Earnings Release • Feb 23, 2017
Earnings Release
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Quarterly Report Q4 2016
As a result of the successful equity offerings, Badger Explorer has started to ramp up the Development Program.
During Q4, Badger Explorer started the second phase of the project regarding Ultrasonic-Assisted Compaction and Associated Enabling Technologies at the University of Glasgow. The project is co-funded by Badger Explorer and the Oil and Gas Innovation Centre in the UK. This phase of the project is focusing on confirming performance expectations in a broader range regarding the use of cutting edge piezo-electric materials for transducer design used in the compaction process. The research into a key enabling technology for successful compaction will continue in Q1 2017.
The work on the drilling solution that will handle drilling in low fluid formations was scaled up in Q4 where drillbit design, control system and the utilization of the ultrasonic transducer were included. These are all improvements of an already existing and functional drilling solution that will expand the tool's working range significantly.
Further work on the locomotion was also initiated. The locomotion of the tool has very few analogs to refer to which means that Badger Explorer over the years have used a broad range of external expertise to understand the challenge in advance of deploying the tool. Several solutions have been evaluated and Badger Explorer has continued working on the most promising ones during Q4. Promising test results mean reduced friction and enhanced propulsion for the tool. In addition, a dedicated test equipment was designed that will be used to qualify the effect of the various locomotion solutions.
The Cuttings Transport module was developed in 2016 and the chain based transporting system passed relevant endurance testing. It also proved to handle dry and wet cuttings in a satisfactory way.
While the sponsorship program with Statoil has been active through 2016, the negotiations with CNPC-DR are still ongoing. As earlier reported, CNPC-DR confirmed their intention to join the Badger Explorer Development Program already in Q1 2016. Badger Explorer is expecting to finalize the contract with CNPC during 2017.
After the equity offerings and ramp up of the development program, Badger Explorer has started the process of attracting further sponsoring from previous and potential new industry sponsors and public institutions.
Badger Explorer's strategy is to accelerate the development of the Badger tool together with prospective partners but also to identify alternative ways to deploy the inherent technologies within the tool. Partnership dialogues with international oilfield service companies are ongoing. BXPL believes such partnerships may play an important role in order to accelerate the future development activities and will continue to consider potential opportunities for co-operation.
In December, Badger Explorer conducted a successful private placement raising NOK 45 million in gross proceeds securing liquidity for the Company. In addition, a subsequent offering of up to NOK 10 million has been launched for eligible shareholders. These exercises secure sufficient funding for the remaining part of the Development Program. The Company has continued to keep expenses for Q4 2016 at a low level.
After the reporting period, Badger Explorer successfully raised further NOK 300 million in gross proceeds in a new private placement. A subsequent offering of up to NOK 40 million will be launched during March 2017 for eligible shareholders.
The Badger Explorer Development Program has been formulated to mature and qualify robust solutions for the following components of the Badger Explorer concept:
To be able to prove the performance of the selected solutions, Badger Explorer will build testing equipment that reflects the expected operating environments. The most important testing equipment is a subsurface test chamber (STC) that can apply high temperature and high pressure (HTHP) conditions to the tested equipment. With the STC, Badger Explorer will be able to verify expected process behavior as well as qualifying the engineering solutions at an earlier stage than previously expected.
Badger Explorer ASA had 890 shareholders on 31st December 2016 (prior to the completion of the private placement announced in Q4 2016). Norwegian entities and individuals held 64.0% of the outstanding shares and the 20 largest shareholders held 53.4% of the outstanding shares.
The staff of Badger Explorer ASA consisted of 4 full-time employees as of 31st December 2016, compared to 6 employees as of 31st December 2015.
Revenues for the fourth quarter ended December 2016 amounted to NOK 19,000, compared to no revenues in the fourth quarter ended December 2015. Revenues for the twelve months ended December 2016 amounted to NOK 65,600, compared to no revenues in the twelve months ended December 2015.
