TIDMMBW
RNS Number : 2595L
Mobilewave Group PLC
31 August 2012
MobileWave Group plc
Previously Fieldbury plc
("MobileWave" or "the Company")
Preliminary Results for the period ended 28 February 2012
MobileWave is pleased to announce audited preliminary results
for the period ended 28 February 2012.
Highlights of the period include
-- Implemented a GBP 4,000,000.00 ordinary share facility with
Dutchess Opportunity Cayman Fund Limited.
-- Agreed a GBP 2,000,000.00 convertible preference share facility.
-- Continuing funding negotiations with new and potential
investors and review of potential acquisitions
Commenting on the outlook for the year, Rory Stear, Chairman,
said:
"The period has been a significantly tough year with our efforts
focussed on implementing the strategy, reducing costs, and
negotiating with potential new investors. The Board is optimistic
that significant investment will be received in the near future
which will enable the Group to achieve its planned development.
-Ends-
For further information, please
contact:
MobileWave Group plc
Rory Stear, Chairman rstear@mobilewave.com
Charles Stanley Securities
Nominated Adviser & Broker
Dugald J.Carlean / Carl Holmes 020 7149 6000
Chairman's Statement
I am pleased to present the results for MobileWave Group plc for
the period ended 28 February 2012. The period under review has been
an extremely trying one for the company and your board continues to
lead the company through an uncertain period, but with a very
definite strategic view as to where we would like to take the
company. The period under review was dominated by negotiating with
potential new investors the process of building an effective
leadership team, the need to define and redefine our strategic
product offering, negotiating the acquisition of Ariose Software
and the litigation with Devin Narang of Delhi, India, for payment
of the outstanding 1,070 000 GBP that he owes the company. It is
fair to say that the non-payment of this debt has placed enormous
pressure on your company as we have been forced to operate under
constrained cash flow due to settlement of this debt. The failure
to have yet received all the contracted for Convertible Preference
Shares (CPS) investment has impacted our ability to close the
Ariose transaction and to vigorously grow the human resources and
technical base of the company. We have received $400 000 to date
and have a written agreement from an investor to invest a further
$2,000,000 as part of this class and the company is currently
negotiating a positive outcome with this investor. In addition, the
agreement with Dutchess Opportunity Cayman Fund Ltd as announced on
6 October 2011 can be fully utilised but the board has been
reluctant due to the dilutive effect at the current share price.
The Group's ability to meet its future funding and working capital
requirements, and further continue as a going concern, is dependent
on being able to generate further investment funding, additional
shareholder loans and continuing agreement from its major creditors
to defer payment of their debt.
Your board remains positive that the contracted for CPS
investment into the company will materialise and management
continue to have in depth discussions with new and existing
investors who have indicated an interest in pursuing an investment
in the Company.
Review of Operations
The Group continues to seek out opportunities for investments
that will generate value for the shareholders. The Ariose Software
agreement announced in December 2011 is one example of
opportunities currently being explored. The idea behind this
proposed acquisition of Ariose was to be able to build on the
intellectual property acquired in 2010 with the acquisition of
MobileWave Limited. Both parties are keen to work together to
develop a consumer facing downloadable application ("app") for
mobile phones, designed to create a vehicle that integrates social
networking, loyalty, market research, sales and promotion through
an ongoing digital dialogue between brands and its consumers. The
terms and format of this acquisition are still being negotiated,
with various options being consider as to the form this investment
may ultimately take. Until such a time as the details are able to
be finalised, the MobileWave Group has no clear pathway to a
revenue generating operation. Without this, the Group has no option
but to consider future cashflows from the intellectual property
acquired as uncertain, at this point in time. The intangible assets
recognised on the acquisition of MobileWave Limited in 2010 have
therefore been impaired.
People
In the last Chairman's Statement, I announced that Kurt
Pakendorf had been appointed as CEO and as a member of the board.
Kurt did an excellent job as CEO but left the company, as
previously announced, at the end of March for personal reasons. We
thank Kurt for his contribution, which included a very thorough
strategic review that was accepted by the board and remains the
template from which we seek to operate the company.
