REG-Limitless Earth Plc: Final Results for the year to 31 January 2023
28/07/2023 07:15
28 July 2023
LIMITLESS EARTH PLC
("Limitless" or the "Company")
Final Results for the year to 31 January 2023
The Company announces its final results for the year to 31 January 2023.
The Annual Report and Accounts for the year ended 31 January 2023 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 UK Market
Abuse Regulation. The Directors of the Company take responsibility for this
announcement.
For further information, please contact:
Limitless Earth plc Guido Contesso +44 7780 700 091 www.limitlessearthplc.com
Cairn Financial Advisers LLPNominated Adviser Jo Turner / Sandy Jamieson / Ludovico Lazzaretti +44 20 7213 0880 www.cairnfin.com
Peterhouse Capital LimitedBrokerCharles Goodfellow / Lucy Williams +44 20 7469 0930 www.peterhousecap.com
Chairman’s Statement
The Company continues to focus on investing in opportunities highlighted by
demographic trends. This investing strategy has governed the selection of our
existing investments including cleantech (Saxa Gres), life sciences (Chronix)
and technology (V-Nova and Exogenesis).
The Board is aware of the importance of making the right investment in the
right sector at the right time and has and will only consider investing in
opportunities that fit into its investing policy. In recent years, the Board
has elected to make follow-on investments into its investee companies rather
than source new investment opportunities, but it continues to review and
consider investment opportunities and will only invest in the best of those
reviewed. The Board further recognises the importance of seeing an exit from
these investments at the right time and it keeps the investment portfolio
under continuous review.
The Company’s investing policy is to principally invest in sectors where
changing demographic factors are important drivers of growth, and these
investments may be in either quoted or unquoted securities made directly or
indirectly in partnerships or joint ventures or into individual assets and can
be at any stage of development. To date, the Board has made direct
investments in opportunities where other investors may or may not participate.
Given the unprecedented changes in recent years and market volatility brought
about by significant factors such as Brexit and the COVID pandemic, the Board
considers it likely that it will focus on co-investment opportunities from
management's extensive, high-level contacts in the areas of family wealth and
asset wealth management. It is expected this will assist in providing
greater liquidity to exit and access to follow-on funding for the investee
company in the event it is required, helping the Board better manage its
exposure to risk and divestment.
The investments made to date are in the form of equity to convertible loans
and all investments are valued 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 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.
The investments are:
Saxa Gres S.p.A, a turn-around circular economy company which specialises in
an innovative tile production process. The company has been successful in
expanding its operations via competitor acquisitions which has enabled it to
satisfy the increasing demands for its products while attracting valuable
funding from relevant institutional investors such as A2A S.p.A, a €4
billion listed company which acquired a 27.7% shareholding in the company
and, as a relevant industrial partner, the Board is optimistic that they could
help to expand and solidify Saxa Gres’ successful business model.
Saxa Gres’ operations are dependent on gas for production and, post period,
due to the global gas price spike during 2022, Saxa sought to and approved,
the restructure of the terms of its bonds. As a result, the spread in the
market value of the bonds has increased. Given the need to simultaneously
reduce debt and recapitalise the group, Saxa Gres has advised the market that
it is currently identifying and exploring options for the most suitable
solution to achieve this result. A solution, once formulated, will be
presented to the bondholders for their assessment and approval pursuant to
applicable legislation in force. As a result of this uncertainty, the Board
have taken a prudent approach and provided for a 90% reduction in the
investment as a fair value adjustment.
V-Nova International 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
valid proof of revenues and concept also in relevant emerging markets
countries.
V-Nova’s LCEVC (Low Complexity Enhancement Video Coding) is the industry’s
first highly optimised implementation of MPEG-5 Part 2 Low Complexity
Enhancement Video Coding (LCEVC), the codec-agnostic ISO/IEC enhancement
standard capable of providing higher quality at up to 40% lower bitrates than
codecs used natively. Its unique low-complexity design can allow for
immediately accelerated encoding by up to 4 times compared to other commonly
used codecs via a simple software upgrade, producing significant transcoding
cost efficiencies.
V-Nova’s management has played a crucial role in establishing the company's
technology as a globally integrated standard.
