Kibo Energy Regulatory News (KIBO)

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: 29 June 2023

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

Results for the Year Ended 31 December 2022

Kibo Energy PLC ("Kibo" or the "Company"), the renewable energy-focused development company, is pleased to release its consolidated annual financial results for the year ended 31 December 2022. 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-2022-Final.pdf.

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

Overview

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

· Total revenues £1,036,743 (2021: £3,245);

· Operating loss £10,570,952 (2021: £24,071,363 loss);

· Loss after tax for the year ended December 2022 £10,908,524 (2021: £23,148,155 loss) includes:

§ £181,684 (2021: £891,375) from the equity accounted results of Katoro Gold Plc ("Katoro"), which is separately funded;

§ £2,732,982 (2021: £1,079,083) from the consolidated results of Mast Energy Developments Plc ("MED"), which is separately funded.

§ £7,038,930 (2021: £20,705,209) impairment loss mainly on Mast Energy Developments plc (Bordersley), Mbeya Coal to Power and Mabesekwa Coal to Power projects as a result of the continuing global shift to move toward renewable energy and disregard fossil fuel assets, coupled with the Group's execution of its renewable energy strategy during the 2022 financial period;

· Administrative expenditure increased to £2,579,028 in the year ended December 2022 (2021: £2,325,750)

· Listing and capital raising fees increased from £321,365 to £363,368;

· Additional renewable energy and exploration project expenditure of £847,567 (2021: £687,963) incurred in 2022 by Kibo's subsidiaries being mainly MAST Energy Developments plc on Bordersley, Pyebridge and Rochdale and on Sustineri Energy (Pty) Ltd on renewable energy in South Africa;

· Cash outflows from company operating activities have increased to £759,985 (2021: £491,229 cash outflow);

· Group net debt position (cash less debt) is (£5,032,945) (2021: (£404,576) net debt);

· Company net debt position (cash less debt) is (£2,659,817) (2021: £6,608 net cash);

· Basic and diluted loss per share of £0.003 for December 2022 (2021: basic and diluted £0.009);

· Headline loss per share of £0.0009 for December 2022 (2021: headline loss per share of £0.0007).

Operational highlights in the 2022 year to date

· Solidified our position in sectors like Waste to Energy, Biofuel, Reserve Power, and Renewable Energy Generation Long Duration Battery Storage, focusing on Southern Africa and the UK.

· Proceeded with the joint venture agreement to jointly develop a portfolio of Waste to Energy projects in South Africa with Industrial Green Energy Solutions (Pty) Ltd, which will initially develop a phased c. 8MW project for an industrial client, to be followed by six other projects at different sites, to a total generation of up to 50MW. A 20-year conditional Power Purchase Agreement secured for initial 2.7 MW phase.

· Ongoing intention to divest from coal assets while retaining energy projects through innovative biofuel technology. Recent testing showed the superior potential of biomass (bio coal) compared to conventional coal in industrial boilers.

· Initiated a technical study to assess the feasibility of replacing fossil fuels with renewable biofuel. In this regard, Kibo has appointed an experienced international biomass and biofuel consultant to evaluate the economic and operational feasibility of implementing bio coal as a fuel replacement for utility-scale power projects.

· In discussions with the Tanzanian government for the Mbeya Power Project, aligning with the Tanzanian Power System Master Plan. A renewed MOU with TANESCO outlines the framework for finalizing power purchase and implementation agreements.

· Partnership with Enerox GmbH secures qualified exclusive rights to deploy VRFB Energy Storage Systems, advancing our commitment to sustainable energy.

· Entered into a share purchase agreement to acquire Shankley Biogas Limited, securing the rights to the Southport project-a 12 MW Waste to Energy initiative near Liverpool, UK. The project aims to generate bio-methane, power a 10 MW CHP plant, and a 2 MW battery storage facility.

Post period highlights and Outlook

· Kibo appointed Beaumont Cornish to the Company as its Nominated Advisor (Nomad) on 11 January 2023 following the resignation of RFC Ambrian as Company Nomad on 9 December 2022.

