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Brand CEO Alan Green talks PowerHouse Energy #PHE, Bloomsbury Publishing #BMY, Salt Lake Potash #SO4 & Vast Resources #VAST on Vox Markets podcast

Brand CEO Alan Green talks PowerHouse Energy #PHE, Bloomsbury Publishing #BMY, Salt Lake Potash #SO4 & Vast Resources #VAST with Justin Waite on the Vox Markets podcast. Interview is 9 minutes 40 seconds in.

PowerHouse Energy Group #PHE CEO Keith Allaun discusses the DNV GLs Independent endorsement of its technology with Proactive London’s Andrew Scott

Keith Allaun, chairman of PowerHouse Energy Group PLC (LON:PHE), caught up with Proactive London’s Andrew Scott as the firm received an independent endorsement of its technology.

DNV GL, a global leader in technical assurance certification, conducted a review of PowerHouse’s proprietary full-scale commercial engineering design for the waste to power and waste to hydrogen technology processes known as DMG.

The end result was the issue of a “Statement of Feasibility” by DNV, which signifies that the consultant found no prohibitive obstacles under its technology qualification process.

Powerhouse Energy Group #PHE Director/PDMR Shareholding and Issue of Equity

PowerHouse Energy Group plc (AIM: PHE), the UK technology company pioneering hydrogen production from waste plastic and used tyres, announces that Keith Allaun, CEO of the Company, has exercised 16,666,667 Share Options at an exercise price of 0.6p, for a cash consideration of £100,000.00 (“Option Shares”).

Application will be made for the admission of 16,666,667 Shares to trading on AIM and it is expected that this will occur on or around 26 October 2018. These shares will rank pari passu in all respects with the Company’s existing issued Ordinary Shares.

Following the acquisition of the Option Shares, Keith Allaun will hold 18,666,667 Ordinary Shares in the Company, which represents 1.09% of the Company’s enlarged issued ordinary share capital and voting rights. Mr. Allaun has made a written commitment to hold the newly issued shares for a minimum of 18 months.

Subsequent to the issue of Option Shares, the Company will have 1,716,431,621 Ordinary Shares in issue. PowerHouse has no shares in Treasury, therefore this figure may be used by Shareholders, from Admission, as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA’s Disclosure and Transparency Rules.

For more information, contact:

PowerHouse Energy Group plc Tel: +44 (0) 203 368 6399
Keith Allaun, Chief Executive Officer

WH Ireland Limited (Nominated Adviser) Tel: +44 (0) 207 220 1666
James Joyce / Chris Viggor

Turner Pope Investments Ltd (Joint Broker) Tel: +44 (0) 203 621 4120
Ben Turner / James Pope

Ikon Associates(Media enquiries) Tel: +44 (0) 1483 271291
Adrian Shaw Mob: +44 (0) 7979 900733

About PowerHouse Energy
PowerHouse Energy has developed a proprietary process technology – DMG® – which can utilise waste plastic, end-of-life-tyres, and other waste streams to efficiently and economically convert them into EcoSynthesis gas from which valuable products such as chemical precursors, hydrogen, electricity and other industrial products may be derived. The PowerHouse technology is one of the world’s first proven, modular, hydrogen from waste (HfW) processes.

The PowerHouse DMG® process can generate in excess of 1 tonne of road-fuel quality H2, and more than 28MW/h of exportable electricity per day.

The PowerHouse process produces low levels of safe residues and requires a small operating footprint, making it suitable for deployment at enterprise and community level.

PowerHouse is quoted on the London Stock Exchange’s AIM Market under the ticker: PHE, and is incorporated in the United Kingdom.

Powerhouse Energy #PHE – Interim results for the six months ended 30 June 2018

PowerHouse Energy Group plc (AIM: PHE), the UK technology company pioneering hydrogen production from waste plastic and used tyres, announces its unaudited interim results for the six months ended 30 June 2018.

 

H1 2018 Highlights

Operational

  • Completion of Front-end Engineering and Design Program (FEED) for DMG® System
  • Initiation of planning and permitting process for Ellesmere Port site
  • Continued operation of G3 Process Demonstration facility and additional data acquisition
  • Augmenting of Commercial Operation/Business Development Team

Financial

  • Equity fundraisings totalling £2,088,434 which includes shares issued to settle the Hillgrove loan note and to consultants in lieu of services provided.

Post-period Highlights

  • Active engagement of Element Energy to assist with UK & EU Grant Funding Applications
  • Accelerated commercial activities by PHE and Waste2Tricity, Ltd for first DMG® facility
  • Engagement of third-party Engineering validation – process well underway and due for completion in the coming weeks.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

For more information, contact:

PowerHouse Energy Group plc                                       Tel: +44 (0) 203 368 6399
Keith Allaun, Chief Executive Officer

WH Ireland Limited (Nominated Adviser)                 Tel: +44 (0) 207 220 1666
James Joyce / Chris Viggor

Turner Pope Investments Ltd (Joint Broker)             Tel: +44 (0) 203 621 4120
Ben Turner / James Pope

Ikon Associates (Media enquiries)                                 Tel:    +44 (0) 1483 271291
Adrian Shaw                                                                            Mob: +44 (0) 7979 900733

About PowerHouse Energy

PowerHouse Energy has developed a proprietary process technology – DMG® – which can utilise waste plastic, end-of-life-tyres, and other waste streams to efficiently and economically convert them into EcoSynthesis gas from which valuable products such as chemical precursors, hydrogen, electricity and other industrial products may be derived.  The PowerHouse technology is one of the world’s first proven, modular, hydrogen from waste (HfW) process.

The PowerHouse DMG® process can generate in excess of 1 tonne of road-fuel quality H2, and more than 28MW/h of exportable electricity per day.

The PowerHouse process produces low levels of safe residues and requires a small operating footprint, making it suitable for deployment at enterprise and community level.

PowerHouse is quoted on the London Stock Exchange’s AIM Market under the ticker: PHE, and is incorporated in the United Kingdom.

For more information see www.powerhouseenergy.net

Interim Results for the six months to 30 June 2018

Chairman’s Statement

Introduction

PowerHouse has made progress in the first half of 2018 on a number of fronts, the most significant of which is completion of the Front-end Engineering and Design (FEED) process for its generic DMG® System. This milestone was accomplished through the efforts of the design engineering team at EngSolve, the test engineering team at PowerHouse, and the application of the empirical data that had been acquired from the on-going operation of the G3-UHt Process Demonstrator at the Thornton Science Park.

Additionally, the Company was able to complete the retirement of the Hillgrove Convertible Loan Note (the Note) through the issuance and placement of the shares outstanding against the Note. This has allowed the Company to accelerate its technical and commercial aims, and freed the Company from the substantial overhang of shares thereby represented.

The principal activity of the Company is to continue the exploitation of the newly engineered and developed PHE Waste-to-Energy system, DMG®, and associated advances in its intellectual property and know-how, in order to achieve successful commercial roll-out of DMG®. The system’s thermal conversion process converts waste materials such as non-recyclable plastic, biomass, and other waste streams into a high-quality, clean, EcoSynthesis© gas composed primarily of hydrogen, methane, and carbon monoxide. The previously developed and constructed PHE G3-UHt Process Demonstration system continues to be operational at Thornton Science Park near Chester, UK.

We have created what we believe to be a distinct and sustainable business model with DMG® and the IP that underscores it: distributed waste elimination; distributed electrical generation; distributed hydrogen production, and the extraction of chemical precursors from heretofore wasted resources – quite literally, waste.

The Company continues to develop commercial interest in the DMG® System and is in advanced negotiations with selected parties regarding the deployment of our initial system and in ongoing discussions with a broader range of potential partners and customers for utilising our technology. We are confident that the completion of our first commercial system will precipitate significant demand for the DMG® System in multiple geographical regions.

PowerHouse no longer sees itself as simply a developer of Waste-to-Energy technology, but also as a pioneer in the nascent process of deriving hydrogen, and other chemical precursors, from waste. We are convinced that DMG® technologies will help fuel our future, cleanly, efficiently and profitably.

Our strategy

The Company’s long-term strategy is to utilise its intellectual, engineering, and operational know-how and to license its intellectual property, to assist in the building of sustainable and profitable waste eradication, energy recovery, and distributed electrical and hydrogen production operations utilising the Company’s proprietary thermal conversion platform technology (DMG®). This will be achieved by working in conjunction with a variety of third-party owner/operators, leading industry partners, and others including waste management companies, material recovery facilities, landfill operators, technology providers, and a suite of external project development partners.

Additionally, the Company will seek to exploit associated opportunities where the Board believes it can add significant value and contribute towards the success of the Company as a whole.

At present the Company’s principal assets are its G3-UHt process demonstrator, currently located at the University of Chester Thornton Science Park, the test data derived, and the Commercial Design materials developed during the on-going Engineering process.

As we enter the commercialisation phase for our proprietary DMG® technology platform, our strategy is to target licensing revenues to move PowerHouse towards becoming a profitable and sustainable business meeting the ever growing global demand for efficient elimination of unrecyclable plastic waste and end of use tyres, the production of clean energy, and the extraction of other useful resources from waste.

Developing our business model

The Company intends to further develop its DMG® process into a fully operational commercial unit capable of processing a nominal 25 tonnes per day of waste and deriving valuable resources such as EcoSynthesis Gas, hydrogen, distributed electricity, and other chemical precursors. It is expected that activities will commence in the UK in the near-term in partnership with Waste2tricity Ltd, an experienced waste-to-energy project development organisation.

The Company also continues the planning and permitting process related to the Peel Environmental site near Ellesmere Port and, furthermore, is concurrently evaluating a number of other potential sites for the roll-out and licensing of its initial DMG® technology.

Over the longer term the Company will look to exploit its proprietary know-how, technology developments, and other processes to develop economical, environmentally sound, and efficient solutions to capture even more physical and chemical energy from the growing waste-steam generated by our planet. Customers are being identified not just in the UK, but across the EU, and in other selected geographic territories.

Commercialisation

The commercialisation phase is now well underway and we are making positive progress by taking a customer-led approach, involving a combination of strategic alliances, commercial partnering and working directly with potential customers/licensors of our IP. Our flexible approach combined with the modular design of our DMG® System allows us to tailor our technology to meet the most specific of partner and customer requirements.

The generic Front End Engineering Design (FEED) Engineering is now complete, allowing initial safety design reviews and independent third party design reviews which have been initiated on schedule.  Third party engineering verification is well underway with results expected in the coming weeks.

We are now focussing on specific applications of the DMG® technology and are in active negotiation and discussions with a number of “early-adopter” commercial customers for our IP. The fabrication, build, and commissioning of the first DMG® system is expected to be completed, depending on specific customer requirements, and adequate funding being in place, by the end of Q3 2019 with full commercial operation commencing soon thereafter.

We are also actively pursuing a number of grant applications, which if successful, will result in additional funding during 2019.

We note that the share price has fallen this year as we have been required to retire the Note and to raise cash for Company operations.  However, we believe this to be a short-term situation for the Company and the Board is confident that third-party technical validation, the appointment of a partner for the fabrication and construction of the first DMG® facility, and, of course, the first contracted commercial order utilising our proprietary DMG® technology, will drive what the Board believes to be the considerable value inherent in PowerHouse.

