Posting of Accounts - Replacement

RNS Number : 3491O

Powerhouse Energy Group PLC

09 October 2012

 

09 October 2012

PowerHouse Energy Group plc

("PowerHouse", the "Group" or the "Company")

Publication of accounts and lifting of suspension

The Annual Report for the year ended 31 December 2011 was posted to shareholders earlier today.  The interim results for the six months ended 30 June 2012 were also released earlier today.  Trading in the Company's shares was suspended with effect from 12 April 2012 pending clarification of the Company's financial position.  The provision of a £380,000 convertible loan from Hill Grove Investments Pty Limited and, amongst other things, the settlement of the US litigation enabled the Company's accounts for the year ended 31 December 2011, which received an unqualified audit opinion, to be prepared on a going concern basis.  Accordingly, trading in the Company's ordinary shares will re-commence with effect from 7.30 a.m. on 10 October 2012.

Copies of the Annual Report are available at the Company's registered office (16 Great Queen Street, London WC2B 5DG) and on its website - www.powerhouseenergy.net.

Keith Allaun, recently appointed as Executive Chairman, commented:

"We have made a tremendous effort to get PowerHouse back on track. We have cleared several hurdles to get to this position but there is still a lot of work to do.  With our newly aligned management objectives and operating in the ever-growing waste-to-energy marketplace, we feel we now have a future and plan to report further developments over the coming months."

For additional information please contact:

PowerHouse Energy Group plc

Keith Allaun
Level 3, 8 Cavendish Square, London W1G OPD

Phone: [phone]
Email: [e-mail]

Merchant Securities Limited (Nominated Adviser & Broker)

David Worlidge/Simon Clements

Phone: [phone]

Statement of Comprehensive Income

		(unaudited) Six months	(unaudited) Six months	(Audited) Year
		ended	ended	ended
		30 June	30 June	31 December
	Note	2012  US$	2011  US$	2011 US$
Revenue		15,805	-	62,379
Cost of sales		-	(13,319)	(73,416)
Gross profit / (loss)		15,805	(13,319)	(11,037)
Administrative expenses		(1,511,949)	(1,748,270)	(7,790,179)
Operating loss		(1,496,144)	(1,761,589)	(7,801,216)
Finance income		4	-	848
Other income		-	-	-
(Loss of control) / Fair value gain on step acquisition		(1,309,296)	6,209,876	6,209,876
Equity accounted loss		(129,600)	-	-
Finance costs		(7,862)	(292,307)	(310,231)
Impairment of non-current assets		-	(35,000)	(33,387,720)
(Loss) / Profit before taxation		(2,942,899)	4,120,980	(35,288,443)
Income tax benefit		10,942	-	3,028,883
(Loss) / Profit after taxation		(2,931,957)	4,120,980	(32,259,560)
Foreign exchange arising on consolidation		56,321	-	(3,621,791)
Foreign exchange included in profit and loss arising from loss of control		1,095,440
Total comprehensive (expense)/ income		(1,780,196)	4,120,980	(35,881,351)
Total comprehensive (expense)/ income attributable to:
Owners of the Company		(1,224,542)	4,120,980	(13,588,143)
Non-controlling interests		(555,654)	-	(22,293,208)
Earnings per share (US$)	3	(0.01)	0.03	(0.05)
Diluted earnings per share (US$)	3	(0.01)	0.02	(0.05)

The notes numbered 1 to 6 are an integral part of the interim financial information.

Statement of Changes in Equity

	Shares and stock US$	Accumulated losses US$	Other reserves US$	Non-control-ling interests US$	Total US$
Balance at 1 January 2011 (unaudited)	6,218,365	(5,516,668)	-	-	701,697
Transactions with equity participants:
-    Issue of common stock	10,199,941	-	-	-	10,199,941
-    Costs related to issue of common stock	(1,486,802)	-	-	-	(1,486,802)
-    Common stock issued for services received	206,250	-	-	-	206,250
-    Equity issued for acquisition	-	-	2,019,736	-	2,019,736
-    Equity reclassification arising from reverse takeover	64,780,459	-	(64,780,459)	-	-
-    Shares issued for services received	48,054	-	-	-	48,054
-    Acquisition of Pyromex	-	-	-	23,951,661	23,951,661
-
Total comprehensive income:
-    Profit after taxation	-	4,120,980	-	-	4,120,980
Balance at 30 June 2011 (unaudited)	79,966,267	(1,395,688)	(62,760,723)	23,951,661	39,761,517
Transactions with equity participants:
-    Costs related to issue of common stock	(35,000)	-	-	-	(35,000)
-    Shares issued for services received	119,438	-	-	-	119,438
-    Exercise of warrants	188	-	-	-	188
-
Total comprehensive income:
-    Loss after taxation	-	(16,695,218)	-	(19,685,322)	(36,380,540)
-    Foreign exchange arising on consolidation			(1,020,946)	(2,600,845)	(3,621,791)
Balance at 31 December 2011 (audited)	80,050,893	(18,090,906)	(63,781,669)	1,665,494	(156,188)
Transactions with equity participants:
-    Exercise of warrants	67,876	-	-	-	67,876
-    Pyromex, loss of control				(1,109,840)	(1,109,840)
Total comprehensive income:
-    Loss after taxation	-	(2,331,486)	-	(600,471)	(2,931,957)
-    Foreign exchange included in profit and loss arising from loss of control	-	-	1,095,441	-	1,095,441
-    Foreign exchange arising on consolidation	-	-	11,504	44,817	56,321
Balance at 30 June 2011 (unaudited)	80,118,769	(20,422,392)	(62,674,724)	-	(2,978,347)