· Kibo appointed Ajay Saldanha to the Board as a director of the Company on 11 January 2023.

· Kibo appointed Peter Oldacre as Kibo Group Business Development Executive on 10 March 2023.

· Kibo announced a potential new revenue stream on 17 January 2023 for its initial project within the IGES waste to energy joint venture, targeting the production of synthetic oil from non-recyclable plastic waste (in addition to the previously reported production of electricity from syngas), which promises significant added benefits.

· Kibo settled outstanding creditors by way of issuing 14,025,314 ordinary shares at 0.14 pence per share, of par value €0.001 each (the "Settlement Shares") to a service provider in payment of an outstanding invoice for value of £19,635.44.

· The Kibo 7% Convertible Loan Note Instrument was redeemed with the agreement of Noteholders for outstanding balances amounting to £714,517 (principal and interest) as of 28 February 2023 on 11 April 2023 for Kibo shares to satisfy one of the conditions precedents to the re-profiling of the Kibo Facility Agreement signed on 10 April 2023 (refer below).

· Kibo announced a reprofiling of the Bridge Loan Facility Agreement signed with an Institutional Investor on 16 February 2022 and for which the maturity date was subsequently extended from its original date of 16 June 2022 to 28 April 2023. The Reprofiling Agreement saw £1,113,980 of the outstanding balance on the existing bridge loan facility converted into a new 24-month term loan (the Reprofiling Agreement) following the completion of the conditions precedent under the Reprofiling Agreement which were satisfied on 25 April 2023 and announced on 26 April 2023. Kibo has also awarded 1,262,300,283 warrants to the Institutional under the agreed reprofiling terms of the Facility.

· Kibo repriced all unexercised and outstanding warrants in the Company to the amount of 1,128,024,625 such that they are exercisable at £0.001 (0.1p). Pursuant to the warrant repricing, Kibo received warrant notices to exercise 284,524,625 Kibo warrants for which 284,524,625 ordinary Kibo shares of €0.001 at a price of £0.001 (0.1p) will be issued.

· Kibo announced on 2 May 2023 that recent verification testing on selected biomass types demonstrate that the selected biomass types not only match but significantly outperforms conventional coal in many specification categories used in industrial boilers. These verification results have shown more favourable outcomes in terms of specifications compared to previous tests.

· Kibo announced on 18 May 2023 that the potential to fuel its legacy coal power plant projects with biofuel is being advanced alongside renewed negotiations on a power purchase agreement with the Tanzanian Government in relation to the Mbeya Power Project. Furthermore, Kibo announced the establishment of a Joint Technical Committee with TANESCO to ensure the key milestones, as set out in the MOU, are met.

· Kibo's subsidiary, MAST Energy Developments plc (MED) announced on 18 May 2023 that it has recently concluded a Heads of Terms ('HoT') with regard to a new Joint Venture ('JV') agreement between MED and a new institutional investor-led consortium (the 'Institutional Investor'). Under the HoT, it is envisaged that the Institutional Investor will inject all required investment capital into the JV with an expected total investment value of c. £33.6m, with no funding contribution required from MED.

· The Group continues to focus on its revised renewable energy strategy in order to align with global requirements.

This announcement contains inside information as stipulated under the Market Abuse Regulations (EU) no. 596/2014 ("MAR"). For further information please visit www.kibo.energy or contact:

I am pleased to provide a review of Kibo Energy PLC ("Kibo" or the "Company") and its subsidiaries' (together with Kibo, the "Group") activities for the 2022 FY reporting period and to present our full-year audited accounts for 2022.

Kibo, still a relatively newcomer to the sustainable clean and renewable energy sector, has made significant progress in waste-to-energy, biofuel, reserve power, and battery storage projects. Despite significant market challenges, Kibo remains resilient, focused and committed to its goals. The Company has successfully transitioned into a clean / renewable energy company and has acquired a strong project portfolio in the UK and Southern Africa.

