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Startup Giants Plc - Interim Financial Statements and Shareholder Update

·14-min read

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY STARTUP GIANTS PLC TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014, AS AMENDED ("MAR"). ON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE ("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

Startup Giants plc

(“Startup Giants” or the “Company”)

Interim Results for the six months period to 30 June 2020

Board Statement

Startup Giants plc is pleased to announce its unaudited interim results for the six months period from 1st January 2020 to 30th June 2020. The financial statements below have not been reviewed by the Company’s auditors.

Financial Results

Financial highlights for the period, extracted from the financial statements which follow, are:

ITEM

30 June 2020

30 June 2019

Operational loss:

£(5,975)

£(21,254)

Loss per share:

(0.59) pence

(2.1) pence

Cash and cash equivalents

£682,289

£642,680

Shareholders’ funds

£628,751

(2019: £699,023)

Review of Business During the Period

During the period under review, the Company has continued to increase its portfolio of founders looking for acceleration of their start-up businesses.

Despite the Covid-19 lock-down being in place from 24th March to 4th July of this year in England, the Company announced in the statement dated 3rd June 2020 accompanying the final results for 2019 that it had received official Endorsing Body status from the Home Office to qualify and endorse foreign entrepreneurs on their innovation, viability, and scalability, and to bring their intellectual property to the United Kingdom for growth and investment. Startup Giants can now be found listed on the Government’s website as an approved body that can endorse foreign applicants’ business concepts for the purpose of applying for either an Innovator or Startup visa.

Startup Giants has an initial allocation of 25 endorsements a year that it can issue, and can apply for an increase should the need arise. Each founding team joins the growth programme, providing business advice and support for three years, with fees starting at £1,000 per month. In some cases, the Company waivers the fees in exchange for an equity in the business.

Current Trading and Post- Balance Sheet Developments

Current trading remains in line with the Directors’ expectations at the beginning of the second half of the financial year.

For the period April 2020 to date, which spans the final two months of the first three months of the second half of financial 2020 Startup Giants has been qualifying many applications from foreign innovators for both the Startup and Innovator Route visa. The Company has received over 200 applications from foreign founders, with a consistent growth of applications coming in. Startup Giants has issued 13 endorsement letters so far for visa applicants joining their three-year programme for funding and growth in their business. There are currently over 70 applications at interview or qualifying stage, with seven in the process of confirming their eligibility to join the programme.

Outlook

The Company will continue to focus on building its international innovation support alongside supporting UK founders. By 2022, Startup Giants aims to be helping over 75 innovative UK businesses of overseas origin at any one time.

Other Information

Along with this regular financial report the Company is this year taking the opportunity to send shareholders with their interim reports some additional information in the form of a separate “Shareholder News Update” dated September 2020. This short document attempts to paint an overview of the Company’s business model and to describe how the Directors believe this can lead to both growth in revenue and to capital growth for the Company through its involvements with and participations in successful start-ups which it endorses. In the interests of transparency, the text of the September 2020 Shareholder News Update is reproduced immediately above the responsibility statement at the end of this announcement. A downloadable PDF copy of the Shareholder News Update shall be available from Startup Giants’ website: https://startupgiants.com/investor-relations/.

Readers of the Shareholder News Update should be clear that it does not form a part of Startup Giants’ Interim Results for the six months period to 30 June 2020.

Conclusion

The Directors would like to thank shareholders for their continuing support and look forward to informing them of developments at Startup Giants during the remainder of the current financial year and beyond.

Jeb Buckler,

Chief Executive Officer,

Startup Giants plc

29th September 2020

Startup Giants plc

Statement of Comprehensive Income

Six months ended 30 June 2020

Six months ended 30 June 2020

Six months ended 30 June 2019

GBP

GBP

Turnover

44,082

45,245

Administrative expenses

(50,057)

(66,499)

Operating loss

(5,975)

(21,254)

Taxation

-

-

Loss for the period

(5,975)

(21,254)

Earnings per share:

Basic and Diluted (pence)

(0.59)p

(2.1)p

Startup Giants plc

Statement of Financial Position

As at 30 June 2019

30 June 2020

30 June 2019

GBP

GBP

Non-current assets:

Goodwill

24,584

29,584

Investments

40,000

40,000

64,584

69,584

Current assets:

Trade and other receivables

49,058

70,982

Cash and cash equivalents

682,289

642,680

731,347

713,662

Total assets

795,931

783,246

Current liabilities:

Trade and other payables

142,180

84,223

Bank borrowings

25,000

-

167,180

84,223

Net current assets

564,167

629,439

Total liabilities

167,180

84,223

Net assets

628,751

699,023

Equity:

