TIDMJADE

RNS Number : 1453O

Jade Road Investments Limited

29 September 2023

29 September 2023

JADE ROAD INVESTMENTS LIMITED

(" Jade Road Investments ", " JADE ", the " Company " or the " Group ")

INTERIM CONSOLIDATED RESULTS FOR THE SIX MONTHSED 30 JUNE 2023

Jade Road Investments Limited (AIM: JADE), the London quoted pan-Asian diversified investment vehicle focused on providing shareholders with attractive uncorrelated, risk-adjusted long-term returns, is pleased to announce its interim results for the six months ended 30 June 2023.

Financial Highlights:

-- Total income decreased to US$0.59 million and was derived from interest income as dividend income from investees, as opposed to interest income from Jade's own cash (H1 2022: US$1.56 million).

   --   Net loss of $ 1.4 million (H1 2022: US$ 1.02 million profit). 

-- Consolidated basic / diluted loss per share of US$ 0.75 cents (H1 2022: profit per share US$ 0.88 cents).

-- Consolidated NAV at 30 June 2023 increased by 3% to US$ 15.46 million/GBP 12.69 million (31 December 2022: US$15.13 million/GBP 12.4 million).

   --   NAV per share at 30 June 2023 US$ 0.05 (GBP 0.04) (31 December 2022: US$0.13 / GBP 0.11 ). 
   --   Period end cash position of US$ 0.1 million (31 December 2022 : US$ 0.3 million). 

Investment and Operational Highlights:

   --   Future Metal Holdings Limited ( "Future Metal ") 

o Pursuant to its latest Investment Policy, the Company has been actively seeking divestment opportunities for this asset.

o In August 2023, the Quarry successfully renewed its mining licence for another two years, which extended the validity period to August 2025. As the Quarry's mining zone covers secondary forestland for public welfare and farming land, the mining zone is narrowed down from 2.3 square kilometres to 1.7 square kilometres. However, the mineral reserves of the Quarry have not been negatively impacted.

o As of the release of this interim report, the Company is finalising the share purchase agreement and other transaction documents with the local buyer.

   --   Meize Energy Industries Holdings Limited (" Meize ") 

o The Company is seeking a full divestment concerning the remaining Series B preferred shares it holds after the successful completion of the partial divestment in August 2022

o As of Q2 2023, as customer contracts were secured, Meize's Xinjiang Plant produced 840 wind turbines and its Inner Mongolia Plant produced 360 wind turbines.

o Based on Meize's management team's estimation, the total output value of Meize would amount to USD21.0MM by the end of 2023.

   --   DocDoc Pte Ltd (" DocDoc ") 

o DocDoc is an asset-light and intellectual property-heavy pan-Asian insurance fintech company.

o DocDoc's management team aims to generate SGD5MM from gross insurance premiums in Singapore by the end of 2023, which would be first revenues for the business.

   --   Outlook: 

o Future investments will be made in asset backed income-generating investments as the Company disposes of all of its legacy Asia-based assets and your Board hopes to be able to make further announcements on this in the near future.

FOR FURTHER INFORMATION, PLEASE CONTACT:

 
 Jade Road Investments Limited                +44 (0) 778 531 5588 
 John Croft 
 
 WH Ireland Limited - Nominated 
  Adviser                                     +44 (0) 20 7220 1666 
 James Joyce 
 Andrew de Andrade 
 
 Hybridan LLP - Corporate Broker              +44 (0) 203 764 2341 
 Claire Noyce 
 
 Lionsgate Communications - Communications 
  Adviser                                     +44 (0) 779 189 2509 
 Jonathan Charles 
 
 

About Jade Road Investments

Jade Road Investments Limited is quoted on the AIM Market of the London Stock Exchange and is committed to providing shareholders with attractive uncorrelated, risk-adjusted long-term returns from a combination of realising sustainable capital growth and delivering dividend income.

The Company is focused on asset-backed and revenue-generating investment opportunities which will provide more certainty when predicting future cash flow. This allows the Company to plan an appropriate dividend policy in due course. It is believed that this will allow for the optimal delivery of shareholder value in the form of the payment of a safe, consistent dividend yield at an attractive spread to other yielding options, while growing the underlying capital base of the Company.

