Energy Mad settlement date pushed back to February

Wednesday 22nd November 2017

The settlement date to sell Energy Mad, the energy efficient light bulb maker and marketer, to Ecobulb has been delayed until February next year to give it time to meet the necessary conditions, the chairman said.

The sale is subject to shareholder approval and the proposed settlement date is now Feb. 28 versus a prior date of Nov. 17, although it could be earlier if the parties agree, Energy Mad said.

Chair Brent Wheeler said the delay was because the company is trying to get sales to a certain level to meet the necessary conditions "and it's been slower than we had hoped." He noted both the New Zealand and Australian economies are "uncertain, so sales are uncertain."

On Tuesday, the company said its gross loss was $29,753 for the six months to Sept. 30 versus a profit of $1.54 million in the prior year. "Inventory is being liquidated in a difficult market, with realisations net of holding costs marginally less than estimated as at 31 March 2017," it said. Energy Mad reported operating revenue of $538,917 for the six months versus $3.7 million in the prior year. This reflects the disposal of inventory without replenishment, it said. Its net loss was $505,685 versus $500,327 in the same period a year earlier.

Wheeler said there is no structural change to the agreement with Ecobulb but "we want the conditions to be met before we take it to shareholders." Wheeler said he is confident the conditions will be met, including shareholder approval. The delay in the settlement is not expected to have a material financial impact on Energy Mad.

In May, Energy Mad said the purchaser, Ecobulb, is associated with Chris Mardon, one of the founding shareholders and former director of Energy Mad.

No price was specified but the deal includes an initial agency arrangement for the orderly sale of inventory, a potential sale of specified assets of the group - primarily residual inventory and intellectual property - and the assumption of specific liabilities, being obligations under the agreement between Energy Mad and My Eco for direct sales within New Zealand, and all customer service obligations.

Ecobulb has been paid $164,325 to Sept. 30 under this arrangement and has also assumed employment-related obligations of the group as at May 8, totalling $96,772, Energy Mad said in its half-year report.

Energy Mad last traded down 20 percent, or 0.1 cents, at 0.4 cents, which values the company at $590,000.

(BusinessDesk)

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