Following a fundraising round in 2021, raising €33 million in total, which
included sector investors, technical validation of V-Nova’s offering
continued and, in the first quarter of 2022, the V-Nova MPEG-5 LCEVC was
selected for the video enhancement codec layer of Brazil’s next-generation
broadcast system.
Brazil’s Digital Terrestrial Television System Forum (SBTVD Forum) has been
working on its next-generation broadcast/broadband solution for a while and
after extensive and rigorous testing followed by agreement by the Brazilian
Ministry of Communication, Brazil’s SBTVD announced the selection of
technologies that will be adopted as part of the TV3.0 Project which
incorporates V-Nova’s MPEG-5 LCEVC codec, the only multilayer enhancement
video codec selected.
Due to the exponential video consumption growth, V-Nova’s technology can
materially increase the energy savings including direct server electricity
consumption, it assists in reducing hardware replacement rates and provides
greater reach to using with older technology and it drives indirect savings in
areas including manufacturing costs, cooling, content transmission, storage
and caching and end-user decoding.
V-Nova rapidly expanded its footprint of reference players integrated with its
MPEG-5 LCEVC technology with several new web players.
The Company is optimistic that V-Nova has reached a stage of development where
it will be able to exploit its years of hard work and, importantly, value the
investments in it as it progresses towards reaching profitability and
expanding V-Nova’s patented capabilities in as many verticals as possible.
The Board is waiting for V-Nova to sign relevant contracts in order to secure
a recurring revenue stream.
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 its 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.
In April 2021, Oncocyte, a listed Nasdaq company specialised as a precision
diagnostics company with the mission to improve patient outcomes by providing
personalised insights that inform critical decisions throughout the patient
care journey, bought Chronix which allowed them to use their network to
distribute Chronix’s products. As part of the terms of the acquisition,
Chronix’s shareholders received rights to future revenues on sales of
Chronix products.
In Q2 2022, Oncocyte announced that it had completed development of its
proprietary TheraSure™ Transplant Monitoring test for liver transplant
patients, marking the successful completion of Chronix technology transfer.
Oncocyte’s readiness to deploy TheraSure following the company’s
acquisition of Chronix Biomedical and Oncocyte announcement marks the first
product to be launched clinically following the Chronix acquisition.
Oncocyte-Chronix’s impact investment angle: Chronix’s tests provide the
opportunity for patients and healthcare providers to avoid billions of pounds
of diagnostic surgery costs, for patients to avoid invasive surgery, and for
healthcare providers to reduce demand on resources. Chronix’s products
provide for cost effective, surgery free treatment monitoring which could lead
to more effective care and treatments, saving money and lives.
The Company is awaiting financial information for actual and projected sales
revenue which it hopes will impact the potential recovery of this investment
and eventual future revenues from the sale of Oncocyte Chronix products.
Exogenesis Corporation Headquartered Massachusetts, USA, Exogenesis is a
private, venture-capital-backed company that has developed and is
commercialising a proprietary technology to modify and control surfaces
without applying a coating or creating sub-surface damage. Exogenesis is
commercialising a platform technology, NanoAccel™, using Accelerated Neutral
Atom Beam (ANAB) and Gas Cluster Ion Beam (GCIB) technologies that modify and
control surfaces of materials at a nanoscale level. The company's proprietary
technologies are used for surface modification and control in a broad range of
biomedical, optical and semiconductor applications.
In 2021, nanoMesh™ LLC, a subsidiary of Exogenesis Corporation, announced
the formation of a Medical Advisory Board supporting the commercial launch of
the nanoMesh™ product line indicated for the repair of abdominal wall
hernias and abdominal wall deficiencies that require the addition of
reinforcing material to obtain the desired surgical result.
nanoMesh™ is commercially available in the US and possesses a unique
nanometer-level surface texture, via the application of Accelerated Neutral
Atom Beam (ANAB) technology during manufacturing.
The Board is looking forward to receiving further news on all the verticals
and the nanoMesh™ product sales.
Exogenesis’ impact investment angle: its technology can modify materials in
order to alter their behaviour or effectiveness or change their chemical
and/or physical properties to replicate other, more expensive materials.
The Board have taken a prudent approach and provided 50% reduction in the
investment as a fair value adjustment.
