NetScientific plc

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

Interim Results for the six months ended 30 June 2023

NetScientific plc (AIM: NSCI), the deeptech and life sciences VC investment group, is pleased to announce its interim results for the six months ended 30 June 2023.

Commenting on the results Dr. Ilian Iliev, CEO of NetScientific, said:

"During the first half of 2023 we have made significant progress and achieved important milestones as we continue to successfully execute on our 'evergreen' strategy, covering core operating costs through a combination of corporate finance fees and value creation services fees via our wholly owned subsidiary, EMV Capital. We have also demonstrated our ability to generate profitable partial exits from our portfolio, even in the absence of a strong M&A or IPO market. Despite challenging capital markets, third-party syndicated investments have played a pivotal role, with EMV Capital syndicating funding of £5.6 million to support ten of our portfolio companies.

"This essential funding for our portfolio companies has helped to facilitate the execution of their growth strategies and preparations for forthcoming scale-up investment rounds as well as supporting the appreciating fair value of NetScientific's direct holdings. In such a challenging venture capital landscape, characterised by macroeconomic volatility and industry fluctuations, our in-house fundraising capacity distinguishes us from many of our peers."

Operational and Financial Highlights

·     Total Income: £1.15m, an increase of c.64% (H1 2022: £0.7m), of which the majority is from the 'core' services provided by NetScientific and EMV Capital.

·     Group losses: from operations decreased slightly to £1.6m (H1 2022: £1.7m).

o  Core Company and EMV Capital losses £0.4m (H1 2022: £0.7m).

o  Losses at both subsidiary portfolio companies, Glycotest and ProAxsis, have increased, reflecting further investments made by them in their growth strategies.

·     Fair Value and Net Assets: Portfolio valuation of £35.5m (2022: £41.8m) and net assets of £18.1m (2022: £25.2m), with the decreases mainly due to the decline of the PDS Biotechnology share price to $5.03 (at 30 June 2023) from $13.20 (at 31 December 2022). These declines were offset by a £3.1m (11%) improvement in fair value in the non-listed portfolio, including the following significant changes:

o  Vortex Biotech Holdings up from £0.7m to £2.8m (a 300% increase of £2.1m).

o  DName-iT up from £0.1m to £1m (a 900% increase of £0.9m).

o  Q-Bot up from £3.8 to £4.1m (an 8% increase of £0.3m).

·     Capital Under Advisory (CUA): Increased c.11% to £26.1m (2022: £23.5m), providing significant and growing potential future profit for the Group from future realisations through performance fee arrangements.

·     Profitable Partial Exits: A total of £117,000 profitable partial exits of the Group's position in certain portfolio holdings, with further profitable sales post-balance sheet leading to total proceeds of £895,000 in the year to date. As well as providing non-dilutive funding to the Group, this demonstrates our strategy and underpins valuations.

·     Value Creation Services: Ongoing programs to accelerate several of our portfolio companies through to value inflection points that offer strong prospects for further fair value increases in the next 12-18 months, and the potential for exits.

Summary and Outlook

Our strategic focus includes the advancement of our sustainable business model and boosting the Net Asset Value and fair value of our portfolio companies. This creates the potential for substantial investment returns from our maturing portfolio through targeted growth and profitable exits. In particular, our objectives include:

·     Value Creation: We are actively progressing a few of our portfolio companies through value creation stages, ensuring they achieve their full potential.

·     External Funding of Portfolio: We are facilitating and syndicating external funding for our portfolio companies, to accelerate growth and development. This also generates advisory, commission and performance fee opportunities.

·     Proactive Portfolio Management: We maintain a proactive approach to portfolio management, protecting our positions while supporting management in their business plan execution.

·     Increased Fee Generation: We are actively working to enhance our fee generation capabilities, ensuring a sustainable revenue stream to support our growth objectives.

·     Selective Group Divestments: We are strategically evaluating our portfolio to identify opportunities for selective divestments, allowing us to optimise our holdings and obtain investment returns.

·     Funds Practice: We are exploring new fund opportunities in line with our growth strategy.

In the first half of this year, we have made significant strides toward our strategic objectives, positioning ourselves for further revenue and balance sheet growth in 2024. We remain confident about the prospects of our Group, driven by a robust investment model, and a strategic vision that positions us at the forefront of the deeptech and life sciences VC industry.

