DIGITALX LIMITED — Annual Report 2010

Aug 31, 2010

Appendix 4E Preliminary final Report

Rules 4.3A

Appendix 4E

Preliminary Final Report

Name of entity

VERUS INVESTMENTS LIMITED

ABN or equivalent company reference 59 009 575 035 For announcement to the market	Financial year ended (‘current period’) 30 June 2010 $A	Financial year ended (‘current period’) 30 June 2010 $A	Financial year ended (‘current period’) 30 June 2010 $A
Other revenue Loss from ordinary activities after tax attributable to members Net loss for the period attributable to members	Down 43% to 32,066 Up 22% to (1,609,540) Up 22% to (1,609,540)
Dividends (distributions)		Amount per security	Franked amount per security
Final dividend Interim dividend		None	- ¢
Previous corresponding period		None	-¢
+Record date for determining entitlements to the dividend, (in the case of a trust, distribution)	N/A
	N/A

The above results should be read in conjunction with the notes and commentary contained in this report.

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Appendix 4E Preliminary final Report

Management Discussion and Analysis

1. Commentary

The consolidated loss after tax for the financial year ended 30 June 2010 was $1,609,540 (2009: $1,318,155).

Review of Operations

Investment in Fausse Point Project (45% Working Interest)

In September 2009, the Company announced that it had secured the right to participate in a highly sought after Oil & Gas investment in Fausse Point, Louisiana, USA.

In December 2009, the drilling program for Well #1 commenced and in January 2010 the joint venture partners agreed to proceed with completion testing on the back of several very encouraging oil and gas shows.

In February 2010, the joint venture partners made a commitment to install production infrastructure at the well head, so as to continue testing the lower intervals with the intention to move into production from the intervals where there was an identification of oil and gas zones.

In June 2010, the Company announced its commitment to invest in the Bongo Prospect, a high impact exploration/appraisal gas well in Wharton County, Texas. This investment provides Verus with a 9.375% Working Interest (“WI”).

Corporate

During the year the Company has been active in securing funds to support the exploration drilling and completion program of the first wells at the Fausse Point and Bongo projects;

• In September 2009, the Company completed a (one for one) non-renounceable entitlement offer which raised approximately $682,000 after costs and a placement to raise a further $528,000 after costs

• In December 2009, the Company completed a further placement which raised a further $1.95 million after costs

• In June 2010, the Company completed a placement which raised a further $1.03 Million after costs.

2. Principal activities

The principal activity of the economic entity during the financial year was the identification, evaluation and possible execution of investment opportunities thought to be worthwhile for any short, medium or long term purposes, to whatever degree or magnitude deemed appropriate whether or not such opportunities relate to securities listed on a Security Exchange or directly owned assets of any type, including investments in the mineral exploration sector.

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Appendix 4E Preliminary final Report

Condensed Consolidated Statement of Comprehensive Income For the Year ended 30 June 2010

	Notes	30 June 2010 $	30 June 2009 $
Continuing operations Revenue Interest Income Expenses Loss before tax from continuing operations Income tax benefit Profit / (loss) before income tax Income tax benefit Loss after income tax from continuing operations Attributable to; Members of the Parent entity Other comprehensive (loss)income Exchange differences arising on translation of foreign operations **Total comprehensive loss of the year **	2 2	32,066 (1,641,606)	56,241 (1,374,396)
		(1,609,540) -	(1,318,155) -
		(1,609,540) -	(1,318,155) -
		(1,609,540)	(1,318,155)
		(1,609,540) 121,833	(1,318,155) 1,175
		(1,487,707)	(1,316,980)

Earnings per share	30 June 2010 $	30 June 2009 $
Basic earnings / (loss) per share from continuing operations	(0.30) cents	(0.55) cents (0.55) cents
Diluted earnings / (loss) per share from continuing operations	(0.30) cents

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Appendix 4E Preliminary final Report

Condensed Consolidated Statement of Financial Position

As at 30 June 2010

As at 30 June 2010
	Notes	30 June 2010 $	30 June 2009 $
Current assets Cash and cash equivalents Receivables		305,986 27,747	573,983 12,683
Total current assets		333,733	586,666
Non-current assets Prepayments Exploration & Evaluation Assets		365,621 3,761,066	- -
Total non-current assets		4,126,687	-
Total assets		4,460,420	586,666
Current liabilities Trade and otherpayables		78,898	35,829
Total current liabilities		78,898	35,829
Total liabilities		78,898	35,829
Net assets		4,381,522	550,837
Equity Contributed equity Reserves Accumulated losses	4	13,148,308 1,429,426 (10,196,212)	8,824,377 313,132 (8,586,672)
Total equity		4,381,522	550,837

