Results for the Year Ended 31 December 2023

 

Kibo Energy PLC (Incorporated in Ireland)

(Registration Number: 451931)

(External registration number: 2011/007371/10)

LEI Code: 635400WTCRIZB6TVGZ23

Share code on the JSE Limited: KBO

Share code on the AIM: KIBO

ISIN: IE00B97C0C31

('Kibo' or 'the Company')

 

Dated: 23 December 2024

 

Kibo Energy PLC ('Kibo' or the 'Company')

Results for the Year Ended 31 December 2023

 

Kibo Energy PLC ("Kibo" or the "Company") is pleased to release its consolidated annual financial results for the year ended 31 December 2023. The Company's Annual Report, which contains the full financial statements, is in the process of being prepared for dispatch to shareholders. A copy of this Annual Report will also be available on the Company's website at https://kibo.energy/wp- content/uploads/Kibo-Annual-Report-2023-Final.pdf.

 

Details of the date and venue for the Company's AGM will be announced in due course.

 

These accounts cover the period prior to the Company's decision to dispose of its operating assets as held by Kibo Mining (Cyprus) Limited and therefore should be read in that context. Similarly, the Company disposed of its interest in MED on 30 September 2024. The Company is currently an AIM Rule 15 cash shell having had the disposal of Kibo Cyprus approved by Shareholders on 11 October 2024. As such the Company has six months to complete a Reverse Takeover pursuant to AIM Rule 14, failing which its shares will be suspended from trading on AIM.

 

Overview

Financial results (includes the consolidated results of MAST Energy Developments Plc)

·    Total revenues £341,207 (2022: £1,036,743).

·    Operating loss £5,518,089 (2022: £ 10,570,952 loss).

·    Loss after tax for the year ended December 2023 £5,715,341 (2022: £10,908,524 loss) includes:

§ £97,340 loss (2022: £181,684 loss) from the equity accounted results of Katoro Gold Plc ("Katoro"), which is separately funded.

§ £3,539,394 loss (2022: £2,732,982 loss) from the consolidated results of Mast Energy Developments Plc ("MED"), which is separately funded.

§ £2,289,372 (2022: £7,038,930) impairment loss mainly on Mast Energy Developments plc (Bordersley and Stather Road sites) due to the current market conditions, most notably the high inflation and interest rates.

·    Administrative expenditure decreased to £2,164,670 in the year ended December 2023 (2022: £2,579,028).

·    Listing and capital raising fees increased from £363,368 in 2022 to £855,323 in 2023.

·    Renewable energy and exploration project expenditure of £326,093 (2022: £847,567) incurred in 2023 by Kibo's subsidiaries being mainly MAST Energy Developments plc on Bordersley, Pyebridge and Rochdale and on Sustineri Energy (Pty) Ltd on its waste-to-energy project in South Africa.

·    Cash outflows from company operating activities have decreased to £826,268 (2022: £2,595,108 cash outflow).

·    Group net debt position (cash less debt) is (£6,238,964) (2022: (£5,032,945) net debt).

·    Company net debt position (cash less debt) is (£2,318,631) (2022: (£2,659,817) net debt.

·    Basic and diluted loss per share of £0.001 for 2023 (2022: basic and diluted £0.003).

·    Headline loss per share of £0.0004 for December 2023 (2022: headline loss per share of £0.0009).

 

Operational highlights in the year 2023 to date

 

·    Commenced with an optimisation and integration study into the production of synthetic oil from non-recyclable plastic waste on the 2.7 MW plastic-to-syngas project under Sustineri Energy (Pty) Ltd ('Sustineri Energy' or 'Sustineri'), a joint venture ('JV') in which Kibo holds 65% and Industrial Green Energy Solutions ('IGES') holds 35%, which could add a potential accelerated additional revenue stream to the project.

·    As part of the Mbeya Power Project, the Company has determined a due diligence scope of work and process for the Tanzania Electric Supply Company Limited ('TANESCO') in line with key project milestones and established a Joint Technical Committee to ensure these milestones are met as agreed to, as previously announced by the Company with regards to its renewed Memorandum of Understanding ('MOU').

