Pri0r1ty AI bolsters the UK’s small cap artificial intelligence sector but lags behind peers in terms of innovation

Pri0r1ty Intelligence Group listed on London’s AIM this week, bolstering the UK’s artificial intelligence small-cap sector by adding to the selection of growth companies with AI at the heart of their operations.

The UK’s AI sector is, at long last, starting to build momentum with more and more companies developing AI services and offering public equity investors exposure to the sector, which will likely drive economic growth in the years to come.

However, investors should consider whether London’s latest addition enriches the sector in terms of innovation. A study of Pri0r1ty’s admission document suggests their platform isn’t as groundbreaking as it first looks with much of their offering a replication of tools available elsewhere.

The UK Investor Magazine has previously highlighted technology and marketing companies that jump on the latest trends and raise funds to develop products but struggle to build meaningful market traction. For example, in 2020, we explored the fundamental constraints of Bidstack’s in-gaming native advertising model and the warning signs of slow revenue growth, which can be read here. In this article, we take a similar approach to Pri0r1ty Intelligence Group.

Although PriOr1ty’s IPO – facilitated by a reverse takeover (RTO) of a SPAC – is a major positive for London’s small-cap tech sector, the company’s service doesn’t appear to offer anything particularly new to a target market that already has many existing options to choose from. And the pricing strategy outlined in the admission document suggests their service may be far more expensive.

The admission document names Hootsuite, Jasper AI and Seedlegals as competitors. In reality, the competition probably runs into the hundreds of companies.

In social management alone, there are already dozens of established services with a core of around 10 services that any social media manager worth their salt will know intimately. Many of these cost no more than £15 per month. Hootsuite, the market leader, charges £89 per month for its ‘professional’ package. This compares to £499 for PriOr1ty’s package.

PriOr1ty launched the ‘Pri0r1ty Advisor GPT’ chatbot-style customer service tool called ‘Pri0r1ty Spotlight’ powered and trained by AI LLMs in late 2024. This has been one of the most exciting areas of Gen AI so far, as it reduces the need for customer service staff and is one of the most straightforward ways of implementing AI to cut costs.

However, PriOr1ty faces the challenge of competing against the heavyweight CRM companies HubSpot, Zoho, and Salesforce, as well as billion-dollar Intercom – a leader in AI Agent customer service – all of whom have invested tens of millions in integrating similar AI-powered functions into their offerings.

In terms of pricing, Hubspot costs around £50 per user per month, while Intercom starts at $29 per month.

It is also worth noting that, at the time of writing, PriOr1ty’s case study AI chatbot developed for a drinks company called Favela Cerveja featured on PriOr1ty AI’s website homepage isn’t immediately available on Favela Cerveja’s own website to test out.

PriOr1ty has earmarked five different platforms/services to be launched in 2025. It is not clear whether these will be standalone services or accessible on one platform. It is clear, however, that each service by itself isn’t particularly groundbreaking.

‘PriOr1ty Ventures’, as detailed in the admission document, doesn’t seem to offer anything already accessible through other long-established services. Google Analytics, ChatGPT and a simple CRM like Hubspot will be able to cover all of the key features. These are all systems marketers will likely have in place already.

The company’s success will hinge on price and user experience. PriOr1ty will rightly have some success onboarding organisations with limited existing marketing operations or inexperienced marketing staff.

However, it’s difficult to pinpoint why firms with established marketing or public relations functions would migrate over their existing work streams to PriOr1ty‘s service, which could result in higher costs, depending on the size of the organisation. This should be a consideration for investors.

Organisations of any substantial size require deeply specific tools to meet the demands of sometimes complex workstreams. It’s inconceivable for a company with departments for finance, marketing, sales, research, and legal, each with its own dedicated team, will find the depth it needs in Pri0r1ty’s services and products.

Most of PriOr1ty’s ‘product key functionalities’ outlined in the admission document can be completed very easily using AI tools like Jasper AI, ChatGPT, Claude or Gemini alongside traditional applications like the Adobe suite.

For more than a year, marketing teams around the world have been using AI tools as a matter of course to complete day-to-day tasks like creating content slated as ‘key functionalities’ of ‘Pri0r1ty Spotlight’.

Tasks mentioned by Pri0r1ty as core to their product, such as ‘Build content based on stakeholder feedback’ or ‘Generate press releases, regulatory news or internal memos’ can be done in seconds using LLM tools like ChatGPT, Jasper AI or Claude, should someone wish to substitute a human for AI in the creation of crucial communications. The suggestion that Pri0r1ty’s users will generate important regulatory news using relatively new and untested AI is interesting.