It is the intention of the Board to seek to exit the current investments when
conditions provide for a successful exit, in order to provide funds for
reinvestment. The Board looks forward to updating shareholders with
further progress in due course.
Guido Contesso
Chief Executive Officer
27 July 2023
Income Statement and Statement of Comprehensive Income
for the year ended 31 January 2023
Year ended31 January Year ended31 January
2023 2022
Continuing operations £ £
Investment income - 22,426
Total income - 22,426
Administrative expenses (475,730) (434,505)
Operating loss and Loss before taxation (475,730) (412,079)
Taxation - -
Loss for the year (475,730) (412,079)
Total comprehensive loss for the year (475,730) (412,079)
Earnings per share:
Basic and diluted earnings per share (0.00730) (0.00630)
There are no items of other comprehensive income.
The notes in the annual report form an integral part of these financial
statements.
Statement of Financial Position
As at 31 January 2023
2023 2022
£ £
Non-current assets
Financial asset investments at fair value through profit and loss 1,150,774 1,524,560
Non-current assets 1,150,774 1,524,560
Current assets
Trade and other receivables 16,250 15,730
Cash and cash equivalents 83,894 95,737
Current assets 100,144 111,467
Current liabilities
Trade and other payables (159,284) (68,663)
Current liabilities (159,284) (68,663)
Net Assets 1,091,634 1,567,364
Equity
Issued Share Capital 654,000 654,000
Share Premium 2,350,630 2,350,630
Retained Earnings (1,912,996) (1,437,266)
Total Equity 1,091,634 1,567,364
The notes in the annual report form an integral part of these financial
statements.
The financial statements were approved and authorised for issue by the Board
on 27 July 2023.
Statement of Changes in Equity
for the year ended 31 January 2023
Share capital Share premium Share warrant reserve Retained earnings Total
£ £ £ £ £
At 31 January 2021 654,000 2,350,630 - (1,025,187) 1,979,443
Total comprehensive loss for the year - - - (412,079) (412,079)
At 31 January 2022 654,000 2,350,630 - (1,437,266) 1,567,364
Total comprehensive loss for the year - - - (475,730) (475,730)
At 31 January 2023 654,000 2,350,630 - (1,912,996) 1,091,634
Statement of Cash Flows
for the year ended 31 January 2023
Year ended Year ended
31-Jan 31-Jan
2023 2022
£ £
Cash flows from operating activities
Loss for the year before tax (475,730) (412,079)
Investment income - (22,426)
Foreign currency exchange gain/loss 77,406 24,348
(Increase)/decrease in receivables 32,940 26,019
Increase in payables (90,621) (25,036)
Other items (7,030) -
Net cash outflow from operating activities (463,035) (409,174)
Cash flows from investing activities
Investment income received net - 22,426
Fair value revaluation of Investment 310,546 227,820
Sale or (Purchase) of investments 140,646 97,357
451,192 347,603
(11,843) (61,571)
Cash at the beginning of year 95,737 157,308
83,894 95,737
The notes in the annual report form an integral part of these financial
statements.
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.
1. Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these
financial statements are set out below. The policies have been consistently
applied throughout the period, unless otherwise stated.
Basis of preparation
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRSs) and IFRIC interpretations and with
Companies Act 2006 applicable to companies reporting under IFRSs.
The financial statements have also been prepared under the historical cost
convention, as modified by the revaluation of financial assets at fair value
through profit or loss.
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 £83,894 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.
1. Financial Asset Investments
2023£ 2022£
On 1 February 1,524,560 1,874,083
Cost of investment purchases - -
Sale proceeds from investments (140,646) (97,356)
Foreign currency exchange gain/(loss) 77,406 (24,347)
Fair value revaluation (310,546) (227,820)
31 January – Investments at fair value 1,150,774 1,524,560
Categorised as:
Level 3 – Unquoted investments 1,150,774 1,524,560
1,150,774 1,524,560
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 (£81,526) in form of a promissory note.
On 19 Match 2021, the Company announced that Chronix had entered into an
agreement with Oncocyte Corporation Inc. (“Oncocyte”), a listed US based
molecular diagnostics company, for its acquisition for cash, equity and a
future revenue share consideration on Chronix products from now on using the
Oncocyte distribution channels
On 20 April 2021 and after the financial year, Chronix repaid $109,460.09
which comprises of the $100,000 promissory note interest.
