Powerhouse Ener Regulatory News (PHE)

30 June 2014 PowerHouse Energy Group plc ("PowerHouse" or the "Company") Final Results PowerHouse announces its audited results for the year ended 31 December 2013.A copy of the annual report and accounts and notice of the Company's annualgeneral meeting, to be held on 28 August 2014 at 10.00 am will be posted toshareholders today and will be available shortly from the Company's website,www.powerhouseenergy.net. CHAIRMAN'S REPORT Another year of building a solid foundation for PowerHouse Energy Group, plc(PHEG). Fiscal year 2013, brought a number of challenges and opportunities. By andlarge, each was met head-on, and a positive outcome was achieved on behalf ofthe company. We were able to convert a number of previously unsettled debtsinto equity in the company, and several long-held disputes were resolvedamicably and in the shareholders' best interests. Much of the year was spentworking with the team at Pyromex, the creators of the Ultra High TemperatureGasification Reactor. By August 2013, the company had achieved its most significant milestone sincethe IPO- that of the completion of the acquisition of the 70 per cent interestin Pyromex Holding, AG, Pyromex AG, and Pyromex GmbH not already owned by thecompany. The acquisition of the Pyromex group of companies has positioned us tointegrate the companies into a workable whole, with each member of the teammoving in concert with the others. This acquisition has brought the technologycompletely under the control of PHEG and has allowed us to begin taking thenecessary steps to deliver a viable commercial platform. By December, 2013, the successful testing and commissioning of the company'sfirst nominal 5 tonne per day unit had been completed in Switzerland andPyromex was awarded the EU Certification verifying its compliance with allregulatory, safety, and environmental standards necessary for sales andoperation throughout the European Union. As part of the commissioning processthe machine was run through the entire thermal cycle dozens of times- moreoften than would be required in an entire year's operation- with very goodresults. A number of projects are being developed around the use of the nominal 5 tonneper day machine and we are confident that these projects will result in salesfor the company. We have hosted over 50 individuals and companies who haveexpressed interest in our system, and we continue to support these potentialcustomers in their permitting and pre-project development efforts. One of the very attractive features of our Pyromex process is our ability to"tune" the gas composition and create a very high volume stream of hydrogengas. Due to this ability we made the decision to acquire a beta version of theAFC Fuel Cell- a technology that appears to be ideally suited to operate inconjunction with our gasification reaction. We are planning a robust testingprogram with the AFC Fuel Cell when the unit is delivered in Q1 of next year.We are confident that the two technologies, working in concert, will deliverenergy from waste with an efficiency not yet seen in the market. A major benefit of the successful commissioning of the 5 tonne per day unit hasbeen that we have developed a number of new modifications and innovations thatwe will be integrating into our 25 tonne per day plant in Eitting, Germany.These innovations have dramatically improved the operational efficiency andmaintenance ability of the plant. We look forward to implementing theseenhancements in our Eitting facility this next year. Our current focus is to build out the commercial capabilities of the companyand begin rolling out sales and revenues based on our core technology. Thereare over 130 companies operating in the Waste to Energy space, each with itsown claims. However, we believe that we have created the most environmentallyfriendly, economically efficient, modular system available on the market today.We are enjoying inquiries from Asia, India, the United States, South Americaand, of course, from across Europe. We are confident that this next year willallow us to gain the traction necessary to begin driving the company forward. PHEG operations, including the completion of the acquisition of Pyromex, wasfunded through a continuation of the Hillgrove Investments Pty Ltd, (Hillgrove)Convertible Loan Agreement dated June 19 2012 which allows Hillgrove, at itsdiscretion, to further fund company operations as it has been doing to date.Furthermore, Hillgrove has provided a Letter of Support to ensure that thecompany's debts are paid as and when they are due and within the normal courseof business. Finally, Hillgrove has extended the maturity date of the note from8 October 2014, to 7 