NOVA RESOURCES LTD
The Board of Nova Resources Limited (AIM: NOVA), is pleased to announce the Company's interim results for the six months to 30 June 2014.
Enquiries:
Chan Fook Meng, Chairman and CEO
Daniel Stewart & Company plc (Nominated Advisor & Broker) +44 20 7776 6550Emma Earl / Alex Brearley
Chairman's Statement
I have pleasure in presenting our interim report for the period to 30 June 2014.
We have incurred a loss for the period of £2,487,000, which relates largely to ongoing developments with our investments. Specifically, the majority of this loss related to a re-valuation of the Company's holdings of warrants over shares in the share capital of Tricor Plc ("Tricor").
We issued a £30,000 convertible loan note in January 2014 for cash, for working capital purposes, which has been converted into 3,000,000 new ordinary shares of 1p each in the capital of the Company ("Ordinary Shares").
In January 2014, we invested in a company called Enerstry Group Limited ("EG"). EG owns 93.99% of Enerstry Co., Limited ("Enerstry Korea"). Enerstry Korea designs, builds and manages renewable energy plants providing heat energy and/or electricity generation. Nova owns 23.72% of EG's ordinary share capital and has also provided an unsecured loan of US$806,480 to EG, which bears interest of 10 per cent per annum was due to be repayable by 18 January 2015.
The loan of US$806,480 was originally provided to EG to allow it to pursue a pipeline involving multiple renewable energy plant projects. During the six months to 30 June 2014, Nova made a series of announcements regarding Enerstry Korea's corporate activities in South Korea. However, despite the progress made by EG, the Board believes that a significant proportion of the loan currently remains unutilised. Accordingly, subject to further developments within EG's business, the Board intends to seek the repayment of the majority of this loan in January 2015.
In February 2014 we acquired warrants over 34,000,000 ordinary shares in the share capital of Tricor. The Company financed this acquisition via the conversion of 200,000,000 warrants in Nova attached to the Company's unsecured loan notes, which resulted in the issue of an additional 200,000,000 new Ordinary Shares at a conversion price of 1p each. We also strengthened our balance sheet, by converting £86,250 of unsecured loan notes into a further 8,625,000 new Ordinary Shares at a conversion price of 1p.
During November 2013, Nova entered into two investment agreements with Upside Management (Offshore) SAL and Consiliou Growth Fund (the "Investment Facilities"). Under these Investment Facilities, each of Upside Management (Offshore) SAL and Consiliou Growth Fund will provide the Company with a facility of up to £500,000 until 31 December 2018. The Investment Facilities can be drawn down by the Company by way of a subscription for new Ordinary Shares at a price of 1p each. Additionally the Company will issue warrants equal to four times the number of Ordinary Shares in
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any such facility transaction, with such warrants having an exercise price of 1p per Ordinary Share. The Company drew down £258,000 from each of these Investment Facilities in January 2014.
Upside Management (Offshore) SAL and Consiliou Growth Fund have both confirmed that the sums remaining under the Investment Facilities, amounting to over £400,000, may be used by Nova for its working capital purposes.
Nova's cash position is critical and its Directors have agreed not to take a salary until such time as the Company has sufficient cash. Nova will need to draw down on the sums remaining under the aforementioned Investment Facilities or raise further new capital via other means, in order to meet the Company's ongoing financial commitments until such time as the Company's investments generate returns to the Company.
Subject to further developments within EG's business, the majority of the loan made by the Company to EG, as announced on 20 January 2014, is expected to be repaid to the Company by 18 January
2015, together with interest accrued at a rate of 10% on the original balance of $806,480. This repayment will be vital in providing financing to the Company. However, given that the loan is unsecured, there can be no guarantee that this loan will be repaid in the timescales and manner that Nova's Board anticipates.