Called up share capital

140,510

140,510

Share premium account

769,790

769,790

Retained earnings

(281,549)

(211,277)

Total equity

628,751

699,023

Startup Giants plc

Statement of Cash Flows

Six months ended 30 June 2020

Six months ended 30 June 2020

Six months ended 30 June 2019

GBP

GBP

Loss for the year after tax

(975)

(21,254)

Adjustments for:

Amortisation of intangible assets

2,500

2,500

Movement in trade and other receivables

1,566

5,768

Movement in trade and other payables

12,209

9,213

Cash generated/(absorbed) by operations

15,300

(3,773)

Investing activities:

Purchase of investments

-

-

Financing activities:

Bank loan received

25,000

-

Increase/(decrease) in cash and cash equivalents

40,300

(3,773)

Cash and cash equivalents at beginning of period

641,989

646,453

Cash and cash equivalents at end of period

682,289

642,680

The financial information set out above has not been reviewed or audited by the Company’s auditors.

The financial information set out above has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union.

Text of Shareholder News Update

SEPTEMBER 2020

“Startup Giants this year received official Endorsing Body status from the Home Office to qualify and endorse the innovation, viability, and scalability of business ventures of foreign entrepreneurs wishing to commercialise, grow and finance their intellectual property in the United Kingdom.

We are proud now to be accredited and approved by the British Home Office as an Endorsing Body for foreign innovators.

Startup Giants can now be found listed on the UK Government’s website as an approved body able to endorse foreign applicants’ business concepts for the purpose of applying for either an Innovator or Startup visa.

Over the past five years, we have strengthened links with a number of strategic partners such as immigration law firms, which introduce overseas investors and innovators to Startup Giants.

Between the introducing lawyers and associates, and direct applicants, we consider only innovative business models that we believe meet the Home Office’s strict criteria. In some cases, the overseas applicant has already studied at a university in the UK and so already meets the educational and linguistic thresholds, as well as having the required capital. In many other cases, candidates are looking to move to the UK with an innovation or an existing business.

Together, we work with these law firms in order to manage the administration process with the Home Office and ensure that every box is ticked so that our applicants stand the best chance of being granted a right to live in the UK and bring their business visions to life here.

SUG has an initial allocation of 25 endorsements a year; it may apply to the Home Office to increase this quota from 25 to 50+ deals per year, if the original quota proves too low.

Bringing innovative, viable, and scalable business ideas to life in the United Kingdom

Mitigating risk with expertise at all stages of development and investment

Long-term scalability requires a plan for sustainable growth. We qualify each business by assessing the following areas before engaging on a three-year strategy and growth plan:

INNOVATION

Does the applicant have a genuine, original business plan that meets new or existing market needs and/or creates a competitive advantage?

VIABILITY

Does the applicant have, or are they actively developing, the necessary skills, knowledge, experience and market awareness to run the business successfully?

SCALABILITY

Is there evidence of structured planning, and of potential for job creation and growth into national markets?

Bringing innovative, viable, and scalable business ideas to life in the UK

After being granted a visa, founders join the Startup Giants’ growth programme for up to three years, thus creating for Startup Giants a steady and consistent pipeline of deal flow to bring to its syndicated investors.

QUOTA

Startup Giants has an initial allocation of 25 endorsements per year that it can issue, and can apply for an increase should the need arise.

PROGRAMME

Each founding team joins the growth programme, which provides business advice and support for three years, with fees starting at £1,000 per month.

DEAL FLOW

By 2022, the Directors believe that, at any one time, Startup Giants will have 75+ foreign innovative businesses under management and available for investment.

Updated visa metrics (September 2020)

During the period April to September, Startup Giants has been qualifying many applications from foreign innovators for both the Startup and Innovator Route visa.

APPLICANTS

Startup Giants has received over 200 applications from foreign founders, with a consistent growth trend in the number of applications being submitted to us.

PENDING

There are currently over 70 applications at interview or qualifying stage, with seven in the process of confirming their eligibility to join the programme.

ISSUED

Startup Giants has issued 13 endorsement letters so far for visa applicants joining their three-year programme for funding and growth in their business.

Startup Giants is propelling the UK forwards to become leaders of innovation

Startup Giants PLC is a tech innovation venture builder and accelerator, building a portfolio of start-ups with high potential.

Founded in 2015 on the belief that entrepreneurs, who have ideas that can positively impact the way we live, should have access to the funding they need to become leading players in their spheres.