Outlook

We believe we have the right strategy in place to deliver substantive growth over the medium to longer-term and to deliver sustainable shareholder value as the commercialisation strategy for our proprietary DMG® technology platform targets revenues to move PowerHouse towards becoming a profitable business.

The Company is currently pre-revenue and is reliant on being able to raise further funds to continue its development as outlined in the going concern note 1.2 of these interim statements.

The Board appreciates the continued support of our shareholders and is making every effort to repay your confidence in the Company and its future.

Corporate Governance

As required under changes to the AIM Rules PowerHouse has adopted a new Corporate Governance Code, the QCA Code. Full details of how the Company complies with the Code are set out on the Company’s website https://www.powerhouseenergy.net/investors/corporate-governance/

Dr. Cameron Davies
Non-Executive Chairman

Statement of Comprehensive Income

(Unaudited)
Six months
(Unaudited)
Six months
(Audited)
Year
ended ended ended
30 June 30 June 31 December
Note 2018
 £
2017
£
2017
£
Revenue
Cost of sales
Gross loss
Administrative expenses (725,872) (424,144) (1,272,204)
Research and development (411,301) (202,842) (527,547)
Share based payments (26,953) (5,078)
Operating loss (1,164,126) (626,986) (1,804,829)
Finance costs (545) (69,863) (69,863)
Loss before taxation (1,164,671) (696,849) (1,874,692)
Taxation
Loss after taxation (1,164,671) (696,849) (1,874,692)
Total comprehensive expense (1,164,671) (696,849) (1,874,692)
Total comprehensive expense attributable to:
                Owners of the Company (1,164,671) (696,849) (1,874,692)
                Non-controlling interests
Basic and diluted loss per share in pence 3 (0.08) (0.08) (0.19)

The notes numbered 1 to 5 are an integral part of the interim financial information.

Statement of Changes in Equity

Share capital
£
Share
premium
£
Accumulated losses
£
Total
£
Balance at 1 January 2017 (audited) 6,153,455 47,031,989 (56,412,008) (3,226,564)
Transactions with equity participants:
–  Shares issued in lieu of services 37,300 32,700 70,000
–  Shares issued 1,741,071 1,008,929 2,750,000
–  Share issue fees (155,126) (155,126)
Total comprehensive loss (696,849) (696,849)
Balance at 30 June 2017 (unaudited) 7,931,826 47,918,492 (57,108,857) (1,258,539)
Transactions with equity participants:
–  Shares issued in lieu of services 66,316 53,684 120,000
–  Shares issued 800,000 800,000 1,600,000
–  Share issue fees (90,384) (90,384)
Share based payment 5,078 5,078
Total comprehensive loss (1,177,843) (1,177,843)
Balance at 31 December 2017 (audited) (GBP) 8,798,142 48,681,792 (58,281,622) (801,688)
Transactions with equity participants:
–  Shares issued to settle liabilities 1,402,155 1,402,155
–  Shares issued 576,277 576,277
–  Shares issued in lieu of services 89,476 20,526 110,002
Share based payment 26,953 26,953
Total comprehensive loss (1,164,671) (1,164,671)
Balance at 30 June 2018 (unaudited) 10,866,050 48,702,318 (59,419,340) 149,028

The notes numbered 1 to 5 are an integral part of the interim financial information.

Statement of Financial Position

(Unaudited)
As at
30 June
(Unaudited)
As at
30 June
(Audited)
As at
31 December
Note 2018
£
2017
£
2017
£
ASSETS
Non-current assets
Property, plant and equipment 2,290 2,424 2,601
Investments 1 1 1
Total non-current assets 2,291 2,425 2,602
Current Assets
Trade and other receivables 238,994 90,771 88,495
Cash and cash equivalents 252,628 144,616 750,226
Total current assets 491,622 235,387 838,721
Total assets 493,913 237,812 841,323
LIABILITIES
Non-current liabilities
Loans 4
Total non-current liabilities
Current liabilities
Loans 4 (1,402,155) (1,402,155)
Trade and other payables 5 (344,885) (94,196) (240,856)
Total current liabilities (344,885) (1,496,351) (1,643,011)
Total assets / (liabilities) (344,885) (1,496,351) (1,643,011)
Net Liabilities 149,028 (1,258,539) (801,688)
EQUITY
Shares and stock 2 10,866,050 7,931,826 8,798,142
Share premium 48,702,318 47,918,492 48,681,792
Accumulated losses (59,419,340) (57,108,857) (58,281,622)
Total surplus / (deficit) 149,028 (1,258,539) (801,688)

The notes numbered 1 to 5 are an integral part of the interim financial information.

Statement of Cash Flows

(Unaudited) (Unaudited) (Audited)
Six months Six months Year ended
ended ended 31
Note 30 June 30 June December
2018
£
2017
£
2017
£
Cash flows from operating activities
Operating loss (1,164,126) (626,986) (1,804,829)
Adjustments for:
Share based payment 26,953 5,078
Expenses settled by shares 110,002 70,000 190,000
Depreciation 568 808
Changes in working capital:
(Increase) / Decrease in trade and other receivables (150,499) (84,436) (82,159)
Increase / (Decrease) in trade and other payables 104,029 43,013 189,672
Net cash used in operations (1,073,073) (598,409) (1,501,430)
Cash flows from investing activities
Purchase of fixed assets (257) (985)
Cash flows from financing activities
Share issues 2,088,434 2,664,874 4,294,490
Expenses settled by shares (110,002) (70,000) (190,000)
Finance costs (545) (69,863) (69,863)
Loans received 69,863 69,863
Loans repaid (1,402,155) (2,000,000) (2,000,000)
Net cash flows from financing activities 575,732 594,874 2,104,490
Net (decrease) / increase in cash and cash equivalents (497,598) (3,535) 602,075
Cash and cash equivalents at beginning of period 750,226 148,151 148,151
Cash and cash equivalents at end of period 252,628 144,616 750,226

The notes numbered 1 to 5 are an integral part of the interim financial information.

Notes (forming part of the interim financial information)

1.   Summary of significant accounting policies

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the financial information.

1.1.     Basis of preparation

This interim financial information is for the six months ended 30 June 2018 and has been prepared in accordance with International Accounting Standard 34 “Interim Financial Statements”. The accounting policies applied are consistent with International Financial Reporting Standards (“IFRS”) adopted for use by the European Union. The accounting policies and methods of computation used in the interim financial information are consistent with those expected to be applied for the year ending 31 December 2018.

The unaudited results for period ended 30 June 2018 do not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The comparative figures for the period ended 31 December 2017 for the company are extracted from the audited financial statements which contained an unqualified audit report and did not contain statements under Sections 498 to 502 of the Companies Act 2006.

This interim financial statement will be, in accordance with the AIM Rules for Companies, available shortly on the Company’s website.

1.2.     Going concern

The Directors have considered all available information about the future events when considering        going concern. The Directors have reviewed cash flow forecasts for 12 months following the date of these Financial Statements.

The cash balance held at 30 June 2018 together with a letter of support provided by one of the Company’s shareholders, as stated in the year-end accounts 2017, indicating to the Directors that he intends for at least 12 months from the date of the approval of the 31 December 2017 financial statements to make available a sum of £650,000 to the company, is considered sufficient to ensure that the Company can pay its debts as they fall due. To date the Company has not drawn down any of the funds previously committed and has been assured that the investor continues to make such funds available if necessary. Should the Company not be able to draw on such funds it would need to raise funds in the market, or elsewhere. The Directors are of the opinion that they can raise further funds as and when required through market sources although there can be no guarantee such funds would be forthcoming. Furthermore, the Directors have agreed to waive any future salaries or fees for themselves, if necessary, to allow the Company to repay its debts as and when they fall due. Based on this, the Directors believe it is appropriate to continue to adopt the going concern basis of accounting for the preparation of the interim financial statements.

1.3.     Functional and presentational currency

This interim financial information is presented in £ sterling which is the Group’s functional currency.

2.   SHARE CAPITAL

0.5 p Ordinary shares 0.5p Deferred
 shares
4.5 p Deferred shares 4.0 p Deferred shares
Balance at 1 January 2018 1,136,872,014 388,496,747 17,373,523 9,737,353
Shares issued 413,581,012
Balance at 30 June 2018 1,550,453,026 388,496,747 17,373,523 9,737,353

The deferred shares have no voting rights and do not carry any entitlement to attend general meetings of the Company. They carry only a right to participate in any return of capital once an amount of £100 has been paid in respect of each ordinary share. The Company is authorised at any time to affect a transfer of the deferred shares without reference to the holders thereof and for no consideration.

On 1 February and 23 April 2018, the Company issued 215,686,275 and 64,744,645 ordinary shares of 0.5p respectively at the agreed price of 0.5p each in final settlement of the outstanding loan balance of Hillgrove of £1,402,155.

On 23 April 2018 the Company issued 115,255,355 ordinary shares of 0.5p each at a price of 0.5p each raising gross proceeds of £576,277.

On 18 May 2018 the Company issued a further 10,000,000 and 7,894,737 ordinary shares of 0.5p each at a price of 0.5p and 0.76p respectively in settlement of services provided.

3.   Loss per share

(Unaudited)
As at
30 June
(Unaudited)
As at
30 June
(Audited)
As at
31 December
2018
£
2017
£
2017
£
Total comprehensive (expense)/profit (GBP £) (1,164,671) (696,849) (1,874,692)
Weighted average number of shares 1,388,586,432 862,671,965 975,055,119
Basic and Diluted Loss per share in pence (0.08) (0.08) (0.19)

4.   LOANS

(Unaudited)
As at
30 June
(Unaudited)
As at
30 June
(Audited)
As at
31 December
2018
£
2017
£
2017
£
Hillgrove Investments Pty Limited             1,402,155 1,402,155
Total loans –                  1,402,155 1,402,155
Classified as:
–         Current 1,402,155 1,402,155
–         Non-current

Hillgrove Investments Pty Limited (“Hillgrove”) had provided the Company with a convertible loan which is secured by a debenture over the assets of the company and carries interest of 15 per cent per annum. Hillgrove had the option at any time to convert the loan in part or whole at a conversion price of 0.5p per share.

In February 2017 Hillgrove accepted a settlement of this loan for a £2m cash pay-out, made in 2017, and the conversion of the residual balance of £1,402,155 into newly issued share capital of the Company at the previously agreed 0.5p conversion price, amounting to 280,430,920 shares. The shares were issued in February and April 2018 as detailed in note 2, and Hillgrove has released the debenture it held over the assets of the Company.

5.   TRADE AND OTHER PAYABLES

(Unaudited)
As at
30 June
(Unaudited)
As at
30 June
(Audited)
As at
31 December
2018
£
2017
£
2017
£
Trade creditors 224,614 75,696 125,141
Other creditors and accruals 120,271 18,500 115,715
Total trade and other payables 344,885 94,196 240,856
Classified as:
–         Current 344,885 94,196 240,856
–         Non-current

Powerhouse Energy Group #PHE – Response to BBC Presentation

The Directors of PowerHouse Energy Group plc (AIM: PHE), the UK technology company pioneering hydrogen production from waste plastic and used tyres, noted a technology referenced on the recent BBC program, “Inside Out,” that converts waste plastic back into liquid hydrocarbons and fuels – effectively returning it into the fossil fuel it once was. While plastic waste is, indeed, a challenge that must be overcome, we believe there is a better solution. 

