Final Results

Final results for the year ended 30 September 2022

The Board of Asimilar Group plc (AIM: ASLR), the investment company focused on technology opportunities in the fields of big data, machine learning, telematics and the Internet of Things, announces the Group's audited results for the year ended 30 September 2022.

The 2022 Annual Report and Accounts (“Annual Report”) have now been published and are available on the Company's website at www.asimilargroup.com.  The Annual Report will be posted to shareholders shortly, and copies will be available from the Company registered office at 4 More London Riverside, London, SE1 2AU.

Introduction

The year under review, and the period post year-end, have represented a particularly challenging time for the Company and a number of its investee companies.  Global events and the macro-economic environment have significantly affected the performance of the portfolio, restricting the funding available to certain of these technology assets on appropriate terms to allow them to stabilise and grow.

A summary of the investment portfolio is provided below.  Whilst the downwardly revised valuation of Veative Group Holdings plc (previously Dev Clever Holdings plc) has been the material driver of the Company’s financial performance and position, the majority of the portfolio companies were valued lower at the year-end than they were at the start of the period.

Proposed cancellation from admission to AIM

Despite material uncertainties disclosed later in the going concern note the Board considers that the Company has sufficient liquid assets to meet its operating costs for the next reporting year. In the absence of any pending liquidity events in respect of its unquoted holdings, or any further fundraising, the Company does not currently have the capacity to pursue new investment opportunities.  During the year, and post year-end, any additional investment has been limited to relatively low levels of follow-on support of existing portfolio companies, albeit the Board has continued to evaluate new opportunities and consider how these would be funded.

It is neither sustainable, nor beneficial, for the Company to be in a position where it needs to liquidate certain holdings in order to meet costs.  The Board is actively reviewing its current cost base, as well as its options for the future.  Certain permanent cost savings have already been implemented, and the Directors have deferred their salaries since December 2022.  Further cost savings are planned. 

Given the Company is currently admitted to trading on both AIM and AQSE, the Board propose to put a special resolution to the forthcoming Annual General Meeting (“AGM”) which will seek shareholder approval to cancel its admission to trading on AIM.  The Board does not consider that any potential benefits to the Company or shareholders from retaining the AIM admission are sufficient to justify the associated costs.  Further details will be provided in the circular convening the AGM.

Options for the future

In the event that shareholders approve the AIM cancellation, the Board currently intends that the Company should retain its admission to AQSE in the near term, thereby maintaining liquidity in respect of its own shares.  The Board will consult further with its shareholders in respect of its future options.  These may include a recapitalisation in order to pursue new investment opportunities and/or support the existing portfolio, and to cover working capital requirements in order to remain listed in the longer term.  It may also consider the commencement of an orderly realisation process and return of proceeds to shareholders. 

Financial review

Total comprehensive loss for the year was £35,271,732 (2021: income £26,705,635). Unrealised losses on investments were £36,630,063 (2021: gain £25,687,510) and realised gains on investments were £226,976 (2021 gains: £2,202,000). Cash at the bank at the year-end was £7,179 (2021: £600,090).  As noted above, however, the Company is able to continue operations through the phased liquidation of its listed asset base.

As at 30 September 2022, total assets were £6,727,334 (2021: £43,735,675) and the net fair value of investments held was £6,566,405 (2021: £43,040,104).  Total net assets were £6,452,184 (2021: £41,474,640) which represents 5.53 (2021: 35.94) pence per share.

Investment Portfolio

Asimilar has developed a portfolio approach to its investments.  In order to expose our investors to the potential returns that we believe they demand, such investments should be regarded as being at the highest end of the risk spectrum.  A brief summary of our investments and developments within them is outlined below:

Magic Media Works Ltd (“Magic Media”)

Magic Media is a music entertainment technology business.  The company's mission is to bring families together through shared music entertainment experiences via its app “ROXi”.

At launch in 2017 Magic Media delivered the ROXi experience to consumers was by way of a dedicated set-top box, which plugged into a TV.

