Interim Results
Roxi Petroleum Plc
07 September 2007
Roxi Petroleum Plc
('Roxi' or the 'Company')
Interim Results for the six months ended 30 June 2007
Roxi Petroleum, which was admitted to AIM in May this year and was created to
acquire controlling interests in and develop oil and gas assets in Central Asia
particularly focusing on Kazakhstan, is pleased to announce its maiden interim
results.
Highlights
O Introduction to AIM in May with a market capitalisation at issue of
approximately £64 million at the placing price of 38p per share
O Raised £39 million from institutional investors to pursue the strategy of
building a diversified portfolio of oil and gas exploration and production
assets in Central Asia
O Strengthened operational team and infrastructure
Post balance sheet events
O Completed the purchase of Ravninnoe and Beibars contract areas - total
of approximately 295 sq km.
O Legal challenges on North Karamandybas have not yet been fully resolved
O Commenced project to reprocess and reinterpret all previous 2D seismic
and well log data on Ravninnoe
O Bids received for 3D seismic programme on Ravninnoe
O Second work-over rig to be mobilised on Ravninnoe Q4
O Invitations to tender issued for 3D seismic on Beibars block
O Proposed acquisition of three further licensed areas for $190 million
o Acquisitions cover approximately 1,200 sq km in Western Kazakhstan
o Valuation in excess of Roxi market capitalisation: deemed as a reverse
takeover under AIM Rules. Shares suspended pending full evaluation and
due diligence process
o Roxi's management will have operational and financial control of
potentially large high quality exploration and production acreage
o Acquisitions to be approved by EGM in due course
Rob Schoonbrood, CEO of Roxi, Commented:
'Roxi has had an extremely busy 2007. From creation of the company, through a
very successful IPO; development of our licenses and a major acquisition, we
have worked constantly to expand our asset base, creating value for
shareholders.
The proposed acquisition marks an excting new phase in Roxi's development. We
stated at IPO that we would both develop our portfolio and look to use our
experience and contacts within the region to add to it through acquisition.
Through the hard work of all the team, this strategy is beginning to bear fruit.
I am confident that we will continue to build on our foundations and deliver
long term value for our shareholders.'
7th September 2007
Enquiries:
Roxi Petroleum plc
Rob Schoonbrood, CEO 020 3159 5315 UK / 7 727 278 1022 KZ
David Barker, COO 020 3159 5315 UK / 7 727 278 1022 KZ
College Hill
Paddy Blewer 020 7457 2020
Nick Elwes 020 7457 2020
WH Ireland
James Joyce 020 7220 1666
Chairman's statement
I am very pleased to issue our first report to shareholders as a public company.
On 22 May the shares of Roxi Petroleum were admitted to trading on the London
Stock Exchange's junior stock market, AIM. At that time the Company raised some
$78 million from institutional investors to purse a strategy of building a
diversified portfolio of oil and gas exploration and production assets in
Central Asia within three to five years. Our initial focus is in Kazakhstan and
I am pleased to report the Company has made significant progress since admission
as is reported later in this interim report.
Progress since the Admission
At the time of our admission to AIM we had agreements to buy three principal
assets, Ravninnoe, Beibars, and North Karamandybas. Since admission, work has
proceeded as planned at Ravninnoe and Beibars but, as we reported at the time of
admission, your Board resolved to await the outcome of a legal challenge
regarding the ownership of the vendors' interests in the North Karamandybas
asset before completing its acquisition.
At the date of this interim report, the final result of the legal challenge has
not yet been fully resolved. Although your Board is hopeful for a positive
outcome, in order to take a prudent approach, the Directors have decided to make
a $3 million provision against the carrying value of the North Karamandybas
assets until the final legal position is determined.
Asset Acquisitions
On 22 August 2007, we announced three further asset acquisitions for an
aggregate purchase consideration of $190 million. This transaction marks a very
significant step forward in our development but it is only the first in what we
expect to be a number of significant acquisitions over the coming months and
years.
The value of the acquisitions announced on 22 August 2007, compared to the
market capitalisation of the Company immediately before the announcement has
resulted in the transaction being deemed a reverse takeover under the AIM Rules.