Since Kurt left the company Rory Stear has combined the duties
of Executive Chairman and CEO. His major focus has been on
continuing to seek investment to properly capitalise the company,
which remains the single biggest issue facing our group. A further
priority is ensuring that the relationship with Ariose management
is strengthened and that despite the lengthy delay in closing this
acquisition that MobileWave and Ariose personnel continue to
communicate closely and work toward a relationship based on mutual
respect and trust.
During the period, Mr Stear has communicated directly with
Ariose CEO, Amit Goenka. In the recent past the company announced
that Steve Le Roux has been appointed as CIO and will work closely
with the team at Ariose as well as developing additional
relationships with other developers as appropriate. Steve is a
London based highly experienced mobile technology professional, who
brings much need technical leadership to our team. We are very
pleased to have him in the leadership group.
Steve Herne continues to provide outstanding service to the
company as Group Financial Manager and through what has been a
difficult period, his immense experience, level headed approach and
outstanding competency, has been a real asset to the company.
Litigation update
As shareholders are aware, the Company has been pursuing Mr
Devinder Raj Narang in respect of the deferred cash payment of US
$1.5 million which was originally due on 31 December 2009, together
with accrued interest following the disposal of the Freeplay
business on 4 August 2008.
The Company has obtained judgment against Mr Narang in the UK in
the amount of GBP1 070 000 which it is seeking to enforce in India
by invoking the treaty that exists between India and the United
Kingdom. This matter is current and both parties have filed their
affidavits to the court. The next Delhi court date is scheduled for
December 2012.
In addition to the Indian proceedings, we have filed for Devin
Narang's personal bankruptcy in the Bankruptcy Division of the High
Court in London. This matter has now been set down for trial and we
await an exact date for this trial but it is likely to be in the
early part of 2013. Your board continues to vigorously pursue Mr
Narang for this debt. Including again reaching out to Narang, on a
Without Prejudice basis, to negotiate a settlement.
Financial Review
MobileWave has not traded in the period to 28 February 2012
other than continuing to explore investment opportunities and in
maintaining the administrative functions of the company. MobileWave
Limited, the Group's 100% owned operating subsidiary has invested
in ongoing Research & Development, Market Research, Corporate
Restructuring and the recruitment of personnel to fulfill its
future objectives. Development and market research costs incurred
during the period were $11,741 ( 2011 $311,997)
On 5 October 2011, the Company entered into an investment
agreement with Dutchess Opportunity Cayman Fund Ltd (the Investor),
whereby the Investor has agreed to subscribe for up to GBP4.0
million
of new ordinary shares over a period of three years. The
material terms of the agreement
are as follows:
- The Company is entitled to serve notice on the Investor (the
"Put Notice") requiring it to subscribe for new ordinary shares
equal in value to the greater of (i) GBP25,000 and (ii) 400% of the
average daily volume (flADV") of new ordinary shares multiplied by
the average of the three (3) daily closing bid prices for the new
ordinary shares immediately preceding the Put Notice. The AOV is
computed using the closing best prices on the three trading days
prior to the Put Notice.
- The Company is also entitled, on one occasion only to serve
notice requiring the Investor to subscribe for new ordinary shares
up to a value of GBP250,000.
- The subscription price at which the Investor will subscribe
for new ordinary shares will be 92% of the lowest daily volume
weighted average price of the new ordinary shares during the ten
(10) consecutive trading days immediately after service of the Put
Notice.
- The Company will not be entitled to require the Investor to
subscribe for further new ordinary shares until each transaction
has been completed.
- The Company is entitled to withdraw from a transaction if the
subscription price of the new ordinary shares as determined by
reference to the share price for the 10 days following service of
the Put Notice falls below a price to be set by the Company when it
serves the Put Notice.
- The Company is required to pay a commitment fee to the
Investor of GBP80,000 to be satisfied by the issue of 5,720,000 new
ordinary shares payable at par.
- The Company will issue warrants to the Investor, entitling the
Investor to subscribe for up to 2,515,723 new ordinary shares
equivalent to a value of GBP40,000 priced at a premium of 20% to
the mid-market price of existing ordinary shares on 03 October
2011.
- In addition, the Company has agreed to pay the Investor's
legal costs limited to $15,000, of which $10,000 has already been
paid.