However, the rapid adoption of Smart TVs and streaming apps has allowed the business to transform itself into a free multi-platform Smart TV App, offering ad-funded free and subscription-funded premium editions of the ROXi experience.

The free ROXi TV App, which was launched in November 2021, offers a full catalogue of 90 million music videos covering all genres and decades, combining all the original music videos with tens of millions of virtual music videos which are exclusive to ROXi. ROXi also offers interactive music games and Karaoke and a Netflix-esque rail based user interface.

The ROXi experience is available on an increasingly large number of Smart TV platforms, including Sky Q, Fire TV, Google TV, Android TV and Samsung. Other platforms and territories are planned.

The company has global rights agreements with the major labels (Universal Music Group, Sony Music Group, Warner Music Group) and major independents including Merlin Music.

In June 2022 Magic Media launched a fund raise to raise up to £5 million at 30 pence per share with an option to invest via loan notes which would pay interest at 5% and have attached a warrant with rights to subscribe for shares in Magic Media at 30p. This amount has been extended by a further £2 million to a total of £7 million. Asimilar invested £100,000 in loan notes and associated warrants.

On 19 December 2022 ROXi announced a partnership with Simon Cowell, creator of X-Factor and Britain’s Got Talent, to curate exclusive music and video content available on the ROXi App.

In December 2022, ROXi also announced a partnership with Samsung, allowing ROXi to be enjoyed on Samsung TVs.

At 30 September 2022, Asimilar held 1,646,682 shares which represents 5.05% (2021: 6.13%) of the issued share capital. Asimilar also holds, before any adjustment to fair value, £1,591,768 (2021: £1,491,768) in convertible loan notes, 1,262,050 (2021: 928,717) warrants and has options over a further 204,811 (2021: 95,000) ordinary shares in Magic Media.  The carrying value of this investment was £1,732,509 at 30 September 2022 (2021: £3,352,295). The main reason for the decline in the carrying value is the fundraise at 30p which is a significant discount to the previous round and an indication that there is need for working capital.

Veative Group Holdings Plc (previously Dev Clever Holdings Plc) (“Veative”)

Veative is a software and technology group specialising in the use of lightweight integrations of cloud-based gamification and VR technologies to deliver rich customer engagement experiences across both the commercial and education sectors.  In January 2019, Veative listed on the Standard List of the London Stock Exchange.

On 24 December 2021, Veative announced that trading in its ordinary shares was to be suspended pending the approval by the FCA of the acquisition of Veative Labs Pte Ltd (Singapore).  On 19 July 2022, the company completed the transaction with the issue of 225 million consideration shares.

At 30 September 2022, Veative’s shares remained suspended and, on 16 December 2022, the company announced its intention to delist and change its name.

The majority of the interest in Veative is held via Asimilar’s wholly owned subsidiary, Asimilar Investments Limited (“AIL”), based in Jersey.  At 30 September 2022, AIL held 70,000,000 ordinary shares in Veative representing approximately 8.4% (2021: 12.2%) of Veative's issued share capital. The carrying value of this investment was £1,890,000 (2021: £26,950,000).  Asimilar Group Plc also held an additional 2,300,000 (2021: 2,300,000) shares at a carrying value of £62,100 (2021: £885,500). 

At year end, AIL held a warrant to subscribe for 35 million new ordinary shares in Veative at 25 pence per Veative share. This warrant expired on 22 March 2023. The carrying value of the warrants was £nil (2021: £5,670,000).

There has been a significant decline in the value of this investment due to Veatives’s prolonged suspension from the Standard List of the LSE as it sought to have its prospectus approved and subsequent delisting.  Given that the Company does not have full visibility of Veative’s ongoing process of raising funds as a delisted company, a considerable downward revaluation has been taken due to uncertainty inherent in the fundraising outcome and further discounts have been applied owing to the illiquidity of Veative’s shares at the current time.

Simplestream Limited (“Simplestream”)

Simplestream is an award winning provider of best in class, next generation TV solutions to some of the biggest players in the broadcast, sports and media industry.  Clients include QVC, UKTV, A&E Networks, AMC Networks, Channel 4, Narrative Entertainment and BFBS amongst others.