Consequently the Company's shares will remain suspended from trading until after
the full evaluation and due diligence process is completed and the publication
of a re-admission document for the enlarged group to AIM. The completion of the
acquisition is subject to shareholder approval at a forthcoming Extraordinary
General Meeting which is expected to be convened later this year.
Financial results
The financial statements in this interim report cover the interim period ended
30 June 2007. Most of our activities in this period are related to the
preparatory work for the IPO and resultant closure of the admission process
which is reflected in the results.
Annual General Meeting
It is conventional to requisition a company's Annual General Meeting following
the publication of the results for the year rather than for the first six months
of the financial year. However, under United Kingdom company law, as a recently
incorporated company, we would be required to hold our first Annual General
Meeting before the planned publication of our full year results for 2007.
Accordingly, you will find a notice of the Company's Annual General Meeting
which has been convened for 19 October 2007 at the end of this interim report.
Summary
The hard work of many people both inside and outside the Company made admission
to AIM possible and I would like to take this opportunity to thank them for
their efforts.
One of the key strengths of your Company is the experience of the executive
management team. It is remarkable that only three months after the date of
admission we have already moved a long way down the road in achieving our
strategic goals. Based on our progress to date and the opportunities we have
already been presented with I look forward with confidence to a successful
future.
Clive Carver
Non-Executive Chairman
7 September 2007
Chief Executive's statement
Acquisition strategy
Roxi Petroleum's strategy is to acquire oil and gas assets and enhance their
value, either by further development or enhanced production techniques. We are
mostly looking for assets that are either already producing or that have
promising near term production characteristics.
Over the medium term we have identified Central Asia as the area of our planned
operations, but in the short term have focused our efforts on the Pre-Caspian
Basin of Western Kazakhstan. This is an area that has already witnessed
significant discoveries and has an extensive extraction and distribution
infrastructure.
It is our strategy to work with local partners who are already well established
in the territories in which we wish to operate. We believe working with well
respected and experienced local partners enhances our operations through better
understanding of the complicated regulatory processes as well as giving us a
deeper knowledge of the local business environment.
In our current and future assets we seek to retain operational and financial
control and believe this is the most effective way to deliver projects on time
and to budget.
Pending acquisitions
On 22 August 2007 we announced the acquisition of three further assets for a
combined purchase consideration of $190 million, payable predominantly in new
Roxi Petroleum shares to be issued at 65p per share.
The assets being acquired cover approximately 1,200 square kilometres in Western
Kazakhstan in the Pre-Caspian and Turgai Basins. The assets give Roxi Petroleum
access to potentially large high quality exploration acreage and further
opportunities for early development of reserves already on the State balance.
The first asset is an Exploration Contract which covers an area of over 1,100
square kilometres, not far from the Tengiz oilfield in the Pre-Caspian Basin of
Western Kazakhstan. The contract for the block was signed earlier this year. The
block is considered by the Company to be highly prospective in both the Jurassic
sandstone at depths of 2,500-3,000m and in the pre-salt Carboniferous sandstones
and carbonates at depths of 4,000-5,000m. Exploration in this area since the
1980's has resulted in the development of several Jurassic discoveries in the
surrounding acreage.
The second asset is an Exploration and Production Contract in the Turgai Basin
near the town of Kyzylorda in central Kazakhstan. The field contains 'probable'
reserves, in Cretaceous and Jurassic sandstones, on a wrench fault structural
trap. There are four wells on the block with three delineating the oil-water
contact and one well drilled higher on the structure tested at rates of up to
70m3/d (500bopd). Exploration upside exists deeper in untested Triassic
sandstone targets.
The third asset is the rehabilitation of an oilfield in the southern Pre-Caspian
Basin. The field produced low rates with a high water cut from Cretaceous and
Jurassic sands at depths of 500-1,200m. The field was re-licensed in 2004. A
full evaluation of remaining reserves needs to be undertaken. Exploration
potential exists deeper in the Permo-Triassic reservoirs.
