Mindflair : R&A

Mindflair plc

(formerly Pires Investments plc)

(Incorporated in England and Wales with registered number 02929801)

Annual Report and

Financial Statements

FOR THE YEAR ENDED 31 DECEMBER 2023

MINDFLAIR PLC (FORMERLY PIRES INVESTMENTS PLC)

Annual Report and Financial Statements

FOR THE YEAR ENDED 31 DECEMBER 2023

Contents

	Page
Company Information	1
Review of Activities	2
Strategic Report	10
Directors Report	13
Report on Remuneration	15
Statements of Directors' Responsibilities	16
Corporate Governance Report	17
Independent auditor's report to the members of Mindflair plc	23
Statement of Comprehensive Income	27
Statement of Changes in Equity	28
Statement of Financial Position	29
Statement of Cash flows	30
Notes to the Financial Statements	31

	MINDFLAIR PLC (FORMERLY PIRES INVESTMENTS PLC)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2023
Company Information
Directors	Nicholas Lee (Director)
	David Palumbo (Director)
Secretary	Robert Porter
Registered office	9th Floor, 107 Cheapside
	London
	EC2V 6DN
Independent Auditors	PKF Littlejohn LLP
	Statutory Auditor
	15 Westferry Circus
	London E14 4HD
Nominated adviser	Cairn Financial Advisers LLP
	9th Floor, 107 Cheapside
	London
	EC2V 6DN
Brokers	Peterhouse Capital Limited
	3rd Floor
	80 Cheapside
	London
	EC2V 6EE
Registrars	Computershare Investor Services plc
	PO Box 82
	The Pavilions
	Bridgwater Road
	Bristol
	BS99 7NH
Company Registration number	02929801

Page | 1

MINDFLAIR PLC (FORMERLY PIRES INVESTMENTS PLC)

Review of Activities

Annual Report and Financial Statements

FOR THE YEAR ENDED 31 DECEMBER 2023

Financial highlights

• Net asset value ("NAV") of £5,844,000 as at the year‐end (31 December 2022: £7,822,000). Reduction principally driven by the liquidation of Emergent Entertainment Limited (although the original cash investment in this company was circa US$200,000.)
• NAV per share of 2.13 pence per share (2022: 4.28 pence) compared to a year end share price of 0.9 pence and a current price of 0.48 pence
• Two‐year debt funding facility amounting to £1.235 million in place
• Placing to raise £730,400 before expenses in December 2023

Portfolio highlights

• Continued progress is being made within the Company's investment portfolio
• A number of funding rounds have taken place for companies such as CameraMatics, Landvault, Engage XR, Virtex and VividQ
• CameraMatics is continuing to grow with a number of new customers
• Getvisibility, one of the Company's larger investments, continues to increase its customer numbers and revenue, with over 250 customers in 39 countries
• New investment made in Captur in October 2023, a company that has built an enterprise AI platform for real‐time, rules‐ based image recognition
• Virtex closed its first major commercial deal in December 2023 worth $3.5 million and has raised new funds at a higher valuation than the cost of the original investment
• Smarttech247 continuing to make good progress as a listed company
• Investment in a third SVV fund ("SVV3"), alongside Enterprise Ireland ("EI"), an investment arm of the Irish Government.
• SVV1 actively focused on the realisation phase of its investment cycle
• Successful change of name and rebranding to Mindflair plc to better reflect the Company's emphasis on exciting AI focused investments

Review of activities

The year to 31 December 2023 has continued to be a difficult time for small‐cap listed companies and for those companies with a technology focus. However, notwithstanding this market backdrop, the majority of the Company's investments have continued to make good progress during the period with the key developments being summarised in the following section.

Mindflair is an investment company focused on next generation technology with a focus on the application of AI to transform large traditional industries. Mindflair invests in its portfolio companies directly, or indirectly, as set out below, through: (i) its investments in three funds managed by Sure Valley Ventures ("SVV") and (ii) its investment in Sure Ventures plc.

