Emv Capital (LSE:EMVC) — Results and Company Update

0:03 Good afternoon, ladies and gentlemen, and welcome to the NET Scientific Results and Company Update Investor Presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Please just simply type in your question and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your Investor Meet

0:33 company dashboard, and we will notify you by email when they are ready for you to review. I'd also like to remind you that this presentation is being recorded. Before we begin, we would like to submit the following poll. And if you could give your kind attention, we'd be most grateful. And I'd now like to hand over to John Clarkson, Chairman of NetScientific. Good afternoon. Good afternoon, Mark, and thank you, and thank you to everyone to joining us today. Welcome to the NET Scientific presentation. It's part of our program to communicate directly with shareholders and investors and build up that relationship. So thank you very much. And we're going to do a short presentation and starting with the inevitable usual disclaimer.

1:23 Matters are generally in the public domain, and the information will be on our website afterwards. But I'm sure you understand that we won't always be able to quote numbers or the specifics that we generally like to do. In terms of the presentation, provide a background introduction to NET Scientific. We're conscious that some people will know a lot about NetScientific, others will know very little. So try to strike the middle ground, an introduction, who the team is, a little bit of background on the history, but most importantly then moving into the future, our strategy, what we've achieved and where we're going with KPIs, and that way forward, and then with a simple summary to round off before we have the the full question and answer session. So if we haven't covered matters in the presentation, then naturally, we look forward to covering them in the Q and A session.

2:19 And those of you who are shareholders and have seen a copy of the annual report will note that this year, we presented a more comprehensive and more detailed document, which is hopefully useful for you in referencing the business. Just a quick summary. NetScientific is an active holding company, and I put the emphasis on active. So it's not just passively investing, but actively involved in the investment development, in particular, the commercialization to realize returns, and that's from life sciences and health care, sustainability, and technology companies. And what we're seeking to do is not only concentrate in The UK, but very importantly, to leverage our transatlantic relationships and build those global opportunities to deliver the essential shareholder value.

3:18 So introducing the team, myself, John Clarkson, the Chairman. My background ranges from partner in charge of developing services in consultancy with what is now PwC. I've been startup mode, CEO of a startup company with successful exit, and also at the other end of the scale involved at the PLC level as well as the the range of activities, turnaround and strategy. So a broad base of experience. And Ilyaan Ilyaan Ilyaan, our CEO, who will be joining the presentation for the second half, a very good rounded experience, both from a venture capital point of view, but as a hands on investor and strategist, with good international experience, including the IP knowledge.

4:12 On the board, and our objective right now is to have the team to deliver the business today and provide effective corporate governance. We have Professor Stephen Smith, who chairs the remuneration and nomination committees, as well as the group that we're setting up to provide a broader range of advice. Steve has had a range of senior roles and academic roles, not only in this country but internationally, recently chairman of a health authority trust, a regional trust. And the great thing about CEV combines the science with the commercial experience, so commercial and science combined. We are pleased to have appointed Clive Sparrow as another nonexecutive director to chair the audit committee in particular, and Clive's extensive experience in the world of finance and accountancy, chairing a community health trust, but also strong business acumen, including time with Treasury and Change Management and also with Grant Thornton and PLC, so a good breadth of experience.

5:24 And finally, Stephen Crow, who is our CFO, and brings to bear some twenty years of broad CFO experience in the financial sector as well as services. So a strong team. And as I say, we are building an advisory group to take on the specialist task as and when we require them. A little bit of history now. So we go back, Net Scientific was admitted to AIM in 2013 and backed by Woodford. And one of the interesting things about Woodford is whilst obviously the catalog of problems and disasters that we felt, we're seeing signs that some of the companies who were backed by Woodford are in that resurrection mode and success mode, and that's where we position ourselves now.

6:20 The investments mentioned before, Transatlantic Healthcare and IP, they started out with a very logical initial approach. Take the capital that was available, the model on the right hand side, and looking to identify the right opportunities and then help those companies incubate through that growth stage and moving from growth into the commercialization with the objective of capital being returned and release of value to shareholders. Sadly, the hard reality, but because of a combination of factors, somewhat passive and inconsistent application and a high cost base that the company had suffered right through until the first quarter of last year and was progressively reflected

7:11 in all aspects of the business. Hence, we came in as a new team, reviewed the strategy, but quite clearly, there was a message that the company had underperformed and I think it was essential. And in amplifying that, it wasn't just change for change's sake. It was saying, okay, let's really understand the underlying part of the business. And the simple model on the left hand side, it does the lessons. When we looked at the portfolio companies, the great news is that the science in those companies is good. So generally, the underlying principles were sound in those businesses, so something to build on. In the world of science, as many of you know, there's a lot of jargon and almost never ending research.