The Powerhouse Energy DMG® System, having been operating and demonstrated at the University of Chester, Thornton Science Park, Energy Centre for the past year, will responsibly, and economically recover the energy from plastics in an environmentally sound manner rather than simply turning waste plastic into another form of greenhouse gas emissions. DMG® allows the conversion of plastics into substantial amounts of road-fuel quality hydrogen to enable the operation of hydrogen-powered trucks, buses and cars with the cleanest of fuels: zero-emission hydrogen.

DMG® affords the conversion of waste plastic to EcoSynthesis gas to displace liquid hydrocarbons responsible for substantive pollution. Excess energy produced through the thermal conversion of non-recyclable plastic can be used to generate low-carbon electricity to power Electric Vehicles.

The Directors of PHE believe our technology, which is being readied for commercial deployment, is a substantially more eco-friendly solution to plastic waste than returning it into a hydrocarbon fuel.  We would welcome an open discussion with Friends of the Earth and the BBC regarding our proposals for solutions to the scourge of plastic mis-management.  DMG® is one such solution. 

Commenting on the show, PowerHouse CEO Keith Allaun noted: “plastic management through effective energy recovery is a key to our future, and key to the health of our planet. While “land-fill mining” may become a part of our future, we at PowerHouse have created a responsible, economically efficient, and environmentally robust solution to the problem that exists today – the mis-management of plastics. We look forward to working with industry to roll-out DMG® as part of the wider solution to this global challenge.”

 

For more information, contact:

PowerHouse Energy Group plc                                       Tel: +44 (0) 203 368 6399

Keith Allaun, Chief Executive Officer

 

WH Ireland Limited (Nominated Adviser)                    Tel: +44 (0) 207 220 1666

James Joyce / Chris Viggor

 

Turner Pope Investments Ltd (Joint Broker)                Tel: +44 (0) 203 621 4120

Ben Turner / James Pope

 

Ikon Associates (Media enquiries)                                 Tel:    +44 (0) 1483 271291

Adrian Shaw                                                                        Mob: +44 (0) 7979 900733

 

About PowerHouse Energy

PowerHouse Energy has developed a proprietary process technology – DMG® – which can utilise waste plastic, end-of-life-tyres, and other waste streams to efficiently and economically convert them into EcoSynthesis© gas from which valuable products such as chemical precursors, hydrogen, electricity and other industrial products may be derived.  The PowerHouse technology is the world’s first proven, modular, hydrogen from waste (HfW) process.

The PowerHouse DMG® process can generate in excess of 1 tonne of road-fuel quality H2, and in excess of 28MW/h of exportable electricity per day.

The PowerHouse process produces low levels of safe residues and requires a small operating footprint, making it suitable for deployment at enterprise and community level.

PowerHouse is quoted on the London Stock Exchange’s AIM Market under the ticker: PHE, and is incorporated in the United Kingdom. 

For more information see: www.powerhouseenergy.net

NBC News: Plastic straw ban? Cigarette butts are the single greatest source of ocean trash – PowerHouse Energy #PHE

Cigarette butts have long been the single most collected item on the world’s beaches, with a total of more than 60 million collected over 32 years.

Environmentalists have taken aim at the targets systematically, seeking to eliminate or rein in big sources of ocean pollution — first plastic bags, then eating utensils and, most recently, drinking straws. More than a dozen coastal cities prohibited plastic straws this year. Many more are pondering bans, along with the states of California and Hawaii.

Turning the Tide on Plastic.

Yet the No. 1 man-made contaminant in the world’s oceans is the small but ubiquitous cigarette butt — and it has mostly avoided regulation. That soon could change, if a group of committed activists has its way.

A leading tobacco industry academic, a California lawmaker and a worldwide surfing organization are among those arguing cigarette filters should be banned. The nascent campaign hopes to be bolstered by linking activists focused on human health with those focused on the environment.

“It’s pretty clear there is no health benefit from filters. They are just a marketing tool. And they make it easier for people to smoke,” said Thomas Novotny, a professor of public health at San Diego State University. “It’s also a major contaminant, with all that plastic waste. It seems like a no-brainer to me that we can’t continue to allow this.”

A California assemblyman proposed a ban on cigarettes with filters, but couldn’t get the proposal out of committee. A New York state senator has written legislation to create a rebate for butts returned to redemption centers, though that idea also stalled. San Francisco has made the biggest inroad — a 60-cent per pack fee to raise roughly $3 million a year to help defray the cost of cleaning up discarded cigarette filters.

‘THE MOST LITTERED ITEM IN THE WORLD’

Cigarette butts have now also fallen into the sights of one of the nation’s biggest anti-smoking organizations, the Truth initiative. The organization uses funds from a legal settlement between state attorneys general and tobacco companies to deliver tough messages against smoking. The group last week used the nationally televised Video Music Awards to launch a new campaign against cigarette butts. As in a couple of previous ads delivered via social media, the organization is going after “the most littered item in the world.”

It’s no wonder that cigarette butts have drawn attention. The vast majority of the 5.6 trillion cigarettes manufactured worldwide each year come with filters made of cellulose acetate, a form of plastic that can take a decade or more to decompose. As many as two-thirds of those filters are dumped irresponsibly each year, according to Novotny, who founded the Cigarette Butt Pollution Project.

The Ocean Conservancy has sponsored a beach cleanup every year since 1986. For 32 consecutive years, cigarette butts have been the single most collected item on the world’s beaches, with a total of more than 60 million collected over that time. That amounts to about one-third of all collected items and more than plastic wrappers, containers, bottle caps, eating utensils and bottles, combined.

People sometimes dump that trash directly on to beaches but, more often, it washes into the oceans from countless storm drains, streams and rivers around the world. The waste often disintegrates into microplastics easily consumed by wildlife. Researchers have found the detritus in some 70 percent of seabirds and 30 percent of sea turtles.

Those discarded filters usually contain synthetic fibers and hundreds of chemicals used to treat tobacco, said Novotny, who is pursuing further research into what kinds of cigarette waste leech into the soil, streams, rivers and oceans.

PLASTIC FIBERS THREATEN TO FOUL THE FOOD CHAIN

“More research is needed to determine exactly what happens to all of that,” said Nick Mallos, director of the Trash Free Seas campaign for the Ocean Conservancy. “The final question is what impact these micro-plastics and other waste have on human health.”

Image: Cigarette butts ocean cleanup
Cigarette butts collected on a Florida beach in 2010.Matt Swedlund / Ocean Conservancy

Tobacco companies initially explored the use of filters in the mid-20th century as a potential method for ameliorating spiraling concerns about the health impacts of tobacco. But research suggested that smoke-bound carcinogens couldn’t be adequately controlled. Then “filters became a marketing tool, designed to recruit and keep smokers as consumers of these hazardous products,” according to research by Bradford Harris, a graduate scholar in the history of science and technology at Stanford University.

Over the last two decades, the tobacco companies also feared being held responsible for mass cigarette litter, said Novotny. Internal company documents show the industry considered everything from biodegradable filters, to anti-litter campaigns to mass distribution of portable and permanent ashtrays.

Industry giant R.J. Reynolds Tobacco Co. launched a “portable ashtray” campaign in 1991, distributing disposable pouches for butts in test marketing with its Vantage, Camel and Salem brands. (A handy pocket behind the pouch was designed for storing matches, keys and loose change.) The company donated to the nationwide Keep America Beautiful anti-litter campaign and in 1992 it installed its own “Don’t Leave Your Butt on the Beach” billboards in 30 coastal cities.

More recently, an R.J. Reynolds subsidiary, Santa Fe Natural Tobacco Company, has launched a filter recycling effort, and the company mounts an intensive public awareness campaign about litter leading into Earth Day. It also says it continues with the portable ashtray effort — distributing some four million pouches to customers this year.

BIG TOBACCO TRIES, ON OCCASION, TO CLEAN UP ITS BUTTS

A spokesman for Philip Morris USA, another big manufacturer, said admonitions on cigarette packs are part of a campaign that also includes installing trash receptacles, encouraging the use of portable ashtrays and support for enforcement of litter laws.

But academics who followed such campaigns said they encountered an essential problem: Most smokers preferred to flick their butts.

In industry focus groups, some smokers said they thought filters were biodegradable, possibly made of cotton; others said they needed to grind the butts out on the ground, to assure they didn’t set a refuse can afire; others said they were so “disgusted” by the sight or smell of cigarette ashtrays, they didn’t want to dispose of their smokes that way. In one focus group cited in industry documents, smokers said tossing their butts to the ground was “a natural extension of the defiant/rebellious smoking ritual.”

“Their efforts — anti-litter campaigns and handheld and permanent ashtrays — did not substantially affect smokers’ entrenched ‘butt flicking’ behaviors,” said a research paper co-authored by Novotny.

Image: Cigarette butts ocean cleanup
Cigarette butts found on a beach in Puerto Rico during the 2010 International Coastal Cleanup.Ocean Conservancy

That’s left cities, counties and private groups like the Ocean Conservancy to bear the brunt of the cleanups. There have been a few other quixotic solutions, like the French amusement park that recently trained a half dozens crows to collect spent cigarettes and other trash.

Original Article by NBC News can be found here

Plastic Waste In The Oceans Could Treble Within The Next Decade – Huffington Post

12 million tonnes of our rubbish is dumped in the ocean every year

By Thomas Tamblyn – Huffington Post

Click here to view the original article with videos.

The amount of waste plastic in the oceans could treble in the next 10 years unless urgent action is taken to curb the problem, a report has warned.

It’s estimated that a frankly staggering 12 million tonnes of plastic rubbish is dumped into the oceans every single year.

NURPHOTO VIA GETTY IMAGES 
Plastic waste is seen on the north coast of Jakarta on Thursday, March 15, 2018.

Plastic waste, along with global warming and industrial pollution present the largest dangers to our oceans warns the Foresight Future of the Sea Report for the Government.

The scientists behind the report warned of the danger of the oceans being “out of sight, out of mind”, with more known about the surface of Mars and the Moon than the deep sea bed.

Professor Ed Hill, executive director of the National Oceanography Centre, said it was time to change the attitude of what goes on below the surface as “out of sight, out of mind” and have more of a “Mission to Planet Ocean” approach.

He said: “When people get to see what is in the ocean, and the Blue Planet series and so on have helped people to visualise it, and then I think their reaction is twofold, one is complete wonder at what is there, and in other cases complete horror at what we’re potentially doing to it.

“It’s this sense of the unexplored world on our own planet, but also it’s important to us, we know less about the bottom of the sea than the moon or Mars, but nothing lives on the moon or Mars, but things live in our ocean and they’re vitally important to us.”

Plastic pollution, which is set to treble between 2015 and 2025 without intervention, has a physical presence in the oceans, and can accumulate on the coasts or in particular areas of the sea.

The spread of plastic pollution in our oceans has gotten so bad that in September last year scientists actually found lumps of polystyrene near the North Pole.

The ocean and its health is hugely important to the UK, with 95% of the country’s international trade travelling by sea, the internet carried by subsea cables, and oceans storing carbon dioxide and heat and producing oxygen and food.