·    Kibo subsidiary Mast Energy Developments plc ('MED') relinquished its existing T-4 Capacity Market ('CM') contract for its Pyebridge site and was successful in the pre-qualification for two new bids, which resulted in a T-1 CM contract at £60/kW/pa and a T-4 CM contract that cleared at a record price of £63/kW/pa.

·    MED furthermore reprofiled the outstanding loan balances on its existing loan facilities as well as entered a Heads of Terms ('HoT') for a new JV agreement between MED and a new institutional-led consortium, who will inject all required capital into the JV with an expected total investment value of c. £31 million, with no funding contribution required from MED.

·    In July 2023, the Sustineri biofuel project was granted an integrated Environment Authorisation ('EA') (RNS dated 3 July 2023) and a further integration study is currently underway to align the test results with feedstock characteristics, as previously announced in an RNS dated 2 May 2023.

 

Post period highlights

 

·    Ajay Saldanha and Louis Coetzee retired from the Board as directors of the Company on 10 January 2024 and 5 July 2024 respectively.

·    On 11 January 2024 the Company announced the allotment of 500,000,000 new ordinary Kibo shares of €0.0001 each to RiverFort representing conversion of accrued fees and interest totalling £161,000 forming part of the outstanding balance of £1,106,146.72 reported by the Company owing to RiverFort under the Facility Restatement Agreement signed on 11 April 2023. The conversion price was £0.000322 (0.0322 pence) calculated as 92% of the lowest daily VWAP over the ten (10) Trading Days immediately preceding the date of the conversion notice in accordance with the terms of the Facility Restatement Agreement.

·    On 8 March 2024, a further 81,081,081 shares in settlement of an invoice to a separate service provider at a deemed price of 0.037p for a total of £30,000 were issued.

·    On 16 January 2024 the Company provided a strategy update on its bio-coal development test work as part of its commitment to on-going sustainable clean energy solutions. It advised that it is currently formulating a joint development agreement with a multinational food and beverage producer ("the Client") intended to be funded equally (i.e., 50-50) by Kibo and the Client. The objective of this collaboration is to build and operate a pilot plant that will produce bio-coal as a preliminary step towards the establishment of a comprehensive production-scale facility. This initiative, subject to a successful pilot plant and financing, will enable the Client to transition from the use of fossil coal to bio-coal in its comprehensive boiler fleet, without any reconfiguration, aligning with established Environmental, Social and Governance (ESG) compliance standards. Furthermore, it noted that it has received conditional preliminary approval for development funding, subject to due diligence, from a prominent development banking institution in Southern Africa for one of the Company's existing waste-to-energy projects. It should be noted that Kibo no longer has any interest in this project following the sale of Kibo Mining (Cyprus) Limited to Aria Capital Management Limited in October 2024.

·    On 9 February 2024 the Company held an extraordinary general meeting where it obtained shareholder approval to renew its ability to issue shares without applying pre-emption rights and to update its Memo & Articles of Association to align with all authorities approved by Shareholders at previous general meetings.

·    On 25 July 2024 the Company held an extraordinary general meeting where it obtained shareholder approval to increase its ordinary authorised share capital to 30 billion shares of €0.0001 each.

·    On 11 October 2024 the Company held an extraordinary general meeting where it obtained shareholder approval for the sale of its wholly owned subsidiary, Kibo Mining (Cyprus) Limited to Aria Capital Management Limited.

·    On 7 June 2024, the Company announced a major corporate restructuring and repositioning of the Company that included, inter alia, the conditional appointment of four new directors to the board including a new CEO and non -executive Chairman, creditor restructuring and settlement, review of its existing energy portfolio, Option awards to directors and a Placing for £500,000.

·    On 20 June 2024 the Company announced a modification to its announcement on 7 June whereby the number of new directors to be appointed to the board was reduced from four to two, and a revised reduced placing of £340,000 by way of new broker sponsored placing and private subscriptions.

·    On 25 June 2024, the Company announced that it was unlikely it could meet its 30 June 2024 deadline for the publication of its 2023 audited accounts following which it would be suspended from trading on AIM effective 7.30 .m. on 1 July 2024 and also provided details for the admission of the new shares to be issued further to the £340,000 placing announced on 20 June 2024.

