Mindflair : RNS Final Results

Mindflair plc

("Mindflair" or the "Company")

Final Results for the year ended 31 December 2023

The Board of Mindflair plc (AIM: MFAI), the investment company invesAng in next generaAon technology with a focus on AI, announces its audited results for the year ended 31 December 2023.

Financial highlights

• Net asset value ("NAV") of £5,844,000 as at the year-end (31 December 2022: £7,822,000). Reduction principally driven by the liquidation of Emergent Entertainment Limited (although the original cash investment in this company was circa US$200,000)
• NAV per share of 2.13 pence per share (2022: 4.28 pence) compared to a year end share price of 0.9 pence and a current price of 0.48 pence
• Two-yeardebt funding facility amounting to £1.235 million in place
• • Placing to raise £730,400 before expenses in December 2023

Portfolio highlights

• ConAnued progress is being made within the Company's investment por_olio
• A number of funding rounds have taken place for companies such as CameraMaAcs, Landvault, Engage XR, Virtex and VividQ
• CameraMaAcs is conAnuing to grow with a number of new customers
• Getvisibility, one of the Company's larger investments, conAnues to increase its customer numbers and revenue, with over 250 customers in 39 countries
• New investment made in Captur in October 2023, a company that has built an enterprise AI pla_orm for real-Ame,rules-based image recogniAon
• Virtex closed its first major commercial deal in December 2023 worth $3.5 million and has raised new funds at a higher valuaAon than the cost of the original investment
• Smargech247 conAnuing to make good progress as a listed company
• Investment in a third SVV fund ("SVV3"), alongside Enterprise Ireland ("EI"), an investment arm of the Irish Government
• SVV1 acAvely focused on the realisaAon phase of its investment cycle
• Successful change of name and rebranding to Mindflair plc to beger reflect the Company's emphasis on exciAng AI focused investments

Review of acBviBes

The year to 31 December 2023 has conAnued to be a difficult Ame for small-cap listed companies and for those companies with a technology focus. However, notwithstanding this market backdrop, the majority of the Company's investments have conAnued to make good progress during the period with the key developments being summarised in the following secAon.

Mindflair is an investment company focused on next generaAon technology with a focus on the applicaAon of AI to transform large tradiAonal industries. Mindflair invests in its por_olio companies directly, or indirectly, as set out below, through: (i) its investments in three funds managed by Sure Valley Ventures ("SVV") and (ii) its investment in Sure Ventures plc.

Investments

SVV1

SVV2

SVV3

Sure Ventures plc

Direct		Getvisibility,	13%	5.9%	16%		21.3%
		Low6 and
		Precog
Indirect			5.9% via Sure	1.3% via Sure		Hold stakes of 25.9% of
			Ventures plc	Ventures plc		SVV1 and 5.9% of SVV2
						and a stake in VividQ
Cornerstone			Enterprise	BriAsh	Enterprise
investor			Ireland	Business Bank	Ireland
Net interest			18.9%	7.2%	16%		21.3%
The Company's principal investment por_olio categories are summarised below:
						Cost or	Cost or
					valuaBon at	valuaBon at
					31	31
					December	December
					2023	2022
						£000's	£000's
Categories
SVV investments				4,932	5,219
Direct investments				1,563	2,901
Cash/other listed securiAes			206	856
Total				6,701	8,976

The cash balance above as at 31 December 2023 does not include the proceeds from the placing that took place in December 2023. The principal cause of the reducAon in the por_olio valuaAon during the year related to the insolvency of Emergent Entertainment Limited (although the original net cash investment in this company was circa US$200,000).

On 23 February 2023, the Company announced that it had agreed to invest in SVV's new venture capital fund, SVV3, alongside Enterprise Ireland, the fund's cornerstone investor that commiged 50% or €15 million to the fund.

1. The SVV investments

1. Sure Valley Ventures Fund 1 ("SVV1")

SVV1 is SVV's first fund which has completed its new investment phase and has now entered its realisaAon phase. It has already achieved three realisaAons/liquidity events to date, with more expected in the short term.

Within the SVV1 por_olio, highlights during 2023 include:

• GetVisibility is a cybersecurity company focusing on data visibility and control and uses state-of-the-art arAficial intelligence ("AI") to classify and secure unstructured informaAon. The company has conAnued to grow its sales pipeline, with a number of new channel partners being onboarded, leading to an increase in its number of enterprise customers to over 250 in 39 countries.