But there are also opportunities for the UK to cash in the global “ocean economy” – which is set to double to 3 trillion US dollars (£2 trillion) by 2030 – in areas where the country is a world leader, such as offshore wind.

Powerhouse Energy #PHE – Placing and issue of equity

PowerHouse Energy Group plc (AIM: PHE), the UK technology company pioneering hydrogen production from waste plastic and used tyres, announces that it has raised £594,030 net of expenses by way of a placing of 98,807,004 new Ordinary Shares of 0.5p in the Company and a subscription for £100,000 of new Ordinary Shares at a subscription price of 0.5p per share.

98,807,004 new Ordinary Shares have been placed by Turner Pope Investments Ltd at a price of 0.5p per Ordinary Share (“Placing Shares”). In addition, one warrant exercisable for a period of 2 years at a subscription price of 0.5p per Ordinary Share, will be issued to participants in the Placing for every two Placing Shares acquired.  This Placing exhausted the Company’s available authority to issue shares afforded it by the Shareholders at the last Annual General Meeting.

Additionally, 20,000,000 new Ordinary Shares are being subscribed by a private investor. One warrant exercisable under the same terms as the Placing Shares shall be issued to the private investor.

Application is being made for the admission of 98,807,004 new Ordinary Shares as a result of the Placing to trading on AIM and it is expected that this will occur on or around 13 July 2018.  These shares will rank pari passu in all respects with the Company’s existing issued Ordinary Shares.

Subsequent to the issue of the new Ordinary Shares arising from the Placing, the Company will have 1,649,260,030 Ordinary Shares in issue.

Application will be made for the admission of 20,000,000 Subscription Shares to trading on AIM conditional upon the passing of a resolution at the Company’s annual general meeting on 27 July 2018 to increase the Company’s authorised share capital and it is expected that this will occur on 3 August 2018.  These shares will rank pari passu in all respects with the Company’s existing issued Ordinary Shares.

PowerHouse has no shares in Treasury, therefore this figure may be used by Shareholders, from Admission, as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA’s Disclosure and Transparency Rules.

The proceeds of this Placing and the Subscription will be used to further the Company’s Commercial activities including achieving independent, third party, Engineering Validation of the DMG® System processes, as well as progressing the relationship with Toyota Tsusho and other multi-national opportunities in the UK, the EU, and AustralAsia.

For more information, contact:

PowerHouse Energy Group plc                     Tel: +44 (0) 203 368 6399

Keith Allaun, Chief Executive Officer

WH Ireland Limited (Nominated Adviser)          Tel: +44 (0) 207 220 1666

James Joyce / Chris Viggor

Turner Pope Investments Ltd (Joint Broker)      Tel: +44 (0) 203 621 4120

Ben Turner / James Pope

Ikon Associates(Media enquiries)                          Tel:    +44 (0) 1483 271291

Adrian Shaw  Mob: +44 (0) 7979 900733

 

About PowerHouse Energy

PowerHouse Energy has developed a proprietary process technology called DMG® which can use waste plastic end-of-life-tyres and other waste streams to convert them into cost efficient energy in the form of electricity and ultra clean hydrogen gas fuel for use in cars and commercial vehicles (FCEV: Fuel Cell Electric Vehicles) and other industrial uses. The PowerHouse technology is the world’s first proven, modular hydrogen from waste (HfW) process.

The PowerHouse DMG® process can convert 25 tonnes of waste plastic into 1 tonne H2 per day and 28 MWh per day of electricity.

The PHE process produces low levels of safe residues and requires a small operating footprint, making it suitable for deployment at enterprise and community level.

PowerHouse is quoted on the London Stock Exchange’s AIM Market. The Company is incorporated in the United Kingdom.

For more information see www.powerhouseenergy.net

Powerhouse Energy Group #PHE – Statement regarding press comments

The Company notes an article in the weekend press that it is working with Toyota for the use of a Powerhouse DMG® system.

The Company advises that it is in discussions with a number of potential industrial customers regarding the use of its technology including Toyota but no agreements have been entered into and there can be no certainty any agreements will be reached.

For more information, contact:

PowerHouse Energy Group plc                                       Tel: +44 (0) 203 368 6399
Keith Allaun, Executive Chairman

WH Ireland Limited (Nominated Adviser)                  Tel: +44 (0) 207 220 1666
James Joyce / James Bavister

Turner Pope Investments Ltd (Joint Broker)             Tel: +44 (0) 203 621 4120
Ben Turner / James Pope

Ikon Associates(Media enquiries)                          Tel:    +44 (0) 1483 271291
Adrian Shaw                                                                                 Mob: +44 (0) 7979 900733

About PowerHouse Energy

PowerHouse Energy has developed a proprietary process technology called DMG® which can use waste plastic end-of-life-tyres and other waste streams to convert them into cost efficient energy in the form of electricity and ultra clean hydrogen gas fuel for use in cars and commercial vehicles (FCEV: Fuel Cell Electric Vehicles) and other industrial uses. The PowerHouse technology is the world’s first proven, modular hydrogen from waste (HfW) process.

The PowerHouse DMG® process can convert 25 tonnes of waste plastic into 1 tonne H2 per day and 28 MWh per day of electricity.

The PHE process produces low levels of safe residues and requires a small operating footprint, making it suitable for deployment at enterprise and community level.

PowerHouse is quoted on the London Stock Exchange’s AIM Market. The Company is incorporated in the United Kingdom.

For more information see www.powerhouseenergy.net

PowerHouse Energy #PHE – Audited results for the year ended 31 December 2017

PowerHouse Energy Group plc (AIM: PHE), the UK technology company pioneering hydrogen production from waste plastic and end-of-life tyres, announces its audited results for the year ended 31 December 2017.

 

Highlights

For Year ended 31 December 2017

Operational

  • DMG® process demonstrator re-sited and re-commissioned at Thornton Science Park and initial testing phase successfully completed.
  • Capture and utilisation of the data from our on-going testing programme to support the initiation of the commercial design.
  • EngSolve Ltd appointed as principal engineering partner to PowerHouse.
  • Board and management team strengthened and Advisory Panel established to underpin the capability of the proprietary DMG® technology and to drive its commercial exploitation.

Commercial

  • Project development agreement signed with Waste2tricity.
  • First operational DMG® site identified at Ellesmere Port with Peel Environmental Ltd.
  • Funding commitment from a party involved in the development of energy and waste projects to cover cost of planning and environmental permits for first five DMG® systems.

Financial

  • £4.6m raised during the year to repay Hillgrove Convertible Loan Note for a combination of cash and shares and to fund engineering design and company operations.
  • Net cash balance at end of December 2017 of £750K.

Post year end  

  • Final engineering design followed by independent verification of DMG® on track for completion.
  • International distribution agreement reached with Tresoil Biofuels SRL to provide a solution for hydrogen bus projects in Bulgaria and Romania.
  • MOU signed with Wrightbus, a leading manufacturer of hydrogen powered buses, to offer a turnkey solution for hydrogen powered buses to local authorities and public transport providers.
  • Elimination of Hillgrove Convertible Loan Note by way of a placing.
  • £576K raised in oversubscribed placing in April 2018 to support the commercial development of PowerHouse’s proprietary DMG® technology platform.

Commenting on these results and the outlook for the Company, Keith Allaun, Chief Executive Officer of PowerHouse, said: “2017 was transformative for PowerHouse as we re-sited our demonstration system for creating clean energy from waste, successfully carried out a significant amount of critical testing and, importantly, signed a number of initial strategic partnerships.

“Our enabling technology platform is now ideally positioned to become embedded within the future energy infrastructure – one in which high efficiency, clean energy, impeccable environmental credentials and economic viability will be at a social, political and commercial premium.

“We are now shifting the balance of our efforts onto the commercialisation path, which we are already actively engaged in and making positive progress, to ensure our technology becomes a profitable and sustainable reality.”

The annual report and accounts for the year ended 31 December 2017 will be sent to shareholders shortly and will be available to view on the Company’s website: www.powerhouseenergy.net

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

For more information, contact:

PowerHouse Energy Group plc                                       Tel: +44 (0) 203 368 6399
Keith Allaun, Executive Chairman

WH Ireland Limited (Nominated Adviser)                 Tel: +44 (0) 207 220 1666
James Joyce / James Bavister

Turner Pope Investments Ltd (Joint Broker)             Tel: +44 (0) 203 621 4120
Ben Turner / James Pope

Ikon Associates(Media enquiries)                                  Tel:    +44 (0) 1483 271291
Adrian Shaw                                                                            Mob: +44 (0) 7979 900733

About PowerHouse Energy

PowerHouse Energy has developed a proprietary process technology called DMG® which can use waste plastic end-of-life-tyres and other waste streams to convert them into cost efficient energy in the form of electricity and ultra clean hydrogen gas fuel for use in cars and commercial vehicles (FCEV: Fuel Cell Electric Vehicles) and other industrial uses. The PowerHouse technology is the world’s first proven, modular hydrogen from waste (HfW) process.

The PowerHouse DMG® process can convert 25 tonnes of waste plastic into 1 tonne H2 per day and 28 MWh per day of electricity.

The PHE process produces low levels of safe residues and requires a small operating footprint, making it suitable for deployment at enterprise and community level.

PowerHouse is quoted on the London Stock Exchange’s AIM Market. The Company is incorporated in the United Kingdom.

For more information see www.powerhouseenergy.net

Chairman’s Report

I am pleased to report to shareholders in respect of the year ended 31 December 2017.

During the year under review PowerHouse Energy Group PLC (“PowerHouse” or the ‘Company’) saw a transformation in its technical capabilities and an increase in activity in terms of partnership establishment, organisational development and financial restructuring. For the two years prior to January 2017, the Company had been exclusively focused on the development and initial testing of the G3-UHt Unit, our process demonstrator, from first principles in conjunction with OrePro engineering in Australia. The end of 2016 saw the recommitment to the building of the Company’s commercial operations headquartered in the UK. 

The delivery of the Company’s process demonstrator to the UK in early 2017 and its re-siting and re-commissioning at the Thornton Science Park Energy Centre successfully concluded the initial testing phase of our proprietary technology.

The confirmation of the demonstrator’s ability to operate within target temperature envelopes and its re-commissioning were completed in accordance with stringent UK Health, Safety, and Environmental regulations and standards. A regular programme of demonstration, testing, enhancement, and consistent operation has been underway at the Thornton Science Park Energy Centre. Recent developments including the expansion of testing of mixed plastics as a feedstock, the independent verification of our gas by third-party laboratories, and positive validation by external hydrogen purification equipment vendors that our gas can be purified to a 99.9995% (road-fuel quality) hydrogen stream.

Of greatest importance for the year was the capture and utilisation of the data from our on-going testing programme to support the initiation of the commercial design, completion of the Pre-FEED (front-end design and engineering,) the identification of our first commercial site, the start of the planning and permitting process for that site, and the establishment of a robust technical and management team for the intended delivery of our first DMG® (Distributed Modular Gasification) System by the end of 2018.

The Board maintains its belief that the DMG® System and the hydrogen-from-waste process that we have created is well on its way to becoming a significant part of the hydrogen economy and the distributed electrical grid.

I would like to take this opportunity to thank our talented team who work tirelessly to drive forward our exciting technology as well as the shareholders whose ongoing support is greatly appreciated.

We are confident in our ability to continue to increase both our capabilities and shareholder value.