Operating expenses for the fourth quarter ended December 2016 amounted to NOK 2.101 million, compared to NOK 1.409 million for the fourth quarter ended December 2015. Operating expenses for the twelve months ended December 2016 amounted to NOK 6.577 million, compared to NOK 12.606 million for the twelve months ended December 2015. The Company significantly reduced its cost structure in 2016 to improve the liquidity position.
a BXPL's total comprehensive income shows a net loss of NOK -2.184 million in the fourth quarter of 2016, compared to -1.566 million in the fourth quarter of 2015 and a net loss of NOK -7.056 million for twelve months ended December 2016, compared to NOK -13.257 million for twelve months ended December 2015. The decrease along with cost saving efforts contributed to a significantly reduced net loss attributable to shareholders of the Company.
Total development costs of the Badger Explorer project for the fourth quarter 2016 amounted to NOK 582,870 (Q4 2015: 3.624 million), of which NOK -410,123 (Q4 2015: -3.069 million) was capitalised for the fourth quarter of 2016 and 2015 respectively. For the twelve months ended December 2016, total development costs amounted to NOK 4.493 million (2015: 16.823 million), of which NOK -3.516 million (2015: -14.124 million) was capitalised. The decrease in research and development expenses resulted primarily from a decrease in cash collection received from public institutions and industry partners.
Capitalised public grants for the Badger Explorer project decreased from NOK 1.109 million in the fourth quarter 2015 to NOK 94,182 for the fourth quarter 2016. Capitalised public grants decreased from NOK 6.574 million for the twelve months ended December 2015 to NOK 1.651 million for the twelve months ended December 2016. The decrease in the government grants funding reflected lower projects activity level during 2016.
Cash and cash equivalents were NOK 334,886 end of 2016 (before completion of the private placement announced in Q4 2016), compared to NOK 585,953 million end of 2015.
Shareholder's equity for BXPL was NOK 58.919 million end of 2016, with an equity ratio of 39.0%, compared to NOK 66.207 million in 2015 (equity ratio of 43.4%).
Net cash flow arising from the operating activities for the fourth quarter ended December 2016 amounted to NOK –1.998 million, compared to NOK –1.911 million for the fourth quarter ended December 2015. Net cash flow arising from the operating activities for the twelve months ended December 2016 amounted to NOK -8.122 million, compared to NOK -12.351 million the twelve months ended December 2015. Net cash outflow includes payments to vendors for goods and services received.
Net cash flow arising from the investment activities for the fourth quarter ended December 2016 amounted to NOK –410,123, compared to NOK –3.069 million the fourth quarter ended December 2015. Net cash flow arising from the investment activities for the twelve months ended December 2016 amounted to -3.516 million, compared to NOK -14.124 million for the twelve months ended December 2015. Net cash flow from investment activities was negative, mainly reflecting the development costs related to the Badger Explorer Development project, which are eligible for capitalisation.
Net cash flow arising from the financing activities for the fourth quarter ended December 2016 was NOK 2.436 million, compared to NOK 4.474 million for the fourth quarter ended December 2015. Net cash flow arising from the financing activities for the twelve months ended December 2016 amounted to 11.386 million, compared to NOK 22.711 million for the twelve months ended December 2015. Net cash inflows in the Q4 2016 include a tax incentive for R&D from Skattefunn. Due to the contributions from the industry partners, net cash flow from financing activities was a positive in 2016 and 2015. Cash outflows include repayment of accrued interest expenses on a credit facility to Sparebanken Vest.
| Quarters | Year end | |||||
|---|---|---|---|---|---|---|
| Unaudited figures in NOK 1000 | Q4 2016 | Q3 2016 | Q4 2015 | 31.12.2016 | 31.12.2015 | |
| Revenues | 19 | 5 | 0 | 66 | 0 | |
| Operating expenses | 2 101 | 1 466 | 1 409 | 6 577 | 12 606 | |
| EBITDA | -2 082 | -1 461 | -1 409 | -6 512 | -12 606 | |
| Earnings per share | -0.12 | -0.09 | -0.08 | -0.38 | -0.72 | |
| Projects development costs | 583 | 848 | 3 624 | 4 493 | 16 823 | |
| Public grants for projects development | 94 | 448 | 1 109 | 1 651 | 6 574 | |
| Capitalisation of development costs and government grants | 316 | 184 | 1 960 | 1864 | 7 550 |
The recent equity offerings have dramatically improved the positon of Badger Explorer in terms of strategic flexibility and ability to accelerate business development. As a result of the recent transactions, the Company will now be able to maximize the value potential of the existing business and related technologies. While ramping up the Development Program, Badger Explorer will continue to have a prudent strategy for developing the Badger tool and aims to maintain costs at a low level. Furthermore, the strong liquidity position enables the Company to pursue other investment opportunities that arise within the oil services industry. Given the current downturn in the industry, the Company is in a unique position compared to many of its peers and will seek to capitalise on that position and expand into other oil services segments. The Company has already evaluated potential investments and is continuing to see interesting investment opportunities. The aim of the Company is to initiate one or more transactions within a relatively short time frame.
