TIDMAEG
RNS Number : 1295N
Active Energy Group PLC
28 September 2021
28 September 2021
Active Energy Group Plc
('Active Energy', 'AEG', the 'Company' or the 'Group')
Interim Results for the Six Months Ended 30 June 2021
Active Energy, the international biomass based renewable energy
business, is pleased to announce its interim results for the six
months ended 30 June 2021.
HIGHLIGHTS
Interim Financial Report for the six months ended 30 June 2021
and strategic update
Active Energy Group plc today announces its unaudited interim
results for the six months ended 30 June 2021 and provides a
strategic update for the Company's shareholders.
Operational Highlights:
-- Construction of a second CoalSwitch reference plant at
Ashland, Maine (the "Ashland Facility") as part of a joint venture
with Player Design Inc.
o First CoalSwitch production commenced at the Ashland Facility
in May 2021
o Transition from conceptual technology to production of next
generation biomass fuel
o Initial deliveries of CoalSwitch to University of Utah,
Brigham Young University and PacifiCorp in June 2021
o Samples of CoalSwitch delivered to twelve prospective
customers
-- Independent CoalSwitch analysis from University of New
Brunswick confirm the product's superior qualities to white pellets
as well as its suitability as a sustainable substitute for carbon
emitting fuels
-- Construction of CoalSwitch reference plant at Lumberton, N.C.
("Lumberton") Facility near completion but suspended and requiring
permit amendment
-- Company ceases lumber and saw log activities in order to
focus on strategy of delivering a next generation biomass
pellet
Financial Highlights:
-- Major balance sheet restructuring successfully completed
o Equity fundraise of GBP7.0 million (gross of expenses)
o Conversion and redemption of outstanding convertible loan
notes and removal of security over the Company's assets
-- Revenue for H1 21 of US$636,241 (H1 20: $499,893)
-- Loss for the reporting period of US$2,039,316 (H1 20: US$593,914)
Post Period End:
-- Design and engineering commenced for a larger proprietary
reactor that would be capable of accommodating production volumes
of up to 70,000 tonnes of CoalSwitch per annum
-- Component failure at Ashland Facility resulting in production
suspension - options to re-establish near-term production at
Ashland Facility currently being evaluated
Outlook:
-- AEG continues to be well placed to deliver on the growing
need for more sustainable power sources
-- The Board is more convinced than ever that CoalSwitch fuel
can form part of the energy transition process
-- The next key step: design and construction of a 70,000 tonne per annum CoalSwitch facility
Michael Rowan, CEO of Active Energy, said:
"I am pleased to report a successful period for AEG that saw the
first production volumes of CoalSwitch and the completion of
construction of a second reference plant in Maine. CoalSwitch has
now transitioned from a concept to a deliverable biomass fuel, and
the manufacturing process know-how obtained in the last three
months is invaluable.
We expect next generation biomass fuels will play a key role in
the transition toward the zero carbon economy. CoalSwitch's
superior qualities to white pellets as well as its suitability as a
sustainable substitute for carbon emitting fuels, positions AEG
extremely well in the evolving global shift towards renewable
energy. With product in hand and increasing market interest, AEG is
now providing CoalSwitch samples to prospective long term
customers.
With a restructured balance sheet, AEG's next key goal is to
expand its production capacity to become a leading biomass fuel
producer of next generation biomass fuels. The road to produce
CoalSwitch is challenging, but the achievements of 2021 to date
have provided confidence to the Board of the next phase for
growth."
Regulatory information
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
Enquiries:
Website LinkedIn Twitter
www.aegplc.com www.linkedin.com/company/activeenergy https://twitter.com/aegplc
@aegplc
-------------------------------------- ----------------------------
Enquiries
Active Energy Group Michael Rowan (Chief Executive info@aegplc.com
Plc Officer)
Andrew Diamond ( Chief
Financial Officer)
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Allenby Capital Limited Nick Naylor/James Reeve Office: +44 (0)20
Nominated Adviser (Corporate Finance) 3328 5656
and Joint Broker Amrit Nahal (Sales/Corporate
Broking)
------------------------------- -------------------
Panmure Gordon & Co John Prior/Harriette Johnson Office: +44 (0)20
Joint Broker (Corporate Finance) 7886 2500
Hugh Rich (Corporate Broking)
------------------------------- -------------------
Camarco Gordon Poole / Tom Huddart aeg@camarco.co.uk
Financial PR Adviser / Emily Hall Office: +44 (0)20
3757 4980
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CHAIRMAN & CEO'S LETTER
Dear Shareholders,
Introduction
AEG is focussed on developing next generation biomass products
and the manufacturing processes and technology required to produce
them.
The Directors believe that CoalSwitch represents a step change
for the pellet industry, utilising steam technologies to produce a
more efficient fuel addressing environmental and energy concerns
for the immediate future.
In the first half of 2021, AEG achieved a number of significant
milestones:
-- the successful financial restructuring of the Company's
balance sheet and raising of equity funding to construct the first
CoalSwitch reference plant;
-- sales and marketing activities moved from conceptual
discussions to testing and analysis of sample fuel quantities
produced at Ashland, Maine (the "Ashland Facility");
-- supply of CoalSwitch samples to twelve prospective customers,
with ongoing discussions with a number of interested parties,
including discussions for technology licensing; and
-- independent testing of initial CoalSwitch production has been
completed to show that CoalSwitch is a superior biomass pellet fuel
to existing white pellets in terms of heating value and bulk
density .
The role of biomass in future energy supply
In the shift towards sustainability, there is an increasing
recognition of the need for a balanced energy supply. The provision
of a consistent level of base-load electricity within existing
electricity grid systems currently requires a combination of energy
sources which includes biomass fuels.
The International Energy Agency's ("IEA") "Net Zero by 2050"
report shows a scenario of a global increase of 50 exajoules in
biomass power to 2050 (equivalent to one-third of China's current
annual electricity consumption). The IEA report noted that "Solid
bioenergy provides flexible low-emissions generation to complement
generation from solar PV and wind and it removes CO2 from the
atmosphere when equipped with CCUS (Carbon capture)".
To date, Europe's regulation has led the way in the use of
biomass power generation. Asia is fast adopting similar policies
and this is expected to lead to future growth in these markets. The
USA is now facing similar challenges to accommodate sustainability
and maintain power supplies within its existing infrastructure. The
interest in next-generation biomass fuels has never been greater.
