REG-Limitless Earth Plc: Final Results
30/07/2021 13:55
30 July 2021
LIMITLESS EARTH PLC
("Limitless" or the "Company")
Final Results for the year to 31 January 2021
The Company announces its final results for the year to 31 January 2021.
The Annual Report and Accounts for the year ended 31 January 2021 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
The Company has continued to focus on investing in opportunities highlighted
by demographic trends. This 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 Company has cash and cash equivalents at the reporting date of £157,310,
and post yearend, the company entered into an agreement to dispose part of the
investment in the Saxa Gress bonds to provide ongoing working capital. The
board considers it has sufficient cash for its operations for the financial
year ahead and the board will look to exit investments when the conditions are
supportive.
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 the last year 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 £1,874,083 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. For V- Nova International Ltd, there was a
placing by the investment in October 2020 that uplifted the fair value of that
investment by £100,000. The information available on the other three
investments were all positive, however 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, 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 and during the reporting period,
A2A S.p.A, a €4 billion listed company took a holding in this investment of
27.7% and as a relevant industrial partner, they could help to expand and
solidify Saxa Gres’ successful business model.
Saxa’s impact investments side; it builds synthetic stone using industrial
waste fulfilling a number of green economy requirements and having significant
environmental benefits.
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 a
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 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 have helped ensure that the company’s technology is
becoming an integrated world standard. The Company is optimistic that V-Nova
may be at a stage of development where it will be able to exploit its years of
hard work and, importantly, recoup the investment in it as it progresses
towards reaching profitability and expanding V-Nova’s patented capabilities
in as many verticals as possible.
V-Nova’s impact investment angle: significantly more efficient data
processing leads to reduced power consumptions offering a valuable reduction
of carbon emissions per hour of video, providing relevant environmental
sustainability benefits to video workflows (source
https://www.broadbandtvnews.com/2021/05/24/v-nova-lcevc-announces-licensing-terms/
)
Due to the exponential video consumption growth, it materially increase the
energy savings in the near future like direct server electricity consumption,
it assists in reducing hardware replacement rates or providing greater reach
to using with older technology and it drives indirect savings in areas
including: manufacturing costs, cooling, content transmission (CDN), storage
and caching and end user decoding.
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 Company 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, bought Chronix Biomedical
allowing them to use their network to distribute Chonix’s products. As part
of the terms of the acquisition, Chronix’s shareholders received rights to
future revenues on products sold.
Chronix’s impact investment angle: Chronix’s tests provide the opportunity
for patients and healthcare provides to avoid billions of pounds of diagnostic
surgery costs, for patients to avoid invasive surgery, healthcare provides to
reduce demand on resources. Chronix’s products provide for cost effecting,
surgery free treatment monitoring which could lead to more effective care and
treatments, saving money and lives.
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.
Although the Board are optimistic and recognise Exogenesis’ technological
achievements, the investment is pre revenue and we look forward to further
news
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.
It is the intention of the board to seek to exit the current investments which
have performed well, when conditions provide for a successful exit, in order
to provide funds for reinvestment. The board looks forward to updating
shareholders with any progress in the year ahead.
Guido Contesso
Chief Executive Officer
Income Statement and Statement of Comprehensive Income
for the year ended 31 January 2021
Year ended 31 January Year ended 31 January
2021 2020
Continuing operations £ £
Investment income 27,583 37,797
Total income 27,583 37,797
Administrative expenses (78,076) (216,332)
Operating loss and Loss before taxation (50,493) (178,535)
Taxation - -
Loss for the year (50,493) (178,535)
Total comprehensive loss for the year (50,493) (178,535)
Earnings per share:
Basic and diluted earnings per share (0.00077) (0.0027)
There are no items of other comprehensive income.