Dr Cameron Davies
Non-Executive Chairman

Chief Executive Officer’s Statement

A number of the items that follow were initially discussed in our interim Accounts on 27 September 2017.   What the team has accomplished this year is worthy of note. However, the retrospective is far more understandable in the context of the key drivers for the Company’s future success:

–      The global requirement for energy is growing every day and together with having to address the monumental environmental issues created by traditional forms of energy production, delivering such a quantum of clean energy is both challenging and disruptive. The result is that a number of new and pioneering modalities for energy generation and distribution will be embraced and established.  PHE’s DMG® technology is one such platform which is suited to both enable, and deliver, such solutions.

–      Waste elimination – particularly for unrecyclable plastics and end of life tyres (two of the biggest challenges faced by the waste management sector) – is also a major global challenge that PHE’s technology platform is ideally positioned to address. The DMG® technology platform efficiently converts such waste into an environmentally friendly and commercially viable source of clean energy thus making it a highly attractive energy feedstock.  Consequently, waste then becomes our friend rather than an enemy.

–      Our objective is to harness the true power of waste by having our enabling technology platform embedded within the future energy infrastructure – one in which high efficiency, clean energy, environmental credentials and economically viable operation will be at a social, political and commercial premium.  Putting it simply, we believe that PHE meets all four of these demanding criteria and we have now embarked on the commercialisation path to ensure our technology becomes a reality.

–      Our core DMG® technology is in its final stages of engineering validation in advance of scheduled independent third party verification and testing by a leading global player in the field. This work is due to be completed by the end of the third quarter.

–      We are now shifting the balance of our efforts onto the commercialisation phase, in which we are already actively engaged, and through which we are making positive progress by taking a customer-led approach, involving a combination of strategic alliances, commercial partnering and working directly with potential customers. Our flexibility combined with the modular design of our DMG® system allows us to tailor our technology to meet the most specific of partner and customer requirements.

It is within the above context that I am delighted to report on an exciting year that has seen the Company delivering against its strategic objectives. Developing its technology, securing funding, eliminating the Hillgrove Investments Pty. Ltd (“Hillgrove”) note and debenture and identifying early-stage, commercially viable, opportunities for the sale of our DMG® System.

Our technology

The focus for PowerHouse in recent years has concentrated on the efficient generation of energy from waste, but increasingly we see exciting prospects for the ability to convert waste, particularly waste plastics and end-of-life tyres, into hydrogen. Our small footprint, our thermal conversion process, and our ability to generate a concentrated volume of hydrogen on a distributed basis sets us apart from others. This process, DMG®, has led to one of the world’s first distributed hydrogen from waste (HfW) system designs.

DMG® enables the molecular conversion of waste into an energy-rich syngas. The syngas can be used immediately to generate low emission electrical energy that can be used locally, thereby leveraging private line or micro-grid connections on-site. If appropriate, it can be sold directly into the National Grid. There is growing awareness of, and demand for, a “distributed grid” which ensures reduced transmission losses and enhanced availability where and when electricity is needed.  Additionally, DMG® has been designed to produce road-fuel quality hydrogen as and when necessary.

Our process is not dependent upon the sun shining, or the wind blowing, but rather on the engagement of wastes that are poorly managed, over-produced, and ubiquitous in our society. End-of-life plastics and tyres represent extremely valuable energy sources, if managed properly. The unfortunate combustion and incineration of these extremely valuable resources is the least effective mechanism for deriving energy from them. DMG® represents a more environmentally responsible and profitable vehicle for the extraction of energy from these, and other, materials.  Our hydrogen-from-waste process allows us to extract well over double the energy from these materials compared to conventional processes. We do this with a dramatically reduced greenhouse gas footprint, and when the hydrogen we produce displaces fossil fuels, we help eliminate over 21,000 kg of CO2 per tonne of hydrogen used.

We believe that DMG® is a quantum shift in technology that can fundamentally enhance the waste-to-energy market. DMG® is a mechanism for the appropriate destruction of waste streams, the generation of distributed electricity, and, most importantly, the production of distributed hydrogen – which we believe will help unleash the hydrogen economy by providing hydrogen as a road-fuel as the demand for Fuel Cell Vehicles (FCVs) ramps up – particularly in industrial and public transportation.

The adoption of hydrogen powered FCV technology in industrial transport is accelerating with the announcement of major fleets adopting the fuel cell as its motive power of choice. Marine ferries, the Alstom hydrogen train, and major initiatives by the EU for the decarbonisation of public transport – leading to the adoption of hydrogen powered buses, are clear evidence that hydrogen in transport, particularly industrial transport, is beginning to gain momentum. Our DMG® process can allow for the efficient processing of non-recyclable waste plastics, the conversion of end-of-life tyres, and the diversion of these and other materials from land-fill; all while producing distributed hydrogen at a cost at, or below, that of petrol and diesel.

2017 was the year that Sir David Attenborough launched Blue Planet 2 on BBC TV. Perhaps more than any event of the past decade, this series highlighted the blight of plastics, the degradation of marine ecosystems, and the pollution of our oceans and beaches that our planet is facing. Subsequent to the airing of the series, most major newspapers in the UK have followed up with on-going coverage of the crisis of plastic in our Oceans. Additionally, Sky TV produced a multi-part documentary regarding the state of plastic recycling, and the significant failings therein. The UK, Australia, the EU and the United States have all been negatively impacted by the recent ban of waste and recycling imports by China.

More virgin plastics will be produced next year than the combined weight of every man, woman, and child on our planet. Plastics have revolutionised our lives in many ways. In healthcare, in food safety, in automobile manufacturing, and mobile devices to name a few. We needn’t declare war on plastics. We need to declare war on the mis-management of end-of-life, non-recyclable, or waste plastics. What was once our enemy can now become our friend. Plastics are a tremendous store of clean energy potential.

PowerHouse has the ability to figuratively squeeze every hydrogen molecule from the stream of plastics while reducing waste plastic from our planet. Less than 50 per cent of recyclable plastic is actually able to be recycled economically, or in an environmentally sound manner. Our DMG® System, can, however, recover the energy value contained within the plastics and convert it into an ultra clean road fuel – hydrogen. Emissions from an FCV contain zero CO2 (Carbon Dioxide), zero NOx (Nitrogen Oxides), and zero Sox (Sulfur Oxides). The only emission from a fuel cell vehicle is water vapour.

Operations

The arrival of our process demonstrator, the G3-UHt Unit in the UK in March 2017 saw the start of a programme of engineering activity to ensure that the unit would safely and securely operate in accordance with UK Health, Safety, and Environmental guidelines. The work followed a comprehensive knowledge transfer from the Ore-Pro team (our prior external engineering partners) to our UK based engineering staff and included extensive upgrading of components, the installation of advanced automation, and the integration of appropriate safety controls for the system. The unit was completely deconstructed, examined, tested, and reconstructed to ensure its optimal operational condition.

During this period the system was moved from its initial commissioning site in Runcorn to its current location at Unit 99 of the Energy Centre at the Thornton Science Park, operated by the University of Chester. Unit 99 had been purpose-built as an emissions test facility for Shell Research and is an ideal location for the continuous operation, demonstration, and improvement of the DMG® System design. The Company has established an active engineering programme at the Centre and has taken a two year lease on its facilities there.

In April 2017 the Company announced that the first phase of the re-commissioning of the G3-UHt process demonstrator had been completed, with the successful production of syngas from the system. The PHE unit has consistently operated at temperatures of over 1000 degrees Celsius, demonstrating its capacity to successfully gasify many historically difficult waste materials and generate an extremely useful synthesis gas.

The second phase of re-commissioning saw additional improvements and modifications made to the system, ahead of the scaling up design necessary for commercial deployment. These included the enhancement of the gas-handling systems, refurbishment of the feed and oxidant systems and the complete redesign and introduction of programmable safety and control systems. During testing, the Company has regularly recorded a maximum peak flow rate of over 50 cubic metres per hour of syngas.

Following a robust programme of testing and technical data collection, the Company announced the completion of its first extended technical trial of the DMG® gasification process at the Energy Centre at Thornton Science Park on 31 July 2017.

Operating on a feedstock of tyre crumb, PowerHouse engineers were able to demonstrate control of the process within defined temperature envelopes that generated a syngas that, according to onsite, in-line, analytical instrumentation, was greater than 50 per cent hydrogen by volume. The remaining, measurable, constituent elements of the syngas were CO (carbon monoxide) and CH4 (methane.) Importantly, the in-line gas analysis equipment detected absolutely no CO2 in the gas stream generated by the demonstration unit.

Subsequently, a substantially more rigorous analysis of syngas samples produced in the process demonstrator has been conducted by off-site, third-party, independent laboratories. These tests have validated our initial findings, including minimal CO2, and continue to reinforce our ability to create target syngas constituent ratios for both electricity production and hydrogen extraction.

Strategic alliances and Relationships

The accomplishments achieved in 2017 were underpinned by a number of strategic alliances with influential partners.

In January 2017 PowerHouse entered into a 24 month project development relationship with Waste2tricity Ltd (“Waste2tricity”). The initial results of that relationship have led to a substantive expansion of our UK capabilities, relationships with other industrial partners, and a pipeline of commercial opportunities, in the UK and elsewhere, under consideration.

Among the introductions made by Waste2tricity on behalf of PowerHouse was to Peel Environmental Limited (“Peel”). Our relationship with Peel continues to grow and develop and has led to the siting of our G3-UHt demonstration unit at the Energy Centre at the Thornton Science Park. This base is the hub of our continuing R&D activities in co-operation with the University of Chester, including the sponsorship of a PhD program to further the science behind the PowerHouse process and the expansion of DMG®. Additionally, Peel has identified the site of our first intended commercial operation in the North West near Ellesmere Port. 

Of tremendous importance, the appointment of EngSolve Ltd (“EngSolve”) as our principal engineering partner, announced in March 2017, to assist in the re-commissioning of the process demonstrator, has proven to be extremely productive and valuable. Their experience with novel waste to energy technologies has helped us accelerate our Commercial Design for which they are ideally suited. We look forward to a long-standing and successful relationship with their multi-talented engineering team.

The test data acquired through our robust programme at Thornton Science Park has been key to the effective engagement of the EngSolve team for the commercial design efforts. That testing program continues to inform design and procurement decisions we are making today.

In June 2017, the Company announced a collaboration agreement with a significant UK partner involved in the development of energy and waste projects. The partner has committed two tranches of funding of up to £500,000 in aggregate to meet the cost of preparing and funding applications for planning permission and environmental permits of the first five PowerHouse DMG® systems.

The agreement will require PowerHouse to supply five systems at locations of the partners’ choosing on a prioritised basis. £100,000 of this commitment was released in July 2017 to fund the planning development of the Company’s first commercial sites.

Risk Reduction and Funding

Hillgrove Convertible Loan Note

The Board made the strategic decision to negotiate the retirement of the Hillgrove Convertible Loan note (Note) with a combination of cash and shares. The retirement of the Note was a significant milestone, and a major accomplishment, for the Company as there is no longer a financial impediment to its growth and operation.

The Note was accruing interest at a rate of 15 per cent per annum and had reached a value of £3.4M. The coupon on the Note would have added approximately a half-million pounds of fully secured debt to the Company each year.

