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.