Asia Entertainment (NASDAQ:AERL)

Results for First Quarter 2012

• Rolling Chip Turnover for the three months ended March 31, 2012 in the Company�s VIP gaming rooms was $5.4 billion, up 32% year-over-year, compared to $4.1 billion in the same period of 2011.
• Net income, which includes a charge of $1.8 million for the change in fair value of contingent consideration related to the acquisition of King's Gaming, grew 19% to $15.3 million, or $0.36 per share (fully diluted) in the first quarter of 2012 from $12.9 million, or $0.37 per share (fully diluted) in the same period of 2011.
• Non-GAAP income before amortization of intangible assets and the change in fair value of contingent consideration related to the acquisition of King's Gaming was $18.4 million, or $0.43 per share (fully diluted) for the three months ended March 31, 2012, an 11% increase as compared to income of $16.5 million or $0.48 per share (fully diluted) for the three months ended March 31, 2011.

The increase in net income and Non-GAAP income in the period was due primarily to higher revenue generated from increased Rolling Chip Turnover, organic growth, the reinvestment of accumulated earnings, increased lines of credit from the casino license holders, increased shareholder loans for additional cage capital and the opening of the VIP gaming room at the Galaxy Macau� in May 2011.

Mr. Man Pou Lam (Mr. Lam), Chairman of AERL, stated, "We are pleased with our first quarter 2012 performance, which resulted from our ability to increase Rolling Chip Turnover for our VIP gaming rooms and the addition of a VIP room at the Galaxy Macau�. In the first quarter of 2012, AERL generated 31% year-over-year revenue growth, exceeding overall gross gaming revenue growth in Macau of 27% and growth in overall Macau VIP Baccarat of 24%, according to the Macau Gaming Inspection and Coordination Bureau. We continue to expect additional Rolling Chip Turnover and revenue growth in 2012."

Outlook for 2012

For the first three months of 2012, AERL's monthly average Rolling Chip Turnover was $1.8 billion. The Company's Rolling Chip Turnover year-to-date through March 31, 2012 in Macau was $5.4 billion, an increase of 32% year-over-year, compared to $4.1 billion for the first three months of 2011.

Mr. Lam further stated, "We are continuing to forecast double-digit growth in Rolling Chip Turnover for 2012. For the first three months of 2012, our Rolling Chip Turnover growth of 32% exceeded our original guidance of 25% growth. We are maintaining our average monthly Rolling Chip Turnover guidance for our three existing VIP rooms in Macau of $2.08 billion per month (subject to monthly fluctuations), which equates to a total of approximately $24.96 billion for full year 2012, up from $19.93 billion in 2011."

"We believe that for remainder of 2012, all of our revenue will continue to be generated on a fixed commission basis of Rolling Chip Turnover. We remain committed to our Non-GAAP income guidance for the year ended December 31, 2012 of $88 million to $95 million based on the current and expected performance of our existing three VIP gaming rooms in Macau," concluded Chairman Lam.

HONG KONG--(BUSINESS WIRE)--Asia Entertainment & Resources Ltd. (“AERL”) (NASDAQ: AERL), which operates through its subsidiaries and related promoter companies as a VIP room gaming promoter, today announced unaudited Rolling Chip Turnover (as defined below) for the month of December 2011 at the company’s VIP rooms in Macau was US$1.756 billion, up 31% year-over-year compared to US$1.339 billion for the month of December 2010. This compares with a year-over-year increase in gross gaming revenue for Macau of 25% for December 2011.

For 2011, AERL’s Rolling Chip Turnover was US$19.932 billion (an average of $1.661 billion per month), up 91% year-over-year, compared to US$10.423 billion (an average of $869 million per month) for 2010. Macau gross gaming revenue increased 42% for 2011.

“While we are pleased that we continue to outperform the Macau industry figures, December 2011 results were affected by a lower than anticipated chips turnover during the final 10 days of the month for the company as well as Macau in general,” said AERL Chairman Lam. “However, our collection period, or days sales outstanding, remains stable and averages under 30 days. We expect our business would continue to grow in 2012 and generate strong earnings for our shareholders.”

GeoInvesting has come across third party due diligence by Robert Carter on Asia Entertainment (AERL).  The author of the report addresses how and why he expects quarterly EPS to grow through Q4 2013, and what he feels are key catalysts that could accelerate the earnings growth.