The notes numbered 1 to 6 are an integral part of the interim financial information.

Statement of Financial Position

		(unaudited) As at 30 June	(unaudited) As at 30 June	(audited)              As at 31 December
	Note	2012 US$	2011 US$	2011 US$
ASSETS
Non-current assets
Intangible assets		-	31,247,927	2,062,838
Property, plant and equipment		2,910	7,916,033	1,825,636
Investment in associate		346,046	-	-
Total non-current assets		348,946	43,232,289	3,888,474
Current Assets
Inventory		-	719,279	637,601
Trade and other receivables		28,118	237,265	278,384
Cash and cash equivalents		68,317	2,948,543	382,455
Total current assets		96,435	3,905,087	1,298,440
Total assets		445,381	47,137,376	5,186,914
LIABILITIES
Non-current liabilities
Deferred taxation		-	(3,822,980)	(372,277)
Loans	4	(207,022)	(420,045)	(376,973)
Trade and other payables	5	(582,750)	(608,692)	(777,000)
Total non-current liabilities		(789,772)	(4,851,717)	(1,526,250)
Current liabilities
Loans	4	(366,906)	(66,000)	(57,996)
Trade and other payables	5	(2,267,050)	(2,458,142)	(3,758,856)
Total current liabilities		(2,633,956)	(2,524,142)	(3,816,852)
Total liabilities		(3,423,728)	(7,375,859)	(5,343,102)
Net assets		(2,978,347)	39,761,517	(156,188)
EQUITY
Shares and stock		80,118,769	79,957,267	80,050,893
Other reserves		(62,674,724)	(62,760,723)	(63,781,669)
Non-controlling interests		-	23,951,661	1,665,494
Accumulated losses		(20,422,392)	(1,395,688)	(18,090,906)
Total equity		(2,978,347)	39,761,517	(156,188)

The notes numbered 1 to 6 are an integral part of the interim financial information.

Statement of Cash Flows

			(unaudited)	(unaudited)	(audited)
			Six months	Six months	Year ended
			ended	ended	31
	Note		30 June	30 June	December
			2012 US$	2011 US$	2011 US$
Cash flows from operating activities
(Loss)/Profit before taxation			(2,942,899)	4,120,980	(35,288,443)
Adjustments for:
-    Finance income			(4)	-	(848)
-    Finance costs			7,862	292,307	310,231
-    Loss of control / (fair value gain on step acquisition)			1,309,296	(6,209,876)	(6,209,876)
-    Equity accounted loss			129,600	-	-
-    Impairment of non-current assets			-	35,000	33,387,720
-    Depreciation and amortisation			123,467	100,212	1,824,241
-    Common stock and shares issued for services			-	254,304	373,742
-    Foreign exchange revaluations			(18,330)		140,581
Changes in working capital:
-    Decrease / (Increase) in trade and other receivables			202,097	(230,611)	(178,542)
-    Increase / (Decrease) in trade and other payables			685,174	(182,306)	1,588,261
-    Taxation paid			(800)	-	(800)
Net cash used in operations			(504,535)	(1,819,990)	(4,053,733)
Cash flows from investing activities
Purchase of other non-current assets			1,356	(85,000)	(85,000)
Purchase of intangible assets			-	(490,840)	(494,429)
Loss of control / reverse acquisition	1.2		(11,010)	(779,243)	(949,660)
Net cash flows used in investing activities			(9,654)	(1,355,083)	(1,529,089)
Cash flows from financing activities
Common stock purchase advance received			-	-
Share/stock issues (net of issue costs)			67,876	8,713,139	8,678,326
Finance income			4	-	848
Finance costs			(7,862)	(292,307)	(310,231)
Loans (repaid) / received			138,959	(2,494,386)	(2,596,592)
Net cash flows from financing activities			198,977	5,926,446	5,772,351
Net increase in cash and cash equivalents			(315,212)	38,969	189,529
Cash and cash equivalents at beginning of period			382,455	197,170	197,170
Foreign exchange on cash balances			1,074	-	(4,244)
Cash and cash equivalents at end of period			68,317	2,948,543	382,455

The notes numbered 1 to 6 are an integral part of the interim financial information.

Notes (forming part of the interim financial information)

1.  Summary of significant accounting policies

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the financial information.

1.1.    Basis of preparation

This interim consolidated financial information is for the six months ended 30 June 2012 and has been prepared in accordance with International Accounting Standard 34 "Interim Financial Statements". The accounting policies applied are consistent with International Financial Reporting Standards ("IFRS") adopted for use by the European Union. The accounting policies and methods of computation used in the interim consolidated financial information are consistent with those expected to be applied for the year ending 31 December 2012.

The financial information set out above does not constitute the company's statutory accounts for the year ended 31 December 2011, but is derived from those accounts. Statutory accounts for 2011 have been delivered to the Registrar of Companies. The auditors have reported on those accounts: their report was qualified and contained a disclaimer of opinion and contained statements under section 498(2) or (3) of the Companies Act 2006.

1.2.    Consolidation

Pyromex loss of control
		US$
Intangible assets		2,005,446
Property, plant and equipment		1,869,045
Inventory		656,418
Trade and other receivables		55,642
Cash		11,012
Trade and other payables		(2,424,114)
Intercompany payables		(216,527)
Deferred taxation		(371,437)
Net assets disposed		1,585,485
Attributable to:
- Non-controlling interests		1,109,839
- Owners of the Company - recognised as investment in associate		475,646
Investment in associate consists of:
- Initial amount recognised after loss of control		475,646
- Equity accounted losses		(129,600)
		346,046

1.3.    Judgements and estimates

The accounting for the Pyromex acquisition has been based on estimated values due to lack of access to its records accordingly, the Group has reported, in this interim financial information, its estimates for profit and loss, and balance sheet items related to Pyromex.

1.4.    Going concern

The directors have considered all available information about the future events when considering going concern. The directors have reviewed cash flow forecasts for twelve months following the date of these accounts. The cash flow forecasts assume no further funding of Powerhouse Energy, Inc. and Pyromex. The £380,000 convertible loan obtained from Hill Grove Investments Pty Limited ("Hill Grove"), secured prior to these accounts being signed, together with the $250,000 convertible loan advanced by Linc Energy Limited on 19 June 2012 is considered sufficient to settle outstanding creditors of the company and maintain the company's reduced overhead and other limited unforeseen events for at least the next twelve months. In addition, the company is in receipt of a letter of intention of financial support from Hill Grove to ensure the company continues to meet its obligations as they fall due and to ensure it operates as a going concern for a period of at least 12 months. Based on this, the Directors continue to adopt the going concern basis of accounting for the preparation of these interim accounts.

1.5.    Functional and presentational currency

This interim financial information is presented in US dollars which is the Group's functional currency. The principal rates used for translation are:

				30 June 2012 Closing	30 June 2012 Average
British Pounds				$1.554	$1.577
Swiss Franc				$1.043	$1.077

2.  MOVEMENT IN SHARE CAPITAL (company)

		1.0 p Ordinary shares	4.5 p Deferred shares	4.0 p Deferred shares
Balance at 31 January 2012		284,271,197	17,373,523	9,737,353
-   Exercise of warrants		243,229	-	-
Balance at 30 June 2012		283,514,426	17,373,523	9,737,353

The deferred shares have no voting rights and do not carry any entitlement to attend general meetings of the Company. They will carry only a right to participate in any return of capital once an amount of £100 has been paid in respect of each ordinary share. The Company will be authorised at any time to affect a transfer of the deferred shares without reference to the holders thereof and for no consideration.

3.  Earnings per share

			(unaudited) As at 30 June	(unaudited) As at 30 June	(audited)             As at 31 December
			2012	2011	2011
Total comprehensive income (expense) (US$)			(2,331,486)	4,120,980	(2,384,162)
Weighted average number of shares			284,499,626	190,956,619	117,474,385
Weighted average number of dilutive potential shares			-	4,322,980	-
Earnings per share (US$)			(0.01)	0.02	(0.02)
Diluted earnings per share (US$)			(0.01)	0.02	(0.02)

4.  LOANS

			(unaudited) As at 30 June	(unaudited) As at 30 June	(audited)              As at 31 December
	Notes		2012 US$	2011 US$	2011 US$
Accrued dividends on preferred stock	4.1		33,000	66,000	33,000
Management loans	4.2		352,322	357,722	349,885
Citi bank business loan	4.3		39,580	62,323	52,084
Aspermont loan	4.4		149,026	-	-
Total loans			573,928	486,045	2,980,432
Classified as:
-    Current			207,022	66,000	57,996
-    Non-current			366,906	420,045	376,973

4.1. Accrued dividends on preferred stock

The accrued dividends on the preferred stock became due on 31 March 2012.

4.2. Management loans

Loans from management incur interest at 5% per annum. The loans are repayable as PowerHouse Energy, Inc. generates gross profits or, if earlier, within 30 days of termination of management's employment contract. Subsequent to balance sheet date these loans have been settled through a Mutual release agreement.

4.3. Citi bank business loan

Loan from Citi bank incurs interest at the prime rate as published by The Wall Street Journal plus 3% and is repayable in equal monthly installments of $2,083.

4.4. Aspermont loan

On 18 April 2012 Aspermont Ltd, Dilato Holdings Pty Ltd and Tesla Nominees Pty Ltd collectively provided a facility of £100,000 to the group. The facility is repayable on demand and incurs interest at 1 per cent. per month. The group is currently in productive negotiations to revise the terms of the loan.

4.5. Hill Grove Loan

On 19 June 2012 the group entered into a convertible loan agreement with Linc Energy Limited under which Linc agreed to advance $250,000 to the Group. The loan is unsecured, repayable on 18 June 2014 and carries interest of 15 per cent. per annum. Linc has the option at any time to convert the loan in part or whole at a conversion price of 1p per share.  On 8 October 2012, the group was advised that all rights under this agreement have been assigned to Hill Grove.

On 8 October 2012, the group entered into a further convertible loan agreement with Hill Grove under which Hill Grove has agreed to advance £380,000 to the group. The loan is unsecured, repayable on 5 October 2014 and carries interest of 15 per cent. per annum. Hill Grove has the option at any time to convert the loan in part or whole at a conversion price of 1p per share.

5.  Trade and other payables

			(unaudited) As at 30 June	(unaudited) As at 30 June	(audited)              As at 31 December
Trade creditors			263,474	1,592,549	856,924
Salary and wage accruals			1,203,186	821,619	1,445,926
RenewMe			1,036,000	-	1,036,000
Customer deposits			153,202	337,293	939,236
Other accruals			193,938	315,373	257,770
Total trade and other payables			2,849,800	3,066,834	4,535,856
Classified as:
-    Current			2,267,050	2,458,142	3,758,856
-    Non-current			582,750	608,692	777,000

5.1. Salary and wage accruals

The difference between salaries and wages paid and the amounts due under service agreements has been accrued. Certain of the US employees filed a lawsuit in the US District Court (Nevada) against Powerhouse Energy, Inc. and Powerhouse Energy Group plc for accrued salaries and amounts due to the end of their service contracts to the value of $1,961,938, plus interest, damages and legal costs. After the lawsuit was filed an agreement was reached with the employees whereby in exchange for a cash settlement of $25,000, 520,000 shares in the company and settlement of their legal fees incurred (approximately $12,000) the case would be withdrawn and the company and its subsidiary released from all obligations to the employees. The case was withdrawn on 1 October 2012. Post balance sheet salary and wage accruals were cleared to nil.

5.2. RenewMe

RenewMe Limited had been granted exclusive rights by Pyromex to use, own, assemble and install and operate Pyromex systems in territories also Licensed to Powerhouse Energy, Inc. The group entered into a settlement agreement with RenewMe whereby the parties agreed to change the respective exclusive rights pertaining to the Pyromex technology. Under the settlement agreement the group has the obligation to pay five instalments of Euro 200,000 annually beginning 30 June 2011. All amounts due under the contract have been recognised as a liability on the balance sheet for 30 June 2012 The Directors are currently in productive negotiations with RenewMe regarding the existing licensing agreement.

6.  AVAILABILITY OF THE INTERIM RESULTS

A copy of this announcement will be available at the Company's registered office (16 Great Queen Street, London WC2B 5DG) 14 days from the date of this announcement and on its website - www.powerhouseenergy.net. A copy of the interim results will not be sent to shareholders.

 

END

 

 

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