More than 99% of the purchase consideration is to be satisfied by the issue of
approximately 146 million new Roxi Petroleum shares at a fixed price of US$1.30
(65p at an exchange rate of 2US$ per 1£) per share. The consideration shares
will represent approximately 46 per cent. of the Company's enlarged share
capital.
The acquisitions, which give Roxi Petroleum a 59% interest in the holding
company of these assets, will constitute a reverse takeover under the AIM Rules
and also fall within the ambit of Rule 9 of the Takeover Code. Accordingly,
completion of the acquisitions, and the resumption of trading in Roxi Petroleum
shares, are conditional upon, inter alia, the publication of an admission
document on the enlarged company, obtaining a Rule 9 waiver from the Takeover
Panel, and approval by the Roxi Petroleum shareholders at a forthcoming
Extraordinary General Meeting.
The acquisitions follow the Company's strategy of acquiring further assets in
Central Asia. On completion of the acquisition, Roxi Petroleum's management will
have operational and financial control of the three oil and gas fields.
The Company will provide detailed information regarding the acquisition in the
re-admission document which will be published as soon as practical; however,
given the work involved this is expected to take several months.
The completion of these acquisitions is subject to prior approval from
shareholders. Based on our current expectations of the process required to
convene the required shareholder meeting, we anticipate taking operational and
financial control of these assets before the end of the year.
Future acquisitions
I am pleased to report that we have no shortage of projects to consider, many of
which appear to fit our strategy and show early promise. We have increased the
number of people in our technical evaluation team to allow us to comfortably
handle our existing and pending projects and to thoroughly evaluate new
opportunities.
Rob Schoonbrood
Chief Executive Officer
7 September 2007
Chief Operating Officer's statement
Staffing
From a standing start in late 2006, we have established a fully functioning
exploration and production infrastructure with effective technical, financial,
and operational capabilities. At the time of the admission in May 2007, we
employed four staff and two managers in our Almaty office. Since then we have
recruited a further twenty one staff and two managers, principally in the areas
of technical evaluation and finance.
Kazakhstan is a booming economy and we have been pleased that experienced and
sought after local staff have joined us.
Infrastructure
In Almaty, we have signed a lease for a new head office which will be capable of
accommodating the company's staff for the next two years with the current and
expected asset base. We are making renovations now and anticipate moving into
these new offices before the end of the year.
We have also opened a regional operations office in the Caspian Sea port of
Aktau. This office will be the center of operations for the existing fields and
two of the three expected acquisition assets
We have recently hired two experienced Western professionals, one to be based in
Aktau as the Area Operations Manager for Western Kazakhstan and one based in
Almaty as the Reservoir Manager.
Field activities
As is normal in any asset acquisition, a series of approvals and regulatory
filings must be submitted, reviewed and approved before actual work begins.
Roxi Petroleum has made significant progress in getting all of the needed
permits and approvals to begin work on both the Ravninnoe and the Beibars
assets.
Ravninnoe Contract Area
The Ravninnoe Contract Area covers 121 square kilometres and is located
approximately 100 kilometres north east of the Tengiz field in the South Emba
sub-basin of the pre-Caspian basin, in the Atyrau Oblast of West Kazakhstan.
Extensive time has been spent for the submission and approval of regulatory
filings and licences in respect of the Ravninnoe asset. These include the
finalization of the extension of the area within the asset boundary and the
extension of the allowable time for the Exploration period in the Sub Surface
Use Contract. Annual work programs and environmental plans have been submitted
and are in the process of review and approval at this time.
Testing of Well #8, which was re entered prior to the admission, continues. A
new string of tubing has been acquired for the well and testing with a
specialised swabbing unit is underway. Results to date are inconclusive.
Invitations to tender were submitted for workover rig services to re-enter up to
four additional existing wells. It is anticipated that a company will be
awarded the tender and will mobilise a rig in the next 30 to 45 days. Equipment
has been purchased and is being procured in preparation for this work. A second
tender was issued for 3D seismic acquisition on the asset. Bids for the 3D
seismic have been received and are currently being evaluated, prior to awarding
the contract and mobilisation in the fourth quarter.