On 29 June 2022 the Chronix Equity Representative receiving Chronix products
sales updated from Oncocyte, estimated a possibility to receive a first cash
flow within one year (potentially up to the 50% on the investment) if the
current sales track were maintained The future cash flows will be received
yearly in a time period from 7 to 10 years depending by each type of Chronix
product and the countries in which Oncocyte distribution channels sell them.
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.
On 30 October 2020, V-Nova raised £16,810,410 on a series C1 funding round
and the company settled unconverted loan not holders with £8,556,144 cash. V
Nova raised further £5,661,027 in December 2020.
On 16 June 2022, V-NOVA finalised a fund raising
(https://app.carta.com/investors/individual/376585/portfolio/) of
£27,014,336 at £0.09 with Limitless Earth holding 7,284,382 shares.
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 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.
On 19 January 2021, the Company announced that a recent investor in Saxa Gres,
was A2A S.p.A., a €4 billion listed company, as a Saxa Gres shareholder
(27.7%) and as a relevant industrial partner which could help to expand and
solidify Saxa Gres’ successful business model.
At the request of Saxa Gres in order for it to gain better access bank
financing to further its investment plans, the Board of LME, together with 96%
of the existing 2023 bond holders, agreed to exchange its 617 Saxa Gres bond
notes with maturity in 2023 into a similar amount of Saxa Gres notes of 7 per
cent with maturity in 2026.
On 29 July 2021, the Company entered into an agreement with an FCA regulated
broker to dispose 30 Saxa Bonds ISIN: IT0005418436 (for a nominal value of
€29,131.73 net of a 3.5% commission).
On 19 July 2022, the Company entered into an agreement with an FCA regulated
broker to dispose EUR 275,000 Saxa Bonds ISIN: IT0005418436 (for a nominal
value of €165,000 net of commission). The Board have provided a fair value
reduction of EUR 227,820 on the carrying value in Saxa Gres investment at 31
January 2022.
At 27 July 2023, the Board agreed to impair the investment in Saxa Gres and
provided a fair value reduction of EUR 211,781 (£178,653).
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.
At 27 July 2023, the Board agreed to impair the investment in Exogenesis and
provided a fair value reduction of $150,000 (£ 131,893).
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:
2023£ 2022£
Brought forward 1,524,560 1,874,083
Purchases - -
Sale proceeds from investments (140,646) (97,356)
Foreign currency exchange gain /(loss) 77,406 (24,347)
Fair value revaluation (310,546) (227,820)
Carried forward 1,150,774 1,524,560
1. Earnings Per Share
(a) Basic
Basic earnings 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.
2023 2022
£ £
Loss from continuing operations attributable to equity holders of the company (475,730) (412,079)
Weighted average number of ordinary shares in issue 65,400,000 65,400,000
Pence Pence
Basic earnings per share from continuing operations (0.00730) (0.00630)
(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 2023.
1. Post Year End Events
The Company announced on 27 July 2023, that it had raised £155,000 via a
subscription for 3,100,000 new ordinary shares of 1 each at a price of 5 pence
per share.
Forward Looking Statements
Certain statements made in this announcement are forward-looking statements.
These forward-looking statements are not historical facts but rather are based
on the Company's current expectations, estimates, and projections about its
industry; its beliefs; and assumptions. Words such as 'anticipates,'
'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar
expressions are intended to identify forward-looking statements. These
statements are not a guarantee of future performance and are subject to known
and unknown risks, uncertainties, and other factors, some of which are beyond
the Company's control, are difficult to predict, and could cause actual
results to differ materially from those expressed or forecasted in the
forward-looking statements. The Company cautions security holders and
prospective security holders not to place undue reliance on these
forward-looking statements, which reflect the view of the Company only as of
the date of this announcement. The forward-looking statements made in this
announcement relate only to events as of the date on which the statements are
made. The Company will not undertake any obligation to release publicly any
revisions or updates to these forward-looking statements to reflect events,
circumstances, or unanticipated events occurring after the date of this
announcement except as required by law or by any appropriate regulatory
authority.
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