8:01 The problem being that there wasn't enough concentration on the other fundamental aspects, the pounds and the dollar signs and the concept of delivering within budget and on time. And that was the failure to deliver and hence the need to introduce robust commercial discipline, which is what we started off with in terms of the management change and approach in that ethos, really concentrating on the commercial development option, understanding the risk, understanding the options, but applying appropriately, making sure that the marketplace was right and the route to market with the IP. And clearly, it was just at the time that COVID was coming out.

8:48 Fortunately, not too badly impacted. There was some short term impact. But the good news is that we do see real opportunities arising from the pandemic. Part of that is making our capital more efficient and leveraging the soft finance, and that's something we'll say more about in a moment. But really focusing on we have to deliver returns and therefore seeking to identify the right value inflection points and where the exits and liquidity.

9:25 The overriding message, though, is that the underlying asset value is there and a strong underlying asset value. We've identified that and given benchmarks in the annual report on accounts, and Iain will say more about that later. But our strategy now focused on delivering shareholder returns. So last time, when we were making our investor presentations and presenting the shareholder circular, the first thing we had to do was turn around the business, focusing very much on the hard graft of execution and controls and make sure the process is scalable, but involved targeting the performance, working with the companies or making the necessary changes in those companies to deliver the returns and in so doing, developing revenue streams.

10:21 The reality is that some of these further investment is needed, but it's judicious and direct and taking advantage of the leveraged opportunities, whether it's third party funding and grants, utilizing those. But it's not a one size fits all. Each of our companies has got its own profiles and requirements. So making sure we tailor to that, there are the advantages, where we need the and there is the potential for those blockbuster returns. So managing on that basis, again, making sure we have excess liquidity events on but at the right time, so in the interim, building that shareholder value.

11:08 Having stabilized the position, we looked at each of the companies and said, we have certain things to do to make sure the business can be successful. So short term actions, what can we do to protect, stabilize and enhance? PDS, a NASDAQ listed company, they're needing funds last year. We were able to come in and anchor that investment round. We spent some $05,000,000 in new shares February 20, and the price at that time was $1.30 per share. We had a similar investment subscription of £05,000,000 in August. That time, the share price was around 2.75 Now the share price, whilst it has some volatility, is hovering around the $5 per share.

12:01 So our fair market value as of today is approaching £5,000,000 But Proaxis, which is a Belfast based company specializing in the diagnostics respiratory area, one of the problems there was that Net Scientific had 60% of the equity and the other equity, the 40% being in the hands of the founders, but Net Scientific was picking up all of the bills and all of the costs in funding the business, which was clearly untenable. So we bought out the minority interests and at the same time, out the IP. And now on a mission to scale up the business, targeting grant finance last year to recognize the impact of the marketplace from COVID, and we have successfully delivered on that with an acquisition now owning 100% of that business and an action program, which is going well.

13:02 GlycoTest, which is Philadelphia based early diagnostic of liver cancer, where again, we were able to concentrate management's efforts on the delivery of the clinical trials. And in the timescale when COVID was affecting site visits, concentrating with a plan to get the results in, we did deliver that and the team did deliver that on-site. And in this process, by focusing the effort, saved some $1,000,000 in the relationships there. And Fosun Pharma are our co investors in that and have been working with them to build that relationship and rebuild that relationship across. So again, a good delivery.

13:50 The other three identified there, EpiBone, which deals with bone specialized bone and cartilage and in board have been a convertible loan. Now having delivered that convertible loan, looking for further enhancement and development of what is quite an exciting business prospect.

14:16 G Tech, Silicon Valley, again, a loan conversion and again is going well. Longevity is the one that is still working process. But just to demonstrate that proactive management we've undertaken is delivering.

14:43 So that brings us to where we're looking and saying, right, we have an offering. We looked at what we needed to do. We set this out in a comprehensive shareholder circular. This time last year, we were working on that. We started developing our plans and presented that in a comprehensive package and set out the new strategic plan. The capital reorganization was relatively simple. It was taking 10 of the original shares, and you might notice a difference in denomination and the low point, the share price was 1.25p. We consolidated that to be the 12.5p today. So the 10 for one consolidation.

15:34 We went through a whitewash process with the Beckman Group and employer. We successfully acquired the whole of EMV CAPITAL PLAYPER acquisition, which really positioned us for further growth. And that was almost unanimously approved by shareholders at our EGM last August. The good news was the placement, which we targeted at $2,000,000 was oversubscribed, and we're delighted to have new and supportive investors and no doubt some of you are in the room today. But at that point, I'll hand over to Ilian to take us forward. Thank you, Ilian. John, thank you very much. And and just to finish off on the drivers for the transaction last year, what what we saw is that the combination of the two organizations with MedCenterfic acquiring EMV would give critical mass to the combined organization, but also combined two very similar investment kind of focuses, of course, with different styles and create something that's greater than the two separate organizations.

