Geo Genesis Group Limited / Ticker: GEOP / Market: PLUS
27 February 2008
Geo Genesis Group Limited (`Geo Genesis' or `the Company')
Preliminary Results for the period ending 30 September 2008
Geo Genesis Group Limited, an emerging markets advisory and investment company,
announces its preliminary results for the period ended 30 September 2008.
Overview
* Rapid development since listing on PLUS in April 2008
* Expanded client base as well as service offering, providing corporate
advisory services to a diverse range of businesses
* Forged new strategic relationships in global emerging markets
* Progressed development of the fund management and investment aspects of the
business model
* Demonstrated adaptability and innovation in challenging market conditions
Chief Executive Officer Roger Bendelac said, "In the face of difficult market
conditions, Geo Genesis is thriving. By being nimble, opportunistic and fully
utilising our extensive worldwide network, we have created the basis of a very
exciting company that is gaining recognition for its ability to source a
diverse range of undervalued companies and help them in their next phases of
growth. With all the bricks now in place since our flotation in April last
year, we look forward to the rest of 2009 with confidence."
For further information visit www.geogenesisgroup.com or contact:
Roger Bendelac, CEO Geo Genesis Group Limited Tel: +1 (917) 969 5475
John Bridges Orange Corporate Finance Tel: 020 3301 3356
Hugo de Salis St Brides Media & Finance Tel: 020 7236 1177
Chris Welsh St Brides Media & Finance Tel: 020 7236 1177
Chairman's Statement
This has been a period of rapid development for the Company following its
flotation on PLUS in April 2008, primarily focussed on building our position as
a strategic management consultancy and private equity firm specialising in
investments and advice within emerging markets, with a particular focus on the
People's Republic of China (`China').
We have made strong progress in consolidating the business infrastructure,
building on relationships with our existing clients and forging new strategic
partnerships across the global emerging markets spectrum. Additionally, we have
made inroads in extending the number of clients and client targets to include a
diverse range of companies from small start up operations to Fortune 500
entities. We have also worked to broaden our provision of services and now
provide a broad range of services ranging from M&A advisory and strategic
management consultancy to corporate restructuring.
Our growing list of clients and strategic partners includes the Qingdao office
of Bank of Communications, China's first state owned shareholding commercial
bank and the Reform and Development Commission of Qingdao, relationships which
give us exposure to a number of interesting, undervalued companies in China. In
May 2008 the Hiking Group, a large collective trading group also headquartered
in Qingdao, referred five of its potential investment companies to Geo Genesis
as initial advisory and investment projects. Furthermore, we have established
relationships with a number of other influential entities across Shandong
Province including the Municipal Government of Linyi, and the Jinan City
Foreign Investment Bureau, opportunities which further strengthen our ties in
this geographical area.
Aside from consultancy and corporate finance agreements, the Company has made
progress in the development of the fund management and investment aspects of
the business model. It has further expanded its China operations to include
strategic relationships in the Beijing and Tianjin Metro region, adding to the
Company's potential corporate advisory business, private equity opportunities
and the development of its two Bermuda registered China related investment
companies, China Partners Private Equity (`CPPE') and China Partners Properties
(`CPP'). CPPE and CPP were set up to focus on pre-IPO investment opportunities
in growth companies based in China that qualify for international listings as
well as those that choose to qualify for domestic listings on the Shanghai and
Shenzhen Stock Exchanges. Progress continues in this area and I look forward to
updating shareholders in due course.
We have completed the establishment of a China based venture affiliate company,
SinoVentures Holdings Ltd. (`SinoVentures'), 40% owned by Geo Genesis with
activities geared towards strategic investments in various early-stage
companies with operations in China. We continue to evaluate our intention of
proceeding with a public listing and fundraising for SinoVentures in 2009, but
acknowledge that any such development will be at least partly dictated by
ongoing market conditions.
