Lucyd'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 smart eyewear with ChatGPT.

As of 31 December 2023, Tekcapital owned 100% of Lucyd Ltd, and  Lucyd Ltd owned ~40% of NASDAQ quoted Innovative Eyewear Inc.

Lucyd® Limited ("Lucyd") is the developer of ChatGPT enabled smart eyewear under the Lucyd®, Nautica®, Eddie Bauer® and Reebok® brands. Innovative Eyewear, Inc ("Innovative Eyewear"), Lucyd's ~40% owned U.S. operating subsidiary, was the first Company to deliver prescription glasses with Bluetooth® technology in 2019. Their eyeglass frames help you stay connected safely and conveniently, by enabling many common smartphone tasks to be performed handsfree with Bluetooth® and voice assistants.

INVESTMENT RATIONALE:

In 2022, the National Highway Traffic Safety Administration (NHTSA) estimates that 7,522 pedestrians died in traffic crashes on public roads, which is a historic high. Open ear audio found in Lucyd smart glasses can help pedestrians maintain situational awareness whilst walking running and cycling. According to the Vision Institute², approximately 75% of the adult population need corrective lenses, and advancements in Bluetooth technology have enabled it to be incorporated into traditional eyeglass form factors. This combination created a new type of eyewear with built-in speakers, microphones and touch controls. Lucyd smart eyewear allows the wearer to forego headphones and use their glasses to listen to audio content and talk to others and digital assistant. Since the speakers are open-ear, Lucyd smart glasses enables the wearer to stay connected to their digital life whilst maintaining situational and social awareness.

2023 DEVELOPMENTS:

·      Licensed sports culture brand, Reebok® for smart eyewear through an agreement with Authentic Brands Group.

·      Launched Nautica Smart Eyewear Powered by Lucyd® and commenced go to market efforts with assistance from ABG's extensive distribution network.

·      Released Lucyd App, an iOS/Android app that enables voice interface for ChatGPT on their smart eyewear.

·      Launched Lucyd Lyte 2.0, a major upgrade to its flagship Lucyd Lyte audio eyewear platform that brings several advances to the company's core product, including:

-     Four speaker array

-     Improved audio input

-     Improved battery life with 12 hours of playback

-     The introduction of Bluetooth 5.2 amongst other innovations introduced by the company.

·      Continued preparation for launches of its licensed brand products: Eddie Bauer and Reebok.

·      Filed a patent application for a software system that focuses on one or more smart devices, which may include smart glasses that operate with chatbots such as ChatGPT. The invention accomplishes this by using an innovative technique for choosing from and prioritizing data that may be drawn simultaneously from several different chatbots or AI language models.

·      Innovative Eyewear has filed a patent on a key product innovation, flexible spring hinges for smart eyewear, with the Company's belief that it will enable each style to be worn by a wider array of users and will also increase the durability of the frames by reducing stress points on the temples caused by extended wear.

·      Continued its sales growth as exhibited by 77% increase in revenue in 2023 compared to 2022.

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 will incorporate artificial intelligence and advanced network technologies to minimize signal latency and improve the safety of autonomous vehicles.

Guident developed state of the art, first fully functional remote monitoring and control software to improve the safety of autonomous vehicles and land-based delivery devices.

As at 31 December 2023, Tekcapital owned 100% of Guident Ltd, ~and 91% 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 these mishaps. Guident's remote monitoring and control centre monitors vehicles and when necessary provide additional support such as calling first responders, taking over control of the vehicle to move it out of harm's way and can provide real-time communication with passengers and pedestrians. Over time, Guident believes remote monitoring centres will be required in most jurisdictions where AV's operate.

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

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

2023 DEVELOPMENTS:

·      Secured and fulfilled its first purchase order from Jacksonville Transportation Authority (JTA) for JTA project to provide remote monitoring and control services.

·  Received Space Florida grant for a groundbreaking project under the Florida-Israel Innovation Partnership program, together with its valued Israeli partner, NOVELSAT. This integration of NOVELSAT's satellite-based space connectivity technologies and Guident's human-in-the-loop AI technologies will provide the first LEO satellite back-up monitoring and control of an autonomous vehicle with reliable and high-speed bi-directional connectivity.