Stavanger, 23rd February 2017 The Board of Directors Badger Explorer ASA
Badger Explorer ASA (BXPL) is a public limited company registered in Norway and listed on the Oslo Stock Exchange (Oslo Axess list). The Company's head office is located at Prof. Olav Hanssensvei 15, 4021 Stavanger, Norway.
The financial statements of BXPL have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
The financial statements have been prepared on an historical cost basis.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If BXPL losses control over a subsidiary, it:
Non-controlling interest represent the portions of profit and loss and net assets not held by BXPL are presented separately in the income statement and within equity in the statement of financial position, separately from parent shareholder's equity.
The interim financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the financial statements as of 31st December 2015.
The accounting policies adopted in the preparation of the interim financial statements are consistent with those followed in the preparation of the financial statements as of 31st December 2015.
BXPL's financial statements are presented in NOK.
Financial assets within the scope IAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables or available-for-sale financial assets, as appropriate.
Financial assets at fair value through profit and loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit and loss.
Financial liabilities within the scope IAS 39 are classified as financial liabilities at fair value through profit or loss, loans and borrowings, as appropriate.
Financial liabilities are recognised initially at fair value and in the case of loans and borrowings, directly attributable transaction costs are added.
Financial liabilities include trade and other payables, loans and borrowings.
Inventories are valued at the lower of cost and net realisable value.
Cash includes cash in hand and at bank.
Accounts receivable are recognised in the statement of financial position at nominal value less provisions for doubtful debts.
Fixed assets are carried at cost less accumulated depreciations and impairment losses.
The gross carrying amount of fixed assets is the purchase price, including duties/taxes and direct acquisition costs relating to making the asset ready for use.
Depreciation is calculated using the straight-line method.
Intangible assets are capitalised if it is probable that the expected future financial benefits referred to the asset will accrue to the Company, and that the cost can be calculated in a reliable matter.
Development expenditures related to the Badger Explorer development project are recognised as an intangible asset when BXPL can demonstrate:
When all the above criteria are met, the cost related to the development starts to be recognised in the statement of financial position.
Costs that have been charged as expenses in previous accounting periods are not recognised in the statement of financial position.
Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired.
Revenue is recognised to the extent when it is probable that the economic benefit will flow to BXPL and the revenue can be reliably measured, regardless of when the payment is being made.
Interest income is recognised in the income statement based on the effective interest method as they are earned.
Public grants are recognised where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. When the grants relate to an expense item, it is recognised as income over the period necessary to match the grant on a systematic basis to the cost it intends to compensate. Where the costs are related to a development project and capitalised, the belonging grants are capitalised together with the cost.
Contributions from partners are recognised in the statement of financial position under long term liabilities as the contributions are subject to repayment ref. note 13 in BXPL annual accounts.
The share options granted in 2014 were replaced with new share options. On 15th March 2016, the Board of Directors of BXPL implemented a new share options program for BXPL employees offering a total of 190,000 share options at a strike price of NOK 1.80 and NOK 370,000 share options at a strike price of NOK 1.50, corresponding to 3% of all outstanding BXPL shares. The options granted will be vested in tranches and can be exercised between three and ten days after publications of the Company's Q4 2017 and Q4 2018 results in 2018 and 2019. A total of 440,000 were "out of the money" on 31st December 2016. Previously issued share options were cancelled.
On 22nd August 2016, Mr. Roald Valen took on the position as CEO of BXPL. Upon commencement of the employment, Mr. Valen was granted 250,000 share options in BXPL at a strike price of NOK 2.40 per share. 125,000 options will vest on the date of the publication of the Company's Q4 2017 report. A further 125,000 options will vest on the date of the publication of the Company's Q4 2018 report. All share options were "out of the money" on 31st December 2016.