 New customers taken on during the year were TVL in Norway, PBS UK, Copa90 and Talk TV.

With the TV landscape changing in terms of delivery, Simplestream’s cloud-based Media Manager and App Platform provides broadcasters and rights owners with an end-to-end technology services eco-system, with a full range of multi-platform TV and video distribution products including low latency online simulcasts of TV channels, real-time sports highlights clipping, broadcaster catch-up services, platform syndication and subscriber management services.

 Simplestream’s App Platform also provides multi-channel and multi-territory front-end templated applications for a complete range of connected devices including mobiles, tablets, connected TVs and fast-growing over the top (OTT) platforms such as Amazon Fire TV, Apple TV and Roku. In the UK Simplestream’s “HBBTV” solution is used by leading broadcasters to power “catchup” services on Freeview and YouView.

Simplestream currently delivers services across Europe, the US and Australia, with further international expansion planned for 2023-24.

At 30 September 2022 Asimilar held 9,943 (2021: 9,943) A shares in Simplestream, which represents 6.71% (2021: 6.71%) on a fully diluted basis and benefits from a one-time non-participatory liquidation preference together with a convertible loan note of £21,000.  The carrying value of this investment at 30 September 2022 is £840,174 (2021: £856,212).

Sparkledun Limited (“Sparkeldun”)

Sparkledun is a private company which, through its trading subsidiary, Fast to Fibre Limited ("Fast to Fibre"), has rights to exploit a patented process for the extraction of the inner core of telecoms and power cables, allowing the insertion of fibre optic without the need for excavation or other disruptive techniques.

The process, particularly in urban areas, offers significant advantages - economically, technologically and environmentally. It reduces the need for costly, disruptive and time-consuming civil engineering works and cable pulling. It also allows for the use of existing cable sheaths as ducts for new cables where no alternative is available.

Fast to Fibre has successfully completed several trials in a variety of geographical locations and complex situations and is now progressing a number of major commercial opportunities in the UK, Europe, North America and India.

On 29 April 2022, the company completed a fundraise of £1.3 million at a share price of £59.45.

At 30 September 2022 Asimilar held 8,307 (2021: 8,307) ordinary shares of £1.00 each in the issued share capital of Sparkeldun, which represents 4.2% (2021: 4.8%) of its issued share capital. The carrying value of this investment was £493,851 at 30 September 2022 (2021: £493,851).

Zeelo Limited (“Zeelo”)

Zeelo’s ambition is to build the world’s leading smart mobility platform for organisations, enabling access to safe and sustainable transportation for everyday journeys. It seeks to use technology and data to provide flexible and cost-efficient transportation programmes in public transit deserts.  This includes the smart provision and procurement of shared transport for businesses and providing employees with a safer commute to work and in education getting students to schools and colleges safely and competitively.  It also gives transport operators access to new business via a digitised service.

In terms of both revenue and the number of journeys taken via the platform, Zeelo continues to grow rapidly and in April 2022 the company received a takeover offer for $100 million from a US SPAC. Unfortunately the SPAC was unable to complete on its offer. The company also subdivided its share capital by 10,000. As a result Asimilar now holds 1,220,000 A shares in Zeelo.

In October 2022, the company launched a fundraise at a valuation of £50 million. The first phase of £5 million was completed by the end of January 2023.

The carrying value of this investment at the year-end was £439,298 (2021: £301,850).

Audioboom Group plc (“Audioboom”)

Audioboom is a global leader in podcasting with more than 130 million downloads each month from 34 million unique listeners around the world.  Audioboom was ranked as the fifth largest podcast publisher in the US by Triton Digital in March 2023.

Audioboom’s ad-tech and monetization platform underpins a scalable content business that provides commercial services for a premium network of 250 top tier podcasts.

For the years ended 31 December 2022 the company reported revenues of $74.9 million, up 24% from $60.3 million in 2021, and adjusted EBITDA of $3.6 million, up by 15% from $3.1 million in 2021.