To provide context, I will offer a concise summary of the year's activities outlined in more detail elsewhere in this annual report:

· Joint venture with IGES converts un-recyclable plastic into syngas, secures power purchase agreement for waste-to-energy facility;

· Kibo acquires Shankley Biogas Limited and invests in Mast Energy Developments PLC for waste-to-energy and reserve energy projects;

· Initiates work program to establish the viability of substituting coal with biofuel in thermal power plants and renews MoU with Tanzanian Government for the Mbeya Power Project;

· Entered Long Duration Energy Storage sector through strategic agreement with Enerox GmbH and establishes joint venture with National Broadband Solution (Pty) Ltd; and

· New appointments made to the board, retirements of long-serving directors.

Kibo is pioneering the energy landscape in its approach to the Company's strategic shift towards sustainable and renewable assets. Through groundbreaking ventures and partnerships, we are driving advancements in waste-to-energy, biofuel, reserve power, and long-duration battery storage. With a forward - looking focus on innovation to address the challenges in maintaining stable base load generation while transitioning to sustainable renewable energy generation solutions, Kibo is contributing to a productive, greener and brighter future.

In terms of International Financial Reporting Standards (IFRS), intangible assets with an indefinite life must be tested for impairment on an annual basis. The change in the Group's strategy during 2021 to move toward renewable energies coupled with global divestments in fossil fuel assets, resulted therein that the Group recognised impairment of £5,504,216 (2021: £20,088,240) related to its coal assets. The result for the reporting period amounted to a loss of £10,908,524 for the year ended 31 December 2022 (31 December 2021: £23,148,155) as detailed further in the Statement of Profit or Loss and Other Comprehensive Income, and further details on financial activities are detailed elsewhere in the Annual Report. The loss is primarily due to the impairment of non-current assets, referred to above.

In closing, I would like to acknowledge the support of our shareholders and all stakeholders as we continue with advancing our new project portfolio. I would like to thank our Board, as well as management and staff, for their continued support and commitment in advancing Kibo.

Introduction

During 2022, the Group demonstrated its firm commitment to transition the Group into a sustainable renewable energy company, despite challenging conditions. We solidified our position in sectors like Waste to Energy, Biofuel, Reserve Power, and Renewable Energy Generation Long Duration Battery Storage. Focusing on Southern Africa and the UK, our achievements have been significant.

Operations

Sustineri Energy Joint Venture - Waste-to-Energy Project (South Africa)

Kibo and Industrial Green Energy Solutions (IGES) have formed Sustineri Energy (Pty) Ltd, aiming to generate over 50 MW of electricity in South Africa through waste-to-energy projects. Pyrolysis technology will convert non-recyclable plastics into syngas.

· Kibo provides £560,000 financial support, including an equity loan.

· First phase: phased construction of c. 8 MW Waste to Energy facility in Gauteng.

· 20-year conditional Power Purchase Agreement secured for initial 2.7 MW phase.

· JV explores synthetic oil production for additional revenue and profitability from the original project design. Viability assessments are being conducted; a feasibility optimisation study is underway for oil integration into original design.

· Kibo identifies additional waste-to-energy opportunities in pursuit of c. 50 MW capacity.

· Lesedi Nuclear Services selected as strategic partner for EPC and O&M.

Southport - Waste-to-Energy Project (UK)

Kibo has entered into a share purchase agreement to acquire Shankley Biogas Limited, securing the rights to the Southport project-a 12 MW Waste to Energy initiative near Liverpool, UK. The project aims to generate bio-methane, power a 10 MW CHP plant, and a 2 MW battery storage facility. Shankley Biogas Limited has secured a favourable conditional Power Purchase Agreement (PPA) and Gas Purchase Agreement (GPA) with a reputable buyer. The project has received full planning permission and has established grid and gas connection points. Financial estimates demonstrate promising returns and value for the project.