In February 2017 the decision was taken to raise £2.5 million in a private placement and to repay the Note with £2 million in cash, and issue £1.4 million worth of shares at the conversion price of 0.5p per share. Hillgrove agreed to release its debenture over the Company’s assets and IP upon the final settlement of the share issuance. This settlement has now occurred and the debenture has been released and all IP assigned to the Company per our agreement with Hillgrove.

Other funding

In January 2017, Yady Worldwide SA made an investment of £250,000 into the Company, showing an early commitment to the Company and the continued development and roll-out of DMG®. Yady further contributed £500,000 as the cornerstone investor to the £2.5 million placing in February 2017.

In August 2017 the Company raised a further £1.6 million through a placing of new ordinary shares at 1.0p to fund the acceleration of our on-going commercial engineering design and Company operations. 

The PowerHouse Team

The Company has made a number of significant appointments to strengthen the board and management team.

David Ryan was appointed as a Non-Executive Director in late February 2017, and on 20 March 2017, began acting in the role of Executive Director of Programme Development, overseeing the technical operations of the Company. Introduced to PowerHouse by Waste2tricity, David was the former CEO and Managing Director of Thyssenkrupp Industrial Solutions’ Oil & Gas Business Unit for the UK.

With over 35 years of complex engineering, business development, and project management experience in the energy sector, David is an expert in sophisticated design engineering and brings a breadth of project delivery, international business management, and general engineering acumen to the management team. David was instrumental in the successful siting and re-commissioning of the G3-UHt process demonstrator at Thornton Science Park and continues to lead the engineering work on the design and development of the Company’s commercial platform, DMG®. Additionally, David has plays a key role in the defining of the Company’s Commercial and Operational Strategies.

The Company was delighted to announce the appointment of Dr. Cameron Davies as Non-Executive Chairman of the Board of Directors. Dr. Davies’ many accomplishments, his extensive experience, and his steady hand have been serving the Company well since his Chairmanship took effect on 3 October of 2017.

Keith Allaun relinquished his role as Executive Chairman at the time of Dr Davies’ appointment and has assumed the role of Chief Executive Officer for PowerHouse. In early 2018, Keith and his wife relocated to the UK for the foreseeable future.

Clive Carver stepped down from his role as Non-Executive Director of the Company in May 2017.

Chris Vanezis joined the PowerHouse management team as Chief Financial Officer, bringing an extensive background in financial accounting and waste-to-energy finance management.

In 2017, the first site personnel in the UK were hired, based at Thornton Science Park.  Additionally, the Company has embarked upon the sponsorship of a Ph.D. program in advanced thermal conversion technology in conjunction with the University of Chester.  That program has led to the seconding of two graduate students to PowerHouse.

2017 also saw the creation of an experienced, knowledgeable, and well-connected Advisory Panel consisting of Peter Jones OBE, Keith Riley, Myles Kitcher, Roudi Baroudi and Howard White. The Advisory Panel has been very influential in terms of our commercial planning and development activities.

Post period events

Elimination of Hillgrove loan note

Since the year end the Company has successfully placed shares issued to settle the Hillgrove outstanding loan balance (280,430,920 shares) in two tranches, the second being in conjunction with an additional private placement which also raised approximately £580,000 for Company operations.

The Hillgrove Debenture has been fully released and removed.

Commercial developments

The Company announced a partnership Memorandum of Understanding (“MOU”) with Wrightbus Ltd (“Wrightbus”), a leading bus manufacturer whose products include innovative hydrogen powered buses, in February 2018. This MOU, negotiated in collaboration with Waste2tricity, is non binding and although there can be no certainty a binding agreement will be entered into, the Board of PowerHouse expects this to lead to a definitive agreement which is currently under review by both Companies. This agreement will allow Wrightbus to supply hydrogen fuel powered buses while PowerHouse provide its DMG® system for the low cost and environmentally responsible production of hydrogen- in a turn-key solution to the Decarbonisation of Public Transport; a major EU Directive.

It is expected that this first-of-its-kind turnkey solution will be marketed to local authorities and public transport providers in the UK and internationally with a particular focus on city centres, where the lack of emissions generated by hydrogen fuel cell buses bring important environmental and quality-of-life benefits. PowerHouse’s DMG® system has the capacity to process a nominal 25 tonnes of plastic per day, and has the potential to provide hydrogen to fuel buses while also providing electricity for sale to either the national grid or private clients.

In April 2018, PowerHouse announced its first international distribution agreement for its proprietary DMG® hydrogen from waste process targeting the supply into hydrogen bus projects in Bulgaria and Romania with Tresoil Biofuels SRL (“Tresoil”) and Waste2tricity, PowerHouse’s projects development partner. The three-way agreement between PowerHouse, Tresoil and PowerHouse’s partner, Wrightbus, provides a cost-effective turnkey solution to bus operators in Romania and Bulgaria who are actively seeking to replace aging fleets of highly polluting public transport buses, with the region encouraged by the EU to deploy low carbon alternatives. Tresoil is a well established company in Bucharest and has been actively, and successfully, involved in seeking grants for alternative energy.

PowerHouse team

The PowerHouse management team was strengthened by the addition of Bruce Nicholson as Commercial Operations Manager in April 2018. Bruce has a proven track record of delivering complex energy projects built over 30 years of project management, asset management and business development. Bruce’s role is to drive and accelerate progress of the Company’s commercial operations, business development, and partner identification.

Current trading and Outlook

The year under review saw the Company make encouraging progress to its longer-term objective of being a leading provider of distributed electricity and distributed hydrogen produced from waste.

2017 was focused on acquiring the empirical data necessary to effect the commercial design of the DMG® System. It was clear that the G3-UHt unit was an excellent process demonstrator, in that it performed as designed, as planned, and as needed. It was, however, only a process demonstrator and has required significant, and sophisticated, engineering enhancement to execute the design for the Commercial PowerHouse DMG® System.

We have created what we believe to be a distinct and evolutionary philosophy with DMG®: distributed waste destruction; distributed electrical generation; distributed hydrogen production. We have taken a contrarian approach to the megaliths of the past and believe in bringing the solution to where the problem lies. 

We are positioned to do something powerful for communities across the UK and throughout the world. We believe that DMG® today is but a ripple in the pond but that in time it will help redefine how our environment is managed and play a key role in the evolution of transport – as the ripple turns into a wave of opportunity for positive change in our world.

The Company is gaining traction in developing commercial interest in the DMG® System with inquiries arriving on a weekly basis.  We believe, and have substantial evidence to this effect, that the completion of our first commercial system will lead to significant demand for our systems.  

PowerHouse Energy Group plc no longer sees itself solely in the Waste to Energy category of companies, but now as a player in the hydrogen from waste (HfW) sector. We are convinced that DMG® will help fuel our future, cleanly and profitably.

We look forward to an even more exciting 2018.  The year when the power of DMG® is finally unleashed.

As always, we appreciate your continued support.

Keith Allaun
Chief Executive Officer

Statement of Comprehensive Income

for the year ended 31 december 2017

31 December 31 December
Note 2017
 £
2016
£
Revenue
Administrative expenses 3 (1,804,829) (851,903)
Operating loss (1,804,829) (851,903)
Finance costs 4 (69,863) (482,106)
Loss before taxation (1,874,692) (1,334,009)
Income tax expense 5
Total comprehensive loss (1,874,692) (1,334,009)
Loss per share from continuing operations (pence) 6 (0.19) (0.24)
Diluted loss per share from continuing operations (pence) 6 (0.19) (0.24)

The notes numbered 1 to 22 are an integral part of the financial information.

Statement of Financial Position

As at 31 December 2017

Note 2017
£
2016
£
ASSETS
Non-current assets
Property, plant and equipment 7 2,601 2,424
Investments 8 1 1
Total non-current assets 2,602 2,425
Current Assets
Trade and other receivables 9 88,495 6,336
Cash and cash equivalents 10 750,226 148,151
Total current assets 838,721 154,487
Total assets 841,323 156,912
LIABILITIES
Current liabilities
Trade and other payables 11 (240,856) (51,184)
Loans 12 (1,402,155) (3,332,292)
Total current liabilities (1,643,011) (3,383,476)
Net liabilities (801,688) (3,226,564)
EQUITY
Share capital 14 8,798,142 6,153,455
Share premium 14 48,681,792 47,031,989
Accumulated deficit 15 (58,281,622) (56,412,008)
Total deficit (801,688) (3,226,564)

The financial statements of PowerHouse Energy Group Plc, Company number 03934451, were approved by the Board of Directors and authorised for issue on 28 June 2018 and signed on its behalf by:

Keith Allaun
Director

The notes numbered 1 to 22 are an integral part of the financial information.
Statement of Cash Flows

For the year ended 31 December 2017

2017
£
2016
£
Cash flows from operating activities
Operating Loss (1,804,829) (851,903)
Adjustments for:
Share based payment 5,078 68,000
Expenses settled by shares 190,000
Renewme settlement 299,152
Depreciation 808
Changes in working capital:
(Increase)/Decrease in trade and other receivables (82,159) (4,885)
(Decrease)/Increase in trade and other payables 189,672 (147,601)
Net cash used in operations (1,501,430) (637,237)
Cash flows from investing activities
–         Purchase of fixed assets (985) (2,424)
Net Cash flows from investing activities (985) (2,424)
Cash flows from financing activities
Proceeds on issue of shares 4,294,490 700,512
Expenses settled by shares (190,000)
Finance costs (69,863) (482,106)
New loans raised
Loans repaid
69,863
(2,000,000)
577,567
(183,911)
Net cash flows from financing activities 2,104,490 612,062
Net (decrease)/increase in cash and cash equivalents 602,075 (27,599)
Cash and cash equivalents at beginning of year 148,151 175,750
Cash and cash equivalents at end of year 750,226 148,151

The notes numbered 1 to 22 are an integral part of the financial information.

Statement of Changes in Equity

For the year ended 31 december 2017

Ordinary Share capital
£
Share premium
£
Deferred shares
(0.5p)
£
Deferred shares
(4.5p)
£
Deferred shares
(4.0p)
£
Accumulated deficit
£
Total
£
Balance at 1 January 2016 2,150,815 46,921,180 1,942,483 781,808 389,494 (55,145,999) (2,960,219)
Transactions with equity participants:
 –   Share issue 45,455 4,545 50,000
 –   Share issue 178,571 56,429 235,000
 –   Share issue 17,857 7,143 25,000
 –   Share issue 192,308 42,692 235,000
 –   Share issue 454,664 454,664
 –   Share based payment 68,000 68,000
–               Total comprehensive loss (1,334,009) (1,334,009)
Balance at 31 December 2016 3,039,670 47,031,989 1,942,483 781,808 389,494 (56,412,008) (3,226,564)
Transactions with equity participants:
 –   Share issue 178,571 71,429 250,000
 –   Share issue 1,562,500 937,500 2,500,000
 –   Share issue in lieu of services 37,300 32,700 70,000
 –   Share issue 800,000 800,000 1,600,000
 –   Share issue in lieu of services 40,000 40,000 80,000
 –   Share issue in lieu of services 26,316 13,684 40,000
–               Share issue fees (245,510) (245,510)
–               Share based payment 5,078 5,078
–               Total comprehensive loss (1,874,692) (1,874,692)
Balance at 31 December 2017 5,684,357 48,681,792 1,942,483 781,808 389,494 (58,281,622) (801,688)

The notes 1 to 22 are an integral part of the financial information.

