Spearhead Limited Inc.
27 September 2007
For Immediate Release
27 September 2007
Spearhead Limited, Inc ('Spearhead' or the 'Company')
Interim Results
We take pleasure in announcing the first semester 2007 results for Spearhead
Limited, Inc.
For the six months ended June 30, 2007, Spearhead Limited, Inc. recorded an
operating loss of US$ 925,368 as compared to a loss of US$ 1,307,763 for the
same period in 2006 on turnover of US$ 6,811,737 in 2007 as compared to US$
8,086,005 in 2006, a reduction of 15.8%.
The margin of the IT operations during the first six months of 2007 improved to
US$ 254,714 as compared to a loss of US$ (98,597) in 2006 and the required
corrective measures have been implemented during the last quarter of 2006 and
took effect during the first quarter of 2007 when operations returned to
historic margin levels.
The net loss for the 2007 1st semester of US$ 925,368 includes interest expenses
of US$433,161.
In addition to the IT services consulting business of its SMC subsidiary, the
Company continued to pursue during the semester its acquisition and roll-up
opportunities, with funding provided by Spearhead's Investor Group.
The Board and the investors have agreed to renew the loans in the same
consistent manner as has been done in the past.
Michel Marengere
Chairman
Spearhead Limited, Inc. and Subsidiary
Condensed Consolidated Statement of Operations
For the six months ended June 30,
(Unaudited)
2007 2006
Consulting revenue 6,811,737 8,086,005
Direct expenses 5,898,370 6,693,760
Gross margin 913,367 1,092,245
Selling, general & administrative 658,653 1,190,842
expenses
Net income (loss) from operations 254,714 (98,597)
Merchant banking expenses 746,921 705,166
Interest expense 433,161 504,000
Net loss before income (925,368) (1,307,763)
taxes
Provision for income taxes 0 0
Net loss (925,368) (1,307,763)
Net income per share ($0.02) (0.03)
Weighted average number of shares 40,651,512 40,651,512
Spearhead Limited, Inc. and Subsidiary
Condensed Consolidated Balance Sheets
(Unaudited)
June 30, December 31,
2007 2006
Current assets:
Cash 2,011 1,514
Accounts receivable - trade 2,604,363 2,616,158
Prepaid expenses 97,321 98,331
Future income taxes 120,480 149,766
Total current assets 2,824,175 2,865,769
Property and equipment net 112,470 155,016
Goodwill 2,743,091 2,743,091
Future income taxes 163,822 92,981
Total assets 5,843,558 5,856,857
Current liabilities
Loans Payable Bank 0 22,307
Demand loan 2,322,833 1,937,283
Accounts payable and accrued expenses 4,295,800 4,071,973
Loans payable stockholders' 3,310,578 3,310,578
Loans payable 2,125,859 1,800,859
Total current liabilities 12,055,070 11,143,000
Total liabilities 12,055,070 11,143,000
Stockholders' equity
Capital stock, .001 par value; 200,000,000
shares Authorized;
40,651,512 issued and outstanding 40,651 40,651
Paid in capital 5,716,349 5,716,349
Retained earnings (deficit) (12,168,532) (11,243,154)
Accumulated comprehensive income 200,011 200,011
Total stockholders equity (6,211,512) (5,286,143)
Total liabilities and stockholders' equity 5,843,558 5,856,857
Spearhead Limited, Inc. and Subsidiary
Condensed Consolidated Statements of Cash Flows
June 30, 2007 and June 30, 2006
(Unaudited)
2007 2006
Cash flow from operating activities (925,368) (1,307,763)
Adjustments to reconcile net loss to net cash used
for operating activities:
Depreciation and amortization 28,284 26,544
Change in assets and liabilities, net of effects of
acquisitions and dispositions
(Increase) decrease in accounts receivable 11,795 87,908
(Increase) decrease in prepaid expenses 1,010 (217,941)
Increase (decrease) in accounts payable and accrued 223,827 771,066
expenses
(Increase) decrease in income taxes future (41,556) (7,219)
Total adjustments 223,360 660,358
Net cash provided for (used by) operations (702,078) (674,405)
Cash flows from investing activities
(Purchase) disposal of equipment 14,262 (181)
Cash flows from investing activities 14,262 (181)
Cash flows from financing activities
Borrowings (repayment) on line of credit 363,243 12,105
Borrowing from stockholders 325,000 620,000
Borrowings
Repayment of stockholder loans 0 (3,862)
Cash flows from financing activities 702,505 628,243
Effect of exchange rate changes on cash 13,714
Net increase (decrease in cash) 497 (5,629)
Cash at beginning of period 1,514 6,227
Cash at end of period 2,011 $598
Cash paid for interest 0 67,222
Basis of presentation
These consolidated financial statements of Spearhead Limited, Inc. have been
prepared in accordance with generally accepted accounting principles in the
United States of America ('US GAAP') for interim financial statements and do not
include all the disclosures required in annual financial statements. These
consolidated financial statements should be read in conjunction with the annual
financial statements for the year ended December 31, 2006.
In management's opinion, all adjustments necessary for fair presentation are
reflected in the financial statements. All adjustments made are normal and
recurring in nature. Spearhead Limited, Inc. together with its wholly owned
subsidiary, has followed the same accounting policies and methods of application
as in the most recent audited financial statements.
-end-
Michel Marengere
CEO & Chairman of the Board +1 561 912 9977
Nominated Adviser
Nabarro Wells & Co. Limited
David Nabarro
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