Supply@ME Capital : 649KB

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30 September 2021

Supply@ME Capital plc

(The "Company" or "SYME")

Interim results for the six months ended 30 June 2021

Supply@ME Capital plc, the fintech business which provides an innovative Platform for use by manufacturing and trading companies to access Inventory Monetisation© solutions enabling their businesses to generate cashflow, announces its results for the half-yearended 30 June 2021.

Highlights

• Post-taxloss of £1.9mn (2020: £2.8mn) as a result of continued investment in technology, operations and hiring new senior team members.
• Revenue of £271,000 generated from "Captive" inventory monetisation stream, primarily from due diligence fees charged by Italian subsidiary. The same revenue trend observed in the prior year is expected (first half dedicated to preliminary analysis with related outcomes underpinning revenues in the second part of the year). The revenue guidance in the RNS of 31 August 2021 is confirmed.
• Captive business origination pipeline valued at £1.5bn, across 126 prospective clients (being the potential value of inventory to be monetised over the Platform).
• Total Investment Advisory origination pipeline valued at £750mn.

Interim results do not incorporate acquisition of TradeFlow Capital Management, which completed on 01 July 2021.

Financial Summary

	H1 2021	H1 2020
	Unaudited	Unaudited and restated
Revenue	£271,000	-
Gross loss	(£131,000)	(£238,000)
Loss after tax	(£1,889,000)	(£2,777,000)
Loss per share (pence)	(0.01)	(0.01)

Alessandro Zamboni, CEO, Supply@ME Capital Plc, said:

"The first half of 2021 was challenging for the entire world, not least for Supply@ME. However, despite being in its infancy, the business has remained steady throughout a global pandemic. We significantly expanded our team - which now includes some of the foremost talent in banking and inventory funding - and we have built an unparalleled inventory monetisation platform that is a genuine alternative to traditional finance.

"While our efforts have not necessarily been borne out in this set of numbers, we have built a strong pipeline of new business, some of which we expect to come into play by year-end. We are poised to seize the multitude of opportunities available to us, including the first monetisation transactions on our platform, and more. I am very proud of the team for what they have achieved in the first half of this year and look forward to the exciting times ahead."

Notes

Supply@ME Capital PLC and its operating subsidiaries (together the "Group") provide an innovative fintech platform (the "Platform") for use by manufacturing and trading companies to access inventory trade solutions enabling their businesses to generate cashflow, via a non-credit approach and without incurring debt. This is

achieved by their existing eligible inventory being added to the Platform and then monetised via purchase by third party Inventory Funders. The inventory to be monetised can include warehouse goods waiting to be sold to end-customers or goods/commodities that are part of a typical import/export transaction. SYME announced in August 2021 the launch of the Global Inventory Monetisation Fund ("Fund") which will be focused on both inventory in transit monetisation and warehouse goods monetisation. This Fund will be focused on creditworthy companies and not those in distress or otherwise seeking to monetise illiquid inventories.

Contacts

Alessandro Zamboni, CEO, Supply@ME Capital plc, [e-mail]

Paul Vann, Walbrook PR Limited, [phone]; [e-mail]

Brian Norris, Cicero/AMO, [phone] [e-mail]

SUPPLY@ME CAPITAL PLC

UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE 6 MONTH PERIOD ENDED 30 JUNE 2021

Chief Executive Report

Business model summary

Supply@ME Capital PLC (the "Company" or "SYME") and its operating subsidiaries (together the "Group") provide an innovative fintech platform (the "Platform") for use by manufacturing and trading companies to access inventory trade solutions, enabling their businesses to generate cashflow via a non-credit approach, without incurring debt. This is achieved by client companies existing eligible inventory being added to the Platform and then monetised via purchase by third-party Inventory Funders ("IM Transactions"). The inventory to be monetised can include warehoused goods waiting to be sold to end-customers or goods/commodities that are part of a typical import/export transaction. On 09 August 2021, SYME announced the launch of the Global Inventory Monetisation Fund ("Fund") which will be focused on both inventory in transit monetisation and warehoused goods monetisation. This Fund will be available to creditworthy companies and not those in distress or otherwise seeking to monetise illiquid inventories.

