SuperSeed Capital Ld - Final Results for FY22

Announcement provided by

SuperSeed Capital Limited · WWW

15/05/2023 07:00

RNS Number : 3042Z

SuperSeed Capital Limited

15 May 2023

SUPERSEED CAPITAL LIMITED

("SuperSeed" or the "Company")

FINAL RESULTS FOR THE FINANCIAL YEAR ENDED 31 DECMEBER 2022

SuperSeed, a company established as a Venture Capital fund of funds for early-stage technology investing, announces that the final results for the financial year ended 31 December 2022, as detailed below, have been fully extracted from the Annual Report and Audited Financial Statements for the period from incorporation on 6 October 2021 to 31 December 2022, and have been approved by the Board of Directors.

In the coming days, the full Annual Report and Audited Financial Statements will be available on the Company's website at: https://www.superseed.com/investors/superseed-capital/documents/.

Chairman's Statement
Introduction
It is my pleasure to make my maiden statement on the inaugural audited financial statements published for the Company since its admission to trading on Aquis Stock Exchange Growth Market in January 2022. The IPO represented a significant milestone for the Company and came at a very difficult time for the market. It was the only closed ended listed investment company to have an IPO during the calendar year. The IPO provided the Company with the opportunity to permit investors to invest into a listed fund with liquidity and no minimum investment which can access opportunities in seed stage venture capital portfolio companies through funds managed by SuperSeed Ventures LLP. As a result, the Board is confident that the Company will deliver value to its shareholders in the years to come.

The focus was to secure a £2m funding which was successfully achieved on Admission, latterly this has been augmented with a £1m loan facility, allowing the Company to continue to meet its capital commitments to SuperSeed II LP (the "Fund") which has in turn deployed its drawn capital into eight new investments that are strongly positioned to take advantage of exceptional growth opportunities. The Company has also entered into share swap arrangements with shareholders of two of the Fund's portfolio companies further increasing its issued share capital to £2,365,606.

The Company became a member of the Association of Investment Companies and has adopted the AIC Code of Corporate Governance which ensures that it meets the required standards of governance and ESG, which are expected by investors and stakeholders. It is an honour to lead such a dynamic and forward-thinking organisation, and I am excited about the opportunities that lie ahead.

Investment Policy
The Company invests in early-stage European software and AI businesses which have technologies that are disruptive to the traditional services sector. A typical investment will offer the prospect of high growth and the potential to scale. The Company's objective is to provide long-term capital growth to shareholders.

Performance
I am pleased to report that the Company has performed well with an increase in the Company's NAV from inception to 101p per share, which is all the more creditable when compared to the performance of 794 UK-domiciled funds, only 17% of which managed to show positive growth¹. Accordingly, we are pleased with the Company's performance which give us confidence in its current value and future prospects. Revenue in SuperSeed II LP's (the "Fund") portfolio companies was up 200% for 2022 as a whole, averaging 9.6% compound monthly growth. The Company continues to actively review potential acquisition targets at various stages of development and operating in a number of geographic regions, all of which have potential global relevance.

¹ https://www.morningstar.co.uk/uk/news/230527/2022s-best-and-worst-performing-funds.aspx

Stakeholders
I would like to extend my sincere thanks to our stakeholders, including my fellow board members, the Company's investment manager, administrator, investors, and investee companies, for their contributions to SuperSeed's success over the past year. The investment manager has demonstrated exceptional commitment, resilience, and dedication in supporting the growth and success of the Company. The Board is also grateful to our investors for their continued support and confidence in our vision and strategy. The Fund's investee companies have played a crucial role in our success, and we are proud to partner with them in their journey.

New Joiners
Over the reporting period we have welcomed Mrs Colette Taylor to the Board as a permanent, alternate director to Mr Andrew Hatton. As a very small Company it is important that costs are controlled and the board is acutely aware of the requirement to have greater diversity. The board hope that Colette's addition as an alternate director will ensure that the Board is not only the right size for the Company's market capitalisation and stage of development, with an appropriate and diverse balance of skills, knowledge and experience but also has greater diversity.

Pipeline
The investment pipeline of the Fund remains strong and the Company's investment manager continues to have visibility over large swathes of the opportunities in European SaaS and AI.