Notes to the Accounts for the year ended 31 December 2017

1.   accounting policies

PowerHouse Energy Group PLC is a Company incorporated in England and Wales. The Company is a public limited company quoted on the AIM market of the London Stock Exchange. The address of the registered office is 10b Russell Court, Woolgate, Cottingley Business Park, Bingley BD16 1PE. The principal activity of the Company is to continue the development of the newly developed PHE G3-UHt Waste-to-Energy System in order to achieve its full commercial roll-out. The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the financial information.

1.1.         Basis of preparation

This financial information is for the year ended 31 December 2017 and has been prepared in accordance with International Financial Reporting Standards (“IFRS”) adopted for use by the European Union and the Companies Act 2006. These accounting policies and methods of computation are consistent with the prior year.

The Company’s only UK subsidiary is non-trading and not material. There are also long-term restrictions on the operations of the Company’s subsidiaries in the US and Switzerland. As such the Company has claimed exemptions applicable to it under Companies Act section 405 (2) and 405 (3b) to not present any Consolidated financial statements for the year ended 31 December 2017.

1.2.         Judgements and estimates

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts in the financial statements.

The component parts of compound instruments (convertible bonds) have a high degree of complexity.  At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument, the residual equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. These are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. In classifying the instruments it has been assessed that there is no equity element in relation to the convertible loan notes.

Other areas involving a higher degree of judgements or complexity, or areas where assumptions or estimates are significant to the financial statements such as the impairment of investments and going concern are disclosed within the relevant notes

1.3.         Going concern

The financial statements have been prepared on a going concern basis, notwithstanding the Company having net liabilities at 31 December 2017 of £802k (2016: £3,227k). Those liabilities include the Hillgrove loan of £1.4m which has been converted to equity since the year end (please refer to Note 21). The Directors believe the going concern basis to be appropriate for the following reasons:

The Company has been provided with a letter of support from one of its shareholders, who has indicated to the Directors that he intends, for at least 12 months from the date of the approval of these financial statements, to make available a maximum sum of £650,000. In addition, the Directors are also of the opinion that they can raise further funds as and when required. Furthermore, the Directors have also agreed to waive any salaries for themselves or fees in the future if necessary so as for the Company to repay debts as and when they fall due for the foreseeable future.

The Directors consider that these should enable the Company to continue in operational existence for the foreseeable future by meeting its liabilities as they fall due for payment.

If the support of shareholders ceased or the Company was unable to raise further funds it would need to seek alternative finance in order to be able to remain as a going concern.  The financial statements do not include the adjustments that would result if the Company is unable to continue as a going concern.

1.4.         Foreign currency translation

The financial information is presented in sterling which is the Company’s functional currency.

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are revalued to the exchange rate at date of settlement or at reporting dates (as appropriate). Exchange gains and losses resulting from such revaluations are recognised in the Statement of Comprehensive Income.

Foreign exchange gains and losses are presented in the Statement of Comprehensive Income within administrative expenses.

1.5.      Revenue

Revenue represents the amounts derived from the supply of goods and services in the normal course of business, net of discounts, value added tax and other sales related taxes.

1.6.      Operating Leases

Rentals payable under operating leases are charged in the profit and loss account on a straight line basis over the lease term.

1.7.      Finance expenses

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

1.8.      Income tax expense

The tax expense for the period comprises current and deferred tax.

UK corporation tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is recognised in respect of all temporary differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date.  Temporary differences are differences between the Company’s taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.

A net deferred tax asset is regarded as recoverable and therefore recognised only to the extent that, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying temporary differences can be deducted.

Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the temporary differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date.  Deferred tax is measured on a non-discounted basis.

1.9.      Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation. Cost represents the cost of acquisition or construction, including the direct cost of financing the acquisition or construction until the asset comes into use.

Depreciation on property, plant and equipment is provided to allocate the cost less the residual value by equal instalments over their estimated useful economic lives of 3 years, once the asset is complete.

The expected useful lives and residual values of property, plant and equipment are reviewed on an annual basis and, if necessary, changes in useful life or residual value are accounted for prospectively.

1.10.    Other non-current assets

Other non-current assets represent investments in subsidiaries. The investments are carried at cost less accumulated impairment. Cost was determined using the fair value of shares issued to acquire the investment.

1.11.    Financial assets

The Company classifies financial assets as loans and receivables within current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as noncurrent assets. Assets are initially recognised at fair value plus transaction costs. Loans and receivables are subsequently carried at amortised cost using the effective interest rate method.

1.12.    Trade and other receivables

Trade receivables are initially recognised at fair value. Subsequently they are carried at amortised cost less any provision for impairment.

1.13.    Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits and are recognised and subsequently carried at fair value.

1.14.    Trade and other payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

1.15.    Financial liabilities

Loans are financial obligations arising from funding received and used to support the operational costs of the Company. These are initially recognised at fair value. Loans are subsequently carried at amortised cost using the effective interest method.

1.16.    Adoption of new and revised standards

New and revised standards adopted during the year and those standards and interpretations in issue but not yet effective:

IFRS 2                     Share based payment
IFRS 9                     Financial instruments
IFRS 15                   Revenue from contracts with customers
IFRS 16                   Leases
IAS 19                     Employee benefits (amendment)

IFRIC 22 Foreign Currency Transactions and advance consideration

IFRIC 23 Uncertainty over income tax treatments

Improvements to IFRSs. Annual improvements 2014-2016 cycle: Amendments to IFRS1 and IAS 28

Improvements to IFRSs. Annual improvements 2015-2017 cycle: Amendments to 4 IFRSs

There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company.

1.17.    Impairment

(i) Impairment review

At each balance sheet date, the carrying amounts of assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses recognised in respect of cash generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash generating units and then to reduce the carrying amount of the other assets in the unit on a pro-rata basis. A cash generating unit is the group of assets identified on acquisition that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets.  The recoverable amount of assets or cash generating units is the greater of their fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.  For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs.

(ii) Reversals of impairments

An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

1.18.    Share-based payments

The Company grants options to Directors and employees through approved and unapproved option plans. The fair value of options is determined at the date of grant and is recognised as an expense in the Income Statement. The fair value at the grant date is determined using a Black and Scholes valuation model. At each reporting date the Company revises its estimates of the number of options that are likely to be exercised with any adjustment recognised in the income statement.

Where share-based payments give rise to the issue of new share capital, the proceeds received by the Company are credited to share capital and share premium when the share entitlements are exercised.

1.19.    Segmental reporting

An operating segment is a component of the Company:

•    that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Company);

•    whose operating results are reviewed regularly by the Company’s chief decision maker to make decisions about resources to be allocated to the segment and assess its performance; and

•    for which discrete financial information is available.

1.20.    Research and development

An internally generated intangible asset arising from development is only recognised where all of the following have been demonstrated: (i) the technical feasibility of completing the asset; (ii) the intention to complete the asset and the ability to use or sell it; (iii) the availability of resources to complete the asset; and (iv) the ability to reliably measure the cost attributable to the asset during its development.

In all other instances research and development expenditure is recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

2.   Staff costs

2017
£
2016
£
Directors’ fees 207,772 194,602
Wages and salaries 11,474
Pensions 230
219,476 194,602

Including Directors, the Company had on average 5 employees during the year (2016: 4) and 6 at year end (2016: 4).

No social security costs were incurred during the year or in the prior year.

3.   Administrative expenses

Included in administrative expenses are:

2017
£
2016
£
Property rentals 10,399
Depreciation 808
Auditor’s remuneration for audit services:
Fees payable to the Company’s auditor for the audit of the Company’s annual financial statements 20,000 12,000
Fees payable to the Company’s auditor and their associates for other services: 1,000

There are no other fees paid to the Company’s auditor other than those disclosed above.

4.   Finance costs

2017
£
2016
£
Shareholder loan interest 69,863 482,106
69,863 482,106

5.   Income tax and deferred tax

As the Company incurred a loss, no current tax is payable (2016: £nil). In addition, there is no certainty about future profits from which accumulated tax losses could be utilised and accordingly no deferred tax asset has been recognised. Accumulated tax losses amount to £9,168,835 (2016: £7,294,143) and reflect tax losses submitted in tax returns and arising during the period.  The tax credit is lower (2016: lower) than the standard rate of tax. Differences are explained below.

2017
£
2016
£
Current tax
Loss before taxation 1,874,692 1,334,009
Tax credit at standard UK corporation tax rate of 19.25% (2016: 20%) 360,878 266,802
Effects of:
Expenses not deductible for tax purposes (73,430)
Deferred tax not recognised (360,878) (193,372)
Income tax expense

6.   Loss per share

2017 2016
Total comprehensive loss (£) (1,874,692) (1,334,009)
Weighted average number of shares 975,055,119 551,433,936
Loss per share in pence (0.19) (0.24)
Diluted loss per share in pence (0.19) (0.24)

The following instruments were excluded from the diluted loss per share calculation due to being anti-dilutive but could be dilutive in the future and are therefore disclosed in accordance with IAS 33.

 warrants – exercisable at 1p per warrant
Hillgrove Loans convertible at 0.5p
5,000,000
£1,402,155
11,000,000
15,000,000
£3,332,292

Shares issued since the year end are disclosed in note 21.

7.   Property, plant and equipment

Property, plant and equipment
£
Cost
At 1 January 2017 5,626
Additions 985
Other adjustments
At 31 December 2017 6,611
Accumulated depreciation
At 1 January 2017 3,202
Charge for the year 808
Other adjustments
At 31 December 2017 4,010
Carrying amount
At 31 December 2017 2,601
At 31 December 2016 2,424

8.   Investments

Investments relate to costs of investments in subsidiary undertakings, namely in PowerHouse Energy, Inc, Pyromex AG and PowerHouse Energy UK Limited. PowerHouse Energy, Inc. is incorporated in California in the United States of America and the Company holds 100 per cent of the common stock and voting rights of the subsidiary.  Pyromex AG is based in Zug, Switzerland and the Company holds 100 per cent of the shares and voting rights of the subsidiary. PowerHouse Energy UK Limited is a wholly owned UK based dormant company.

2017
£
2016
£
Investment – Cost 48,947,155 48,947,155
Accumulated impairment (48,947,154) (48,947,154)
1 1

The registered address of PowerHouse Energy Inc is 145 N Sierra Madre Blvd Pasadena, CA 91107, USA.

The registered address of Pyromex AG is Chollerstrasse 3, CH-6300, Zug, Switzerland.

The registered address of PowerHouse Energy UK Limited is 10b Russell Court, Cottingley Business Park, Bingley, UK BD16 1PE

9.   Trade and other receivables

2017
£
2016
£
Other receivables 77,287 6,336
Prepayments and accrued income 11,208
88,495 6,336

10.    Cash and cash equivalents

2017
£
2016
£
Cash balances 750,226 148,151
750,226 148,151

11. Trade and other payables

2017
£
2016
£
Trade payables 125,141 34,183
Other creditors and accruals 115,715 17,001
240,856 51,184

Capital commitments not accrued for at the year end amounted to £nil (2016: £Nil).