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Appendix 4E Preliminary final Report

Condensed Consolidated Statement of Cash Flows For the Year ended 30 June 2010

For the Year ended 30 June 2010
	30 June 2010 $	30 June 2009 $
Cash flows from operating activities Payments to suppliers and employees Interest received Deposit refund	(480,550) 30,506 -	(638,460) 74,438 39,596
Net cash flows used in operating activities	(450,044)	(524,426)
Cash flows from investing activities Exploration and Evaluation expenditure – O&G Exploration and Evaluation expenditure-Minerals Purchase ofproperty, plant and equipment	(4,008,483) - -	(122,832) (574,216) (1,366)
Net cash flows used in investing activities	(4,008,483)	(698,414)
Cash flows from financing activities Proceeds from issue of securities Securities issue costs	4,511,327 (320,797)	- -
Net cash flows from financing activities	4,190,530	-
Net decrease in cash held Net foreign exchange difference Cash and cash equivalents at beginningofperiod	(267,997) - 573,983	(1,222,839) - 1,796,822
Cash and cash equivalents at end ofperiod	305,986	573,983

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Appendix 4E Preliminary final Report

Condensed Consolidated Statement of Changes in Equity Year ended 30 June 2010

	Issued Capital $	Accumulated losses $	Reserves $	Total equity $
At 30 June 2009	8,824,377	(8,586,672)	313,132	550,837
Loss for the period Divesture of foreign operations Foreign currency translation Total Comprehensive Income Share issues (net of costs) Share based payments – employee benefits expense Equity settled share based payments	- - -	(1,609,540) - -	- (4,904) 126,737	(1,609,540) (4,904) 126,737
	- 4,323,931 - -	(1,609,540) - - -	121,833 - 318,111 676,350	(1,487,707) 4,323,931 318,111 676,350
At 30 June 2010	13,148,308	(10,196,212)	1,429,426	4,381,522

	Issued Capital $	Accumulated losses $	Reserves $	Total equity $
At 30 June 2008	8,824,377	(7,268,517)	304,757	1,860,617
Loss for the period Foreign currency translation Total Comprehensive Income Share based payments – employee benefits expense	- -	(1,318,155) -	- 1,175	(1,318,155) 1,175
	- -	(1,318,155) -	1,175 7,200	(1,316,980) 7,200
At 30 June 2009	8,824,377	(8,586,672)	313,132	550,837

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Appendix 4E Preliminary final Report

1 CASH BALANCES

(a) Reconciliation of cash

Reconciliation of cash at the end of the period (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows:	30 June 2010 $	30 June 2009 $
Cash on hand and at bank Deposits at call	305,986 -	43,884 530,099
Totalcash atend of period	305,986	573,983

(b) Non-cash financing and investing activities

The following significant non-cash financing and investing activities have occurred during the year,

• On 26 November 2009 the Company issued 75 million listed options to Cicero Corporate Pty Ltd in consideration for investor relation services services in accordance with shareholder approval granted at the annual general meeting held on 24 November 2009.

• On 4 June 2010 the Company issued 4.6 million fully paid ordinary shares to Active Energy Advisors Pte. Ltd as consideration for the introduction and assistance with the Bongo transaction.

• On 4 June 2010 the Company issued 15 million unlisted options (with an exercise price of 3 cents and expiry date of 31 December 2009) as part consideration for the completion of a capital raising and advisory services.

(c) NTA backing

	30 June 2010 $	30 June 2009 $
Net tangible asset backing per ordinary security	0.05 cents	0.23 cents

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Appendix 4E Preliminary final Report

2 REVENUE AND EXPENSES

2 REVENUE AND EXPENSES
Consolidated Other Income Finance revenue - Interest received	30 June 2010 $	30 June 2009 $
	32,066	56,241
	32,066	56,241
Expenses Impairment of Oil & Gas investment Impairment of Brazilian Minerals investment Administration expenses Share based payments Investor relations consulting fee (Note 1) Other expenses	- - (648,495) (318,111) (675,000) -	(34,429) (716,908) (614,129) (7,200) - (1,730)
	(1,641,606)	(1,374,396)

3 DIVIDENDS PAID AND PROPOSED

No dividends have been paid or proposed during the year.