ESG
The Company and its investment manager, SuperSeed Ventures LLP, recognises the importance of ESG and governance considerations in building a sustainable and resilient business. As an investment fund with no staff and premises the Company's main effort to ensure positive ESG outcomes are achieved is by monitoring the actions of our investment manager and our portfolio companies, further details of which can be found here: https://www.superseed.com/journal/superseed-esg-policies-and-investment-strategy/.

Outlook
The Board is of the view that the combination of an established, successful and hands-on investment manager with access to an attractive seed portfolio as well as an identified and growing pipeline of investments in the SaaS and AI space, makes this a compelling investment. We remain committed to our vision and strategy of supporting the growth of innovative and high-potential AI companies, while adhering to high standards of governance and ESG practices. We welcome our new shareholders and look forward to working with them and successfully delivering on our investment strategy.

Joseph Truelove
Chairman
SuperSeed Capital Limited


Investment Manager's Report
As we enter 2023, we are in the middle of three major transitions:

1.	Zero Interest Rate Policy (ZIRP) --> Inflation and higher Interest Rates
2.	Globalisation --> Global Power Rivalry
3.	Internet & Mobile --> Next-Gen AI

We have only seen the beginning of the disruption caused by these transitions. The next decade will see an upheaval of business unlike anything we have seen in our lifetimes. The challenges will be immense but the opportunities will be profound.

Opportunities in software investing
As the world changes and industries are dislocated, lots of new investment opportunities emerge. When measuring using the return on investment method, the biggest investment opportunities continue to be in software. In the past decade, SaaS has already been an attractive investment category. And the value created by SaaS companies only increases when they embed advanced AI into their platforms.

SuperSeed exists to back Europe's best B2B SaaS founders at the earliest stages, and to help them build great companies. In the short term, our portfolio companies enable their customers to drive revenue growth and efficiency savings using next-generation software and AI. In the long-term, they have an opportunity to create category defining global technology companies.

The current investing landscape
In 2021 we started seeing something we haven't seen for a long time: inflation. In response, central banks have increased interest rates to reduce liquidity and cool down economies.

This policy change has done exactly what was expected. Liquidity has come down, and with less money sloshing around, so have the frothy valuations of 2020 and 2021.

The tech sector went through a massive valuation correction in 2022. From the peak in November 2021 to the trough in November 2022, EMCLOUD (the Bessemer Emerging Cloud Index - an index of 75 publicly listed SaaS/Cloud companies) declined by 62%. It's not quite the dotcom collapse, but it is a meaningful drop.

During the same period, the median forward revenue multiple declined from 15x out of the ordinary increase while 4.5-5x is the norm since 2017. (it's since recovered to 5x). Investment valuations are now back to where they were in 2017.

The upside of "back-to-basics"
Counterintuitive as this may sound, the reduction in valuations is largely a great thing for serious technology start-up founders and investors. Frothy valuations and abundance of capital drove all the wrong behaviours. Too much capital spent on unproductive endeavours. And too much competition for talent and customer attention.

All of this has been replaced with a "back-to-basics" focus on strong unit economics and how to build good companies. This makes it easier for founders to focus on what matters, and for investors to buy into the best companies at appropriate valuations.

Strong performance in the SuperSeed portfolio
At SuperSeed, we have always focused on the fundamentals. Essentially, we are about helping founders build good companies with strong unit economics and sensible distribution models.

This approach served the portfolio well in 2022. While SuperSeed's companies were subject to declining valuation multiples just like everyone else, robust revenue more than made up for the multiple contraction.

Essentially, companies in the Fund's portfolio more than tripled SaaS revenue over the course of 2022. In essence, top line grew faster than revenue multiples declined. The result of this was that the Fund was up more than 23% over the year.

Outlook for 2023
Financial markets continue to be turbulent in 2023, and we don't expect to see valuation multiples increase meaningfully in the short term. However, the wider market backdrop leads to many exciting investment opportunities in 2023 - especially in AI.

Generative AI is a concept that has been building for years, but it really came to the forefront of the tech industry in 2022. Over the past decade, AI/machine learning has primarily been used for classification. Show an algorithm lots of data, and it can help figure out whether it is a cat or a dog; a working product or a defective product; a stock to buy or a stock to sell: classification.