The Company's investment manager, Harmony Global Partners Limited ("Harmony Capital"), will advise the Board and the Company on the orderly disposal of the legacy portfolios and advise on any proposed new investments to be made in accordance with the Company's new Investment Policy recently approved by shareholders.

Harmony Capital shall, subject to the overall supervision and control of the Board, also undertake general administrative, investor relations, marketing, portfolio management and risk management functions for the Company.

Chairman's Statement

As mentioned in my statement in our 2022 Annual Results, 2023 is a year of ongoing transition for the Company as it moves away from its previous focus on Asia to a more geographically diverse investment strategy characterised by investing in a portfolio of high yielding assets with a low correlation to most markets or major asset classes.

In February of this year, the Company announced the completion of an equity fundraise which was underwritten in its entirety by Heirloom Investment Management LLC ("HIM"). The gross placing amount for this fundraise was $1,750,000.

In line with its new amended investment strategy, the Company then announced in April that it had invested USD500,000 in Heirloom Investment Fund SPC - Heirloom Fixed Return Fund SP, managed by HIM.

The new fund is geographically diverse with low correlation to most markets or major asset classes, such as equities, fixed income and real estate. Current themes include asset-backed lending, equipment leasing, agriculture (farm business), niche real estate (US single family rental), infrastructure, litigation finance and music royalties.

An important element of transitioning the Company away from its previous Asian focus is to actively seek buyers for its legacy assets. In order to support this, the remuneration fee structure for the Company's Investment Manager Harmony Capital has been changed to comprise of a sharply reduced fixed annual management fee of US$350k, alongside an incentive fee structure for asset disposals. Incentive fees in this regard are only payable after a minimum net sales value of US$6m has been reached.

Progress on asset disposals has inevitably been slow, given their common characteristics of being essentially private equity in nature. However, the Investment Management team have been working closely with all our major assets with a view to finding suitable exits, and I am hopeful that announcements on some core asset disposals can be made during this year.

An equity fundraise of $1,050,000 was also completed in September 2023 with new shares placed at a significant premium to the Company's then share price.

Finally, on behalf of the board, I would like to extend my thanks to all of our shareholders for your continued support.

The principal assets as of 30 June 2023 are detailed below:

 
 Principal      Effective   Instrument     Valuation   Credit     Cash       Equity        Fair          Provision   Valuation 
  assets         interest    type           at 31       income    receipts   investment/   value          US$         at 30 
                 %                          December    US$       US$        other         adjustment     million     June 
                                            2022        million   million    movement      US$ million                2023 
                                            US$                              US$ million                              US$ 
                                            million                                                                   million 
 Future 
  Metal 
  Holdings                   Structured 
  Limited       84.8          Equity       5.3         0.3        -          -             -               (0.3)     5.3 
 
 Meize Energy                Redeemable 
  Industrial                 convertible 
  Holdings                   preference 
  Ltd           6.3          shares        8.8         -          -          -             -               -         8.8 
 
 DocDoc                      Convertible 
  Pte Ltd       -             Bond         2.8         0.1        -          -             -               (0.1)     2.8 
 
 Infinity 
  Capital                    Secured 
  Group         -             Loan Notes   1.4         0.2        -          -             -               (0.2)     1.4 
 
 Heirloom 
  Investments   -                          -           -          0.5        -             -               -         0.5 
 
 Project 
  Nicklaus      -                          1.8         -          -          -             (0.1)           -         1.7 
 
 Corporate 
  debt          -                          (3.9)       -          -          -             -               -         (3.9) 
 
 Other 
  liabilities   -                          (1.4)       -          -          0.2           -               -         (1.2) 
 
 Cash                                      0.3                -   1.7        (1.9)         -             -           0.1 
 
 
 Total N et Asset 
  Value                                      15.1      0.6        2.2        (1.7)         (0.1)         (0.6)       15.5 
--------------------------  ------------  ----------  ---------  ---------  ------------  ------------  ----------  ---------- 
 
 

Future Metal Holdings Limited ("FMH")

Our largest asset by value is the dolomite quarry project ("Quarry") in China, Future Metal Holdings Limited ("FMHL"), which was previously known as Hong Kong Mining Holdings. The Company has an 85% shareholding in FMHL.

JADE has been exploring the option of a partial or full exit of this investment by actively engaging with interested parties on the ground in the Shanxi Province as well as with brokers in Mainland China, Hong Kong and Singapore.

