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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Graphite Energy Corp | CSE:GRE | CSE | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.465 | 0.035 | 0.025 | 0 | 00:00:00 |
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RNS Number:9680M
Greenchip Investments PLC
30 June 2003
CHAIRMAN'S STATEMENT
During the period under review the Group has had to deal with many technical and
financial impediments in its pursuit of its underlying business strategy, this
being the creation of a technology platform company in the generic field of
programmable materials, with a primary emphasis on degradable and biodegradable
polymers.
There has been, and continues to be, industry interest in the Group's degradable
technologies and the manufacturing cost benefits which have been independently
attributed to them, and, in particular, in the development of a syrup-based
degradent material which has been at the core of the current effort.
Regrettably, I have to report to you that, in common with many other early-stage
development projects, it has proved more difficult, time-consuming and expensive
than originally envisaged to bring this technology to commercial fruition.
In the interim statement published on 27th September 2002, the Board also
mentioned that it had identified, and was pursuing, a number of potential
merger/acquisition transactions. One such potential acquisition was, in fact, at
an advanced stage of discussions and, subject to financing and final due
diligence, was expected to close no later than February of this year. I regret
to inform shareholders that, despite the potential benefits of the acquisition,
the Group was not able to complete the transaction due to its inability to
secure the necessary finance. Accordingly, negotiations in respect of this
transaction have been abandoned.
Considerable effort is still going into maximising the future benefits from the
existing Group patent portfolio. However, the substantial product development
and marketing effort that was expended during 2002 has absorbed most of the
Group's available cash resources, as reflected in these financial statements. At
this time there can be little certainty of the quantum of new funding which will
be required to bring the product development and marketing effort to fruition
and shareholders should remain cognisant that the funds thus required could be
equal to, or even exceed, those already expended in the period from January
2002. This notwithstanding, the Board will continue to make every possible
effort to procure new funding although shareholders should note that there can
be no guarantee that such efforts will prove successful.
Day-to-day management of the Group was effectively passed to the American
management team following the acquisition in January 2002 of Programmable Life
Inc. ("PLI") but, in spite of efforts from the new team, the absence of a
licensable product or system to take to market did not permit any significant
commercial successes in the period under review. Save for Bob Downie, who
remains the sole executive director of the Group, all of the other new
appointees have resigned from their positions.
The acquisition of PLI resulted in an increase in the Company's issued share
capital from circa 35m to 135m Ordinary Shares. Upon preparation of the
statutory financial statements of the Group for the 12 months to 31st December
2002, this gave rise to Goodwill upon Consolidation of approximately #4.10m. In
view of the uncertainties now prevailing, and in consideration of the financial
reporting requirements under FRS11 (Impairment of Fixed Assets and Goodwill),
the Board has considered it necessary to make a full provision against the
goodwill arising on consolidation. This has meant the taking of an exceptional
charge of some #4.10m in the period, that being the major component of the
retained loss for the year of #5.14m.
As a result of this, the Group's net assets are now less than half its called-up
share capital. Section 142 of the Companies Act 1985 requires the Board to
convene an Extraordinary General Meeting of shareholders no later than 56 days
from the date of the signing of these accounts, the purpose of the meeting being
to consider whether any, and if so what, measures should be taken to deal with
the current situation. On a more positive note, I am pleased to report that all
former and current directors and officers of the Group have agreed to waive any
and all claims that they might otherwise have against the Group in respect of
accrued but unpaid wages, salaries, fees and any other outstanding expenses.
Additionally, the three lenders of a Second Secured Loan Note in the sum of
US$250,000 have also agreed to write off entirely their entitlement to
repayment. It is also worth noting that all of the current Board have been
working in their current roles since November 2002 on an unpaid basis and will
continue to do so in order to identify and develop the most beneficial next
stage of development for the Group. These sacrifices have enabled the Group to
report both positive net assets and satisfactory solvency requirements for the
financial year ended 31st December 2002, notwithstanding the section 142
Companies Act 1985 issue referred to above.
In consideration of what is a complex position, the Board does not yet intend to
call the 2003 AGM, believing it to be in the best interest of all stakeholders
to have the opportunity to fully explore what avenues of opportunity may be open
to it before reporting further to shareholders. You may wish to note that the
latest date at which the AGM can be called is 31st October 2003, being 15 months
from the date of the last such meeting.
Finally, while the Board itself acknowledges the disappointing nature of this
report, shareholders can be assured that every possible effort will be made to
enable the capture of the potential in PLI's technology in which we all believed
and which we all supported when this project was first undertaken back in
January 2002.
