Pires Investments : Interim Results 2021

15 September 2021 NLv13 14 9 21 final

Pires Investments PLC

("Pires" or the "Company")

Unaudited interim results for the six months ended 30 June 2021

Pires Investments plc (AIM: PIRI), the investment company focused on next generation technology, is pleased to announce its unaudited interim results for the six-month period ended 30 June 2021.

Highlights

Company highlights

• Profit achieved of £1.53 million during the period (six months ended 30 April 2020: loss before taxation of £427,000)
• Net asset value ("NAV") of £7,080,000 as at the period end (31 December 2020: £2,926,000), equating to NAV per share of 4.94 pence, an increase of over 80% since 31 December 2020

Portfolio highlights

• Interest in Sure Valley Ventures ("SVV") increased to circa 20% via the purchase of a shareholding in Sure Ventures plc ("SV plc")
• New investments made by SVV include Virtex, PreCog, Smarttech247 and follow-on investments in Warducks and Getvisibility
• Significant increase in valuation of the majority of portfolio companies based on new funding rounds involving third party investors
  o Portfolio continues to attract international investors such as EQT, University of Tokyo, Foresight Williams Technology (a joint collaboration between Foresight Group and Williams Advanced Engineering), Business Growth Fund, Puma Investments, Japanese
  Miyako Capital, Austrian APEX Ventures and Silicon Valley's R42 Group
• New direct investment made in PreCog and follow-on investments in Low6 and Getvisibility, coupled with an increase in valuation of Getvisibility
• Investments made in the digital assets technology sector

Post-period end highlights

• £11 million raised by VividQ from investors including the University of Tokyo, Foresight Williams Technology and Silicon Valley's R42 Group
• €3 million raised by Ambisense through funding round led by BGF and supported by existing investors, including SVV, Atlantic Bridge and Enterprise Ireland
• CameraMatics announced a partnership with UK transport and logistics operator Maritime Transport Ltd
• Balance of proceeds received from the sale of Artomatix
• Capital restructuring of the Company's balance sheet approved by shareholders
• Smarttech247, a recent portfolio investment, is already actively pursuing an IPO

Nicholas Lee, Director of Pires, commented:

"This has been another very busy and exciting period for the Company, with a significant level of investment activity and gains made across the portfolio. We strongly believe that our investment portfolio has the potential to deliver a high level of return, as demonstrated by the progress made to date. In particular, our investment in SVV is performing beyond the Board's expectation, with the

majority of the portfolio companies attracting additional investment from other investors at significantly higher valuations compared to the level of original investment and thereby also ensuring that these companies are well funded going forward.

Furthermore, SVV has almost completed its initial portfolio investment deployment and we anticipate further increases in the value of the portfolio companies and subsequent exits over the medium term. We are also excited about our investment in the digital asset technology sector where we have already achieved substantial gains."

Investment overview

The Company's principal investment portfolio categories are summarised below:

Category	Cost or	Cost or
	valuation at 30	valuation at 31
	June 2021	December 2020
	£000s	£000s
Sure Valley Ventures	3,851	1,507
Direct investments	884	419
Digital assets sector	1,951	-
Cash/other listed securities	474	1,122
Total	7,160	3,048

Investment in SVV

During the period, the Company increased its exposure to SVV through the purchase of 1.5 million shares in SV plc using new Pires shares as consideration. SV plc has a 25.9% interest in SVV and a direct investment in VividQ, one of the SVV portfolio companies. As a result of this transaction, Pires now has an aggregate (direct and indirect) interest in SVV of around 20%.

Within the SVV portfolio, new investments have been made in: Virtex, a company building a platform for the next-generation of live, immersive entertainment within the virtual reality gaming and e-sports industries; PreCog, a security solution platform company that provides data intelligence to combat crime, terrorism and protect vulnerable people; and Smarttech247, a global artificial intelligence based cyber security cloud business that protects enterprises as they migrate to cloud-based IT operations. Smarttech247 is profitable with high forecast revenue growth and has over 100 technology partners, including Tanium and CrowdStrike, and 50 clients based in Europe and the US. Smarttech247 has also recently announced its intention to seek a listing by way of a reverse takeover transaction which is expected to complete later in the year.