Against this backdrop, CoalSwitch is well positioned.
Strategy
The Board has drawn further confidence from:
-- the utilisation of waste biomass material as a core feedstock;
-- the validation of the steam explosion production process in
scale from running the test reactors at Ashland;
-- the additional technical product knowledge and know-how
obtained during the first production cycles at Ashland; and
-- the positive market interest in CoalSwitch received to date.
The Board is watching regulatory and technology developments,
where recent supply challenges have identified potential power
shortages. Next generation biomass fuels (such as CoalSwitch) will
play an important part in addressing the shortcomings of renewable
energies within existing electricity grid systems.
Developing a new technology has inevitable challenges and
CoalSwitch is no different - notably the recent suspension of
production at Ashland in August. However, we have now produced
CoalSwitch through an industrial scale facility providing
considerable manufacturing data and know-how. Design improvements
for the reactors have already been identified alongside ways to
simplify the manufacturing process to reduce costs of
production.
The market requires a scalable solution to produce next
generation pellets and the Directors believe that AEG now has the
technical solutions to deliver pellets that have been produced via
steam technologies. The Company's strategy is to construct scalable
production facilities starting with the design and build of the
first 70,000 tonne per year CoalSwitch plant in Ashland.
Operational update
During the first six months of the year, AEG focused its
operational activities in two centres on the US East Coast, namely
Ashland, Maine and Lumberton, North Carolina. AEG remains focussed
on developing manufacturing capacity in the USA, which is at the
heart of the current global biomass manufacturing industry. Our
locations also allow AEG to make the greatest impact toward the
industry changes that the biomass industry needs to make in the
coming years.
Operations at Ashland, Maine
During construction of the Lumberton reference plant, AEG and
Player Design Inc. ("PDI") received additional commercial enquiries
about the possibility of combining CoalSwitch production facilities
within existing lumber mill operations in North Eastern USA. This
model aligned with the strategy being pursued in Lumberton and the
Group was keen to expand into this region. In April 2021, AEG and
PDI worked with the State of Maine to obtain a temporary operating
permit to allow a second CoalSwitch reference plant to be
constructed at PDI's facility at the Ashland Facility.
AEG had sufficient equipment to build a second facility when
combined with PDI's existing operating infrastructure at the
Ashland Facility. The Board therefore decided to proceed with this
development before the permitting and construction issues arose in
Lumberton during May 2021. With the subsequent events at Lumberton,
resources within AEG and PDI were refocused toward completion of
construction of the second reference plant and for it to become
operational within the existing timetables. As a result, the
reference plant at the Ashland Facility was completed and
operational within 14 weeks from the date of issuance of the
relevant temporary operating permit. First CoalSwitch fuel
production commenced in May 2021 and first deliveries of CoalSwitch
to the program organised by the University of Utah, Brigham Young
University ("BYU") and PacifiCorp ("PacifiCorp") were made in June
2021.
The Ashland Facility reference plant continued to operate until
5 August 2021 when a monitoring component failure resulted in a
suspension of production, rendering both reactors inoperable and
requiring replacement. All other equipment at the Ashland Facility
remains operable and capable of recommencing CoalSwitch production
operations at any time. More importantly, production from the
second reference plant validated the steam explosion process to
produce next generation biomass fuels on an industrial scale.
During the production period, valuable manufacturing and product
data was acquired which provides key information to allow the
construction of larger scale production facilities.
Operations at Lumberton, North Carolina
Lumberton (the "Lumberton Site") was purchased in 2019 to become
a strategic hub for a variety of lumber activities, including the
production of next generation biomass fuels, such as CoalSwitch,
and performing various ancillary lumber activities, including the
production of rail ties and other lumber products. These activities
were seen as complementary given AEG's aim to demonstrate that
biomass fuel production must work within sustainability goals. By
situating all the activities within one facility, AEG sought to
demonstrate that biomass fuel manufacture can be successfully
accommodated within an integrated lumber producing facility. This
model has attracted increasing interest from prospective lumber
partners throughout the USA and Canada during 2021 and remains a
core component of the Company's strategy.
In respect of the lumber activities during the period, the first
quarter provided a number of operational issues for Active Energy
Renewable Power LLP ("AERP"), the Company's operating subsidiary at
Lumberton. These issues included adverse weather conditions which
disrupted log supplies to the Lumberton Site, ongoing supply chain
disruption for product distribution and the continuing operational
limitations occurring as a result of COVID-19. The Board had set
modest goals to operate AERP's lumber and saw log activities at
breakeven by the 2020 year-end but did not achieve the operational
scale to attain these targets. The Board's review of the lumber and
saw log activities at the Lumberton Site determined that they
neither aligned with the Group's strategic intent of utilising
residual materials in the production of biomass fuels, nor could
the investment required to achieve scale for these businesses be
justified at the expense of developing CoalSwitch. As a result, the
Board took the decision to cease the Company's lumber and saw log
activities in AERP.
Since the fourth quarter of 2020, AEG's focus at the Lumberton
Site has been the production of CoalSwitch where relevant permits
had been issued by the North Carolina Department of Environmental
Quality ("NCDEQ") in August 2020. Preparatory engineering work
commenced in the third quarter of 2020 using the engineering
services of PDI. The Board set a target for first production by May
2021 and fuel available for customer delivery by June 2021.
Construction activities commenced in early February 2021, with
regular monitoring carried out by the NCDEQ.
In May 2021, AEG received a notice of violation from NCDEQ in
respect of the installation of additional control devices to
enhance emissions reduction which required an amendment to the
existing air quality permits issued by NCDEQ in 2020. AEG and its
representatives immediately submitted the relevant amendments to
ensure construction might remain on schedule. Subsequent to this,
the NCDEQ requested additional information on emissions including
data from an operational facility in order to revise and re-issue
the permits. AEG was required to suspend construction activities of
the reference plant at the Site.
AERP has continued dialogue with the NCDEQ and the NCDEQ has
made clear that AEG cannot resume the permit approval process
without the independent emissions analysis being submitted.
Nonetheless, it remains AEG's intention to develop the Lumberton
Site given its optimal location in South-Eastern USA. Sales and
marketing activities continue in the region with the aim of
securing sizeable CoalSwitch offtake agreements. In the past AERP
has leased out parts of the Lumberton Site. AERP continues to
examine options to create economic value from the Lumberton
Site.