The author also goes on to provide documentation which he believes that the company's SEC documents are a true representation of AERL's operations.

http://www.geoinvesting.com/companies/duediligence/aerl_asian_wealth_play_11082011.aspx


Disclaimer: GeoInvesting has no affiliation with Robert Carter in any way, nor has it vetted this information in any way. The GeoTeam does not attest to the accuracy of the information contained in this report and always urges investors to conduct their own due diligence.

Future Sources and Uses of Cash
 
We expect that our future liquidity and capital requirements will be affected by:
 
  · Capital requirements related to future acquisitions; 
  · Cash flow from acquisitions; 
  · Working capital requirements; 
  · Obtaining funds via as a result of the exercise of our warrants by warrantholders; 
  · Raising funds through the private placement of our securities; and 
  · Accumulation of earnings.

HONG KONG--(BUSINESS WIRE)--Asia Entertainment & Resources Ltd. (“AERL” or the “Company”) (NASDAQ: AERL), which operates through its subsidiaries and related promoter companies as a VIP room gaming promoter, today announced that its Board of Directors has authorized a regular semi-annual cash dividend of $0.10 per outstanding ordinary share each year after the release of the Company’s financial results for the six months ending June 30, and, for each year after the release of the Company’s financial results, an amount per outstanding ordinary share equal to (i) 15% of the Company’s non-GAAP net income for the most recently completed fiscal year less the amount paid pursuant to the immediately previous six-month dividend, divided by (ii) the number of ordinary shares outstanding on the record date for such dividend.

“We believe that the Company is adequately capitalized to significantly grow its VIP business over the long-term while at the same time returning capital to shareholders at a meaningful rate”

The record date for each period’s dividend will be set by the Company’s management to be as close as practicable to, but no less than, 15 days after the public release by the Company of the financial results for the applicable six-month period and fiscal year end. The payment date for each period’s dividend will be set by the Company’s management to be as close as practicable to, but no less than, 10 days after the record date. The first dividend will be paid after the release of financial results for the six-month period ended June 30, 2011.

The Company also announced today that its Board of Directors has authorized the establishment of a share repurchase program for the Company to purchase up to two million of its ordinary shares on the open market at prices to be determined by the Company’s management. In order to comply with our insider trading policy, the program will begin after the release of the Company’s financial results for the six-month period ended June 30, 2011 and will expire on June 30, 2012. Purchases pursuant to the program may be made from time to time in accordance with SEC rules and regulations through open market transactions, subject to market conditions, the Company’s share price and other factors. The repurchase program may be modified, suspended or discontinued at any time.

“We believe that the Company is adequately capitalized to significantly grow its VIP business over the long-term while at the same time returning capital to shareholders at a meaningful rate,” said AERL Chairman Lam. “With cage capital expected to exceed $200 million as of June 30, 2011, the Board of Directors believes that we are now in a healthy position to pay a dividend to our shareholders. In addition, the repurchase program further validates our commitment to our shareholders, as we intend to purchase shares of AERL when we believe the market does not adequately reflect the value of our business.”

First Quarter Results:

• Revenue for the three months ended March 31, 2011 was $51.3 million, up 103% from $25.3 million in the same period of 2010.
• GAAP earnings per share ("EPS") for the three months ended March 31, 2011, based on net income after deduction of $2.4 million change in fair value of contingent consideration for the acquisition of King’s Gaming Promotion Limited ("King’s Gaming"), was $0.37 for both basic weighted average shares (approximately 34.6 million) and fully diluted weighted average shares (approximately 35.3 million).
• Non-GAAP income including pre-acquisition profit, before amortization of intangible assets and change in fair value of contingent consideration grew 71% to $16.5 million in the three months ended March 31, 2011 from $9.7 million (including pre-acquisition profit) in the same period of 2010 due to organic growth, an increase in shareholders’ loans, an increase in cage capital related to the additional capital of $35.5 million from warrant exercises, and the addition of the VIP gaming room at the Venetian Macao-Resort-Hotel in connection with the acquisition of King’s Gaming.
• Non-GAAP EPS (basic and diluted) before amortization of intangible assets and the change in the fair value of contingent consideration for the three months ended March 31, 2011 was $0.48.

