Q-Bot Investment and Share Acquisition – NetScientific Plc
5th January 2022
Q-Bot Investment and Share Acquisition
NetScientific takes c.19% direct stake in construction industry robotics company Q-Bot and leads Convertible Loan round
London, UK – 21 December 2021 – NetScientific plc (AIM:NSCI), the international life sciences and sustainability technology investment and commercialisation Group, announces that on 20 December 2021, it completed a convertible loan investment and share acquisition totalling approximately £1.3m in Q-Bot Limited (“Q-Bot”).
The Board considers that these transactions will result in a broadening of the Group’s portfolio, via its hands-on investment approach, and deepening its participation in a proven pioneering robotics and AI business with rapid scale-up potential
Q-Bot is a London-based award-winning robotics and AI company that has pioneered cutting edge technology and digital solutions for the inspection, maintenance, insulation and upgrade of buildings and homes. In the year to 31 March 2021, Q-Bot generated a loss before taxation of £1.36m on sales of £1.03m, with net assets of £3.7m (based on unaudited management accounts).
NetScientific’s corporate finance and venture capital division EMV Capital Ltd (“EMVC”) led and advised the £2.8m transaction, featuring:
(i) EMVC advising on a first close of a £1.5m Convertible Loan Facility (of which NetScientific is responsible for £0.54m) with a committed first close of £0.58m, of which £0.3m was provided by NetScientific out of its £0.54m undertaking; and
(ii) EMVC advising on the purchase from early Q-Bot investors and a departing founder of shares in Q-Bot for a consideration of £1.3m, of which c.£1.0m was provided by NetScientific.
The Convertible Loan Facility carries interest at 10%, a discount on conversion of 20% on the next investment round and is repayable within two years. The buyout results in a significant direct equity holding in Q-Bot by NetScientific of 18.7% (from nil), in addition to EMVC’s Capital Under Advisory representing 12.3%.
There are several changes to the Q-Bot Board including the departure of Chief Executive Officer, Mathew Holloway and the appointment of Professor Peter Childs (founder Director and co-director of the Energy Futures Lab Imperial College London) as Chairperson. Martin Jervis will continue to lead the commercial operations of the business; Anthony Blaiklock as the CFO will continue to manage the finances; and founder Director Tom Lipinski will be interim Chief Technology Officer.
Q-Bot’s post-money valuation in an investment round completed in January 2021 was £16.6m on a fully diluted basis. Since then, the company has realised important growth and sales milestones in its core underfloor insulation offering and is looking to expand into other geographical markets. Its patented robotic system for applying insulation in tight spaces and suspended floors to immediately reduce heat loss and stop draughts, damp and mould, won the Queen’s Award for Enterprise in the Innovation category in 2020, and is attracting global attention.
Professor Peter Childs, Chairman of Q-Bot, commented: “I am thrilled at the prospects for Q-Bot. We have seen significant growth in installations and therefore revenue over recent months and have also rolled out the company’s latest low void and high void robots. In addition, we have secured our first overseas robot as a service contract. I am delighted by NetScientific’s involvement with the company, and the continued support by EMV Capital, and look forward to working with them and the company towards significant growth.”
Dr Ilian Iliev, CEO of NetScientific and Investment Director at Q-Bot, commented: “As an early supporter of Q-Bot, I am pleased to see the company move to the next stage of its commercial development, through a focused growth strategy on revenues, profitability and expanded applications of its technology in the construction and engineering industry. This substantial direct investment exemplifies the implementation of our stated plans, prioritising portfolio companies for deeper ownership, targeted investment and greater involvement to deliver shareholder returns, while helping our portfolio companies accelerate growth.”
John Clarkson, Executive Chairman of NetScientific, commented: “After many months of hard work, it is gratifying that this excellent deal has to come to fruition, with the necessary restructuring and updated strategic plans for Q-Bot’s future success. This targeted financing reinforces NetScientific’s commitment to technology and sustainability, utilising Q-Bot’s proven robotics and AI platform, to expand from the established building market to exploit the company’s wider potential.”