Including loan disbursements provided by the Company to FMHL and its subsidiaries and accrued PIK interest, the estimated fair value of the Company's investment is US$ 5.3 million as of 30 June 2023. Due to the potential exit of this investment, in order to be prudent, the company has decided to apply a 100% provision against the income expected from FMHL.

Meize Energy Industries Holdings Limited ("Meize")

Swift Wealth Investments Limited, a 100% (2019: 100%) owned subsidiary of the Company incorporated in the British Virgin Islands, held a 7.2% stake in Meize through a redeemable preference share structure.

Meize is a privately owned company that designs and manufactures blades for both onshore and offshore wind turbines.

In June 2022, the Company entered into a share purchase agreement for 112,500 shares of the Series B Preferred Equity in Meize for consideration of USD1.2 million. The transaction price implies a valuation of USD10.0 million for the Company's investment in Meize.

The partial divestment was completed by the end of August 2022. The Company held approximately 6.3% interest in Meize post this divestment.

As of 30 June 2023, the Company's interest in Meize had a fair value of US$ 8.8 million based on an implied valuation following the divestment of 112,500 shares.

DocDoc Pte Ltd. ("DocDoc")

DocDoc is a Singapore-headquartered online network of over 23,000 doctors, 600 clinics, and 100 hospitals serving a wide array of specialities. It uses artificial intelligence, cutting-edge clinical informatics, and proprietary data to connect patients to doctors which fit their needs at an affordable price.

DocDoc pivoted its business model to become a "Neo Insurer" and attempts to partner with insurance companies to enhance their policy offerings. DocDoc is working to offer fully-digitised insurance products to consumers or businesses, exclusively through digital channels, with end-to-end digital service delivery. These offerings will include quoting, binding, issuing of policies, documentation, proof of insurance, electronic billing, payment and real time policy management all digitally.

As of 30 June 2023, the carrying value of the Convertible Bond was US$ 2.8 million. An annual coupon of 8% (4.0% cash and 4% Payment-in-Kind was converted to 8% Payment-in-Kind).

In order to be prudent, the company has decided to apply a 100% provision to the income expected from DocDoc.

Infinity Capital Group Limited ("ICG")

Ultimate Prosperity Limited, a 100% owned subsidiary of the Company incorporated in the British Virgin Islands, holds a Secured Loan to ICG.

ICG develops premium residential projects in Hirafu Village, a world-class ski village in Niseko, Japan - one of the most popular winter travel destinations in the world.

As the COVID-19 pandemic continues to impact Japan and the Hokkaido region, ICG has been working closely with the local management to monitor the domestic property market and the local market's response to the pandemic, including construction project planning and potential movements in property prices.

As of 30 June 2023, the carrying value of the Secured Loan was US$ 1.4 million. The Company has decided to escalate its efforts to ensure an exit from this position including taking legal action while also pursuing consensual avenues. Due to the planned exit of this investment, in order to be prudent, the company has decided to apply a 100% provision against the income expected from ICG.

John Croft

Chairman

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 
                                                Six months ended     Year ended 
                                          30 June       30 June      31 December 
                                           2023          2022         2022 
                                           Unaudited     Unaudited    Audited 
                                   Note    US$000        US$000       US$000 
 
 Income from unquoted 
  financial assets                        588           580          1,174 
 Finance income from 
  loans                                   -             679          1,359 
 Gain on disposal                         -             300          300 
 
 Gross portfolio income          4                588        1,559   2,833 
 
 Fair value changes on 
  financial assets at 
  fair value through profit 
  or (loss)                                     (101)          737   (47,409) 
 
 Investment provisions           4              (588)          (3)   (6,003) 
                                         ------------  -----------  ------------ 
 
 Net portfolio income/(loss)     4              (101)        2,293   (50,579) 
 
 Management fees                 13             (376)        (674)   (1,200) 
 Incentive fees                                     -            -   158 
 Administrative expenses                        (639)        (344)   (763) 
 
 Operating profit/(loss)                      (1,116)        1,275   (52,384) 
 
 Finance expense                                (273)        (259)   (520) 
 
 Profit/(loss) before 
  taxation                                    (1,389)        1,016   (52,904) 
                                         ------------  -----------  ------------ 
 
 Taxation                        5                  -            -   - 
 
 
   Profit/(loss) and total 
   comprehensive expense 
   for the period                             (1,389)   1,016        (52,904) 
                                         ============  ===========  ============ 
 