AERL Chairman Lam stated, "The first quarter of 2011 showed continued strong growth, with another quarter of triple-digit revenue growth, as a result of a significant increase in the Rolling Chip Turnover for our VIP gaming rooms in Macau, as well as the addition of the VIP gaming room at the Venetian Macao-Resort-Hotel in November 2010. For the first quarter of 2011, AERL generated 103% year-over-year revenue growth, exceeding the overall growth in Macau of 43% according to the Macau Gaming Inspection and Coordination Bureau (DICJ), while our Non-GAAP income including pre-acquisition profit, before amortization of intangible assets and change in fair value of contingent consideration increased 71% from the prior-year period. We expect strong organic growth to continue going forward and are very excited about opening our latest VIP room at the Galaxy Macau in Cotai in four days."

"We believe that for 2011, the large majority of the business will be on a fixed commission basis. We are reiterating our Non-GAAP income guidance of $62 million to $68 million for 2011 based on the current performance of our existing three VIP gaming rooms in Macau," concluded Chairman Lam.

Fourth Quarter Results:

• Revenue for the three months and year ended December 31, 2010 was $43.1 million and $127.0 million, respectively, up 102% and 110% from $21.3 million and $60.5 million in the same periods of 2009.
• Income including pre-acquisition profit and before amortization grew 100% to $11.5 million and 145% to $38.1 million, respectively, in the three months and year ended December 31, 2010 from $5.7 million and $15.5 million in the same periods of 2009, due to the shift toward a more commission-based business for 2010, organic growth, an increase in cage capital due to the $35.5 million warrant exercise, and the addition of the VIP gaming room at the Venetian Macao-Resort-Hotel. Of note, the Iao Kun VIP room at the MGM Hotel and Casino had a win rate in 2010 below the normalized win rate of 2.90%. If it had a fixed commission (equivalent to the normal 2.90% win rate) in 2010, the earnings derived from the chips turnover at the VIP room would increase by approximately $3.3 million for the full year 2010.
• Non-GAAP earnings per share (EPS) derived from income including pre-acquisition profit and before amortization for the year ended December 31, 2010 was $2.69, based on a basic weighted average share count of 14,177,408, and $2.17 based on a fully diluted weighted average share count of 17,571,255.

AERL Chairman Lam stated, "2010 was a strong year for our company, with triple-digit revenue growth during the year, primarily due to our ability to increase the Rolling Chip Turnover for our VIP gaming rooms in Macau, as well as the addition of the VIP gaming room at the Venetian Macao-Resort-Hotel in November. For 2010, AERL generated 110% year-over-year revenue growth, exceeding the overall growth in Macau of 58% according to the Macau Gaming Inspection and Coordination Bureau (DICJ), while our income including pre-acquisition profit and before amortization increased 145% from last year. In addition, for 2010, there was approximately $10.4 billion in Rolling Chip Turnover, representing 101% year-over-year growth. We are seeing continued strength thus far in the new year and we expect strong double-digit growth in Rolling Chip Turnover for the full year 2011."

"We believe that for 2011, the large majority of the business will be on a fixed commission basis. We are raising our net income guidance to $62 million to $68 million for 2011 based on the current performance of our existing three VIP gaming rooms in Macau," concluded Chairman Lam.

Asia Entertainment & Resources Ltd. today announced the results of its warrant redemption, which concluded on October 28, 2010. The ordinary share purchase warrants were originally issued by AERL, which was formerly known as CS China Acquisition Corp. (“CS China”), in connection with CS China’s initial public offering in August 2008.

Of the 14,648,000 warrants outstanding and available for exercise, 7,095,790 non-insider warrants were exercised at US$5.00, raising gross proceeds of approximately $35.5 million for AERL, while 3,944,210 non-insider warrants expired unexercised, and the holders of these warrants were paid US$0.01 per warrant upon their extinguishment. 3,608,000 were considered insider warrants, and 3,505,771 of these warrants were submitted for cashless exercise into 1,343,050 shares. Of these new shares, 1,296,976 shares (or approximately 97% of new shares) are restricted until October 28, 2011.

As of October 28, 2010, AERL has ordinary shares issued and outstanding of approximately 21.0 million. The Company intends to use the proceeds from the warrant redemption to continue the expansion of its VIP room gaming business. In addition, AERL is announcing preliminary guidance for 2011. Pending the completion of the acquisition of King’s Gaming Promotion Limited, the VIP room gaming promoter that operates at the Venetian Macao-Resort-Hotel on the Cotai Strip, AERL is expecting 2011 Rolling Chip Turnover of US$1.15 billion per month and full year net income of US$55-60 million.