Additionally, during the period, a number of the portfolio companies have been revalued upwards based on new funding rounds which have taken place at higher valuations compared to the valuation at the time of the initial investment. These companies include:

• CameraMatics raised €4 million in additional funding at a valuation that represents over 300% of the CameraMatics' valuation as at the time of SVV's initial investment in November 2017. The round was led by Puma Investments, a leading provider of growth capital. CameraMatics also announced a major partnership with UK transport and logistics operator Maritime Transport Ltd.

• Getvisibility completed a further funding round at a significant premium to the last round. This was led by Herb Hribar who was formerly CEO of Eircom, the largest telecoms group in Ireland and is currently a director of ScienceLogic, Inc, a leading provider of AI-based operations technology which recently completed its own US$105 million round. Mr Hribar, who is based in the US, recently become Chairman of Getvisibility and is leading Getvisibility's dialogue with potential Silicon Valley investors.
• Post the period end, VividQ has also raised new funds (£11 million) at a significant premium to previous valuations. This funding was led by a consortium of new international investors including the University of Tokyo, Foresight Williams Technology (a joint collaboration between Foresight Group and Williams Advanced Engineering), Japanese Miyako Capital,
  Austrian APEX Ventures and Silicon Valley's R42 Group and follow-on investments from SVV, University of Tokyo Edge Capital (UTEC) and Essex Innovation. SV plc has a significant direct investment in VividQ thereby providing Pires with a disproportionately greater interest in VividQ through its shareholding in SV plc.

VR Education ("VRE"), one of the portfolio companies which is already listed on AIM, and from which funds have already been returned to Pires, has also made significant progress during the period with revenue up 83% for the half year to 30 June 2021. In particular, its ENGAGE product has now reached the milestone of over 130 commercial customers, including Abbott Laboratories, KPMG, MongoDB, and the US State Department as recent additions. Its strategic partner HTC Corporation ("HTC") has commenced selling its ENGAGE product, VIVE Sessions, in China, as part of a software bundle with HTC's new headset, the VIVE Focus 3, and with new HP ProBook laptops being sold in the region. In June 2021, VRE announced the planned development of a new fully featured corporate metaverse called "ENGAGE Oasis" with the launch expected in the first half of 2022. In addition, it raised €9.0 million (£7.7 million) before expenses at a price of £0.16 per share by way of an oversubscribed placing, announced on 18 June 2021 - the company's net cash position was €9.2 million as at 30 June 2021.

As at the period end, SVV had a portfolio of 13 investee companies at different stages of development spanning a range of sectors. The portfolio provides Pires with exposure to a number of key, cutting- edge and rapidly growing technology sectors. Further details of the portfolio companies and recent developments are set out below:

Artificial intelligence
Ambisense	Provides an Artificial Intelligence platform to deliver environmental
	risk assessment to allow real-time gas and environmental monitoring
	using both IoT and sensor solutions. The company has already been
	awarded a number of major contracts and has a substantial pipeline
	of opportunities.
Buymie	An artificial intelligence-based same day grocery delivery company
	operating in both the UK and Ireland working with companies such as
	Tesco, Lidl, Asda and the Co-op.
Security
Nova Leah	An artificial intelligence cyber-security assessment and protection
	platform for connected medical devices.
Getvisibility	An artificial intelligence security company addressing the substantial
	problem faced by corporations in storing, sorting, accessing and
	protecting data. Recently raised additional funds at a significant
	premium and has been voted as one of Ireland's top 18 start-ups.