AERP has received legal challenges from the Southern
Environmental Law Centre ("SELC") based in North Carolina regarding
alleged permit breaches at the Site from an existing wastewater
treatment plant. This action correlates to the period when the
Group first assumed ownership of the property in 2019. The
Directors are confident that the Group fully complies with its
environmental and permit obligations and wholly refutes SELC's
claims. The Group has requested a dismissal of the legal challenge
and awaits the verdict of this application.
Development of sales and marketing activities for CoalSwitch
fuel and production technology
With the development plans for production of CoalSwitch underway
through the first half of the year, the Group focussed on sales
activities to look for long term supply contracts both in North
America and internationally.
New personnel have been retained both in the USA and Japan to
develop sales and marketing in each region. Within the USA, the
prime focus has been to examine opportunities with existing power
utilities and other key manufacturing industries who remain current
users of coal, such as cement and aggregate industries. The
interest remains to focus on co-firing opportunities with these
industries that want to address their immediate environmental
concerns in the consumption of coal.
The opportunity in Japan is different in that Japan has publicly
stated its goals for future biomass consumption, which provides AEG
with the opportunity to present its fuels to an incentivised
audience. Our marketing efforts in Japan are progressing and
samples of CoalSwitch fuel have been delivered and tested with
favourable results. AEG is working toward securing long term supply
contracts but it is acknowledged that this will take time and
dedicated resources.
To date, AEG has supplied fuels to twelve prospective clients
and universities for independent analysis within North America and
internationally. The first test results, published by the Wood
Science and Technology Centre at the University of New Brunswick on
2 September 2021, demonstrate, for the first time in three years,
the premier qualities of CoalSwitch as a biomass pellet compared to
white pellets.
The CoalSwitch delivered to BYU and PacifiCorp in June 2021
allowed the first stage of the test program (the "Test Program") to
commence. The Test Program is designed to facilitate the analysis
and co-firing qualities of CoalSwitch in both PacifiCorp and BYU
facilities. Having completed the ball mill testing, the next stage
of the Test Program is testing of the co-firing process. Additional
quantities of CoalSwitch will be required for this next stage and,
at this point, we are unable to supply sufficient volumes to
complete this test. In the meantime, AEG is working with BYU to
focus on an additional co-firing program to provide performance
data on CoalSwitch utilising some of the existing fuel supplies in
Utah. AEG is also in discussions with other commercial partners for
additional co-firing opportunities within North America.
Intellectual property progress during the period
During the 2021, AEG has continued to develop its intellectual
property portfolio and production know-how in regard to CoalSwitch
and its manufacture. The award of the patent in the USA (Patent No:
10,858,607) has accelerated an additional patent application in the
USA. On 4 June 2021, AEG was notified by the Canadian Intellectual
Property Office of the grant of notice of allowance confirming the
award of the Canadian patent. Since that announcement, AEG has
completed the administrative formalities and awaits the formal
award of the Canadian patent.
Production data and know-how acquired in recent weeks will
further accelerate the intellectual property program for AEG within
North America and internationally. Finally, throughout the period,
AEG has continued to focus on opportunities for technology
licensing using existing and recently developed intellectual
property. Recent enquires from South-East Asia, South Africa and
India have all demonstrated the underlying interest in steam
technologies to produce biomass fuels. Progress has been slowed by
the COVID-19 travel restrictions, but we are working with each of
these partners to develop these opportunities.
Corporate
In January 2021, Andrew Diamond was appointed as the Group's
Finance Director and in February 2021 Antonio Esposito resigned as
Executive Director of the Company.
The Company's application to be listed on Nasdaq OTCQB is
complete subject to compliance with the existing trading rules.
When the Company's share price complies with these rules, the
commencement of trading is expected to be formalised and a further
announcement will be provided at that time.
Going concern
The Directors have given careful consideration to the
appropriateness of the going concern basis in the preparation of
the Unaudited Interim Condensed Consolidated Financial Statements.
Further details of our current financial position and uncertainties
which may affect the Company's ability to continue operating as a
going concern are to be found in the Financial Review and in Note 3
of the Unaudited Interim Condensed Consolidated Financial
Statements set out below.
Summary
The first half of 2021 has brought some challenges and a number
of steps forward. With the support of our shareholders, CoalSwitch
has moved from concept to the production of a next generation
biomass fuel, which we have successfully produced and supplied to
prospective customers. In addition, our balance sheet has been
restructured and the Company is largely debt free.
The next key step for the Company is the design and construction
of a facility to produce up to 70,000 tonnes of CoalSwitch per
annum, to show that AEG can produce commercial volumes of
CoalSwitch and meet market volume demand. Engineering activities
are underway to improve the reactor and process designs are
underway, following which the Group will seek to obtain the
appropriate permits from the State of Maine. It is imperative that
we move quickly to achieve these steps.
To maintain our positive momentum, we are examining all options
to re-establish limited production at Ashland as soon as
practicable, subject to relevant operating permits being granted.
Suitable existing test reactors remain available at Lumberton and
we are analysing moving and modifying these, as a temporary
measure, whilst new reactors are designed and fabricated.
Recent events within the global power industry have highlighted
the need for stable and diverse sources of energy supply, including
biomass, which of itself needs to evolve to meet increasing
environmental criteria and regulation. The Board is more convinced
than ever that CoalSwitch has these properties and has an important
future role to play. The Board views the prospects of the Company
with confidence.
James Leahy Michael Rowan
Non-executive Chairman CEO
27 September 2021
FINANCIAL REVIEW
The Unaudited Interim Condensed Consolidated Financial
Statements for the six-month period ended 30 June 2021 ("reporting
period" or "H1 21") is compared to the six-month period ended 30
June 2020 ("prior period" or "H1 20") as required by International
Financial Reporting Standards ("IFRS")
The Group has made significant progress during H1 21. In
February 2021, the convertible loan note ("CLN") holders agreed to
either convert their CLN's or have them redeemed. Furthermore, the
CLN holders agreed to a release of the security previously held
over the Group's assets by the CLN holders. At the same time, the
Company raised GBP7.0 million in an equity fundraising (before
expenses), principally to progress the final stages of construction
of the first reference plant at Lumberton Facility. These actions
restructured the Group's balance sheet and positioned the Company
to advance its CoalSwitch product.