October 2015. Due to the increase in operational expenses PHEG was required to assume in thewake of the acquisition of the Pyromex companies, Hillgrove requested, and wasgranted, a fixed and floating charge (debenture) over the assets of PHEG,including all shares of Pyromex Holding, AG, on 24 February 2014. The company has continued to operate with a very lean approach to the businessas we better understand our customers' needs and how our technology andplatform solve the significant challenges inherent in carbon-neutral wastedestruction and green-energy generation - all the while operating safely andgenerating only a minor amount of completely non-toxic, non-leaching, residuewhich can be perfectly utilized in the construction industry. As these are our accounts up to 31 December 2013, they do not reflect thesettlement of the large debt due to Aspermont and other parties post year end.However, that loan was settled at a price of less than face-value, andeliminated a significant distraction to management. It was announced earlierthis year that a settlement had been reached with Renewme to release itsclaimed geographical licenses to use our technology under a disputed royaltyagreement with Pyromex and other claims against the company in return for €211,000 and the issue of 18,331,996 new Ordinary Shares in the Company. Whilethe equity portion of that settlement has been satisfied, the cash payment hasnot been settled and the agreement has not been completed. We remain in activediscussion with Renewme to finalize an amicable agreement. The annual accounts for the year ended 31 December 2013 show separate accountsfor both the Company and the Group. The Company accounts have been presentedprior to the Group accounts as the Board of Directors believes that this moreaccurately represents the ongoing position of PHEG. The Group accounts include the results of the Pyromex group as PHEG hasacquired Pyromex in totality. However, as can been seen in the Auditor'sReport, the Pyromex accounts have not been finalized and may be subject torevision. Previously, due to challenges with the Pyromex technology, butsubsequently resolved, the asset value of our 30% holding of the company wasimpaired, however with the completion of the nominal 5 tonne per day unit, andseveral innovations in the development of the unit, applicable to our 25 TPDunit (and the clear path to building a 50TPD unit) further investments madeduring the year have not been impaired. The principal risks of the company are included in note 13 of the annualreport. A key risk for the Company, which of maintaining the cash resourcesnecessary to operate as a going concern, has been mitigated through theprovision of the convertible loan agreement and letter confirming its currentintention to continue to provide financial support for the next 12 monthsprovided by Hillgrove Investments Pty. Ltd. The Directors have a reasonable expectation that the Company will have adequateresources to continue as a going concern for the foreseeable future. Thus wecontinue to adopt the going concern basis of accounting for the preparation ofthe annual financial statements. The Waste to Energy market continues to grow dramatically. We're now wholly apart of that through our acquisition of the Pyromex technology. The challengesof the future are now those of execution. We have all of the parts. We havecreated a solid foundation on which a robust company can be built. It is ourintention to create a showplace of our Eitting facility (next to the MunichAirport), and to leverage the tremendous demand for non-toxic, waste to energysolutions. Ours is one of the few- no tar, no smoke, no ash, and no toxins.Clean synthesis gas, and green, renewable energy from waste is the result ofour process. We're now positioned to begin our commercial roll-out of ourtechnology and I look forward to reporting progress in the coming year. Sincerely, Keith AllaunChairman For additional information please contact:PowerHouse Energy Group plc Keith Allaun - Executive ChairmanPhone: +44 (0)20 7079 4407Email: inquire@powerhousegroup.co.uk Sanlam Securities UK Limited (NOMAD and Broker)David Worlidge/Simon Clements+44 (0) 20 7628 2200 Company Statement of Comprehensive Income 31 December 31 December Note 2013 2012 £ £ Revenue - 45,000 Administrative expenses (404,309) (354,571) Operating loss (403,935) (309,571) Finance income - 2 Finance costs 3 (274,153) (124,972) Impairment of investment - (119,999) Loan waivers - 1,109,068 (Loss)/profit before taxation (678,462) 554,528 Income tax expense - - Total comprehensive (expense)/income (678,462) 554,528 (Loss)/earnings per share (pence) 4 (0.22) 0.19 Diluted (loss) / earnings per share (pence) 4 (0.22)