REG-Limitless Earth Plc: Final Results
31/07/2020 07:05
31 July 2020
LIMITLESS EARTH PLC
("Limitless" or the "Company")
Final Results for the year to 31 January 2020
The Company announces its final results for the year to 31 January 2020.
The Annual Report and Accounts for the year ended 31 January 2020 will shortly
be posted to shareholders and uploaded to the Company’s website,
www.limitlessearthplc.com.
This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014.
For further information, please contact:
Limitless Earth
plc
+44 (0) 7780 700 091
Guido Contesso
www.limitlessearthplc.com
Cairn Financial Advisers
LLP +44 (0)
20 7213 0880
Nominated
Adviser
www.cairnfin.com
Jo Turner/Sandy Jamieson
Peterhouse Corporate Finance Limited +44
(0) 20 7469 0930
Broker
www.pcorpfin.com
Duncan Vasey / Lucy Williams / Eran
Zucker
Chairman’s Statement
We continue our focus on identifying opportunities where the changing patterns
of consumer behaviour and population are key drivers of growth and we target
investments which demonstrate the potential to generate substantial returns
through capital appreciation.
Working within the broader field of demographic trend investing, we have
initially concentrated on cleantech (Saxa Gres), life sciences (Chronix) and
technology (V-Nova and Exogenesis).
At this stage, we are looking to the opportunity to valorize a few of these
investments and get to further opportunities given this particular economic
time.
The board is acutely aware of the importance of making the right investment in
the right sector at the right time and has considered and will continue to
consider a broad range of attractive opportunities that are sourced by the
board or are introduced to it and will choose to invest in only the best of
these.
The Company is well funded with cash and cash equivalents at the reporting
date of £262,845.
To date, we have made investments which have varied in nature from equity to
convertible loans in four companies.
These investments are valued in these accounts at fair value. To determine
the fair value of each investment, the directors have reviewed all the
information received from each investee company and also from publicly
available information on the internet and whilst all of the information
available is all positive there is insufficient information to demonstrate
that the fair value is anything other than cost as a result of a lack of other
inputs or evidence to suggest an uplift or impairment of the value.
These are:
The Investments
Saxa Gres S.p.A, a turn-around circular economy company which specialises in
an innovative tile production process, has been extremely successful in
expanding its operations by competitor acquisitions and this has enabled it to
satisfy the increasing demands for its products while attracting valuable
funding from relevant institutional investors
Saxa’s founders, management and professionals have demonstrated outstanding
achievements in terms of the development of its operations, sales, product
expansion and integration of its acquisitions.
V-Nova Ltd. is a London-headquartered technology company providing
next-generation compression solutions that address the ever-growing media
processing and delivery challenges. V-Nova as an IP Software company has
developed an innovative video and imaging compression technology, with a valid
proof of revenues and concept also in relevant emerging markets countries.
V-Nova provides solutions spanning the entire media delivery chain, including
content production, contribution, storage and distribution to end users.
The Company is pleased to learn that Moving Picture Experts Group (MPEG) has
selected V-Nova’s technology to become a new standard (MPEG5-Part2), which
is expected to yield V-Nova a recurring revenue stream for a long period.
V-Nova’s management have helped ensure that the company’s technology is
becoming an integrated world standard. The Company is optimistic that V-Nova
may now be at a stage of development where it will be able to exploit its
years of hard work and, importantly, recoup its investment to date as it
progresses towards reaching profitability and expanding V-Nova’s patented
capabilities in as many verticals as possible.
Chronix Biomedical, inc. is a privately-owned biotech company founded in 1997
which specialises in simple blood tests (liquid biopsies) for real-time
monitoring of the effectiveness of cancer drugs, including immunotherapies,
and rejection of transplanted organs. The cancer test is based on a patented
technology whereby Chronix can identify gains and losses in cell free DNA that
allow them to determine if a cancer therapy is working. The transplant test
allows Chronix to determine if the organ that is transplanted is being
accepted or rejected, and thereby allows the physician to alter the
immunosuppressive drug regimen given to the patient.
In June 2018, Chronix signed it first commercial agreement with a large
EU-based lab group, which already processes more than 150,000 laboratory
samples daily, providing an exclusive licence for Germany, Austria,
Switzerland and Belgium. The contract is for 15 years and Independent research
analysts have estimated the net present value of the licensing payments to
Chronix over the life of the agreement to be approximately $92 million.
We value and recognise the considerable achievements of Chronix’s management
and understand that additional partnership agreements need to be secured in
order to increase revenue, exploit its potential and, ultimately, drive
company valuation. Chronix’s management is actively raising funds to
support such growth and to allow it to file additional patents. The Company
expects to be profitable in 2-3 years.
Exogenesis Corporation is a Boston-based nanotech firm which specialises in
modifying and controlling the surface of objects at a nanoscale level, through
accelerated particle beam processing, to avoid needing to apply coatings.
Application of the company’s technology can improve the safety and efficacy
of implantable medical devices and improving the performance of optics, glass
and a variety of substrates used in the laser, memory and semiconductor
industries.