Investor Meet Company Presentation

The Company will provide a live presentation relating to the Interim Results via Investor Meet Company on 3 October 2023 at 11:00 a.m.

The presentation is open to all existing and potential shareholders. Questions can be submitted pre-event via your Investor Meet Company dashboard up until 9:00 a.m. on the day before the meeting or at any time during the live presentation.

Investors can sign up to Investor Meet Company for free and add to meet NETSCIENTIFIC PLC via:

https://www.investormeetcompany.com/netscientific-plc/register-investor

Investors who already follow NETSCIENTIFIC PLC on the Investor Meet Company platform will automatically be invited.

The person responsible for arranging the release of this announcement on behalf of the Company is Ilian Iliev, Chief Executive Officer of the Company.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE UK VERSION OF REGULATION (EU) NO 596/2014 WHICH IS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

-ends- 

For more information, please contact:

NetScientific

Dr. Ilian Iliev, CEO                                                                                             Via Belvedere Communications

WH Ireland (NOMAD, Financial Adviser and Broker)

Chris Fielding / Darshan Patel                                                                                     +44 (0)20 7220 1666

Belvedere Communications

John West / Llew Angus                                                                                                +44 (0) 203 008 6867

Email: [email protected]

About NetScientific

NetScientific plc (AIM: NSCI) is a deeptech and life sciences VC investment group with an international portfolio of innovative companies.

NetScientific identifies, invests in, and builds high growth companies in the UK and internationally. The Company adds value through the proactive management of its portfolio, progressing to key value inflection points, and delivering investment returns through partial or full liquidity events.

NetScientific differentiates itself by employing a capital-efficient investment approach, making judicial use of its balance sheet and syndicating investments through its wholly owned VC subsidiary, EMV Capital. The group secures a mixture of direct equity stakes and carried interest stakes in its portfolio of companies, creating a lean structure that can support a large portfolio.

NetScientific is headquartered in London, United Kingdom, and is admitted to trading on AIM, a market operated by the London Stock Exchange.

www.netscientific.net

CHIEF EXECUTIVE OFFICER'S STATEMENT

Overview

I am delighted to present an update on NetScientific's progress during the first half of 2023. Our commitment to becoming a prominent deeptech venture capital investor in the life sciences, sustainability, and industrials sectors, both in the UK and internationally, continues to drive strong results across our business and portfolio companies.

Operational Highlights

Within our own business we have made significant progress and achieved a number of key milestones, including:

·     Successfully executing our 'evergreen' sustainable strategy, covering core operating costs through a combination of corporate finance fees, value creation fees, and profits from partial exits of portfolio holdings.

·     NetScientific has shown a reduction in losses during this period, attributed to our capital-efficient model, while EMV Capital has remained profitable. As a result, we have no immediate need to raise capital through Company share placements.

·     Substantial operational progress including expanding our team, improving our 'playbooks', and continuing to enhance our fund management practice.

In our portfolio companies:

·     Syndicated investments have played a pivotal role, with EMV Capital syndicated investors contributing £5.6m in third-party syndicated investments to support ten portfolio companies, of which £2.6m was added to CUA.

·     EMV Capital's fundraising support has secured essential funding for our portfolio companies and facilitated the execution of their growth strategies and preparations for forthcoming scale-up investment rounds. It has also substantially contributed to the appreciating fair value of NetScientific's direct holdings.

·     Despite a 15% decrease in fair value, primarily attributed to the decline in the share price of NASDAQ-listed PDS Biotechnology, we have seen strong gains in the valuations of several other portfolio companies where we have been proactively engaged. This validates our investment strategy of portfolio diversification and active management.

·     Value creation programs are ongoing to support and accelerate a cohort of our portfolio companies as they progress towards key value inflection points. This provides strong prospects for further fair value increases in the next 12-18 months and increases the prospects for profitable exits.

Financial Highlights

Reflecting our venture capital model, we report on both the 'core' operations of our Group (composed of NetScientific and EMV Capital), and our 'portfolio subsidiaries' (Glycotest and ProAxsis). We treat the latter as separately managed portfolio companies, each now supported by external investors.

·     Total income was £1.15m, an increase of c.64% (H1 2022: £0.7m)

o  Income from the 'core' of NetScientific and EMV Capital increased by c.100% to £1.0m (H1 2022: £0.5m), primarily from the near doubling of EMV Capital revenues.

o  A total of £117,000 profitable partial exits of the Group's position in certain portfolio holdings, and further such exits post-balance sheet period leading to total proceeds of £895,000 in the year to date. As well as providing non-dilutive funding to the Group, this demonstrates our strategy and underpins valuations.

