Seraphim Space Investment Trust : Interim Report

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ABOUTSECTION TITLE THE COMPANY

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Seraphim Space Investment Trust PLC (the "Company" or "SSIT") is the world's first listed SpaceTech fund. It is an externally managed closed-ended investment company that was launched in July 2021. SSIT seeks to generate capital growth over the long term through investment in a diversified, international portfolio of predominantly early and growth stage privately financed SpaceTech businesses that have the potential to dominate globally and are category leaders with first mover advantages in areas such as global security, food security, climate change and sustainability. The Company's shares are traded on the London Stock Exchange's main market.

I N T E R I M M A N A G E M E N T R E P O R T

KEY HIGHLIGHTS

As at 31 December 2022

KEY PERFORMANCE INDICATORS

For the period from 1 July 2022 to 31 December 2022

CONTENTS

INTERIM MANAGEMENT REPORT

FINANCIAL STATEMENTS

Find us online: investors.seraphim.vc

INVESTMENT MANAGER

The Company is managed by Seraphim Space Manager LLP (the "Investment Manager" or "Seraphim Space"), the world's leading SpaceTech investment group. The Investment Manager's team consists of seasoned venture capitalists and some of the space sector's most successful entrepreneurs who scaled their businesses to multi-billion Dollar outcomes.

The Investment Manager has supported more than 100 SpaceTech companies across its fund management and accelerator activities since 2016 and has a proven track record of delivering value.

FURTHER INFORMATION

Positioned at the heart of the global SpaceTech ecosystem, the Investment Manager has a unique model, using information asymmetry generated from its global deal flow, partnerships with leading industry players and primary research to back the most notable emerging SpaceTech companies shaping a new industrial revolution.

The Investment Manager is a signatory to the UN Principles for Responsible Investment ("UN PRI"). Its first UN PRI report is due in 2024.

FINANCIAL SUMMARY

Please note that the Glossary on pages 58 and 59 provides definitions for defined terms used through the report.

2 Seraphim Space Investment Trust PLC

1. Alternative performance measure - see Alternative Performance Measures on pages 56 and 57.
2. For the 12-month period ended on the relevant period-end date.

I N T E R I M M A N A G E M E N T R E P O R T

CHAIR'S STATEMENT

I N T E R I M M A N A G E M E N T R E P O R T

CHAIR'S STATEMENT

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"The war on Ukraine and the global macro environment have had a significant impact on global markets. While asset valuations have rallied in recent months, sentiment towards growth-oriented private companies remains depressed. Remote sensing and earth observation are playing an increasingly important role in addressing the global challenges of our time. The space industry has a crucial role to play, and the Company's portfolio overall is robust, having closed 11 new financings, and is now well-capitalised throughout 2023. With 18% of NAV in cash the Investment Manager continues to carefully add new companies to the portfolio."

Will Whitehorn

Chair

Given the discrepancy of performance between NAV and share price over the Period, the Board has considered buying back shares as part of discount management. However, we continue to believe that it is in the best interests of shareholders at this time to reserve the Company's cash to support the portfolio and make selective new investments.

EARNINGS AND DIVIDEND

The Company made a revenue loss after tax of £2.4m for the Period, equal to (0.99)p per share.

The Company is focused on achieving capital growth

leading the way in strengthening, developing and diversifying the capability and supply chains that the modern world depends upon.

Governmentrevenues,intheformofcontractsorgrants, are a significant driver for many portfolio companies. They provide a source of stable funding, which can act as a cushion against reduced demand from the commercial sector in a challenging economic environment with elevated inflation and rising interest rates. This stability can help the industry to weather economic downturns and maintain its operations, research and development and infrastructure investments.

I am pleased to present the Interim Report of Seraphim Space Investment Trust PLC, covering the period from 1 July 2022 to 31 December 2022 (the "Period").

I would like to thank all shareholders for their continued support during the challenging macroeconomic climate of 2022.