Overall, it appears Pri0r1ty will act more like a marketing agency bringing together a suite of services for SME marketing companies with little internal marketing capabilities. It doesn’t appear to offer anything that will win over the mass market.

Valuation

This questions the valuation and whether the current market cap can be sustained. For the sake of confidence in London’s small-cap markets, one would hope sales would rise sharply to justify the rich valuation.

We recently highlighted GenIP as the standout UK small-cap Gen AI stock. This remains the case after PriOr1ty‘s AIM admission. GenIP has identified a clear pain point for its target market and is providing a solution to a problem that is being adopted by some of the world’s largest technology firms. This type of traction is absent from PriOr1ty‘s admission document. 

There are also a number of companies pivoting towards AI with much lower valuations despite being at a similar stage to PriOr1ty. Cel AI is a notable example.

Why companies left AIM in December 2024

In December, there were five companies that left AIM. Four companies chose to leave, including one that will be wound up in the medium-term, and one was taken over. Greatland Gold (LON: GGP) was readmitted after the acquisition of the rest of the Havieron project. There were two new admissions during the month: Amcomri Group (LON: AMCO) and Alteration Earth (LON: ALTE), which will change its name to Pri0r1ty Intelligence Group (LON: PR1).
5 December
Adams
Isle of Man-based Adams decided to leave AIM ahead of liquidating the investment portfolio and returning cash to shareholders. There were se...

Hutchison (China) builds cash pile with joint venture stake disposal

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AIM-quoted cancer treatments developer Hutchmed (China) Ltd (LON: HCM) is selling non-core 45% interest in Shanghai Hutchison Pharmaceuticals to GP Health Service Capital and Shanghai Pharmaceuticals Holding. The $608m raised will be reinvested in the drug development pipeline.

Shanghai Hutchison Pharmaceuticals was not consolidated in the results. It manufactures and distributes own-brand prescription medicines. In 2023, net income was $47.4m.

GP Health Service Capital will own 35%, existing joint venture partner Shanghai Pharmaceuticals Holding will increase its stake to 60%. Hutchmed (China) Ltd retains 5% and is guaranteeing GP Health Service Capital minimum net profit growth of at least 5% over three years.

There will be a gain on disposal of $477m, although the final sum is subject to withholding tax. Shareholders have to approve the deal, so it may not be completed until March.

Hutchmed (China) Ltd can concentrate od developing cancer treatments. A new drug application for fruquintinib as part of a combined treatment for gastric cancer in China was withdrawn because the improvement in survival rate was not statistically significant. There have been positive results for a treatment for lung cancer.

A $10m milestone payment is due from Takeda Pharmaceutical relating to the Fruzaqla cancer treatment, which follows a previous payment of $20m.

There was a 43% decline in interim revenues of Hutchmed (China) Ltd to $305.7m because of a sharp fall in R&D income. Product sales were higher. A loss of around $90m is forecast for 2024.

Net cash was $720m at the end of June 2024. The cash outflow in the first half from operations and capital investment was $51.3m. Clinical trials require significant spending, but the additional cash will mean that there will be no requirement for additional funding from investors.  

The share price was 235p at the end of 2024, which values Hutchmed (China) Ltd at £2bn. Cavendish was appointed joint broker on New Year’s Eve. The shares are also listed on Nasdaq.

Why companies left AIM in November 2024

In November, there were seven companies that left AIM. That includes three takeovers completed, three companies that chose to leave and the other was placed in liquidation. Another two companies joined AIM during the month: cash shell Selkirk Group (LON: SELK) and video games services provider Winking Studios (LON: WKS).
1 November
i3 Energy
il and gas producer i3 Energy recommended a bid from Gran Tierra Energy, which was equivalent to 13.92p/share. The offer was one Gran Tierra Energy share for every 207 i3 Energy shares and 10.43p in cash. Shareholders received a dividend of 0.2565p/share. ...

DG Innovate reveals delisting plan

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Power electronics developer for electric vehicles DG Innovate (LON: DGI) is cancelling its listing in the transition category of the Main Market because of the difficulty in raising cash since floating on the now-defunct standard list via reverse takeover of Path Investments in April 2022. The share price dived 70.4% to 0.0225p. The original placing price was 0.5p.

DG Innovate did raise £500,000 at 0.08p/share. This will help to support the joint venture with Indian electric vehicle manufacturer EVage Automotive for the production of DG Innovate’s Pareta e-drives and provide working capital until early February 2025. Much more cash will be required, though.