The statement of cash flow is prepared in accordance with the indirect method and based upon IAS 7.
| Quarters | Year End | |||||||
|---|---|---|---|---|---|---|---|---|
| Unaudited figures in NOK 1000 | Q4 2016 | Q3 2016 | Q4 2015 | Note | 31.12.2016 | 31.12.2015 | ||
| Revenues | ||||||||
| Other Income | 19 | 5 | 0 | 66 | 0 | |||
| Total Revenues | 19 | 5 | 0 | 66 | 0 | |||
| Operating Expenses | ||||||||
| External services for development project | 65 | 201 | 1 959 | 1 561 | 8 726 | |||
| Payroll and related costs | 1 144 | 1 166 | 1 983 | a | 4 140 | 9 921 | ||
| Other operating expenses | 1 303 | 731 | 536 | 4 391 | 8 083 | |||
| Capitalised development costs | -410 | -632 | -3 069 | -3 516 | -14 124 | |||
| Total Operating Expenses | 2 101 | 1 466 | 1 409 | 6 577 | 12 606 | |||
| EBITDA | -2 082 | -1 461 | -1 409 | -6 512 | -12 606 | |||
| Depreciation | 4 | 15 | 44 | 99 | 200 | |||
| Operating profit (loss) | -2 086 | -1 476 | -1 453 | -6 611 | -12 807 | |||
| Net finance income (loss) | -98 | -105 | -114 | 2, 8 | -445 | -450 | ||
| Profit (loss) before taxes | -2 184 | -1 581 | -1 566 | -7 056 | -13 257 | |||
| Tax on ordinary result | 0 | 0 | 0 | 0 | 0 | |||
| Net profit (loss) | -2 184 | -1 581 | -1 566 | -7 056 | -13 257 | |||
| Profit (loss) attributable to equity holders of the company |
-2 184 | -1 581 | -1 566 | -7 056 | -13 257 | |||
| Earnings per share | -0.12 | -0.09 | -0.08 | -0.38 | -0.72 | |||
| Earnings per share diluted | -0.12 | -0.09 | -0.08 | -0.38 | -0.71 |
| Unaudited figures in NOK 1000 | Quarters Year end |
|||||
|---|---|---|---|---|---|---|
| Total comprehensive income | Q4 2016 | Q3 2016 | Q4 2015 | 31.12.2016 | 31.12.2015 | |
| Profit (loss) for the year (period) | -2 184 | -1 581 | -1 566 | -7 056 | -13 257 | |
| Other comprehensive income - items that will later be reclassified to profit and loss |
0 | 0 | 0 | 0 | 0 | |
| Comprehensive income at end of period | -2 184 | -1 581 | -1 566 | -7 056 | -13 257 | |
| Quarters | Year end | |||||
| Total comprehensive income attributable to: | Q4 2016 | Q3 2016 | Q4 2015 | 31.12.2016 | 31.12.2015 | |
| Equity holders of the company | -2 184 | -1 581 | -1 566 | -7 056 | -13 257 | |
| Total comprehensive income | -2 184 | -1 581 | -1 566 | -7 056 | -13 257 |
| ASSETS Unaudited figures in NOK 1000 | 31.12.2016 | 30.09.2016 | Note | 31.12.2015 |
|---|---|---|---|---|
| NON-CURRENT ASSETS | ||||
| Capitalised development costs | 149 632 | 149 316 | 2, 5 | 147 768 |
| Patent rights | 387 | 387 | 387 | |
| Total intangible assets | 150 019 | 149 703 | 148 154 | |
| Property, plant & equipment | 24 | 28 | 101 | |
| Total tangible assets | 24 | 28 | 101 | |
| TOTAL NON-CURRENT ASSETS | 150 043 | 149 730 | 148 255 | |
| CURRENT ASSETS | ||||
| Other receivables | 605 | 2 227 | 1 | 3 630 |
| Total receivables | 605 | 2 227 | 3 630 | |
| Cash and cash equivalents | 335 | 327 | 586 | |
| TOTAL CURRENT ASSETS | 940 | 2 554 | 4 216 | |
| TOTAL ASSETS | 150 983 | 152 284 | 152 471 | |
| EQUITY AND LIABILITIES Unaudited figures in NOK 1000 | 31.12.2016 | 30.09.2016 | Note | 31.12.2015 |
| EQUITY | ||||
| Share capital | 2 317 | 2 317 | 3 | 2 317 |
| Share premium | 218 070 | 218 070 | 4 | 218 070 |
| Other paid in capital | 3 935 | 3 869 | 4 | 4 167 |