·    On 27 June 2024, the Company announced further changes to the placing details announced on 20 June 2024 as regards placing amount, placing price, placees and schedule for admission of placing shares to AIM. The placing amount was increased from £340,000 to £350,000 and at a placing price of 0.0084 pence and the issue of 4,166,666,666 new ordinary Kibo shares. (the "Placing Shares"). The entire placing amount was subscribed for by a private investor to be settled in  two tranches with 1,785,714,286 Placing Shares (Tranche 1) for a consideration of £150,000, settling immediately and 2,380,952,380 Placing Shares (Tranche 2) for a consideration of £200,000 settling following Kibo shareholder approval for an increase in authorized share capital of the Company at a General Meeting to be held as soon as possible after settlement of Tranche 1; and all Kibo creditor conversions as noted in the 7 June and  20 June RNS Announcement being  settled in full.  Admission of the shares to AIM was scheduled to coincide with the lifting of the Company's share trading suspension, such trading suspension subsequently coming into effect as anticipated from 30 June 2024 and as announced by the Company on 1 July 2024.

·    On the 5 July 2024, the Company announced the stepping down of Louis Coetzee as CEO of the Company the appointment of Cobus van der Merwe as the Interim CEO of the Company.

·    On 18 July 2024 the Company announced the appointment of Clive Roberts as non-executive chairman of the Company.

·    On 5 August 2024, the Company announced the completion of the creditor conversions (credit restructuring) first announced on 7 June 2024) following shareholder approval for an increase in its authorised capital at its EGM on 25 July 2024 which was required to create sufficient authorised share headroom for the creditor conversion to be implemented.

·    On 16 September 2024, the Company announced that it had signed a binding term sheet (the "Term Sheet") with Swiss company, ESTI AG to acquire a diverse portfolio of renewable energy projects across Europe and Africa spanning wind and solar generation, agri-photovoltaics and technology development by way of a proposed reverse takeover transaction. Under the Term Sheet Aria Capital Management Limited ("Aria), a global asset management company were to be appointed as the arrange to the reverse takeover transaction.

·    On the 19 September 2024, the Company announced that it had signed a sale agreement with Aria Capital Management Limited for the purchase by Aria of Kibo's its wholly owned subsidiary Kibo Mining (Cyprus) limited subject to shareholder approval as required under AIM Rules. Shareholder approval was subsequently obtained at a Kibo EGM on 11 October 2024 from which date the Company was considered an AIM Rule 15 cash shell. As a cash shell, it was noted that the Company had six months from 11 October 2024 to undertake a Reverse Takeover or otherwise will be suspended, after which it will have a further six months to complete a Reverse Takeover or otherwise be cancelled from trading on AIM.

·    On 3 December 2024, the Company announced that it had terminated  the Term Sheet by mutual consent with ESTGI AG and secured a loan facility for up to £500,000 from Aria (the "Aria Facility") The Company noted that it had taken this decision as it believed that, it does have sufficient time to secure all relevant information in a timely manner necessary to complete the ESTGI AG reverse takeover  particularly noting the Company will have been suspended for 6 months on 31 December 2024. The Company noted that it will now focus on completing and publishing its audited accounts to 31 December 2023 and interim accounts to 30 June 2024 before 31 December 2024 to enable the Company's current suspension from trading on AIM to be lifted. Following resumption of trading, the Company will be noted that it will seek an alternative project portfolio to proceed with a revised transaction (the "Revised Transaction") and that it is already evaluating a number of project acquisition opportunities.

·    The Aria Facility is to provide the Company with working capital for the next four months (to 31 March 2025) until it is able to identify and complete a Revised Transaction.

·    The Company also announced that it had also signed a Deed of Amendment to the terms of its outstanding loan facility with River Global Opportunities PCC limited (the "RiverFort Loan"). The terms of the RiverFort Loan required RiverFort's consent for the Company to enter into another loan facility with another institution.

·    These measures summarised above amount to a business re-set for the Company where it intends to move ahead under the stewardship of the reconstituted board by transitioning Kibo to a broader based energy company.