On 20 May 2021, the Company announced its 50/50 joint venture
arrangement with PDI. Under this joint venture, AEG and PDI jointly
own a CoalSwitch plant in Ashland, Maine. The second reference
plant was completed and production commenced in May 2021.
On 5 August 2021, a monitoring component failure resulted in an
unexpected interruption in a production cycle. As a result of this
failure, both reactors at the Ashland Facility are inoperable and
will require replacement. All other equipment remains operable and
capable of resuming CoalSwitch production operations at any
time.
The Company has engaged sales and marketing representatives to
establish CoalSwitch supply contracts in North America and
internationally. Aside from initial deliveries to BYU and
PacifiCorp, CoalSwitch samples have been sent to several
prospective customers who have expressed an interest in the fuel
and wish to test independently.
In January 2021, Advanced Biomass Solutions Plc ("ABS"), a
subsidiary of the Company, agreed a debt facility up to GBP1
million and has drawn down GBP550,000 to date. The debt instrument
is repayable within twelve months based on monthly capital
repayments following a four-month repayment holiday. Initiation
fees of 7% were payable, and interest is charged at 10% per annum
payable quarterly in arrears. The Company has provided a corporate
guarantee as security. The Company has been repaying the amounts
drawn down and the balance outstanding at the date of reporting is
GBP284,167.
Going concern
The Interim Financial Statements have been prepared on a going
concern basis. Note 3 of the Interim Financial Statements lays out
the material uncertainties relating to the Group's ability to
continue as a going concern. The net proceeds of the fundraise in
February 2021 received by the Company, after CLN redemptions, have
been used to construct the CoalSwitch plants at Lumberton and
Ashland. The Directors anticipate that further funding will be
required in the coming twelve-month period in order to finance
plant modifications, expand CoalSwitch production capacity,
undertake additional research and testing programs and for
marketing activities.
Whilst there can be no guarantee that funding will be available
on terms that are acceptable to the Company or at all, the
Directors are confident, based on the progress made to date on the
production of CoalSwitch, and the restructured balance sheet of the
Group, that it will be able to secure the funding required. The
Directors are considering a number of options for securing the
additional funding including debt and equity or a combination of
both.
Performance
During H1 21, the Board has reassessed AEG's strategy and
determined that the saw log export business, which involved loading
saw logs into containers to be shipped to South-East Asia, did not
align with AEG's environmental strategy to focus on the use of
residual and waste forestry products from the lumber industry. In
addition, the Company has not been able to operate the saw log
export business at a scale to produce profitable returns. The level
of capital investment required to scale up and operate profitably,
to the detriment of CoalSwitch development, was deemed unacceptable
and the Board decided it was in the best interests of the Company
to cease the operations of this business.
Furthermore, the sawmill business struggled to operate
profitably. With a limited pool of capital the Board believes that
it is in the best interests of the Group to focus its time and
capital allocations on the opportunities presented by CoalSwitch
and therefore ceased sawmill activities.
Revenue for H1 21 was US$636,241 (H1 20: US$499,893). With the
closure of the saw log and sawmill businesses, the Company does not
anticipate further revenues from these businesses in H2 21.
Gross loss for H1 21 was US$496,588 (H1 20: profit of
US$357,835) reflecting the difficulties in both trading conditions
and the lack of scaled operations in the saw log and sawmill
businesses.
Administrative costs were US$1,486,064 (H1 20: US$1,080,087).
Costs associated with the operations and closure of the saw log and
sawmill businesses have been fully accounted for. The ongoing costs
associated with maintaining the Lumberton property have been
reduced as far as possible.
The full conversion of the CLN's, which incurred interest
charges to 31 January 2021, has reduced the interest cost charge.
Foreign exchange costs, which are included in disclosed finance
costs resulted in an increase in costs for the reporting
period.
Loss for the reporting period was US$2,039,316 (H1 20:
US$593,914), and basic and diluted loss per share was 0.06 cents
(H1 20: 0.05 cents).
Financial Position
Non-current assets
Additions to plant and equipment of US$4,251,496 relate to the
development of the Lumberton and Ashland CoalSwitch plants. The
termination of leases following the cessation of the sawmill
business resulted in a deemed disposal of US$435,066 of plant and
equipment.
Liabilities
Trade and other payables of US$1,573,733 (31 December 2020:
US$2,091,657) includes an accrual of approximately US$700,000 for
Lumberton and Ashland construction costs which have not yet been
invoiced.
Loans and borrowings of US$852,471 (31 December 2020:
US$22,127,323) reflects the impact of the removal of the CLN
obligation. The remaining balance mainly reflects the ABS debt
facility referred to above.
Net debt
The Group reports a net cash position at 30 June 2021 of
US$1,135,058 compared to a net debt of US$21,127,692 at 31 December
2020 (see note 11). The strong reduction in the liabilities of the
Group reflects the actions taken to strengthen the balance sheet
following the conversion and redemption of CLN obligations and the
equity raised at the beginning of the year.
Cash Flows
Operating cash outflows of US$3,409,601 (H1 20: US$172,038)
included US$1,047,804 of working capital reductions, reflected in
the reduction of trade and other payables.
Investing outflows of US$3,543,036 (H1 20: US$95,420) relate to
the purchase of equipment related to the CoalSwitch facilities in
Lumberton and Ashland.
Financing activities included US$8,994,643 of net equity raised
in the fundraising in February 2021, less US$1,484,728 of CLNs
redeemed as part of the balance sheet restructuring process. Funds
of US$750,296 were raised via the ABS facility in January 2021.
Directors' Responsibility Statement
The Directors confirm that to the best of their knowledge the
unaudited Interim Financial Statements have been prepared in
accordance with IAS 34 'Interim Financial Reporting'.