With generative AI, the field of AI is taking a great leap forward. It's no longer just about classifying things into neat categories but about creating new things. At first, as digital objects (e.g. a digital product design), but this now also extends to physical objects. An example of this is our portfolio company Ai Build which helps high-end manufacturers in automotive and aerospace use AI and 3D printing to create new products, faster and more efficiently.

The outlook for the Fund's portfolio in 2023 is very encouraging. Revenue for the existing portfolio is expected to more than double over the course of the year, and in parallel we will be adding existing new AI/SaaS companies to the portfolio.

2023 is a great time to build technology companies, and an excellent time to back the best technology founders to help them on their journey. We look forward to an exciting year ahead for both our portfolio and the wider software/AI industry.

Mads Jensen
Managing Director
SuperSeed Ventures LLP

Statement of Comprehensive Income
for the period from incorporation on 6 October 2021 to 31 December 2022

		6 October 2021
		to
		31 December 2022
	Notes	£

Income
Investment income		379
Unrealised gain on investments held at fair value through profit or loss	7	260,581
Bank interest income		2,347
Total income		263,307

Expenses
Administration fees	13	27,432
Audit fees		21,000
Directors' fees	13	18,000
Establishment costs		194,298
Insurance		1,316
Legal & professional fees		40,838
Regulatory fees		14,839
Sundry expenses		1,599
Total expenses		319,322

Total profit and comprehensive income for the period		(56,015)

Basic earnings per share	6	(0.037115)

Diluted earnings per share	6	(0.036791)

All the above items are derived from continuing operations.

There is no other comprehensive income for the period.

Statement of Financial Position
as at 31 December 2022

		2022
	Notes	£

Non-current assets
Investments	7	1,799,616
Total non-current assets		1,799,616

Current assets
Trade and other receivables	8	11,025
Cash and cash equivalents		235,089
Total current assets		246,114

Total assets		2,045,730

Current liabilities
Trade and other payables	9	21,745
Total current liabilities		21,745

Total liabilities		21,745

Net assets		2,023,985

Equity
Share capital	11	2,080,000
Retained earnings		(56,015)
Total equity		2,023,985

Net asset value per ordinary share		0.973070

Statement of Changes in Equity
for the period from incorporation on 6 October 2021 to 31 December 2022

	Share Capital	Retained Earnings	Total
	£	£	£
Ordinary Shares issued on incorporation	1	-	1
Issue of Ordinary Shares	2,079,999	-	2,079,999
Total comprehensive income for the period	-	(56,015)	(56,015)

Balance as at 31 December 2022	2,080,000	(56,015)	2,023,985

Statement of Cash Flows
for the period from incorporation on 6 October 2021 to 31 December 2022

			2022
			£
Cash flows from/(used in) operating activities
Net profit for the period			(56,015)
Unrealised gain on investment revaluation			(260,581)
Movement in receivables			(11,025)
Movement in payables			21,745
Net cash flow used in operating activities			(305,876)

Cash flows used in investing activities
Purchase of investments			(1,539,035)
Net cash flow used in investing activities			(1,539,035)

Cash flows from financing activities
Proceeds from issue of shares			2,080,000
Net cash flow from financing activities			2,080,000

Net movement in cash and cash equivalents during the period			235,089

Cash and cash equivalents at the beginning of the period			-

Cash and cash equivalents at the end of the period			235,089

Notes to the Financial Statements

for the period from incorporation on 6 October 2021 to 31 December 2022

General Information

The Company was incorporated on 6 October 2021 in Guernsey, as a non-cellular company limited by shares under The Companies (Guernsey) Law, 2008 (as amended) ("Company Law"). The Company is regulated by the Guernsey Financial Services Commission as a Registered Closed-ended Collective Investment Scheme pursuant to the The Protection of Investors (Bailiwick of Guernsey) Law, 2020 and the Registered Collective Investment Schemes Rules and Guidance 2021.

The main purpose of the Company is to carry on business as a fund-of-funds. The Company will invest in technology-led innovation primarily through unquoted funds managed directly and indirectly through Fund II by SuperSeed Ventures LLP, the Investment Manager, with the objective of maximising investors' long-term total returns - principally through capital appreciation.

Significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been adopted consistently in the preparation of the financial statements unless otherwise stated.