With reference to the qualified audit opinion on the Company's investment in Shankley Biogas Limited, Kibo was unable to provide the auditor with sufficient appropriate audit evidence about the carrying values of the investment in Shankley and its associated assets and liabilities, as included in the Group and Company Balance Sheet as at 31 December 2022. This is because of a dispute with the vendor due to the vendor's inability to provide sufficient and reliable financial information for Shankley Biogas Limited, despite numerous requests in this regard, and the Company being unable to agree an option to lease agreement in respect of the site with the vendor. The Company is currently engaged in constructive negotiations to reach an amicable resolve for the ongoing dispute and is confident that this will be settled soon.

Legacy Coal Projects - Tanzania, Botswana and Mozambique and Biofuel Initiative

Kibo is actively pursuing sustainable fuel sources for its energy projects in Tanzania, Botswana, and Mozambique.

· Kibo aims to divest from coal assets while retaining energy projects through innovative biofuel technology. Recent testing showed the superior potential of biomass (bio coal) compared to conventional coal in industrial boilers.

· The company has initiated a technical study to assess the feasibility of replacing fossil fuels with renewable biofuel. In this regard, Kibo has appointed an experienced international biomass and biofuel consultant to evaluate the economic and operational feasibility of implementing bio coal as a fuel replacement for utility-scale power projects.

· Kibo is in discussions with the Tanzanian government for the Mbeya Power Project, aligning with the Tanzanian Power System Master Plan. A renewed MOU with TANESCO outlines the framework for finalizing power purchase and implementation agreements.

Long Duration Energy Storage 

Kibo's CellCube Vanadium Redox Flow Battery Energy Storage Systems (VRFB BESS) strengthens the Company's Southern Africa project development with durable, long-duration energy storage for renewables, addressing key aspects such as load shedding and grid stability.

· The partnership with Enerox GmbH secures qualified exclusive rights to deploy VRFB Energy Storage Systems, advancing our commitment to sustainable energy.

· Kibo's role as a project developer includes the prospective manufacturing specific CellCube BESS, driving our clean energy solutions.

Investments

Mast Energy Developments PLC ("MED")

Since its IPO in April 2021, MAST Energy Developers (MED), in which Kibo holds a 57.86% investment has been steadily advancing towards its goal of establishing a portfolio of flexible power sites in the UK, aiming for a capacity of up to 300 MW. MED's recent addition of the Hindlip Lane and Stather Road projects, alongside existing gas peaker plants, brings them closer to this target. The company's announcement of a heads of terms for a Joint Venture Agreement, with a significant investor providing an investment of c. £33.6 million, positions MED to accelerate project acquisition and achieve their capacity goal within the next two years.

Further information on these projects and the latest MED updates can be found on its website at www.med.energy.

Katoro Gold PLC - Mineral Exploration

During 2022, Kibo's 20.88% investment in Katoro Gold PLC yielded progressive results in their projects in Tanzania and South Africa. While the planned listing and IPO for the Blyvoor gold tailings joint venture was delayed, Katoro is actively seeking funding options for its development. In Tanzania, Katoro made progress with drilling phases in the Haneti Nickel-PGM Project and reestablished a joint venture interest in the Imweru Gold Project, restructuring the transaction with Lake Victoria Gold for the asset's development.

Further information on the Katoro projects and the latest updates can be found on its website at www.katorogold.com.

Corporate

In 2022, Kibo underwent financial and organizational changes, issuing shares to settle invoices, fees, and debts.

· Share Issuance: Kibo issued 108,540,021 new ordinary shares at various prices to settle invoices, implementation fees, and outstanding debts.

· Director and Management Changes: In a series of key transitions, Christian Schaffalitzky and Chris Schutte retired, and Andreas Lianos resigned from their director positions. Ajay Saldanha joined the Board in early 2023, while Pieter Krügel took on the role of CEO at Mast Energy Developments PLC. Cobus van der Merwe assumed the position of Kibo Group CFO, and Peter Oldacre was appointed as the Group Business Development Executive. Shard Capital Partners LLP became a joint broker alongside Hybridan LLP, and Beaumont Cornish took over as the new Nomad. These changes aimed to fortify internal management capacity and support strategic growth.