Changes in Directors during the period is discussed in the
Corporate section of the Chairman's letter. A list of the current
Directors is available on the Company's website: www.aegplc.com
Andrew Diamond
Finance Director
27 September 2021
CONDENSED CONSOLIDATED STATEMENT OF INCOME AND OTHER
COMPREHENSIVE INCOME
FOR THE SIX-MONTH PERIODED 30 JUNE 2021
30 June
30 June 2021 2020
Unaudited Unaudited
Note US$ US$
REVENUE 6 636,241 499,893
============= ============
GROSS (LOSS)/PROFIT (496,588) 357,835
Other operating income 411,178 -
Administrative expenses (1,486,064) (1,080,087)
------------- ------------
OPERATING LOSS (1,571,474) (722,252)
Finance costs (469,237) 111,844
------------- ------------
LOSS FROM OPERATIONS (2,040,711) (610,408)
Tax 1,395 16,494
LOSS FOR THE PERIOD - attributable
to Parent 6 (2,039,316) (593,914)
============= ============
Basic and Diluted loss per share
(US cent) 5 (0.06) (0.05)
OTHER COMPREHENSIVE (LOSS) / INCOME
Items that may be subsequently
reclassified to profit or loss:
Exchange differences on translation
of operations (1,185,420) (247,604)
Revaluation of other financial
assets - (106,366)
TOTAL COMPREHENSIVE LOSS FOR THE
PERIOD (3,224,736) (947,884)
============ ============
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
30 June 31 December
2021 2020
Unaudited Audited
Note US$ US$
NON-CURRENT ASSETS
Intangible assets 7 5,259,024 5,259,024
Property, plant and equipment 8 14,277,041 10,443,641
Other financial assets 945,803 931,312
20,481,868 16,633,977
------------- -------------
CURRENT ASSETS
Inventory 241,347 237,506
Trade and other receivables 84,107 270,755
Cash and cash equivalents 1,987,529 999,631
-------------
2,312,983 1,507,892
------------- -------------
TOTAL ASSETS 22,794,851 18,141,869
============= =============
CURRENT LIABILITIES
Trade and other payables 9 1,573,733 2,091,657
Lease liabilities - 136,891
Other current liabilities 150,000 150,000
Loans and borrowings 10 852,471 21,772
2,576,204 2,400,320
------------- -------------
NON-CURRENT LIABILITIES
Deferred income tax liabilities 148,744 150,139
Lease liabilities - 202,417
Loans and borrowings 10 - 22,105,551
-------------
148,744 22,458,107
------------- -------------
TOTAL LIABILITIES 2,724,948 24,858,427
------------- -------------
NET ASSETS / (LIABILITIES) 2 0,069,903 (6,716,558)
============= =============
EQUITY ATTRIBUTABLE TO OWNERS
OF THE PARENT
Share capital - Ordinary shares 12 5 50,694 219,436
Share capital - Deferred shares 12 18,148,898 18,148,898
Share premium 5 1,158,499 18,711,637
Merger reserve 2,350,175 2,350,175
Foreign exchange reserve ( 1,370,395) (184,975)
Own shares held reserve (268,442) (268,442)
Convertible debt / warrant reserve 8 58,069 3,701,803
(5 1,862,241
Retained earnings ) (49,899,736)
Revaluation reserve 504,646 504,646
------------- -------------
TOTAL EQUITY 2 0,069,903 (6,716,558)
============= =============
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX-MONTH PERIODED 30 JUNE 2021
Own Convertible
Foreign shares debt and
Share Share Merger exchange held warrant Retained Revaluation Total
capital premium reserve reserve reserve reserve earnings Reserve equity
US$ US$ US$ US$ US$ US$ US$ US$ US$
At 31 December
2019 17,265,379 17,303,159 2,350,175 (67,274) (268,442) 3,490,621 (40,206,405) 504,646 371,859
Total
comprehensive
loss - - - (353,970) - - (593,914) - (947,884)
Issue of share
capital 802,467 - - - - - (452,467) - 350,000
Conversion of
CLN 172,413 4,578 - - - (21,160) - - 155,831
Embedded
derivative
on CLN issue - - - - - 208,532 - - 208,532
Share based
payments - - - - - - 69,632 - 69,632
At 30 June
2020 18,240,259 17,307,737 2,350,175 (421,244) (268,442) 3,677,993 (41,183,154) 504,646 207,970
=========== =========== ========== ========== ========== ============ ============= ============ ==========
At 31 December
2020 18,368,334 18,711,637 2,350,175 (184,975) (268,442) 3,701,803 (49,899,736) 504,646 (6,716,558)
Total
comprehensive
loss - - - (1,185,420) - - (2,039,316) - (3,224,736)
Issue of share
capital 98,218 8,896,425 - - - - - - 8,994,643
Conversion of
CLN 233,040 23,550,437 - - - (2,843,734) - - 20,939,743
Share based
payments - - - - - - 76,811 - 76,811
At 30 June
2021 18,699,592 51,158,499 2,350,175 (1,370,395) (268,442) 858,069 (51,862,241) 504,646 20,069,903
=========== =========== ========== ============ ========== ============ ============= ======== ============
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX-MONTH PERIODED 30 JUNE 2021
30 June
30 June 2021 2020
Unaudited Unaudited
Note US$ US$
Cash flows from operating activities
Loss for the period (2,039,316) (593,914)
Adjustments for:
Non-cash / separately disclosed items (403,481) (37,393)
Working capital (outflow) / inflow (1,043,577) 459,269
------------- ----------
Net cash outflow from operating activities 15 (3,490,601) (172,038)
Cash flows from investing activities
Purchase of intangible assets - (50,250)
Purchase of property, plant and equipment (3,543,036) (45,170)
Sale of property, plant and equipment - -
------------- ----------
Net cash outflow from investing activities (3,543,036) (95,420)
------------- ----------
Cash flows from financing activities
Issue of equity share capital, net
of share issue costs 8,994,643 -
Redemption of CLNs (1,484,728) -
Loans repaid (97,251) -
P roceeds from loans advanced 750,296 -
Principal elements of lease payments (57,900) -
Finance expenses paid (87,752) -
------------- ----------
Net cash inflow from financing activities 8,017,308 -
------------- ----------
Net increase/(decrease) in cash and
cash equivalents 987,898 (267,458)
Cash and cash equivalents at beginning
of the period 999,631 397,323
Exchange gains on cash and cash equivalents 4,227 5,527
------------- ----------
Cash and cash equivalents at end of
the period 1,987,529 135,392
============= ==========
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIODED 30 JUNE 2021
1. GENERAL INFORMATION
Active Energy Group plc is a London quoted (AIM: AEG) renewable
energy company focused on the production and development of next
generation biomass products that have the potential to transform
the traditional coal fired-power industry and the existing
renewable biomass industry.