·      Executed letter of intent with Auve Tech OÜ ("Auve Tech") to provide remote monitoring  and control services for Auve Tech's autonomous vehicles. By combining Auve Tech's advanced Level 4 autonomous vehicles with Guident's RMCC software, the two companies will bring an enhanced level of safety to self-driving technology. Guident's patented software provides human-in-the-loop supervision, adding an extra layer of security to Auve Tech's new autonomous shuttle..

·              Received Notice of Allowance from USPTO for patent for "Systems and Methods for Remote Monitoring of a Vehicle, Robot or Drone", which reinforces its DNA of innovation, it also significantly expands its patent portfolio in the secure and safe operation of autonomous vehicles with the human-in-the-loop concept.

·              Additionally, Guident has announced progress with their regenerative shock absorbers (RSA). Guident has produced its first generation or prototype regenerative shock absorbers and is currently testing these new shocks with Tier-1 automotive companies.  This technology will enable EVs to increase their range and have more available power for telemetric connection with the RMCC. The goal of this technology is to manufacture electromagnetic regenerative shock absorbers with energy densities that can recover a vehicle's vibration energy which is otherwise lost as heat, and in doing so extend their range between charges. In addition, this unique design utilising rotary mechanical motion rectifiers can be tuned to achieve better damping characteristics than existing shock absorbers. In a significant step forward, Guident secured a paid proof of concept agreement with a tier-1 tyre manufacturer for their regenerative shock absorber. This collaboration resulted in successful tests and detailed reports regarding the performance of the regenerative shock absorber. Subsequently, Guident incorporated a new subsidiary, Revive Energy Solutions Ltd, to commercialise its regenerative shock absorber technology. Guident believes that in the next few years all electric vehicles will have both regenerative braking and regenerative shock absorbers to enhance range and comfort.

Belluscura plc ("Belluscura") is a respiratory medical Device company that has developed and launched an improvedportable 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. 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.

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, they must often replace their devices with greater capacity models as their disease progresses. With Belluscura's new patented device, users can swap out the filter cartridges to enable higher capacity oxygen flow without having to buy a new device, like upgrading memory on a laptop. The result is more affordable oxygen therapy which increases the number of people who can avail themselves of these life-extending and life saving devices.

2023 DEVELOPMENTS:

·      Belluscura announced it received orders for 6,500 of its next-generation DISCOV-R portable oxygen concentrator. This represents approximately US$15 million of potential revenue to the Company, with initial production of the DISCOV-R expected to begin by the end of this year.      

·      Belluscura announced it has entered into an Exclusive License, Marketing and Distribution Agreement ("Agreement") with its global manufacturing partner InnoMax Medical Technology Ltd. Minimum cumulative royalties over the term of the Agreement will therefore range from US$27.5m if the license is converted to non-exclusive from year 6 and up to US$55m in cumulative royalties if the license remains exclusive for the entire term.

·      Signed a distribution agreement with McKesson Medical-Surgical, a division of McKesson. McKesson delivers a third of all pharmaceuticals used in North America and operates the fourth-largest pharmacy chain in North America.

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

·      Announced its X-PLOR portable oxygen concentrator ("POC") is now marketed in the US through GoodRx, Inc.  www.goodrx.com

·      Raised total of GBP 7.1m through combination of convertible loan notes and new placings

CORPORATE FINANCIAL PERFORMANCE

Our investment objective is to achieve long-term growth of net assets and deliver returns on invested capital through the commercialisation of university and other new discoveries that can make a positive impact on people's lives. In 2023 we had a productive year for long-term value creation, setting the foundation for meaningful growth in 2024 as evidenced by the successful floatation of Microsalt plc post year end. Our portfolio companies achieved significant milestones, however due to unrealized reductions in the end of period quoted valuations of Lucyd and Belluscura, our profitability, net assets and net assets per share were commensurately negatively impacted.