4 ISSUED CAPITAL

Ordinary shares Issued andfully paid	30 June 2010 $	30 June 2009 $
	13,148,308	8,824,377
Opening balance Shares issued during the year	Number of shares	Number of shares
	238,794,160 446,757,429	238,794,160 -
Closing balance	685,551,589	238,794,160

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Appendix 4E Preliminary final Report

5 LISTED OPTIONS

	5 LISTED OPTIONS
	Options As at 1 July 2008 No movement As at 30 June 2009 Options issued 26 November 2009 Options expired 30 June 2010 As at 30 June 2010	Number of options
		164,196,107 -
		164,196,107
		75,000,000 (239,196,107)
		-

6 SEGMENT REPORTING

Business Segments

The following tables present the revenue and loss information regarding segments for the years ended 30 June 2010 and 30 June 2009.

	Revenue Yearended 30-Jun 30-Jun 2010 2009 $ $ Continuing operations Oil and Gas Exploration – USA - - Discontinued operation Mineral Exploration – Brazil - - Interest income Share based payments Investor relations consulting fee Corporate, administration and directors fees Loss before tax Oil and Gas Exploration – USA Mineral Exploration – Brazil Total segment assets Unallocated assets Total Assets	Revenue Yearended	Revenue Yearended		Segment Loss / (Profit) Yearended	Segment Loss / (Profit) Yearended
		30-Jun 2010 $ - -	30-Jun 2009 $ - -		30-Jun 2010 $ 10,856 (1,381)	30-Jun 2009 $ 34,429 770,060
					9,475 (32,066) 318,111 676,350 637,670	804,489 (56,241) 7,200 - 562,707
					1,609,540	1,318,155
					Group Assets by Reportable Operating Segment
					30-Jun 2010 $ 4,139,598 -	30-Jun 2009 $ - -
					4,139,598 320,822	- 586,666
					4,460,420	586,666

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Appendix 4E Preliminary final Report

7 AFTER BALANCE DAY EVENTS

The following events have arisen since the end of the financial year;

• (a) On 30 July 2010, the Company completed a capital raising via a Share Purchase Plan, issuing 8.3 million shares at an issue price of 2.2 cents each, for gross proceeds of $183,420.

• (b) On 2 August 2010, the Company announced that it had executed a term sheet with Pass Petroleum Pty Ltd (“Pass”) to merge Pass into Verus. Key terms of the merger being:

• a. Verus will issue approximately 370 million shares to Pass shareholders based on a merger ratio of Verus 65% /Pass 35% at final closing;

• b. Pass may nominate one director to the Board of Verus;

• c. The merger is subject to the approval of shareholders of both Verus and Pass;

• d. A break fee of $500,0000 is payable (in shares) if either party fails to complete the transaction; and

• e. Subject to satisfactory final due diligence investigations.

The merger, if approved, will provide Verus with an increased WI in the exciting Fausse Point project (from 45% to 72%), the producing Bullseye project (WI 10%) and exposure to other high quality and impactful projects such as Bowtie West (WI 18%).

• (c) On 12 August 2010, the Company announced a private placement of 26.25 million shares, to professional and sophisticated investors, at an issue price of 2.1 cents each, for gross proceeds of $551,250.

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Appendix 4E Preliminary final Report

Annual meeting

(Preliminary final report only)

The annual meeting will be held as follows:

Place Date Time

Approximate date the[+] annual report will be available

To be confirmed To be confirmed To be confirmed 29[th] September 2010

Compliance statement

• 1 This report has been prepared in accordance with AASB Standards, other AASB authoritative pronouncements and Urgent Issues Group Consensus Views or other standards acceptable to ASX.

• 2 This report, and the[+] accounts upon which the report is based (if separate), use the same accounting policies.

• 3 This report does give a true and fair view of the matters disclosed.

• 4 This report is based on[+] accounts to which one of the following applies. (Tick one)

� The +accounts have been � The +accounts have been audited. subject to review. � The +accounts are in the � The[+] accounts have not yet process of being audited or been audited or reviewed. subject to review.

Sign here : Date: 31[st] August 2010

Print name : Andrew McIlwain Director

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