PreCog	A security solution platform company that provides data intelligence
	to combat crime, terrorism and protect vulnerable people. The
	company recently completed a £1 million fundraising round.
	Customers include leading law enforcement and security agencies
	and transport infrastructure groups.
Smarttech247	A global artificial intelligence based cyber security cloud business that
	protects enterprises as they migrate to cloud-based IT operations.
	The company has recently won a major new contract with a Fortune
	Global-1000 company employing over 100,000 staff and already has
	a purchase order under this contract for €6 million. It has also recently
	announced its intention to list via an RTO process.
Immersive Technologies
VR Education	A developer of virtual reality and immersive experiences with a
	specific focus on education and enterprise learning and development.
	The company is listed on AIM, has over 100 commercial customers
	and is rapidly growing revenue and margins. It recently raised €9.0
	million in new funds.
Admix	A platform enabling the monetisation of interactive programmatic
	brand placements in, for example, video games and other AR/VR
	applications. The company is rapidly growing revenues and numbers
	of active users.
Warducks	A game development studio known for the production of leading
	games and is soon to launch an AR game that could be the next
	Pokémon Go.
VividQ	A deep tech software company which has developed a framework for
	real-time 3D holographic displays for use in heads-up displays and AR
	headsets and glasses. The company recently completed a significant
	£11 million funding round at a significant premium.
Volograms	A reality capture and volumetric video company. It is currently
	trialling a new app which has had very positive feedback to date.
Virtex	A company building a platform for the next-generation of live,
	immersive entertainment within the virtual reality ("VR") gaming and
	e-sports industries. It is actively developing its new Stadium app.
Internet of things
CameraMatics	Platform enabling transport fleet managers to reduce risk, increase
	driver safety and comply with growing industry governance and
	compliance. It recently raised €4 million at a 300% uplift in valuation.
	The company is growing revenues significantly and building its
	presence in the very significant US market where it has already won a
	number of new contracts.
Wia	Provides a platform solution for smart buildings. Its platform provides
	full device and application management, security, data capture and
	storage, analysis and control.
Direct investments

During the period, the Company increased its investment in Low6, an influencer-led B2B gamification company for sports franchises around the world. Low6 recently raised an additional £6.5 million in July 2021 in an over-subscribedpre-IPO fund raising. Its user base continues to increase and it now has over 250,000 users. Low6 is also actively progressing its IPO.

The Company made a new investment of £250,000 in PreCog, a security solution platform company that provides data intelligence to combat crime, terrorism and protect vulnerable people, as part of its £1 million fundraising round. Its customers include leading law enforcement and security agencies and transport infrastructure groups.

Pires also made a follow-on investment in Getvisibility, as part of a €1.1 million funding round led by a new lead investor Herb Hribar, who has also become Chairman of the company. This new funding took place at a significant premium to the valuation at which Pires made its original investment of €250,000 in March 2020. The funds raised will be used to enhance the company's marketing and sales capability in addition to deepening its technology and research know-how The company is accelerating customer growth and is also now servicing customers in Europe and the MENA region.

Digital assets sector

The Company completed its first investment in the digital assets sector through an investment in De Tech Studio Limited and YOP tokens. Certain YOP tokens were sold to realise a substantial cash profit and the balance of the investment was used to subscribe for shares in Pluto Digital Assets plc ("Pluto"). The rationale for this transaction was to diversify and de-risk the investment and provide greater liquidity given Pluto's intention to list.

Pluto is a software technology company and operator in the decentralised finance ("DeFi") and non- fungible tokens ("NFT")/Metaverse (virtual environments) sectors. It is currently developing a DeFi software platform, that provides a highly usable web DeFi portal to open up DeFi to a mass audience. This platform provides vault middleware to find and categorise a set of proprietary DeFi vaults to offer users the ability to generate yield from crypto currencies. Furthermore, Pluto has partnered with a leading NFT metaverse platform and is currently engaging with owners of digital media and rights to offer their content to the NFT community. In addition to Pluto's operational activities, it has made further investments in Web3 ventures and has acquired an NFT portfolio including assets such as Cryptopunks, Artblocks and BAYCs.

Pluto has advised the Company that it currently holds treasury assets including Bitcoin, Ethereum, Polkadot, Cardano and Solana. The company has also advised that, overall, its portfolio of venture and treasury assets has been performing well and the company's current NAV per share exceeds 6 pence, the price at which Pluto carried out its most recent fund raise in March 2021.

During the summer of 2021, Pluto has been focusing on expanding its product team and forming key partnerships. This work has progressed well and the company now believes that it is well-positioned to proceed with its planned IPO.

The Company's equity holding in Pluto is valued at almost £2 million based on the price of 6 pence per share, which represents a significant uplift on the Company's initial investment in this sector.