Note: This guidance works out to EPS about $2.71.

Financial Highlights for the Three and Nine Months Ended September 30, 2010

• Rolling Chip Turnover (a metric used by casinos to measure the aggregate amount of players’ bets and overall volume of VIP gaming room business transacted that is defined below) for the three and nine months ended September 30, 2010 in our two VIP gaming rooms in Macau was $2.4 billion and $6.7 billion, respectively, up 49% and 105% year-over-year, compared to $1.6 billion and $3.3 billion in the same periods of 2009.

• Revenue for the three and nine months ended September 30, 2010 was $28.5 million and $83.9 million, respectively, up 105% and 114% from $13.9 million and $39.2 million in the same periods of 2009.

• Net Income (including pre-acquisition profit) grew 1,847% to $7.3 million and 172% to $26.7 million, respectively, in the three and nine months ended September 30, 2010 from $0.4 million and $9.8 million in the same periods of 2009, due primarily to the shift toward a more commission-based business and the overall low win rate during the quarter ended September 30, 2009.

• Non-GAAP earnings per share (EPS) derived from net income (including pre-acquisition profit) for the nine months ended September 30, 2010 was $2.15, based on a basic weighted average share count of 12,378,633, and $1.24 based on a fully diluted weighted average share count of 21,523,430.

• GAAP EPS for the three and nine months ended September 30, 2010 (based on net income after deduction of $4.3 million pre-acquisition profit) was $0.57 and $1.80, respectively, based upon the basic weighted average share counts of 12,810,908 and 12,378,633, respectively, and $0.40 and $1.04, respectively, based upon fully diluted weighted average share counts of 18,345,903 and 21,523,430, respectively.

AERL Chairman Lam stated, “The third quarter of 2010 was our second consecutive quarter of triple-digit revenue growth, primarily due to our ability to increase the Rolling Chip Turnover for our two VIP gaming rooms in Macau. For the nine months ended September 30, 2010, AERL generated 114% year-over-year revenue growth, exceeding the overall growth in Macau of 60% according to the DICJ, while our income including pre-acquisition profit increased 172% from the same period last year. In addition, for the first nine months of 2010, there was approximately $6.7 billion in Rolling Chip Turnover, representing 105% year-over-year growth. We believe the absolute growth of Rolling Chip Turnover will continue through the remainder of the year; however, monthly year-over-year improvement for the last three months of 2010 could be moderated when measured against the highly successful months during the last quarter of 2009.”

Mr. Lam further stated, "Compared to the previous two quarters, the overall performance of this quarter was below expectations mainly due to the low win rate at the Iao Kun VIP Room at the MGM Grand Hotel and Casino – which was 1.94% for the three months ended September 30, 2010 – and the higher than average commission paid to non-marker agents in July. Assuming the Iao Kun VIP room at the MGM Hotel and Casino had a normal win rate of 2.90%, which is equivalent to the fixed commission of 1.25%, and the commission paid to agents on Rolling Chips Turnover remained at the average rate of 0.74% (year–to-date is 0.74%), earnings for the third quarter 2010 would have increased by approximately $2.1 million which would have resulted in total earnings of approximately $9.3 million for the quarter."

Outlook for 2010

For the first nine months of 2010, AERL’s Rolling Chip Turnover averaged $748 million per month. The Company’s Rolling Chip Turnover year-to-date through September 2010 in Macau was $6.734 billion, an increase of 105% year-over-year, compared to $3.284 billion for 2009.

Chairman Lam further stated, “While the monthly percentage year-over-year growth rates may decline for the remainder of 2010 due to the highly successful last quarter of 2009, we continue to forecast growth. For 2009, the average monthly Rolling Chip Turnover was $433 million. We are maintaining Rolling Chip Turnover guidance for our two existing VIP rooms in Macau to average $700 million to $725 million per month, which equates to a total of $8.4 billion to $8.7 billion for full year 2010, up from $5.19 billion in 2009.”

“We continue to believe that for the remainder of 2010, the majority of the business will be on a fixed commission basis. We are adjusting our income (including pre-acquisition profit) guidance to $36 million to $39 million for 2010 based on the current performance of our existing two VIP gaming rooms in Macau,” concluded Chairman Lam.

