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Limitless Earth Plc - Final Results

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26 July 2022

LIMITLESS EARTH PLC

("Limitless" or the "Company")

Final Results for the year to 31 January 2022

The Company announces its final results for the year to 31 January 2022.

The Annual Report and Accounts for the year ended 31 January 2022 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 +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 Capital Limited +44 (0) 20 7469 0930

Broker www.pcorpfin.com

Peter Greensmith/Charles Goodfellow

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 has cash and cash equivalents at the reporting date of £95,737, which the board considers is sufficient 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 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 £1,524,560 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.

The investments are:

Saxa Gres S.p.A, a turn-around circular economy company which specialises in an innovative tile production process, has been 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.

The Board considers 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. Further, 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, the Board is optimistic that they could help to expand and solidify Saxa Gres’ successful business model.

The global gas price spike started from last year and is still exacerbated by the current relevant market disruptions. Saxa Gres’ operations are dependent on gas for production and, post period, Saxa has sought to, and had approved, restructure the terms of its bonds. As a result, the spread in the market value of the bonds has increased. Whilst the Board remains optimistic that this will correct itself, it has also sought to divest of part of the Company’s holding of bond, but it maintains its equity participation option in full.

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 has helped ensure that the company’s technology is becoming an integrated world standard.

Following a fundraising round in 2021, raising €33 million in total, a relevant investor company publicly declared they invested in V-Nova because it has all the right components to soon establish itself on the market as a tech leader alongside top global players.

Technical validation of V-Nova’s offering continues and, in the first quarter of 2022, the V-Nova MPEG-5 LCEVC has been 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, it materially increases 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.

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.

Guido Meardi, CEO and Co-Founder, V-Nova said they are looking forward to replicating this model elsewhere,”

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 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 Biomedical allowing 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 Chronix’s products sold.

In Q2 2022 Oncocyte announced that it has 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 from Chronix acquisition completed in April 2021.

The company is working with the Equity holder Representative to receive sharing Sales revenue news on the potential recovering of the investment and eventual future revenues from the sale of Oncocyte Chronix products on which the company holds rights.

Oncocyte-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 effective, 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.

On Mid 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 nanometre-level surface texture, via the application of Accelerated Neutral Atom Beam (ANAB) technology during manufacturing.

Although the Board are optimistic and recognise Exogenesis’ technological achievements, the investment is pre revenue and we look forward to 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.

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 any progress in the year ahead.

Guido Contesso

Chief Executive Officer

22 July 2022

Income Statement and Statement of Comprehensive Income

for the year ended 31 January 2022

Year ended
31 January

Year ended
31 January

2022

2021

Continuing operations

£

£

Investment income

22,426

27,583

Total income

22,426

27,583

Administrative expenses

(434,505)

(78,076)

Operating loss and Loss before taxation

(412,079)

(50,493)

Taxation

-

-

Loss for the year

(412,079)

(50,493)

Total comprehensive loss for the year

(412,079)

(50,493)

Earnings per share:

Basic and diluted earnings per share

(0.00630)

(0.00077)

There are no items of other comprehensive income.

Statement of Financial Position

As at 31 January 2022

2022

2021

£

£

Non-current assets

Financial asset investments at fair value through profit and loss

1,524,560

1,874,083

Non-current assets

1,524,560

1,874,083

Current assets

Trade and other receivables

15,730

41,749

Cash and cash equivalents

95,737

157,310

Current assets

111,467

199,059

Current liabilities

Trade and other payables

(68,663)

(93,699)

Current liabilities

(68,663)

(93,699)

Net Assets

1,567,364

1,979,443

Equity

Issued Share Capital

654,000

654,000

Share Premium

2,350,630

2,350,630

Retained Earnings

(1,437,266)

(1,025,187)

Total Equity

1,567,364

1,979,443

Statement of Changes in Equity

for the year ended 31 January 2022

Share capital

Share premium

Share warrant reserve

Retained earnings

Total

£

£

£

£

£

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

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

Statement of Cash Flows

for the year ended 31 January 2022

Year ended

Year ended

31-Jan

31-Jan

2022

2021

£

£

Cash flows from operating activities

Loss for the year before tax

(412,079)

(50,493)

Investment income

(22,426)

(27,583)

Foreign currency exchange gain/loss

24,348

(6,103)

(Increase)/decrease in receivables

26,019

35,409

Increase in payables

(25,036)

20,245

Net cash outflow from operating activities

(409,174)

(28,522)

Cash flows from investing activities

Investment income received net

22,426

27,583

Fair value revaluation of Investment

227,820

(100,000)

Sale or (Purchase) of investments

97,357

(4,594)

Net cash outflow from investing activities

347,603

(77,011)

Net decrease in cash and cash equivalents during the year

(61,571)

(105,533)

Cash at the beginning of year

157,308

262,844

Cash and cash equivalents at the end of the year

95,737

157,310

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.

2.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 £95,737 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

2022
£

2021
£

On 1 February

1,874,083

1,763,386

Cost of investment purchases

-

4,594

Sale proceeds from investments

(97,356)

-

Foreign currency exchange gain/(loss)

(24,347

6,103

Fair value revaluation

(227,820)

100,000

31 January – Investments at fair value

1,524,560

1,874,083

Categorised as:

Level 3 – Unquoted investments

1,524,560

1,874,083

1,524,560

1,874,083

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 t 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 20th April 2021 and after the financial year, Chronix repaid $109,460.09 which comprises of the $100,000 promissory note interest.

On 29th 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, The future cash flows will be received yearly in a time period for 7 to 10 years.

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 finalized a fund raising 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 29th 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 19th 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 31.1.2022.

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:

2022
£

2021
£

Brought forward

1,874,083

1,763,386

Purchases

-

4,594

Sale proceeds from investments

(97,356)

Foreign currency exchange gain /(loss)

(24,347)

6,103

Fair value revaluation

(227,820)

100,000

Carried forward

1,524,560

1,874,083

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.

2022

2021

£

£

Loss from continuing operations attributable to equity holders of the company

(412,079)

(50,493)

Weighted average number of ordinary shares in issue

65,400,000

65,400,000

Pence

Pence

Basic earnings per share from continuing operations

(0.00630)

(0.00077)

(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 2022.

5.Post Year End Events

On 21 July 2022, the company announced that Saxa Gres had extended the maturity of the Bonds from 2026 to 2027 and agreed that it would pay coupons conditional on certain revenue targets being met and linked to the sale of non-core assets. As a result of this restructuring, the Company decided to reduce its holding in the Bonds and sold 275 Bonds for a total consideration of EUR 165,000. Following the sale, the Company continues to hold Bonds with a face value of EUR 317,000. The proceeds of the sale will be used for general working capital purposes.

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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