The Company is incorporated in England and Wales (Company number
03148295) and the address of the registered office is 27-28
Eastcastle Street, London, W1W 8DH, United Kingdom.
2. BASIS OF PRESENTATION
On 31 December 2020, IFRS as adopted by the European Union at
that date was brought into UK law and became UK-adopted
International Accounting Standards, with future changes being
subject to endorsement by the UK Endorsement Board. Active Energy
Group Plc transitioned to UK-adopted International Accounting
Standards in its consolidated financial statements on 1 January
2021. This change constitutes a change in accounting framework.
However, there is no impact on recognition, measurement or
disclosure in the period reported as a result of the change in
framework.
The condensed consolidated interim financial report for the
half-year reporting period ended 30 June 2021 has been prepared in
accordance with the UK-adopted International Accounting Standard
34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
The Interim Financial Statements do not include all the
information and disclosures required in the annual financial
statements and should be read in conjunction with the Group's
consolidated financial statements for the year ended 31 December
2020. The Interim Financial Statements are presented in US Dollars,
except as otherwise indicated. The Interim Financial Statements
have been prepared on a going concern basis, under the historical
cost convention, except for the revaluation of certain financial
instruments.
The Interim Financial Statements is unaudited and does not
constitute full statutory accounts under Section 434 of the
Companies Act 2006. The financial information in respect of the
year ended 31 December 2020 has been extracted from the statutory
accounts which have been delivered to the Registrar of Companies.
The Group's Independent Auditor's report on those accounts was
unqualified and did not contain a statement under section 498(2) or
498(3) of the Companies Act 2006. The auditor's report on those
accounts included a material uncertainty in relation to the going
concern assumptions detailed in the notes to those accounts. The
auditor did not qualify their report in respect of this matter. The
financial information for the half years ended 30 June 2021 and 30
June 2020 is unaudited and the twelve months to 31 December 2020 is
audited.
The accounting policies applied by the Group in this financial
information are the same as those applied by the Group in its
financial statements for the year ended 31 December 2020 and which
will form the basis of the 2021 financial statements, except for a
number of new and amended standards which have become effective
since the beginning of the previous financial year. These new and
amended standards are not expected to materially affect the
Group.
The preparation of financial statements in compliance with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise judgment in the most appropriate
application in applying the Group's accounting policies. The areas
where significant judgments and estimates have been made in
preparing these interim financial statements are not materially
different from those disclosed in the financial statements for the
year ended 31 December 2020.
These Interim Financial Statements were approved by the Board of
Directors on 27 September 2021.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIODED 30 JUNE 2021
3. GOING CONCERN
The Directors are required to give careful consideration to the
appropriateness of the going concern basis in the preparation of
the interim financial statements.
In February 2021, the Company restructured its balance sheet by
securing the conversion and redemption of the entire convertible
loan note obligation ("CLN"). Furthermore, the securities in place
for the CLN holders have been revoked. At the same time the Company
recapitalised the business by raising GBP7.0 million (gross) to be
used principally for the construction of the Lumberton CoalSwitch
reference plant ("Lumberton Facility"), certain CLN redemptions and
improvement of the working capital position.
During the six-month period ending 30 June 2021 ("current
period") the Group progressed with the construction of the first
reference plant at the Lumberton Facility. Construction of the
reference plant was suspended owing to a requirement to amend the
existing air quality permits to accommodate the installation of
additional control devices. The Company signed a joint venture
agreement with Player Design Inc., on a 50/50 basis, and
constructed the second CoalSwitch reference plant in Ashland, Maine
("Ashland Facility"). The Ashland Facility is strategically located
near to several large lumber product manufacturers who have
significant wood residuals to dispose of. It commenced production
in May 2021 and delivered the first CoalSwitch product to
PacifiCorp in Utah in June 2021. On 5 August 2021, a monitoring
component failure resulted in an unexpected interruption in a
production cycle. As a result of this failure, both reactors at the
Ashland Facility are inoperable and will require replacement. All
other equipment remains operable and capable of resuming CoalSwitch
production operations at any time.
Preliminary testing by the University of New Brunswick of
CoalSwitch produced at the Ashland Facilty has validated the
technical merits of the product, and sales and marketing activities
both in the USA and internationally are currently underway with
CoalSwitch samples sent to a number of prospective customers for
independent testing.
At the reporting date the Group has sufficient funding for
near-term administration, working capital costs and debt servicing
but will need to seek additional funding to finance further plant
expansions and modifications and/or new plant developments.
Uncertainties exist in relation to the commercial viability of
CoalSwitch, the completion of the Lumberton and Ashland CoalSwitch
Facilities, the Group's ability to locate and secure long-term
off-take agreements for CoalSwitch and the Company's ability to
secure additional funding, either equity or debt, to support these
activities. These conditions indicate the existence of a material
uncertainty which may cast significant doubt over the Group's
ability to continue as a going concern.
The Directors have reviewed the cash forecasts in respect of the
Group's operating and planned growth activities. The expected cash
flows, plus available cash on hand, after allowing for funds
required and allowing for existing debt facilities, are not
sufficient to cover these activities. The Company will need to
raise funding to support operations in the twelve-month period from
the date of approval of these interim financial statements. The
Directors are confident, based on the CoalSwitch progress made to
date, and the restructured balance sheet of the Group, that it will
be able to secure the funding required.
On the basis of the considerations set out above, the Directors
have concluded that it is appropriate to prepare the interim
financial statements on a going concern basis. These Interim
Financial Statements do not include any adjustments to the carrying
amount and classification of assets and liabilities that may arise
if the Group or the Parent Company was unable to continue as a
going concern.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIODED 30 JUNE 2021
4. Basis of consolidation
The financial information incorporates the results of AEG plc
and entities controlled by the AEG plc (its subsidiaries). Control
is achieved when the Group has power over relevant activities, is
exposed, or has rights, to variable returns from its involvement
with the entity and has the ability to affect those returns through
its power over the entity. The consolidated interim financial
statements present the financial results of AEG plc and its
subsidiaries (the Group) as if they formed a single entity. Where
necessary, adjustments are made to the results of subsidiaries to
bring the accounting policies used into line with those used by the
Group. All intra-Group transactions, balances, income and expenses
are eliminated on consolidation.