	Investments	SVV1	SVV2	SVV3	Sure Ventures plc
Direct	Getvisibility, Low6 and	13%	5.9%	16%	21.3%
Indirect	Precog	5.9% via Sure	1.3% via Sure		Holds stakes of
		Ventures plc	Ventures plc		25.9% in SVV1, 5.9%
					in SVV2 and a
Cornerstone investor		Enterprise Ireland	British Business	Enterprise	stake in VividQ
			Bank	Ireland
Net interest		18.9%	7.2%	16%	21.3%

Page | 2

MINDFLAIR PLC (FORMERLY PIRES INVESTMENTS PLC)

Review of Activities (continued)

Annual Report and Financial Statements

FOR THE YEAR ENDED 31 DECEMBER 2023

The Company's principal investment portfolio categories are summarised below:
	Cost or	Cost or
	valuation at	valuation at
	31 December	31 December
	2023	2022
	£000's	£000's
Categories
SVV investments	4,932	5,219
Direct investments	1,563	2,901
Cash/other listed securities	206	856
Total	6,701	8,976

The cash balance above as at 31 December 2023 does not include the proceeds from the placing that took place in December 2023. The principal cause of the reduction in the portfolio valuation during the year related to the insolvency of Emergent Entertainment Limited (although the original net cash investment in this company was circa US$200,000).

On 23 February 2023, the Company announced that it had agreed to invest in SVV's new venture capital fund, SVV3, alongside Enterprise Ireland, the fund's cornerstone investor that committed 50% or €15 million to the fund.

1. The SVV investments

1. Sure Valley Ventures Fund 1 ("SVV1")

SVV1 is SVV's first fund which has completed its new investment phase and has now entered its realisation phase. It has already achieved three realisations/liquidity events to date, with more expected in the short term.

Within the SVV1 portfolio, highlights during 2023 include:

• GetVisibility is a cybersecurity company focusing on data visibility and control and uses state‐of‐the‐art artificial intelligence ("AI") to classify and secure unstructured information. The company has continued to grow its sales pipeline, with a number of new channel partners being onboarded, leading to an increase in its number of enterprise customers to over 250 in 39 countries.
  Mindflair also has a direct interest in GetVisibility and, an additional indirect interest through SV plc. The total valuation of the Company's interest in GetVisibility, held both direct and indirectly, amounts to circa £2.43 million (€2.8 million) based on the company's last funding round. A number of conversations have already taken place with regard to the possible sale of this company at a higher valuation.
• CameraMatics offers a cloud based, SaaS solution to fleet managers, enabling companies to deal with the increasing demands around driver shortages, driver retention, rising fuel costs, insurance costs, emission output and driver safety protocols. Its in‐house developed smart technologies, smart vision systems, AI safety technologies, fleet safety/risk management tools and data software solutions have been achieving good results for customers. In Q1 2023, the company raised €3 million from existing investors at an increasing valuation to assist with funding growth. CameraMatics has continued to grow both annual recurring revenue and customers, with expansion into new geographies, such as the US and new clients being won including Maritime Transport, one of the UK's largest privately owned transport companies, Van Elle and Hendrick European. The company will also be receiving around €12 million in funding from the Disruptive Technology and Innovation Fund to develop next generation neural processing units to improve driver safety.
• LandVault, a large metaverse builder, successfully raised an additional US$3 million after extending its Series B funding round in April 2023. This strategic funding was raised from Web3 focused investors including, The Sandbox, The Gemini Frontier Fund, HodICo and hedge fund Kingsway Capital. The proceeds of the fundraise will assist its global expansion, further investment in innovative technologies and development of an open protocol, Matera, to make the metaverse experience more accessible. The company has signed a number of new deals with an increased focus on the Middle East.
• Virtex has developed an app called Virtex Stadium which is an application that enables esports organisers to host their existing formats on a 3D entertainment platform, offering millions of viewers a completely new viewing experience. Virtex has recently completed a £1.8 million fundraise at a higher valuation than the cost of the original investment and closed its first major commercial deal in December 2023 worth $3.5 million with the operator of an esports venue to provide technology and solutions for viewing esports live in 3D.

Page | 3

MINDFLAIR PLC (FORMERLY PIRES INVESTMENTS PLC)

Review of Activities (continued)