Difficult market conditions throughout 2008 have meant that the Company has had
to remain flexible in its strategies in order to operate in the current
economic climate. The Company has diversified its risks by extending its
expertise beyond China, for example in December 2008 it signed an agreement to
provide consultancy and advisory services to US/Ecuadorian based mining and
exploration company, Trilliant Exploration Co., for a consideration of $1.5
million, satisfied by the upfront payment of 1 million shares in Trilliant,
which are currently trading at US$2.50 on the OTC Bulletin Board.
The Company's geographical reach was further expanded in October 2009 with the
signing of a strategic cooperation agreement with Arbel Capital Group Ltd
(`Arbel'), to provide corporate advisory and capital raising services to growth
companies primarily in the agricultural and technology sectors. Arbel's focus
on the Middle East, Africa and Europe, complements Geo Genesis' Chinese and US
focussed activities and should enable both parties to benefit from cross
emerging market investment and trade.
Geo Genesis has been innovative in seeking alternative options for companies
looking to raise cash on the public markets. An example of this is its
successful listing of Changda International, a Chinese based chemical and
fertilizer company, on the US OTC bulletin board. Changda had originally been
hallmarked for an AIM listing, however the decision was taken, in light of
market conditions, to seek an initial flotation on the OTC whilst continuing to
evaluate the possibility of a secondary listing on an alternative UK or US
market at a later date. Geo Genesis maintains its original holding in Changda
of 1.2 million shares, however, under certain conditions, it has the
possibility to receive 2% warrants with a strike price of $1.20.
Financial
The Company results for the year reflect the high costs associated with the
process of admission to PLUS and setting up an international business
infrastructure. As such, we have recorded a pre tax loss of US$2,421,445. PLUS
admission costs, in addition to the assurance of options required to secure key
personnel, total almost $850,000. This figure also accounts for approximately
35% of the total loss incurred by the Company for the year, with operating
costs and investments accounting for the balance. However, the Company has
signed a number of consultancy agreements, which should impact the next
financial year and has assumed significant stakes in various companies, which
will also serve to positively affect future financial reports.
Additionally, the Company has worked to reduce overheads and executive
compensation has been modified to reflect performance, therefore allowing for a
longer cash flow use for the development of the business.
The Team
We continue to attract talented individuals with the expertise and experience
across the divisions of the business. This includes the appointment of Joelle
Mekers in January 2009, a corporate financier with over 15 years experience in
the financial arena, as senior executive in charge of project finance.
Outlook
We have progressed through a difficult and costly formative period. However,
having passed through this stage, we now have the key infrastructure in place
to effect a positive implementation of the Company's business plans and begin
to reap the rewards of our efforts. I would like to thank shareholders for
their continued support and look forward to updating the market on a successful
2009.
