GCITekcapital raises £2 million to accelerate portfolio growth
(TEK ) has raised a total of £2 million - that’s around US$2.5m - before expenses, which will primarily be used to accelerate the growth of the Company’s portfolio companies.
The UK intellectual property investment group has executed an oversubscribed placing from existing and new shareholders, by way of the issue of, in aggregate, 8,000,000 new ordinary shares of 0.4 pence each in the Company, at a price of 25 pence per share to raise £2m.
The £2 million proceeds will be used to build commercial inventory of MicroSalt and SaltMe crisps and inventory of wireless chargers for Lucyd Lyte smart glasses; as well as to provide CAPEX to enhance Guident’s remote monitoring and control centre with AI software features.
Executive Chairman of Tekcapital, Dr Clifford M. Gross, who told investors that remainder of the funds raised will be used primarily for additional working capital, said today’s placing will enable Tekcapital’s portfolio companies to achieve “additional important milestones in 2022.”
In its results for the year to 30 November 2021 released early this month, Tekcapital saw net assets rise by 108% to a record $68.1m, generating total income of $29.2m, an increase of over 243% from FY20 while profit after tax jumped 243% to $26.4m, up from $7.7m in FY20.
Tekcapital said these record results had been mostly driven by a $28.1m - up from $8.7m in FY20 - increase in fair value of its investment portfolio. At present, the IP screening process of this portfolio looks robust given most have grown significantly since initial investment in 2018.
Today, Tekcapital outlined that it will build a commercial inventory of MicroSalt®, a patented process for producing micro-particle salt crystals in which its US subsidiary Salarius owns.
Sitting at the heart of the low sodium ingredient market, the process was developed to reduce sodium content in snack foods by up to 50% whilst delivering the same level of salty flavour.
Back in October 2021, the U.S. FDA released a series of voluntary sodium reduction goals for the food industry in what was described at the time as “a major milestone” for the US. Salarius expects these goals to have a positive impact on the sales of MicroSalt® as well as the retail sales of its SaltMe! Crisps, its range of “all-natural potato chips” developed using MicroSalt®.
The SaltMe® potato chips range can now be found in 2,200 Kroger supermarkets in the US as well as 200 other retail locations. Whilst too early to place a firm number of estimated revenues this year, Salarius has forecast potentially “significant” sales growth for FY22.
Today’s funds will also go towards building an inventory of wireless chargers for Lucyd’s Lucyd Lyte smart glasses. The US subsidiary, which develops the smart eyewear range, was the first company to deliver prescription glasses with Bluetooth in 2019. Lucyd’s technology enables common smartphone tasks to be performed handsfree, increasing pedestrian safety.
Notably, Lucyd signed a distribution deal with D. Landstrom Associates for its Lucyd® Lyte® range smart-glasses in large retail stores in the US while its subsidiary, Innovative Eyewear, has filed a registration statement for a potential IPO on NASDAQ, seeking to raise $10m.
Giudent, Tekcapital’s US subsidiary and its largest holding, is developing an autonomous vehicle connectivity solution and related patent. In recent weeks, the company has also announced its selection as a vendor for
Jacksonville’s mass transit modernisation project.
Both contracts utilise its ultra low-latency remote monitoring and control system (RMCC) and software, which is aimed at improving safety of autonomous vehicles and delivery drones. Tekcapital said today’s proceeds will also go towards enhancing this RMCC and software.
View from Vox
Tekcapital shares rising 161% over the past 12 months tells us that investors have rewarded the UK intellectual property investment group’s strong 2021 performance. Over the past three months alone, shares have traded between 27.5p and 35p, following a dip to 25.5p in March.
Prospects are positive after Tekcapital’s bets on multiple disruptive technologies have paid off thus far. It seems many investors believe the IPs of Tekcapital’s portfolio - addressing multiple billion dollar markets - could become worth 9 figures, and the market appears to agree here.
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