 Earnings per share              7 
                                          (0.75)                     (45.89) 
 Basic                                     cents        0.88 cents    cents 
                                         ============  ===========  ============ 
 
                                          (0.75)                     (45.89) 
 Diluted                                   cents        0.76 cents    cents 
                                         ============  ===========  ============ 
 
 
 

The results above relate to continuing operations.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 
 
                                        30 June        30 June       31 December 
                                         2023          2022          2022 
                                         Unaudited     Unaudited     Audited 
                                 Note    US$000        US$000        US$000 
-----------------------------   -----  -----------  ------------  -------------- 
 Assets 
 Unquoted financial assets 
  at fair value through 
  profit or loss                 8          18,708        67,344          18,227 
 Loans and other receivables     9           1,721         6,347           1,769 
 Cash and cash equivalents                     100           437             321 
 Total assets                               20,529        74,128          20,317 
                                       -----------  ------------  -------------- 
 
 Liabilities 
 Other payables and accruals                 1,209         1,257           1,334 
 Current liabilities                         1,209         1,257           1,334 
                                       -----------  ------------  -------------- 
 
 Loans & borrowings              10          3,873         3,827           3,859 
                                       -----------  ------------  -------------- 
 Total liabilities                           5,082         5,084           5,193 
                                       -----------  ------------  -------------- 
 
 Net assets                                 15,447        69,044          15,124 
                                       ===========  ============  ============== 
 
 Equity and reserves 
 Share capital                   11        150,615       148,903         148,903 
 Treasury share reserve          11          (615)         (615)           (615) 
 Share based payment reserve                 2,936         2,936           2,936 
 Accumulated losses                      (137,489)      (82,180)       (136,100) 
                                       -----------  ------------  -------------- 
 Total equity and reserves 
  attributable to owners 
  of the parent                             15,447        69,044          15,124 
                                       ===========  ============  ============== 
 
 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 
                                                         Share 
                                              Treasury    based 
                                   Share       share      payment   Accumulated 
                                    capital    reserve    reserve    losses       Total 
                                    US$000     US$'000    US$000     US$000        US$000 
 
 
 Group balance at 1 
  January 2022                      148,903      (615)      2,936      (83,196)     68,028 
 Profit for the period                    -          -          -         1,016      1,016 
 Other comprehensive 
  income                                  -          -          -             -          - 
                                  ---------  ---------  ---------  ------------  --------- 
 Total comprehensive 
  income for the period                   -          -          -         1,016      1,016 
 
 
 Group balance at 
  30 June 2022                      148,903      (615)      2,936      (82,180)     69,044 
                                  ---------  ---------  ---------  ------------  --------- 
 
 Loss for the period                      -          -          -      (53,920)   (53,920) 
 Other comprehensive 
  income                                  -          -          -             -          - 
                                  ---------  ---------  ---------  ------------  --------- 
 Total comprehensive 
  income for the period                   -          -          -      (53,920)   (53,920) 
 
 
 Group balance at 31 
  December 2022 and 
  1 January 2023                    148,903      (615)      2,936     (136,100)     15,124 
                                  ---------  ---------  ---------  ------------  --------- 
 
  Loss and total comprehensive 
   expense for the period                 -          -          -       (1,389)    (1,389) 
 
 Total comprehensive 
  income for the period                   -          -          -       (1,389)    (1,389) 
 
 Issue of shares net 
  of issue costs                      1,712          -          -                    1,712 
 
 Group balance at 
  30 June 2023                     150,615       (615)      2,936     (137,489)     15,447 
                                  =========  =========  =========  ============  ========= 
 
 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

 
                                          Six months ended         Year ended 
                                         30-Jun       30-Jun       31 December 
                                          2023         2022         2022 
                                          Unaudited    Unaudited    Audited 
                                          US$'000      US$'000      US$'000 
-------------------------------------   -----------  -----------  ------------ 
 Cash flow from operating activities 
 