Marc Koplik
Chairman
CONSOLIDATED INCOME STATEMENT
Note Year to 30 Period to 30
September September
2008 2007
US$ US$
Revenue 2 170,554 59,262
Less : Sales tax (5,834) (2,968)
Gross margin 164,720 56,294
Operating expenses :
Selling expenses 214,582 55,258
General and administrative 1,459,616 70,757
expenses
Cost of Offering 384,816 -
Share option charge 445,742 -
Wages and salaries 62,999 5,211
Depreciation 10,307 1,802
Rent expense 22,655 260
Total expenses (2,600,717) (133,288)
Operating loss (2,435,997) (76,994)
Finance income 20,759 1,383
Finance charges (266) (152)
Loss before provision of income taxes (2,415,504) (75,763)
Provision for income taxes 3 - -
Net loss (2,415,504) (75,763)
Loss per share :
Basic and diluted (cents) 6 (3.7) (0.3)
CONSOLIDATED BALANCE SHEET
Note 2008 2007
US$ US$
ASSETS
Non-current assets
Property, plant and equipment 43,332 38,953
Total non-current assets 43,332 38,953
Current assets
Trade and other receivables 308,178 72,019
Cash and cash equivalents 385,725 307,337
Total current assets 693,903 379,356
Total assets 737,235 418,309
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables 29,796 48,165
Accrued expenses 24,227 8,850
Total liabilities 54,023 57,015
Equity
Issued capital 4 6,773 6,420
Share premium 4 2,719,929 428,582
Retained earnings (2,491,267) (75,763)
Share option reserve 445,742 -
Foreign exchange reserve 2,035 2,055
Total equity attributable to equity 683,212 361,294
holders
Total equity and liabilities 737,235 418,309
CONSOLIDATED SHAREHOLDERS' EQUITY
Share Share Share Retained Foreign Total
capital premium option earnings exchange
reserve reserve
US$ US$ US$ US$ US$ US$
Issue of 6,420 428,582 - - - 435,002
shares
Exchange - - - - 2,055 2,055
difference
arising on
translation
of foreign
operations
Loss for the period - - - (75,763) - (75,763)
Balance as at 30 6,420 428,582 - (75,763) 2,055 361,294
September 2007
Issue of shares 353 2,291,347 - - - 2,291,700
Exchange difference - - - - (20) (20)
arising on
translation
of foreign
operations
Share option - - 445,742 - - 445,742
reserve
Loss for the year - - - (2,415,504) - (2,415,504)
Balance as at 30 6,773 2,719,929 445,742 (2,491,267) 2,035 683,212
September 2008
CONSOLIDATED CASH FLOW STATEMENT
Year to 30 Period to
September 30
2008 September
2007
US$ US$
Operating activities
Net loss (2,415,504) (75,763)
Adjustments to reconcile net
income to net cash provided/
(used) for operating
activities
Depreciation and amortisation 10,307 1,802
Issuance of stock based payments 445,742 -
Working capital adjustments :-
(Increase)/decrease in trade and (236,159) 50,879
other receivables
(Decrease) in trade and other (2,992) (55,859)
payables
Net cash flows used for operating (2,198,606) (78,941)
activities
Cash flows from investing
activities
Acquisition of subsidiary - 300,294
Purchase of tangible assets (14,017) (1,601)
Net cash flows from investing (14,017) 298,693
activities
Cash flows from financing
activities
Proceeds from issuance of shares 2,291,701 86,050
Net cash flows from investing 2,291,701 86,050
activities
Net increase in cash and cash 79,078 305,802
equivalents
Cash at beginning of year/ 307,337 -
incorporation
Translation differences (690) 1,535
Cash and cash equivalent at the end 385,725 307,337
of the period
1 Basis of preparation
The financial information set out in the preliminary announcement does not
constitute the Company's statutory financial statements for the year ended 30
September 2008.
The financial information has been prepared in accordance with International
Financial Reporting Standards and the accounting policies adopted in the
Company's PLUS Admission Document dated 7th April 2008.
The financial information set out in this announcement does not constitute the
Company's statutory financial statements for the year ended 30 September 2008,
but is derived from those financial statements. The auditors have reported on
the statutory financial statements for the year ended 30 September 2008; their
report was unqualified.
The financial information set out in this announcement was approved by the
Board on 27th February 2009.
The directors do not recommend the payment of a dividend.
