RNS Number : 3364E
Spearhead Limited Inc.
26 September 2008
26 September 2008
Spearhead Limited, Inc ('Spearhead' or the 'Company')
Interim Results
We take pleasure in announcing the interim results for the period ended 30 June 2008 for Spearhead.
During this period, Spearhead recorded an operating loss of US$57,154 compared to a loss of US$925,368 for the first six months of 2007,
on turnover of US$6,246,947 for the first six months of 2008, compared to a turnover of US$6,811,737 for the equivalent period during 2007.
During the first six months of 2008, the Company's core IT consulting business maintained its focus on increasing the margins, which
increased from 13.41% to 17.76%, resulting in an increase in gross profit from US$913,367 for the first six months of 2007 to US$1,109,691
for the equivalent period during 2008.
During the first six months of 2008, the Company's net income from its IT consulting business, after associated general and
administrative expenses, increased to US$287,852, compared to US$254,714 for the same period during 2007.
The Company's reduced merchant banking expenses and interest costs to US$345,006 for the first six months of 2008, compared to
US$1,180,082 for the corresponding period in 2007. This resulted in an operating loss for the Company of US$57,154, compared to an operating
loss of US$925,368 for the same period last year.
The improvement in the results is reflected on the statement of consolidated cashflows; during the first six months of 2008, the Company
generated US$722,441 of operational cashflow, compared to a negative operating cashflow of US$702,008 for the same period during 2007. As a
result, the Company was able to reduce its line of credit by US$787,005 in 2008 to US$1,354,046 (2007: US$2,141,051) while maintaining full
operations with no incremental funding requirement by way of shareholder loans.
The change in classification of some of the investor loans from long term as at 31 December 2007 to short term as at 30 June 2008 was
dictated by the 31 January 2009 maturity date of those loans.
In addition to the IT consulting business of its Ottawa based subsidiary, the Company continued evaluating acquisition opportunities
during the six month period ended 30 June 2008, while recognizing the need to improve its financial position.
Michel Marengere
Chairman
Contacts
Michel Marengere +1 561 912 9977
CEO & Chairman of the Board
Nominated Adviser
Nabarro Wells & Co. Limited +44 (0)20 7634 4705
David Nabarro
Spearhead Limited, Inc. and Subsidiary
Condensed Consolidated Balance Sheets
(Unaudited)
30 June 31 December
2008 2007
$ $
Current assets:
Cash 38,584 192,293
Accounts receivable - trade 1,982,322 2,650,950
Accounts receivable - other
Prepaid expenses 82,845 20,752
Future income taxes 204,998 211,181
Total current assets 2,308,749 3,075,176
Property and equipment net 92,638 114,656
Goodwill 2,743,091 2,743,091
Future income taxes 212,221 218,622
Total assets 5,356,699 6,151,545
Current liabilities
Demand loan 1,354,046 2,141,051
Accounts payable and accrued expenses 3,791,828 3,653,147
Loans payable stockholders' 879,370 879,370
Loans payable stockholders' and related 5,150,923
parties
Loans payable 632,225
Total current liabilities 11,808,392 6,673,568
Loans payable stockholders' 5,150,923
Loans payable 632,225
Long Term Liabilities 0 5,783,148
Total liabilities 11,808,392 12,456,716
Stockholders' equity
Capital stock, .001 par value;
200,000,000 shares
authorized; 40,651,512 issued and 40,651 40,651
outstanding
Preferred stock, $.001 par value -0- 0 0
shares issued and outstanding
Paid in capital 5,716,349 5,716,349
Retained earnings (deficit) (12,319,337) (12,353,524)
Accumulated comprehensive income 110,644 291,353
Total stockholders equity (6,491,693) (6,305,171)
Total liabilities and stockholders' 5,356,699 6,151,545
equity
Spearhead Limited, Inc. and Subsidiary
Condensed Consolidated Statement of Operations
For the six months ended 30 June
(Unaudited)
2008 2007
$ $
Consulting revenue 6,246,947 6,811,737
Direct expenses 5,137,256 5,898,370
Gross margin 1,109,691 913,367
Selling, general & administrative expenses 821,839 658,653
Net income (loss) from continuing operations 287,852 254,714
Merchant banking expenses
General & administrative 130,719 746,921
Interest expense 214,287 433,161
Total merchant banking expenses 345,006 1,180,082
Operating loss (57,154) (925,368)
Net (loss) per share ($0.001) ($0.02)
Spearhead Limited, Inc. and Subsidiary
Condensed Consolidated Statements of Cash Flows
30 June
(Unaudited)
2008 2007
$ $
Cash flow from operating activities (57,154) (925,368)
Adjustments to reconcile net loss to net cash used
for operating activities:
Depreciation and amortization 21,795 28,284
Change in assets and liabilities, net of effects of
acquisitions and dispositions
(Increase) decrease in accounts receivable 668,628 11,795
(Increase) decrease in prepaid expenses (62,093) 1,010
Increase (decrease) in accounts payable and accrued 138,681 223,827
expenses
Increase (decrease) in income taxes future 12,584 (41,556)
Total adjustments 779,595 223,360
Net cash provided for (used by) operations 722,441 (702,008)
Cash flows from investing activities
(Purchase) disposal of equipment 223 14,262
Cash flows from investing activities 223 14,262
Cash flows from financing activities
Borrowings (repayment) on line of credit (787,005) 363,243
Borrowing from stockholders 325,000
Cash flows from financing activities (787,005) 688,243
Effect of exchange rate changes on cash (89,368)
Net increase (decrease in cash) (153,709) 497
Cash at beginning of period 192,293 1,514
Cash at end of period 38,584 2,011
Cash paid for interest 0 0
Basis of presentation
These consolidated financial statements of Spearhead Limited, Inc. have been prepared in accordance with generally accepted accounting
principles in the United States of America ("US GAAP") for interim financial statements and do not include all the disclosures required in
annual financial statements. These consolidated financial statements should be read in conjunction with the annual financial statements for
the year ended 31 December 2007.
In the Directors' opinion, all adjustments necessary for fair presentation are reflected in the financial statements. All adjustments
made are normal and recurring in nature. Spearhead Limited, Inc. together with its wholly owned subsidiary, has followed the same accounting
policies and methods of application as in the most recent audited financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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