Last checked at 30 Jun 2015 15:35
30 June 2015
VELOX3 PLC
("Velox3" or "the Group")
FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2014
Velox3, the AIM quoted investment company focusing on the online trading services sector, is pleased to announce its final results for the year ended 31 December 2014.
Financial and operational highlights
· Transitioned into an investing company in March 2015
STRATEGIC REPORT
I am pleased to present our Results for the financial year ended 31 December 2014.
Financial review
2014 was a year of operational changes for Velox3 (formerly: 24/7 Gaming Group). After the successful admission to AIM in 2013, the Company faced unforeseen difficulties in the marketing activities of the gaming operations. This led to a number of changes in the management team and composition of the Board of Directors, as announced on 5 February 2014.
During 2014 the Group's Gross Gaming Revenues decreased to € 71,014 from € 163,871 in 2013. Due to rapid changes in the gaming industry the Wannagaming operations were by then running on an outdated technology. Therefore the Company started to implement a new platform, running on HTML5 technology and entered into discussions with software providers. The development time, however, took too long to be launched into a live environment and the Company didn't have sufficient funds to speed up the process. In early December 2014, the Directors decided to end the development and cease operations in the gaming industry.
The revenue of the publishing business slightly increased as the Group released one new title during the year. Revenues totaled €53,798, an increase of 95% compared to 2013. The total revenue and the expected revenues in the near future, led to the decision to cease the publishing operations.
The total loss for the year was € 4,362,344 (2013: 3,140,336).
To reduce overhead expenses the Directors started a restructuring of the business, as announced on 4 December 2014. Subsequently, the Company transitioned to an Investing Company after approval by Shareholders during the Extraordinary General Meeting held on 9 March 2015. The Company is currently looking for acquisition targets.
Board appointment
During the year, the Company made several changes in the Board of Directors:
In early 2014, non-executive directors John Harley and Erik van Emden resigned from the Board. Furthermore, Marcel Noordeloos resigned from the Board but remained as the Group CFO.
The Group announced the appointment of Mark Rosman as non-executive director on 19 March 2014.
Following the year-end, the Group announced the resignation of Willy Simon on 22 April 2015 as non-executive director.
Current trading and outlook
On 16 February 2015 the Company announced its intention to become an investing company, and published its proposed investing policy, which was approved by shareholders in an Extraordinary General Meeting held in Amsterdam on 9 March 2015.
Following the implementation of the investing policy, the Directors are currently actively reviewing investment opportunities in the online trading services industry. These online trading services include services such as binary options, trading in CFDs and Forex. The Company will consider investment opportunities anywhere in the world. The Company will also consider opportunities, as they arise, in industries related to the online trading services sector, including, but not limited to providers of services, marketing and technology to the sector. Investments may be by way of purchasing quoted shares in appropriate companies, outright acquisition or by the acquisition of assets, including the intellectual property, of a relevant business, or by entering into partnerships or joint venture arrangements.
For further information please contact:
24/7 Gaming Group | + 31 (0)20 775 0910 |
David Mathewson, Executive Chairman | |
Westhouse Securities | |
Antonio Bossi | +44 (0)20 7601 6100 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended | Year ended | ||||
31 December | 31 December | ||||
Notes | 2014 | 2013 | |||
€ | Restated € | ||||
CONTINUING OPERATIONS | |||||
Revenue | - | - | |||
Cost of goods and services | - | - | |||
Gross loss | - | - | |||
Listing expenses | - | (664,687) | |||
Salary expense | (320,526) | (107,650) | |||
General administrative expense | (662,721) | (69,319) | |||
Total administrative expenses | (983,247) | (841,656) | |||
Operating loss | (983,247) | (841,656) | |||
Financial (expenses)/income | (12,281) | 1,784 | |||
Loss before tax | (995,528) | (839,872) | |||
Taxation | - | - | |||
Loss for the year from continuing operations | (995,528) | (839,872) | |||
DISCONTINUED OPERATIONS | |||||
Loss for the year from discontinued operations | 3 | (3,366,816) | (2,300,464) | ||
TOTAL COMPREHENSIVE LOSS FOR THE YEAR | (4,362,344) | (3,140,336) | |||
|
| ||||
Loss per share | |||||
- Basic and diluted loss per share from continuing operations | 2 | (0.01) | (0.01) | ||
- Basic and diluted loss per share from total operations | (0.03) | (0.02) | |||
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| |||||
31 December | 31 December | ||||
2014 | 2013 | ||||
€ | € | ||||
Non-current assets | |||||
Property, plant and equipment | - | 53,367 | |||
Intangible assets | - | 169,748 | |||
Deferred tax asset | - | 986,975 | |||