However,  post end of period, using 20 May 2024 closing market prices, our estimated portfolio valuation was approximately US$75m (appx. US$0.37 per share), recovering the entire fair value losses of 2023 and exceeding the $55m valuation reported in 2022 by ~36%.

CORPORATE SERVICES ACTIVITY

·      In 2023 our corporate services revenue from Invention Evaluator and Vortechs Group increased ~43%.

·      Tekcapital delivered over 290 Invention Evaluator (IE) reports, a significant increase from the previous year. These reports help organizations worldwide evaluate the market potential of their technologies, indicating the company's growing influence and expertise in this field.

·      Notably, Tekcapital expanded its client base to include industry giants such as Vale S.A., the world's largest producer of iron ore and nickel. Tekcapital also added well known academic clients such as the University of Johannesburg, one of the largest, multi-campus, residential universities in South Africa.

·      Vortechs, Tekcapital's executive search firm, secured more than 12 executive search assignments in 2023, demonstrating substantial growth compared to the previous year. Additionally, it expanded its list of academic clients to include prestigious institutions such as the Massachusetts Institute of Technology (MIT), indicating the firm's increasing reputation in talent acquisition within academia and beyond.

·      Tekcapital played a significant role in sponsoring the 'Innovation for Sustainable Water USA-MEX' open innovation hub in collaboration with Grupo Rotoplas, the Tijuana Development Council, and the United States-Mexico Foundation for Science. This initiative aimed to promote sustainable water solutions, showcasing Tekcapital's commitment to societal and environmental impact through innovation.

DR. CLIFFORD GROSS, EXECUTIVE CHAIRMAN SAID:

"The Group has made good progress during 2023. Our portfolio companies have demonstrated solid business growth, and we believe they should achieve additional significant milestones by the end of 2024. 

Notably during the year, Innovative Eyewear Inc. launched the world's first ChatGPT enabled eyewear.

Key 2023 milestones included:

Guident signed re-seller agreements with both Auvetech a leading Estonia autonomous minibus manufacturer and Adastec a leading AV software provider.  Guident's RMCC software will be included in all Auvetech MiCa vehicles and as part of Adastec's autonomous software stack for future deployments.

Additionally, Guident has continued to improve and rigorously test its regenerative shock absorbers. Numerous Tier-1 companies are evaluating the shocks for potential inclusion in their electric vehicles.  

We are also pleased to highlight Microsalt's strong progress ending the year by growing its revenues, signing up additional customers and launching its low sodium saltshakers in approximately 400 supermarkets and engaging its advisory team for their AIM IPO which was completed on 1 Feb 2024.

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

We remain steadfast and excited about the commercial progress of our portfolio companies in 2023 and for their future prospects for the remainder of 2024. As per our mission and investment objective, we believe that all of our key portfolio companies have the potential to make a positive impact on the lives of the customers they serve, as well as produce meaningful returns on invested capital for our shareholders over the long term." 

POST PERIOD END HIGHLIGHTS

Following Microsalt plc's introduction of its low-sodium saltshakers in the United Kingdom, the Company successfully completed its Initial Public Offering and commenced trading on the AIM market of the London Stock Exchange on February 1st, 2024. Tekcapital holds a 77.24% interest in MicroSalt after the IPO (at 1 February 2024), which at the listing price of 43p per ordinary share, was valued at approximately £14.3m on Admission.

Also following our year end, Guident announced that it will integrate its industry-leading AV remote monitoring, control, assistance, and passenger support services with the world's most compact and flexible level 4 autonomous shuttle, MiCa from Auve Tech.  By working together, the groundbreaking MiCa shuttle will now incorporate Guident's teleoperation solution, further enhancing its safety and Auve Tech's leading, self-driving technology. For each vehicle outfitted with Guident's technology there will be a hardware fee and a recurring license fee.

On 15 May 2024 Microsalt has announced it has been granted an important patent protecting the IP of its micron-sized salt. This particular patent, entitled Low Sodium Salt Composition, is focused on how Microsalt's low-sodium salt adheres to food particles in a different way than traditional table salt. "We believe the grant of patent 11,992,034 is an important milestone for the Company as it further strengthens our IP position in the global low sodium market," said Rick Guiney, CEO of Microsalt.