5. LOSS PER SHARE
30 June 30 June
2021 2020
Unaudited Unaudited
Weighted average ordinary shares in
issue (Number) 3,206,905,598 1,239,618,243
Loss for the period (US$) (852,471) (22,127,323)
-------------- --------------
Basic and diluted loss per share (US
cent) (0.06) (0.05)
============== ==============
Basic and diluted loss per share are the same where the effect
of any potential shares is anti-dilutive and is therefore
excluded.
6. SEGMENTAL INFORMATION
The Group reports three business segments:
-- "CoalSwitch (TM)" denotes the Group's renewable wood pellet business.
-- "Wood processing" denotes the Group's sawmill and saw log activities.
-- "Corporate and other" denotes the Group's corporate and other costs.
The business segments are aligned to the Group's strategy. The
comparative segmental information has been restated to align with
the current reporting segments.
Factors that management used to identify the Group's reportable
segments
The Group's reportable segments are strategic business units
that offer different products or services.
Measurement of operating segment profit or loss
The Group evaluates segmental performance on the basis of profit
or loss from operations calculated in accordance with IFRS but
excluding non-recurring losses, such as goodwill and asset
impairments.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIODED 30 JUNE 2021
6. SEGMENTAL INFORMATION (continued)
Six months to 30 June Corporate
2021 CoalSwitch Wood processing & Other Total
(Unaudited) US$ US$ US$ US$
Revenue - 636,241 - 636,241
Operating segment (loss) (110,467) (571,476) (889,531) (1,571,474)
Segment (loss) before
tax (216,463) (596,982) (1,227,266) (2,040,711)
Tax credit/(charge) - 1,395 - 1,395
----------------- ---------------- ------------------ -------------
Segment (loss) for
the period (216,463) (595,587) (1,227,266) (2, 039,316)
================= ================ ================== =============
Total Assets 15,418,397 691,664 6,684,790 22,794,851
================== =============
Total Liabilities (1,418,977 (427,230) (878,741) (2,724,948)
================== =============
Other segmental information:
Capital Expenditure 4,235,999 12,500 2,997 4,251,496
Depreciation & amortisation - 163,769 554 164,323
Six months to 30 June Wood Corporate
2020 CoalSwitch processing & Other Total
(Unaudited) US$ US$ US$ US$
Revenue - 499,893 - 499,893
Operating segment (loss) (48,664) (210,986) (462,602) (722,252)
Segment (loss) before
tax (48,664) (210,986) (350,758) (610,408)
Tax credit/(charge) - - 16,494 16,494
----------------- ---------------- ---------------- -------------
Segment (loss) for
the period (48,664)) (210,986) (334,264) (593,914)
================= ================ ================ =============
Total Assets 10,955,003 1,232,142 11,087,960 23,275,105
================ =============
Total Liabilities (761,265) (862,645) (21,443,225) (23,067,135)
================ =============
Other segmental information:
Capital Expenditure: 463,651 776,099 970 1,240,720
Additions to Intangibles 61,654 151,298 50,444 263,396
Depreciation & amortisation - 17,547 75,495 93,042
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIODED 30 JUNE 2021
7. INTANGIBLE ASSETS
Six months to 30 June Intellectual Timber
2021 (Unaudited) Goodwill property licences Total
US$ US$ US$ US$
Cost
At 31 December 2020
and
30 June 2021 567,668 5,259,386 6,503,975 12,331,029
========= ============= ========== ===========
Accumulated amortisation
At 31 December 2020
and
30 June 2021 567,668 362 6,503,975 7,072,005
========= ============= ========== ===========
Net book value
At 31 December 2020
and
30 June 2021 - 5,259,024 - 5,259,024
========= ============= ========== ===========
Twelve months to 31 Intellectual Timber
December 2020 (Audited) Goodwill property licences Total
US$ US$ US$ US$
Cost
At 31 December 2019 - 5,028,061 6,314,713 11,342,774
Additions 567,668 231,325 189,262 988,255
------------- ---------- -----------
At 31 December 2020 567,668 5,259,386 6,503,975 12,331,029
========= ============= ========== ===========
Accumulated amortisation
At 31 December 2019 - 362 2,161,946 2,162,308
Impairment charge 567,668 - 4,191,039 4,758,707
Amortisation charge
for the year - - 150,990 150,990
--------- ------------- ---------- -----------
At 31 December 2020 567,668 362 6,503,975 7,072,005
========= ============= ========== ===========
Net book value
At 31 December 2020 - 5,259,024 - 5,259,024
========= ============= ========== ===========
Intellectual property comprises costs incurred to secure the
rights and knowledge associated with the CoalSwitch and PeatSwitch
technologies.
Recoverability of intellectual property assets is dependent on
successfully commercialising CoalSwitch, which is subject to a
number of uncertainties including the ability of the Group to
access financial resources to develop the projects and bring the
product to economic maturity and profitability. Commercial
production of CoalSwitch has recently commenced and based upon
forward projections of production growth, management determined
that no impairment was required. Management will continue to
monitor the recoverability of these assets.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIODED 30 JUNE 2021
8. PROPERTY, PLANT AND EQUIPMENT
Furniture
Land & Plant and and office
Buildings equipment equipment Total
US$ US$ US$ US$
Cost
----------- ----------- ------------ -----------
At 31 December 2019 4,017,645 5,247,016 42,097 9,306,758
----------- ----------- ------------ -----------
Additions 281,829 1,281,071 1,222 1,564,122
Disposals (5,614) - - (5,614)
Transfers (12,031) 45,168 (33,137) -
Foreign exchange differences - - 167 167
----------- ----------- ------------ -----------
At 31 December 2020 4,281,829 6,573,255 10,349 10,865,433
=========== =========== ============ ===========
Additions - 4,248,499 2,997 4,251,496
Disposals - (435,066) - (435,066)
Foreign exchange differences - - 161 161
----------- ----------- ------------ -----------
At 30 June 2021 4,281,829 10,386,688 13,507 14,682,024
=========== =========== ============ ===========
Accumulated depreciation
----------- ----------- ------------ -----------
At 31 December 2019 54,000 5,428 15,587 75,015
----------- ----------- ------------ -----------
Charge for the year 111,977 201,198 33,486 346,661
Transfers 39,740 (39,740) -
Foreign exchange differences - - 116 116
----------- ----------- ------------ -----------
At 31 December 2020 165,977 246,366 9,449 421,792
=========== =========== ============ ===========
Charge for the period 64,184 99,585 554 164,323
Disposals (181,277) - (181,277)
Foreign exchange differences - - 145 145
----------- ----------- ------------ -----------
At 30 June 2021 230,161 164,674 10,148 404,983
=========== =========== ============ ===========
Net book value
At 30 June 2021 4,051,668 10,222,014 3,359 14,277,041
=========== =========== ============ ===========
At 31 December 2020 4,115,852 6,326,889 900 10,443,641
=========== =========== ============ ===========
Plant and equipment additions relate to CoalSwitch equipment
acquired for the Lumberton production facility. Right of use assets
included within Plant and equipment, with a cost of US$435,066, and
accumulated depreciation of US$181,277, are reflected as a disposal
following termination of the lease at the end of the current
period.