12. Operating leases

Future minimum rentals payable under non-cancellable operating leases are as follows:

2017
£
2016
£
Amounts payable:
Within one year 5,419
5,419

13. Loans

2017
£
2016
£
At 1 January 3,332,292 2,938,636
New loans raised 69,863 577,567
Loans repaid (2,000,000) (183,911)
Interest expense 69,863 482,106
Interest paid (69,863) (482,106)
1,402,155 3,332,292

 

2017
£
2016
£
Loans classified as:
–         Current 1,402,155 3,332,292
–         Non-current    –

Hillgrove Investments Pty Limited (“Hillgrove”) has provided the Company with a convertible loan agreement, the amount of which has increased from time to time at Hillgrove’s option and based upon Company needs.  The loan is secured by a debenture over the assets of the Company and carries interest of 15 per cent per annum. Hillgrove has the option at any time to convert the loan in part or whole at a conversion price of 0.5p per share.

In February 2017 Hillgrove accepted a settlement of this loan for a £2 million cash pay-out, which was paid during the year, and the conversion of the residual balance of £1,402,155 into newly issued share capital of the Company at the previously agreed 0.5p conversion price, amounting to 280,430,920 shares. The shares have been issued since the year end and Hillgrove has released the debenture it held over the assets of the Company.

14.    Share capital & share premium

0.5 p
Ordinary
shares
0.5 p Deferred shares 4.5 p Deferred shares 4.0 p Deferred shares
Shares at 1 January 2016 430,163,261 388,496,747 17,373,523 9,737,353
Issue of shares 177,771,275
Shares at 31 December 2016 607,934,536 388,496,747 17,373,523 9,737,353
Issue of shares 528,937,478
Shares at 31 December 2017 1,136,872,014 388,496,747 17,373,523 9,737,353

 

0.5 p Ordinary shares 0.5 p Deferred shares 4.5 p Deferred shares 4.0 p Deferred shares Share Capital Share Premium
£ £ £ £ £ £
At 1 January 2016 2,150,815 1,942,483 781,808 389,494 5,264,600 46,921,180
Issue of shares 888,855 888,855 110,809
At 31 December 2016 3,039,670 1,942,483 781,808 389,494 6,153,455 47,031,989
Issue of shares 2,644,687 2,644,687 1,895,313
Share issue costs (245,510)
At 31 December 2017 5,684,357 1,942,483 781,808 389,494 8,798,142 48,681,792

All types of deferred shares carry no voting right nor any entitlement to attend general meetings of the Company. They carry only a right to participate in any return of capital once an amount of £100 has been paid in respect of each ordinary share.

On 26 January 2016 the Company issued 9,090,909 ordinary shares of 0.5p each at a price of 0.55p each, totalling £50,000.

On 23 February 2016 the Company issued 35,714,285 ordinary shares of 0.5p each at a price of 0.7p each, totalling £250,000, before issue costs.

On 3 March 2016 the Company issued 3,571,419 ordinary shares of 0.5p each at a price of 0.7p each, totalling £25,000.

On 15 July 2016 the Company issued 38,461,538 ordinary shares of 0.5p each at a price of 0.65p each, totalling £250,000, before issue costs.

On 29 April 2016 the Company announced that a full and final settlement had been reached with Renewme to settle the remaining balance in exchange for the issue of 90,932,961 new Ordinary shares.

On 19 January 2017 the Company issued 35,714,285 ordinary shares of 0.5p each at a price of 0.7p each, totaling £250,000, before issue costs.

On 15 February 2017 & 15 March 2017 the Company issued 250,000,000 and 62,500,000 ordinary shares of 0.5p each respectively at a price of 0.8p each, totaling £2,500,000, before issue costs.

On 27 June 2017 the Company issued 7,460,035 ordinary shares of 0.5p each at a price of 0.9p each, totaling £70,000, before issue costs.

On 24 August 2017 the Company issued 160,000,000 ordinary shares of 0.5p each at a price of 1.0p each, totaling £1,600,000, before issue costs.

On 31 August 2017 the Company issued 8,000,000 ordinary shares of 0.5p each at a price of 1.0p each, totaling £80,000, before issue costs.

On 31 August 2017 the Company issued 5,263,158 ordinary shares of 0.5p each at a price of 0.8p each, totaling £40,000, before issue costs.

15.    Accumulated deficit

2017
£
2016
£
As at 1 January (56,412,008) (55,145,999)
Loss for the year (1,874,692) (1,334,009)
Share based payment 5,078 68,000
At 31 December (58,281,622) (56,412,008)

16.    Convertible Instruments

16.1        Warrants

On 4 July 2017, the Company granted 5,000,000 warrants to a consultant (2016: nil). The options may be exercised between the Grant date and the third anniversary of the Grant date and will lapse if not exercised during that period. At the date of grant the shares price was 0.85p and the warrants have an exercise price of 1p per share. There were no other warrants outstanding at year end. The valuation of the warrants followed the same methodology as for share options as disclosed in note 16.3 below. These warrants have incurred a charge of £5,078 during the year (2016: £nil).

16.2 Hillgrove

In February 2017 Hillgrove exercised the right to convert part of its loan to shares, further details are detailed in note 13.

16.3 Share Options

On 8 December 2014, the Company granted 11,000,000 options over ordinary shares to the Board, under the PowerHouse Energy Group plc Unapproved Share Option Plan 2011. The options may be exercised between the Grant date and the tenth anniversary of the Grant date and will lapse if not exercised during that period. The options have an exercise price of 2.5p per share.

On 7 March 2016, the Company granted 11,000,000 options over ordinary shares to the Board, under the PowerHouse Energy Group plc Unapproved Share Option Plan 2011. The options may be exercised between the Grant date and the fifth anniversary of the Grant date and will lapse if not exercised during that period. The options have an exercise price of 0.75p per share.

No further options were issued in 2017.

The number of options outstanding at 31 December 2017:

Date of grant Granted Share price on grant Exercised Forfeits At 31 December 2017 Exercise price Exercise period
8 December 2014 11,000,000 1.875p 11,000,000 2.5p 9 December 2014 until 8 December 2024
7 March 2016 15,000,000 0.55p 15,000,000 0.75p 8 March 2016 until 7 March 2021
Total 26,000,000 26,000,000

The estimated fair value of the options issued during the year was calculated by applying the Black-Scholes option pricing model. The assumptions used in the calculation were as follows:

8 December 2014 7 March 2016
Options in issue 31 December 2017 11,000,000 15,000,000
Exercise price 2.5p 0.55p
Expected volatility 127.56% 127.56%
Contractual life 10 years 5 years
Risk free rate 2% 2%
Estimated fair value of each option 1.79p 0.45p

These options have incurred a charge of £nil (2016: £68,000) in the current year.

17.    Material risks

The Company is subject to various risks relating to political, economic, legal, social, industry, business and financial conditions. Risk assessment and evaluation is an essential part of the Company’s planning and an important aspect of the Company’s internal control system. The Company’s approach to these risks is detailed in the Strategic Report.

Requirement for further funds

In assessing the going concern, the Directors have reviewed cash flow forecasts for 12 months following the date of these accounts. The cash flow forecasts assumed no further funding of PowerHouse Energy, Inc. and Pyromex AG. The current cash reserves and funding plans forward are considered sufficient to enable the Company to meet its liabilities as they fall due.

18.    Directors’ remuneration and share interests

The Directors who held office at 31 December 2017 had the following interests, including any interests of a connected person in the ordinary shares of the Company:

Number of ordinary shares of 0.5p each Percentage of voting rights
Nigel Brent Fitzpatrick 103,459 <0.1

The remuneration of the Directors of the Company paid for the year or since date of appointment, if later, to 31 December 2017 is:

2017
£
Salary/Fee
2017
£
Pension
2017
£
Benefits
2017
£
Total
2016
£
 Total
William Cameron Davies 12,500 12,500
Robert Keith Allaun 163,772    163,772 93,527
Nigel Brent Fitzpatrick 15,000 15,000 37,942
James John Pryn Greenstreet 9,000 9,000 27,133
David Ryan
Clive Carver 7,500 7,500 36,000

Share options held by the Directors are detailed in note 16.3. No options have been exercised during the year. Total remuneration includes share based payments arising from the issue of options amounting to £nil (2016: £68,000). There have been no awards of shares to Directors under long term incentive plans.

William Cameron Davies, Nigel Brent Fitzpatrick and James John Pryn Greenstreet have service contracts which can be terminated by providing three months’ written notice. Robert Keith Allaun has a service contract which can be terminated by providing six months’ written notice.

Robert Keith Allaun’s services amounting to £163,772 were provided via Critical Point Solutions Limited and relate wholly to his services as a Director of the Company.

Nigel Brent Fitzpatrick’s services amounting to £15,000 were provided via Ocean Park Developments Limited and relate wholly to his services as a Director of the Company.

David Ryan’s services were provided via Nayr Consultants Limited, an engineering consultancy. Details of amounts paid are provided in Note 19. Related Parties. This does not include any amount for services as a Director of the Company.

Clive Carver’s services amounting to £7,500 were provided via Elk Associates LLP and relate wholly to his services as a Director of the Company.

19.   Related parties

Hillgrove Investments Pty Limited is a related party by virtue of its shareholding in the Company. During the year Hillgrove Investments Pty Limited loans decreased by a net £1,930,137 and £69,863 of loan interest was settled by way of further loans.  The balance outstanding at the year-end was £1,402,155 (2016: £3,332,292).

Waste2tricity Limited is a related party due to common directorships. During the year, Waste2tricity provided business development services to the Company amounting to £230,000.

Nayr Consultants Limited, an engineering consultancy services company, wholly owned by David Ryan and his associates, provided engineering services to the Company during the year amounting to £50,375.

Transactions with other related parties were conducted on an arms’ length basis and totalled £nil (2016: £nil).

20.    Segmental reporting

The Company comprises a single operating segment being a development Company operating solely within the United Kingdom. As such the statement of comprehensive income and the statement of financial position may be used as a report on the segment. No revenue is currently being generated as the equipment is currently being developed and tested.

21.    Post balance sheet events

On 1 February and 23 April 2018, the Company issued 215,686,275 and 64,744,645 ordinary shares of 0.5p respectively at the agreed price of 0.5p in final settlement of the outstanding loan balance due to Hillgrove of £1,402,155.

On 23 April 2018 the Company issued a further 115,255,355 ordinary shares of 0.5p at a price of 0.5p raising gross proceeds of £576,277.

Additionally, in May 2018, the Company has issued a further 10,000,000 and 7,894,737 ordinary shares of 0.5p at a price of 0.5p and 0.76p respectively in settlement of services provided.

Since the year end, Mr Allaun and Mr Greenstreet acquired 2,000,000 and 1,000,000 ordinary shares of 0.5p in the Company respectively from the market

On 6 March 2018, the Company granted share options to Directors under the Company’s Share Option Schemes at an exercise price of 0.6p per share as follows:

Mr Robert Keith Allaun                                                   30,000,000
Mr David Ryan                                                                  21,000,000
Mr William Cameron Davies                                         15,000,000
Mr Nigel Brent Fitzpatrick                                              12,000,000
Mr James John Pryn Greenstreet                                   12,000,000

22.    Ultimate controlling party

There is no controlling party of the Company.

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