16:50 And with that in mind, what for myself now as the NetScientific CEO, this provides an amazing opportunity to grow and create value. It is a organization that is at critical mass that can do interesting things on the market. There is now a sufficiently

17:10 good infrastructure that we can do bigger things. But, also, there is a combined team that has the capability to execute. In combination, I'm able to bring the various networks, capabilities, experiences from my previous businesses to to bear on the NetScientific growth opportunity. Now NetScientific gained several things through the transaction. And what I want to emphasize with this diagram on the left is that we now have the capability of acting throughout the company's life cycle in terms of investment. Now with those of you with some experience in this space, you know that this different different stages of development of the company, different tools are available. In The UK, we've got the ES investment, which then, of course, follows into classic venture capital deals. There's family offices. There's corporate VC.

18:02 There is a whole plethora of tools available for companies to grow, and we are able to engage with those and provide

18:09 or develop the best solution in our view for those for the companies we support. In addition to that, I mentioned that we have additional and growing deal execution capacity. You look at some of the things we've done recently. But also importantly, we now have an additional income stream both through transaction advisory fees, which was not here before, but also importantly through the syndication of deals and the management of that of that investment, the carried interest returns that we get over and above the balance sheet investments by NetCentric. Now we are in high-tech. We are in two of the high growth areas and high promise areas in the post COVID space. On the one side is health care with everything that really we're living in a golden era for life sciences and health care. And on the other side, there are all the opportunities in sustainability broadly with the many different subsectors of sustainability, all of which once again are having a a really a new push globally.

19:10 And we have the specialist capability to engage with those opportunities, be it the deal flow that we get from from our networks or the corporate links that we have, and, of course, the capability of incubating and supporting with the IP strategy these these investments. We have a lot of proprietary deal flow that's coming through our combined networks, and this is positioning us quite well for work in the future. Now looking at what has been achieved since the acquisition, well, I mean, the immediate one was the doubling of the portfolio to 17 companies. For those of you counting, this includes EMV CAPITAL as a portfolio company. But, of course, the 16 here are the holding or investment portfolio businesses.

19:56 To begin with, all of these are direct ownership by NetCentific, and all of these are carried interest. But as time goes, we expect that this will start mixing up. But what that provides us is with a critical mass, robust, balanced portfolio where every single one of these companies has its own story. It has its own business plan. It has its own development path that we have engaged with and and shaped to one or another extent. And, therefore, we're able to see how this whole fits together both on a company by company basis, but importantly, as a portfolio. And, really, it's the portfolio dynamics that we're getting now that for us are quite quite exciting.

20:34 I should mention for each of these companies, there's a lot of information in the annual report on our website and, of course, on the website of the businesses. So we encourage you to familiarize yourselves with with our portfolio. Now we've maintained progress since September last year on the portfolio companies. What John showed earlier was more or less kind of up until September. So since then, a lot more has happened. After the acquisition of the Proaxis stake, we have implemented a number of action focused initiatives. This has resulted in some things that you don't see, but what's visible is the an additional license obtained by University of Geneva, a new distributorships that we've signed with Proaxis, and, of course, there's other things that we are doing.

21:20 With glyco test, we have now completed the site trials, and this has enabled us to move to commercialization both on The US side, on the Chinese side, and perhaps beyond. With PDS very much in the public domain, there was an announcement recently that the Brazilian government provided $60,000,000 of funding for the consortium led by PDS for a phase one, two COVID vaccine trials. We expect this will be a a continuing story, but there was also positive pre interim data on the phase two one of the phase two trials, things that were started with the funding that we that we contributed to last year. There've been a number of fundraisers where EMV CAPITAL has syndicated an investment, and this is now added to our capital under advisory.

22:10 Sage Tech and SoftFront, in particular, we let successful funding rounds in those. This has led to increased capital under advisory, but it has also helped us increase our influence. And in turn, this has seen both companies go through significant technical and commercial milestones, which we expect will lead to good things for NetCentivex shareholders in due course. PointGrap is specifically interesting. It's an Israeli based company backed by ABB Ventures and Philips Lighting. They're broadly in the smart building space,

22:43 and we led a capital restructuring, the setup of a working capital facility, and an ongoing investment round. But this has enabled the company to focus on the COVID opportunities emerging in workspace management as a recognition that were re featured by CNN business as the future of the post COVID office, and, of course, there's a lot more to do there. Vaultex, some of you may be familiar with, again, really strong developments in the last year and in q one. There's a new CEO in place now, but also consistent with the transatlantic thesis that we have. Whereas initially, the company or traditionally, the company had been based in San Francisco and only in San Francisco. We've now established UK operations with a significant part of of of the hardware side of the business here working with really strong capabilities in the Cambridge cluster.