2 Segmental analysis
The directors consider that the Group's activities represent a single class of
business. The analysis of the Group's turnover, gross profit, assets,
liabilities, additions to plant, property and equipment and depreciation and
amortisation by the component used by management to make decisions about
operating matters:
Year ended 30 Period ended 30
September 2008 September 2007
US$ US$
Turnover
Marshall Islands - -
Bermuda - -
USA 105,690 -
China 64,864 59,262
170,554 59,262
Gross profit
Marshall Islands - -
Bermuda - -
USA 105,690 -
China 59,030 56,294
164,720 56,294
Carrying amount of assets
Marshall Islands 341,540 39,824
Bermuda 29,883 33
USA 276,206 276,732
China 89,606 101,720
737,235 418,309
Liabilities
Marshall Islands 24,226 3,000
Bermuda - -
USA 194 6,045
China 29,603 47,970
54,023 57,015
Additions to plant, property and
equipment
Marshall Islands - -
Bermuda - -
USA - 629
China 14,017 40,186
14,017 40,815
Depreciation and amortisation
Marshall Islands - -
Bermuda - -
USA - -
China (10,307) (1,862)
(10,307) (1,862)
3 Taxation
Year ended Period ended
30 September 30 September
2008 2007
US$ US$
Current tax charge - -
Factors affecting tax charge:
Loss before tax (2,415,504) (75,763)
Tax at 4.08% (2007: 10.82%) (98,553) (8,198)
Loss carried forward 98,553 8,198
Current tax charge - -
The Group has tax losses arising that are available against future taxable
profits. The directors are of the opinion that the probability of the Group
trading profitably in the next 12 months is uncertain. As a result of the
existing uncertainties of their realisation, a deferred tax asset has not been
recognised.
4 Share capital
30 30
September September
2008 2007
US$ US$
Authorised
350,000,000 common shares of US$0.0001 each 35,000 35,000
30 September 2007
Share Share
Capital Premium
US$ US$
Allotted, called up and fully paid
64,200,000 common shares of US$0.0001 each 6,420 428,582
30 September 2008
Share Share
Capital Premium
US$ US$
Allotted, called up and fully paid
67,725,692 common shares of US$0.0001 each 6,773 2,719,929
The Company has one class of shares. Each share entitles the holder to one (1)
vote at general meetings of the Company. The authorised number of shares is
350,000,000 with a par value of US$0.0001 per share.
On 30 September 2008, the share capital of the Company was US$6,773 and the
total number of shares was 67,725,692.
Date of issue Nominal Market Number of Nominal Share
value per value per shares issued value of premium
share US$ share issue increase
US$ US$ US$
Brought forward - - 64,200,000 - 428,582
3 December 2007 0.0001 0.65 100,000 10 64,990
6 December 2007 0.0001 0.65 50,000 5 32,495
28 November 2007 0.0001 0.65 50,000 5 32,495
20 November 2007 0.0001 0.65 100,000 10 64,990
16 November 2007 0.0001 0.65 100,000 10 64,990
27 December 2007 0.0001 0.65 200,000 20 129,980
22 November 2007 0.0001 0.65 200,000 20 129,980
21 December 2007 0.0001 0.65 340,000 34 220,966
4 January 2008 0.0001 0.65 78,000 8 50,692
14 January 2008 0.0001 0.65 2,307,692 231 1,499,769
67,725,692 353 2,719,929
5Share options
The fair value of the share options granted has been calculated using the
Black-Scholes option-pricing model individually applied to each option granted.
The inputs into this model were as follows:
Issued on
9 January 2008
Share price 7p
Exercise price 5p
Expected 22%
volatility
Expected life 3 years
Risk free rate 5%
The expected volatility represents management's best estimate of volatility
given the lack of historical information available regarding share price
volatility.
Share Options
Number Weighted Weighted
of shares average average
exercise remaining
price per contractual
share life (years)
Balance at 1 October 2007- - - -
exercisable
Options granted in the year- 8,095,000 5p 2.73
exercisable
Balance at 30 September 2008 - 8,095,000 5p 2.73
exercisable
Balance at 30 September 2007 - - - -
exercisable
6Loss per share
30 September 30 September
2008 2007
US$ US$
Loss after taxation (2,415,504) (75,763)
Basic weighted average shares in issue in 65,209,308 24,172,929
period
Basic and diluted loss per share based on the 3.7 0.3
weighted average number of shares in issue in
the year
In accordance with IAS 33 and as the group has reported a loss for the period,
the share options are not dilutive.
END
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