| Total paid in equity | 224 322 | 224 256 | 224 555 | |
| Retained earnings | -165 403 | -163 219 | -158 347 | |
| Total retained earnings | -165 403 | -163 219 | -158 347 | |
| TOTAL EQUITY | 58 919 | 61 038 | 66 207 | |
| LIABILITIES | ||||
| Capitalised grants | 81 500 | 81 500 | 5 | 75 000 |
| Total non-current liabilities | 81 500 | 81 500 | 75 000 | |
| Accounts payables | 2 063 | 1 979 | 7 | 3 078 |
| Public duties payables | 281 | 456 | 474 | |
| Debt financial institutions | 6 889 | 6 910 | 8 | 6 711 |
| Other short term liabilities | 1 331 | 402 | 1 001 | |
| Total current liabilities | 10 564 | 9 747 | 11 264 | |
| TOTAL LIABILITIES | 92 064 | 91 247 | 86 264 | |
| TOTAL EQUITY AND LIABILITIES | 150 983 | 152 284 | 152 471 | |
| Unaudited figures in NOK 1000 | Note | Share capital |
Share premium |
Other paid in capital |
Retained earnings |
Total equity |
|---|---|---|---|---|---|---|
| Equity as of 31.12.2015 | 2 317 | 218 070 | 4 167 | -158 347 | 66 207 | |
| Profit (loss) 01.01.2016 - 31.12.2016 | -7 056 | -7 056 | ||||
| Other comprehensive income | 0 | 0 | ||||
| Total comprehensive income | -7 056 | -7 056 | ||||
| Option plan payment | 4 | -232 | -232 | |||
| Equity as of 31.12.2016 | 2 317 | 218 070 | 3 935 | -165 403 | 58 919 |
| Quarters | Year end | |||||
|---|---|---|---|---|---|---|
| Unaudited figures in NOK 1000 | Q4 2016 | Q3 2016 | Q4 2015 | Note | 31.12.2016 31.12.2015 | |
| Contribution from operations* | -2 004 | -1 494 | -1 273 | -6 731 | -12 098 | |
| Change in accounts receivables and accounts payables | 84 | -862 | -433 | 7 | -1 015 | 683 |
| Change in other receivables and payables | -79 | 544 | -205 | -376 | -936 | |
| Net cash flow from operating activities | -1 998 | -1 813 | -1 911 | -8 122 | -12 351 | |
| Capitalisation of development cost | -410 | -632 | -3 069 | 2 | -3 516 | -14 124 |
| Net cash flow from investment activities | -410 | -632 | -3 069 | -3 516 | -14 124 | |
| Government grants | 2 547 | 0 | 2 922 | 1 | 5 166 | 8 060 |
| Contribution from industry partners | 0 | 2 500 | 0 | 5 | 6 500 | 8 390 |
| Interest received | 8 | 4 | 16 | 30 | 54 | |
| Interest paid | -119 | -109 | -130 | 8 | -488 | -505 |
| Proceeds from borrowings financial institution | 0 | 90 | 1 666 | 8 | 178 | 6 711 |
| Net cash flow from financing activities | 2 436 | 2 485 | 4 474 | 11 386 | 22 711 | |
| Total net changes in cash flow | 8 | 40 | -505 | -252 | -3 764 | |
| Cash and cash equivalents beginning of period | 327 | 287 | 1 091 | 586 | 4 351 | |
| Cash and cash equivalents end of period | 335 | 327 | 586 | 335 | 586 | |
| Profit (loss) attributable to equity holders of the company | -2 184 | -1 581 | -1 566 | -7 056 | -13 256 | |
| Employee options | 66 | -33 | 137 | 4 | -232 | 508 |
| Depreciation | 4 | 15 | 44 | 99 | 200 | |
| Finance income | -8 | -4 | -16 | -30 | -54 | |
| Finance expenses | 119 | 109 | 130 | 8 | 488 | 505 |
| *Contribution from operations before tax | -2 004 | -1 494 | -1 273 | -6 731 | -12 098 |
For the financial year 2016, RCN has through its PETROMAKS2-program granted NOK 2.057 million funding to further develop HPHT ultrasonic system, compared to NOK 5.138 million for the same period in 2015. The project period is from January 2014 to June 2017.
