EnviroMission Ltd. (EVOMY)

[tykundegex]

As of March 8, o/s = 447560840 @ last trade A$0.031 =~ A$14 million mkt cap.

With the Texas license fee, they should have enough cash to operate for more than 2 years at the current burn-rate, so dilution should slow/stop.

From recently filed annual accounts:

RESULTS AND REVIEW OF OPERATIONS
DIRECTORS' REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2012

The Board of Directors of EnviroMission Limited have pleasure in submitting the financial report of the consolidated group for
the half year ended 31 December 2012.

During December 2012 the Company executed a Memorandum of Understanding (MOU) with a Texas based development company that grants an exclusive development licence for Solar Tower development throughout the State of Texas, USA. A formal Heads of Agreement and contract between the parties is currently underway and completion is expected in the near future.

The licence provides the Company with an initial non refundable fee of US$2,000,000, which grants the Texas developer the right to market and develop Solar Towers in Texas from the date of signing the MOU. The Company will also receive equity participation in the development entity and receive ongoing technology fees on an annual basis at the successful conclusion of each Solar Tower development in the State of Texas, details of which will be disclosed at the completion of the formal Heads of Agreement.

The US$2,000,000 licence fee is due and payable at 31 December 2012 and must be received, in full, by the Company no later than 30 June 2013. The development rights will revert back to the Company in the unlikely event that full payment is not received. At the date of this report, US$250,000 has been received in line with the payment scheduled agreed by the two parties.

Net loss from ordinary activities was $713,962 (2011: Net loss $616,620), the expenditures during the half year were consistent with expectations. Refer to Note 2 for further explanation regarding the classification of the development licence fee.

During the half year ended 31 December 2012 the Board of the Company believe that significant advances in commercialising the right to develop the intellectual property associated with the global licence held by the Company have been made. The development licence agreement with a Texas based consortia is an example of recent commercialisation success.

As previously disclosed, the Intellectual Property owned by the Company was independently valued by Acquity in February 2011 at $60,000,000. The valuation was conducted using a relief from royalties approach that included a probability adjusted net present value of likely future cash flows, based on revenue projections supported by the Power Purchase Agreement signed with the Southern California Public Power Authority. As previously announced, the Power Purchase Agreement has since been terminated by both parties to the agreement. However the Company’s Board of Directors believe that more favourable terms can now be negotiated to those stipulated in the original Power Purchase Agreement, thereby increasing potential revenue projections.

Accounting Standards in Australia and the United States of America prevent the valuation being brought to account due to the fact that no active market, under Australian Accounting Standard definitions, exists for the asset.
The recent Texas Development Licence Agreement, the La Paz Solar Tower development, and negotiations to assign development licences in other markets, supports the Board’s opinion that the value of the technology is realistic, despite its inability to be brought to account.

The Company’s management is confident that demand for renewable energy will continue to increase. Sighting factors such
as but not limited to, the continued rise in global energy demand of which current demand is primarily met by a generation of
finite resources. The emission and risk liabilities associated with these finite resources will ultimately lead to renewable energy forming a greater component of the current energy mix as a matter of necessity.

...

The Group has accumulated losses of $35,428,000 and a net asset deficiency of $1,416,893 at 31 December 2012. The directors believe that the company will be successful in its future operations and has accordingly prepared the financial report on a going concern basis. The Company is also in the discussion to grant further development licences with similar terms as those negotiated for the State of Texas to other jurisdictions both within and outside USA.