As outlined in the company's RNS announcement of 31 August 2021, following the acquisition of TradeFlow Capital Management Pte. Ltd ("TradeFlow") and the launch of the Fund, the Group is now focused on establishing and growing the following active, and future, revenue streams:

• Investment Advisory ("IA"): this is the revenue stream currently being generated by TradeFlow in its capacity as investment advisor to its well-established funds, as well as its anticipated role as investment advisor to the Fund going forward.
  This stream is expected to generate recurring revenues of approximately 1.25% of Assets Under Management for which TradeFlow acts as advisor. Additionally, TradeFlow could receive a further performance incentive fee of up to 15% of the profits generated by the Fund, based on performance.
• "Captive" inventory monetisation platform servicing ("C.IM"): this is revenue generated through the use of the Platform to facilitate inventory monetisation ("IM") transactions performed by the Fund and its Inventory Funders. This revenue is generated by the Group's Supply@ME operating subsidiaries, and in the future is expected to be supplemented by Tijara Pte Ltd, a technology subsidiary company of TradeFlow. Revenue will be earned in relation to the following activities:
  o origination and due diligence (pre-IM); and
  o monitoring, controlling and reporting (post-IM).
  This stream is expected to generate revenues of approximately 1-3% of the gross value of the inventories monetised (purchase price plus VAT).
• "White Label" inventory monetisation platform servicing ("WL.IM"): this is the revenue to be generated through the use of the Platform by third parties who choose to employ the self-funding model. This stream is expected to generate recurring software-as-a-service revenues of approximately 0.5- 1.5% of the value of each Inventory Monetisation transaction (the amount of funding provided).

Inventory funding programme, boosting the IA and C.IM revenue streams

The Group's Platform can be used in conjunction with several funding routes to facilitate IM Transactions for client companies with eligible inventories.

Following the recent launch of the Fund, the promotion of the inventory funding activities is managed directly by the Fund and TradeFlow, with the support of regulated introducers and distributors. As a result of these activities, the Company announced via RNS on 09 August 2021 that TradeFlow' funds received an Investment Grade final rating from a leading ratings agency for its 4-year Senior Note. Leveraging the global investor network of the Group, the funds have secured investors subscribing for the full, initial $40m issuance.

In order to support the IM transactions and mitigate the potential funding concentration risk, the Fund is liaising with over 12 Institutional Investors and family offices which have demonstrated interest in being the Inventory Funder for the initial IM Transactions. These initial transactions will involve inventory warehoused in Italy, as well as in the UK and UK common law geographies.

With reference to the Fintech Bank initiative (referenced in the RNS of 29 June 2021), on 10 August 2021 decree no.114 of the Italian Ministry of Economy and Finance of 25 May 2021, was issued. This decree contained Regulations requiring the registration of non-possessing personal pledges to be kept exclusively electronically. This regulation, following international market practices, aims to align the transparency of collateralised inventories to improve inventory funding transactions, and also strengthen the legal enforceability of the latter collaterals.

This key regulatory change impacted the current structuring activities of the Italian IM Transactions, and there is now the opportunity to further improve the security package. As a result, SYME and the Fintech bank are discussing, together with a leading Italian company which specialises in trade insurance and financial guarantees, how to create an inventory funding format that is both scalable and replicable. As a result, it is highly likely that an extension to the expiry date within the current term sheet will be agreed by both Parties. At the same time the Captive Bank project is progressing and the Company will update the market in due course with further developments.

The Shariah compliant version of the Platform is progressing well with its funding specialist and a dedicated announcement regarding this initiative is expected shortly.

Self-funding programme, boosting the White Label (WL.IM) revenue streams

During H1 2021, the Group invested in developing the integrated capabilities to enable it to offer its White Label inventory monetisation platform service. SYME's operating subsidiaries, both in the UK and in Italy, are in discussions with potential IM funders and origination partners. An increase in WL.IM requests from local Italian Banks or banking service providers is also expected as a result of the Italian decree referred to in the section above.

Client Company origination continues to remain strong

In line with the Company's trading update published on 31 August 2021, the Company continues to see clear and growing demand for the Group's Platform to facilitate the inventory monetisation service. As a result of the Fund, the Company has now been able to extend its client base to cover both warehoused goods and those subject to import/ export trade transactions.

As stated in the recent trading update, the total IA pipeline was £750m while the C.IM pipeline was approximately £1.5bn across 126 clients, the majority of which are based in Europe. The Company recently appointed a new Head of Origination, Ms Nicola Bonini, whose focus is to help identify and grow the number of UK client companies interested in using the Group's Platform to facilitate IM transactions.

The recent trading update defined the C-.IM "pipeline" as client companies for which due diligence is completed or underway and/ or eligible prospects which show an interest in the inventory monetisation services and with which the Group is working in the pre-analysis phase. The monetary value above represents the potential value of inventory to be monetised by these client companies rather than the pipeline revenue expected to be earned by the Group. However, this does provide a good indicator of the level of demand for the Group's current and future services.

These pipeline numbers does not include any client companies that have been lost due to either failing to meet eligibility criteria or delays in obtaining securitisation funding. Some of these lost client companies can be expected to be re-onboarded once the first inventory monetisation has been completed.