No comparative figures have been presented as the Company's financial information covers the period from incorporation on 6 October 2021.

Basis of accounting

These financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and The Companies (Guernsey) Law, 2008. These financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities at fair value through profit or loss.

Functional and presentational currency

The financial statements are presented in British Pound Sterling ("GBP" or "£"), which is the Company's functional currency as the Company's primary business transactions and majority of overall transactions are conducted in GBP. The Directors consider GBP as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions of the Company.

Foreign currency translation

Monetary assets and liabilities are translated from currencies other than GBP ("foreign currencies") to GBP (the "functional currency") at the rate prevailing at the period end date. Income and expenses are translated from foreign currencies to the functional currency at the rate prevailing at the date of the transaction. Exchange differences are recognised in the Statement of Comprehensive Income.

Foreign currency transaction gains and losses on financial instruments classified as fair value through profit or loss are included in the Statement of Comprehensive Income.

Financial instruments

Financial assets and financial liabilities are recognised in the Company's Statement of Financial Position when the Company becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are only offset and the net amount reported in the Statement of Financial Position and Statement of Comprehensive Income when there is a currently enforceable legal right to offset the recognised amounts and the Fund intends to settle on a net basis or realise the asset and liability simultaneously.

The Company's financial assets comprise of receivables and cash at amortised cost and investments held at fair value through profit and loss.

Receivables

With the exception of receivables related to investments, receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They principally comprise trade and other receivables. They are initially recognised at fair value plus transaction costs that are directly attributable to the acquisition, and subsequently carried at amortised cost using the effective interest rate method, less provisions for impairment. The effect of discounting on these financial instruments is not considered to be material.

For assets measured at amortised cost, IFRS 9 requires an assessment of impairment based on providing for expected losses. The Company has chosen to apply an impairment approach similar to the simplified approach for expected credit losses under IFRS 9 for the Company's receivables. Therefore, the Company does not track changes in credit risk, but instead recognises a loss allowance based on life time expected credit losses at each reporting date. This approach takes into account historic observed loss rates over the expected life of the receivables, and is adjusted for forward looking estimates.

Investments at fair value through profit or loss

(i)

Classification

The Company classifies its investments as financial assets at fair value through profit or loss. These financial assets are designated by the Company at fair value through profit or loss at inception.

(ii)

Recognition

Purchase and sales of investments will be recognised on the trade date which is the date on which the Company commits to purchase or sell the investment. Investment purchases which involve earn-out payments or similar deferred payments will be accounted for at the best estimate of fair value, any subsequent changes in these fair value estimates are recognised in the Statement of Comprehensive Income as part of the changes in fair value of financial assets held at fair value through profit or loss.

(iii)

Measurement

The investments will be initially recognised at cost, being the fair value of consideration given. Subsequently such assets are carried at fair value and the changes in fair value are recognised in the profit and loss.

(iv)

Derecognition of financial assets

A financial asset (in whole or in part) is derecognised either:

•

When the Company has transferred substantially all the risks and rewards of ownership; or

•

When it has neither transferred nor retained substantially all the risks and rewards and when it no longer has control over the assets or a portion of the asset; or

•

When the contractual right to receive cash flow has expired.

Cash and cash equivalents

Cash and cash equivalents are defined as cash in hand, demand deposits and highly liquid investments readily convertible to known amounts of cash with an original maturity of three months or less and are subject to an insignificant risk of changes in value. As at 31 December 2022 cash and cash equivalents consists only of cash at bank.

Fair value estimation

International Financial Reporting Standard 13, "Fair Value Measurement" recommends investments treated as "financial assets at fair value through profit or loss" to be subsequently measured at fair value. IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions. Fair value under IFRS 13 is an exit price regardless of whether that price is directly observable or estimated using another valuation technique.

The Board has delegated responsibility for carrying out the fair valuation of the Company's portfolio to the Investment Manager.

Investments are reported as having the fair value estimated by the Investment Manager at the reporting date. The fair value of the Company's investments in SuperSeed Fund II LP and other future investments will be calculated in accordance with International Private Equity and Venture Capital ("IPEV") valuation guidelines. Under IPEV guidelines, the fair value of unquoted investments can be calculated using a number of approaches, broadly categorised under three headings, Income Approach, Market Approach and Replacement Cost.