In the period to February 28 2012 the Investor subscribed to
21,500,000 new ordinary shares with a market value of GBP 227,835.
The board has not utilised this facility in the recent past given
its dilutive effect at the current share price but reserves its
right to again use the facility should it consider that action to
be in the best interests of shareholders.
Outlook
In May 2011 the Company received shareholder approval for the
issue of Convertible Preference Shares to raise GBP2m at a coupon
of 15%. As at 28 February 2012 the sum of $400,000 had been
received. The Company has received written agreement from an
investor to invest a further $2 000 000 as part of this class. The
flow of cash has been dependent on the investor being paid for a
significant transaction that they are involved in and the
finalization of this deal has severely impacted on MobileWave. Mr
Stear is in constant contact with the leadership team of the
investor and is optimistic that this long drawn out matter will be
resolved in the near future..
When the above funding is in place, MobileWave Group PLC will be
well placed to take advantage of the numerous client leads it is
now developing for its products.
The period under review has been a tough one but with a highly
experienced board, excellent professional advisors and a clear
strategy to ensure that the best interests of shareholders are
paramount, we are optimistic that the months ahead will yield a
desired result.
RM Stear
CHAIRMAN
MobileWave Group Plc
CONSOLIDATEd statement of COMPREHENsive INCOME
For the period ended 28 February 2012
Notes Year ended 14 months
28 February ended
2012 28 February
2011
US$'000 US$'000
REVENUE - -
Cost of sales - -
--------------------------------------- ---------------------------------------
Gross profit - -
Administrative expenses
(before
separately
identifiable costs) (1,908) (2,313)
Separately identifiable
costs 2 (1,566) (1,242)
--------------------------------------- ---------------------------------------
LOSS FROM OPERATIONS (3,474) (3,555)
Finance expenses (112) (11)
Finance income - 10
--------------------------------------- ---------------------------------------
LOSS BEFORE TAXATION (3,586) (3,556)
--------------------------------------- ---------------------------------------
Taxation - -
--------------------------------------- ---------------------------------------
LOSS FOR THE PERIOD
ATTRIBUTABLE
TO THE EQUITY HOLDERS
OF THE
PARENT (3,586) (3,556)
====
===================================== =========================================
OTHER COMPREHENSIVE
INCOME,
NET OF TAX
Currency translation
difference (20) (3)
--------------------------------------- ---------------------------------------
Other comprehensive
income (20) (3)
--------------------------------------- ---------------------------------------
TOTAL COMPREHENSIVE
EXPENSE
FOR THE PERIOD
ATTRIBUTABLE
TO EQUITY HOLDERS OF
THE PARENT (3,606) (3,559)
========================================= =========================================
$ $
Basic and fully diluted
loss
per share - ($ per
share) 3 (0.04) (0.05)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 28 February 2012
Notes 28 February 28 February
2012 2011
US$'000 US$'000
Assets
Non-current assets
Intangible assets 59 1,648
Property, plant and equipment 6 20
---------------- ----------------
65 1,668
--------------- ---------------
Current assets
Inventories - 2
Trade and other receivables 42 64
Cash and cash equivalents 104 5
------------------ ------------------
146 71
------------------ ------------------
TOTAL ASSETS 211 1,739
============= =============
Equity
Share capital 15,101 15,051
Share premium account 29,289 28,761
Preference shares 129 -
Merger reserve (1,047) (1,047)
Share warrant reserve 60 60
Foreign currency translation
reserve (23) (3)
Share based payment reserve 351 1,278
Retained deficit (46,240) (43,584)
------------------- -------------------
EQUITY ATTRIBUTABLE TO OWNERS
OF THE PARENT COMPANY (2,380) 516
------------------ ------------------
Current liabilities
Trade and other payables 2,284 1,223
------------------ ------------------
2,284 1,223
------------------ ------------------
Non current liabilities
Debt element of preference
shares 271 -
Accrued preference share interest 36 -
------------------ ------------------
307 -
------------------ ------------------
TOTAL EQUITY AND LIABILITIES 211 1,739
============= =============
consolidated statement of changes in equity
For the period ended 28 February 2012
Share Share Preference Merger Share Share Foreign Retained Total
Capital Premium Shares Reserve Warrant based currency Deficit
Account Reserve payment translation
reserve reserve
US$000 US$000 US$000 US$000 US$000 US$000 US$000 US$000 US$000
At 1 January
2010 13,373 28,761 - - 60 1,479 - (40,234) 3,439
Loss for
the period - - - - - (3,556) (3,556)
Other
comprehensive
income:
Currency
translation
difference - - - - - - (3) - (3)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------- ----------------- ----------------- ---------------
Total
comprehensive
expense for
the period - - - - - - (3) (3,556) (3,559)
Issue of
shares 1,678 - - (1,047) - - - 631
Share based
