TIDMTEK
Tekcapital plc
25 October 2022
25 Oct 2022
Tekcapital Plc
("Tekcapital", the "Company" or the "Group")
Tekcapital plc provides CFO Update
Tekcapital Plc (AIM: TEK, OTCQB: TEKCF), the UK intellectual
property investment group is pleased to present the October 2022
CFO Newsletter Update.
Whilst the last few months have seen some of the most
challenging economic times in recent memory, we have continued to
make strong progress with our portfolio companies, from product
roadmaps to go-to-market efforts. Before we dive deeper, let's take
a step back and discuss our overarching strategy with regards to
our portfolio companies.
For each portfolio company the strategy is to grow the business
so that it can make a meaningful impact on people's lives through
the commercialization of their unique technologies. Concomitant
with this, the financial goal is to deliver liquidity events (such
as an IPO's or trade sales) for each portfolio company early in
their life cycle (such as the Initial Public Offerings undertaken
by each of Belluscura Plc, Innovative Eyewear Inc.) whilst
retaining meaningful ownership of the companies until they grow to
scale.
One key criterion behind each investment from Tekcapital is the
presence of a US$1b+ addressable market. As an example, in the case
of Innovative Eyewear Inc, the US eyewear market alone is expected
to be worth US$29b in 2022
(https://www.statista.com/outlook/cmo/eyewear/united-states), with
1% market penetration equal to US$290m in annual sales.
We believe that early IPO of portfolio companies, with
Tekcapital retaining significant stakes, are advantageous to the
companies, their investors and Tekcapital. These capital injections
can accelerate product roadmap/R&D, scale-up hiring especially
for sales and marketing efforts, improve economies of scale and
provide more commercial opportunities. Following Innovative
Eyewear's example, it allowed the company to hire sales executives
that previously helped grow sales of companies like Luxottica, New
Balance etc., and onboard eyewear designers who previously designed
for leading eyewear fashion brands. We believe strengthening the
quality of the team and skillset help maintain and enhance a
competitive advantage, and significantly improve the chance of
achieving goals such as 1% market penetration. While a public
listing is not a guarantee of long-term success, we believe the
brand exposure, investor interest and access to capital that come
with it, improve the likelihood of a profitable exit for
Tekcapital.
Besides a clear focus on increasing chances of the commercial
success of each company and therefore their valuation, this early
liquidity event strategy also means less reliance on Tekcapital for
funding the growth of its portfolio companies. At the moment, both
Belluscura Plc and Innovative Eyewear Inc are no longer funded by
Tekcapital. We envision Microsalt joining this group after their
planned 2023 IPO. This will also give the Company more flexibility
regarding new, exciting potential investments in its pipeline. This
means less dilutive funding for Tekcapital, especially given
Tekcapital's relatively small overhead. Tek's low overhead is a
notable feature in itself - Tekcapital helps fund, manage and
assist with multiple operational aspects of many companies using a
small handful of employees.
Tekcapital plans to provide shareholder returns via special
dividends upon meaningful sales of its portfolio company shares.
Whilst Tekcapital ideally seeks to grow each company to at least a
US$100m+ valuation before any major sale of its shares in portfolio
companies, it also considers its own capital requirements, as well
as the potential to provide special dividends to its
shareholders.
In summary, Tekcapital is actively engaged in building multiple
companies with proprietary technologies, coupled with star power
management, each addressing a serious market need in billion-dollar
verticals. Having raised approximately US$25m since its IPO, which
has been utilized to build net assets of over US$70m as of 31 May
2022, the Company's goal is to deliver significant returns on
invested capital whilst bringing leading innovations to market,
coupled with opportunities for special dividends along the way.
Guident CORP ("Guident")
In September Guident and its partner Perrone Robotics gave fully
autonomous rides, with an extra safety layer, to the Broken Sound
Country Club (BSCC) members, in hopes of securing another customer
for its state-of-the-art Remote Monitoring and Control Center. The
BSCC management supported Guident and Perron for the autonomous
electric vehicle showcase, and provided autonomous rides to the
club members.
Also together with Perrone Robotics, Guident participated in the
Lake Nona Verizon Innovation Hub, showcasing precision-guided
self-navigation. Guident also attended MOVE: Mobility Re-imagined
on September 27-28 in Austin, Texas.
The Regenerative Shock Absorber project is undergoing more
rigorous testing, as the company is working with one of world's
leading automotive companies on manufacturing a prototype in
accordance with industry standards. This month, the Company
evaluated real-world conditions in their testing lab in Boca Raton,
Florida. With precise force and displacement measurements, Guident
aims to demonstrate the advantages of the modern energy-harvesting
shock absorber over traditional oil-filled shock absorbers. R&D
breakthrough going from prototype to production was successfully
achieved.
Additional developments are expected in the coming months.
Notably, Guident's CEO Harald Braun is visiting Europe for
discussions with multiple potential customers on last mile delivery
solutions.
Innovative Eyewear Inc ("Innovative Eyewear")
The company has been delivering on its promise to expand its
sales and marketing capabilities. In general, the IPO has helped
take the company to the next level in terms of organizational
structure, talent procurement, product roadmap, brand awareness and
more. The company is building a strong foundational structure to
solidify its position as an early mover in the tech eyewear space.
