Dear Shareholder,
DMXCP’s NAV decreased 2.3% (after all accrued management fees and expenses) for June 2023. The NAV as at 30 June
2023 was $2.1841 compared to $2.2357 as at 31 May 2023.

Markets were mixed during June -the All Ordinaries was up 1.7% while the Small Ordinaries declined 0.4%. The Emerging
Companies Index recovered after a challenging May, rising 2.4% during June.

June Portfolio Developments

June saw a continuation of the tax loss selling and disinterest towards small and illiquid companies observed in recent
months, with little news to generate interest across the portfolio. Pleasingly, conditions have improved in July, with the
conclusion of financial year end tax loss selling and some positive news-flow resulting in improved interest being
observed among many small companies.

Key detractors for the month included:
• Various illiquid, low market-cap companies that were sold down 10 – 20% towards the end of the financial
year, on very light volume and on no news such as Pureprofile (ASX:PPL), SOCO Corporation (ASX:SOC), Corum
(ASX:COO), AVA Group (ASX:AVA), Knosys (ASX:KNO) and Findi (ASX:FND).
• Several holdings were sold down on significant volume which likely represented tax loss selling from funds
exiting prior to 30 June. PeopleIn (ASX:PPE) fell 20% after advising the market that discussions around a
potential takeover had concluded with no deal on offer, while Field Solutions Group (ASX:FSG) was down 17%.
Both PPE and FSG have recently confirmed their guidance for FY23.
• We also wrote down the value of some small holdings that are looking for new opportunities and have not
traded for some time (ICS Global and Chant West).

Offsetting some of these declines were increases in Kip McGrath (ASX:KME)(+13%) which reported an improved second
half result, and Acadamies Australia (ASX:AKG) and AF Legal (ASX:AFL) which both increased ~20% on no news.

For the financial year to 30 June 2023, DMXCP returned -0.7%. While some of this disappointing performance has been
self-inflicted, it has been a challenging period for investing in small and illiquid companies.

As highlighted below, nano-caps and micro-caps have been under pressure over the last 12 months, despite the
fundamentals of many of these companies improving strongly. While the largest ASX companies delivered a median
share price return of 8% for the financial year, the median of the smallest companies declined by 37% over the year. In
a more uncertain, risk-off environment, investors have preferred the liquidity and comfort of larger, more mature
businesses.

With a median market cap holding of under $30m, our portfolio has struggled to get traction against this broad negative
sentiment towards small companies, particularly in the second half of the year.

The positive out of this pretty brutal sell-off is that it creates opportunities, and with the valuations of many holdings
trading at multi-year lows and the broad-based nature of the sell-off, we think the current opportunity set is one of the
most prospective we have seen in this part of the market since we commenced DMXAM in 2015. When we see holdings
sold down to a level where they are trading below their net cash backing, as happened this month, we think this is a
good indication of the real value on offer. Feedback from CEOs that we speak to is that they are seeing very little interest
in sub $100m market cap companies from institutions, while a broker we recently spoke to noted that over 90% of his
client base no longer invest in these smaller companies – all of which creates further opportunities for us, and the
potential for large re-rates when interest returns to the space.

Within the small cap universe there are certainly a number of ‘story’ stocks with unproven business models and burning
cash (which we seek to avoid). Some of these have rightfully seen share price declines to levels that better reflect their
speculative nature. However, if we screen out these uninvestable opportunities, it is very much the case of the baby
being thrown out with the bathwater.

We believe that there are many small companies that have strong and improving fundamentals and attractive growth
outlooks, where there has been a real disconnect between their growing intrinsic value and their falling share prices.
We think these types of companies are well positioned for a strong re-rating, having underperformed the broader
market and being very much unloved for well over 18 months. To highlight this opportunity, we detail below an update
of our portfolio’s 10 largest positions as at 30 June 2023: all growing and profitable, with strong balance sheets and
supportive tail winds.

Outside of the top 10 holdings, we are excited about the potential for the likes of Advanced Braking (ASX:ABV), Corum
(ASX:COO), Aeeris (ASX:AER) and Field Solutions (ASX:FSG) – all growing with improving fundamentals, with low market
capitalisations (<$30m) and attractive profit profiles.

We are expecting significant profit milestones to be achieved during FY24 from technology company holdings such as
8Common (ASX:8CO), AVA Group (ASX:AVA) and Kinatico (ASX:KYP), which have been out of favour with investors over
the last couple of years, and, with a bit more investor interest on the back of evidence of improving profits, have the
potential for re-rates from their current low market capitalisations.

We see value in the likes of Findi (ASX:FND) which has recently guided for $4m NPAT and has a $13m market cap, while
Yellow Brick Road (ASX:YBR) trades at ~50% discount to its asset backing, with $7m of its $19m market cap in net cash.
Whilst this is clearly an uncertain time for investing with many economic unknowns, we believe there are multiple ways
to win from the names we own. We think the odds of success from here are in our favour due to:
• Our key holdings have proven business models supported by long term structural growth trends.
• The majority are on low multiples/valuations that allow for significant multiple expansion and valuation rerates.
• Many holdings are misunderstood by the market, offering re-rate potential as they become better understood.
• Low market caps/enterprise values with limited liquidity that offer plenty of upside as they grow and attract
broader investor interest, and catch up to their larger peers.
• Many positions don’t need a broad market rally to re-rate – some of them are so cheap they just need a few
new investors to take notice of them.

While sentiment towards small companies will ebb and flow, we see substantial value across the portfolio with many
holdings trading well below their intrinsic value. We expect the material upside potential from these positions to deliver
strong long-term portfolio returns.

We thank all our investors for your support and look forward to updating you again next month