·     Group losses from operations decreased slightly to £1.6m (H1 2022: £1.7m).

o  Losses from operations at the 'core' decreased by c.43% to £394,000 (H1 2022: £695,000), with EMV Capital achieving a modest profit.

o  Losses at both subsidiary portfolio companies, Glycotest and ProAxsis, have increased, reflecting further investments made by them in their growth strategies. While these losses are consolidated at Group level, the companies are funded by third party sources and therefore do not require further funding from the 'core'.

·     The Directors' valuation of the Company's portfolio (fair value) has decreased by 15% to £35.5m (2022: £41.8m) and net assets reduced to £18.1m (2022: £25.2m).

o  These decreases are mainly due to the decline of the PDS Biotechnology share price to $5.03 (at 30 June 2023) from $13.20 (at 31 December 2022).

o  These declines were offset by a £3.1m (11%) improvement in fair value in the non-listed portfolio, including the following significant changes:

§ Vortex Biotech Holdings up from £0.7m to £2.8m (a 300% increase of £2.1m)

§ DName-iT up from £0.1m to £1m (a 900% increase of £0.9m)

§ Q-Bot up from £3.8 to £4.1m (an 8% increase of £0.3m)

·     CUA increased c.11% to £26.1m (2022: £23.5m), providing growing potential future profit for the Group from future realisations.

·     Working capital management remains prudent. The Group ended the period within an existing £200,000 bank overdraft facility, with a negative net cash balance of £93,000. The net cash position is £296,000 as of 26 September 2023. The Group has a further c.£5.2m held as readily realisable quoted securities as at 26 September 2023.

Portfolio Review

Summary

Despite continued headwinds in the venture and capital markets, our portfolio has seen some strong fundraising results, continued progress through value inflection points, and fundraising support by EMV Capital. Following our capital-efficient investment model, the portfolio consists of a combination of direct investments and CUA, as summarised in the table below.

Note: The 'Group stake %' amounts show direct holdings of the Group in the issued share capital of each relevant company at 30 June 2023. These percentages are likely to be diluted by future events, such as future dilutive investment rounds, exercise of management options, and the conversion of convertible securities.

The combination of direct and capital under advisory investments gives the Group a greater influence in the portfolio companies, access to follow-on funding through other investors, and enables greater financial and value-added support for the portfolio companies.

The amounts under capital under advisory are associated with carried interest or profit share agreements, typically between 10% and 20%. While it is difficult to value or estimate the current value of these stakes, for demonstration purposes an average 2x portfolio return on the capital under advisory of £26.1m would result in carry returns to EMV Capital of over £4.5m.

Selected portfolio company highlights

Glycotest, Inc. ("Glycotest") (https://www.glycotest.com/)  - 62.5% direct stake / 3% CUA

·     Glycotest is a liver disease diagnostics company commercialising new and unique blood tests for life threatening liver cancers and fibrosis-cirrhosis. The Philadelphia-based company has exclusive, world-wide rights to over 50 patent-protected serum protein biomarkers, assay technology, and biomarker panels and algorithms that exploit novel sugar-based disease signals. Fosun Pharma, a leading global pharmaceutical company, is a co-investor in the business, and has a licence for the distribution of the product in China.

·     In August 2023 Glycotest completed subject enrolment and sample collection in its HCC Panel clinical validation study.

·     With one of the world's largest databanks in the liver cancer study space, Glycotest is now positioned to complete sample assays and data analysis when validated assays are available with the objective of establishing the effectiveness of the HCC Panel test for the identification of patients with curable early-stage liver cancer.

·     Troubleshooting of the HCC Panel assays by an expert contract lab was completed earlier in 2023 and a way forward to revised assays has been identified. Delivery of effective assays for the HCC Panel is a priority for 2024.

·     The Company continues to explore avenues for commercialisation, having established important relationships with multiple key clinical opinion leader sites through the HCC Panel clinical validation study.

·     Glycotest continues to work closely with Fosun Pharma for the successful development and realisation of returns from the business, including through commercialisation of licensed products in China.

·     In line with NetScientific's capital-efficient approach, in May 2023 EMV Capital launched a third party fundraising program to raise up to $1m to complement funding provided by Fosun Pharma. To date $495,000 has been raised for such fundraising program, though a secured convertible loan agreement.

