.7% was sold for €2.15 million (equivalent to £1.83 million), of which €1.57 million (£1.34 million) was paid on closing and the balance of €580,000 (£487,000) payable in 2022. The gain on disposal figure included in these accounts is £130,000

Retained investments: combined loss in value recorded in these accounts: £116,000.

Supply@ME Capital Plc ("SYME): Inventory securitisation

SYME is an inventory monetisation business based on a novel asset securitisation concept, enabled by an innovative software platform. SYME is listed on the Standard List of the London Stock Exchange. SYME's share price has not performed well and ECP's £250,000 investment, acquired at a share price of £0.11 has seen a drop to £0.0017 at the year-end, with a total fall in value of over £200,000 since purchase. The movement during the year under review, included in the income statement, is a loss of £90,000. Although the share price reduction has been a source of concern, the Board recognises that the concept and possibilities for SYME were, and still are, interesting once a critical mass of investment capital to support securitisations can be delivered by SYME's management.

Evrima Plc ("EVA"): Mining and exploration investment

Evrima was formerly Sports Capital Group ("SCG") and ECP invested in a football related project from which SCG withdrew. They reverted to their previous sector of investment: mining and associated exploration and changed their name. The Company's investment was approximately £140,000 and is currently £131,000, based on its quote on AQSE Growth Market. We will dispose of this investment in due course.

Greencare Capital Plc ("GRE"): Investment in Cannabis health products and general wellness.

The Company invested both prior to and at IPO when GRE listed on the AQSE Growth Market in December 2019. The total investment was £280,000 and the average price paid per share was 10.9p.  The shares at the year-end - and currently - were quoted at 30.5p, having fallen slightly since the end of 2020. It was recently announced that Dominic White, Chairman of ECP, has become chairman of GRE. We await positive developments.

Fair value adjustment on contingent liability

The terms of the acquisition of InnFin included an earn-out formula contingent upon the attainment of certain levels of profitability in future years, creating a contingent liability towards the vendor at the date of acquisition in May 2021. The fair-valuing of this liability at 31 December 2021 has resulted in a positive adjustment in the income statement of £300,000.

Refined Growth Strategy

As part of its transformation into an operating group, ECP has recently refined its growth strategy to focus increasingly on those businesses engaged in "Fintech" operations, including the digitisation of banking services and blockchain-backed decentralised finance and other disruptive financial services technologies, all of which seek to improve and automate the delivery and use of financial services. Your Board also considers there to be many value creation opportunities for shareholders from the further aligning and expansion of the activities of Epsion and InnFin.

By combining their advisory and transactional expertise with the strategic utilisation of ECP's growing in-house capital resources, ECP is able to provide significant support to the transactions managed by the operating subsidiaries through the provision of early-stage and growth co-investment capital to growing companies seeking finance for expansion, development, consolidation or acquisition, or as pre-IPO/RTO funding.

The competitive advantage of ECP's new operating structure is its flexibility in terms of where it invests in the "capital stack" pyramid, being equally comfortable with private or public debt and/or equity positions, convertibles and structured equity or debt facilities. Much of the financial services advisory market only delivers third party capital and advice, without direct access to supportive in-house capital, or having access to in-house capital lines with a less flexible mandate.

Corporate Transactions during the year

Eight Capital successfully completed a number of corporate transactions during the year, each one forming part of its strategic objective to grow the market capitalisation of the Company towards and beyond £50 million, and establishing a strong balance sheet base from which to significantly expand its operations and its own equity valuation.

To this end, in May 2021, the Company acquired InnFin, based in Milan, which develops mergers and acquisitions and financing solutions across multiple sectors, primarily in Europe.

In August, ECP disposed of its investment in Finance Partners Group SPA ("FPG"), an Italian-based financial services business, realising €2.15million. The profitable sale of this minority stake has provided ECP with a better strategic alignment between the Company's two remaining wholly owned subsidiaries and its other activities with a primary focus on technological developments within the financial services industry, such as fintech SME funding solutions and digitisation of banking including decentralised finance technology, to be key growth areas.

As announced on 4 August 2021 the purchaser agreed to pay ECP a total of €2.15 million for the acquisition of FPG.  The cash element of €1.57 million was paid immediately.  Discussions are ongoing relating to the final part of the settlement €0.58 million, which remains due, and against which an extra amount of Euros 10,000 has been paid to ECP plus further asset security backing provided to support the receivable, to the benefit of the Company.  The agreed latest date of payment is now 1 September 2022.