 

Disposal, loss of control and deconsolidation of Mast Energy Developments

·    On 6 June 2024, the Company entered into an agreement with Riverfort Global Opportunities in which it ceded its loan with Mast Energy Developments Plc (MED) through its subsidiary Kibo Mining (Cyprus) Limited to Riverfort in partial settlement of its loan with Riverfort. The loan with Riverfort Global Opportunities and a transaction date balance of £767,205 was reduced to £400,000 in exchange for the cession of the £797,396 loan receivable from MED.

·    The loan receivable from MED was payable on demand and was historically partially settled with shares issued in MED. The directors considered the loan and historic precedent of conversion thereof as part of their assessment on control over MED in terms of IFRS 10.

·    The directors determined that the combined factors of significant reduction in shareholding in MED during the 2024 year, and the disposal of the loan receivable from MED and resulting convertibility of the loan through shares issued, resulted in loss of control of MED with effect from 7th of June 2024. From this date onwards MED was recognised as an associate and equity accounted until the investment in MED was disposed of in full on the 30th of September 2024.

·    As a result of the investment in MED being reclassified as an associate and the Group accounting policy of investments in listed associates being measured at fair value of the shares at market value, the Group expects impairments and gains on disposals of MED shares to amount to £12,482 and £268,497 respectively in its 30 June 2024 interim results. The gain on disposal is as a result of the proceeds from share disposals and the recovery of loan and fair value of the retained MED shares exceeding the net asset value thereof on disposal date.

·    The retained investment in MED was disposed of in September 2024 to Riverfort for £120,074.

 

Disposal of investment in Kibo Energy Botswana Limited

·    The Group disposed of its interest in Kibo Energy Botswana Limited on 31 January 2024 to Aria Capital Management Limited for an amount of £70,000. The shareholding of Shumba Energy Limited did not form part of this agreement and was transferred to Kibo Energy (Cyprus) Limited (KMCL) pending secretarial finalisation. The transfer was completed in September 2024. The value of Kibo Energy Botswana Limited was represented by the investment in Shumba Energy Limited of £307,725. As Kibo Energy Botswana was held at a £Nil balance the group expects a profit on disposal of £70,000 in its 30 June 2024 interim results.

 

Disposal of investment in Kibo Mining (Cyprus) Limited

·    The Group disposed of its interest in Kibo Mining (Cyprus) Limited (KMCL) and its subsidiaries on 16 September 2024 for £Nil; the disposal did not include MED which contributed £1,902,936 of the carrying value of KMCL of £2,210,661 as at 31 December 2024. The disposal of the remaining carrying value of £307,725, represented by the investment in Shumba, will result in a loss on disposal of £307,725 of Kibo for the year 2024.

·    The disposals above came about after the restructuring process initiated in 2024.

 

Going Concern 

 

·    The financial statements have been prepared on the going concern basis which contemplates the continuity of normal business activities and the realisation of assets and the settlement of liabilities in the normal course of business. In performing the going concern assessment, the Board considered various factors, including the availability of cash and cash equivalents; data relating to working capital requirements for the foreseeable future; cash-flows from operational commencement, available information about the future, the possible outcomes of planned events, changes in future conditions, the current global economic situation due to the ongoing Ukraine and Israel and Gaza conflicts, and the responses to such events and conditions that would be available to the Board. 

·    The Board has, inter alia, considered the following specific factors in determining whether the Group is a going concern:  

§ The significant financial loss for the year amounting to £5,715,341 (2022: £10,908,524);  

§ Cash and cash equivalents readily available to the Group in the amount of £64,057 in order to pay its creditors and maturing liabilities in the amount of £5,453,266 as and when they fall due and meet its operating costs for the ensuing twelve months (2022: £163,884 and £4,192,170 respectively);

§ Whether the Group has available cash resources, or equivalent short term funding opportunities in the foreseeable future, to deploy in developing and growing existing operations or invest in new opportunities; and 

§ Investment and associated funding opportunities available to the company after disposal of its Cyprus subsidiary, Kibo Mining (Cyprus) Limited effective on 11 October as disclosed in note 26 (the "KMCL Disposal"), following which the Company became an AIM Rule 15 cash shell. Given the Company's limited available cash resources post the KMCL Disposal and considering the Company's status as a cash shell, the Board will need to undertake a Reverse Takeover transaction ("RTO") as envisaged under the AIM Rules which will coincide with a substantial fundraise to provide the Company with sufficient working capital to meet its overhead and project development commitments post RTO. 