PDS Biotechnology Corporation ("PDS") (https://www.pdsbiotech.com/) (PDSB: NASDAQ) - 4.3% direct stake

·     PDS Biotech is a clinical-stage immunotherapy company focusing on cancer and infectious diseases. Using its Versamune® technology, it develops therapies and vaccines that activate T-cells and enhance immune responses. Its primary focus is on HPV-related head and neck cancers. PDS Biotech has four Phase 2 trials with partners such as Merck, the National Cancer Institute, MD Anderson, and Mayo Clinic, and an infectious disease vaccine program. The company also plans to launch a Phase 3 clinical trial for one of its programs.

·     NetScientific backed PDS Biotechnology in 2014 prior to its NASDAQ listing.

·     PDS has continued to make progress in 2023 in its ambitious clinical development program, including:

o  Conclusion of an exclusive global license agreement for Investigational IL-12 Tumor-Targeted Cytokine from Merck KGaA, Darmstadt, Germany (January 2023).

o  Successful meeting with FDA for triple combination of PDS0101, PDS0301 and a commercial immune checkpoint inhibitor (February 2023) and announcement of plan to initiate a Phase 3 study evaluating PDS0101 in combination with KEYTRUDA® in head and neck cancer (March 2023).

o  Presentation of interim data at the leading 2023 American Society of Clinical Oncology (ASCO) annual meeting, demonstrating a 12-month overall survival rate of 87% (June 2023).

o  Addition of PDS Biotech to Russell 2000® and Russell 3000® Indexes (June 2023).

·     The period has been characterised by continued weakness in the US biotech public markets, and respectively PDS' share price has remained at relatively low levels.

ProAxsis Ltd ("ProAxsis") (https://proaxsis.com/) - 100% direct stake

·     ProAxsis is a commercial medtech company, with a focus on respiratory diagnostics, a growing global health burden. ProAxsis uses its proprietary ProteaseTag® technology to develop laboratory-based assays and rapid point-of-care tests for the measurement of inflammatory biomarkers associated with chronic respiratory diseases such as Chronic Obstructive Pulmonary Disease (COPD), cystic fibrosis and bronchiectasis. The company is a spin-out of Queens University Belfast.

·     ProAxsis continues to benefit from ongoing sales of its Neatstik product, and several potential contracts for lab services with global pharma in the pipeline.

·     Following a strategic review at the start of the year, the ProAxsis board determined to refocus the company on its core respiratory capabilities, cutting out non-core activities, pausing its US laboratory initiative, and implementing various related team and cost reduction measures resulting in c.50% decreased cost base.

·     The company has recently appointed Alan Markey as its new Chair. Alan brings 25 years' executive experience in the international pharmaceutical and medical devices sectors, and specific experience in taking diagnostic products to market. 

·     ProAxsis is now developing a highly novel, digitally-enabled version of the company's point-of-care test (NEATstik®) for ongoing monitoring of patients with chronic respiratory disease. To accelerate this, it is exploring a partnership with telehealth specialist Wanda Health, another portfolio company.

·     To support this development program, the company is partnering with clinical experts at Imperial College, London, one of the largest COPD expert centres in the world.

·     The £500,000 loan facility provided by AB Group in February 2023 remains in place.

·     In line with NetScientific's capital-efficient approach, in July 2023 EMV Capital launched a third party fundraising program to raise up to £500,000. To date c.£200,000 has been raised under such fundraising program, though a convertible loan agreement, including £35,000 from ProAxsis directors.

·     The company also won grants of £100,000 and £30,000 from the Regional Economic Development Agency for NI and Association of British HealthTech Industries to develop advanced respiratory products and to develop regulatory strategies.

·     The company is now focused on implementing its commercial strategy, through a combination of sales of existing products, and progressing a route to launch the digitally-enabled Neatstik.

Q-Bot Ltd ("Q-Bot) (https://q-bot.co) - direct stake 18.6% / CUA 33.9%

·     Q-Bot is an award-winning robotics developer for construction retrofit. Its AI-powered robotic tools are used to inspect, monitor, and retrofit insulation for residential buildings. Specifically, Q-Bot is focused on the unmet market need for underfloor insulation, helping to reduce fuel poverty in social housing, improve energy efficiency, and align with new regulations around decarbonisation. As a market leader, Q-Bot is now scaling and seeking to capture a significant share of this market in the UK and internationally.