R&D projects have been approved for the SkatteFUNN arrangement, a Norwegian tax incentive scheme. BXPL has two approved projects covering all its major R&D activities, supported by SkatteFUNN from 2014 to 2016. For the financial year 2016, the Company recognised NOK 2.547 million, compared to NOK 2.922 million in 2015.
The share options agreements are equity-based incentive compensation. The employee share options are recognised as an expense in the income statement under "Payroll and related costs" and in the statement of financial position under "Other paid in capital". The options (incl. Employers' national insurance contributions) are recognised over the vesting period starting from September 2009. The share option value is based on a third party evaluation of the options at the grant date where the Black-Scholes model is used for calculation. The replacement of options is treated as a cancellation and repricing under IFRS 2.
On 16 September 2013, Mr. Steinar Bakke took on the position as President and CEO. Upon commencement of the employment, Mr. Bakke was granted 370,000 share options in BXPL at a strike price of NOK 6.50 per share. 185,000 share options vested on the date of the publication of the Company's Q4 2015 report. A further 185,000 share options forfeited due to the resignation from his position on 29 February 2016.
On 15 January 2016, CEO Øystein Larsen was granted 370,000 share options at a strike price of NOK 1.50. All share options forfeited due to the resignation from his position as CEO on 9 September 2016.
On 22 August 2016, Mr. Roald Valen took on the position as CEO of BXPL. Upon commencement of the employment, Mr. Valen was granted 250,000 share options in BXPL at a strike price of NOK 2.40 per share. 125,000 options will vest on the date of the publication of the Company's Q4 2017 report. A further 125,000 options will vest on the date of the publication of the Company's Q4 2018 report. Upon exercise of the options, the option holder shall pay to the Company a price of NOK 2.40 per option share. If on the exercise day the market price of the Company's shares is exceeding NOK 25, the exercise price shall be increased by an amount equivalent to 8% of the market price deducting NOK 25. The option holder is free to exercise of fully vested options at his sole discretion. All share options were "out of the money" on 31 December 2016.
The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year:
| Transactions with related party | 31.12.2016 | 31.12.2015 |
|---|---|---|
| Purchases of services | 1 401 | 2 516 |
In June 2013, BXPL entered into a consultancy agreement with two of its largest shareholders - Dalvin Rådgivning AS and Nilsholmen AS. For the year ended 31 December 2016, payments totalling NOK 820,000 were made to Dalvin Rådgivning AS in respect of performed consultancy services and NOK 14,001 related to travel expenses. Mr. Gunnar Dolven, who is CFO of BXPL, is a director of Dalvin Rådgivning AS.
For the year ended 31 December 2016, Nilsholmen AS (Mr. Kjell Markman was Sr.VP Business Development & Strategy of BXPL) received payments of NOK 345,000 in respect of performed consultancy services. The consultancy agreement with Nilsholmen AS was terminated on 30 June 2016.
In March 2016, BXPL entered into a consultancy agreement with the former Company's CEO and its shareholder Mr. Steinar Bakke. As of 31 December 2016, payments totalling NOK 214,359 were made to S. Bakke Consulting AS in respect to performed consultancy services and NOK 7,166 related to travel expenses. The consultancy agreement with S. Bakke Consulting was terminated on 30 November 2016.
The following table provides the total amount of shares held by the members of the Board of Directors and the members of the management group for the relevant financial year.