Given the type and stage of investments, the Investment Manager will seek to take a Market Approach where possible, most often based on calibration to the price of the recent investment and market multiples. Alternative methodologies may be considered in accordance with IPEV.

It is the opinion of the Directors, that the IPEV valuation methodology used in deriving a fair value is not materially different from the fair value requirements of IFRS 13.

All valuations made by the Investment Manager will be made, in part, on valuation information provided by the portfolio companies of SuperSeed Fund II LP alongside other future investments. Although the Investment Manager will evaluate all such information and data, it may not be able to confirm the completeness, genuineness or accuracy of such information or data. In addition, the financial reports provided by the Portfolio Companies may be provided only on a quarterly basis and generally will be issued one to two months after their respective valuation dates. Consequently, each quarterly Net Asset Value is likely to contain information that may be out of date and require updating and completing. Shareholders should bear in mind that the actual Net Asset Values at such time may be materially different from the quarterly valuations.

Investment income from financial assets at fair value through profit or loss is recognised in the Statement of Comprehensive Income when the Company's right to receive payments is established.

Financial liabilities

The classification of financial liabilities at initial recognition depends on the purpose for which the financial liability was issued and its characteristics.

All financial liabilities are initially recognised at fair value net of transaction costs incurred. All purchases of financial liabilities are recorded on trade date, being the date on which the Company becomes party to the contractual requirements of the financial liability. Unless otherwise indicated, the carrying amounts of the Company's financial liabilities approximate to their fair values. The Company's financial liabilities consist of only financial liabilities measured at amortised cost.

(i)

Financial liabilities measured at amortised cost

These include trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest rate method.

(ii)

Derecognition of financial liabilities

A financial liability (in whole or in part) is derecognised when the Company has extinguished its contractual obligations, it expires or is cancelled. Any gain or loss on derecognition is taken to the Statement of Comprehensive Income.

Segmental reporting

In accordance with IFRS 8, Operating Segments, the Company is required to present and disclose segmental information. The Chief Operating Decision Maker, which is the Board, is of the opinion that the Company is engaged in a single segment of business through its investment portfolio, with the aim of providing long-term returns through capital appreciation to shareholders. The financial information used by the Chief Operating Decision Maker to manage the Company presents the business as a single segment.

Critical accounting judgements and key sources of estimation uncertainty

IFRS requires the Directors to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability in future periods.

The areas where assumptions and estimates are significant to the financial statements include the valuation of investments. The Company's investment into SuperSeed II LP is measured at the net asset value of the Company's investment at year end. The underlying investments of SuperSeed II LP are valued in accordance with the IPEV methodology in which unlisted investments are carried at such fair value as is considered appropriate by the Investment Manager. Direct investments have been valued at the price at which third party capital has recently been raised. The models used to determine fair values are validated and periodically reviewed by the Investment Manager. Refer to note 2 (d) for further disclosure details.

Income and expenses

Operating income and expenses have been accounted for on an accruals basis, and are recognised in the Statement of Comprehensive Income in the period which they are incurred.

Management fees

Management fees are accounted for on an accruals basis and are measured at the fair value of the consideration paid.

Going concern

The Directors, and the Investment Manager having considered the Company's objectives and available resources along with its projected income and expenditure, are satisfied that the Company has adequate resources to meet its liabilities as they fall due and continue in operational existence for the foreseeable future. The Company adopts an "Overcommitment Policy" in order to reduce the cash reserves held by the Company that have not been called by its commitment-based investments. In order to meet ongoing investment commitments, the Company may utilise any cash reserves held, incur borrowings, issue new share capital or sell assets in order to realise their value. The Directors are cognisant of potential capital calls from underlying investments. On 28 February the Company sold £1,000,000 of its commitment in SuperSeed II LP to the investment manager SuperSeed Ventures LLP as disclosed under note 15 to improve liquidity. Loans can also be drawn from the Investment Adviser under the Convertible Loan Note Instrument entered into on 14 September 2022 if required. The Directors do not consider there to be any threat to the going concern status of the Company.

For these reasons, the Company continues to adopt the going concern basis in preparing the financial statements.