Financial Highlights for the Three and Six-months Ended June 30, 2010 

• Rolling Chip Turnover (a metric used by casinos to measure the aggregate amount of players’ bets and overall volume of VIP gaming room business transacted that is defined below) for the three and six-months ended June 30, 2010 in our 2 VIP gaming rooms in Macau was $2.45 billion and $4.34 billion, respectively, up 194% and 160% year-over-year, compared to $831 million and $1.67 billion in the same periods of 2009.
  
• Revenue for the three and six-months ended June 30, 2010 was $30.1 million and $55.4 million, respectively, up 172% and 120% from $11.1 million and $25.2 million in the same periods of 2009.
  
• Income (including pre-acquisition income) grew 176% to $9.5 million and 103% to $19.2 million, respectively, in the three and six-months ended June 30, 2010 from $3.4 million and $9.4 million in the same periods of 2009.
  
• Earnings per share (EPS) derived from income (including pre-acquisition income) for the six-months ended June 30, 2010 was $1.58, based on a basic weighted average share count of 12,158,912, and $1.05 based on a fully diluted weighted average share count of 18,273,664.
  
• GAAP EPS for the three and six-months ended June 30, 2010 (based on net income after deduction of $4.3 million pre-acquisition income) was $0.76 and $1.22, based upon the basic weighted average share counts, and $0.40 and $0.65, based upon fully diluted weighted average share counts.
  
• Total available cage capital at the end of the second quarter was approximately $73.3 million, up 6.2% from $69.0 million the first quarter of 2010.

Outlook for 2010

For the first seven months of 2010, AERL’s Rolling Chip Turnover averaged $745 million per month. Its Rolling Chip Turnover year-to-date through July 2010 in Macau was $5.21 billion, an increase of 150% year-over-year, compared to $2.08 billion for 2009.

Chairman Lam further stated, “While the monthly percentage year-over-year growth rates may decline for the remainder of 2010 due to the highly successful last quarter of 2009, we continue to forecast growth. For 2009, the average monthly Rolling Chip Turnover was $433 million. We are providing Rolling Chip Turnover guidance for our two existing VIP rooms in Macau to average $700 million to $725 million per month, which equate to $8.4 billion to $8.7 billion for the full year 2010, up from $5.19 billion in 2009.

“We continue to believe that for the remainder of 2010, the majority of the business will be on a fixed commission basis.

We are issuing initial income (including pre-acquisition income) guidance of $38 million to $39 million for 2010 based on current performance of our existing 2 VIP gaming rooms in Macau.

“We are delaying our proposed expansion in Jeju, Korea because the continued strength of the Macau VIP gaming market makes it desirable to continue to increase our efforts there. Also, the favorable risk/reward of the commission model in Macau offers more stability than the capital risk of the win/loss split model used in Jeju.”

Asia Entertainment is redeeming its warrants:

"it will be sending out redemption notices to all of the record holders of its issued and outstanding ordinary share purchase warrants, which trade under the ticker symbol AERLF. The final redemption date for the warrants will be October 28, 2010 (the “Redemption Date”). The warrants are currently exercisable. Holders of warrants who have not exercised them by the Redemption Date will be paid $0.01 per warrant, and the warrants will be extinguished.

In accordance with the Warrant Agreement governing the warrants, AERL is entitled to redeem these warrants because the last sales price of its ordinary shares was $8.50 or greater for more than 20 of the trading days within the last 30 day trading period ending on the third business day prior to the notice date of redemption sent to warrant holders of record, and because there is a current and effective registration statement covering the ordinary shares underlying the warrants. The closing price of the AERL’s ordinary shares on June 24, 2010 was $7.50.

The underlying common stock has a wide bid/ask spread that currently stands at $2.25 by $9.60. The warrants have a strike price of $5.00. The arbitrage opportunity that potentially existed with the warrants will evaporate, unless the bid price rises above $5.00 before the redemption date.

Outlook for 2010

For the first five months of 2010, AERL’s Rolling Chip Turnover averaged $729 million per month. Its Rolling Chip Turnover year-to-date through May for 2010 in Macau was $3.65 billion, an increase of 169% year-over-year, compared to $1.36 billion for 2009.