On 19 Feb 2024 Guident hosted a grand opening for the first U.S. commercial Remote Monitor and Control Centre (depicted below) for enhancing AV safety.

Innovative Eyewear Inc announced a new partnership with Windsor Eyes, a leading eyewear manufacturing and distribution firm. Over the last 50 years, Windsor has become a leading manufacturer and supplier of fashion eyewear under the Bruno Magli, Sanctuary, Pier Martino, Adolfo, Eyecroxx, as well as private label options. Windsor Eyes products are distributed nationwide in leading optical chains and prominent optical shops. The partnership aims to forge a robust collaboration between Innovative Eyewear's unique, cutting-edge smart eyewear products and Windsor Eyes' well-established distribution network within the optical retail sector. Together, Innovative and Windsor intend to work closely to ensure extensive distribution of smart eyewear across the United States, targeting key large optical retail outlets.

Image courtesy of Innovative Eyewear, Inc.

Innovative Eyewear also announced a partnership with New Look Vision Group to distribute its smart eyewear in Canada. New Look Vision Group is the largest optical group in the eye care industry in Canada and has been rapidly expanding in the United States since its acquisition of Edward Beiner in March 2020, its partnership with Black Optical in 2021, and the acquisition of LOH in December 2021. New Look Vision Group has a network of 489 locations operating mainly under the Iris, New Look Eyewear, Vogue Optical, Greiche & Scaff and Edward Beiner banners and a laboratory facility using state-of-the-art technologies.  

Innovative Eyewear Inc. also appointed Micah Richards as a brand ambassador. Micah is a former England International footballer, turned successful broadcaster, currently working for Sky Sports, CBS Sports and BBC Sport whilst he is also a co-host of "The Rest is Football" - a top ten UK podcast.

For further information, please contact: 

About Tekcapital plc

Tekcapital creates value from investing in new, university-developed discoveries that can enhance people's lives and provides a range of technology transfer services to help organisations evaluate and commercialise new technologies. Tekcapital is quoted on the AIM market of the London Stock Exchange (AIM: symbol TEK) and is headquartered in the UK. For more information, please visit www.tekcapital.com

General Risk Factors and Forward-Looking Statements

The information contained in this document has been prepared and distributed by the Company and is subject to material updating, completion, revision, verification and further amendment. This Report is directed only at Relevant Persons and must not be acted on or relied upon by persons who are not Relevant Persons. Any other person who receives this Report should not rely or act upon it. By accepting this Report, the recipient is deemed to represent and warrant that: (i) they are a person who falls within the above descrip-tion of persons entitled to receive the Report; (ii) they have read, agree and will comply with the contents of this notice. The securities mentioned herein have not been and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or under any U.S. State securities laws, and may not be offered or sold in the United States of America or its territories or possessions (the "United States") unless they are registered under the Securities Act or pursuant to an exemption from or in a transaction not subject to the registration requirements of the Securities Act. This Report is not being made available to persons in Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa or any other jurisdiction in which it may be unlawful to do so and it should not be delivered or distributed, directly or indirectly, into or within any such jurisdictions.

Investors must rely on their own examination of the legal, taxation, financial and other consequences of an investment in the Com-pany, including the merits of investing and the risks involved. Prospective investors should not treat the contents of this Report as advice relating to legal, taxation or investment matters and are advised to consult their own professional advisers concerning any acquisition of shares in the Company. Certain information contained in this Report has been obtained from published sources prepared by other parties. Certain other information has been extracted from unpublished sources prepared by other parties which have been made available to the Company. The Company has not carried out an independent investigation to verify the accuracy and completeness of such third-party information. No responsibility is accepted by the Company or any of its directors, officers, em-ployees or agents for the accuracy or completeness of such information.

