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Valiant Investments Plc (VALP)

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Friday 28 June, 2019

Valiant Investments Plc

Final Results to 30 November 2018

28 June 2019

VALIANT INVESTMENTS PLC
To be renamed Eurocann International plc)
(“Valiant”, the “Group”, or the “Company”)

AUDITED FINAL RESULTS FOR THE 12 MONTHS ENDED 30 NOVEMBER 2018

The Directors present the Strategic Report for the year ended 30 November 2018.
Fair review of the business
Valiant Investments plc is an investment company focused on venture capital through investing in small, fledgling companies that demonstrate the opportunity for attractive levels of growth and returns on investment. Valiant Investments plc is listed on the NEX Exchange Growth Market.

The Company held a general meeting on 21 June 2019 at which a number of resolutions were passed which lay the foundations for a new direction for the Company. Firstly, Mr J Ross and Mr S T Bhohi were appointed to the board of directors. Mr E Taylor stood down as a director and will continue as company secretary. The board of directors would like to thank Mr E Taylor for his many years of service to the Company.

The Company's shares were consolidated on a basis of 1 for 150 and the simultaneously sub-divided into shares of £0.0001 each. The Company placed 17,516,162 ordinary shares at £0.015 raising £262,742 before expenses.

A resolution was also agreed to dispose of the Company's 84.7% interest in Flamethrower plc for a nominal consideration of £1 to Mr C Windham. In return, Mr C Windham agreed to forgive an amount of approximately £75,000 owed to him by the Company. Furthermore, a resolution was agreed to waive an amount of £154,520 owed by Flamethrower plc to the Company.

The Company will also change its name to Eurocann International plc.

It is important that I elucidate further as to why we have decided to proceed with this restructuring of Valiant. During the course of 2018, one of Valiant’s key financial backers shut up shop, thereby cutting off a crucial component of Valiant’s modus operandi that had been key to its development, and in particular that of its subsidiary company, Flamethrower plc. By not having a strong cash position, Valiant had been reliant upon regular modest fundraisings to meet its ongoing financial obligations and to provide funding to its subsidiary, Flamethrower, to enable it to grow through both acquisition and organically.

Such a strategy was delivering, as evidenced by the growth in turnover that Flamethrower has seen since its formation. Our objective had always been to get the turnover and profit of Flamethrower to a certain level whereby there would be no requirement for Valiant to continue raising capital and the Group would be self-sufficient.

Unfortunately our financial backers ceasing to do business has meant that the growth trajectory of Flamethrower had flatlined, with the costs of being a public company devouring the free cash flow generated by this subsidiary. The failure to reach critical mass and to be self sufficient led to us having to look at alternate plans that can deliver value for our shareholders.

Therefore I was very pleased to announce on 24 June, a new direction for Valiant will see the Company renamed Eurocann International plc, recapitalised as described above, the board strengthened through the appointment of new directors, and with plans to move into the medicinal cannabis market.

In many ways this is a natural market for the Company to pivot to, having held investments in Canadian cannabis companies for a number of years. Whilst we exited the position in Tetra Bio Pharma at the start of 2019, we do continue to hold a small number of shares in North Bud Farms Inc, a Canadian Securities Exchange company constructing a modern purpose-built cannabis production facility located on 95 acres of agricultural land in Low, Quebec. North Bud is focussed on pharmaceutical and food grade cannabinoid production in preparation for the legalization of edibles and ingestible products scheduled for October 2019.
 

   

I am excited that Valiant is poised to move into the medicinal cannabis market. The importance of the endocannabinoid system in humans and the role this plays in our health is only starting to be fully appreciated. The hemp plant contains over 100 different phytocannabinoids, one of which, cannabidiol, more commonly known as CBD, has become recognised for its potential health benefits. However, it is important to understand the full spectrum of phytocannabinoids, and how they complement one another, because it is recognised that CBD is not the sole solution to supporting the endocannabinoid system as a whole.

Our bodies produce cannabinoids that share a similar structure to the cannabinoids found in cannabis, and if our bodies do not produce sufficient amounts to feed our receptors, then various conditions and illnesses can ensue. It is no wonder, therefore, at the level of global interest in the medicinal cannabis market and the number of companies now focussed on this industry. Understanding and targeting our endocannabinoid system is likely to dominate medicine and nutrition for at least the next couple of decades, and it is exciting that we will be positioned in this transformative industry.

Turning to Valiant’s subsidiary company, Flamethrower plc, which was disposed of under the restructuring:
 
Investments

Flamethrower plc

The prime objective of Flamethrower during the financial year was to expand its digital asset portfolio, which was achieved through the acquisition of two websites, namely National-Preservation.com in March 2018, and xpGameSaves.com in June 2018.