·    Following from the losses incurred in the current financial period, coupled with the net current liability position the Group finds itself in as at December 2023, these conditions, together with those mentioned above are considered to indicate that a material uncertainty exists which may cast significant doubt on the Group's ability to continue as a going concern.  

·    This is largely attributable to the short-term liquidity position the Group finds itself in as a result of the significant capital required to meet its obligations that exceeds cash contributed to the Group by the capital contributors. The Directors have evaluated the Group's liquidity requirements to confirm whether the Group has adequate cash resources to continue as a going concern for the foreseeable future, taking into account the net current liability position, and consequently prepared a cash flow forecast covering a period of 12 months from the date of approval of these financial statements, concluding that the Group would be able to continue its operations as a going concern.  

·    In response to the net current liability position, to address future cash flow requirements, detailed liquidity improvement initiatives have been identified and are being pursued, with their implementation regularly monitored in order to ensure the Group is able to alleviate the liquidity constraints in the foreseeable future. Therefore, the ability of the Group to continue as a going concern is dependent on the successful implementation or conclusion of the below noted matters in order to address the liquidity risk the Group faces on an ongoing basis:  

§ Successful conclusion of funding initiatives of the Group in order to keep the Company in good standing until the successful completion of a reverse takeover transaction as the Company pursues its objective to acquire a new portfolio of assets; and 

§ Successful completion of a reverse takeover transaction as required under AIM Rule 15 given that the Company became a cash shell on 11 October 2024 with the disposal of its subsidiary, Kibo Mining (Cyprus) Limited.  

·    Further to the above, on 3 December 2024 the Company announced that it had secured a loan facility for up to £500,000 from Aria Capital Management Limited ("Aria") (the "Aria Facility"). The Company has received the first payment totalling £122,585 under the Aria Facility. The purpose of the Aria Facility is to provide the Company with working capital until it is able to identify and complete a reverse takeover transaction. Aria has also provided the Company with written confirmation, which is effective for a period until 31 December 2025, that it will support the Company in its capacity as lender under the Aria Facility and advisor to the Company, as follows: 

§ Assist the Company in the timely sourcing and procurement of an appropriate project portfolio as part a reverse takeover transaction; 

§ Assist the Company to raise appropriate funding to the Company in good standing until completion of a reverse takeover transaction to enable the Company to continue as a going concern for the foreseeable future; and 

§ Aria will not recall or demand cash repayment of the Aria Facility provided to the Company, except insofar as the funds of the Company permit repayment and that such repayment will not adversely affect the ability of the Company to carry on its business operations as a going concern. 

·    In addition to the Aria Facility, should the completion of a Reverse Takeover run into the second half of 2025, the Company will also be reliant, as noted above, on additional funds being raised either from Aria or, if not, third parties which could include equity placings as the Company has relied upon in the past.

·    As the Board is confident it would be able to successfully implement the above matters, it has adopted the going concern basis of accounting in preparing the consolidated financial statements.

 

 

 

For further information please visit www.kibo.energy or contact:

 

Cobus van der Merwe	[email protected]	Kibo Energy PLC	Chief Executive Officer
James Biddle Roland Cornish	+44 207 628 3396	Beaumont Cornish Limited	Nominated Adviser
Claire Noyce	+44 20 3764 2341	Hybridan LLP	Joint Broker
James Sheehan	+44 20 7048 9400	Global Investment Strategy UK Limited	Joint Broker

 

Beaumont Cornish Limited ('Beaumont Cornish') is the Company's Nominated Adviser and is authorised and regulated by the FCA. Beaumont Cornish's responsibilities as the Company's Nominated Adviser, including a responsibility to advise and guide the Company on its responsibilities under the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed solely to the London Stock Exchange. Beaumont Cornish is not acting for and will not be responsible to any other persons for providing protections afforded to customers of Beaumont Cornish nor for advising them in relation to the proposed arrangements described in this announcement or any matter referred to in it.

 

 

Johannesburg

23 December 2024

Corporate and Designated Adviser

River Group