Recoverability of plant and equipment assets is dependent on
successfully commercialising CoalSwitch, which is subject to a
number of uncertainties including the ability of the Group to
access financial resources to develop the projects and bring the
product to economic maturity and profitability. Commercial
production of CoalSwitch has recently commenced and based upon
forward projections of production growth, management determined
that no impairment was required. Management will continue to
monitor the recoverability of these assets.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIODED 30 JUNE 2021
9. TRADE AND OTHER PAYABLES
30 June 31 December
2021 2020
Unaudited Audited
US$ US$
Trade payables 517,706 1,340,213
Social security and other taxes 213,434 383,664
Accruals and deferred income 842,593 367,780
---------- ------------
1,573,733 2,091,657
========== ============
Accruals includes an amount of $700,000 relating to Lumberton
and Ashland construction costs which have not yet been
invoiced.
The carrying value of trade and other payables approximates to
fair value.
10. LOANS AND BORROWINGS
The book value and fair value of loans and borrowings are as
follows:
30 June 31 December
2021 2020
Unaudited Audited
US$ US$
Secured convertible debt - 21,914,723
Unsecured loans 165,888 212,600
Secured loans 686,583 -
---------- ------------
852,471 22,127,323
========== ============
Secured convertible debt
In February 2021, the convertible loan note ("CLN") holders
agreed to either convert their CLN's or have them redeemed.
Furthermore, the CLN holders agreed to a release of the securities
held over the Companies assets in favour of the CLN holders.
Secured loans
In January 2021, Advanced Biomass Solutions Plc, a subsidiary of
the Company, completed a debt facility of GBP1.0 million and drew
upon GBP550,000. The debt instrument is repayable within twelve
months based on monthly capital repayments following a four-month
repayment holiday. Initiation fees of 7% were payable, and interest
is charged at 10% p.a. payable quarterly in arrears. The Company
has provided a corporate guarantee as security.
The carrying value of loans and borrowings approximates to fair
value.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIODED 30 JUNE 2021
11. NET CASH/(DEBT)
30 June 31 December
2021 2020
Unaudited Audited
US$ US$
Cash and cash equivalents 1,987,529 999,631
Loans and borrowings (852,471) (22,127,323)
---------- -------------
1,135,058 (21,127,692)
========== =============
12. SHARE CAPITAL
Number of
shares US$
Allotted, called up and fully paid
At 1 January 2020 1,201,906,951 17,265,379
Issue of shares 339,271,092 1,102,955
-------------- -----------
At 31 December 2020 1,541,178,043 18,368,334
Issue of shares 700,000,001 98,218
Conversion of CLNs 1,660,873,700 233,040
-------------- -----------
At 30 June 2021 3,902,051,744 18,699,592
============== ===========
This is split as follows between:
Ordinary shares (0.01p each) 3,902,051,744 550,694
Deferred shares (0.99p each) 1,287,536,163 18,148,898
-----------
Total share capital 18,699,592
===========
On 7 September 2020 the 1,287,536,163 Ordinary shares of 1p each
in issue at that time were sub-divided into the same number of new
Ordinary Shares of 0.01p each and one Deferred Share of 0.99p. The
Deferred Shares were not admitted to trading on AIM, carry no
voting rights and are purchasable at GBP1 in aggregate. At the
company's Annual General Meeting on 8 July 2021 the shareholders
approved the reduction of the Deferred Shares.
13. RELATED PARTY DISCLOSURES
During 2021, the Group paid $8,680 to INJ London Ltd for sales
and marketing services. This company is owned by Max Aitken.
14. CAPITAL COMMITMENTS
There were no capital commitments at 30 June 2021.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2021
15. RECONCILIATION OF LOSS FOR THE PERIOD TO CASH OUTFLOWS FROM OPERATING ACTIVITIES
30 June 30 June
2021 2020
Unaudited Unaudited
US$ US$
Loss for the period (2,039,316) (593,914)
Adjusted for:
Share based payment expense 76,811 69,631
Depreciation 164,323 17,547
Amortisation of intangible assets - 75,495
Gains on disposal of right of use assets (49,884)
Gain on redemption of CLNs (411,177)
Foreign currency translations (292,176) (1,525,962)
Finance expenses 110,017 1,342,390
Income tax (1,395) (16,494)
------------ ------------
(2,442,797) (631,307)
Increase in inventories (3,841) (103,702)
Decrease in trade and other receivables 186,648 491,067
Increase in trade and other payables (1,230,611) 71,904
------------ ------------
Net cash outflow from operating activities (3,490,601) (172,038)
============ ============
16. SUBSEQUENT EVENTS
The key business developments since 30 June 2021 were as
follows:
-- The Company was notified that its commercial cutting permit
had been cancelled in the Province of Newfoundland and Labrador
(the "Province"), owing to the requisite volume allocation not
having been harvested within specified time limits. Covid-19 travel
restrictions had further prevented AEG or any of its advisers from
accessing the Province in the last 16 months. The permit was fully
impaired in 2020.
-- The Company held its AGM on 8 July 2021. All of the resolutions were passed.
-- On 5 August 2021, a monitoring component failure resulted in
an unexpected interruption in a production cycle. As a result of
this failure, both reactors at the Ashland Facility are inoperable
and will require replacement. All other equipment remains operable
and capable of resuming CoalSwitch production operations at any
time.
17. COPIES OF THE INTERIM FINANCIAL STATEMENTS
Copies of the Consolidated Interim Financial Statements will be
made available on the Company's website at www.aegplc.com .
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END
IR BLGDCRSDDGBR
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