Management says that the constraints of the prospectus rules and the lack of demand for small companies at an early stage of development have made it hard for the company to raise money. This is not expected to change. The costs and administrative burden mean it is not worth being listed.

There are potential new investors, but they do not want DG Innovate to be listed. DG Innovate does not have get shareholder approval for delisting. This will be effective on 31 January 2025.

AIM movers: ValiRx extends exclusivity period and ADM Energy returns from suspension

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Cancer treatments developer ValiRx (LON: VAL) has extended the exclusivity period with TheoremRx Inc on the sub-licence of VAL201 until the end of May 2025. This is the final extension, and it is due to TheoremRx Inc being involved in a transaction with a Nasdaq listed company. The share price recovered 24% to 0.775p.

Gift wrap supplier IG Design (LON: IGR) has had a post-Christmas bounce. It rebounded 10.9% to 152.5p.

Pulsar Helium Inc (LON: PLSR) is raising up to $7.5m at 38 cents(30p)/share. A loan will be provided by University Bancorp Inc will provide a $4m line of credit to ABCrescent Cooperatief so that it can exercise 15.5 million warrants. The cash will finance exploration at the Topaz project in Minnesota and enable a decision to be made on a combined helium and CO2 production facility. Further drilling on the Jetstream #1 appraisal well will restart this week. The share price improved 3.85% to 27p.

Zephyr Energy (LON: ZPHR) has received $7.5m of drilling funds that will cover the expected costs of drilling and production testing the extended lateral on the State 36-2 LNW-CC-R well in the Paradox Basin, Utah. This activity should start in the middle of January. The share price rose 3.33% to 3.1p.

FALLERS

Trading in ADM Energy (LON: ADME) shares was restored following the publication of 2023 accounts and interims for 2024. In 2023, there was a £16.8m impairment charge. There was £66,000 in cash at the end of June 2024 and two investments have generated cash, but ADM Energy is still constrained by a lack of cash. The share price slumped 41.2% to 0.25p.

Spreadex Ltd has cut its shareholding, via voting rights through financial instruments, in Tiger Royalties and Investments (LON: TIR) from 4.94% to 3.53%. The company is in the process of acquiring a technology incubator business. The share price slipped 12.5% to 0.175p.

Cancer treatments developer Sareum (LON: SAR) says CRT Pioneer Fund has given notice to terminate its licence for SRA737, which is an oral Checkpoint kinase 1 inhibitor targeting cancer cell replication and DNA damage repair. CRT Pioneer Fund has been involved in co-development of SRA737 since 2013. The share price is 9.26% lower at 24.5p.

Hummingbird Resources (LON: HUM) has signed a new loan agreement for $35.6m to provide cash flow for the core Mali subsidiary. The loan becomes repayable from any financing following the completion of the recommended 2.68p/share cash bid by Nioko Resources Corporation. The share price dipped 4.87% to 2.15p.

German investor Investmentaktiengesellschaft für langfristige Investoren TGV has sold its 12% stake in online wine retailer Naked Wines (LON: WINE). The share price fell 1.88% to 46.85p, having fallen to 46p during the morning.

Why companies left AIM in October 2024

The rate of AIM departures slowed down in October with four companies leaving. Two were acquired, another went bust, while the other decided to exit. There were two new admissions – GenIP (LON: GNIP) and Pulsar Helium Inc (LON: PLSR) – so the overall rate of decline in AIM company numbers slowed.
3 October
Base Resources
Base Resources merged with uranium and critical minerals producer Energy Fuels (NYSE: UUUU/TSX: EFR). This deal will help to fund the Toliara project in Madagascar. Monazite produced by the product can be processed by the group’s White Mesa mill in the US.  The combined g...

AIM movers: SDX Energy postpones general meeting and Arecor Therapeutics licence deal

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SDX Energy (LON: SDX) has postponed the general meeting on 31 December. This was called to gain shareholder approval to leave AIM due the costs of the quotation and the greater potential flexibility as a private company. Potential investors would apparently prefer to invest in an unquoted company. The strategy continues to be to become a vertically integrated gas and renewable energy producer in Morocco. The general meeting will be rearranged. The share price jumped 71.4% to 0.6p.

Jonathan Rowland has increased his stake in fire suppression technology company Zenova Group (LON: ZED) to 7.8%. The share price rebounded 22.7% to 0.675p.