Total non-current assets | - | 1,210,090 | |||
Current assets | |||||
Cash and cash equivalents | 1,836 | 2,657 | |||
Trade and other receivables | 130,010 | 205,925 | |||
Total current assets | 131,846 | 208,582 | |||
Total assets | 131,846 | 1,418,672 | |||
Equity and liabilities | |||||
Share capital | - | - | |||
Additional paid-in capital | 5,859,702 | 4,032,774 | |||
Combination reserve | 2,999,953 | 2,999,953 | |||
Shares to be issued | 168,423 | 1,226 | |||
Retained earnings | (10,969,112) | (6,606,768) | |||
Total shareholders' equity | (1,941,034) | 427,185 | |||
Current liabilities | |||||
Trade and other payables | 2,032,880 | 733,963 | |||
Borrowings | 40,000 | 257,524 | |||
Total current liabilities | 2,072,880 | 991,487 | |||
Total equity and liabilities | 131,846 | 1,418,672 | |||
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
|
| ||||||||||||||||
Additional | |||||||||||||||||
Share | paid in | Combination | Shares to | Retained | |||||||||||||
capital | capital | reserve | be issued | earnings | Total | ||||||||||||
€ | € | € | € | € | € | ||||||||||||
Balance as at 31 December 2012 | 86,013 | 2,913,940 | - | - | (3,466,432) | (466,479) | |||||||||||
Issue of share capital | - | 4,032,774 | - | - | - | 4,032,774 | |||||||||||
Acquisition of subsidiaries | (86,013) | (2,913,940) | 2,999,953 | - | - | - | |||||||||||
Loss for the financial year | - | - | - | - | (3,140,336) | (3,140,336) | |||||||||||
Share based payments | - | - | - | 1,226 | - | 1,226 | |||||||||||
Balance as at 31 December 2013 | - | 4,032,774 | 2,999,953 | 1,226 | (6,606,768) | 427,185 | |||||||||||
Issue of share capital | - | 1,826,928 | - | 69,260 | - | 1,896,188 | |||||||||||
Loss for the financial year | - | - | - | - | (4,362,344) | (4,362,344) | |||||||||||
Share based payments | - | - | - | 97,937 | - | 97,937 | |||||||||||
Balance as at 31 December 2014 | - | 5,859,702 | 2,999,953 | 168,423 | (10,969,112) | (1,941,034) | |||||||||||
CONSOLIDATED STATEMENT OF CASH FLOWS | ||||
31 December | 31 December | |||
2014 | 2013 | |||
€ | Restated € | |||
Cash flows from operating activities | ||||
Loss from operating activities | (983,247) | (841,656) | ||
Share based payment | 85,656 | 1,226 | ||
Loss before working capital change | (897,591) | (840,430) | ||
Decrease/(increase) in receivables | 7,523 | (15,553) | ||
Increase in payables | 790,166 | 221,933 | ||
Cash flow from operations | (99,902) | (634,050) | ||
Interest paid | - | - | ||
Cash flow from continuing operating activities | (99,902) | (634,050) | ||
Cash flow from discontinued operating activities | (1,246,517) | (2,883,569) | ||
Cash flow from operating activities | (1,346,419) | (3,517,619) | ||
Cash flow from investing activities | ||||
Outgoing loans | (120,000) | - | ||
Net cash outflow from continuing investing activities | (120,000) | - | ||
Net cash outflow from discontinued investing activities | (64,826) | (33,133) | ||
Net cash outflow from investing activities | (184,826) | (33,133) | ||
Cash flow from financing activities | ||||
Proceeds from issue of new shares | 1,490,424 | 3,769,999 | ||
Loans received | 40,000 | - | ||
Net cash inflow from continuing financing activities | 1,530,424 | 3,769,999 | ||
Net cash outflow from discontinued financing activities | - | (217,838) | ||
Net cash inflow from financing activities | 1,530,424 | 3,552,161 | ||
Net (decrease)/increase in cash and cash equivalents | (821) | 1,409 | ||
Cash and cash equivalents at start of period | 2,657 | 1,248 | ||
Cash and cash equivalents at end of period | 1,836 | 2,657 |
Notes
1: General Information
The financial information set out in this announcement does not comprise the Group's statutory accounts for the years ended 31 December 2014 or 31 December 2013 but is derived from those accounts.
The statutory accounts for the year ended 31 December 2013 have been delivered to the Registrar of Companies and those for the year ended 31 December 2014 will be delivered following the Company's Annual General Meeting.
The auditors have reported on those accounts and their reports were unqualified. In both 2014 and 2013 their reports drew attention to the going concern disclosures contained in the notes to the accounts by way of emphasis.
The going concern disclosure for the year ended 31 December 2014 is repeated below in this note.
The consolidated financial statements incorporate the results of Velox3 plc (the "Company") and entities controlled by the Company (its subsidiaries) (collectively the "Group").
Going concern
The Group reported a loss of €4,362,344 for the year ended 31 December 2014 and a loss of €3,140,336 for the year ended 31 December 2013. The Group reported a working capital deficit of €1,941,034 for the year ended 31 December 2014 and a working capital deficit of €782,905 for the year ended 31 December 2013.
The Directors plan to acquire new assets before 4 December 2015 under the Investing Policy approved by Shareholders, in order to comply with AIM regulation. To complete an acquisition successfully, the Company will raise new funds by issuing new ordinary shares of the Company. This new funding should be sufficient to cover the future working capital requirements of the Company including current outstanding payables up to the date of the fundraise.