Chairman
Nova Resources Limited Consolidated Comprehensive Income Statement For the period to 30 June 2014Notes | 6 Months 30 June 2014 Unaudited £'000s | Year to 31 December 2013 Audited £'000s | 6 Months 30 June 2013 Unaudited £'000s | |
Revenue | - | - | 41 | |
Cost of sales | - | - | (197) | |
Gross (loss) / profit | - | - | (156) | |
Administrative expenses | (133) | (358) | (446) | |
Operating loss | 4 | (133) | (358) | (602) |
Gains (Losses) on | ||||
financial assets designated | at fair | |||
value through profit or loss account | (2,354) | 47 | 27 | |
| | | ||
(2,487) | (311) | (575) | ||
Finance income | - | - | 5 | |
Finance expense | - | - | (53) | |
| | |
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operations | (2,487) | (311) | (623) |
Loss from discontinued operations | - | (786) | - |
| | | |
Loss for the year | (2,487) | (1,097) | (623) |
Income tax charges | - | - | - |
| | | |
Loss for the period | (2,487) | (1,097) | (623) |
Other comprehensive loss | - | (93) | (62) |
Total comprehensive loss | | | |
for the period | (2,487) | (1,190) | (685) |
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Attributable to: | |||
- Owners of the parent | (2,487) | (1,190) | (685) |
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Loss per share | |||
From continuing operations: |
Basic and diluted 6 (0.77p) (1.07p) (0.59p)
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Nova Resources Limited Consolidated Statement of Financial Position As at 30 June 2014 Notes 6 Months Year to 6 Months 30 June 2014 31 December 2013 30 June 2013 Assets Unaudited Audited Unaudited £'000s £'000s £'000sNon-current assets
Property, plant and equipment - - 2,174
Financial assets designated at
fair value through profit or loss account
Current assets
254 607 680
254 607 2,854
Cash and cash equivalents 4 19 6
Trade and other receivables 491 - 264
495 19 270
Total assets 749 626 3,124═══════ ═══════ ═══════
Equity and liabilitiesCapital and reserves
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Issued capital | 3,928 | 1,291 | 1,061 |
Share premium | 4,996 | 4,996 | 4,996 |
Loan note equity reserve | 29 | 29 | 13 |
Share based payment reserve | 23 | 23 | 17 |
Foreign exchange reserve | - | - | (62) |
Accumulated deficit | (8,607) | (6,120) | (5,553) |
| | | |
Total equity | 369 | 219 | 472 |
| | | |
Non Current liabilities | |||
Non-interest bearing loans | 85 | 124 | 14 |
| | | |
85 | 124 | 14 | |
| | | |
Current liabilities | |||
Trade and other payables | 214 | 185 | 486 |
Borrowings | - | | 2,129 |
Convertible loan | 81 | 98 | 23 |
| | | |
295 | 283 | 2,638 | |
| | | |
Total equity and liabilities | 749 | 626 | 3,124 |
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Purchases of plant and equipment - - (108)
Financing activitiesProceeds from issue of shares 516 - - Proceeds of issue of loan note 30 400 -
Net cash inflow/(outflow) (15) (100) (51)
Effects of changes in exchange rates - - (62) Cash and cash equivalents at the
beginning of the period 19 119 119
Bank balances and cash 4 19 6
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Reconciliation of operating loss to net cash outflow from operating activities4
Period to 30 June 2014 Unaudited Year to 31 December 2013 Audited Period to 30 June 2013 Unaudited Loss for the period before interest £'000s £'000s £'000s and tax (2,487) (996) (575)
Adjustments for:
Finance expense - - (53) Finance Income - - 5
Share based payment 35 6 - Provision for quoted investments - - (27)
Loss on
financial assets designated at fair value
through profit or loss account
2,354 - -
Depreciation - - 104 (Increase)/Decrease in inventory - 19 19 (Increase)/Decrease in receivables (492) 722 659
Increase/(decrease) in payables 29 (247) (75) Loss on disposal of fixed assets - (4) -
Net cash outflow from operating activities
(561) (500) 57
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Nova Resources Limited Consolidated statement of changes in equity For period to 30 June 2014Foreign | Share | Loan note | Share | Share | Accumulated | Total |
exchange reserve | based payment | equity reserve | capital | premium | deficit | |
reserve | ||||||
£000's | £'000s | £'000s | £'000s | £'000s | £'000s | £'000s |
Shares Issued in period - - - 361 2,392 - 2,753
Loss after tax - - - - - (3,168) (3,168)
Issue of convertible loan notes - - 13 - - - 13
Share based payments - 17 - - - - 17
Prior year losses in subsidiaries - - - - - (21) (21)
Loss after tax - - - - - (623) (623)
Foreign exchange reserve (62) - - - - - (62)
As at 30 June 2013 (62) 17 13 1,061 4,996 (5,553) 472Loss after tax - - - - - (567) (567) Conversion of loan notes - - - 230 - - 230
Capital portion of loan notes - - 16 - - - 16
Share based payment - 6 - - - - 6
Reserve no longer required 62 - - - - - 62
As at 31 December 2013 - 23 29 1,291 4,996 (6,120) 219Loss after tax - - - - - (2,487) (133) Issue of shares for cash - - - 516 - - 516
Conversion of loan notes - - - 86 - - 86
Exercise of loan of warrants - - - 2,035 - - 2,035
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Nova Resources Limited Notes to the Interim Financial Information 1. General InformationNova Resources Limited is incorporated in Bermuda with company number 39768 and quoted on the AIM market of the London Stock Exchange Plc.