The existing field camp is in the process of being upgraded and health, safety,
and environmental programs are being implemented. At this time, there are
twelve employees and two managers located in the Aktau office and Ravninnoe
field location.
Beibars Contract Area
The Beibars contract area covers approximately 167 square kilometres and is
situated on the coastline of the Caspian Sea approximately 40 kilometres south
of the port of Aktau.
As this asset does not have prior operations, the number of regulatory
submissions are not as extensive as for Ravninnoe . The annual work program has
been submitted and approved. Additional technical information has been
purchased from the State and is being analysed.
In order to accelerate the development of this asset, the seismic acquisition
has been brought forward and will commence this year. A 3D seimic programme has
been designed and invitations to tender have been submitted. Results of the
tender are due by the end of September. This work will be started as soon as
equipment is available for mobilisation.
Environmental issues
After the acquisition of the properties, no significant environmental issues on
either of the two assets have sufaced. Compliance with environmental regulatory
bodies is being managed both from the Aktau and the Almaty offices.
David Barker
Chief Operations Officer
7 September 2007
Independent Review Report to Roxi Petroleum plc
Introduction
We have been instructed by the Company to review the financial information set
out below and we have read the other information in the Interim Statement set
out above and considered whether it contains any apparent misstatements or
material inconsistencies.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the Directors. The AIM Rules
require that the accounting policies and presentation applied to the interim
figures should be consistent with those applied in preparing the preceding
annual accounts except where any changes, and the reasons for them, are
disclosed.
This interim report has been prepared in accordance with the basis set out in
the notes below.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and based thereon, assessing whether the disclosed accounting policies have been
applied. A review excludes audit procedures such as tests of controls and
verification of assets, liabilities and transactions. It is substantially less
in scope than an audit and therefore provides a lower level of assurance.
Accordingly we do not express an audit opinion on the financial information.
This report, including the conclusion, has been prepared for and only for the
Company for the purposes of the AIM Rules and for no other purpose. We do not,
in producing this report, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2007.
BDO Stoy Hayward
8 Baker Street
London
7 September 2007
CONSOLIDATED INCOME STATEMENT
Period from
13 October 2006 to 30
June 2007
Note $000s
IPO costs 611
Share based payments 585
Other administrative expenses 434
Administrative expenses (1,630)
Impairment of non current asset investments (2,983)
Finance income (net) 260
Loss on ordinary activities before taxation (4,353)
Income tax expense -
Loss for the period (4,353)
Loss attributable to minority interests (159)
Loss attributable to equity shareholders (4,194)
(4,353)
Loss per Ordinary share (US cents) Basic and diluted 4 (9.2)
All of the activities of the Group during the period are classed as acquired.
CONSOLIDATED BALANCE SHEET
As at 30 June 2007
30 June 2007
Note $000s
ASSETS
Non-current assets
Unproven oil and gas assets 5 50,611
Financial assets 1,000
Property, plant and equipment 209
Total non-current assets 51,820
Current assets
Inventories 65
Trade and other receivables 980
Cash and cash equivalents 53,831
Total current assets 54,876
Total assets 106,696
EQUITY AND LIABILITIES
Equity
Issued share capital 7 33,707
Share premium account 8 52,029
Other reserves 8 2,963
Retained earnings 8 (4,194)
Shareholders' equity 8 84,505
Minority interests (281)
Total equity 84,224
Current liabilities
Trade and other payables 5,303
Non-current liabilities
Borrowings 3,900
Deferred tax liabilities 13,269
Total non-current liabilities 17,169
Total liabilities 22,472
Total equity and liabilities 106,696
CONSOLIDATED CASH FLOW STATEMENT
Period from
13 October 2006 to
30 June 2007
Note $000s
Cash flow used in operating activities 9 (2,568)
Cash flow from investing activities
Purchase of property, plant and equipment (40)
Purchase of unproven oil and gas assets (704)
Purchase of subsidiary undertaking net of 6 (14,940)
cash recieved
Cash flow from investing activities (15,584)
Cash flow from financing activities
Issue of share capital, net of
expenses relating to issue of shares 72,083
Increase in cash and cash equivalents 53,831
Notes to the interim financial statements
1. STATUTORY ACCOUNTS
The interim results for the period ended 30 June 2007 are unaudited. The
financial information contained within this report does not constitute statutory
accounts as defined by Section 240 of the Companies Act 1985. Statutory
accounts have not yet been prepared for any period by the Company.