PROGRESS IN THE PERIOD

The Company invested £13.4m in four new portfolio companies (two of which were sourced through accelerator programmes managed by an affiliate of the Investment Manager) and six existing portfolio companies during the Period. Highlights include leading investment rounds in three companies and investing in category-leading companies in the UK, US, EU and Middle East.

At 31 December 2022, the Company had investments in 29 SpaceTech companies with an aggregate value of £181.2m and cash reserves of £40.9m.

The war on Ukraine and the global macro environment have had a significant impact on global markets. As a consequence, the Company has deliberately slowed its pace of deployment in order to reserve cash to follow its rights in existing portfolio companies whilst continuing to actively seek new target companies to add to the portfolio, albeit investing smaller units of investment. As outlined in the Investment Manager's Report, overall, the portfolio is well-capitalised.

NAV

The NAV per share decreased by 7.2% over the Period, from 99.97p to 92.74p at 31 December 2022, largely driven by a reduction in the fair value of the portfolio.

Despite the challenging macroeconomic environment, the fair value of the private companies in the portfolio (which accounted for 86% by number and 94% by fair value of the portfolio) largely remained stable over the Period, with fair value reaching 114.1% vs. cost (122.2% excluding FX impact) at the Period-end. The Investment Manager's Report includes a more detailed review of the performance of portfolio companies.

Contrastingly, the listed element of the portfolio (28.5% fair value vs. cost) continued to mirror the depressed share price performance of technology and growth stocks on public markets worldwide, precipitated by rising interest rates, global energy prices, high inflation and the war on Ukraine. Three of these four portfolio companies listed as part of SPAC mergers in 2021, and their performance has suffered in line with the overall SPAC market.

There was limited impact from foreign exchange variations (+£2.3m) in the Period, with a strengthening of Sterling in the final quarter of 2022 offsetting weakness against the Dollar in the previous quarter.

SHARE PRICE

The Company's share price fell over the Period and, at 31 December 2022, was 45.2p, a decrease of 14.7% from 53.0p at 30 June 2022.

Inevitably, the Company's share price has not been immune to the significant volatility being experienced by global stock markets in 2022 and, in particular, the heavy falls suffered by growth and technology stocks which continued to be depressed through the Period. At the Period-end, the share price was at a discount of -51.3% versus NAV per share.

over the long term. Given the nature of the Company's investments, we do not anticipate recommending to pay a dividend in the foreseeable future.

RESPONSIBLE INVESTMENT

During the Period, the Investment Manager continued to use its proprietary due diligence tool in order to assess sustainability opportunities and ESG risks associated with each potential investment. As a result of the development of this tool, the Investment Manager has been able to identify risks that have led it to turn down opportunities in the Period, as well as to identify opportunities that portfolio companies can take advantage of in order to deliver positive ESG and sustainability impact.

BOARD

From the Annual General Meeting which took place on 13 November 2022, Angela Lane succeeded Christina McComb as Chair of the Audit Committee and Christina succeeded me as Chair of the Management Engagement Committee.

EVENTS AFTER THE PERIOD-END

The Investment Manager is in advanced negotiations for follow-on investments in two of the top 10 portfolio companies and has signed agreements for two follow- on investments in early stage portfolio companies.

OUTLOOK

The Russian invasion of Ukraine changed the economic imperatives of financial markets in a way that had not been seen for decades. Faced with a new set of challenges, the western economies have innovated, with the venture capital industry and, in particular, the space industry, playing a crucial part of this process,

Remote sensing and earth observation continue to play a key role in addressing one of the greatest global challenges of our time - climate change. Satellite- based monitoring systems are providing critical data and information on weather patterns, addressing the impacts of climate-related extreme weather events, carbon emissions and other factors related to mitigating the effects of climate change. Revenue from this area is the other key driver for portfolio companies, underpinning expectations of continuing growth.

The Investment Manager is actively engaged with numerous investment prospects, carefully selecting those with a strong growth premise and offer the highest returns for shareholders. It is taking a cautious approach to the allocation of cash between supporting existing portfolio companies, making new investments, and managing the Company's working capital until the market improves and more capital can be raised.

WILL WHITEHORN

Chair

8 March 2023