Startup Giants is supported by the Department for International Trade and has been granted Official Endorser status by the Home Office.

You will find our shares traded on the Aquis Exchange Growth Market in London, search for AQSE: SUG

Our founders are the future entrepreneurial leaders of innovation. Together with them, we are helping ensure that the UK is richly diverse, talented and inclusive.

How are we unique in our marketplace?

Where some seed accelerators drop off after three months, we apply a much stronger vetting process before we invest and partner with a founder.

It’s a three-year contract, the founder is then placed on an accelerator programme for concept improvement, marketing, branding, whilst given all of the financial and accounting and legal assistance they need to create their MVP and refine it for their marketplace.

We build entrepreneurs. We invest in the founder’s idea and their mindset. During the three years, we help them grow to the point where they are eligible for higher investment rounds, where we may also exercise our rights to participate in their business.

Obsessed with growth

We’re obsessed with growth. Innovative, verifiable and scalable business demands it. Startup Giants makes money from the moment we on-board a new founder. Here’s how:

Each deal Startup Giants endorses and completes adds to the Company’s recurring monthly revenues and pipeline of deals available for investment.

Startup Giants also takes equity and/or options to participate in businesses that it supports early on in the growth programme. Growth in the value of any individual business should thus be reflected in Startup Giants’ balance sheet and, in time, in its share price.

Startup Giants has a constant pipeline of applicants to consider. Experts across multiple fields of legal, business and marketing view and speak to each applicant as part of a comprehensive application and support process.

Startup Giants has also reached out to other business angel groups and venture capital funds to build relationships that may participate in follow-on investment rounds with its founders and successful visa candidates.

Because innovation never sits still

In line with its own business goals and values, Startup Giants is reviewing the following future initiatives for rollout:

Co-investment fund

An SEIS/EIS co-investment fund that provides a ‘cornerstone’ (say 30%) commitment to its deals (conditional on a successful funding round), which will allow SUG to scale-up significantly the number of deals it can take through a funding round (thereby increasing the number of options to participate in SUG’s portfolio; and its accelerator fee revenue).

Strategic partner investments

The creation of a Venture Builder fund from which SUG would allocate pre-seed funding to UK startup businesses, wherein the fund would largely control the spending on trusted and necessary resources (rather than

writing a cheque to founders) in order to reduce risks, manage cash-flow and to position SUG as a strategic partner to the business.

Subscription-based investing

A subscription model for smaller retail investors to invest regularly and tax- efficiently under SEIS/EIS on a regular plan, e. g. £100 to £500 per month, to access and build a portfolio. This would be a managed approach, where SUG allocated or advised on allocation of the monthly subscriptions.

The future is ‘appy

SUG is in the throes of organising a global app competition within key universities and colleges worldwide, to source team talent and design a whole suite of business apps to help people become better founders and entrepreneurs, with the entire suite being available for a single monthly subscription.

Moving with the times ...

A number of other platforms provide deal- flow to investors via proprietary platforms, in some cases using a subscription

model. SUG is considering releasing such an app to enable high net worth business angels and/or venture capital firms to access a portal to see and, if sufficiently impressed, invest in any of Startup Giants’ deals.

A note from the founder and CEO of Startup Giants, Jeb Buckler

Much has happened for everyone over the past 12 months.

Our Company has taken major steps forwards despite of the growing global challenges which, as we see it, have only heightened the need for positive future innovations to be shared globally as quickly as possible.

We are leaping forwards. As we develop our branding, we want our values to be crystal clear. Our entire Startup Giants’ team was unanimous in voting to conclude this document with our vision, to inspire confidence in everything we do and for our partners to act accordingly. Here it is:

We are a company that is obsessed with ideas and innovation.

These can only come from people.

Diversity is therefore our norm.

Startup Giants is inclusive.

We get to know our founders, their idea, and if it’s right for investment, we’ll empower them to flourish.

We’re in the business of creating legacies of positive innovation.

Nothing more, nothing less.

Join us and be inspired.”

This announcement has been made after due and careful inquiry and the Directors of Startup Giants plc accept responsibility for its content.

Enquiries:

Startup Giants plc

Cherry Martin; cherry@startupgiants.com +44 20 7 157 9764

Keith, Bayley, Rogers & Co Limited

Graham Atthill-Beck +44 20 7464 4091; +44 750 643 4107; +097 50 856 9408;

Graham.Atthill-Beck@kbrl.co.uk; blackpearladvisers@gmail.com

Brinsley Holman: +44 20 7464 4098: Brinsley-Holman@kbrl.co.uk