Mindflair also has a direct interest in GetVisibility and, an addiAonal indirect interest through SV plc. The total valuaAon of the Company's interest in GetVisibility, held both direct and indirectly, amounts to circa £2.43 million (€2.8 million) based on the company's last funding round. A number of conversaAons have already taken place with regard to the possible sale of this company at a higher valuaAon.

• CameraMaAcs offers a cloud based, SaaS soluAon to fleet managers, enabling companies to deal with the increasing demands around driver shortages, driver retenAon, rising fuel costs, insurance costs, emission output and driver safety protocols. Its in-house developed smart technologies, smart vision systems, AI safety technologies, fleet safety/risk management tools and data soqware soluAons have been achieving good results for customers. In Q1 2023, the company raised €3 million from exisAng investors at an increasing valuaAon to assist with funding growth. CameraMaAcs has conAnued to grow both annual recurring revenue and customers, with expansion into new geographies, such as the US and new clients being won including MariAme Transport, one of the UK's largest privately owned transport companies, Van Elle and Hendrick European. The company will also be receiving around €12 million in funding from the DisrupAve Technology and InnovaAon Fund to develop next generaAon neural processing units to improve driver safety.
• LandVault, a large metaverse builder, successfully raised an addiAonal US$3 million aqer extending its Series B funding round in April 2023. This strategic funding was raised from Web3 focused investors including, The Sandbox, The Gemini FronAer Fund, HodICo and hedge fund Kingsway Capital. The proceeds of the fundraise will assist its global expansion, further investment in innovaAve technologies and development of an open protocol, Matera, to make the metaverse experience more accessible. The company has signed a number of new deals with an increased focus on the Middle East.
• Virtex has developed an app called Virtex Stadium which is an applicaAon that enables esports organisers to host their exisAng formats on a 3D entertainment pla_orm, offering millions of viewers a completely new viewing experience. Virtex has recently completed a £1.8 million fundraise at a higher valuaAon than the cost of the original investment and closed its first major commercial deal in December 2023 worth $3.5 million with the operator of an esports venue to provide technology and soluAons for viewing esports live in 3D.
• Everyangle, whose computer vision soluAons help retailers improve efficiencies, opAmise operaAons and reduce losses, recorded over 200% growth in 2023 alone. They have recently expanded their product suite with advanced demographic analyAcs, enhancing their market-leading foo_all soluAon. Recent product enhancements around customer idenAficaAon and speed of service have been designed to reveal genuine converAble traffic, opAmise retail service efficiency and elevate customer saAsfacAon. A number of new contracts have been signed and new funcAonality has been added.
• Smargech247 Group plc ("Smargech247") (AIM: S247) is an established global arAficial intelligence- based cybersecurity business, specialising in automated managed detecAon and response. Recent full year and interim results of Smargech247 demonstrate that the company is conAnuing to grow revenue and EBITDA and win new contracts. The company was also recognised again as one of the fastest growing tech companies in 2023 by Deloige. Further updates include the announcement of a new AI Assistant, a pioneering AI capability for cybersecurity operaAons, and the extension of its robust cybersecurity framework to wider markets.
• Wia, a leading player in smart technology soluAons, announced in 2023 the closure of a landmark 5- year contract with one of the world's most prominent logisAcs companies. The agreement, valued at over $2 million, involves a rollout of energy monitoring across 5 million square metres of property in 14 countries, underscores the industry's shiq towards sustainability and the pressing need for efficient resource management.