2. BASIS OF PREPARATION
Roxi Petroleum Plc is registered and domiciled in England and Wales.
The interim financial statements have been prepared in accordance with
International Financial Reporting Standards, as adopted by the European Union.
They do not include all of the information required for full annual financial
statements. They have been prepared on a consistent basis with the accounting
policies to be adopted for the statutory accounts for the period ended 31
December 2007, as set out below. The financial information is presented in US
Dollars and has been prepared under the historical cost convention and on a
going concern basis.
3. ACCOUNTING POLICIES
Basis of consolidation
(a) Subsidiaries
Subsidiaries are entities that are directly or indirectly controlled by the
Group. Control exists where the Group has the power to govern the financial and
operating policies of the entity so as to obtain benefits from its activities.
In assessing control, potential voting rights that are currently exercisable or
convertible are taken into account.
The purchase method of accounting is used to account for the acquisition of
subsidiaries by the Group. The cost of an acquisition is measured as the fair
value of the assets given, equity instruments issued and liabilities incurred or
assumed at the date of exchange, plus costs directly attributable to the
acquisition. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their
fair values at the acquisition date, irrespective of the extent of any minority
interest. The excess of the cost of acquisition over the fair value of the
Group's share of the identifiable net assets acquired is recorded as goodwill.
Inter-Company transactions, balances and unrealised gains on transactions
between Group companies are eliminated.
(b) Transactions and minority interests
The Group applies a policy of treating transactions with minority interests as
transactions with parties external to the Group. Disposals to minority
interests result in gains and losses for the Group that are recorded in the
income statement. Purchases from minority interests result in goodwill, being
the difference between any consideration paid and the relevant share acquired of
the carrying value of net assets of the subsidiary.
Foreign currency translation
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates ('the functional currency'). The consolidated financial
statements are presented in US Dollars (USD), which is the Group's functional
and presentation currency.
For the purpose of presenting consolidatedfinancial statements, the assets and
liabilities of the Group's foreign operations are expressed in $US using
exchange rates prevailing at the balance sheet date. Income and expense itemsare
translated at the average exchange rates for the period. Exchange differences
arising, if any are classified as a separate component of equity and transferred
to the Group's translation reserve. Such exchange differences are recognised in
profit or loss in the period in which the foreign operation is disposed of.
Goodwill and fair value adjustments arising are treated as assets and
liabilities of the foreign operation and translated at the closing rate..
Deferred tax
Deferred tax is provided on temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used
for taxation purposes. The following temporary differences are not provided
for: the initial recognition of assets or liabilities that affect neither
accounting nor taxable profit other than in a business combination, and
differences relating to investments in subsidiaries to the extent that they will
probably not reverse in the foreseeable future. The amount of deferred tax
provided is based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted or
substantively enacted at the balance sheet date.
Exploration and unproven oil and gas properties
The Group applies the full cost method of accounting for exploration and
evaluation costs, in accordance with the requirements of IFRS 6 'Exploration for
and Evaluation of Mineral Resources'. Under the full cost method of accounting,
costs of exploring for and evaluating oil and gas properties are accumulated and
capitalised by reference to appropriate cost pools. Such cost pools are based
on geographic areas. The Group currently has one cost pool, being Kazakhstan.
The amounts included within intangible fixed assets include the fair value that
was paid for the acquisition of licences in Kazakhstan during the period ended
30 June 2007. These licences have been capitalised to the Group's Kazakhstan
full cost pool.
Intangible fixed assets are reviewed for impairments if events or changes in
circumstances indicate that the carrying amount may not be recoverable. When a
review for impairment is conducted, the recoverable amount is assessed by
reference to the net present value of expected future cash flows of the relevant
income generating unit or disposal value, if higher. If an asset is impaired, a
provision is made to reduce the carrying amount to its estimated recoverable
amount.