We recognise the Exogenesis’ technological achievements and, as it has still
to prove its revenue streams, await news of its first commercial deals which
are expected to be linked to its existing vertical sectors.
Guido Contesso
Chief Executive Officer
Income Statement and Statement of Comprehensive Income
for the year ended 31 January 2020
Year ended 31 January Year ended 31 January
2020 2019
Continuing operations £ £
Investment income 37,797 47,312
Total income 37,797 47,312
Administrative expenses (186,384) (184,391)
Foreign currency exchange loss (29,948) 108,541
Operating loss and Loss before taxation (178,535) (28,538)
Taxation - -
Loss for the year (178,535) (28,538)
Total comprehensive loss for the year (178,535) (28,538)
Earnings per share:
Basic and diluted earnings per share (0.0027) (0.00044)
There are no items of other comprehensive income.
Statement of Financial Position
As at 31 January 2020
2020 2019
£ £
Non-current assets
Financial asset investments at fair value through profit and loss 1,763,386 1,711,809
Non-current assets 1,763,386 1,711,809
Current assets
Trade and other receivables 77,158 33,289
Cash and cash equivalents 262,845 530,863
Current assets 340,003 564,152
Current liabilities
Trade and other payables (73,453) (67,490)
Current liabilities (73,453) (67,490)
Net Assets 2,029,936 2,208,471
Equity
Issued Share Capital 654,000 654,000
Share Premium 2,350,630 2,350,630
Share warrant reserve - 14,095
Retained Earnings (974,694) (810,254)
Total Equity 2,029,936 2,208,471
Statement of Changes in Equity
for the year ended 31 January 2020
Share capital Share premium Share warrant reserve Retained earnings Total
£ £ £ £ £
At 31 January 2018 654,000 2,350,630 14,095 (781,716) 2,237,009
Total comprehensive loss for the year - - - (28,538) (28,538)
At 31 January 2019 654,000 2,350,630 14,095 (810,254) 2,208,471
Total comprehensive loss for the year - - - (178,535) (178,535)
Warrants expired during the period (14,095) 14,095 -
At 31 January 2020 654,000 2,350,630 - (974,694) 2,029,936
Statement of Cash Flows
for the year ended 31 January 2020
Year ended 31 January Year ended 31 January
2020 2019
£ £
Cash flows from operating activities
Loss for the year before tax (178,535) (28,538)
Investment income (37,797) (47,312)
Foreign currency exchange gain/(loss) 29,947 (108,541)
(Increase)/decrease in receivables (43,869) 5,839
Increase in payables 5,964 13,770
Net cash outflow from operating activities (224,290) (164,782)
Cash flows from investing activities
Investment income received net 37,797 47,312
Purchase of investments (81,526) -
Net cash outflow from investing activities (43,729) 47,312
Net decrease in cash and cash equivalents during the year (268,019) (117,470)
Cash at the beginning of year 530,863 648,333
Cash and cash equivalents at the end of the year 262,844 530,863
Notes
1.General information
Limitless Earth Plc is a company incorporated and domiciled in the United
Kingdom. The Company is a public limited company, which is listed on the AIM
market of the London Stock Exchange. The address of the registered office is
Suite 2, Northside House, Mount Pleasant, Barnet, Hertfordshire, England, EN4
9EB
The Investing Policy is to invest principally, but not exclusively, in sectors
where changing demographic factors are important drivers of growth. The
Company intends to focus initially on projects located in Europe but will also
consider investments in other geographical regions. The Company may become an
active investor, acquire controlling stakes or minority positions, in each
case, as the Board considers appropriate and commercial.
The financial statements are presented in Pounds Sterling, which is the
Company’s functional and presentational currency.
The summary above is an extract of the report and accounts to 31 January 2020,
which should be read in full. References to page numbers and notes are in
relation to the pagination and contents of the full report and accounts, a
copy of which is available from the Company’s website.
2.Summary of Significant Accounting Policies
Basis of preparation
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRSs) and IFRIC interpretations as adopted by
the European Union applicable to companies reporting under IFRSs. The
financial statements have also been prepared under the historical cost
convention.
The preparation of financial statements in conformity with IFRSs requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Company’s accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the financial
statements are disclosed later in these accounting policies.
Going Concern
At the reporting date the Company had cash resources of £262,845 and the
Directors have prepared cash forecasts that show that, at the time of
approving the financial statements, the Company has adequate resources to
continue in existence for the foreseeable future. Thus, they continue to
adopt the going concern basis of accounting in preparing the financial
statements.
Changes in accounting policies and disclosures
New standards, amendments and interpretations adopted by the Company
The Company has applied the following new and amended standards for the first
time for its annual reporting period commencing 1 February 2019:
* IFRS 16 Leases
* Annual improvements to IFRS Standards 2015-2017 Cycle
* Interpretation 23 ‘Uncertainty over Income Tax Treatments’
These new and amended standards have not had a material effect on the
Company’s financial statements.