• ENGAGE XR Holdings plc (AIM: EXR) is a metaverse technology company focused on becoming a leading global provider of virtual communicaAons soluAons through its new fully featured corporate metaverse, ENGAGE Link. The company also has a proprietary soqware pla_orm, ENGAGE. ENGAGE provides users with a pla_orm for creaAng, sharing, and delivering VR content for educaAon, training, and online events through its three soluAons: Virtual Campus, Virtual Office, and Virtual Events.
  In February 2023, the company raised €10.5 million by way of a placing which included a subscripAon by HTC for £0.58 million. In June 2023, Lenovo's new VR headset was released. Lenovo is a channel partner for ENGAGE XR and so this is expected to provide a new route to market for the company. In September 2023, the company published its 2023 interim results which showed conAnued revenue growth of 18% over the same period in 2022. More recently the company has signed its largest contract to date with a large Middle East based company. It has also just announced its results for 2023 with revenue of €3.7 million and an improving EBITDA result with net cash at the period end of €7.9 million.
• VividQ has been making good progress and is now able to share images of real holograms projected through high-performance 4K display hardware. The ability to deliver 'reAna resoluAon' computer- generated holograms means that next-generaAon VR headsets will be able to offer unparalleled levels of immersion and realism to users. In Q4 2023, the company raised £3.2m. The funds were raised at a price which was less than the previous round but it provides the company with sufficient cash to fund development for the next two years.

As at the year end, SVV1 had a por_olio of 14 investee companies at different stages of development spanning a range of sectors. The por_olio provides Mindflair with exposure to a number of key, cutng edge and rapidly growing technology sectors. Further details of the por_olio companies and recent developments are set out below:

ArBficial intelligence
Ambisense	Provides an ArAficial Intelligence pla_orm to deliver environmental risk
(Ambisense Limited)	assessment to allow real Ame gas and environmental monitoring using both
	IoT and sensor soluAons. However, the company has been unable to raise new
	funds and therefore went into liquidaAon in June 2024.
Security
Nova Leah	An ArAficial Intelligence cybersecurity risk assessment and protecAon pla_orm
(Nova Leah Limited)	for connected medical devices.
Getvisibility
(Visibility Blockchain	An ArAficial Intelligence security company addressing the substanAal problem
Limited)	faced by corporaAons in storing, sorAng, accessing and protecAng data.
PreCog	An ArAficial Intelligence security soluAon pla_orm company that provides data
(Polience Limited)	intelligence to combat crime, terrorism and protect vulnerable people.
	Customers include leading law enforcement and security agencies, and
	transport infrastructure groups.
Smargech247	Is an established global ArAficial Intelligence-based cybersecurity business,
(Smargech247 Group	specialising in automated managed detecAon and response. The company is
plc)	listed on AIM.
Immersive
Technologies
Engage XR	A developer of virtual reality and immersive experiences with a specific focus
(Engage XR Holdings	on educaAon and enterprise learning and development. The company is listed
plc)	on AIM.

Landvault	A moneAsaAon pla_orm and gateway for brands to enter the metaverse. The
(WAM Group Limited)
company is rapidly growing revenues and numbers of acAve users.
Warducks	An AR/VR game development studio known for the producAon of leading
games. However, more recently this company has struggled to raise new
(Warducks Limited)
funding and therefore filed for liquidaAon in early 2024.
VividQ.	A deep tech soqware company which has developed a framework for real
(VividQ. Limited)	Ame 3D holographic displays for use in heads up displays and AR headsets and
	glasses.
Volograms	An ArAficial Intelligence deep learning company that uses AI to create 3D
(Volograms Limited)	Augmented Reality from 2D photos and videos. The company has launched a
	consumer AR Camera app called Volu and has browser and enterprise versions
	in
Virtex	A company building a pla_orm for the next generaAon of live, immersive
(Virtex Limited)	entertainment within the virtual reality ("VR") gaming and esports industries.
	It is acAvely developing its new Stadium app.
Internet of things
CameraMaAcs	An ArAficial Intelligence platform enabling transport fleet managers to reduce
(MySafe Drive	risk, increase driver safety and comply with growing industry governance and
Limited)	compliance. The company is growing revenues considerably and building its
	presence in the very significant US market where it has already won a number of
	new contracts.
Wia	Provides a pla_orm soluAon for smart buildings. Its pla_orm provides full
(WIA Technologies	device and applicaAon management, security, data capture and storage,
Limited)	analysis and control.
Everyangle	An ArAficial Intelligence pla_orm that uses machine learning to provide
(Everyangle Limited)	enterprises, such as large retailers, with line of business soluAons to reduce
	fraud, churn and waste using machine vision.

SVV1 has completed its investment in new companies and is now in its realisaAon phase which should lead to further returns to the Company and its shareholders.