Financial instruments
The Group's financial assets consist of cash on interest bearing short-term
deposits. Other receivables are stated at cost less any provision for
impairment. The Group's financial liabilities are non-interest bearing trade
and other payables and other interest bearing borrowings.
Currency of borrowings
Management reviews the Group's exposure to currency risk, interest rate risk,
liquidity risk and credit risk on a regular basis and considers that through
this review they manage the exposure of the Group. No formal policies have been
put in place in order to hedge the Group's exposure to currency risk or interest
rate risk.
Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents are
defined as short term cash deposits.
Segmental analysis
The Group operates in one business segment, being the exploration for,
development and production of oil and gas in the Republic of Kazakhstan.
Share capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are shown in equity as a
deduction from the proceeds.
Share based payments
The Group has used shares and share options as consideration for goods and
services received from suppliers and employees. Equity-settled share-based
payments are measured at fair value (excluding the effect of non market-based
vesting conditions) at the date of grant. The fair value determined at the
grant date of the equity-settled share-based instrument is expensed on a
straight-line basis over the vesting period, based on the Group's estimate of
the shares that will eventually vest and adjusted for the effect of non
market-based vesting conditions.
Notes to the financial statements (continued)
4. EARNINGS PER ORDINARY SHARE
The calculation of earnings per ordinary share is based on:
Period from
13 October 2006 to
30 June 2007
The basic weighted average number of
Ordinary shares in issue during the period 45,564,366
Dilutive effect of share options -
The diluted weighted average number of
Ordinary shares in issue during the period 45,564,366
The loss for the period attributable to equity shareholders ($000s) (4,194)
5. Unproven oil and gas assets
$000s
At the start of the period -
Acquisitions (see Note 6) 49,907
Additions 704
At the end of the period 50,611
6. ACQUISITIONS
As described in the admission document dated 16 May 2007, during the period the
Company completed the acquisition of Sytero BV, Sytero 2 BV and Sytero 3 BV.
Sytero 2 BV and Sytero 3 BV own interests in Beibars Munai LLP and Ravninnoe Oil
LLP, respectively. The preliminary assessment of the fair values of the assets
and liabilities acquired as at the date of acquisition is as follows:
Fair value
Book values adjustments Fair values
$000s $000s $000s
Unproven oil and gas assets 5,678 44,229 49,907
Financial assets 1,000 2,983 3,983
Property, plant and equipment 169 - 169
Inventories 65 - 65
Trade receivables 427 - 427
Other receivables 3,600 - 3,600
Cash and cash equivalents 26 - 26
Trade and other payables (6,533) - (6,533)
Deferred taxation - (13,269) (13,269)
4,432 33,943 38,375
Minority interests 122
Net assets acquired 38,497
Consideration:
- Ordinary shares 16,031
- Cash 14,292
- Deferred consideration 7,500
- Expenses 674
Total consideration 38,497
Related cashflows:
- Cash consideration 14,292
- Expenses 674
- Cash acquired (26)
14,940
The surplus of the fair value of the consideration over the other separable net
assets and liabilities of the acquired entities has been attributed to the value
of the negotiated rights in respect of the unproven oil and gas properties and
financial assets, based on the findings contained in the relevant competent
persons' reports:
Subsequent to the Group's investment in Sytero BV it has not been able to
complete the legal transfer of ownership of RS Munai, and therefore the
Directors have concluded that the investment of $3,983,000 in the RS Munai
project has been impaired and should be written down to its net realisable value
of $1,000,000.
Notes to the interim financial statements (continued)
7. CALLED UP SHARE CAPITAL
Number $000s
Authorised
Ordinary shares of 10p each 1,000,000,000 188,000
Issued and fully paid
Ordinary shares of 10p each 168,207,490 33,707
A Share issues during the period
The Company was incorporated on 13 October 2006 with an authorised share capital
of £100,000,000 divided into 1,000,000,000 Ordinary Shares of 10 pence each. On
incorporation 2 Ordinary Shares of 10 pence each were issued at par, nil paid.