Annual Report and Financial Statements

FOR THE YEAR ENDED 31 DECEMBER 2023

• Everyangle, whose computer vision solutions help retailers improve efficiencies, optimise operations and reduce losses, recorded over 200% growth in 2023 alone. They have recently expanded their product suite with advanced demographic analytics, enhancing their market‐leading footfall solution. Recent product enhancements around customer identification and speed of service have been designed to reveal genuine convertible traffic, optimise retail service efficiency and elevate customer satisfaction. A number of new contracts have been signed and new functionality has been added.
• Smarttech247 Group plc ("Smarttech247") (AIM: S247) is an established global artificial intelligence‐based cybersecurity business, specialising in automated managed detection and response. Recent full year and interim results of Smarttech247 demonstrate that the company is continuing to grow revenue and EBITDA and win new contracts. The company was also recognised again as one of the fastest growing tech companies in 2023 by Deloitte. Further updates include the announcement of a new AI Assistant, a pioneering AI capability for cybersecurity operations, and the extension of its robust cybersecurity framework to wider markets.
• Wia, a leading player in smart technology solutions, announced in 2023 the closure of a landmark 5‐year contract with one of the world's most prominent logistics companies. The agreement, valued at over $2 million, involves a rollout of energy monitoring across 5 million square metres of property in 14 countries, underscores the industry's shift towards sustainability and the pressing need for efficient resource management.
• ENGAGE XR Holdings plc (AIM: EXR) is metaverse technology company focused on becoming a leading global provider of virtual communications solutions through its new fully featured corporate metaverse, ENGAGE Link. The company also has a proprietary software platform, ENGAGE. ENGAGE provides users with a platform for creating, sharing, and delivering VR content for education, training, and online events through its three solutions: Virtual Campus, Virtual Office, and Virtual Events.
  In February 2023, the company raised €10.5 million by way of a placing which included a subscription by HTC for £0.58 million. In June 2023, Lenovo's new VR headset was released. Lenovo is a channel partner for ENGAGE XR and so this is expected to provide a new route to market for the company. In September 2023, the company published its 2023 interim results which showed continued revenue growth of 18% over the same period in 2022. More recently the company has signed its largest contract to date with a large Middle East based company. It has also just announced its results for 2023 with revenue of €3.7 million and an improving EBITDA result with net cash at the period end of €7.9 million.
• VividQ has been making good progress and is now able to share images of real holograms projected through high‐performance 4K display hardware. The ability to deliver 'retina resolution' computer‐generated holograms means that next‐generation VR headsets will be able to offer unparalleled levels of immersion and realism to users. In Q4 2023, the company raised £3.2m. The funds were raised at a price which was less than the previous round but it provides the company with sufficient cash to fund development for the next two years.

Page | 4

MINDFLAIR PLC (FORMERLY PIRES INVESTMENTS PLC)

Review of Activities (continued)

Annual Report and Financial Statements

FOR THE YEAR ENDED 31 DECEMBER 2023

As at the year end, SVV1 had a portfolio of 14 investee companies at different stages of development spanning a range of sectors. The portfolio provides Mindflair 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
(Ambisense Limited)	real time gas and environmental monitoring using both IoT and sensor solutions. However,
	recently the company has been unable to raise new funds and therefore went into
	liquidation in June 2024.
Security
Nova Leah	An Artificial Intelligence cybersecurity risk assessment and protection platform for connected
(Nova Leah Limited)	medical devices.
Getvisibility	An Artificial Intelligence security company addressing the substantial problem faced by
(Visibility Blockchain Limited)	corporations in storing, sorting, accessing and protecting data.
PreCog	An Artificial Intelligence security solution platform company that provides data intelligence
(Polience Limited)	to combat crime, terrorism and protect vulnerable people. Customers include leading law
	enforcement and security agencies, and transport infrastructure groups.
Smarttech247	Is an established global Artificial Intelligence‐based cybersecurity business, specialising in
(Smarttech247 Group plc)	automated managed detection and response. The company is listed on AIM.
Immersive Technologies
Engage XR	A developer of virtual reality and immersive experiences with a specific focus on education
(Engage XR Holdings plc)	and enterprise learning and development. The company is listed on AIM.
Landvault	A monetisation platform and gateway for brands to enter the metaverse. The company
(WAM Group Limited)	is rapidly growing revenues and numbers of active users.
Warducks	An AR/VR game development studio known for the production of leading games.
(Warducks Limited)	However, more recently this company has struggled to raise new funding and therefore filed
	for liquidation in early 2024.
VividQ	A deep tech software company which has developed a framework for realtime 3D
(VividQ. Limited)	holographic displays for use in headsup displays and AR headsets and glasses.
Volograms	An Artificial Intelligence deep learning company that uses AI to create 3D Augmented Reality
(Volograms Limited)	(Volograms Limited)from 2D photos and videos. The company has launched a consumer AR
	Camera app called Volu and has browser and enterprise versions in development.
Virtex	A company building a platform for the next generation of live, immersive entertainment
(Virtex Limited)	within the virtual reality ("VR") gaming and esports industries. It is actively developing its
	new Stadium app.

Page | 5

MINDFLAIR PLC (FORMERLY PIRES INVESTMENTS PLC)

Review of Activities (continued)

Annual Report and Financial Statements

FOR THE YEAR ENDED 31 DECEMBER 2023

Internet of things
CameraMatics	An Artificial Intelligence platform enabling transport fleet managers to reduce risk, increase
(MySafe Drive Limited)	driver safety and comply with growing industry governance and compliance. The company
	is growing revenues considerably 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 (WIA
(Wia Technologies Limited)	Technologies Limited)application management, security, data capture and storage, analysis
	and control.
Everyangle	An Artificial Intelligence platform that uses machine learning to provide enterprises, such
(Everyangle Limited)	as large retailers, with line of business solutions to reduce fraud, churn and waste using
	machine vision.