Adoption of new and revised standards

Standards issued and effective

There are new standards and amendments to existing standards that are effective for the period beginning on 6 October 2021 and have therefore been adopted. None of these standards or amendments have a significant impact on the Company's financial results or position; hence they have not been disclosed.

Standards issued but not yet effective

New standards, amendments and interpretations issued but not yet effective and not early adopted by the Company. At the date of authorisation of these financial statements, several new, but not yet effective, Standards and amendments to existing Standards and Interpretations have been published by the IASB. None of these Standards or amendments to existing Standards have been adopted early by the Company and are not thought to have any impact on the Company's financial results.

Taxation

The Company is exempt from income taxation in Guernsey under the provisions of the Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989, as amended. An annual fee of £1,200 is payable and is included in the Statement of Comprehensive Income within regulatory fees.

Material agreements

Investment Manager

Under the Alternative Investment Fund Management Agreement dated 21 January 2022, the Company has appointed SuperSeed Ventures LLP as the Company's Investment Manager to provide portfolio and risk management services to the Company. The Investment Manager does not charge separate fees to the Company for managing funds where it is already paid a fee as part of a direct fund management mandate (including the Company's investment in SuperSeed II LP). For all other investments, the Investment Manager is entitled to receive from the Company a management and performance fee for the management of investments. This is calculated as being:

(a)

0.25 per cent. of the Total Portfolio Value; and

(b)

20 per cent. of the aggregate net realised profits on Investments since the start of the relevant Calculation Period.

In each case, calculated as at the end of a Calculation Period and payable in arrears within 30 days after the end of that Calculation Period.

For these purposes:

"Calculation Period" means each calendar quarter, with the first Calculation Period commencing on Admission and ending on 31 March 2022.

"Investment" means any investment or other asset (including cash) of the Company of any description, the acquisition or holding of which is authorised under the investment policy of the Company from time to time, and in the case of investment commitments into other funds the total commitment to that fund should be regarded as an "Investment".

"net realised profits" means the net profit received by the Company following a disposal of an Investment as recorded in its accounts in accordance with the Company's adopted accounting policies from time to time.

"Portfolio" means the portfolio of Investments held by the Company directly or indirectly from time to time.

At 31 December 2022 there were no portfolio companies subject to management fees.

Administrator

Under the Administration agreement dated 15 October 2021, Imperium Fund Services Limited provides secretarial, directors and administration services to the Company and is entitled to remuneration and reimbursement of expenses as may be determined from time to time by the parties.

VSA Engagement Letter

Under the engagement letter dated 7 October 2021, the Company appointed VSA Capital Limited to act as its Corporate Adviser for the purposes of seeking admission of the Company's shares to trading on the Access Segment of the Growth Market operated by Aquis Exchange Limited, for which the Company agreed to pay VSA Capital Limited £40,000 plus any applicable VAT.

AQSE Corporate Adviser Agreement

Under the AQSE Corporate Adviser agreement dated 7 October 2021, the Company has appointed VSA Capital Limited to act as corporate adviser and broker to the Company on an on-going basis following admission of the Company's shares to trading on the AQSE, for which the Company agreed to pay VSA Capital Limited a fee of £40,000 plus any applicable VAT per annum payable quarterly in advance.

Registrar

The Company utilises the services of Link Market Services (Guernsey) Limited as a registrar in relation to the transfer and settlement of its issued shares. Under the terms of the Registrar Agreement, the Registrar is entitled to an annual fee of £3,500 per annum. In addition, the Registrar is entitled to remuneration as may be determined from time to time by the parties. Additional remuneration of £2,916 was paid during the period.

Earnings per share

Earnings per share is calculated by dividing the profit or loss for the period by the weighted average number of ordinary shares in issue during the period.

31 December 2022

Total profit and comprehensive income for the period

(56,015)

Weighted average number of shares in issue

1,509,234

Basic earnings per share

(0.037115)

Diluted weighted average number of shares in issue

1,522,505

Diluted earnings per share

- 0.036791

Investments held at fair value through profit or loss

31 December 2022

Cost as at inception

Purchases during the period

1,539,035

Cost as at 31 December 2022

1,539,035

Movement in fair value during the period

260,581

Movement in fair value as at 31 December 2022

260,581

Fair value at period end

1,799,616

All investments are fair valued at the period end.