As at 30 September 2022 Asimilar held 85,200 (2021: 155,000) shares in Audioboom which represents 0.52% (2021: 0.99%) of the issued share capital.  At year end the investment was valued at £421,740 (2021: £1,575,920). 

All Active Asset Capital Plc (“AAA”)

Asimilar holds 24 million shares in AAA as a result of the Company assigning its rights to subscribe into a Belgian AI based technology platform, Sentiance NV (“Sentiance”).  This represents some 0.01% of AAA’s issued share capital.  The assignment was originally made to MESH Holdings Plc (“MESH”) which issued 24 million shares to Asimilar credited as fully paid.  MESH was subsequently acquired by AAA through a Court approved Scheme of Arrangement on 29 November 2021, on the basis of one new AAA share for one MESH share. The original assignment was announced by Asimilar on 3 August 2020. 

AAA’s strategy is to invest in opportunities in the global technology, software and AI space.

As result of its acquisition of MESH, AAA now holds approximately 25.3% of Sentiance, an emerging and leading organisation within behavioural and ethical artificial intelligence and machine learning with its “Motion Intelligence” and “Behavioural Change Platform” technologies.

AAA also holds an investment in AAQUA B.V. a company registered in Netherlands with operating subsidiaries in Singapore, Belgium and Canada. AAQUA’s ambition was to develop a global social experience hub intended to curate original content. In August 2022 AAQUA was named in a worldwide freezing order on the assets of its founder and shareholder Robert Bonnier.  Since then the company has filed for bankruptcy protection in Singapore.

In December 2022 a new board was appointed to carry out a strategic review of the company’s existing investment portfolio. On 11 April 2023 the board announced that it cannot currently value its 36% holding in AAQUA. However, Sentiance is showing strong sales growth whilst requiring additional working capital.

As a result, Asimilar’s holding in AAA has been valued based solely on its 25.3% holding in Sentiance.

At year end, the holding of 24 million shares in AAA was valued at £240,000 (2021: £984,000). The Board of Asimilar conducted detailed due diligence on Sentiance in 2021 whilst it held the right to subscribe into it and believes that considerable value can be created in this exciting business.

Gfinity plc (“Gfinity”)

Gfinity is a leading esports solutions provider listed on AIM. It focuses on designing, developing and delivering esports solutions for e-games publishers, rights holders and brands. It has contracts and partnership arrangements with EA Games, Microsoft, FIFA, Formula 1 and Indycar.

Following a number of acquisitions during 2020 and 2021 the company has now evolved its business model to reflect the rapidly developing gaming market focusing on three distinct areas:

• Gfinity Digital Media group (“GDM”) is made up of 8 sites that reach more than 16 million unique active users and deliver 75 million impressions per month.


• Gfinity Engagement Platform (“GEP”) is a fully configurable white label solution designed to maximise community engagement through competitive play.


• Joint Venture Partnerships, such as Global Racing Series (“GRS”). This allows the company to benefit from co- owned ideas and create products such as GRS with Abu Dhabi Motorsports Management.

At 30 September 2022 Asimilar held 8,148,954 (2021: 8,148,954) shares in Gfinity which represent 0.05% (2021: 0.05%) of the issued share capital.  The carrying value of this investment at 30 September 2022 is £81,490 (2021: £224,463).

Low 6 Limited (“Low6”)

Low6 builds award winning Free-to-Play (F2P) games for sports franchises, teams, leagues, sportsbooks, influencers and media organisations. Described as “the most exciting acquisition platform for rights holders” by EGR, the online gaming industry’s leading information and networking group, Low6 works with some of the biggest global sports brands.

Low6 has a multi award winning proprietary tech stack and in May 2022 moved from pre-revenue to revenue generating by offering their F2P gaming technology to the iGaming market.

In October 2022 the company completed a fund raise of £2 million at a share price of £7.20 per share.