compensation - - - - - 5 - 5
Transfer
due to lapsed
options - - - - - (206) 206 -
----------------- ----------------- ----------------- ----------------- ----------------- ------------------ ------------------ ------------------ ----------------
At 28 February
2011 15,051 28,761 - (1,047) 60 1,278 (3) (43,584) 516
Loss for
the period (3,586) (3,586)
Other
comprehensive
income:
Currency
translation
difference (20) (20)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------- ----------------- ----------------- ----------------
Total
comprehensive
expense for
the period (20) (3,586) (3,606)
Issue of
ordinary
shares 50 528 578
Issue of
preference
shares 129 129
Share based
compensation 3 3
Transfer
due to lapsed
options (930) 930 -
----------------- ----------------- ----------------- ----------------- ----------------- ------------------ ------------------ ------------------ ----------------
At 28 February
2012 15,101 29,289 129 (1,047) 60 351 (23) (46,240) (2,380)
============ ============ ============ ============ ============ ============ ============ ============ ===========
Share capital
Share capital represents the nominal value of equity shares
issued.
Share premium
The share premium account comprises the consideration received
in excess of the nominal value of equity shares issued net of issue
costs and the difference between the carrying amount of a financial
liability and the nominal value of equity instruments issued when
debt instruments are settled by the issue of equity
instruments.
Preference shares
This represents the equity element recognised on preference
shares issued. The preference shares are identified as compound
instruments. The liability element is determined by determining the
fair value of future cash flows of similar debt instruments without
the equity element. The difference between the value of the
preference shares and the debt element is recognised as the equity
element.
Merger reserve
The merger reserve represents the difference between the fair
value of equity instruments issued as part of a business
combination and the nominal value in transactions.
Translation reserve
The translation reserve comprises all foreign exchange
differences arising from the translation of the financial
statements of foreign operations whose functional currency differs
from the reporting currency of the Group.
Share based payment reserve
This reserve is the result of the Company's grant of equity
settled share options and warrants to selected employees and
measured in accordance with IFRS2 Share-based payment
transactions.
Share warrant reserve
Net proceeds of US$60,000 have been attributed to an issue of
warrants in a prior year and this amount has been included within
equity as another reserve.
Retained deficit
The Retained deficit reflects the cumulative losses incurred to
date.
CONSOLIDATED CASH FLOW STATEMENT
for the period ended 28 February 2012
Year ended 14 months
28 February ended 28
2012 February
2011
US$'000 US$'000
Cash flow from operating activities
Loss for the period before
tax (3,586) (3,556)
Adjustments for:
Finance cost 112 11
Finance income - (10)
Gain on bargain purchase - (776)
Share based payment expense 3 5
Depreciation 37 11
Impairment 1,566 -
Changes in working capital
Decrease in inventory, accrued
income, trade and other receivable 24 1,519
Increase in trade and other
payables 508 800
------------------------ ------------------------
Cash used in operating activities (1,336) (1,994)
Income taxes credit received - -
------------------------ ------------------------
Net cash used in operating
activities (1,336) (1,994)
Cash flows from investing activities
Acquisition of subsidiary undertaking - (66)
Net cash acquired on acquisition
of subsidiary undertaking - 2
Payments to acquire intangible
assets - (12)
Interest received - 10
------------------------ ------------------------
Net cash used in investing
activities - (66)
Cash flows from financing activities
Proceeds from the issue of
preference shares 400 -
Proceeds from the issue of
shares 578 -
Proceeds from shareholder loans 477
Interest on loans - (11)
------------------------ ------------------------
Net cash outflow from financing
activities 1,455 (11)
------------------------ ------------------------
Net decrease in cash and cash
equivalents 119 (2,071)
Cash & cash equivalents at
the beginning of the financial
period 5 2,079
Effect of foreign exchange
rate changes (20) (3)
------------------------ ------------------------
Cash & cash equivalents at
the end of the financial period 104 5
================ ================
1 General information
The financial information set out in this preliminary
announcement does not constitute statutory accounts within the
meaning of Section 434 of the Companies Act 2006 for the year ended
28 February 2012 but is derived from those accounts. The financial
statements for the year ended 28 February 2012 will be delivered to
the Registrar of Companies following the Company's Annual General
Meeting. The auditors have reported on the 28 February 2012
accounts and have issued an unqualified opinion, with an emphasis
of matter to the Going Concern basis of preparation.