23:38 Further system placements, with universities and commercially, and continued investor support. And, again, each of these companies is a story in itself. Only have so much time now, but we're worth following. And and all of these qualitative and quantitative developments in the end, of course, translating specific KPIs.

23:58 Starting with the share price, as John mentioned, last year, we reached a low point of 1.25 p old money, 12.5 new money. It has moved around during the year. The average over the last year has been 55 p, I should say, over twenty twenty. As you know, there were certain spikes, and it continues to hover around that level. In terms of the loss of the year, 2019 was less a a slow a small loss than 2018, and this trend has continued in 2020. But what I should emphasize here that given our holding company structure, where we have companies such as Glycotest and Proaxis that are holding companies that are investing in new in new technologies, new products, this translates into losses at group level. So the loss in itself is not a bad thing. It it can represent investment in the

24:53 future. The reason we have this drop is because of the further cuts in waste that we have implemented and the further streamlining of the organization. We're running a much more efficient business now than I would say historically. Apologies for this busy slide, but I'll try to take you through it. And this is when it comes to the bottom of it. The difference with NetScientific now is that we have a mixture of subsidiaries, directly owned stakes through investment from balance sheet, and interest in the companies through capital under advisory where we've syndicated deals, and we're taking a cut through carried interest or shared profit, classic VC style. This is quite interesting because it provides the company with multiple sources multiple offsetting sources or balancing sources of of capital growth.

25:40 Turning to the fair value, we've seen an 80%, eight zero, 80% increase in fair value over the year going from 11.8 to 21.2. Now you could say, well, yeah, that's the director saying that. We'll do our own maths. To that, what I would say is that

25:55 we've taken a conservative approach whereby we're measuring fair value on the basis of historical cost or the most recent investment round even if that round was some time ago. We are not taking into consideration in the fair value our expectations of growth. And as you can imagine, we have such expectations. Now we'll continue to we anticipate further increase in this going forward, and this will be both through driving value in the existing assets as the value inherent in the portfolio crystallizes through the various measures that ourselves and the management teams are putting in place, but also through appropriate investments. Now in addition to that, there's the capital under advisory that I mentioned. Of course, last year the beginning of last year, this was zero.

26:42 Through the acquisition of EMV, it went from 0 to 14,600,000. But what we also wanted to show you here that EMV CAPITAL in itself has had a good year good year last year in terms of growth in capital under advisory. We continue this will continue to grow through further funding of the existing portfolio, the existing bigger portfolio where EMV CAPITAL almost acts as an in house corporate finance VC to the portfolio as well as new projects, new deals that we are looking at. This is not just blue sky. It's based on a fairly well measured and purposefully executed pipeline of further deals and transactions both within 2021 and beyond of which we have visibility.

27:25 And this brings us to the business and financial plan going forward. And as as we've hammered throughout, we now have a stronger financial base with new and recurrent current income streams as well as capital realization opportunities. Importantly, and and I can't emphasize this enough, we now have a capital light model that we've shown over the since September that can work, where we're combining judicious and direct investments from balance sheet with syndicated investment through the capital under advisory mechanism that kind of gives us a a greater influence with with with less balance sheet than would be the case otherwise. And in addition to that, combining it with soft funding from public sector grants, whether it's in The UK, US, or elsewhere, as well as corporate joint development agreements, all of these, we feel, provide enhanced returns than the alternative model in in these very interesting sectors.

28:20 We'll continue to establish the necessary resources and the infrastructure to deliver the strategy.

28:26 The strategy, of course, while we have the broader strategy, the implementation evolves over time, so we identify resource that we need. But I think, importantly, we want to operationalize further the transatlantic initiatives or vision that the the two companies they had prior to the combination last year. And we've launched what we call internally the transatlantic bridges initiative, where we're looking for two way traffic between companies. And it's not only about transatlantic for us does not mean let's take money from The UK and throw it in The US. That's not interesting. What that means for us is helping UK companies expand in The US and international markets with advice, with networks, with funding opportunities, but also with hands on local presence. And vice versa, The US portfolio companies we have, actually, they do have passports. They are interested, at least some of them. They are interested in expanding into The UK and internationally, and we are able to provide that with our local networks.

29:25 And this will be something you'll hear from us in in the in the months months to come.