| 31.12.2016 | 31.12.2015 | |
|---|---|---|
| ABN AMRO Bank (Luxembourg) S.A. (Chairman of the Board - Marcus Hansson) | 565 000 | 565 000 |
| Dalvin Rådgivning AS (CFO - Gunnar Dolven) | 426 872 | 426 872 |
| Nilsholmen Investering AS | 64 422 | 209 222 |
| Senior Advisor - Steinar Bakke | 473 | 155 000 |
| Nilsholmen AS | 0 | 20 200 |
| Chairman of the Board - Marcus Hansson | 11 668 | 11 668 |
| CFO - Gunnar Dolven | 8 000 | 8 000 |
| Ordinary shares | 1 076 435 | 1 395 962 |
| % of total shares | 5.8 % | 7.5 % |
Some of the shares were acquired in connection with the private placement that was carried out on 6 December 2016. The following primary insiders were allocated new shares in January 2017 and the new total amount of the shares is as follows:
| 13.01.2017 | 31.12.2016 | |
|---|---|---|
| Chairman of the Board - Marcus Hansson and close associates | 20 616 668 | 616 668 |
| Dalvin Rådgivning AS (CFO - Gunnar Dolven) | 2 834 872 | 434 872 |
| CEO - Roald Valen | 2 400 000 | 0 |
BXPL has entered into a revolving credit facility with its Norwegian bank Sparebanken Vest on 22 August 2012 that provides for borrowings of up to NOK 7.5 million with an interest rate of 4.95%. In addition, there is a yearly commission of 1.0% on the credit line. As of 31 December 2016, NOK 6.889 million has been drawn on the overdraft facility. Interest incurred of NOK 112,695 have been repaid during Q4 2016. Financial covenants: equity - not be less that NOK 75 million and should exceed more than 50% of the book equity ratio. The book equity less intangible assets must be positive. Accounts receivable - must exceed 75% of the withdrawn credit facility. Financial review - quarterly financial statement submission to the bank. The overdraft facility of NOK 7.5 million with Sparebanken Vest is in breach with the agreed covenants as of 31 December 2016.
The outstanding debt of NOK 6.889 million was repaid due to the private placement of NOK 45 million on 13 January 2017.
Pursuant to section 3-3 (a) of the Norwegian Accounting Act, it is confirmed that the conditions for assuming that BXPL is a going concern are present, and that the financial statements have been prepared on the basis of this assumption. The Company has reported significant doubt about the Company`s ability to continues as a going concern in the previous periods as a result of a very tight liquidity situation. Additional funding was required to carry on the future development of the Badger tool and pay overdue debt where the Company as of 31 December 2016 was in breach with the covenants. The Board assess that there is not significant uncertainty related to going concern as of today based on the private placement of NOK 45 million carried out in January 2017, and the further planned subsequent offering as described in note 10 "Events after the reporting date" in this report.
On 6 December 2016, BXPL has carried out a private placement consisting of 360,000,000 new ordinary shares for gross proceeds of NOK 45 million with a subscription price of NOK 0.125. The proceeds were received on 13 January 2017. The private placement will be used to fund the Company's ongoing Development Program as well as for general corporate purposes.
At the extraordinary general meeting on 9 January 2017, the Company's shareholders resolved to approve the private placement and authorized a subsequent offering. As a result of the issuance, the Company's new registered share capital is NOK 47,317,161 divided into 378,537,288 shares, each with a nominal value of NOK 0.125 on 16 January 2017. Costs and fees related to the capital increase transaction is NOK 3.050 million and will be recognised as a reduction to equity.
On 2 February 2017, The Company announced that it had raised NOK 300 million in gross proceeds through a new private placement consisting of 600,000,000 new shares with a subscription price of NOK 0.50 per share. The net proceeds from the Private Placement will be used for further development of the Badger tool and pursue opportunities which can accelerate the commercialization of the Company's patents and knowhow.
The Norwegian Financial Supervisory Authority has on 15 February 2017 approved a prospectus prepared by BXPL. The prospectus comprise (i) listing of 360,000,000 new shares (the "Private Placement I Shares") issued in a private placement conducted on 6 December 2016 (the "Private Placement I"), (ii) listing of 600,000,000 new shares (the "Private Placement II Shares") to be issued in connection with a private placement conducted on 2 February 2017 (the "Private Placement II"), (iii) the offer and listing of 80,000,000 shares (the "Offer I Shares") in connection with the Subsequent Offering I and (iv) the offer and listing of 80,000,000 new shares (the "Offer II Shares") in connection with the Subsequent Offering II.
The Private Placement II and Subsequent Offering II is conditional upon approval from the extraordinary general meeting to be held on 23 February 2017.
No other events have taken place after the reporting period that would have affected the financial statements or any assessments carried out.
Badger Explorer ASA Org.nr. 985 955 107 MVA
Visiting address: Prof.Olav Hanssensvei 15, 4021 Stavanger Postal address: P.O.Box 8046, 4068 Stavanger E-mail: [email protected]
www.bxpl.com
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