·     In July 2023, EMV Capital led a successful closing of a £3.5m investment round to fund the next stage of growth, from a mixture of existing and new investors.

·     The company continues to make progress in its international expansion strategy, with specific initiatives for growth into the EU and US.

·     The company's revenues increased 56% in its most recent financial year to March 2023, and are expected to continue growing.

Vortex Biotech Holdings Ltd ("Vortex") (https://vortexbiosciences.com/) - direct stake 25.0% / CUA 13.9%

·     Vortex's core technology allows for the capture and isolation of high-quality Circulating Tumour Cells ("CTCs") from blood samples. Its mission is to be the innovation leader in liquid biopsy CTC capture technology that improves therapeutic decisions and saves lives. This is expected to contribute to a shift in how cancer can be treated and monitored in the growing liquid biopsy market. Vortex was founded upon research at UCLA, and is now dually based in London and San Francisco.

·     In June 2023 EMV Capital led a £3.2m EIS investment round into Vortex, which has allowed further acceleration of the roadmap.

·     The company is progressing its service offering for biopharma to support the development of biomarker-driven personalised medicines.

·     It has launched a CTC Centre of Excellence at The London Cancer Hub's Innovation Gateway, on the same site as the Institute of Cancer Research and the Royal Marsden NHS Foundation Trust.

·     Vortex also announced in September 2023 the launch of a Technical Feasibility Study to characterise a fully integrated "sample-to-result" workflow combining Vortex's VTX-1 platform, and that of their partner AxonDx to isolate, count, and characterise CTCs in cancer patient samples. 

·     A recent study by the Nice University Hospital compared several CTC liquid biopsy platforms. This peer-reviewed evaluation concluded that Vortex' VTX-1 platform is superior across a range of parameters critical for future commercial adoption.[1]

[1] Martel et al (2023) Assessment of Different Circulating Tumor Cell Platforms for Uveal Melanoma: Potential Impact for Future Routine Clinical Practice - PubMed (nih.gov)

DName-iT (https://dnameit.com) - 36.9% direct stake / 14.8% CUA

·     A University of Leuven spin-out, DName-iT has developed a platform to avoid sample authentication errors and to correct for sample contamination in genetic sequencing laboratory tests. DName-iT operates at the cross-roads of major, growing markets of liquid biopsy, laboratory services, clinical trials, and NGS. DName-iT estimates that up to 2% of specimens are mis-identified through laboratories' workflows, leading to potentially fatal consequences for patients. 

·     Following the CetroMed acquisition by NetScientific, EMV Capital's value creation team took over the development of the business, refreshed its business plan, and has worked alongside the founder and other experts.

·     EMV Capital advised on the reorganisation of the company, and on its recent £500,000 EIS investment round, with the participation of EMV Capital investors and Belgium's Gamma Frisius Fund. NSCI has an effective ownership of 46.1% through CetroMed's ownership of 61.5% in DName-iT. University of Leuven is a co-investor in the project.

·     Kevin Dean, an EMV Capital Venture Partner, joined the company as Interim CEO, driving the company through its pilots program and towards the next investment round.

·     DName-iT also setup a collaboration partnership with ProAxsis as manufacturing partner, helping to scale the company in a capital-efficient way.

·     There is an EU Laboratory pilot underway to validate the technology, with regulatory planning, and a go-to-market strategy for 2024.

Sofant Technologies (https://sofant.com) - 1.7% direct stake / 30.5% CUA

·     An Edinburgh University spin-out, the company is developing phased array antennas for satellite for the rapidly growing low-orbit satellite telecommunications market. Leveraging its innovative technology, Sofant asserts a substantial up to 70% energy efficiency advantage and significant cost savings compared to its competitors, due to its modular design. The company is executing a €7.3m contract with the UK Space Agency and the European Space Agency.

·     In May 2023, Sofant unveiled a substantial partnership with Inmarsat, a global leader in satellite communications, which involves non-dilutive funds in Non-Recurring Engineering and a substantial pre-purchase commitment by Inmarsat (recently acquired by Viasat).

·     EMV Capital provided further support by leading a follow-on EIS investment of £2.3m, including £1.3m from EMVC investors.