29:30 So what is the way forward? Well, we'll continue to utilize and leverage the asset base we've got, the PLC brand, which is strong in The UK, but it's also strong internationally. Matters to people that we are a listed company. And to harness the group synergies, not only within that scientific and the old EMV CAPITAL, but also synergies between the various group companies and just specific examples of things that we have done. Our focus will continue to be on life sciences, sustainability, technology. But, again, I want to emphasize we are not a passive investor. There are many good passive investors out there. We're not one of them. We are active and focused. So with everything that we do, we go through a structured and robust evaluation. We go through the projections with the management teams. We build that into a model both at company level and at portfolio level. And with the combination of this information, we we have good knowledge or good guess, at least, of

30:23 where the investments needed will be over the next three years, not one, but over the next three years. And that in turn enables us to make better informed judgments or should we invest more or should we look to exit. We're measuring this both to clear milestones, but also setting up quarterly KPIs on which I'm measured by my board, as well as rolling twelve month actions so we have visibility on what needs to be done, and once again, a three to five year planning horizon. All of this, we feel, will enable us to scale the investments that we have and the future investments we will make. We're focusing on high growth opportunities in the post COVID environment in our sectors of focus, and you know from the media and from your research and from what you hear from your networks, there is a lot. There's a lot of changes happening in industry. We're well positioned to engage with that.

31:08 We also have effective and we think effective and preemptive risk management. And, again, there's a few mistakes we've helped management of our companies not to do over the last year. But last but not least, we want to focus on realizing profits and maximizing value with these businesses and, of course, evaluating your opportunities. In summary, look. It's we are very in technology, you'll hear lots of buzzwords being thrown around, and the buzzwords rotate and year on year, they change. We have a very old fashioned and bricks and mortar focus approach in in in in in the high-tech space. We want to combine good science with hands on common sense commercial management and smart investment approach to deliver returns to investors.

31:55 With that, I hand over back to John. Well, thank you very much, Billie, and I hope that's illustrated to audience today what we're actually doing and how we're doing it. Just to summarize, therefore, clearly, there are risks and there are obviously challenges. But I think fundamentally, NetScientific is in a completely different place than it was this time last year. We do believe we have the right asset base. The fundamental is that portfolio companies are good companies. It is the right space, life sciences, health care, very much the four huge opportunities arising for us, both directly and in value terms.

32:40 And it's the right time to complete this transformation of the business, creating and growing that essential shareholder value. So it's really a staged operation now. We've still got to complete the turnaround. It's gone well so far, but it's hard work and it's hard draft, and that's the basis of delivering it. And we do focus on aligning the underlying asset value, which we identified very clearly and Ilian has expanded on in terms of the fair value and on the assets under management and the carried interest that brings. And the firm and above that, it's that future potential that each of these offers, which is still not aligned with our market cap. So that's objective one.

33:31 Secondly, to continue to develop the portfolio, but in parallel with that, looking at the new growth opportunities. Some of those will come from the portfolio, others come fresh. But continue that growth but by firm application of commercial principles. And as a result of that, we're in a great position of having multiple prospects now. It's not just a single or one or two shots on goal. We really do have multiple prospects and the potential to realize significant shareholder returns. And speaking not just for Ilium and myself, but for the whole team, our commitment is to deliver. So thank you very much indeed for your patience in listening to us. And happy to take I can see questions are coming up, so we'll try and answer the questions if we can work through them. You. Sean, Ilhan, thank you very, very much indeed for the presentation and the update. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of your questions submitted today. I'd like to remind you that a recording of this presentation, along with a copy of the slides and the published Q and A, can be accessed via your Investor Meet company dashboard on the Investor Meet company platform.

34:52 I'd also like to remind you that your feedback is important to the company. And immediately after the presentation has ended, you'll be redirected to the opportunity to provide feedback in order that the company can better understand your views and expectations. John, Ilian, obviously, we've had a a number of questions that have been pre and, of course, you can see there are a number of questions that are in the live channel. What I'd like to do is, if I may, is if I start off with the presubmitted questions, and then I'll I'll address you to the q and a tab and ask you to read out the questions where it's appropriate to do so. But the first question we received ahead of today's event is what does your pipeline of potential investments look like? Thank you, Mark. Maybe if I'll take this one. So maybe do you wanna start with that? Yes, sir. It's a bit of a bit of a delay.

35:40 So so I think in terms of our pipeline, first of all, organically, we get a lot of deal flow from the market simply. You know, if you're in the market and you're doing interesting deals, you know, things come to you, but also we have strong networks with corporates, universities, investment partners, and so on. So there is a good set of opportunities coming to us regularly both from both in the in the life sciences and sustainability space. In terms of our current strategy, our focus over the last year has been, number one, to service the exist to service and support the existing portfolio. So at the moment, I would say most of the actively focused opportunities are focused on on the portfolio to support the existing businesses, but we do anticipate looking at new opportunities as later in the year, and there's a number of things we're looking at the moment.

36:35 Thank you very much. The next question we received is which of your current investments have has outsized return potential? John? Well, that's a wonderful question, and I'd like to say all of them. But being practical about it, I think we should go back to the basic principles. We are a holding company and with an excellent portfolio of investments. So we've got an excellent range of investments. And of those, each one is individual. And we also start with something about Vantage now because in some ways, the original Net Scientific portfolio had been cleansed, and they are the survivors that are there and the ones that are strong that are there. So the ones we've got are going places.