Chairman Lam further stated, “While the monthly percentage year-over-year growth rates may decline for the remainder of 2010 due to the highly successful last quarter of 2009, we continue to forecast growth. For 2009, the average monthly Rolling Chip Turnover was $433 million. We are providing Rolling Chip Turnover guidance for our two existing VIP rooms in Macau to average $700 million to $725 million per month, which equates to $8.4 billion to $8.7 billion for the full year 2010, up from $5.19 billion in 2009.

“We continue to believe that for the remainder of 2010, the majority of the business will be on a fixed commission basis. We are issuing initial pro-forma, non-GAAP net income guidance of $38 million to $39 million for 2010 based on our existing 2 VIP gaming rooms in Macau.

“We are delaying our proposed expansion in Jeju because the continued strength of the Macau VIP gaming market makes it desirable to continue to increase our efforts there. Also, the favorable risk/reward of the commission model in Macau offers more stability than the capital risk of the win/loss split model used in Jeju.”

The GeoTeam® is monitoring the warrants of Hambrecht Asia Acquisition Corp. (OTCBB:HMAQF) and CS China Acquisition Corp. (OTCBB:CSAQF). Both companies have entered into business combination agreements with Asian firms.

We are hoping that the respective warrants will provide similar arbitrage opportunities as TMI and HOL warrants have thus far.

Investors need to be aware of possible amendments that could negatively effect the value of the warrants. One common example is an amendment to increase the warrant exercise price. Also, the arbitrage strategy fails if shareholders do not ultimately approve a business combination within a certain allotted time.

See research note for TMI arbitrage strategy
See research note for HOL arbitrage strategy

Hambrecht Asia Acquisition Details

We have emailed Hambrecht Asia Acquisition Corp. requesting information on its proposed business combination.

Underlying Symbol- AERCF
Warrant Symbol- AERLF

Possible arbitrage strategy if shareholders approve the proposed business combination

Data to be considered:

• Current Price of Common Stock: $7.73
• Current Ask Price of Warrants: $0.55 (warrants have a wide bid/ask spread)
• Strike price of Warrants: $5.00
• Implied intrinsic value of warrants: $7.73 - $5.00= $2.73

Strategy

• Buy the warrants at current price of $0.55.
• If the business combination is completed and the warrants become exercisable then the warrants should approach the implied intrinsic value.
• Profit = (New Value of Warrant, Properly Priced) minus $0.55.

CS China Acquisition Details

Underlying Symbol- CSAQF
Warrant Symbol- CSAXF

Target Firm- Asia Gaming & Resort Limited, (See Release)

Asia Gaming is an investment holding company. The principal business activities of its wholly owned subsidiaries are to hold Profit Agreements with VIP Room gaming promoter companies and to receive 100% of the profit streams from the Promoters. The Promoters currently participate in the promotion of two major luxury VIP gaming facilities in Macau, China, the largest gaming market in the world.

See incentive financial targets.

Possible arbitrage strategy if shareholders approve the proposed business combination

Data to be considered:

• Current Price of Common Stock: $5.70
• Current Ask Price of Warrants: $0.44 (warrants have a wide bid/ask spread)
• Strike price of Warrants: $5.00
• Implied intrinsic value of warrants: $5.70 - $5.00= $0.70

Strategy

• Buy the warrants at current price of $0.44
• If the business combination is completed and the warrants become exercisable then the warrants should approach the implied intrinsic value.
• Profit = (New Value of Warrant, Properly Priced) minus $0.44

CS China currently has 6.9 million common shares outstanding and 14.648 million warrants inclusive of shares and warrants held by management.

CS China will issue 10.35 million shares and 10.35 million warrants at closing. The warrants will have a strike price of $ 6.10 and will be exercisable during the five-year period from their date of issuance but only if AGRL annual U.S. GAAP net incomes exceed US$ 30 million for the fiscal year preceding the date of exercise

Shareholders may earn up to an additional 17.2 million shares of the Company’s common stock, subject to the achievement of the following net income targets:

Source: Business Wire (October 13, 2009)

^a The GeoTeam® calculated implied EPS figures using 21.5 million diluted shares for 2009 as the initial base amount and adding incentive shares in subsequent years assuming net income targets are met. We did this only as a frame of reference as the figures do not take into account the possibility of any future dilutive events. (After the closing of the share exchange, we have calculated that there will be approximately 31.6 million fully diluted ordinary shares outstanding.  We do not use the treasury method in our share calculations. However, doing so would lead to higher EPS numbers. We are contacting management to confirm our share assumptions).