Ventive (https://ventive.co.uk) - 18.4% direct stake / 35.3% CUA

·     Ventive specialises in passive and energy-efficient ventilation systems for schools and a unique modular heat pump for newbuild residential applications. Once in production, its innovative design for heat pumps, which utilise phase change material for heat transfer, is expected to position it well in the growing market for heat pumps. The company is focused on growth in two markets segments of high-priority for the sustainability agenda: air quality and sustainable heating.

·     Notable developments post-investment include an accelerated development program with Clear Blue Energy and QM Systems, a pre-purchase agreement with a leading non-UK heat pump distributor, and increased sales in the Natural Ventilation range.

·     Following the September 2022 restructure and investment round led by EMV Capital, the company has focused on execution of the heatpump project and revenue growth from its passive air ventilation project.

·     Ventive's passive air ventilation system has now been delivered to over 30 schools and five leisure centres, achieving excellent air quality results. Market demand has continued to increase with minimal marketing spend by the company.

·     The heatpump project has progressed well, with prototypes now being tested and the company building a book for potential buyers.

·     Ian Cooke, a Venture Partner at EMV Capital, joined as Chair in August 2023, as part of the company's preparation for further investment and growth.

DeepTech Recycling Technologies - 30% direct stake

·     In December 2022, Deeptech Recycling Technologies acquired the majority of assets from the administrator of Recycling Technologies Limited, which company had aborted an AIM IPO that had been targeted for admission in early 2022. Recycling Technologies had developed advanced and environmentally sound technologies for recycling mixed plastic waste, generating valuable naptha, lubricants, and feedstock for the plastics industry. During 2023, Deeptech Recycling Technologies, with support from EMV Capital's value creation team, has focused on consolidating assets and intellectual property, further R&D, assessing market opportunities, and starting the company's commercial roadmap.

·     Commercial progress includes:

o  Successful commercial discussions with a company in the plastic waste space, with approval to start a proof-of-concept project to demonstrate the technology.

o  Discussions with various private and public funding sources for funding support for future plants in the UK.

o  Discussions with UK and EU parties for potential proof-of-concept and technical feasibility projects to demonstrate management and recycling of different waste streams.

Board and management

As we embark on the next phase of our development, significant changes have been made to our Board and management team. These changes demonstrate our commitment to strengthening our leadership and enhancing our capabilities and corporate governance.

·     Dr. Charles Spicer has joined our Board as the Non-Executive Chair, bringing a wealth of experience from the City, complementing the Board's skillset.

·     Dr. Jonathan Robinson, who previously served as Interim Non-Executive Chair, has transitioned into the role of Senior Independent Director.

·     Prof. Stephen Smith, after a seven-year tenure with NetScientific, stepped down on 30 June 2023 from his position as a Non-Executive Director. We thank him for his service and contributions to the Company.

In line with our commitment to growth and excellence, we are actively refreshing our panel of advisers and venture partners. This initiative is geared towards bolstering the Group's capacity to provide comprehensive support to our portfolio companies.

We have also made planned additions to our management team. These new members bring valuable expertise in project management, human capital management, and other crucial infrastructure skills. Their contributions will be instrumental in driving our organisation forward as we continue to pursue our goals.

Summary and Outlook

Our strategic focus includes the advancement of our sustainable business model and boosting the Net Asset Value and Fair Value of our portfolio companies. This creates the potential for substantial investment returns from our maturing portfolio through targeted growth and profitable exits. In particular, our objectives include:

·     Value Creation: We are actively progressing a cohort of our portfolio companies through value creation stages, ensuring they achieve their full potential.

·     External Funding of Portfolio: We are facilitating and syndicating external funding for our portfolio companies, to accelerate growth and development. This also generates advisory, commission and performance fee opportunities.

·     Proactive Portfolio Management: We maintain a proactive approach to portfolio management, protecting our positions while supporting management in their business plan execution.

·     Increased Fee Generation: We are actively working to enhance our fee generation capabilities, ensuring a sustainable revenue stream to support our growth objectives.

·     Selective Group Divestments: We are strategically evaluating our portfolio to identify opportunities for selective divestments, allowing us to optimise our holdings and obtain investment returns.

·     Funds Practice: We are exploring new fund opportunities in line with our growth strategy.

In the first half of this year, we have made significant strides towards our strategic objectives, positioning ourselves for further revenue and balance sheet growth in 2024. We remain confident about the prospects of our Group, driven by a robust investment model, and a strategic vision that positions us at the forefront of the deeptech and life sciences VC industry.

CONSOLIDATED INCOME STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2023

NetScientific plc