2. Sure Valley Ventures UK SoYware Technology Fund ("SVV2")

In March 2022, the Company invested in a second SVV fund, the Sure Valley Ventures UK Soqware Technology Fund (the "SVV2"). The principal investor in the SVV2 is the BriAsh Business Bank ("BBB"), an investment arm of the UK Government. The first close of this fund amounted to £85 million, with the BBB invesAng up to £50 million and other investors ("Private Investors"), including Mindflair, invesAng up to £35 million over the 10 year life of the fund.

Mindflair expects to invest up to £5 million in total over the life of the fund which would provide it with a circa 5.9% interest. SVV2 invests in a range of private UK soqware companies with a focus on companies in the ArAficial Intelligence sector and within the subsectors of AI in the enterprise, AI in Immersive Technologies (such as AR/VR) and AI in Cybersecurity sectors.

SVV2 is managed by the same SVV team which, to date, has been highly successful in achieving a number of cash realisaAons from, and upward revaluaAons of, the majority of the companies in the SVV por_olio. The profit share arrangements within this new fund are designed to encourage the involvement of the Private

Investors alongside the BBB, meaning that Mindflair and the other Private Investors would expect to receive a significantly enhanced share of the total return generated by the fund compared to industry standard.

As at the period end, SVV2 had made three investments in which are described below:

RETinZE Limited	RETiniZE is an award-winningcreaAve-tech company based in Belfast,
(RETinZE Limited)	Northern Ireland. The company is developing an innovaAve soqware
	product called AnimoAve that is harnessing the latest VR and GeneraAve
	Al technologies to transform the 3D animaAon producAon process.
Jaid	Jaid is a rapidly growing pla_orm that uses Al as a Service (AIaaS) soluAon
( O p s m a A x S y s t e m s	to help businesses reduce costs, improve efficiency and make data-driven
Limited)	decisions, including client service automaAon, sales automaAon, payment
	excepAon processing and claims administraAon processing.
Captur	Captur is a company that has built an enterprise AI pla_orm for real-Ame,
(Captur Limited)	rules-based image recogniAon. ExisAng investors, MMC Ventures and
	Ascension Ventures parAcipated in this round, along with other investors
	including ex-Deliveroo, and enterprise AI investors Concept Ventures and
	Two Culture Capital, backers of ElevenLabs and Electric AI.
	The company's technology uses Edge AI, the implementaAon of arAficial
	intelligence in an edge compuAng environment, which allows calculaAons
	to be completed nearby to where data is created, rather than an offsite
	data centre or a centralised cloud compuAng facility. This localised
	processing allows Captur's technology to make decisions using visual AI in
	under 3 seconds.
	Captur's visual AI soluAon is fast to implement and offers product owners
	easy-to-embed APIs and SDKs that act as a smart camera within their
	mobile apps. Captur is currently being used in the delivery sector for
	drivers to map doorways and verify the correct address, reducing delivery
	to incorrect addresses and fraud by up to 40%. Captur has recently made
	significant progress on new business and product features. They have
	launched their real- Ame camera SDK into producAon, which is now being
	used by tens of thousands of users per month. They have conAnued to
	grow their market lead in mobility with plans to launch with new clients in

The funding requirement for this fund is expected to be met from exisAng cash resources and/or realisaAons from SVV1. In June 2024, a fourth investment was made in this fund in Igybit, a pioneering developer tools company.

2. Sure Valley Ventures III Limited Partnership ("SVV3")

On 23 February 2023, Mindflair announced that it had agreed to invest in SVV's new venture capital fund, SVV3, alongside Enterprise Ireland, the fund's cornerstone investor who has commiged 50% or €15 million to the fund. SVV3 plans to invest in circa 15 high growth Al soqware companies in sectors such as Enterprise, Immersive Technologies and Cybersecurity across the Republic of Ireland. Whilst new investments for this fund are being reviewed, the funding requirement is expected to be relaAvely limited in the short term and will be met from exisAng cash resources and/or realisaAons from SVV1. In June 2024, this fund made its first investment in Inspeq AI, a transformaAve full-stack AI Ops pla_orm, alongside Delta Partners and a number of other leading investors.