37:24 And also from EMVC, these are the ones that have been carefully chosen, nurtured and developed and are progressing successfully. So we have a very good portfolio to start with. And out of that portfolio, success, I think, rather than outside returns is what we'd like to concentrate on. They will deliver in different ways. Some of them have the potential for significant revenue growth. Others will have the opportunity through the value inflection points to hit that multiplier return as each level is achieved. So I think in that regard, we can certainly look at it. People will be familiar with the marketplace of some of the multipliers that can be achieved in this sector. And we have a handful that would fit into that category that can deliver those outside returns. But we want to balance that also with practicality and timing.

38:22 Ilian may want to identify the cherries, but I think given the opportunity to see that come in at all, I mean I mean, what I'll say to that is that, just like John said, you know, for each of these companies, the reason that they made it to to to our through our filters is because the potential is there, and the potential is there for really, really large multipliers. That's the easy part. I I think what we are looking at with these businesses is more the financial engineering in a positive sense. You know, what what are the optimal points at which we should deploy capital in these businesses, how to make them capital light, because as we all know in the venture capital space, companies can be really thirsty, and we don't necessarily subscribe to to that model. So it's it's hard graft. We just for each of these companies, we're looking at their funding strategy and on a continuous basis and making decisions as appropriate to maximize our return in the medium and long term.

39:23 Thank you. There is a question in the live event that's come through that I'm gonna add if I may to the one that was pre submitted. It says, what is the ultimate size of your portfolio, both holdings and investment wise, and how will this evolve? And the other question is, is there a maximum number of portfolio companies you look to hold? K. Oh, John, I'll go first. So I I don't think there is a magic number. We are looking to grow our portfolio in a balanced and sequential way. There are natural limits to how large we can get because our approach is proactive, and we want to understand what's happening inside these businesses and and to have some influence.

40:10 So it will grow. It will grow in a natural and sequential way. We're not after numbers for the sake of numbers. At the same time, we do believe we have a scalable model. So, therefore, there's scope for growth. I would also mention that within the existing portfolio, we're not companies go for cycles. And for some of the companies in our portfolio, you know, we are much less active than we used to be, and that that kind of frees up management team capacity to to focus on the next ones. I hope this answers the question. John, do you want to add something? Yes. I think in some ways, it's also worth looking at the other side of that equation was that we needed to we believe to be having a sensible portfolio.

41:04 So it's more important in the first instance that we had a good portfolio in order to balance the risk. And I think as Ilian demonstrated with the company logo slides, we do have that established portfolio. And that breaks down into the three elements, which we show in the appendix. So there are those few that are wholly owned subsidiaries or where we have the control, which clearly take more intensive management, but in some ways provide greater opportunities to provide that for us for the business going forward. We then have those where we've got a significant stake and are very active. And we have the carried interest, the assets under management. Now there are a few also where we have a stake where in truth, we're not that active, but the companies are doing very well, something like site avail, where there is the ongoing development processes.

42:00 So as we build, we are going through a structured evolutionary growth. And through that evolutionary growth, we're growing the team, we're splitting the responsibilities effectively across the team and we've set up an effective effective data management system. So we're putting in the infrastructure in place so that we have a detailed data analysis of each company. We've got a dashboard overall that we review and then we've got financial projections going forward on a three to five year basis, so we can manage it. So we've put in place an infrastructure that enables us to grow and manage that growth to give the board effective control and management information. So it's a combination of factors, and we are set up for that three to five year horizon starting already with the turnaround, but we will add where appropriate and grow where appropriate, but we won't expose ourselves to unnecessary risk.

43:01 Okay. Perfect. Thank you very much indeed. Long winded answer. No. Perfect. Thank you. The next question is when and how can we expect you to realize some value? John, do you wanna continue? Yes. I think it's got two sides to the equation. When we say we, I think there is that we as a shareholder and from taking the shareholder perspective first, we hope we're delivering that value. And as we've demonstrated, Ilyan's slide, it was the pre despite COVID, the share price has moved. People who did buy shares at the very low figures of 2p or the old money or 20p in current money are already realizing the first level of value.

43:58 And it's up to the individual to determine at what point they may want to release that value. Some people may say, I'd like an early profit. And other people may say, this is just the start of a very exciting and we believe profitable journey, and we'll stay with that. But I'll back to the point I made earlier. The first clear milestone is to have the market cap and the consequence of the share price reflecting that in line with the underlying asset value. So that is the first level of delivering returns and the time scale for so doing. And we see that being already underway on step one, which should be largely complete this year. Then as we move forward, it will be about the opportunities.