Colin Hill
Non-executive Chairman
30th June 2003
GROUP PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER 2002
Acquisitions
2002 2001
# #
Turnover 80,861 133
Cost of Sales 82,326 12,529
______________ ______________
Gross loss (1,465) (12,396)
Administrative Expenses (including impairment of goodwill) 4,985,539 567,868
Other Operating Income 7,565 -
Operating loss before impairment of goodwill (878,205) (580,264)
Impairment of goodwill (4,101,234) -
______________ ______________
Operating loss (4,979,439) (580,264)
Interest receivable 12,757 57,123
Waiver of secured loans 155,247 -
Amounts written off investments (315,567) (48,803)
Interest payable (12,777) (7,228)
______________ ______________
Loss for the year before and after taxation #(5,139,779) #(579,172)
============== ==============
Loss per ordinary share - basic (3.68) p (1.91) p
============== ==============
Loss per ordinary share before impairment of goodwill - basic (0.74) p (1.91) p
============== ==============
There is no difference between the profits and losses stated above and their
historical cost equivalents.
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 31ST DECEMBER 2002
2002 2001
# #
Loss for the year (5,139,779) (579,172)
Exchange differences on translation of net assets
of subsidiary undertaking 62,193 -
_____________ _____________
Total losses recognised since last annual report #(5,077,586) #(579,172)
============= =============
GROUP BALANCE SHEET AS AT 31ST DECEMBER 2002
2002 2002 2001 2001
# # # #
FIXED ASSETS
Intangible Assets 157,233 -
Tangible Assets 1 2,000
Investments 91,875 32,442
______________ _______________
249,109 34,442
CURRENT ASSETS
Stocks 1,000 -
Debtors 12,518 298,021
Cash at bank and in hand 64,376 1,168,011
______________ _______________
77,894 1,466,032
CREDITORS: Amounts falling (131,180) (282,184)
due within one year
______________ _______________
NET CURRENT (LIABILITIES)/ (53,286) 1,183,848
ASSETS
______________ _______________
TOTAL ASSETS LESS CURRENT 195,823 1,218,290
LIABILITIES
CREDITORS: Amounts falling due (180,119) -
after more than one year
______________ _______________
#15,704 #1,218,290
============== ===============
CAPITAL AND RESERVES
Called up share capital 1,602,816 352,816
Share premium account 7,136,165 4,511,165
Profit and loss account (8,723,277) (3,645,691)
______________ _______________
SHAREHOLDERS' FUNDS #15,704 #1,218,290
============== ===============
COMPANY BALANCE SHEET AS AT 31ST DECEMBER 2002
2002 2002 2001 2001
# # # #
FIXED ASSETS
Tangible Assets - 2,000
Investments 91,875 32,442
______________ _______________
91,875 34,442
CURRENT ASSETS
Debtors 12,334 297,227
Cash at bank and in hand 32,787 1,167,375
______________ _______________
45,121 1,464,602
CREDITORS: Amounts falling (70,376) (279,598)
due within one year
______________ _______________
NET CURRENT (LIABILITIES)/ (25,255) 1,185,004
ASSETS
______________ _______________
TOTAL ASSETS LESS CURRENT 66,620 1,219,446
LIABILITIES
CREDITORS: Amounts falling due (1,185) -
after more than one year
______________ _______________
#65,435 #1,219,446
============== ===============
CAPITAL AND RESERVES
Called up share capital 1,602,816 352,816
Share premium account 7,136,165 4,511,165
Profit and loss account (8,673,546) (3,644,535)
______________ _______________
SHAREHOLDERS' FUNDS #65,435 #1,219,446
============== ===============
GROUP CASH FLOW STATEMENT FOR YEAR ENDED 31ST DECEMBER 2002
2002 2002 2001 2001
# # # #
Net cash outflow from (902,514) (576,837)
operating activities
Returns on investments and
servicing of finance
Interest receivable 12,757 57,123
Interest payable on hire purchase - (6,589)
contracts
Other interest payable (12,777) (639)
_______________ _______________
Net cash (outflow)/inflow from (20) 49,895
returns on investments and
servicing of finance
Capital expenditure
Payments to acquire tangible fixed - (647)
assets
Proceeds from disposal of tangible 285 11,429
fixed assets
_______________ _______________
Net cash inflow from capital 285 10,782
expenditure
Acquisitions and disposals
Purchase of subsidiary (288,318) -
Cash acquired with subsidiary 4,323 -
_______________ _______________
(283,995) -
_______________ _______________
Net cash outflow before financing (1,186,244) (516,160)
Financing
Issue of ordinary share capital - 218,750
Repayment of capital element of
hire purchase contracts - 45,065
_______________ _______________
Net cash inflow from financing - 173,685
_______________ _______________
Decrease in cash resources # (1,186,244) # (342,475)
=============== ===============
This information is provided by RNS
The company news service from the London Stock Exchange
END
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