Tekcapital Announces 108% Increase in Net Assets in FY21

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Business update:

Tekcapital (TEK Follow | TEC), an intellectual property investment group, has released impressive audited results for the fiscal year ended November 30, 2021 (“FY21”).

Net assets increased 108% to a record $68.1 million, generating total income of $29.2 million, an increase of more than 243% over fiscal 2020.

Profit after tax increased by 243% to $26.4 million (EX20: $7.7 million), mainly due to an increase of $28.1 million (EX20: $8.7 million) of the fair value of TECinvestment portfolio.

NAV per share increased by 37%.

The operating cash outflow of $1.8 million was bolstered by equity investments totaling $9.4 million during the period, resulting in a strong balance sheet with cash and cash equivalents. Treasury. of $3.5 million as of November 30, 2021.

Wallet update:

TEC holds an investment portfolio composed mainly of 4 companies: Salarius (97.2% holding), Lucyd (100% holding), Guident (100% holding) and Belluscura (15% holding). The companies were all created by Tekcapitalventuring into disruptive technologies developed by universities across multiple sectors.

In particular, the IP filtering process appears robust given that most have grown significantly since the initial investment in 2018:

Summary of TEK holdings and recent highlights:

Gudentan American subsidiary, is TEC‘s largest stake, representing 47% of the company’s value. Guident made headlines this week after announcing the development of an advanced autonomous vehicle connectivity solution and related patent, and selection as a supplier for the Jacksonville Transit Modernization Project.

Both contracts use Guident’s ultra-low latency remote monitoring and control (RMCC) system and software, aimed at improving the safety of autonomous vehicles and delivery drones.

Lucydan American subsidiary, focuses on the development of smart glasses and was the first company to offer prescription glasses with Bluetooth technology in 2019. Lucyd technology allows common smartphone tasks to be performed hands-free, which makes increases pedestrian safety.

Lucyd has signed a distribution agreement with D. Landstrom Associates for the distribution of Lucyd® Lyte® smart glasses in major retail stores in the United States. Lucyd’s subsidiary, Innovative Eyewear, has filed a registration statement for a possible NASDAQ IPO, seeking to raise $10 million.

Belluscure, a medical technology company, has developed an advanced, modular, user-operable (“POC”) portable oxygen concentrator, providing supplemental oxygen on the go. The product has been cleared by the FDA. The company is focused on reducing the price of POC for the 300 million people with COPD worldwide.

Belluscura’s value increased tenfold during the fiscal year ended November 30, 2021 with a valuation of $22.7 million from $2 million as of November 30, 2020, following an IPO on AIM from London in May 2021.

Since November 30, 2021, the company has signed an agreement to manufacture its X-PLO2R® portable oxygen concentrator in China, which is expected to double its manufacturing capacity; and has also been granted a Distribution and Pricing Agreement (“DAPA”) by the US Defense Logistics Agency.

salary, a US subsidiary, has patented Microsalt®, an all-natural, non-GMO salt that contains about half the sodium content of regular table salt. Excessive sodium intake has been linked to cardiovascular disease. Salarius sought to alleviate the problem by developing an advanced process for producing salt crystals, giving the same taste at half the sodium content.

Salarius’ product is now found in SaltMe® potato chips, sold in 2,200 Kroger supermarkets in the United States, as well as 200 other outlets.

Dr. Clifford Gross, President and CEO, summed up the year:

“We are pleased to report very strong full-year performance for the Group, with net assets increasing by 108% to $68.0 million, a record high. portfolio are progressing well and are expected to achieve additional significant milestones by the end of 2022. We are also delighted to highlight the successful IPO of Belluscura during the period, the filing by Lucyd’s subsidiary of Innovative Eyewear, Inc. of its registration statement for a potential IPO with a listing on NASDAQ, the rollout of MicroSalt’s SaltMe!Crisps to Kroger supermarkets across the United States, and Guident’s demonstration of their monitoring center and remote control with industry-leading glass-to-glass low latency. We are excited about what our portfolio companies achieved in 2021 and their outlook for 2022.”

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All in all, a very good performance for the company in 2021, which investors rewarded with TEC shares up 161% in the past 12 months.

Over the past three months, shares have traded between 27.5p and 35p, after falling to 25.5p in March.

Stock chart | TEC

The outlook is positive after TekcapitalBetting on multiple disruptive technologies has paid off so far.

TECGuident’s portfolio approach is very beneficial to investors, as this set of results shows, following Guident’s slight decline in value in FY21. Guident, which was historically the top performer in the portfolio, is now surpassed by Belluscura whose book value has risen from $2 million in November 2020 to over $22 million in November 2021.

However, Lucyd is the top performer in 2H 21 percentage-wise, increasing her book value from $8 million to over $17 million over the six-month span.

Indeed, TEK’s portfolio now looks more balanced than ever with Guident, Belluscura and Lucyd all valued at 8 figures!

Many investors in Tekcapital I think the IPs of these beneficiary companies, addressing multi-billion dollar markets, could themselves reach 9 figures, and the market seems to agree.

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