3.Financial Asset Investments
2020 £ 2019 £
On 1 February 1,711,809 1,603,268
Cost of investment purchases 81,526 -
Foreign currency exchange gain (29,948) 108,541
Fair value adjustment - -
31 January – Investments at fair value 1,763,386 1,711,809
Categorised as:
Level 3 – Unquoted investments 1,763,386 1,711,809
1,763,386 1,711,809
The valuation model adopted by management is explained in Note 3, Critical
accounting judgements and estimations and is applicable to each of the
investments listed below:
Chronix Biomedical Inc (“Chronix”)
On 8 October 2015 the Company made an investment in Chronix of US$500,000
(approximately £329,511) in the series I round of convertible preference
stock (“Series I Stock”) at a price of US$0.40 per share. On a fully
diluted basis, considering all classes of common and preference stock in
issue, at the date of investment, Limitless’ investment represented 0.72% of
Chronix’s issued share capital and values Chronix at approximately US$69
million.
On 20 September 2019, the company announced that it made a further investment
of $100,000 in the form of a convertible promissory note (£81,526).
V Nova International Ltd (“V-Nova”)
On 18 December 2015, the Company made a cash investment of £500,000 in
V-Nova, a company that specialises in Advanced Signal & Data Compression
Solutions. The investment was through the acquisition of £500,000 worth of
Convertible loan notes. On 4 April 2017, these notes were converted into
7,284,382 Series B1 Participating shares at a 20% discount to the preferential
valuation of V-Nova at the time, of £100 million.
Saxa Gres S.A (”Saxa”)
On 23 December 2015, the Company invested €350,000 (approximately £258,830)
in Saxa. As a first round subscriber, Limitless has also been granted an
option to acquire 1.1655 per cent. of the equity in Saxa at nominal value with
the intention that, once the bonds have been repaid, Limitless will be able to
maintain an interest in Saxa of approximate value to the bond investment.
On 21 March 2017, Limitless announced that it had increased its investment in
Saxa Gres by acquiring a further 267 Notes for a value of €267,000. These
Notes were also accompanied by options to acquire shares in Saxa Gres, in this
case to acquire another 1.333% of its equity share capital with each option
having an exercise price of €1. In total, Limitless has options to acquire
approximately 2.5% of the equity share capital of Saxa Gres at an exercise
price of €1 per share.
On 16 November 2017, the company announced that it had made a further
investment in Saxa Gres S.p.A. of approximately EUR €75,000 in the form of a
loan. Saxa Gres was raising funds, via an increase in its share capital, in
order to invest in a new production line, it required to meet a significant
increase in orders. Limitless participated alongside two sizable credit funds
in order to maintain its interest in Saxa Gres.
Exogenesis
On 6 May 2016, the Company made an investment in Exogenesis, a nanotechnology
company which has developed nanoscale surface modification technology
to, inter alia, improve the safety and efficacy of implantable medical
devices and is being used to develop next generation microscopy tools for DNA
analysis.
The Company invested US$300,000 (approximately £200,000) in the Exogenesis
senior convertible notes which accrued an 8 % annual interest (“Notes”).
The Notes, together with accrued interest, are convertible into Exogenesis
series B preferred stock at a price of US$0.382 per share or, at the option of
Limitless, into Exogenesis series C preferred stock at a 20 % discount to the
issue price at the time of the next financing.
On 9 June 2017, the Company extended the maturity date of the loan notes to 31
December 2017 from 30 June 2017 and lowered the conversion threshold amount to
$2,500,000. Upon the cash financing being achieved and the maturity date being
reached, the notes were then converted into series B preferred stock at the
agreed price.
The table of investments sets out the fair value measurements using the IFRS 7
fair value hierarchy. Categorisation within the hierarchy has been
determined on the basis of the lowest level of input that is significant to
the fair value measurement of the relevant asset as follows:
Level 1 – valued using quoted prices in active markets for identical assets.
Level 2 – valued by reference to valuation techniques using observable
inputs other than quoted prices included within Level 1.
Level 3 – valued by reference to valuation techniques using inputs that are
not based on observable market data.
The valuation techniques used by the Company are explained in the accounting
policy note, “Financial asset investments”.
LEVEL 3 FINANCIAL ASSETS
Reconciliation of Level 3 fair value measurement of financial assets:
2020 £ 2019 £
Brought forward 1,711,809 1,603,268
Purchases 81,526 -
Foreign currency exchange loss (29,948) 108,541
Carried forward 1,763,386 1,711,809
4.Loss Per Share
(a) Basic
Basic loss per share is calculated by dividing the loss attributable to equity
holders of the Company by the weighted average number of ordinary shares in
issue during the period.
2020 2019
£ £
Loss from continuing operations attributable to equity holders of the company (178,535) (28,538)
Weighted average number of ordinary shares in issue 65,400,000 65,400,000
Pence Pence
Basic earnings per share from continuing operations (0.0027) (0.00044)
b) Diluted
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares outstanding to assume conversion of all dilutive
potential ordinary shares. There were no potentially dilutive instruments
outstanding at 31 January 2020.
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