44:46 We have to balance even with the leverage model and support the companies with further investment to make sure that additional investment enhances the position and takes us to the value inflection point. So it's that model of managing not only the science and the development process for commercialization along with the time and cost it takes to get there. But we would like to release some of that value and bring that back into the company. But the time scales are going to be about the opportunities and where we hit the value added points. So we're not driven by time per se, but by realizing the right level of returns and the right price for that. And an interesting analysis of that is using the PDS example.

45:38 PDS is where we see in the marketplace because it's NASDAQ listed, everyone can see that. And it's easy for us to put up the hard numbers of saying we bought at that and that's the current share price and here's a return. PBS represents it's a bit like the tip of the iceberg. It shows the oneten and very often Net Scientific share price seems to be a reflection of that oneten of the visibility of the company. But the nineten of the company, the great massive strength is underlying it, and we will be working over the coming months to deliver that and see the tangible returns. But I'm afraid I can't give you hard times and hard commitments or solid pound sign that go with it.

46:24 Thank you very much indeed, John. I mean, I'll just join some excellent answer. I'll just add to that from a proactive perspective, In terms of looking at the right exits for the companies, we are fact driven. We work with management closely with management, but also a big part of our strategy is to be quite close to the corporates in this space. And therefore, we have early visibility on developing trends in certain markets, and that hopefully enables us to have the right conversations at the right time. But I think we want to emphasize we are not looking at exits at any price.

47:11 You know? Ultimately, we are looking at good investment returns at and the right times to exit a investment through whatever channel it is that we do that, and it might be for a partial investment exit. Thank you, Ilion and John. Well, look, I'm just mindful of time, and I'm mindful that you've got a number of questions that are coming in during the live event from investors. And perhaps, I mean, I could and John, I could hand back to you to click on that q and a tab and just really read out the questions, perhaps who they're from, and and give a response where it's appropriate to do so. And and, of course, any questions that we don't get around to answering during the meeting, we can review post the event. Okay. So over to you guys. Certainly. Thank you.

47:56 If I respond first, I see you come up with two pretty directed hard questions. And I think in some ways, they are linked together. So if I read them out, the shares have been pretty poor performers since the placing. They have traded pretty much the entire period below the placing price. What is the company looking at doing to address that? And I think the second one links in the same way. The company has done very little shareholder engagement via social media outside of today's Investor Meet. It would be useful if you could keep the story fresh by upping this. Is this something you will look at going forward? So the direct answer is yes.

48:43 This is the start of the process. We felt the first thing we had to do was to get a grip of the business and concentrate on the business. And rather than coming up with the statements and we're going to do it, we've tried to concentrate on the actions speak louder than words, which is why when I was referring to what we set out in the shareholder circular last year and in the presentations, we have done and have delivered those tasks. We would agree that it's a disappointment that the share price still doesn't fully reflect the or in many ways, not even close to fully reflecting the underlying asset value. So yes, this is one step in that process, and our commitment is to engage much more to take onboard your feedback, take the hard questions.

49:36 That's why we're here to take the hard questions. We will not only reflect and give you answers today, but we will work on that. So explicitly, we will be having more engagement, more up to date news, and we have good news in the pipeline, and we will continue to communicate that as soon as we can and when it arises. But we as I say, we needed to get on with the graph. It has been a focus on the business, and that's what we have been doing and the results are coming forward. But, William, did you want to add to that? No. I I think I think it it's nothing to add. Maybe, John, maybe if I take the next question. Sorry. Please go on.

50:26 So I was simply saying we we look forward to coming back on the platform here for a further update before too long. Maybe I'll just start. You know, we we welcome any ideas around ways in which you you think we can better explain the information on the website. So, you know, feel feel free to email us with with your suggestions as well. K. Maybe if I take the next question, which is, again, relating to deal flow, how come from from Andy m hello, Andy. How competitive is it to source the right transactions at the right price when you see the deal flow, and how much of the deal flow is proprietary? I was the answer has two parts. One is within the existing portfolio company portfolio of companies.

51:19 Because we are a insider or quasi insider, of course, we're able to track the companies, understand their plans whether we are on the board or or not, and time our participation for when when is the right the right time for us. And, of course, when companies need support, they go to their existing shareholders first, so we're in a good position there. I would also say that where where we're looking at the more earlier stage companies, there is an attraction they see in us because they see an institutional investor that can provide smart money skill set beyond financial resources. So people I would say people want to work with us.

52:05 When we're looking at new deal flow, and I touched on this point earlier, we get deal flow from everywhere. And, you know, the old saying of marketing, you know, 50% of marketing spend is wasted if you only knew which 50%. So we get deal flow from all the sources you can imagine, but the good and strong and interesting deals that come to us are from the network that's close to us. It's the investors with whom we've worked with in the past that are sharing deals with us. It's the corporates with whom we have a good link on the corporate VC side or corporate development as well as entrepreneurs that we've worked with in the past past CEOs that are showing us deals that they're in that they're involved in. To look at it from their perspective, I I think what they like is the flexibility and what I what I showed earlier on try to get to that slide on slide 11, I think it was, the ability for us to play across the whole life cycle of the businesses. Because when we invest in a business, people know that, look. Actually, this is a partner that we can work with in in the long term. So I hope this answers your question.

