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Tekcapital sees “advanced development” across trio of portfolio companies

The companies; Lucyd, Salarius, and Belluscura, are all delivering value despite being established less than two years ago
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Tekcapital's chairman Clifford Gross said the time frame has been "compressed" in terms of bringing intellectual properties to market

Tekcapital PLC’s (LON:TEK) is invested in plenty of smart-tech, from wearable smart technology to low-sodium salt substitutes and smartglasses.

In its latest half-year, the AIM-listed investment firm, which specialises in commercialising university technology, reported revenue from services increased by 29% to US$640,000, while its portfolio saw a net increase of US$639,000.

Net assets overall rose by 35% to US$10.7mln, onto US$0.25 per share from US$0.19 a year ago.

At current exchange rates, this gives a sterling NAV of around 20p.

Three companies dominate the portfolio: Lucyd (100%), Salarius (97.5%), and Belluscura (33%), and all are developing rapidly.

Lucyd store launches the smartglasses revolution

Lucyd’s augmented reality (AR) smartglasses are expected to be available in early 2019.

The group has just launched its first online store and speaking to Proactive, Tekcapital’s executive chairman Clifford Gross said one of the other key differentiators of the Lucyd store was that aside from regular currency, the store also accepts payments in Bitcoin and Ethereum cryptocurrencies.

Gross adds that while the AR glasses will initially be one product, the technology will be available as an addable feature across the product range in the future and are primed to be the next step away from hand-held touchscreen technology.

“It [smartglasses] combines glasses with a peripheral device for your mobile phone or smartwatch … it enriches the visual experience with audible information,” Gross says, adding that one of the firm’s guiding principle is to make the AR complimentary rather than distracting from the intended use of the glasses.

“There are 27 augmented reality products on the market and not one of them adheres to that principle … all of them are a detriment to your visual acuity,” Gross says.

The store launch follows a cryptocurrency token sale in September 2017 to fund its upcoming range of AR glasses, which by March 2018 had generated US$6.1mln in contributions to advance Lucyd’s business plan.

Salarius aims squarely at lucrative low-salt market

Aside from wearable tech, the company also has its eyes on the food substitute market, with another portfolio company, Salarius, developing a low sodium salt product known as Microsalt.

Claiming to be the world’s smallest salt crystal, Microsalt has up to 67% less sodium by weight than standard table salt due to its smaller size and is primed to exploit the drive for salt reduction across food products amid health concerns over excess sodium consumption.

The market size isn’t to be sniffed at either.

In a 2015 report from Future Market Insights, the global sodium reduction market was estimated to have a compound annual growth rate (CAGR) of 11.7% between 2015 and 2025, to a value of around US$1.7bn, with the snacks segment (which Salarius is targeting), accounting for around 26.9% of the market, with an estimated CAGR of 11%.

Belluscura meanwhile has licensing deals for three products made by med-tech giant Stryker

The business holds the rights to: Slyde, an evacuation sled; Passport, a cutting device used in keyhole surgery; Snap II, which monitors consciousness during general anaesthesia; and Wire Caddy, a proprietary wire management system used in operating theatres.

In February 2017, it signed a co-exclusive licence and development agreement with Separation Design Group, a leading research laboratory in the field of oxygen concentrators, to develop a portable oxygen concentrator.

Successful development of a product will see Belluscura targeting the massive market for treatment of chronic obstructive pulmonary disease.

Belluscura will look to bring in further devices to the portfolio and could one day be spun-out of Tekcapital to have its own listing on AIM.

“Advanced signs of development” across portfolio

These three portfolio companies are seeing progress in what is seen by Gross as a compressed timeframe, with the launch of Lucyd’s store coming less than a year after its establishment in September 2017.

Lucyd, Salarius and Belluscura are showing “advanced signs of development” Gross says, adding that the firms are delivering value despite being less than two years old.

“All of [these companies] didn’t exist 30 months ago, most of them are under two years old, which is very compressed in terms of taking [intellectual property] to market in the form of product … a typical time for companies … to get to market is around 8 years, and we’re doing it in a fraction of that time,” Gross adds.

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Tekcapital PLC Timeline

August 24 2018

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