REWS (Renewable Energy and Waste Solutions UK plc) files December 2017 accounts; further investment needed

In August REWS (Renewable Energy and Waste Solutions UK plc), which has raised funds via a series of bonds paying between 8% and 20% per year, filed its accounts for the period ending December 2017.

The company was incorporated in February 2017 and 2017 was, in the directors’ words, “a building year”. The company is building a waste processing and energy production facility and expects to roll out its product in the last quarter of 2018.

As you would expect, the company made no revenue in 2017 as its plant was still under construction, and posted a £378k net loss.

The accounts reveal (under note 14) that the company had raised £2.8 million from investors as at December 2017, of which a quarter (£724,000) was paid out in issue costs (i.e. commission, accounting fees, legal fees, printing costs etc).

The £724,000 of issue costs has been charged to the profit and loss account as a finance cost rather than as a liability on the balance sheet.

At December 2017 the company had net assets of minus £366k, representing roughly £1.5m of property, plant and equipment, £460k of other assets (e.g. VAT receivables and prepayments), minus £2.1 million of investor loans (not including the £724,000 issue costs which as mentioned above is charged to the profit and loss account) and £216,000 trade and other creditors.

As at December 2017, the company still needed to raise further funds to complete the construction of the energy production facility. The auditors note that this creates a material uncertainty over whether REWS will be able to continue as a going concern.

1.2 Going concern

These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the Group will continue in operational existence for the forseeable future. However, the directors are aware of certain material uncertainties in respect of its asset under construction which may cause doubt on the Group’s ability to continue as a going concern. The uncertainties are in respect of the funding and the implementation of the asset under construction which are described in critical accounting estimates and judgements as per note 3 below.


3 Critical accounting estimates and judgements

[…] Asset under construction

The main asset of the Group is the waste processing and energy production unit which is being constructed. The stage of the construction has been regularly monitored and in the directors’ opinion, good progress has been made and the unit is on budget and schedule. It is envisaged that further funding will be obtained to enable the unit to be completed in the second half of 2018.

Whether REWS succeeds in raising further funds, completing the facility and bringing it on stream on schedule will likely become clear in 2019, when c. £1.3 million of its bonds fall due for repayment (around 45% of its borrowings as at December 2017). The next accounts will be due at the end of June 2019.

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