Despite Kibo's proven ability to secure ongoing funding, unexpected and uncontrollable obstacles during Q4 2022 disrupted its annual funding plans, causing a loss of time and moreover, business continuity.

· The Company faced an initial setback with the unexpected resignation of the previous NOMAD, resulting in a mandatory suspension from AIM and a pause in closing planned funding initiatives.

· Additionally, major shareholders faced voting challenges arising from a technical problem within the Euroclear system preventing them from voting from outside the EU jurisdiction during critically important extraordinary general meetings.

· Despite the correction of, and recovery after the NOMAD and Euroclear issues and the subsequent resumption of funding plans, this created severe delays in securing funding, resulting in extensive operational disruption and progressive execution. Nevertheless, the situation was contained, and the company is back on track.

Kibo remains confident in its ability to adequately address its short and medium terms funding requirements through various strategic partnerships and creative funding solutions. Recent success in this regard is demonstrated by the various initiatives set out below:

· Convertible Loan Note Redeemable Instrument (CLN): In January 2022, a CLN was issued to settle debts. The maturity date was extended multiple times, with a final date set for April 28, 2023. Noteholders converted £714,517 worth of Notes into 510,369,286 Kibo shares.

· Bridge Loan Facility: In February 2022, Kibo secured a bridge loan facility of £1 million with an institutional investor. The loan carried a fixed coupon interest rate of 3.5% and was originally due for repayment in June 2022. To settle a facility implementation fee of £70,000, shares were issued. The repayment date was extended to April 2023, and the investor gained the right to trade Mast Energy Developments PLC shares worth up to £250,000, offsetting the outstanding amount.

· Reprofiling Agreement: Kibo implemented a Reprofiling Agreement on April 11, 2023, converting £1,113,980 of the bridge loan facility into a 24-month term loan. Additionally, Convertible Loan Notes were converted to shares, warrants were repriced and exercised, and new warrants were awarded. The agreement took effect on April 25, 2023, with the issuance of new warrants and shares.

All activities derive from continuing operations.

The Company has no recognised gains or losses other than those dealt with in the Statement of Profit or Loss and Other Comprehensive Income.

1. Segment analysis

IFRS 8 requires an entity to report financial and descriptive information about its reportable segments, which are operating segments or aggregations of operating segments that meet specific criteria. Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the chief operating decision maker. The Chief Executive Officer is the chief operating decision maker of the Group.

Management currently identifies individual projects as operating segments. These operating segments are monitored, and strategic decisions are made based upon their individual nature, together with other non-financial data collated from exploration activities. Principal activities for these operating segments are as follows:

Geographical segments

The Group operates in six principal geographical areas being Tanzania (Exploration), Botswana (Exploration), Cyprus (Corporate), South Africa (Renewable Energy), United Kingdom (Renewable Energy) and Ireland (Corporate).

All revenue generated was from the United Kingdom geographical area with the only customer being Statkraft Markets GMBH.

2. Revenue

Revenue comprised ancillary electricity sales from operational testing of the renewable energy operations of MAST Energy Developments PLC in the United Kingdom.

3. Investment and other Income

During the financial year the Group recorded other income resulting from the revaluation of derivative liabilities. These liabilities were recognised as part of convertible loan notes entered into during the financial year. The derivative liability was fair valued at year end and resulted in a gain for the financial year.

4. Finance costs

5. Loss on ordinary activities before taxation

6. Staff costs (including Directors)

The average monthly number of employees (including executive Directors) during the period was as follows:

7. Directors' emoluments

The emoluments of the Chairman were £ 55,950 (2021: £ 47,578). The emoluments of the highest paid director were £164,726 (2021: £129,347).

Directors received shares in the value of £Nil during the year (2021: £Nil) and warrants to the value of £Nil (2021: £Nil) during the year.

Key management personnel consist only of the Directors. Details of share options and interests in the Company's shares of each director are shown in the Directors' report.

The following table summarises the remuneration applicable to each of the individuals who held office as a director during the reporting period: