RNS Number:8275Q
Bluewater Bio International
27 March 2008
27th March 2008
Bluewater Bio International
Interim Results
For the period ended 31 December 2007
Bluewater Bio International ("Bluewater Bio" or "the Company"), the AIM listed
provider of an advanced biological wastewater treatment solution named HYBACS,
announces its interim results for the period from incorporation on 12 September
2007 to 31 December 2007.
Highlights
* Successful AIM listing, raising �2.8 million ($5.7 million) before costs
* Signed agreement with the Infrastructure division of Indochina Capital
to jointly develop wastewater treatment opportunities in Vietnam on 4 March
2008
Daniel Ishag, CEO, said;
"Bluewater Bio is a young and ambitious company, focusing on an area of
increasing importance in wastewater management. We were delighted with the
demand for our stock at float and are working hard to deliver on our IPO
objectives, namely leveraging our innovative HYBACS solution to provide a cost
effective and sustainable wastewater solution. We have already signed an
agreement to identify suitable projects in Vietnam and hope to announce further
developments shortly."
Enquiries
Bluewater Bio International Tel: +44 (0) 20 7907 9820
Daniel Ishag, CEO
Citigate Dewe Rogerson (PR advisor) Tel: +44 (0) 20 7638 9571
Sarah Gestetner/Fiona Mulcahy/Lindsay Noton
Strand Partners Limited (Nominated Adviser) Tel: +44 (0) 20 7409 3494
James Harris/Angela Peace
Notes to Editors
About Bluewater Bio
Bluewater Bio International designs and markets a highly innovative advanced
biological solution to the treatment of wastewater, called HYBACS. This system
deploys a different biological approach to any internationally established
wastewater treatment process. Through its design and operation, HYBACS
biologically selects a particular group of bacteria, Bacillus, with unusual
natural properties which if correctly stimulated exhibit higher biological
reaction rates than other known naturally occurring bacteria.
The company believes that HYBACS will be proven to be commercially superior to
the majority of existing comparable treatment processes worldwide, and is able
to treat efficiently both municipal wastewater as well as a wide range of
organic industrial wastewaters, including highly concentrated livestock
wastewater and the effluent from, among others, breweries, food processors,
textile manufacturers, hospitals, factories and residential developments.
Bluewater Bio is looking to make sales of its HYBACS technology globally.
Key benefits of the HYBACS system include:
* HYBACS produces high quality treated wastewater, treating the biological waste
in municipal wastewater down to 10 mg/L BOD (Biological Oxygen Demand), and up
to 99 per cent. treatment of the biological waste in concentrated wastewaters;
* HYBACS requires between five and 15 per cent. less capital expenditure than
most widely installed comparable technologies to achieve these performance
qualities on a like-for-like basis;
* HYBACS requires between 22 and 30 per cent. less ongoing operating expenditure
based on an overall lower energy consumption requirement on a like-for-like
basis.
* HYBACS is highly suited to plant retrofitting which makes HYBACS more suitable
for various types of plant upgrading as compared to many other advanced modern
wastewater treatment processes.
* In applications where odour levels emanating from the plant may be an issue,
the HYBACS process removes offensive odour without the requirement for
additional deodorisation facilities which involve additional capital and
operating expenditures; and
* HYBACS removes approximately twice the concentration of E. coli bacteria,
compared to conventional technology which may result in moderately reduced
operating expenditure at sites where disinfection of the effluent is required.
Chairman's Statement
I am pleased to present the first set of interim results of Bluewater Bio
International covering the period from incorporation on 12th September 2007 to
31st December 2007. The Group's first interim report covers a short period and
is in accordance with AIM reporting guidance.
On 13th December 2007 Bluewater Bio announced the admission of 215,283,438
ordinary shares of 0.5 pence each ("Ordinary Shares") to trading on the London
Stock Exchange's AIM market. Of these 148,400,000 Ordinary Shares were issued at
a price of 12.5p in satisfaction of the acquisition of the companies Bluewater
Bio Limited, Global Water Institute Limited, Global Water Institute Korea
Limited and Javel Limited, which became wholly owned subsidiaries of the Group,
and 22,200,000 Ordinary Shares were issued also at 12.5p to raise net funds of
$4.72 million (�2.31 million) which were applied to the repayment of operational
loans and towards providing the group with additional funding for its ongoing
working capital requirements.
Bluewater Bio is the holding company of a Group of companies ("Group") involved
in the design, marketing and operation of an advanced biological solution to the
treatment of wastewater, called HYBACS. The Directors believe that HYBACS will
be proven to be commercially and environmentally superior to existing treatment
processes worldwide, across a wide range of treatment requirements, which will
enable it to generate unique economics for nutrient removal and landfill
applications. In addition, the Directors consider that the Group is well
positioned to take advantage of new legislation.
On 4th March 2008, the Group announced an agreement with the Infrastructure
division of Indochina Capital ("Indochina") to develop jointly wastewater
treatment opportunities in Vietnam. Under the terms of the agreement Bluewater
Bio and Indochina will work together to identify, to evaluate and to bid on
wastewater treatment projects in Vietnam, with the intention of addressing both
the municipal and industrial sectors.
Over the coming year the Group's strategy is to establish a number of similar
agreements with strong partners in countries where it is planning to operate in
order to leverage their expertise and commercial contacts.
This is an exciting period for the Group and we look forward to reporting
further progress. I would like to thank all the shareholders for their support
at this early stage of the Group's development and also to pay tribute to the
Group's staff who are working most diligently and effectively to make a success
of Bluewater Bio.
Adrian Collins
Chairman
27th March 2008
Consolidated Income Statement
For the period ended 31 December 2007
Period
ended
31 December
2007
Note USD'000
Revenue -
Administrative expenses (75)
-----------
Loss from operations (75)
Finance income 5 5
-----------
Loss before taxation (70)
Taxation 6 -
-----------
Loss after taxation and retained (70)
loss attributable to the equity ===========
holders of the company
Loss per ordinary share (cents) 7
Basic (0.15)
Diluted (0.15)
===========
Consolidated Statement of Changes in Equity
For the period ended 31 December 2007
Shares
to be Profit
Share Share issued and loss Total
capital premium reserve account equity
USD'000 USD'000 USD'000 USD'000 USD'000
Loss for the period - - - (70) (70)
Issue of share capital 2,136 41,881 - - 44,017
Cost of share issue - (1,323) - - (1,323)
Shares to be issued - - 6,827 - 6,827
Exchange difference on
cost of business
combination - - - - -
------- ------- ------- ------- -------
At 31 December 2007 2,136 40,558 6,827 (70) 49,451
======= ======= ======= ======= =======
Consolidated Balance Sheet
At 31 December 2007
31 December
2007
Note USD'000
ASSETS
Non-current assets
Intangible assets 8 46,181
Property, plant and equipment 9 21
---------
46,202
Current assets
Other receivables 11 325
Cash and cash equivalents 3,815
---------
Total current assets 4,140
---------
Total assets 50,342
=========
LIABILITIES
Current liabilities
Other payables 12 891
---------
891
Total liabilities 891
---------
EQUITY
Share capital 14 2,136
Share premium 40,558
Shares to be issued reserve 6,827
Profit and loss account (70)
Total equity attributable to equity ---------
holders of the Company 49,451
---------
Total equity and liabilities 50,342
=========
Consolidated Cash Flow Statement
For the period ended 31 December 2007
Period ended
31 December
2007
USD'000
Cash flows from operating activities
Loss before taxation (70)
Interest received (5)
Change in other receivables (14)
Change in other payables (1,464)
---------
Net cash (outflow) from operating activities (1,553)
---------
Purchase of subsidiary - professional fees (687)
Cash acquired with subsidiary undertaking 164
Interest received 5
---------
Net cash used in investing activities (518)
---------
Cash flows from financing activities
Proceeds from issue of share capital 7,011
Share issue costs (1,125)
---------
Net cash inflow from financing activities 5,886
---------
---------
Net change in cash and cash equivalents 3,815
---------
Cash and cash equivalents at beginning of period -
---------
Cash and cash equivalents at end of period 3,815
=========
Notes to the Interim Results
For the period ended 31 December 2007
1 General Information
The information for the period from 12 September 2007 to 31 December 2007 does
not constitute statutory accounts as defined in section 240 of Companies Act
1985.
2 Accounting Policies
Basis of Preparation
The Company was incorporated in the Cayman Islands which do not prescribe the
adoption of any particular accounting framework. The Board has therefore adopted
and complied with International Financial Reporting Standards (as adopted by the
EU) (IFRS) and this interim report has been prepared on this basis, under the
historical cost convention and in accordance with International Accounting
Standard 34 "Interim Financial Reporting". The Company's shares are listed on
the AIM market of the London Stock Exchange.
The interim financial statements for the period ended 31 December 2007 were
approved by the Board on 25th March 2008.
The principal accounting policies of the Group are set out below.
Basis of consolidation
The Group financial statements consolidate those of the Company and all of its
subsidiary undertakings drawn up to the balance sheet date. Subsidiaries are
entities over which the Group has the power to control the financial and
operating policies so as to obtain benefits from their activities. The Group
obtains and exercises control through voting rights.
Unrealised gains on transactions between the Group and its subsidiaries are
eliminated. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred. Amounts reported in
the financial statements of subsidiaries have been adjusted where necessary to
ensure consistency with the accounting policies adopted by the Group.
Acquisitions of subsidiaries are dealt with by the purchase method. The purchase
method involves the recognition at fair value of all identifiable assets and
liabilities, including contingent liabilities of the subsidiary, at the
acquisition date, regardless of whether or not they were recorded in the
financial statements of the subsidiary prior to acquisition. On initial
recognition, the assets and liabilities of the subsidiary are included in the
consolidated balance sheet at their fair values, which are also used as the
bases for subsequent measurement in accordance with the Group accounting
policies. Goodwill is stated after separating out identifiable intangible
assets. Goodwill represents the excess of acquisition cost over the fair value
of the Group's share of the identifiable net assets of the acquired subsidiary
at the date of acquisition.
Goodwill
Goodwill, representing the excess of the cost of the business combination over
the fair value of the Group's share of the identifiable net assets acquired, is
capitalised and reviewed annually for impairment. Goodwill is carried at cost
less accumulated impairment losses. Any excess in the net fair value of an
acquiree's identifiable net assets over the cost of acquisition is recognised
immediately after acquisition in the income statement.
Taxation
Current tax is the tax currently payable based on taxable profit or loss for the
period.
Deferred income taxes are calculated using the liability method on temporary
differences. This involves the comparison of the carrying amounts of assets and
liabilities in the consolidated financial statements with their respective tax
bases. Deferred tax is generally provided on the difference between the carrying
amounts of assets and liabilities and their tax bases. However, deferred tax is
not provided on the initial recognition of goodwill, nor on the initial
recognition of an asset or liability unless the related transaction is a
business combination or affects tax or accounting profit. In addition, tax
losses available to be carried forward as well as other income tax credits to
the Group are assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided for in full, with no discounting. Deferred
tax assets are recognised to the extent that it is probable that the underlying
deductible temporary differences will be able to be offset against future
taxable income. Current and deferred tax assets and liabilities are calculated
at tax rates that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted at the balance
sheet date.
Changes in deferred tax assets or liabilities are recognised as a component of
tax expense in the income statement except where they relate to items that are
charged directly to equity in which case they are charged or credited directly
to equity.
Intangible Assets
Assets acquired as part of a business combination
In accordance with IFRS 3 "Business Combinations", an intangible asset acquired
in a business combination is deemed to have a cost to the Group of its fair
value at the acquisition date. The fair value of the intangible asset reflects
market expectations about the probability that the future economic benefits
embodied in the asset will flow to the Group. The fair value is then amortised
over the economic life of the asset as detailed above. Where an intangible asset
might be separable, but only together with a related tangible or intangible
asset, the group of assets is recognised as a single asset separately from
goodwill where the individual fair values of the assets in the Group are not
reliably measurable. Where the individual fair values of the complementary
assets are reliably measurable, the Group recognises them as a single asset
provided the individual assets have similar useful lives.
Impairment testing of goodwill, other intangible assets and property, plant and
equipment
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash-generating
units). As a result, some assets are tested individually for impairment and some
are tested at cash-generating unit level. Goodwill is allocated to those
cash-generating units that are expected to benefit from synergies of the related
business combination and represent the lowest level within the Group at which
management monitors the related cash flows.
Goodwill, other individual assets or cash-generating units that include
goodwill, other intangible assets with an indefinite useful life, and those
intangible assets not yet available for use are tested for impairment at least
annually. All other individual assets or cash-generating units are tested for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset's or
cash-generating unit's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of fair value, reflecting market conditions
less costs to sell, and value in use based on an internal discounted cash flow
evaluation. Impairment losses recognised for cash-generating units, to which
goodwill has been allocated, are credited initially to the carrying amount of
goodwill. Any remaining impairment loss is charged pro rata to the other assets
in the cash generating unit. With the exception of goodwill, all assets are
subsequently reassessed for indications that an impairment loss previously
recognised may no longer exist.
Financial Assets
The Group's financial assets comprise other receivables. All financial assets
are recognised on entering into contractual arrangements. All financial assets
are initially recognised at fair value; plus transaction costs.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, bank deposits
repayable on demand and other short-term highly liquid investments with original
maturities of three months or less from the date of acquisition.
Equity
Share capital is determined using the nominal value of shares that have been
issued.
The share premium account represents premiums received on the initial issuing of
the share capital. Any transaction costs associated with the issuing of shares
are deducted from share premium, net of any related income tax benefits.
The shares to be issued reserve represent shares to be issued at the estimated
share price at the date of issue.
The profit and loss account includes all current results as included in the
income statement.
Share Based Payments
All share based payment arrangements are recognised in the financial statements.
All services received in exchanges for the grant of any share based remuneration
are measured at their fair values. These are indirectly determined by reference
to the fair value of the share options/warrants awarded. Their value is
appraised at the grant date and excludes the impact of any non-market vesting
conditions (for example, profitability and sales growth targets).
Share based payments are ultimately recognised as an expense in profit or loss
or included as part of the cost of share issues with a corresponding credit to
the share based payment reserve, net of deferred tax where applicable. If
vesting periods or other vesting conditions apply, the expense is allocated over
the vesting period, based on the best available estimate of the number of share
options/ warrants expected to vest. No adjustment is made to the expense of
share issue cost recognised in prior periods if fewer share options/ warrants
ultimately are exercised than originally estimated.
Upon exercise of share options/ warrants, the proceeds received net of any
directly attributable transaction costs up to the nominal value of the shares
issued are allocated to share capital with any excess being recorded as share
premium.
Financial Liabilities
The Group's financial liabilities include loans and other payables. Financial
liabilities are obligations to pay cash or other financial assets and are
recognised when the Group becomes a party to the contractual provisions of the
instrument.
All financial liabilities are recognised initially at fair value, net of direct
issue costs, and are subsequently recorded at amortised cost using the effective
interest method with interest related charges recognised as an expense in the
income statement.
Dividend distributions to shareholders are included in 'other short term
financial liabilities' when the dividends are approved by the shareholders'
before the period end.
Other provisions, contingent liabilities and contingent assets
Provisions are recognised when present obligations will probably lead to an
outflow of economic resources from the Group and they can be estimated reliably.
The timing or amount of the outflow may still be uncertain. A present obligation
arises from the presence of a legal or constructive commitment that has resulted
from past events, for example, legal disputes or onerous contracts.
Provisions are measured at the estimated expenditure required to settle the
present obligation, based on the most reliable evidence available at the balance
sheet date, including the risks and uncertainties associated with the present
obligation. Any reimbursement expected to be received in the course of
settlement of the present obligation is recognised, if virtually certain as a
separate asset, not exceeding the amount of the related provision. Where there
are a number of similar obligations, the likelihood that an outflow will be
required in settlement is determined by considering the class of obligations as
a whole. In addition, long term provisions are discounted to their present
values, where time value of money is material. All provisions are reviewed at
each balance sheet date and adjusted to reflect the current best estimate.
In those cases where the possible outflow of economic resource as a result of
present obligations is considered improbable or remote, or the amount to be
provided for cannot be measured reliably, no liability is recognised in the
balance sheet. Probable inflows of economic benefits to the Group that do not
yet meet the recognition criteria of an asset are considered contingent assets.
Property, plant and equipment
Measurement bases
Property, plant and equipment are stated at cost less accumulated depreciation
and impairment losses. The cost of an asset comprises its purchase price and any
directly attributable costs of bringing the asset to the working condition and
location for its intended use. Subsequent expenditure relating to property,
plant and equipment is added to the carrying amount of the assets only when it
is probable that future economic benefits associated with the item will flow to
the Group and the cost of the item can be measured reliably. All other costs,
such as repairs and maintenance are charged to the income statement during the
period in which they are incurred.
When assets are sold, any gain or loss resulting from their disposal, being the
difference between the net disposal proceeds and the carrying amount of the
assets, is included in the income statement
Depreciation
Depreciation is calculated so as to write off the cost of property, plant and
equipment, less its estimated residual value, which is reviewed annually, over
its useful economic life on a straight line basis as follows:
Office Equipment 33% straight line
Foreign currencies
The financial statements are presented in US Dollars which is the presentation
currency of the Group.
The functional currency of the subsidiaries is considered to be sterling and the
functional currency of the parent company is also sterling.
Transactions in foreign currencies are translated into the functional currency
at the exchange rate ruling at the date of the transaction. Monetary assets and
liabilities in foreign currencies are translated at the rates of exchange ruling
at the balance sheet date. Non-monetary items that are measured at historical
cost in a foreign currency are translated at the exchange rate at the date of
the transaction. Non-monetary items that are measured at fair value in a foreign
currency are translated into the functional currency using the exchange rates at
the date when the fair value was determined.
Any exchange differences arising on the settlement of monetary items or on
translating monetary items at rates different from those at which they were
initially recorded are recognised in the profit or loss in the period in which
they arise. Exchange differences on non-monetary items are recognised in the
statement of changes in equity to the extent that they relate to a gain or loss
on that non-monetary item taken to the statement of changes in equity, otherwise
such gains and losses are recognised in the income statement.
The assets are liabilities in the financial statement of group companies are
translated into the presentation currency at the rate of exchange ruling at the
balance sheet date. Income and expenses are translated at the exchange rate at
the date of the transaction. Goodwill and intangible assets are treated as
assets of the subsidiary to which they relate and are translated from the
functional currency of that subsidiary to the presentation currency of the Group
at the rate of exchange ruling at the balance sheet date. Related impairment and
amortisation charges are translated at the actual rate.
The exchange differences arising from translation to the presentation currency
are taken directly to the foreign exchange reserve.
Segmental reporting
A segment is a distinguishable component of the Group that is engaged either in
a particular business (business segment) or conducting business in a particular
geographical area (geographical segment), which is subject to risks and rewards
that are different from those of other segments.
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual
results. The estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the
next accounting year are discussed below:
Impairment of assets
The Group conducts impairment reviews of assets when events or changes in
circumstances indicate that their carrying amounts may not be recoverable
annually, or in accordance with the relevant accounting standards. An impairment
loss is recognised when the carrying amount of an asset is lower than the
greater of its net selling price or the value in use. In determining the value
in use, management assesses the present value of the estimated future cash flows
expected to arise from the continuing use of the asset and from its disposal at
the end of its useful life. Estimates and judgments are applied in determining
these future cash flows and the discount rate. As there are no current
indications of impairment to the intangible assets an annual impairment review
will be undertaken at 30 June 2008.
Critical judgements in applying the Group's accounting policies
The directors in applying the accounting policies, which are described above,
consider that the most significant judgement they have had to make is the use of
the purchase method of accounting for the acquisitions as detailed in note 10.
3 Segmental Information
(a) Primary business segment
The directors consider that the Group's primary business segment is that of
design of a proprietary waste water treatment and the sale of associated
equipment internationally.
(b) Secondary business segment - geographical area
The only material geographical segments that the group currently operates in are
the UK and South Korea.
The results for each business segment are identical to those set out in the
Consolidated Income Statement.
4 Employee Remuneration
Expense recognised for employee benefits, including key management personnel, is
analysed below:
Period
ended
31 December
2007
USD'000
Wages and salaries 31
=======
Included within the above are amounts in respect of key management personnel as
follows:
Period
ended
31 December
2007
USD'000
Emoluments 31
=======
The average number of persons (including directors) employed by the Group during
the period was 7.
5 Finance Income
Period
ended
31 December
2007
USD'000
Bank interest receivable 5
=======
6 Taxation
Period
ended
31 December
2007
USD'000
Current tax charge -
Deferred tax credit (note 13 ) -
-------
-
=======
The Company is registered in the Cayman Islands and is therefore not subject to
corporation tax. The subsidiary companies are registered in the UK and Korea and
are subject to corporation tax at 29%, which is the effective tax rate for the
Group. The tax assessed for the period differs from the Group's effective rate
as follows:
Period
ended
31 December
2007
USD'000
Loss for the period before tax (70)
-------
Loss for the period multiplied by effective rate
of tax for the Group of 29% (20)
Effect of:
Cayman Islands taxation 20
-------
Total tax (credit) for the period -
=======
7 Loss Per Share
The calculation of the basic loss per share is based on the loss after tax
attributable to ordinary shareholders of USD 70,000 divided by the weighted
average number of ordinary shares in issue during the period of 45,257,290
Reconciliations of the loss and weighted average number of shares used in the
calculations are set out below.
Period
ended
31 December
Continuing operations
Loss after tax attributable to ordinary shareholders (USD'000) (70)
Weighted average number of shares 45,257,290
Basic loss per share (c) (0.15)
-------
The impact of share options and shares to be issued is anti-dilutive.
8 Intangible Assets
31 December 2007
Goodwill on
Patents consolidation Total
USD'000 USD'000 USD'000
Cost
On acquisition 692 45,489 46,181
------- ------- -------
At 31 December 2007 692 45,489 46,181
======= ======= =======
======= ======= =======
Amortisation
Charge in the period - - -
------- ------- -------
At 31 December 2007 - -
======= ======= =======
Net book amount at 31 December 2007 692 45,489 46,181
======= ======= =======
9 Property, Plant and Equipment
31 December
2007
Office equipment
USD'000
Cost
On acquisition 21
-------
At 31 December 2007 21
=======
Depreciation
Charge in the period -
-------
At 31 December 2007 -
=======
Net book amount at 31 December 2007 21
=======
10 Acquisitions
On 13 December 2007, the Group acquired 100% of the issued ordinary share
capital of Bluewater Bio Limited, Global Water Institute Korea Limited, Global
Water Institute Limited and Javel Limited for a total consideration of USD
43,806,000. The acquisition has been accounted for by the purchase method of
accounting. From the date of acquisition to 31 December 2007 the acquisitions
did not contribute to revenue or losses of the group.
The cost of the business combination comprises the following:
Period
ended
31 December
2007
USD'000
Cash consideration -
Issue of ordinary shares in Bluewater Bio International 36,808
Shares to be issued 6,310
Due diligence fees 647
Other professional fees 40
-------
Fair value of purchase consideration 43,805
=======
The fair value of the net assets and liabilities acquired has been determined as
follows:
Fair value
Book value adjustments Fair value
USD'000 USD'000 USD'000
Intangible assets 692 - 692
Property, plant & equipment 21 - 21
------- ------- -------
Non-current assets 713 - 713
Other receivables 290 - 290
Cash and cash equivalents 164 - 164
Current assets 454 - 454
------- ------- -------
Other payables (2,851) - (2,851)
------- ------- -------
Current liabilities (2,851) - (2,851)
------- ------- -------
Non-current liabilities - - -
Fair value of net assets (1,684) - (1,684)
------- ------- -------
Goodwill capitalised 45,489
-------
Fair value of purchase consideration 43,805
=======
The provisional allocation of the fair value adjustments and the goodwill is
still under review
11 Other Receivables
31 December
2007
USD'000
Other receivables 312
Prepayments and accrued income 13
-------
325
=======
The fair value of these short term financial assets is not individually
determined as the carrying amount is a reasonable approximation of fair value.
12 Current Liabilities - Other Payables
31 December
2007
USD'000
Loans 262
Other payables 586
Accruals 43
-------
891
=======
The fair value of other payables has not been disclosed as, due to their short
duration, management considers the carrying amounts recognised in the balance
sheet to be a reasonable approximation of their fair value.
13 Deferred Taxation
The Group has no unrecognised deferred taxation assets and liabilities at 31
December 2007.
14 Share capital
2007
USD'000
Authorised
300,000,000 ordinary shares of 0.5 pence 2,976
=======
Allotted, issued and fully paid
215,283,438 ordinary shares of 0.5 pence 2,136
=======
The Company was incorporated on 12 September 2007 with an authorised share
capital of $2,480,000 divided into 250,000,000 ordinary shares of 0.5 pence
each. One ordinary share was issued at par.
On 15 November 2007, the authorised share capital was increased to $2,976,000
divided into 300,000,000 ordinary shares of 0.5 pence. On the same day
39,399,999 ordinary shares of 0.5 pence each were issued at par to the founding
shareholders raising $391,000.
On 13 December 2007, 27,483,438 ordinary shares of 0.5p each were issued at
12.5p per share. The total value of the issue was $6,618,000 (including 800,000
ordinary shares issued to the Nominated Advisor as part of their advisory fee).
The total premium on the issue before costs of $6,354,000 was credited to the
share premium account.
On 13 December 2007 148,400,000 ordinary shares of 0.5p each were issued as
consideration shares to the vendors of Bluewater Bio Limited, Global Water
Institute Korea Limited, Global Water Institute Limited and Javel Limited at a
valuation of 12.5p per share. The total premium on the issue before costs of
$35,337,000 was credited to the share premium account.
At 31 December 2007, warrants to subscribe at par per share for 27,523,000
Ordinary Shares were in existence.
15 Share Options
The Group has adopted as employee options scheme in order to incentivise key
management and staff. The fair value of options granted was determined using the
Black-Scholes valuation model. Significant inputs to the calculations were as
follows:
* 50% to 100% volatility based on expected share price
(ascertained by reference to historic share prices of both the Company and
comparable listed companies)
* a risk free interest rate of 5.50%
At 31 December 2007 the Group had the following options outstanding:
Market
price at
Grant date of
Date of grant Dates exercisable price issue Number Fair value
13 December 2007 1 year from date of grant 12.5p 12.5p 6,066,845 4.9940p
13 December 2007 2 years from date of grant 12.5p 12.5p 5,947,834 5.4628p
13 December 2007 3 years from date of grant 12.5p 12.5p 5,947,821 4.8852p
17,962,500
No share based payment has been recognised in the income statement for the
period ended 31 December 2007.
16 Contingent Liabilities
There were no contingent liabilities at 31 December 2007.
17 Capital Commitments
There were no capital commitments at 31 December 2007.
18 Financial Instruments
The Group is exposed to a variety of financial risks which result from both its
operating and investing activities. The Board is responsible for co-ordinating
the Group's risk management and focuses on actively securing the Group's short
to medium term cash flows. Long term financial investments are managed to
generate lasting returns.
The Group does not actively engage in the trading of financial assets and has no
financial derivatives. The most significant risks to which the Group is exposed
are described below:
Credit risk
The Group's credit risk will be primarily attributable to its trade receivables.
At 31 December 2007, the Group had no trade receivables and therefore no risk
arises.
Cash flow risks
The Group seeks to manage risks to ensure sufficient liquidity is available to
meet foreseeable needs and to invest cash assets safely and profitably. The
Directors prepare rolling cash flow forecasts and seek to raise additional
funding whenever a shortfall in facilities is forecast.
19 Related Party Transactions
Transactions with related companies
On admission to AIM, 3,283,438 shares were issued to Corvus Capital Inc (a
significant shareholder) for a total consideration of �410,000 in order to fully
satisfy the loan outstanding to Corvus Capital Inc from the Company at the date
of AIM admission.
Transactions with key management personnel
The following transactions with key management personnel took place during the
period:
Interest
Loan balance (payable) payable
31 December At date of 31 December
2007 appointment 2007
USD'000 USD'000 USD'000
William Moon (162) (162) -
Geneva Financial Services - (170) 4
Daniel Ishag (100) (270) 2
------- ------- -------
(262) (602) 6
======= ======= =======
Geneva Financial Services is a company controlled by Yves Cohen, a non executive
director of the Company
This information is provided by RNS
The company news service from the London Stock Exchange
END
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