Asimilar holds 6,612 shares which represents 0.28% (2021: 1.1%) with a carrying value of £47,606 (2021: £119,993) at year end.

SeeQuestor Limited (“SeeQuestor”)

SeeQuestor brings together leaders in cyber security and computer vision to deliver an Artificial Intelligence (“AI”) tool to comb through some of the estimated 1.5 trillion hours of CCTV footage produced per year, harnessing what it believes to be world leading AI technology and affordable supercomputing to turn terabytes of video into actionable intelligence.

SeeQuestor has two main products available: SeeQuestor ‘Post-Event’ which allows teams to analyse archives of video footage to find vehicles or persons of interest, helping to solve investigations in a fraction of the time that would otherwise be needed; and SeeQuestor 'iCCTV' which monitors surveillance cameras in real-time. Use cases range from homeland security to smart cities, airports, industrial and mining operations.

The SeeQuestor 'Post-Event' product has been used successfully to solve crimes by 20 police forces in the UK and overseas. Having successfully completed a number of pilots in the field through 2019, SeeQuestor 'iCCTV' is now being deployed at scale to secure sensitive events and sites in several countries.

0n 31 December 2021 AIL exercised its option and acquired 33,784 shares at £10 each, bringing its total holding to 67,568 shares.

In July 2022 SeeQuestor launched an internal fundraising round at £10 per share to help with short term cash needs while it progressed its trials with customers in the Far and Middle East. Asimilar subscribed for 10,000 of these shares. The company also implemented cost reduction plans to preserve cash.

During August 2022 the company also started initial discussions with a potential US acquirer. The plan was to complete the deal by the end of November 2022 so that the enlarged company would be in a position to benefit from the pipeline of orders that would follow after completion of the trials.

A formal term sheet was received on 14 November 2022 valuing the business at a premium to the last funding round. However while final negotiations were being concluded there was a delay in customer receipts relating to the trials resulting in a cash shortfall. The potential buyer took the opportunity to reduce their offer price and structure. The final offer that was accepted by the board was for the sale of the assets and IP of the company for cash and a conditional payment to the shareholders in January 2024 if certain earn out conditions are achieved by end of December 2023.

If the earn out conditions were to be met then Asimilar and AIL between them could receive around $270,000 of shares in the acquiring company, however the board of Asimilar does not have a high degree of confidence that these earn out conditions will be met.

The holding of SeeQuestor shares totalled 124,586 (2021:80,802) as at 30 September 2022, representing 9.0% (2021:7.08%) of the issued share capital of SeeQuestor, and the carrying value of the investment was £nil (2021: £970,138).

Share issues

During the year Asimilar issued new shares as a result of the exercise of various warrants as follows:

• 573,333 5p warrants were exercised raising funds of £28,667


• 3,150,000 0.01p warrants were exercised raising funds of £315


• 2,000,000 5p warrants were exercised on a cashless exercise basis, as per the terms of the warrant, resulting in 1,090,849 shares being issued at par and raising £109

No other shares or warrants were issued during the year.

Admission to AQSE Growth Market

On 4 April 2022 Asimilar shares were admitted to trading on the Access Segment of the AQSE Growth Market.  At the same time, the Company appointed Station 12 Limited as its Alternative Investment Fund Manager (AIFM).

John Taylor

Chairman

Date: 21 April 2023

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2022

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 30 SEPTEMBER 2022

The financial statements were approved and authorised for issue by the board of directors on 21 April 2023 and were signed  on its behalf by

John Taylor
Chairman

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2022

Share capital

Represents the par value of shares in issue.

Share premium

Represents amounts subscribed for share capital in excess of its nominal value, net of directly attributable issue costs.

Merger relief reserve

Represents premium on shares issued in connection with the acquisition of Intrinsic Capital Jersey Limited, recognised in accordance with S162 of the Companies Act 2006.

Retained earnings

Represents accumulated losses to date.

Warrant reserve

Represents the fair value of placing warrants issued.

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2022

The Group had no debt in either period, therefore no net debt reconciliation has been presented.

Notes