All statements of opinion and/or belief contained in this Report and all views expressed represent the directors' own current as-sessment and interpretation of information available to them as at the date of this Report. In addition, this Report contains certain "forward-looking statements", including but not limited to, the statements regarding the Company's overall objectives and strategic plans, timetables and capital expenditures. Forward-looking statements express, as at the date of this Report, the Company's plans, estimates, valuations, forecasts, projections, opinions, expectations or beliefs as to future events, results or performance. Forward-looking statements involve a number of risks and uncertainties, many of which are beyond the Company's control, and there can be no assurance that such statements will prove to be accurate. No assurance is given that such forward looking statements or views are correct or that the objectives of the Company will be achieved. Further, valuations of the Company's portfolio investments and net asset value can and will fluctuate over time due to a wide variety of factors both company specific and macro-economic. Changes in net asset values can have a significant impact on revenue and earnings of the Company and its future prospects. As a result, the reader is cautioned not to place reliance on these statements or views and no responsibility is accepted by the Company or any of its directors, officers, employees or agents in respect thereof. The Company does not undertake to update any forward-looking statement or other information that is contained in this Report. Neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the information contained in this Report or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Report. Neither the issue of this Report nor any part of its contents is to be taken as any form of contract, commitment or recommendation on the part of the Company or the directors of the Company. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal, analysis or investigation of the Company. This Report should not be considered a recommendation by the Company or any of its affiliates in relation to any prospective acquisition or disposition of shares in the Company. No undertaking, Report, warranty or other assurance, express or implied, is made or given by or on behalf of the Company or any of its affiliates, any of its directors, of-ficers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this Report and no responsibility or liability is accepted for any such information or opinions or for any errors or omissions.

Intellectual Property Risk Factors

Tekcapital mission is to create valuable products from university intellectual property that can improve people's lives.  Therefore, our ability to compete in the market may negatively affected if our portfolio companies lose some or all of their intellectual property rights. If patent rights that they rely on are invalidated, or if they are unable to obtain other intellectual property rights. Our success will depend on the ability of our portfolio companies to obtain and protect patents on their technology and products, to protect their trade secrets, and for them to maintain their rights to licensed intellectual property or technologies. Their patent applications or those of our licensors may not result in the issue of patents in the United States or other countries. Their patents or those of their licensors may not afford meaningful protection for our technology and products. Others may challenge their patents or those of their licensors by proceedings such as interference, oppositions and re-examinations or in litigation seeking to establish the invalidity of their patents. In the event that one or more of their patents are challenged, a court may invalidate the patent(s) or determine that the patent(s) is not enforceable, which could harm their competitive position and ours. If one or more of our portfolio company patents are invalidated or found to be unenforceable, or if the scope of the claims in any of these patents is limited by a court decision, our portfolio companies could lose certain market exclusivity afforded by patents owned or in-licensed by us and potential competitors could more easily bring products to the market that directly compete with our own. The uncertainties and costs surrounding the prosecution of their patent applications and the cost of enforcement or defence of their issued patents could have a material adverse effect on our business and financial condition.

To protect or enforce their patent rights, our portfolio companies may initiate interference proceedings, oppositions, re-examinations or litigation against others. However, these activities are expensive, take significant time and divert management's attention from other business concerns. They may not prevail in these activities. If they are not successful in these activities, the prevailing party may obtain superior rights to our claimed inventions and technology, which could adversely affect their ability of our portfolio companies to successfully market and commercialize their products and services. Claims by other companies may infringe the intellectual property rights on which our portfolio companies rely, and if such rights are deemed to be invalid it could adversely affect our portfolio companies and ourselves as investors in these companies.

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

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

STRATEGIC REPORT

CHAIRMAN'S SUMMARY

Tekcapital plc and subsidiaries ('Tekcapital') brings new scientific innovations from lab to market to enhance safety and health and improve the quality of life of the customers we serve. In the past year, thankfully, all of our portfolio companies have made significant advancements. Belluscura expanded production, distribution and sales of its portable O₂ concentrator, Innovative Eyewear launched the first ChatGPT enabled smart eyewear, and had record annual sales growth MicroSalt on-boarded two Fortune 500 B2B clients to use MicroSalt in their products and have expanded sales of their saltshakers to >400 retail locations throughout the US.  Additionally, Guident has begun providing RMCC services to its first customer, the Jacksonville Transportation Authority, for its remote monitoring and control service and has built and continues to test their regenerative shock absorbers with Tier 1 companies for use with electric vehicles.