 (Loss) / Profit before taxation            (1,389)        1,016      (52,904) 
 Adjustments for: 
 Finance income                                   -        (679)       (1,359) 
 Finance expense                                273          259           520 
 Exchange loss                                   84           29            83 
 Fair value changes on unquoted 
  financial assets at fair value 
  through profit or loss                         19      (2,043)        47,074 
 Share-based expenses                             -            -             - 
 Fair value changes on loans 
  and receivables at fair value 
  through profit or loss                          -          679         5,059 
 Realised (gain) on disposal 
  of investments                                  -        (300)         (300) 
 Increase/(Decrease) in other 
  receivables                                  (35)         (21)            28 
 Increase/(Decrease) in other 
  payables and accruals                       (127)          247           325 
                                        -----------  -----------  ------------ 
 
 Net cash used in operating 
  activities                                (1,175)        (812)       (1,477) 
                                        -----------  -----------  ------------ 
 
 Cash flow from investing activities 
 Sale proceeds of unquoted financial 
  assets at fair value through 
  profit or loss                                  -          400         1,200 
 Purchase of unquoted financial 
  assets at fair value through 
  profit and loss                             (500)            -             - 
 
 Net cash generated from investing 
  activities                                  (500)          400         1,200 
                                        -----------  -----------  ------------ 
 
 Issue of Shares                              1,712            -             - 
 Payment of interest on loans 
  and borrowings                              (259)            -         (228) 
                                        -----------  -----------  ------------ 
 Net cash generated used in 
  financing activities                        1,453            -         (228) 
                                        -----------  -----------  ------------ 
 Net (decrease) in cash & cash 
  equivalents during the period               (222)        (412)         (505) 
 Cash and cash equivalents and 
  net debt at the beginning of 
  the period                                    321          848           848 
 Foreign exchange on cash balances                1            1          (22) 
 Cash & cash equivalents and 
  net debt at the end of the 
  period                                        100          437           321 
                                        ===========  ===========  ============ 
 

NOTES TO THE FINANCIAL INFORMATION

   1.        CORPORATE INFORMATION 

The Company is a limited company incorporated in the British Virgin Islands ("BVI") under the BVI Business Companies Act 2004 on 18 January 2008. The address of the registered office is Commerce House, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola, British Virgin Islands VG 1110 and its principal place of business is 19/F., CMA Building, 64 Connaught Road Central, Central, Hong Kong.

The Company is quoted on the AIM Market of the London Stock Exchange (code: JADE) and the Quotation Board of the Open Market of the Frankfurt Stock Exchange (code: 1CP1).

The principal activity of the Company is investment holding. The Company is principally engaged in investing primarily in unlisted assets in the areas of mining, power generation, health technology, telecommunications, media and technology ("TMT"), and financial services or listed assets driven by corporate events such as mergers and acquisitions, pre-IPO, or re-structuring of state-owned assets.

The condensed consolidated interim financial information was approved for issue on 29 September 2023.

   2.        BASIS OF PREPARATION 

The condensed consolidated interim financial information has been prepared in accordance with International Accounting Standard ("IAS") 34 "Interim Financial Reporting" and presented in US Dollars.

   3.        PRINCIPAL ACCOUNTING POLICIES 

The condensed consolidated interim financial information has been prepared on the historical cost convention, as modified by the revaluation of certain financial assets and financial liabilities at fair value through the income statement.

The accounting policies and methods of computation used in the condensed consolidated financial information for the six months ended 30 June 2023 are the same as those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2022 and are those the Group expects to apply into financial statements for the year ending 31 December 2023. There was no impact on the Company's accounting policies as a result of any new or amended standards which became applicable for the current accounting period.

The seasonality or cyclicality of operations does not impact the interim financial information.

   4.        SEGMENT INFORMATION 

The operating segment has been determined and reviewed by the Board to be used to make strategic decisions. The Board considers there to be a single business segment, being that of investing activity.

The reportable operating segment derives its revenue primarily from debt investment in several companies and unquoted investments.

The Board assesses the performance of the operating segments based on a measure of adjusted Earnings Before Interest, Taxes, Depreciation and Amortisation ("EBITDA"). This measurement basis excludes the effects of non-recurring expenditure from the operating segments such as restructuring costs. The measure also excludes the effects of equity-settled share-based payments and unrealised gains/losses on financial instruments.