National-Preservation.com is a forum website that is focused primarily on British railway heritage, providing users a platform to discuss a wide range of topics associated with railways and British heritage. It was established in 2005 and has grown to become the leading forum for the discussion of railway and heritage topics in the UK. The website was acquired for a cash consideration of US$17,500.

xpGameSaves.com is a website that provides news and opinion on the gaming industry to users, as well as having an active forum. It was established in 2009, and has grown to have over 1 million registered users, and was acquired for a cash consideration of US$11,501.

The prime websites in Flamethrower’s portfolio are National-Preservation.com, MinecraftCommand.Science, xpGameSaves.com, and FootballTipsFC.com, and are monetized, in the case of the first three, through serving ads to users, and through paid subscription in the case of FootballTipsFC.com. The performance of the websites in the period can be described as satisfactory.

Flamethrower’s app portfolio continues to perform well, and the portfolio for Apple devices has had over 1.3 million downloads since we commenced its construction in May 2016. The app portfolio is monetized through a combination of in-app purchases, direct sale, and through serving ads to users.

During the first half of the financial year we updated a number of the Mac apps from 32-bit binary to 64-bit binary, so as to ensure they perform optimally on the modern Macs with their 64-bit processors, whilst we also continue to update other apps in the portfolio.

There have been no additions or disposals of domain names since the last update to shareholders at the time of the interim results in August 2018. Flamethrower continues to hold ComputerPlace.com, WhatClub.com, HottestThing.com, ScrapHeaps.com, MediaFeeds.com, LockStore.com, Gungy.com, GamingBooth.com, LQEX.com, and UFBS.com.

In terms of the investment portfolio, I reported in the interim results of August 2018 that there had been one disposal, being the 1,125 shares held in Caledonia Mining. Since this point the rest of the investment portfolio has been sold, so as to assist with meeting the financial obligations of the Group.

   

Slot Right In Limited

Slot Right In Ltd was formed in November 2016 as a wholly-owned subsidiary of Flamethrower plc, for the purpose of serving as the social casino app and gaming division of the group. Whilst a handful of initial apps were launched, this division never took off in the manner originally anticipated at formation, and was put on the backburner.

At the time of the interim results in August 2018, we advised that Slot Right In had recently entered into a joint venture with BlueWater Publishing (“BlueWater”), an independent American-based app developer, to construct a portfolio of high-end social casino apps for iOS and Android devices.

The initial social casino app under the joint venture, 777 Lucky Slot Casino, was released for iOS devices in November 2018. From a financial perspective its performance to date has been underwhelming, with the app fluctuating between being loss-making or just breaking even each month. We are working with BlueWater to try and address the disappointing financial performance through introducing new levels to the game, and trying to improve the monetization.

It is too early to fully conclude on the success or otherwise of this joint venture. Whilst it is disappointing that we are yet to see a return on our investment into the venture, we remain optimistic that its performance will improve, and that it will become profitable.

Outside of the joint venture our intention is to work toward building a portfolio of social casino apps for iOS and Android devices, but the pace at which this is achieved is highly dependent on having the financial resources to meet such investment.

All Star Minerals plc

The £20,000 convertible loan note with NEX Exchange Growth Market company, All Star Minerals plc, continues to be outstanding, with the interest due on the note from May 2017, payable in the form of ordinary shares of All Star, still outstanding. Valiant is currently awaiting the issuance of 4,000,000 shares in All Star in respect of the interest earned on the loan note in the period to May 2018, and a further 4,000,000 shares in respect of the interest earned on the loan note in the period to May 2019.

Valiant will hold a total of 18,260,712 shares in All Star once the shares earned in respect of the interest on the loan note have been issued.

All Star is an investment vehicle listed on the NEX Exchange Growth Market that is seeking a transaction, and which holds 5,519,545 shares in NQ Minerals plc, shares in which are also listed on the NEX Growth Market. At the time of writing, shares in NQ Minerals are trading at 4.5p, which values All Star’s shareholding at £267,697.

In its most recent update, being its interim results to 30 June 2018, All Star reiterated that it continues to review potential opportunities to ensure that a suitable transaction is secured to move the business forward.
Outlook

The outlook for Valiant was primarily dependent on shareholders approving the resolutions at the General Meeting to approve the recapitalisation of the Company and the new direction into the medicinal cannabis sector.

With shareholders having voted in favour these resolutions, I can say with some confidence that I feel the Company has an optimistic and exciting future.

Having a company that is well capitalised, with a strong board, should ensure that we can complete a transaction or transactions that will be transformational to the future of the Company.

I look forward to updating shareholders on developments in the weeks ahead, and am cautiously optimistic about the future.

The directors do not recommend payment of a further dividend.

The audited results noted a material uncertainty relating to going concern:

“The Directors have considered the cash flow requirement of the company over the next 12 months from the date of signing this report. If the company is to continue to meet its operational costs, it will be necessary to continue to raise additional funds. On 21 June 2019, a resolution was passed to place £262,742 (before expenses) of ordinary shares to support the Company's on going operations and future investment strategy. Whilst it is difficult in the current economic climate to generate the extra funds required, the Directors consider that the Company has sufficient funds to meet the funding requirements for the next 12 months and therefore believe that the going concern basis is appropriate for the preparation of the financial statements.”