As a result, consistent with our mission, Tekcapital's portfolio companies are making a positive impact on the lives of the customers they serve.

CURRENT TRADING AND OUTLOOK

We are enthusiastic about the development of Tekcapital's portfolio companies, their performance to-date and their prospects to significantly expand in 2024. The Board is confident that continued investment in our non-quoted portfolio companies remains the right approach for potential long-term value creation. Additionally, we are currently exploring adding a fifth portfolio company focused on the commercialisation of generative artificial intelligence.

Whilst Tekcapital Group is progressing well, investors should note that net asset values will fluctuate from period to period due to individual portfolio company performance, valuations and changes in market conditions and macro-economic financial conditions, and that material changes in the value of our portfolio companies can have a significant impact on our NAV, operating result and future prospects.

KEY PORTFOLIO COMPANIES

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

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

Microsalt is a food tech business that owns a patented process to produce micron sized salt.

Microsalt has made significant progress in 2023, including receipt of purchase orders from two Fortune 500 customers for Mirosalt as an ingredient. In addition to its focus on B2B sales of MicroSalt® to snack food companies where the Company has made substantial progress, Microsalt has launched its own snack food brand called SaltMe!™. Additionally, MicroSalt has launched its low sodium salt in saltshakers during 2023. Approximately 400 supermarkets now carry theses better-for-you saltshakers.

Tekcapital owned approximately 87% of MicroSalt Ltd as of 31 December 2023.

Guident Ltd seeks to improve the safety and efficiency of autonomous vehicles and land-based delivery drones with a SaaS software platform that enables the remote monitoring and control of these vehicles to serve rapidly resolve the situation.

In 2023, Guident Secured and fulfilled its first purchase order from Jacksonville Transportation Authority (JTA) for JTA a project to provide remote monitoring and control services. The company also received Space Florida grant for a groundbreaking project under the Florida-Israel Innovation Partnership program, together with its valued Israeli partner, NOVELSAT. This integration of NOVELSAT's satellite-based space connectivity technologies and Guident's human-in-the-loop AI technologies will provide the first satellite back-up monitoring and control of an autonomous vehicle with reliable and high-speed bi-directional connectivity.

In a significant step forward, Guident secured a paid proof of concept agreement with a tier-1 tyre manufacturer for their regenerative shock absorber. This collaboration resulted in successful tests and detailed reports regarding the performance of the regenerative shock absorber. Subsequently, Guident incorporated a new subsidiary, Revive Energy Solutions Ltd, to commercialise its regenerative shock absorber technology. Guident believes that in the next few years all electric vehicles will have both regenerative braking and regenerative shock absorbers to enhance range and comfort.

Tekcapital owned 100% of Guident Ltd and 90% of its U.S. subsidiary Guident Corporation as of 31 December 2023.

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

In 2023, the Company licensed sports culture brand, Reebok® for smart eyewear through an agreement with Authentic Brands Group. The Company demonstrated quarterly sales growth in 2023 while also continuing preparation for launch of its remaining branded products including Nautica and Eddie Bauer. In another milestone achievement, the Company released Lucyd App, an iOS/Android app that enables voice interface for ChatGPT on their smart eyewear.

As at 31 December 2023, Tekcapital owns, via it's 100% interest in Lucyd Limited, 40% of the share capital of Innovative Eyewear, Inc.  Innovative Eyewear shares are listed on the NASDAQ under ticker: LUCY.

Belluscura has developed and sells an improved portable oxygen concentrator to provide on-the-go supplemental O₂ (oxygen), with user replaceable filter cartridges.

When a patient's disease progresses, they now can upgrade the filter cartridge to provide more liters of O₂ per minute, like adding memory on a laptop, rather than having to replace an expensive medical device. These cost savings will be beneficial to patients and insurance companies and should help make portable respiratory devices more affordable which is core to Belluscura's mission. Belluscura filed for and received clearance from the Hong Kong Department of Health has received approval for the distribution of the X-PLOR® portable oxygen concentrators. China has almost 100 million people living with chronic obstructive pulmonary disease (COPD) and accounts for almost 25% of all COPD cases globally[1].

Financial performance

•  Net Assets US$47.89m (2022: US$57.8m)

•  NAV per share US$0.27 (2022: US$0.38)

•  Portfolio valuation US$41.1m (2022: US$54.9m)

•  Total loss after tax: US$15.7m, resulting primarily from net unrealised fair value reduction of US$14.23m (2022: loss of US$12.7m).

Fundraisings during the period

In 2023 we closed share placements totaling US$ 5.2m. (2022: US$ 2.5m), excluding expenses. Proceeds were used primarily to accelerate the commercial progress and IPO readiness of Microsalt and fuel the further fabrication and testing of Guident's regenerative shock absorbers coupled with building Guident's new remote monitoring and control centre in Boca Raton, Florida.

PRINCIPAL RISKS AND UNCERTAINTIES

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

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

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

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

•     The current barbaric and senseless Russian invasion of Ukraine, as well as Israel/Gaza conflict over time may contribute to inflation of energy costs and supply chain disruption which could increase the cost and complexity of sourcing components for some of our portfolio companies. Additionally, due to the conflict and the uncertainty it has introduced to the capital markets, whilst large cap stocks have progressed well, small cap stocks worldwide are still feeling the pinch, and this can be seen in Belluscura's and Innovative Eyewear's share prices at the end of the period.

We are grateful for the patience and support of our shareholders. We are also sincerely appreciative of our dedicated, creative and incredibly hardworking teams at portfolio companies and 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.

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 every day 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 the Group's investments focus on improving quality of life and attempt to solve significant health and safety problems facing communities. The Board also considers impact of 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 shareholders of the Group. On this basis the Board feels that the executive Directors are fully aligned with shareholders.

g)    MicroSalt Ltd ('Microsalt') listing

As at 31 December 2023, we had initiated the process for listing of Microsalt Ltd's shares to enhance its ability to raise capital and compete effectively in the sodium reduction market. The listing, if successful, will enhance the Microsalt's ability to recruit experienced managers by being able to offer associates stock options grants with a near-term path towards monetisation.

h)    Fundraising activities

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

We are enthusiastic about the development of Tekcapital's portfolio companies, their performance to-date and their prospects to significantly expand in 2024. The Board is confident that continued investment in our portfolio companies remains the right approach for potential long-term value creation. Additionally, we are currently exploring early-stage venture funding for Guident to accelerate growth further.

Clifford M. Gross, Ph.D.

Chairman and CEO

21 May 2024

DIRECTORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2023

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 29. No dividend was declared or paid during the period ended 31 December 2023 (2022: $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.

DIRECTORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2023

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 2.1.1 for additional information on Going Concern.

FUTURE DEVELOPMENTS

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

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

AUDIT COMMITTEE 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' REPORT FOR THE YEAR ENDED
31 DECEMBER 2023

DIRECTORS' EMOLUMENTS

The Director's proportion of the share option expense was US$1,362 (2022: US$62,747). The Group did not make any contributions to a pension scheme in the year ended 31 December 2023 (2022: Nil).  The Directors' beneficial interests in shares is set out below:

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

The details of the options held by each director at 31 December 2023 are as follows:

DIRECTORS' REPORT FOR THE YEAR ENDED
31 DECEMBER 2023

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 activities pertinent to incorporation of Generative AI technology to Invention Evaluator and Vortechs services.

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.

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

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

Statement of disclosure of information to auditors

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

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

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

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

Louis Castro

Director

21 May 2024

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2023

* 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 34 to 64 are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2023

The notes on pages 34 to 64 are an integral part of these financial statements.

The financial statements on pages 29 to 64 were approved and authorised for issue by the Board of Directors on 21 May 2024 and were signed on its behalf.