The segment information provided to the Board for the reportable segment for the periods are as follows:

 
                                   Six months ended     Year ended 
                                   30 June    30 June   31 December 
                                    2023       2022      2022 
                                     US$000   US$000    US$000 
 
 Income on unquoted financial 
  assets                                588   580       1,174 
 Financial income on loans 
  & receivables                           -   679       1,359 
 Gain on disposal                         -   300       300 
 
 Gross portfolio income                 588   1,559     2,833 
                                  ---------  --------  ------------ 
 
 Expected credit loss 
  provision                           (588)   (3)       (6,003) 
 Foreign exchange                     (101)   (84)      (113) 
 Equity fair value adjustments            -   821       (47,296) 
 
 Portfolio income through 
  profit or loss                      (101)   2,293     (50,579) 
                                  ---------  --------  ------------ 
 
 Net assets: 
 
 FMHL                                 5,252   50,666    5,270 
 Meize                                8,800   8,801     8,801 
 Other                                    -   -         - 
 DocDoc                               2,806   2,696     2,806 
 ICG                                  1,335   1,515     1,335 
 Infinity TNP                             -   3,650     - 
 Heirloom Investment Fund               500   -         - 
 Other                                   15   16        15 
                                  ---------  --------  ------------ 
 Unquoted assets at fair 
  value through profit 
  or loss                            18,708   67,344    18,227 
 
 Loans and other receivables 
  at fair value through 
  the profit or loss (third 
  party)                              1,721   6,347     1,769 
 Cash                                   100   437       321 
 Liabilities                        (5,082)   (5,084)   (5,193) 
 
 Net assets                          15,447   69,044    15,124 
 

The impact of fair value changes on the investments in the portfolio are as follows:

 
                                        Six months ended     Year ended 
                                        30 June    30 June   31 December 
                                         2023       2022      2022 
                                          US$000    US$000   US$000 
 
 Income on unquoted financial 
  assets through profit or 
  loss                                       588       580   1,174 
 
 Equity fair value adjustments: 
 
        *    FMHL                              -             (45,146) 
 
        *    Meize                             -     1,500   1,500 
 
        *    DocDoc                            -         -   - 
 
        *    Infinity Capital Group            -         -   - 
 
        *    Infinity TNP                      -         -   (3,650) 
                                       ---------  --------  ------------ 
                                               -     1,500   (47,296) 
                                       ---------  --------  ------------ 
 
 Realised Gain                                 -         -   300 
 Expected credit loss provision: 
            - ICG                          (112)       (3)   (363) 
            - FMHL                         (300)         -   (581) 
            - DocDco                       (176)         -   - 
 Foreign exchange on unquoted 
  financial assets at fair 
  value through profit or 
  loss                                      (19)      (34)   (8) 
 
 Total fair value changes 
  on financial assets at 
  fair value through profit 
  or loss                               (19)       2,043     (46,774) 
                                       =========  ========  ============ 
 
   5.         TAXATION 

The Company is incorporated in the BVI and Hong Kong. The Company is not subject to any income tax in the BVI. The Company does not engage in any business activities or generate income in Hong Kong; therefore it is not subject to taxation in Hong Kong.

   6.        DIVID 

The Board does not recommend the payment of an interim dividend in respect of the six months ended 30 June 2023 (30 June 2022: Nil).

   7.        EARNINGS PER SHARE 

The calculation of the basic and diluted earnings per share attributable to owners of the Group is based on the following:

 
                                                       Six months ended     Year ended 
                                                       30 June    30 June   31 December 
                                                        2023       2022      2022 
                                                        US$000     US$000    US$000 
 Numerator 
 Basic/Diluted:    Net (loss) / profit                  (1,389)     1,016      (52,904) 
                                                      ---------  --------  ------------ 
 
                                                       Number of shares 
                                                           '000   '000      '000 
 Denominator 
 Basic:            Weighted average shares              185,008   115,278       115,278 
                   Dilutive effect of warrants                -    17,568             - 
 
 
 Diluted:          Adjusted weighted average shares     185,008   132,846       115,278 
                                                      ---------  --------  ------------ 
 
 
 
 Earnings per share 
 Basic (cents)          (0.75)   0.88   (45.89) 
 Diluted (cents)        (0.75)   0.76   (45.89) 
 
 

For the year ended 31 December 2022 and the period ending 30 June 2023, the warrants issued to the Investment Manager were anti-dilutive and therefore there is no impact on the weighted average shares in issue. 1,002,333 warrants were issued during the current period ending 30 June 2023.