2. Basis of Preparation
This interim report, which incorporates the financial information of the company, has been prepared using the historical cost convention, on a going concern basis and in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, using accounting policies which are consistent with those set out in the financial statement for the year ended 31 December 2013. This interim financial information for the six months ended 30 June
2014 was approved by the Board on 30 September 2014.
The group's primary reporting format is business segments and its secondary format is geographical segments. The group currently has neither an operating business nor geographical segment. Accordingly no segmental information for business segment or geographical segment is required.
4. Operating loss for the period is stated after charging / (crediting) Period to 30 June 2014 Unaudited Year to 31 December 2013 Audited Period to 30 June 2013 Unaudited £'000s £'000s £'000s
Depreciation - - 104
Share based payment 35 6 - (Profit) / Loss on foreign
currency translation - (7) (152)
Auditors' remuneration - 19 -
The fees paid in the period to
30 June 2014 were:
Chan Fook Meng - 30 - Christopher Morgan - 30 - Nazim Khan - 30 -
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Loss per ordinary share:
£'000s £'000s £'000s
Basic - pence (0.77p) (0.36p) (0.59p) Diluted - pence (0.77p) (0.36p) (0.59p)
The loss per ordinary share is based on the company's loss for the period of £2,487,000 (31
December 2013 - £1,190,000; 30 June 2013 - £685,000) and a basic and diluted weighted average number of shares in issue of 323,105,066 (31 December 2013 - 111,275,105; 30 June
2013 - 106,115,287).
On 29 January, the acquisition of the Company's 23.72% holding in Enerstry Group Limited was funded partly by the issue of 51,600,000 new ordinary shares of £0.01 each at par.
On 20 January, £38,250 of the unsecured loan stock 2017 were converted into 3,825,000 new ordinary shares of £0.01 each at par and a further £18,000 were converted at par into 1,800,000 new ordinary shares.
On 21 January 2014 warrants attached to the unsecured loan stock 2017 were converted into
3,500,000 new ordinary shares of £0.01 each and on 27 February a further 200,000,000 warrants were converted into 200,000,000 new ordinary shares of £0.01 each to fund the acquisition of investments.
On 20 January 2014 £30,000 unsecured loan notes 2018 were issued for cash, for working capital. These were convertible at par and on 22 January 2014 they were converted into
3,000,000 new ordinary shares of £0.01 each.
No loans were issued in the period - see note 7 for conversions.
9. Related-party transactionsTransactions between the group and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
10. Events subsequent to 30 June 2014No events occurred after the period end which require reporting.
11. The unaudited results for the period ended 30 June 2014 do not constitute statutory accounts.The comparative figures for the period ended 31 December 2013 are extracted from the audited financial statements which contained an unqualified audit report.
12. This interim financial statement will be, in accordance with Rule 26 of the AIM Rules for
Companies, available shortly on the company's website at www.novaresourceslimited.com.
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