The Directors of Valiant accept responsibility for the content of this announcement.

ENQUIRIES:

Company

Valiant Investments plc
(To be renamed Eurocann International plc)
Conrad Windham
Telephone: 01366 381541

Corporate Advisor
Peterhouse Capital Limited
Guy Miller / Mark Anwyl
Telephone: 020 7220 9796

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 NOVEMBER 2018

2018 2017
£ £
Turnover 109,578 57,832
Cost of sales (70,137) (47,326)
Gross profit 39,441 10,506
Administrative expenses (186,109) (254,942)
Operating loss (146,668) (244,436)
Interest receivable and similar income 6,317 4,000
Listed investments movements (1,019) 24,675
Loss before taxation (141,370) (215,761)
Taxation - -
Loss for the financial year and total comprehensive income (141,370) (215,761)
Loss for the financial year is attributable to:
- Owners of the parent company (139,599) (212,038)
- Non-controlling interests (1,771) (3,723)
(141,370) (215,761)
Total comprehensive income for the year is attributable to:
- Owners of the parent company (139,599) (212,038)
- Non-controlling interests (1,771) (3,723)
(141,370) (215,761)
The Profit And Loss Account has been prepared on the basis that all operations are continuing operations.
Basic and diluted earnings per share (pence) (0.01) (0.02)

CONSOLIDATED BALANCE SHEET

AS AT 30 NOVEMBER 2018

2018 2017
£ £ £ £
Fixed assets
Intangible assets 112,396 141,154
Tangible assets 3,666 4,719
Investments 63,294 60,519
179,356 206,392
Current assets
Debtors 22,406 27,508
Investments 4,130 -
Cash at bank and in hand 1,289 3,606
27,825 31,114
Creditors: amounts falling due within one year (76,108) (40,063)
Net current liabilities (48,283) (8,949)
Total assets less current liabilities 131,073 197,443
Capital and reserves
Called up share capital 1,208,159 1,158,159
Share premium account 1,067,510 1,042,510
Profit and loss reserves (2,141,152) (2,001,553)
Equity attributable to owners of the parent company 134,517 199,116
Non-controlling interests (3,444) (1,673)
131,073 197,443
The financial statements were approved by the Board of Directors and authorised for issue on ......................... and are signed on its behalf by:
..............................
Mr C  Windham
Director

COMPANY BALANCE SHEET

AS AT 30 NOVEMBER 2018

2018 2017
£ £ £ £
Fixed assets
Investments 141,354 138,679
Current assets
Debtors 164,050 183,599
Cash at bank and in hand 40 951
164,090 184,550
Creditors: amounts falling due within one year (73,702) (39,107)
Net current assets 90,388 145,443
Total assets less current liabilities 231,742 284,122
Capital and reserves
Called up share capital 1,208,059 1,158,059
Share premium account 1,067,510 1,042,510
Profit and loss reserves (2,043,827) (1,916,447)
Total equity 231,742 284,122
As permitted by s408 Companies Act 2006, the Company has not presented its own profit and loss account and related notes. The Company’s loss for the year was £127,380 (2017 - £189,431 loss).
The financial statements were approved by the Board of Directors and authorised for issue on ......................... and are signed on its behalf by:
..............................
Mr C  Windham
Director
Company Registration No. 06010900

COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 NOVEMBER 2018

2018 2017
£ £ £ £
Cash flows from operating activities
Cash absorbed by operations (79,911) (341,223)
Investing activities
Purchase of fixed asset investments (1,822) (4,000)
Interest received 4,000 4,000
Dividends received 1,822 -
Net cash generated from/(used in) investing activities 4,000 -
Financing activities
Proceeds from issue of shares 75,000 328,250
Net cash generated from financing activities 75,000 328,250
Net decrease in cash and cash equivalents (911) (12,973)
Cash and cash equivalents at beginning of year 951 13,924
Cash and cash equivalents at end of year 40 951

   

2018 2017
£ £ £ £
Cash flows from operating activities
Cash absorbed by operations (33,391) (208,559)
Cash flow from investing activities
Purchase of intangible assets (43,469) (129,236)
Proceeds on disposal of intangibles 1,263 530
Purchase of tangible fixed assets (213) (3,949)
Purchase of fixed asset investments (969) -
Other investments and loans made (19,102) -
Proceeds from other investments and loans 16,247 -
Dividends received 2,317 -
Net cash used in investing activities (43,926) (132,655)
Cash flow from financing activities
Proceeds from issue of shares 75,000 328,350
Net cash generated from financing activities 75,000 328,350
Net decrease in cash and cash equivalents (2,317) (12,864)
Cash and cash equivalents at beginning of year 3,606 16,470
Cash and cash equivalents at end of year 1,289 3,606

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