On 26 October 2006 499,998 Ordinary Shares were subscribed for in cash at a
price of 10 pence per share and issued paid up as to one quarter and the two
subscriber shares paid as to one quarter, for an aggregate consideration of
£12,500.
On 5 February 2007 10,000,000 Ordinary Shares were issued at par as partial
consideration under the Sytero 2 SPA, as referred to in paragraph 11.5(a) of
Part V of the Company's Admission Document.
On 2 March 2007 20,000,000 Ordinary Shares were issued at par as partial
consideration under the Sytero SPA, as referred to in paragraph 11.5(a) of the
Company's Admission Document.
On 2 March 2007 30,000,000 Ordinary Shares were issued at par as partial
consideration under the Sytero 3 SPA, as referred to in paragraph 11.5(a) of the
Company's Admission Document.
On 21 May 2007 102,444,332 Ordinary Shares were issued upon the Admission of the
Company's shares to trading on the AIM market, for cash, net of related
expenses, of $71.5m.
On 21 May 2007 5,263,158 Ordinary Shares were issued in settlement of deferred
consideration in relation to the acquisition of Sytero 3 BV.
As referred to in paragraph 11.8 of the Company's Admission Document Aristea
International S.A. have paid up the remainder of the amount of the nominal value
plus the difference between the Placing Price and the nominal value of such
shares.
B Share option schemes
During the period the Company issued equity-settled share-based instruments to
its directors and certain employees. Equity-settled share-based instruments
have been measured at fair value at the date of grant. The fair value
determined at the grant date of the equity-settled share-based instrument is
expensed on a straight-line basis over the vesting period, based on an estimate
of the shares that will eventually vest. Options generally vest in equal
tranches over the four year period following grant, provided the option holder
remains an employee of the Group.
Exercise
Number price Expiry
Directors 10,092,450 38p 21 May 2017
Employees 3,364,150 38p 21 May 2017
13,456,600
Fair value is measured using a trinomial lattice model that takes into account
the effect of financial assumptions, including the future share price
volatility, dividend yield, and risk-free interest rates. The expected
volatility was determined based on both the volatility of the Company's share
price since flotation and the volatility of similar quoted companies. Employee
exit rates and the expected period from vesting to exercise are also considered,
based on historical experience. The principal assumptions are:
Share price at grant date (p) 38
Exercise price (p) 38
Expected volatility (%) 60
Expected life (years) 2-5
Risk-free rate (%) 5.75
Fair value per option (p) 11.8 - 16.7
C Share warrants
During the period the Company issued warrants over 10,023,112 Ordinary shares of
the Company. These warrants entitle the holders to subscribe for Ordinary
shares for cash consideration of 38p per Ordinary Share, and were issued as
consideration for corporate and advisory services to the Company prior to its
flotation. Warrants over 7.5m shares may be exercised at any time prior to 21
May 2017, while the remainder may be exercised at any time prior to 21 May 2010.
Notes to the financial statements (continued)
8. Movement in Capital and Reserves
Share Share Other Retained
capital premium reserves earnings Total
$000s $000s $000s $000s $000s
At the start of the period - - - - -
Arising on share issues 33,707 54,407 - - 88,114
Arising on employee share - - 585 - 585
options
Arising on warrants - (2,378) 2,378 - -
Loss for the financial period - - - (4,194) (4,194)
and total recognised income
and expense
At the end of the period 33,707 52,029 2,963 (4,194) 84,505
9. RECONCILIATION OF LOSS ON ORDINARY ACTIVITIES BEFORE TAX TO CASH FLOW USED
IN OPERATING ACTIVITIES
Period from
13 October 2006 to 30
June 2007
$000s
Loss before taxation (4,353)
Employee share options 585
Increase in recievables (553)
Decrease in payables (1,230)
Impairment of non current asset investment 2,983
Cash flow used in operating activities (2,568)
10. SUBSEQUENT EVENTS
The Company's shares were suspended from trading on AIM on 22nd August 2007
following the announcement by the Company that it is planning to enter into a
reverse takeover as detailed in the Chairman's report.
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 17th May 2024
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