SVV1 has completed its investing in new companies and is now in its realisation phase which should lead to further returns to the Company and its shareholders.

2. Sure Valley Ventures UK Software Technology Fund ("SVV2")

In March 2022, the Company invested in a second SVV fund, the Sure Valley Ventures UK Software Technology Fund (the "SVV2"). The principal investor in the SVV2 is the British Business Bank ("BBB"), an investment arm of the UK Government. The first close of this fund amounted to £85 million, with the BBB investing up to £50 million and other investors ("Private Investors"), including Mindflair, investing up to £35 million over the 10 year life of the fund.

Mindflair expects to invest up to £5 million in total over the life of the fund which would provide it with a circa 5.9% interest. SVV2 invests in a range of private UK software companies with a focus on companies in the Artificial Intelligence sector and within the subsectors of AI in the enterprise, AI in Immersive Technologies (such as AR/VR) and AI in Cybersecurity sectors.

SVV2 is managed by the same SVV team which, to date, has been highly successful in achieving a number of cash realisations from, and upward revaluations of, the majority of the companies in the SVV portfolio. The profit share arrangements within this new fund are designed to encourage the involvement of the Private Investors alongside the BBB, meaning that Mindflair and the other Private Investors would expect to receive a significantly enhanced share of the total return generated by the fund compared to industry standard.

As at the period end, SVV2 had made three investments which are described below:

RETiniZE	RETiniZE is an award‐winning creative‐tech company based in Belfast, Northern Ireland.
(RETiniZE Limited)	The company is developing an innovative software product called Animotive that is
	harnessing the latest VR and Generative Al technologies to transform the 3D animation
	production process.
Jaid	Jaid is a rapidly growing platform that uses Al as a Service (AIaaS) solution to help businesses
(Opsmatix Systems Limited)	reduce costs, improve efficiency and make data‐driven decisions, including client service
	automation, sales automation, payment exception processing and claims administration
	processing.

Page | 6

MINDFLAIR PLC (FORMERLY PIRES INVESTMENTS PLC)

Review of Activities (continued)

Annual Report and Financial Statements

FOR THE YEAR ENDED 31 DECEMBER 2023

Captur

(Captur Limited)

Captur is a company that has built an enterprise AI platform for real‐time, rules‐based image recognition. Existing investors, MMC Ventures and Ascension Ventures participated in this round, along with other investors including ex‐Deliveroo, and enterprise AI investors Concept Ventures and Two Culture Capital, backers of ElevenLabs and Electric AI.

The company's technology uses Edge AI, the implementation of artificial intelligence in an edge computing environment, which allows calculations to be completed nearby to where data is created, rather than an offsite data centre or a centralised cloud computing facility. This localised processing allows Captur's technology to make decisions using visual AI in under 3 seconds.

Captur's visual AI solution is fast to implement and offers product owners easy‐to‐embed APIs and SDKs that act as a smart camera within their mobile apps. Captur is currently being used in the delivery sector for drivers to map doorways and verify the correct address, reducing delivery to incorrect addresses and fraud by up to 40%. Captur has recently made significant progress on new business and product features. They have launched their real‐ time camera SDK into production, which is now being used by tens of thousands of users per month. They have continued to grow their market lead in mobility with plans to launch with new clients in the US and AUS markets in H1'24. They are also expanding into delivery and logistics and are in late‐stage negotiations with a Fortune 100 retailer in the US.

The funding requirement for this fund is expected to be met from existing cash resources and/or realisations from SVV1. In June 2024, a fourth investment was made in this fund in Ittybit, a pioneering developer tools company.

2. Sure Valley Ventures III Limited Partnership ("SVV3")

On 23 February 2023, Mindflair announced that it had agreed to invest in SVV's new venture capital fund, SVV3, alongside Enterprise Ireland, the fund's cornerstone investor who has committed 50% or €15 million to the fund. SVV3 plans to invest in circa 15 high‐ growth Al software companies in sectors such as Enterprise, Immersive Technologies and Cybersecurity across the Republic of Ireland.

Whilst new investments for this fund are being reviewed, the funding requirement is expected to be relatively limited in the short‐ term and will be met from existing cash resources and/or realisations from SVV1. In June 2024, this fund made its first investment in Inspeq AI, a transformative full‐stack AI Ops platform, alongside Delta Partners and a number of other leading investors.