Statement of Financial Position
As at 31 January 2021
2021 2020
£ £
Non-current assets
Financial asset investments at fair value through profit and loss 1,874,083 1,763,386
Non-current assets 1,874,083 1,763,386
Current assets
Trade and other receivables 41,749 77,158
Cash and cash equivalents 157,310 262,845
Current assets 199,059 340,003
Current liabilities
Trade and other payables (93,699) (73,453)
Current liabilities (93,699) (73,453)
Net Assets 1,979,443 2,029,936
Equity
Issued Share Capital 654,000 654,000
Share Premium 2,350,630 2,350,630
Retained Earnings (1,025,187) (974,694)
Total Equity 1,979,443 2,029,936
Statement of Changes in Equity
for the year ended 31 January 2021
Share capital Share premium Share warrant reserve Retained earnings Total
£ £ £ £ £
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
Total comprehensive loss for the year - - - (50,493) (50,493)
At 31 January 2021 654,000 2,350,630 - (1,025,187) 1,979,443
Statement of Cash Flows
for the year ended 31 January 2021
Year ended Year ended
31-Jan 31-Jan
2021 2020
£ £
Cash flows from operating activities
Loss for the year before tax (50,493) (178,535)
Investment income (27,583) (37,797)
Foreign currency exchange gain/loss (6,103) 29,947
(Increase)/decrease in receivables 35,409 (43,869)
Increase in payables 20,245 5,964
Fair value revaluation of Investment (100,000) -
Net cash outflow from operating activities (128,522) (224,290)
Cash flows from investing activities
Investment income received net 27,583 37,797
Purchase of investments (4,594) (81,526)
Net cash outflow from investing activities 22,989 (43,729)
Net decrease in cash and cash equivalents during the year (105,533) (268,019)
Cash at the beginning of year 262,844 530,863
Cash and cash equivalents at the end of the year 157,310 262,844
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 2021,
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
accounting standards (IASs) in conformity with the requirements of the
Companies Act 2006. 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 IASs 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 £157,310. 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.
3. Financial Asset Investments
2021 £ 2020 £
On 1 February 1,763,386 1,711,809
Cost of investment purchases 4,594 81,526
Foreign currency exchange gain/(loss) 6,103 (29,948)
Fair value revaluation 100,000 -
31 January – Investments at fair value 1,874,083 1,763,386
Categorised as:
Level 3 – Unquoted investments 1,874,083 1,763,386
1,874,083 1,763,386
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 19th 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 20(th) April 2021 and after the financial year, Chronix repaid $109,460.09
which comprises of the $100,000 promissory note interest.
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. These C1 shares and the
company’s B1 shares rank similarity and the investment fair value uplift in
note 12 is based on the increase in the placing price. A fair value uplift of
£100,000 was recognised using the price per share in the October 2020 fund
raise as a valuation.
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 19th January 2021, the company announced that a recent investor in
Saxagress, 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 Grs bond
notes with maturity in 2023 into a similar amount of Saxa Gres notes of 7 per
cent. with maturity in 2026.
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
13 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:
2021 £ 2020 £
Brought forward 1,763,386 1,711,809
Purchases 4,594 81,526
Foreign currency exchange gain /(loss) 6,103 (29,948)
Fair value revaluation 100,000 -
Carried forward 1,874,083 1,763,386
No unobservable inputs were used in the fair value measurement for assets
categorised in Level 3 of the fair value hierarchy. No sensitivities have been
included on the other investments, as their fair value equates to cost.
4. 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.
2021 2020
£ £
Loss from continuing operations attributable to equity holders of the company (50,493) (178,535)
Weighted average number of ordinary shares in issue 65,400,000 65,400,000
Pence Pence
Basic earnings per share from continuing operations (0.00077) (0.0027)
(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 2021.
5. Post Year End Events
On 20th April 2021 and after the financial year, Chronix repaid $109,460.09
which comprises of the $100,000 promissory note and interest.
On 29th July 2021, the Company entered in to 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) and further 220 Bonds (for a
nominal value of €220,000 at the prevailing market conditions and gross
before a commission of 5%), in various tranches from October to 31 December
2021, with an undertaking that the further 220 Bonds will be purchased by the
broker and accounted for no later than 31 December 2021.
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