TIDMNSCI
RNS Number : 0464V
NetScientific PLC
03 April 2023
Strictly embargoed until: 07.00, 3 April 2023
NetScientific plc
("NetScientific" or "NSCI" or the "Company" or the "Group")
Business and Portfolio Update and Board Changes
London, UK: NetScientific plc (AIM: NSCI), the investment and
commercialisation group with an international portfolio of
innovative life science, sustainability and industrial technology
companies, is pleased to provide a business update for the year
ended 31 December 2022 and the period to date, as well as an update
on its Board changes.
Highlights of 2022
-- Including EMV Capital, its VC firm, the Group now has a portfolio of 24 companies.
-- The Group expects a significant increase in Fair Value as at 31 December 2022.
-- Across the Group's portfolio, an aggregate amount of c.GBP70
million was raised through equity and venture debt by 18
companies.
-- The Group's 'capital light' investment model saw it make
modest direct equity investments of c.GBP0.6 million, together with
GBP5.3 million of third party 'advised' investments in which it has
a carried interest, across 11 portfolio companies.
-- A short-term proprietary trade profit of GBP0.3 million on
facilitating the sale of a GBP0.5 million position in a portfolio
company, highlighting the Group's intention to move progressively
to a more 'evergreen' investment model, and an ability to generate
liquidity in private company investments.
-- Fees generated by EMV Capital covered the majority of its
costs, whilst providing infrastructure and services to the Group
and its portfolio companies.
-- H2 2022 saw a marked increase in activity, with several
portfolio companies achieving significant operational milestones
and key fundraisings.
-- Strengthened Board to drive strategic growth ambitions, and
key strategic hires to expand and deepen transactional and
portfolio management capabilities.
-- Final results for the year to 31 December 2022 expected to be
announced by the end of May 2023.
Update on Chair search and board changes
The Group's search for a new Chair has progressed well. The
Board has met a variety of high calibre candidates and is working
through a short list of further meetings in this regard. It remains
on track to announce the appointment of a new Chair ahead of the
annual general meeting.
After seven years with NetScientific, Professor Stephen Smith
has indicated his wish to retire from the Board and he will
accordingly not stand for re-election at the next annual general
meeting, likely in June 2023. It is anticipated that he will remain
an adviser to a number of the Group's life sciences portfolio
companies. Further information will follow in due course.
Portfolio highlights of 2022
During the period, a number of the Group's portfolio companies
raised growth financing and made substantial progress on their
business plans. Key highlights include:
-- ProAxsis Limited - 100 per cent. direct holding - the company
won further pharma services contracts and grant support for its new
products programme, and entered into key R&D collaborations. In
February 2023, the company secured a GBP500,000 funding facility
from AB Group.
-- Glycotest, Inc. - 62 per cent. direct stake - the company
closed a $1.46 million convertible loan facility with Fosun Pharma
lending $500,000.
-- PDS Biotech Inc. (NASDAQ:PDSB) - 4.4 per cent. direct holding
- this immunotherapy for oncology company made substantial clinical
progress across four Phase 2 clinical trials and secured a $35
million venture debt facility during the second half of the year.
Since year end, the company has completed an in-licensing deal with
Merck KGaA, and announced plans for a Phase 3 trial.
-- Q-Bot Limited - 19.3 per cent. direct holding and a further
33.8 per cent. advised holding - EMV Capital syndicated a GBP2.8
million fundraising for working capital, scale-up production of
robots, and engagement with growing UK and international
demand.
-- Sofant Technologies Ltd - 1.8 per cent. direct holding and a
further 27.2 per cent. advised holding - EMV Capital syndicated and
led a GBP4.2 million fundraising. The company has made significant
progress towards commercial launch, including a further joint
development agreement with a global player, and reaching technical
milestones.
-- DName-iT Holdings Limited - 46 per cent. direct holding
(through Cetromed subsidiary). EMV Capital syndicated a first close
of GBP147,000 as part of a GBP500,000 equity fundraising programme.
This spin-out from Belgium's University of Leuven has developed a
powerful proprietary technology that provides quality assurance
throughout genetic testing processes for clinical laboratories.
Since the year end a number of other portfolio companies have
announced further positive news including EpiBone's progress in
clinical trials and FOx Biosystems raising EUR5.8 million.
New investments
During the period the Group introduced three new investments
into the portfolio utilising its 'capital light' investment
model:
-- Vortex Biotech Holdings Limited - 30 per cent. direct holding
- the company (one we previously advised but with no direct
holding), continued its progress in creating Centres of Excellence
for pharma services around Circulating Tumour Cells.
-- Ventive Limited - 16 per cent. direct holding - EMV Capital
led a GBP2.5 million financing package including equity and debt
matched funding that unlocked a c.GBP1.5m BEIS grant, receiving its
stake in partial settlement of fees. The company's business lines
include a passive air ventilation system used by schools and a
modular heat pump for newbuild residential applications.
-- Deeptech Recycling Technologies Limited - 30 per cent. direct
holding - the company acquired for an undisclosed amount from
administration the majority of the assets of Recycling Technologies
(a business that had targeted an AIM IPO in Q1 of 2022 at a
pre-money valuation of c. GBP60 million). Our Value Creation team
is working on relaunching this business in the rapidly growing
plastics waste management space.
Dr Ilian Iliev, Chief Executive Officer of NetScientific
commented :
"We have seen a 'heads down' dynamic and productive period for
the Group, including high levels of growth activity within our
portfolio, driven by positive operational and financial milestones
achieved across a number of key companies. As we continue to scale
our activities utilising our capital light investment model, we
have also strengthened our Board and wider team, and improved our
operating structures, corporate governance, and commercial reach.
We are mindful of the transforming investment market environment,
and are focused on real world, evidence-based delivery.
"2022 has been a solid year in a challenging environment and our
key focus for 2023 is to progress our cohort of companies through
our platform, creating value and fees, and progressing closer to
exits and liquidity. With plans in place for further growth, the
Board is optimistic about the potential for enhanced value creation
and potential liquidity events."
-Ends-
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 AMED. UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A
REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
For more information, please contact:
NetScientific
Ilian Iliev, CEO Via Belvedere Communications
WH Ireland (NOMAD, Financial Adviser and Broker)
Chris Fielding / Darshan Patel / Enzo Aliaj +44 (0)20 7220
1666
Belvedere Communications
John West / Llew Angus +44 (0) 203 008 6867
Email: nsci@belvederepr.com
About NetScientific
NetScientific plc (AIM: NSCI) is an investment and
commercialisation group with an international portfolio of
innovative life science, sustainability and technology
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-light
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.
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END
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