   8.        UNQUOTED FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 
 
                                   30 June   30 June   31 December 
                                    2023      2022      2022 
                                    US$000    US$000    US$000 
 
 At the beginning of the period     18,227    66,202        66,202 
 Fair value changes through 
  profit and loss                      569     2,045      (46,131) 
 Expected credit loss provision 
  through profit and loss            (588)       (3)         (944) 
 Realised gain                           -         -           300 
 Disposals                               -     (900)       (1,200) 
 Additional investment               500           -             - 
 
 At the end of the period           18,708    67,344        18,227 
                                  ========  ========  ============ 
 
 

On 5 April 2023, the Company invested $500,000 in Heirloom Investment Fund SPC which provides a diversified portfolio of asset backed and / or income producing investments target to deliver a risk-adjusted return over the long term across geographically diverse assets. The investment is expected to provide a fixed yield of 6% per annum, contingent on the performance of the underlying investments.

   9.         LOANS AND OTHER RECEIVABLES AT FAIR VALUE THROUGH PROFIT OR LOSS 
 
                                     30 June   30 June   31 December 
                                      2023      2022      2022 
                                      US$000    US$000    US$000 
 
 At the beginning of the 
  period                               1,769     5,556         5,556 
 Additions - Meize consideration           -       800             - 
 
 Fair value changes through 
  profit and loss                     (48)       (688)          (87) 
 Expected credit loss provision 
  through profit and loss                  -         -       (5,059) 
 Finance income on loans                   -       679         1,359 
 
 At the end of the period              1,721     6,347         1,769 
                                    ========  ========  ============ 
 
 
                               Note    30 June   30 June   31 December 
                                        2023      2022      2022 
                                        US$000    US$000    US$000 
 
 Due in respect of Meize                     -       800   - 
  divestment 
 Other receivables                       1,721     5,547         1,769 
 
 Total loans and borrowings              1,721     6,347         1,769 
                                      ========  ========  ============ 
 

Loans represent the Convertible Bond issued by Fook Lam Moon Holdings plus accrued interest. The Group has assessed the recoverability of Loans in accordance with its policy, and at year-end 31 December 21 applied a 100% provision against this investment such that the carrying value of the Convertible Bond was US $0 .0m. The circumstances remain unchanged as at 30 June 2023. No bond interest receivable has been recognised during the period .

The breakdown of Loans is as follows:

 
                                       30 June    30 June    31 December 
                                        2023       2022       2022 
                                        US$000     US$000     US$000 
 
 Loan principal                          26,500     26,500   26,500 
 Accrued PIK interest                     2,248      1,966   2,248 
 Accrued interest payable in 
  cash                                    3,070      2,672   3,070 
 Fair Value Adjustments - Principal    (26,500)   (26,500)   (26,500) 
 Fair Value Adjustments - Accrued 
  Interest                              (5,318)    (4,638)   (5,318) 
                                      ---------  ---------  ------------ 
 
 Net loans receivable                         -          -   - 
                                      =========  =========  ============ 
 
   10.      LOANS AND BORROWINGS 
 
                               30 June   30 June   31 December 
                                2023      2022      2022 
                                US$000    US$000    US$000 
 Corporate debt                 3,873      3,827         3,859 
 
 Total loans and borrowings    3,873       3,827         3,859 
                              ========  ========  ============ 
 

The movement in loans and borrowings is as follows:

 
                                  30 June   30 June   31 December 
                                   2023      2022      2022 
                                   US$000    US$000    US$000 
 Opening balance                    3,859     3,568         3,568 
 Borrowing costs amortised              -        31            52 
 Interest expense accrued             273       228           467 
 Payment of interest liability      (259)         -         (228) 
 
 Closing balance                    3,873     3,827         3,859 
                                 ========  ========  ============ 
 
   11.      SHARE CAPITAL 
 
                                            Number 
                                             of           Amount 
                                             Shares        US$000 
 Issued share capital excluding treasure 
  shares at 31 December 2022                115,277,869   148,288 
 
 Shares issues in the period                201,996,350   1,712 
                                           ------------  -------- 
 Issued share capital excluding treasure 
  shares at 30 June 2023                    317,274,219   150,000 
                                           ------------  -------- 
 
 
 Consisting of: 
 Authorised, called-up and fully paid 
  ordinary shares of no-par value each 
  at 30 June 2023                           319,922,023   150,615 
 Authorised, called-up and fully paid 
  ordinary shares of no-par value held 
  as treasury shares by the Company at 
  30 June 2023                              (2,647,804)   (615) 
 

(i) Under the BVI corporate laws and regulations, there is no concept of "share premium", and all proceeds from the sale of no-par value equity shares are deemed to be share capital of the Company.

