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Addvalue Tech releases unprecedented valuation of IP assets in response to shareholder queries

Michelle Zhu

SINGAPORE (Oct 18): Addvalue Technologies has for the first time provided an indication of the value of its intellectual property (IP) assets – and that it anticipates a few more Inter-Satellite Data Relay System (IDRS) contracts to be signed for the remaining financial year ending March 2019.

The revelation comes as part of the group’s response to two separate shareholder queries received via its website, both of which called for more information about Addvalue’s growth potential, market size of its businesses, and valuation of its IPs.

“It is my concern that the company’s share price has been plummeting despite many positive announcements made on IDRS, SDR contracts and others (which had been ignored by the market). I think that more information needs to be conveyed to shareholders,” wrote one shareholder.

See: Things might finally be taking a turn for Addvalue Technologies

In a filing to the SGX on Wednesday evening, Addvalue explains that its generally accepted accounting principles do not allow for intrinsic value, nor the worth of its staff, to be accounted for so as to be reflected in the group’s financial position and performance.

While Addvalue says it does not normally respond to every enquiry received via its website, the group has made an exception for the queries of these particular shareholders as it relates to the core existence of the group – which it describes as “both a people and technology company [with] indispensable and overriding assets” including its staff and IPs. 

The group had engaged intangible asset specialist EverEdge Global (NZ) to review its IP assets for its management’s internal reference in 2017. As at end-May that year, EverEdge valued Addvalue’s IP assets at roughly $123 million.

This information was previously not shared with Addvalue shareholders nor the investing public at large.

Addvalue is currently targeting the small satellites market in the New Space segment. It comments that the “tremendous” prevailing growth potentials of the IDRS market have led it to outgrow the expectations or assumptions assumed in EverEdge’s valuation.

The group is also expecting a few more IDRS contracts to be signed for the remainder of FY19, with recently-forged partnerships to accelerate the growth of its IDRS business in FY19 and beyond.

Shares in Addvalue closed 3.57% lower at 2.7 cents on Wednesday.