The Company has committed to invest up to £5,500,000 in SuperSeed II LP, of which £4,041,365 is unfunded as at 31 December 2022.

Trade and other receivables

31 December 2022

Prepayments

2,689

Prepaid investment costs

8,336

Total

11,025

Trade and other payables

31 December 2022

Audit fees payable

21,000

Legal fees payable

745

Total

21,745

Financial risk management

The Company's activities expose it to a variety of financial risks including credit risk, liquidity risk, and the market risks of interest rate risk, price risk and foreign currency risk. The Company uses different methods to measure and manage the various types of risk to which it is exposed. These methods are explained below.

Credit risk

Credit risk refers to the risk that the counterparty to a financial instrument will default on its contractual obligations that it has entered into with the Company resulting in financial loss to the Company. At 31 December 2022, the major financial assets which were exposed to credit risk are cash and cash equivalents, investments (note 7) and trade and other receivables (see note 8). The maximum exposure to credit risk is represented by the carrying value of each financial asset recognised in the statement of financial position. The Company has no overdue financial assets as at the period end.

The table below shows the cash balance at the reporting date and the Standard & Poor's credit rating for the counterparty as at 31 January 2023.

Rating

Carrying Amount

31 December 2022

Silicon Valley Bank (a division of First Citizens Bank)

BBB+

235,089

On 10 March, Silicon Valley Bank was placed into receivership and all deposits held by the Company were transferred to an account held by the Investment Manager at Barclays Bank in order to safeguard the Company's assets. At this date its credit rating was lowered to D.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting its obligations arising from financial liabilities. At 31 December 2022 the Company had £235,089 in cash balances. Financial liabilities consist of trade and other payables (see Note 9).

The following table details the Company's expected maturity for its financial liabilities as at 31 December 2022:

Total

Less than

More than

31 December 2022

3 months

12 months

Financial liabilities

Trade and other payables

21,745

The Company's investments will be, by their nature, illiquid. As a result the Company may not be able to liquidate quickly any part of its investment at an amount close to fair value.

In order to meet ongoing liquidity requirements, the Company may incur borrowings, issue new share capital or sell assets in order to realise their value.

Market risk

Interest rate risk

Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. The Company is exposed to interest rate risk as it has current account balances.

The Company does not have any interest bearing liabilities and hence considers interest rate risk, in respect of financial liabilities to be minimal. The Company monitors market interest rates and will place interest bearing assets at best available rates but also taking into consideration the counterparty's credit rating and financial position.

During the period, the interest received on current accounts and deposit accounts was immaterial, and therefore no sensitivity analysis has been provided.

ii)

Price Risk

The Company's investments will be susceptible to market price risk arising from the business and financial uncertainties facing individual underlying portfolio companies. The value of investments may fall as well as rise and consequently the Company may not be able to return all or any of the investment made by shareholders. To manage market price risk, the Investment Manager will review the performance of the underlying portfolio companies and will be in regular contact with the management of the underlying portfolio companies for business and operational matters.

ii)

Price Risk

The table below summarises the sensitivity of the Company's investments. It is based upon the assumption that the investments increase or decrease by 10% with all the other variables held constant. The Directors feel that 10% best represents the margin of price risk associated to the activity of the Company.

2022

Effect on net assets attributable to investments of an increase in the index

188,266

Effect on net assets attributable to investments of an decrease in the index

(188,266)

iii)

Foreign currency risk

As all monetary assets and liabilities and all transactions of the Company are denominated in its functional currency, the Company is not exposed to significant foreign currency risk.

Financial investments measured at fair value

IFRS 13 requires disclosure of fair value measurements by level of the following fair value hierarchy:

●

Level 1 -

Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access at the measurement date;

●

Level 2 -

Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; and,

●

Level 3 -

Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

The Company's investments have been classified within Level 3 as these investments are valued based on unobservable inputs and trade infrequently or not at all.

The following table presents the investments carried on the Statement of Financial Position by level within the valuation hierarchy as at 31 December 2022.

31 December 2022

Level 1

Level 2

Level 3

Total

Investments

1,799,616

There have been no transfers between levels during the period. Due to the nature of the investments, they are always expected to be classified under Level 3.

Note 7 shows a reconciliation of all movements in the fair value of investments categorised within Level 3 between the beginning and the end of the reporting period.