   12.       FINANCIAL INSTRUMENTS 

Financial assets

 
 
                               As at      As at      As at 
                                30 June    30 June    31 December 
                                2023       2022       2022 
                               US$'000    US$'000    US$'000 
 
 Unquoted financial assets 
  at fair value                18,708     67,344     18,227 
 Other receivables at fair 
  value                        1,659      6,291      1,738 
 Cash and cash equivalents 
  at amortised cost            100        437        321 
                              ---------  ---------  ------------- 
 
 Financial assets              20,467     74,073     20,286 
                              =========  =========  ============= 
 

Financial liabilities

 
                                As at      As at      As at 
                                 30 June    30 June    31 December 
                                 2023       2022       2022 
                                US$'000    US$'000    US$'000 
 
 Other payables and accruals 
  at amortised cost             1,209      1,257      1,334 
 Corporate debt at amortised 
  cost                          3,873      3,827      3,859 
                               ---------  ---------  ------------- 
 
 Financial liabilities          5,082      5,084      5,193 
                               =========  =========  ============= 
 

The corporate debt reached maturity in October 2022. The Company has not yet realized sufficient funds from its current program of legacy asset disposals to redeem these bonds. In December 2022 the Company agreed an extended maturity of the loan notes issued to 31 December 2023 and an increased interest rate of 15% from December 2022. The interest rate payable on the principal amount of the loan notes will increase to 16% per annum where US$1.8m or more of the principal amount remains outstanding by 30 June 2023. The interest payment due on 30 June 2023 was not made and the Company agreed with bondholders to increase the interest rate between 1 July 2023 and 14 August 2023 to 18%. As the interest payment was not made by 14 August 2023, the interest rate will continue at 18% until such payment is made.

Financial assets at fair value through profit or loss

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1, 2 or 3 based on the degree to which the fair value is observable:

 
                              Note   As at      As at      As at 
                                      30 June    30 June    31 December 
                                      2023       2022       2022 
                                      US$000     US$000     US$000 
 
 Level 3 
 Unquoted financial assets 
  at fair value                  8     18,708     67,344         18,227 
 Other receivables at fair 
  value                       9,14      1,721      6,291          1,769 
 
                                       20,429     73,635         19,996 
 
 

There is no transfer between levels in the current period. Carrying values of all financial assets and liabilities are approximate to fair values. The value of level 3 investments has been determined using the yield capitalisation (discounted cash flow) method.

   13.      RELATED PARTY TRANSACTIONS 

During the period under review, the Group entered into the following transactions with related parties and connected parties:

 
                                                         30 June   30 June   31 December 
                                                          2023      2022      2022 
                                                Notes     US$000    US$000    US$000 
 
 Remuneration payable to Directors                           183      117    260 
 
 Harmony Capital 
 Management fee                                 (i)          376       674   1,200 
 Incentive fee                                                 -         -   (158) 
 
 Amount due to Harmony Capital at period end                 910     1,089   1,234 
 
 

(i) Harmony Capital has been appointed as the Investment Manager of the Group. In prior years the management fee. was calculated and paid bi-annually in advance calculated at a rate of 0.875% of the net asset value of the Company's portfolio of assets at 30 June and 31 December in each calendar year. A new management fee was agreed in April 2023 reducing the annual management fee to $350,000 per annum and amending the incentive structure to encourage an orderly realization of value from the Company's existing portfolio.

   14.   EVENTS AFTER THE REPORTING PERIOD 

On 26 July 2023 agreement was reached with the bondholders to waive rights to accelerate the US$10,000,000 12.5% fixed secured bond instrument resulting from the non-payment of interest due on Friday 14 July 2023. Interest will accrue on the bonds at an interest rate between 1 July 2023 and 14 August 2023 to 18%. As the interest payment was not made by 14 August 2023, the interest rate will continue at 18% until such payment is made.

   15.      COPIES OF THE INTERIM REPORT 

The interim report is available for download from www.jaderoadinvestments.com.

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END

IR EASNNALFDEEA

(END) Dow Jones Newswires

September 29, 2023 02:00 ET (06:00 GMT)

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