3. Sure Ventures plc ("SV plc")

SV plc (LSE: SURE) is a London-listed venture capital fund which invests in early-stage soqware companies in the rapidly growing technology areas of Augmented Reality, Virtual Reality, Internet of Things and ArAficial Intelligence. Mindflair has a 21.3% shareholding in SV plc whose principal investments are a 25.9% interest in SVV1, a 5.9% commitment to SVV2 and an investment in VividQ. Consequently, as a result of its shareholding in SV plc, Mindflair has an aggregate (direct and indirect) interest in SVV1 of around 19%, which comprises its original direct 13% interest in SVV1 and an indirect interest of 5.9%. It also has an aggregate interest of 7.2% in SVV2. This investment is carried at its market value and as at 31 December 2023, SV plc's NAV per share was £1.07 (€1.24) compared to a current share price of £0.725.

1. Direct investments

	Getvisibility	Details of this investment are covered in the section above.
	Low6	Low6 is focused on the revenue generaAve free-to-play and affiliate markets in North
		America with the ambiAon to be the global leader in fan engagement. A number of
	(Low6 Limited)	new partnerships have been established, including the appointment as the NaAonal
		Hockey League ("NHL") free to play provider for a period of 3 years, who have also
		invested in Low6. In July 2023, the company announced that it had become EBITDA
		posiAve and in February 2024 it said that it expected current year revenue to be
		around £4.5 million and that it had traded profitable for the last 7 months.
	Precog	PreCog is a soqware soluAon that understands visitor flow, protects borders, detects
		persons of interest, and ensures locaAons are protected from those who wish to cause
	( P o l i e n c e	damage or commit crime. PreCog provides totally unique, scalable, acAonable
	Limited)	intelligence soluAon. Customers include top UK and internaAonal government security
		and law enforcement agencies and transport infrastructure organisaAons.	The
		company is involved in a number of customer deployments. The signature of one or
		two new contracts is expected to result in an upliq in valuaAon.
	E m e r g e n t	Emergent is focused on becoming a next-generaAon entertainment company, bringing
	Entertainment	audiences and storytellers together by harnessing emerging technologies. Whilst in
	Limited	the earlier part of 2023, the management team had been working on reducing the
		company's cost base and had revised its 2023 revenue forecasts upwards, as the year
		progressed trading deteriorated. Then in December 2023, the Company announced
		that Emergent was engaging with insolvency advisers and expected to be shortly
		placed into liquidaAon which then took place on 10 January 2024 with a resoluAon to
		voluntarily wind up the company.
		This investment has therefore been provided for in full.
	Other

As at the end of March 2024, John May, a non-execuAve director, reAred from the board aqer a number of years with the Company in order to devote more Ame to his other roles.

Financial

For the year under review, the Company reported a loss before taxaAon of £2.67 million (for the year ended 31 December 2022: loss of £0.37 million). The result for the Company includes unrealised gains/losses in the por_olio of quoted equity investments which are marked to market, plus any return from and adjustment to the carrying value of its unlisted investments. The principal cause of the loss for the year related to the insolvency of Emergent Entertainment Limited (although the original cash investment in this company was circa US$200,000).

Net asset value as at the end of the year amounted to £5,844,000 (31 December 2022: £7,822,000). We continue to believe that absolute NAV does not fairly represent the Company's financial potential, given the scope for significant valuation uplift of the companies within the portfolio. This is clearly demonstrated by the gains, both realised and unrealised, that have been achieved to date from the investment portfolio. Furthermore, it is worth reiterating that realisations that are achieved within the SVV portfolio result in cash distributions to the Company and are not retained within the fund.

On 22 December 2022, the Company entered into a two-year £1.235 million unsecured loan facility accruing interest at 7.5% per annum with a bullet repayment of principal and interest at the end of the term. Warrants over 47,839,284 new ordinary shares were issued to the investors which will vest if the average of the Company's volume weighted average price over five consecuAve trading days exceeds 5.163 pence within the three-year exercise period of the warrants. The warrant exercise price is 4 pence, which represented a 60% premium to the closing mid-market price of 2.5 pence per the Company's ordinary share on 21 December 2022. These are currently the only unexercised warrants that are in issue.

On 21 December 2023, the Company placed 91,300,000 shares at a price of 0.8 pence per share, raising gross proceeds of £730,400, The shares were placed at a 30 per cent. discount to the closing mid-price of the ordinary shares on 20 December 2023.