Until the date of completing an acquisition, the Company has received non-binding offers from certain existing shareholders for the provision of working capital facilities to enable it to continue to trade. The total amount received on this basis amounts to €129,100 as of the date of this report. In June 2015 a shareholder confirmed in writing their intention to provide the Company with the minimum amount of funding, capped at €150,000, required to keep the Company active until the end of 2015. The funds would be made available through a convertible loan. The conversion price will contain a discount of 10% to the price offered in the next funding round, plus 1 warrant on every 5 shares.
Furthermore, on 9 March 2015 the Directors converted unpaid fees amounting to €159,428 into ordinary shares. This included the unpaid fees to 28 February 2015.
The Directors assume the continuing support of existing creditors, who have been willing to delay payments to them to date.
There is no guarantee that the Group will receive sufficient operational cash flow and/or funding to sustain operations or implement any future business plan steps. However the Directors are confident of the Group's ability to execute a business plan of attracting new finance and finding opportunities to merge a target into the company.
Accordingly, the Directors consider it appropriate to prepare the Consolidated Financial Statements on a going concern basis.
2 Loss per share (basic and diluted)
2.1 Loss per share from continuing operations
Year ended 31 December 2014 | Year ended 31 December 2013 | |||
€ | € | |||
Earnings | ||||
Earnings for the purposes of basic earnings per share being net loss after tax attributable to equity shareholders | (995,528) | (839,872) | ||
Number of shares | ||||
Weighted average number of ordinary shares for the purposes of basic earnings per share | 171,707,405 | 131,461,507 | ||
Basic earnings per share | (0.01) | (0.01) | ||
Diluted earnings per share | (0.01) | (0.01) | ||
2.2 Loss per share from discontinued operations
Year ended 31 December 2014 | Year ended 31 December 2013 | |||
€ | € | |||
Earnings | ||||
Earnings for the purposes of basic earnings per share being net loss after tax attributable to equity shareholders | (3,366,815) | (2,300,464) | ||
Number of shares | ||||
Weighted average number of ordinary shares for the purposes of basic earnings per share | 171,707,405 | 131,461,507 | ||
Basic earnings per share | (0.02) | (0.02) | ||
Diluted earnings per share | (0.02) | (0.02) | ||
3 Discontinued operations
As described in the Strategic Report the Group ceased Gaming and publishing operations in early December 2014.
As required by IFRS 5, the results of the gaming and publishing operations are presented as discontinued operations within the Consolidated Statement of Comprehensive Income. Cash flows pertaining to the gaming and publishing operations are presented separately in the Consolidated Statement of Cash Flows. The results of operations and cash flows reported for the year ended 31 December 2013 have been re-presented for these discontinued operations.
The results of the discontinued gaming and publishing operations, which have been included in the Consolidated Statement of Comprehensive Income were as follows:
Year ended 31 December 2014 € | Year ended 31 December 2013 € | ||
Revenues | 124,811 | 191,365 | |
Cost of goods and services | (166,813) | (278,843) | |
Gross loss | (42,002) | (87,478) | |
Total administrative expenses | (1,568,216) | (2,312,159) | |
Interest expense | (21,242) | (22,326) | |
Loss before tax | (1,631,460) | (2,421,963) | |
Taxation | (986,975) | 121,499 | |
Loss after tax | (2,618,435) | (2,300,464) | |
Loss on disposal of discontinued operations | (748,381) | - | |
Loss for the year from discontinued operations | (3,366,816) | (2,300,464) | |
4 Post balance sheet events
On 16 February 2015, the Company announced that it would have transitioned into an Investing Company under the AIM rules. The Investing policy was approved by the shareholders in an Extraordinary General Meeting held in Amsterdam on 9 March 2015.
On 9 March 2015 the Company received a proposal to subscribe for 4,555,083 new ordinary shares of the Company in lieu of unpaid Directors' and management fees totaling € 193,035. This conversion would include any unpaid fees up to 28 February 2015.
On 27 March 2015 the Company announced that it intended to change its name from 24/7 Gaming Group Holdings plc to Velox3 plc, as part of the transition to becoming an investing company. The ticker code on AIM has been changed to VLOX on 30 March 2015.
During the period April to May 2015, the Company has received non-binding offers from certain existing shareholders for the provision of working capital facilities to enable it to continue to trade. The total amount received on this basis amounts to €129,100 as of the date of this report. In June 2015 a shareholder confirmed in writing their intention to provide the Company with the minimum amount of funding, capped at €150,000, required to keep the Company active until the end of 2015. The funds would be made available through a convertible loan. The conversion price will contain a discount of 10% to the price offered in the next funding round, plus 1 warrant on every 5 shares.
In April 2015 the Company completed the process of liquidating its subsidiary TFS Ltd in Malta. TFS was incorporated in 2013 to run a new casino brand, but remained dormant. Due to the Group's restructuring this entity was no longer needed and in order to save costs, the Directors liquidated the company.
5 Annual General Meeting
A copy of the audited annual report for the year ended 31 December 2014 will be posted to shareholders shortly and is being made available from the Company's website at www.247gaminggroup.com.