The profile of Innovative Eyewear's new hires in the sales vertical
represent talent that helped grow one of the leading eyewear
companies in the world and helped build one of the leading athletic
brands. Both hires bring significant contacts and experience in the
optical and apparel industries.
We view the licensing of the global lifestyle brand Nautica(R)
for smart eyewear was a major victory for the company. With Nautica
products present in over 1,700 stores worldwide, the deal empowers
Innovative Eyewear access to the renowned fashion brand to produce
and sell fashion branded smart eyewear worldwide. The team is
working hard on designing and manufacturing the product to be
launched by Q1 2023. The strategy of licensing global fashion
brands on top of the Lucyd house brand sales is an interesting one.
It's worth noting that Luxottica, the world's largest eyewear
manufacturer, helped build their multi-billion dollar business by
licensing fashion brands and producing eyewear under these brands.
We believe that smart eyewear is a new platform opportunity to
replicate this strategy - pursuant to our belief that in the
future, most eyewear sold will be smart, since the smart eyewear
produced under the Lucyd brand already has the same appearance and
price tag of traditional eyewear but offers so much more
functionality.
The scale of opportunity here is immense. Even just one category
of eyewear, the safety glasses sector, represents a US$1b+
addressable market. You can see how busy the company is just by
looking at their product roadmap, which includes the first Nautica
smartglass release, the new quadrophonic Lucyd Lyte release, sport
styles, safety eyewear, and the Vyrb social audio app's ongoing
development. The company is showing an intense level of progress
and promise, and has built a leading product line that competes
well with well capitalized and storied tech brands.
Microsalt Inc ("Microsalt")
Microsalt is also making excellent progress. MicroSalt(R)
shakers were debuted at the Expo East Food Convention in
Philadelphia during the week of 28 September 2022, with initial
sales underway with major retail chains and food distribution
channels this October. MicroSalt(R) shakers will soon be available
for purchase on Amazon. As announced MicroSalt(R) has already
received commitments from UNFI, North America's premier food
wholesaler, for placement in several of its distribution
centres.
The show was a success, and the company expects first shipments
of the product to occur by November to UNFI.
Microsalt application testing has been successfully completed
with some of the largest retail chains in the US. Full production
tests of snack foods with Microsalt applied were finished with
outstanding results, with product flowing well and being applied at
an even and consistent rate using the customer's equipment, is a
significant milestone.
The company also successfully consummated a deal in the
ready-meals market, partnering with Presty! Foods (
https://prestyfood.com/ ) in their efforts to offer low-sodium
solutions to their customer base. This also shows the breadth of
addressable market segments for Microsalt's flagship product, which
can be used to reduce sodium content without impacting flavor in a
world of applications ranging from frozen foods to crisps to the
restaurant table.
Finally, the company received its first bulk B2B ingredient
order. According to Microsalt's CEO, the interest is also very high
for bulk B2B Microsalt sales internationally.
Summary
All of our companies demonstrate steadfast commitment to
operational excellence resulting in material progress across the
board. Thus, we strongly believe each company has the potential to
become US$100m+ business in the foreseeable future whilst improving
quality of life across several crucial verticals. We continue to
build momentum and hope to provide more exciting updates in the
near future.
Konrad Dabrowski, CPA
Chief Financial Officer
Tekcapital plc
For further information, please contact:
Tekcapital Plc Via Flagstaff
Clifford M. Gross, Ph.D.
SP Angel Corporate Finance LLP
(Nominated Adviser and Broker) +44 (0) 20 3470 0470
Richard Morrison/Charlie Bouverat (Corporate
Finance)/Abigail Wayne / Rob Rees (Corporate
Broking)
Flagstaff Strategic and Investor Communications +44 (0) 20 7129 1474
Tim Thompson/Andrea Seymour/Fergus Mellon
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 .
LEI: 213800GOJTOV19FIFZ85
Forward-Looking Statements
This press release is for informational purposes only. The
information herein does not constitute investment advice nor an
offer to invest and may contain statements related to our future
business and financial performance and future events or
developments involving Innovative Eyewear, Inc., Lucyd or
Tekcapital that may constitute forward-looking statements. These
statements may be identified by words such as "expect," "look
forward to," "anticipate" "intend," "plan," "believe," "seek,"
"estimate," "will," "project" or words of similar meaning. We may
also make forward-looking statements in other reports, in
presentations, in material delivered to customers, stakeholders and
in press releases. In addition, our representatives may from time
to time make oral forward-looking statements. Such statements may
be based on the current expectations and certain assumptions of
Tekcapital or Lucyd's management. Please note that these are
subject to a number of risks, uncertainties and factors, including,
but not limited to those described in various disclosures. Should
one or more of these risks or uncertainties materialize, or should
underlying expectations not occur or assumptions prove incorrect,
actual results, performance or achievements of Innovative Eyewear
Inc., Lucyd and/or Tekcapital may vary materially from those
described explicitly or implicitly in the relevant forward-looking
statement. Neither Innovative Eyewear Inc, Lucyd nor Tekcapital
intends, nor assumes any obligation, to update or revise these
forward-looking statements in light of developments which differ
from those anticipated.
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October 25, 2022 02:00 ET (06:00 GMT)
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