3. Sure Ventures plc ("SV plc")

SV plc (LSE: SURE) is a London‐listed venture capital fund which invests in early‐stage software companies in the rapidly growing technology areas of Augmented Reality, Virtual Reality, Internet of Things and Artificial Intelligence. Mindflair has a 21.3% shareholding in SV plc whose principal investments are a 25.9% interest in SVV1, a 5.9% commitment to SVV2 and an investment in VividQ. Consequently, as a result of its shareholding in SV plc, Mindflair has an aggregate (direct and indirect) interest in SVV1 of around 19%, which comprises its original direct 13% interest in SVV1 and an indirect interest of 5.9%. It also has an aggregate interest of 7.2% in SVV2. This investment is carried at its market value and as at 31 December 2023, SV plc's NAV per share was £1.07 (€1.24) compared to a current share price of £0.725.

Page | 7

MINDFLAIR PLC (FORMERLY PIRES INVESTMENTS PLC)

Review of Activities (continued)

Annual Report and Financial Statements

FOR THE YEAR ENDED 31 DECEMBER 2023

B.	Direct investments
Getvisibility	Details of this investment are covered in the section above.
Low6	Low6 is focused on the revenue generative free‐to‐play and affiliate markets in North
(Low6 Limited)	America with the ambition to be the global leader in fan engagement. A number of new
		partnerships have been established, including the appointment as the National Hockey
		League ("NHL") free to play provider for a period of 3 years, who have also invested in Low6.
		In July 2023, the company announced that it had become EBITDA positive and in February
		2024 it said that it expected current year revenue to be around £4.5 million and that it had
		traded profitable for the last 7 months.
Precog	PreCog is a software solution that understands visitor flow, protects borders,
(Polience Limited)	detects persons of interest, and ensures locations are protected from those who wish to
		cause damage or commit crime. PreCog provides totally unique, scalable, actionable
		intelligence solution. Customers include top UK and international government security and
		law enforcement agencies and transport infrastructure organisations.
		The company is involved in a number of customer deployments. The signature of one or
		two new contracts is expected to result in an uplift in valuation.
	Emergent Entertainment	Emergent is focused on becoming a next‐generation entertainment company, bringing
	Limited	audiences and storytellers together by harnessing emerging technologies. Whilst in the
		earlier part of 2023, the management team had been working on reducing the company's
		cost base and had revised its 2023 revenue forecasts upwards, as the year progressed trading
		deteriorated. Then in December 2023, the Company announced that Emergent was
		engaging with insolvency advisers and expected to be shortly placed into liquidation which
		then took place on 10 January 2024 with a resolution to voluntarily wind up the company.
		This investment has therefore been provided for in full.

Other

On 31 March 2024, John May, a non‐executive director, retired from the board after a number of years with the Company in order to devote more time to his other roles.

Financial

For the year under review, the Company reported a loss before taxation of £2.67 million (for the year ended 31 December 2022: loss of £0.37 million). The result for the Company includes unrealised gains/losses in the portfolio of quoted equity investments which are marked to market, plus any return from and adjustment to the carrying value of its unlisted investments. The principal cause of the loss for the year related to the insolvency of Emergent Entertainment Limited (although the original cash investment in this company was circa US$200,000).

Net asset value as at the end of the year amounted to £5,844,000 (31 December 2022: £7,822,000). We continue to believe that absolute NAV does not fairly represent the Company's financial potential, given the scope for significant valuation uplift of the companies within the portfolio. This is clearly demonstrated by the gains, both realised and unrealised, that have been achieved to date from the investment portfolio. Furthermore, it is worth reiterating that realisations that are achieved within the SVV portfolio result in cash distributions to the Company and are not retained within the fund.

On 22 December 2022, the Company entered into a two‐year £1.235 million unsecured loan facility accruing interest at 7.5% per annum with a bullet repayment of principal and interest at the end of the term. Warrants over 47,839,284 new ordinary shares were issued to the investors which will vest if the average of the Company's volume weighted average price over five consecutive trading days exceeds 5.163 pence within the three‐year exercise period of the warrants. The warrant exercise price is 4 pence, which represented a 60% premium to the closing mid‐market price of 2.5 pence per the Company's ordinary share on 21 December 2022. These are currently the only unexercised warrants that are in issue.

On 21 December 2023, the Company placed 91,300,000 shares at a price of 0.8 pence per share, raising gross proceeds of £730,400, The shares were placed at a 30 per cent. discount to the closing mid‐price of the ordinary shares on 20 December 2023.

Page | 8