Post year end

In January 2024, Warducks was unable to raise new funding and therefore filed for liquidaAon. In June 2024, a new investment was made in Inspeq AI, a transformaAve full-stack AI Ops pla_orm, alongside Delta Partners and a number of other leading investors. This was the first investment by SVV3. Also in June 2024, the fourth investment by SVV2 was made in Igybit, a pioneering developer tools company. In addiAon, in June 2024, Ambisense went into liquidaAon as it was unable to raise new funds.

Outlook

Our investment strategy is focused on AI based next generaAon technology businesses. Whilst 2023 has been a difficult year, we believe that significant progress has been made by the majority of our investments and that the outlook for the respecAve sectors in which they operate remains encouraging.

We expect that in the coming months we will see some addiAonal realisaAons or liquidity events from the investment por_olio. Furthermore, it is important to note that, as previously menAoned, the first SVV fund has now completed its deployment phase and so is in its realisaAon phase which is expected to generate further cash inflows for the Company.

In summary, we believe that our por_olio provides excellent exposure to companies at the forefront of the AI revoluAon with the potenAal for significant growth and the ability to deliver real returns for shareholders.

Nicholas Lee

Director

26 June 2024

STATEMENT OF COMPREHENSIVE INCOME

	Year Ended 31	Year ended
	31
	December 2023	December
	£000's	2022 £000's
CONTINUING ACTIVITIES
Income		-
Other Income	4
Total income	-	-
(Loss)/Gain on investments held at fair value through profit or	(2,169)	420
loss
OperaGng expenses	(500)	(786)
OperaBng (loss) from conBnuing acBviBes	(2,665)	(366)
(Loss) before taxaBon from conBnuing acBviBes	(2,665)	(366)
TaxaGon	-	-
(Loss) for the year from conBnuing acBviBes	(2,665)	(366)
Other Comprehensive Income	-	-
Total Comprehensive Income aeributable to equity holders of	(2,665)	(366)
the Company
Basic (loss) per share
Equity holders
Basic	(1.44p)	(0.20p)
Fully diluted	(1.44p)	(0.20p)

STATEMENT OF CHANGES IN EQUITY
	Shar		Share	Capital
	e		Capital	Redempti	Retain
	Capit	Share	to be	on	ed	Tota
	al	Premi	issued	Reserve	Earnin	l
	£000	um	Reserv		gs	£00
	's	£000's	e	£000's	£000's	0's
Balance at 1 January 2022	396	7,874	-	11,995	(13,042)	7,223
Loss and total comprehensive	-	-	-	-	(366)	(366)
loss for the period
Issue of shares (net of costs)	61	904	-	-		965
As at 31 December 2022	457	8,778	-	11,995	(13,408)	7,822
Loss and total comprehensive	-	-	-	-	(2,665)	(2,665)
loss for the period
Issue of shares (net of costs)	-		687	-	-	687
As at 31 December 2023	457	8,778	687	11,995	(16,073)	5,844

Share Capital - amount subscribed for share capital at the nominal amount

Share Premium - amount subscribed for share capital above the nominal amount

Share Capital to be issued Reserve - amount subscribed, net of fees, for share capital alloged on 9 January 2024.

Capital RedempAon Reserve - own shares purchased by the Company

Retained earnings - cumulaAve gains and losses recognised

The accounAng policies and notes are an integral part of these financial statements

STATEMENT OF FINANCIAL POSITION

31 December

	31 December	2022
	2023 £000's
	£000's
Current assets
Investments	6,498	8,129
Trade and other receivables	692	373
Cash and cash equivalents	203	847
Total current assets	7,393	9,349
Total assets	7,393	9,349
Equity
Issued share capital	457	457
Share premium	8,778	8,778
Share capital to be issued reserve	687	-
Capital redempAon reserve	11,995	11,995
Retained earnings	(16,073)	(13,408)
Total equity (Net assets)	5,844	7,822
Non-current LiabiliBes
Term Loan	-	1,235
Current liabiliBes
Trade and other payables	219	292
Term Loan	1,330	-
Total liabiliBes and current liabiliBes	1,549	1,527
Net current assets	5,844	9,057
Total equity and liabiliBes	7,393	9,349