53:17 Hello? Looking at other questions, thank you, Ryan, for your question. How do you see EMV scaling its operation to benefit the wider portfolio? And are you looking to expand its geographic reach further? You might expect me to hand this question over to Ilian, but in the first instance, I'm going to take it because when we were looking at the NetScientific strategy a year ago and said the company had run down effectively to no full time employees and how did we actually grow the business when the balance sheet was nonexistent effectively. So we looked at this at the time, and this is why the strategy led to the shareholder circular and the acquisition of EMVC.

54:11 So from a company point of view, we consciously acquired EMV using paper to do that. So it was an effective acquisition for us, specifically that it would help scale the operations. And as Ilian has pointed out, in scaling that, it was about the portfolio in the first instance to exploit. But as we're already exemplifying, it's no longer all balance sheet. And we are looking not only for The UK companies and as Julian described, already helping those UK companies either with or without the NetScientific basic anchor investment to leverage and bring in more money from the syndicated investments, which is happening not just in The UK, but we are already exploring those opportunities in The U. S. And we are looking beyond. So whilst Iain has talked about the transatlantic bridges initially through The UK, those transatlantic bridges clearly now for us, one of the advantages is to look into Europe and beyond. And in due course, we hope to be explaining that, but also taking the global opportunities.

55:27 It goes right back to the introduction slide of what Net Scientific and expanding that geographic reach with the benefit of EMVCs, a, resources and b, expertise and the advantages of that network. But I might have still on your lines there, Liam, but hopefully, it's a fairly accurate representation. It is. And I'll and I'll just add to that two elements. I mean, one is EMV before its acquisition, EMV CAPITAL was a bootstrapped business. And what I mean by that is that it it grew organically without external investment, and that means that the part of our of our DNA is running things very efficiently and having an an above above size footprint internationally.

56:17 And what that means is that we built a fairly significant network of advisers, venture partners, and other friends internationally, not only in The UK, but across Europe, in The US, Asia, and and beyond. The network I mentioned before, the network of corporate VCs, which by its nature is global. And in a way, that gives us the scaffolding of what we want to what we want to grow. It's we for a small company, we have a fairly significant global reach in in our sectors of choice. In turn, that enables us now to fast to grow faster and more capital efficiently than you would expect in other cases. So it's a really exciting opportunity for both myself and the rest of the team.

57:06 Ily and John, thank you very much. I'm just mindful that we're coming up to the hour. I I don't know if there's anything else to address. Or if not, if I could just ask you perhaps for a few closing comments. I know investor feedback is important, and then we would divert investors to provide you their feedback. Well, I think for me, it's to say thank you. And as I say, it is the start of the process of greater engagement if the questions are valuable. I noticed that MDM had asked what is our time line or rationale we're looking for realizing returns and recycling capital. I think we have indicated those, it's turnaround growth and results. But right now, we have had to look at that balance in terms of the portfolio needs, and that's been our preoccupation, securing the home base for us, and we're still committed to that and to delivering on that basis.

58:04 We do realize that people are investing to get attractive returns, and that's what we intend to deliver. But we are looking at that from what is the best value, not just we need money quickly. So it's not looking to say we're making an exit already, whether it's the event just for the sake of demonstrating it. We're adopting a professional and business approach to say, if that's the right time and the right deal, we will take it. We will not stay in if it's wrong because we can take more money now. So it's careful evaluation, and that will be the basis that we'll go forward. But we are very conscious of that. And ultimately, that's why investors are with us and will stay with us because we are demonstrating we're committed to delivering those returns. That's our mission.

58:54 Thank you. Julian, do you want to take closing comments? Thank you, John. Well, I think join us on a journey. Last year when we took on the challenge of NetScientific, many people believed what we're we're trying to do is not possible. Less than a year later, a significant part of the turnaround has been completed with a positive result. This is now a business that can do business, but it's the beginning of the story. This is a model that can scale significantly in some really high growth markets globally. It's a UK born, but organization with global reach. So we hope you join us on this journey and stay to reap the rewards in the long term. Thank you. Ilya and John, thank you very, very much indeed for your time and being so generous with the Q redirected for the opportunity to provide feedback?

59:50 If you access this meeting from our website, then the feedback page will appear. But if you access this meeting via the link sent to you by email, you'll simply be asked to log back in to submit your feedback, and we'll be most grateful, and I think the company would greatly appreciate any comments that you may be able to provide them. On behalf of the management team of NetScientific, I'd like to thank you very much indeed for attending, this afternoon or this evening's presentation. That concludes today's session, and thank you for your time today.