The Company's investment into SuperSeed II LP is measured at the net asset value of the Company's investment at year end. Direct investments have been valued at the price at which third party capital has recently been raised.

SuperSeed II LP's investments are valued in accordance IPEV valuation guidelines, including valuing investments at the price at which third party capital has recently been raised, comparative industry price earnings ratios discounted for marketability and performance of the investment, and net asset valuations for asset based investments.

A reasonably possible change in the net asset value used +/-10.0% would result in:

An increase in carrying value of GBP 169,202 or 8% (+10%)

An decrease in carrying value of GBP (169,202) or -8% (-10%)

A reasonably possible change in the recent capital raising price used +/-10.0% would result in:

An increase in carrying value of GBP 19,024 or 1% (+10%)

An decrease in carrying value of GBP (19,024) or -1% (-10%)

Share Capital

31 December 2022

Authorised:

Number

Ordinary Shares of no par value

Unlimited

Issued:

Allotted and paid up Ordinary Shares of no par value

2,080,000

On 24 November 100,000 warrants in the Company were issued at no premium with an exercise price of 100p. Each warrant shall entitle the warrantholder (VSA Capital Limited) to subscribe in cash for one share at the exercise price. Each warrant is exercisable at any time during the subscription period on or prior to the expiry date, which is six months from the date of issue.

The subscription rights shall automatically lapse and be of no further effect if they have not been excercised by the expiry date.

Shares issued pursuant to the exercise of a warrant will rank in full for all dividends and other distributions declared, made or paid after the relevant exercise date and rank pari passu in all other respects with the shares in issue at that date.

Ordinary shareholders are entitled to vote at the general meeting of the Company, to receive dividends and to participate in the results of the Company.

Capital risk management

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns to shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

Management assesses the Company's capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the warrants and convertible loan note. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt. As at 31 December 2022 the Company's capital structure consists of 100% equity.

Related parties

Joseph Truelove, Andrew Hatton and Mads Jensen were Directors of the Company during the period.

Joseph Truelove earned £18,000 in the period ended 31 December 2022, £nil of which was outstanding at 31 December 2022.

Andrew Hatton is an employee of the Administrator, whose services include the provision of his directorship. During the period ended 31 December 2022, the Company incurred £27,432 of administration fees of which £nil was outstanding at the period end.

Mads Jensen is Managing Partner of the Investment Manager and has waived any director fees payable to himself.

Ultimate controlling party

In the opinion of the Directors the ultimate controlling party is Mads Jensen.

Contingent liability

On 14 September a convertible loan note agreement was signed with SuperSeed Ventures LLP. This is a loan facility of which the aggregate principal amount of notes outstanding at any time is limited to £1,000,000.

The notes when issued and outstanding shall rank pari passu, equally and rateably, without discrimination or preference among themselves and as obligations of the Company.

Until the notes are repaid by the Company or converted into Shares, in each case in accordance with the provisions of this Instrument, interest shall accrue and be paid on the principal amount of the notes outstanding at the rate of SONIA plus 10% per annum.

All outstanding notes shall automatically convert into fully paid Shares of the class set out below at the Conversion Price on written notice of the noteholder. The noteholder shall have the right to serve a Conversion Notice on the Company at any time to convert some or all of the notes outstanding into fully paid Ordinary Shares at a price of £1.30 per Share.

Events after the end of the reporting period

On 12 January 2023 a further 122,120 Ordinary shares were issued by the Company as compensation for a further investment in Duel Holdings Limited (formerly Daredevil Projects Limited) of £244,240 which was completed in December 2022.

On 28 February the Company sold £1,000,000 of its commitment in SuperSeed II LP to the investment manager SuperSeed Ventures LLP.

On 15 March 2023 a further 41,366 Ordinary shares were issued by the Company as compensation for an investment in Kluster Enterprises Limited of £45,503 which was completed in February 2023.

There are no further subsequent events to note.

*END*

For more information, please contact:

SuperSeed Capital Limited	+44(0)20 3405 3060
Mads Jensen, Investment Manager

VSA Capital - AQSE Corporate Adviser and Broker	+44(0)20 3005 5000
Corporate Finance: Andrew Raca Corporate Broking: Peter Mattsson, David Scriven

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