Versarien (VRS) has received a further £150,000 for the sale of equipment in South Korea. The date of the final payment of £92,000 has been extended to the end of February 2025. There is an annual interest charge of 10%. The share price is 14.3% higher at 0.04

Three directors of Invinity Energy Systems (LON: IES) at 14.85p/share. Chairman Neil O’Brien bought 135,000 shares, chief executive Jonathan Marren acquired 134,680 shares and finance director Adam Howard purchased 134,333 shares. The share price moved up 10.3% to 16p.

Ondine Biomedical Inc (LON: OBI) has enrolled the first patient in the Light-Activated Antimicrobial Therapy to Prevent Surgical Site Infections phase 3 clinical trial. The trial will involve 5,000 patients. The share price increased 5.88% to 9p.

Arecor Therapeutics (LON: AREC) has signed an exclusive licence agreement for a formulation of liquid drug product AT351 for a large client. The use of the product is undisclosed. There is an upfront milestone payment with potential for further payments. The licensee will be responsible for further development and hopes to seek FDA approval within three years. The share price improved 5.76% to 73.5p. Panmure Liberum has a target share price of 361p.

Mosman Oil & Gas (LON: MSMN) is acquiring an 82.5% working interest in the Sagebrush project in Colorado, where there are seven producing oil wells and there is potential for helium and other hydrocarbons. The cost is $630,000. Oil production is 40 barrels/day. The share price rose 3.7% to 0.028p.

FALLERS

Shares in retailer Quiz (LON: QUIZ) continue to decline following its decision to ask shareholder permission to leave AIM. The general meeting will take place on 23 January. The share price declined 18.4% to 0.7225p.

On Friday afternoon, Sunrise Resources (LON: SRES) said Tolsa USA Inc has decided not to exercise its option to acquire the Pioche Sepiolite project in Nevada. There was no agreement on the terms of a continuing royalty for Sunrise Resources. The share price fell a further 15.4% to 0.0275p.

Engage XR (LON: EXR) is rolling out the School of AI to its education clients. This is an immersive learning environment where students can speak to people from history. The share price slipped 4.17% to 0.575p.

Narf revenues decline as it changes focus to SocialCyber

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A change in long-term strategy led to a slump in revenues at Main Market listed cybersecurity company Narf Industries (LON: NARF). It was also hit by US government budget delays.

In the six months to September 2024, revenues dipped from $3.11m to $1.18m. The loss increased from $1.01m to $1.87m. Cash has fallen to $136,000, which is after receiving $864,000 from the chief executive. The cash outflow from operating activities was $1.34m. Net liabilities are $1.5m.

Since the end of the period, the working capital loan facility provided by chief executive Steve Bassi was raised from $2.5m to $3m. He has promised not to demand repayment until the group has cash to pay. Directors have deferred salary, which achieved savings of $500,000 in the first half, until sufficient revenues are being generated. That means that the company should be able to meet obligations.

The focus is the SocialCyber platform, which will provide recurring revenues. Narf could inject this open source code protection IP into a joint venture. This would bring in additional finance.

There are $900,000 of annual salary savings that have been made. There is a potential $5m plus multi-year contract that could be awarded by the US government in the first quarter of 2025. The share price has fallen 4.17% to 0.58p.

MicroSalt set to benefit from FDA’s new ‘healthy’ labelling rules

MicroSalt is set to benefit from FDA’s new ‘healthy’ labelling rules that set out new limits for sodium content.

According to recent data, 90% of Americans exceed the Chronic Disease Risk Reduction limits for sodium consumption, highlighting a significant public health concern.

This statistic underscores the importance of the FDA’s updated “healthy” labeling criteria, which aims to help consumers make more informed dietary choices.

New Sodium Guidelines Under “Healthy” Labeling The FDA’s final rule, announced on December 19, 2024, establishes specific sodium limits for products to qualify for the “healthy” label. For individual food products, the maximum sodium content allowed is 230mg (10% of Daily Value) per Reference Amount Customarily Consumed.

This limit applies across various food categories including grains, dairy, vegetables, fruits, and protein foods. For more complex products, the requirements adjust accordingly, with mixed products allowing up to 345mg of sodium and complete meals permitted to contain up to 690mg of sodium.

MicroSalt’s low-sodium salt has the potential to help manufacturers of complex products reduce their sodium content significantly and meet the new rules.

The new guidelines represent a comprehensive approach to food labeling that considers both individual nutrients and their role in overall dietary patterns.

By providing clear sodium limits and other nutritional criteria, the FDA aims to help consumers make informed choices while encouraging manufacturers to develop products that better align with current nutritional recommendations. MicroSalt is well-placed to benefit from this.