In addition to these corporate transactions, and as part of the Board's key strategic objective to build scale to the business by further strengthening the Balance Sheet, in August the Company purchased €40m 2.5% Fixed Rate Secured Bonds at Par from IWEP Limited, a company controlled by Dominic White, ECP's chairman and ECP's major shareholder, which significantly increased ECP's gross assets. Consideration for the acquisition of the Bonds was settled by a one-year vendor loan which was subsequently restructured into a €15 million 4.8% Bond described below and a €25 million interest-free vendor loan ("Vendor Loan").

In September, the Company launched a €25 million 4.8% Fixed Rate five-year Bond Programme, with an initial tranche, placed at launch and listed on The Vienna Stock Exchange. This Bond programme also provided a logical next step towards the continuing expansion of the Balance Sheet, whilst also providing better medium-term visibility for the refinancing of ECP's existing 7% listed bonds which mature in July of this year.

Corporate Transactions after the year end

On 23 May, the Company announced that it had issued a further €5 million tranche of its 7% Bond to a third party that had acquired €5 million of the Vendor Loan from IWEP. In that announcement, ECP also reinforced its commitment to a transformational strengthening of the Company's balance sheet through IWEP seeking to convert, subject to regulatory and shareholder consent, as much as possible of its debt with the Company into equity.

On 24 June, the company announced that at a Bondholder meeting held on the 23 June, an Extraordinary Resolution approved a proposal to modify the terms and conditions of the 7% Bond such that the terms align with the more recently issued €25m 4.8% Bond repayable on 3 September 2026.

These current and proposed balance sheet transactions are intended to consolidate and expand the Company's service offering as well as helping it to develop a platform from which it can develop as a multi-faceted financial services company, whilst also providing a stronger base from which it can raise third party capital.

Planned Placing and Open Offer

As announced in the Corporate Update in September 2021, it is the Company's intention to raise new equity capital via a placing once the restructuring of debt is completed. Your Board recognises that those who have already invested in the Company may wish to increase their investment and it is therefore anticipated that current shareholders will be invited to participate in the fundraise on the same terms as the debt conversions and equity placing. Further information will be given in due course.

The Company also intends to provide an opportunity for all debt investors to convert debt to equity on the same terms.

Strengthening of the Management Team

Integral to the success of the Company's transition to an operating business has been the strengthening of its senior management team, with the appointment to the Board in June 2021 of former Bank of England Chief Accountant, David Bull, who joined initially as a Non-Executive Director and then, following the Company's successful transition to operating group status, was appointed full-time Chief Executive Officer.

David has responsibility for leading the further development of ECP's financial services business, both organically and through acquisition, all within the context of fintech services. His knowledge and experience of technology and the way it relates to asset and commercial finance, international banking and the digitisation of banking services, combined with his strong risk management skills and proven business leadership qualities are already proving invaluable as we move towards more advanced technologies in the financial services sector. He will also be strengthening the operational management team with further additions in financial management and compliance, which will be at the heart of the Company's operating activities.

The Group is also delighted to have announced on 13 May 2022, the appointment of Richard Day to the Board of Epsion as its Non-Executive Chairman. Richard was co-founder of institutional stockbroker Arden Partners plc, where, from 2002 to when he left in 2015, he was head of corporate finance for much of that time, whilst playing an important role in building its sectoral and geographical presence. He currently holds chairmanships of two quoted companies: Pelatro plc, a "Big Data" analytics company on AIM and The British Honey Company plc, the premium British honey and craft spirits producer. He also chairs Eden Geothermal Limited, a private company drilling its first of two geothermal wells, adjacent to the Eden Project in Cornwall in the south-west of England. Richard's broad experience of public markets, corporate finance and corporate governance across diverse business sectors is already having a significant influence and will without doubt be a huge asset not only to Epsion, but to the Group as a whole.

Outlook

2021 was a watershed year for Eight Capital. It successfully transitioned into a financial service operating group, completing a number of complementary corporate and financial transactions, strengthening both the Company's operational capabilities and putting in place actions to radically strengthen its Balance Sheet. It has a clear strategy in place for the transformation of the business in terms of its size, market value and influence within the fintech sector of financial services and through our wholly-owned subsidiaries, Epsion and InnFin.

The Board's strategy is to grow the business both organically through the development of new financial, "fintech-led" services and by selective acquisitions to boost revenue and market presence, thereby significantly increasing shareholder returns.

The Group has made a good start to the current financial year. We are nurturing earnings potential and structuring the business and the Balance Sheet for future sustained growth, while building value for shareholders. We have a growing pipeline of opportunities that we intend to deliver through our business model and the management team in place to deliver growth over the next two years. The Board views the future with increasing confidence.  

Dominic White

Chairman