While the financial information included in this preliminary
announcement has been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting
Standards (IFRS), as adopted by the European Union (EU), this
announcement does not in itself contain sufficient information to
comply with IFRS's.
MobileWave Group plc is incorporated and domiciled in the United
Kingdom.
GOING CONCERN
The Directors of MobileWave Group plc have prepared the
financial statements on a going concern basis, which assumes the
Group will continue in operational existence for the foreseeable
future. The Group's ability to meet its future funding and working
capital requirements, and therefore continue as a going concern, is
dependent upon being able to generate further investment funding,
additional sharehoder loans and continuing agreement from its major
creditors to defer payment of their debt. The Directors have
prepared projected cash flow information for the period ending 12
months from the date of approval of these financial statements.
On the basis of these projections, the Directors have identified
the requirement to obtain further shareholder funding and it was
announced on 31 July 2012 that Rory Stear, Executive Chairman and
major shareholder had agreed further funding of US$ 150,000.00 and
negotiations have also been commenced with other major
shareholders. Current indications are that these will come to a
satisfactory conclusion. Agreement of further investment would,
based upon projections prepared by the Group, enable it to continue
to meet its debts as they fall due for at least the next 12 months.
As at the date of these financial statements, however, there
remains some uncertainty over the timing and success of these
matters.
Should further investment not be secured or trading activities
not meet anticipated targets, then the Group may be unable to
realise its assets and discharge its liabilities in the normal
course of business. Whilst there is a material uncertainty in
relation to the timing and completion of the above matters, the
Directors are continuing their negotiations with various parties
and, based on indications so far, anticipate a positive outcome and
consider that it is appropriate that the financial statements be
prepared on a going concern basis.
2 sepArately disclosed items
2012 2011
US$000 US$000
-
Abortive acquisition costs - 298
Acquisition costs - 220
- 518
Gain on bargain purchase - (776)
Impairment of deferred income
receivable - 1,500
Impairment of intangible assets 1,566 -
1,566 1,242
3 LOSS PER SHARE
2012 2011
US$000 US$000
Loss for the financial year (3,606) (3,556)
Weighted average number of
ordinary shares in issue 82,209 66,613
US$ US$
Basic loss per 0.1p ordinary
share (in US$) (0.04) (0.05)
Diluted loss per 0.1p ordinary
share (in US$) (0.04) (0.05)
The calculation of the basic and diluted loss per ordinary share
of 4 cents (2011: 5 cents) each has been based on the loss for the
relevant financial period and on 82,208,637 shares (2011:
66,613,000 shares). This represents the weighted average number of
ordinary shares in issue. The loss for the year from continuing
operations and the weighted average number of ordinary shares for
the purposes of calculating the diluted loss per share from
continuing operations are the same as for the basic loss per share
calculation. This is because the outstanding share options would
have the effect of reducing the loss per ordinary share and are
therefore not dilutive under the terms of IAS 33.
4 STATUS of the preliminary announcemenT
The board of directors of MobileWave Group plc approved the
Preliminary Results on 30 August 2012
The statutory accounts will be posted to shareholders in due
course. Further copies will be available to the public, free of
charge, at the company's registered office, 2 Stone Buildings,
Lincoln's Inn, LONDON WC2A 3TH and the Company's website at
www.mobilewave.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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