AMP.L Regulatory News (AMP)

8 Mar 2006 07:04

Amphion Innovations PLC08 March 2006 8 March 2006 Amphion Innovations plc Preliminary Results Show 24% Increase In Net Asset Value Per Share Over Four Months Since IPO Strong Progress with Partner Companies Amphion Innovations plc (LSE:AMP) ("Amphion" or "the Company"), the developer oftechnology and life sciences businesses, today announces its audited preliminaryresults for the period from the incorporation of Amphion on 7 June 2005 throughto 31 December 2005. Amphion floated on the AIM market of the London Stock Exchange on 23 August2005, placing 20 million shares of the Company at 25p per share, raising £5million (approx. $8.5 million US). On 5 December 2005, Amphion placed anadditional 3.6 million new shares at 27.5p per share, raising £1 million(approx. $1.7 million US). Financial Highlights • Revenues of $319,673 and a fair value gain on investments of $3,550,094 • Net Assets increased to $24.1 million ($19.6 million as of 23 August 2005 AIM floatation) • Net Asset Value Per Share up 24% to 14.98p (12.10p as of 23 August 2005 AIM floatation) • Earnings per share of $.02 Partner Company Highlights • WellGen, our nutrigenomics company, uses a proprietary technology to discover and develop ingredients from plants and foods for wellness products. WellGen completed in vitro and in vivo studies on bioactive ingredients in their Inflammation and Obesity Programmes, including a potent anti-inflammatory derived from black tea and an obesity product derived from orange peel. WellGen received a $1 million investment from Amphion on 30 Aug 2005 as part of a $3 million financing that completed after the close of the reporting period. The new investments will allow WellGen to advance several technical programmes and will lead to significant product introductions. • Motif BioSciences, our population genetics company, received a $500,000 investment from Amphion on 30 Dec 2005 as part of an oversubscribed $1.875 million financing that completed after the close of the reporting period. Motif has since initiated sample collection and analysis in the Persian/ Arabian Gulf and made key hires to do so. • Durham Scientific Crystals, a spin-out of Durham University creating semi-conducting materials for medical imaging, received a £1m investment from Amphion, filed five semiconductor patents, and successfully completed its first European Space Agency contract, earning a second. • Supertron Technologies Inc., developer of electronic components that dramatically improve the imaging capabilities of MRI scanners, received a $1m investment from Amphion. • FireStar released EdgeNode, a software product designed to simplify the integration of back-office transactions between multiple enterprises. FireStar also filed a broad patent for the technology, with detail examples of 17 different applications. FireStar received a $980,000 investment from Amphion. • Axcess (AXSI.OB), our company working on applications of RFID (radio frequency identification) technologies, booked record RFID revenues of $986,377 during 2005 (of $1,080,240 in total revenue) with gross margins of 40%. 4Q2005 RFID revenues represented an increase of 177% over 4Q2004 and 139% over 3Q2005. Amphion made an additional $750,000 investment on 30 December 2005, during the reporting period, and the investment was announced on 3 January 2006. • Beijing Med-Pharm (BJGP.OB) saw a share price rise during the period from $1.65 to $3.87. Amphion's investment experienced an attendant increase in value from $1.1 million to $2.6 million. BMP announced agreements to distribute Cytokine PharmaSciences' Cervadil and pSivida's BrachySil into China. BMP also received approval for their acquisition of Beijing Wanwei Pharmaceutical Co., Ltd. and announced their intention to acquire a majority interest in Rongheng Corp., a Shanghai distributor. Richard Morgan, CEO of Amphion, said: "We are highly satisfied with the progress made by each of our partner companiessince Amphion's IPO in August 2005, reflected in the 24% uplift in Net Asset Value Per Share. "We believe that our partner companies have tremendous potential and expect tobe able to announce material newsflow over the coming year. 2006 has startedstrongly for Amphion Innovations and we expect to see further progress withinour existing portfolio. We also expect to add at least one new partner companyduring the year. "We look to the future with great confidence." Enquiries: Amphion Innovations +1 (212) 210-6224 Ben Austin, Investor Relations +1 (917) 686-3979 mobile Financial Dynamics +44 207 831 3113 Ben Atwell / John Gilbert A meeting to review company financials will be held at the offices of FinancialDynamics, Holborn Gate, 26 Southampton Buildings, London WC2A 1PB at noon onMarch 8. For more details, please call Claire Rowell on 020 7269 7285. Note to Editors: Company Summary: Working in partnership with universities and corporations seeking tocommercialise their intellectual property, Amphion Innovations plc utilises aproven company creation and building process, staying deeply involved with theirpartner companies before seeing them through to a public offering or trade sale. This process has helped to build a group of companies including Celgene (Nasdaq:CELG, currently valued at more than $13B), MediSense (formed from intellectualproperty developed at two UK Universities and subsequently sold to Abbott Labsfor $920M), and Vortech (medical imaging company, acquired by Kodak). Amphion currently holds a large stake in each of seven partner companies, iscontinually evaluating new opportunities, and expects to add one new partnercompany during 2006. On the Web: www.amphionplc.com 2005 Overview Amphion Innovations plc was incorporated on 7 June 2005 and acquired the assetsof Amphion Capital Partners LLC, allowing Amphion's senior management theopportunity to extend their 25-year track record developing and operatingcompanies in the life sciences and medical technology markets. Working in partnership with universities and corporations seeking tocommercialise their intellectual property, the Amphion team utilises a provencompany creation and building process, staying deeply involved with theirpartner companies over a long period of time before seeing them through to apublic offering or trade sale. This method has assisted in the creation ofcompanies with aggregate market capitalisations of well over US $13 billion. Amphion Innovations plc was admitted to the AIM (Alternative Investment Market)of the London Stock Exchange on 23 August 2005 and currently trades as (LSE:AMP). The Company placed 20 million new shares representing 22.22% of theCompany at 25 pence each, raising a total of £5 million (approx. $8.5million US). On 5 December 2005, Amphion placed 3.6 million additional newshares of the Company at 27.5 pence each, raising £1 million (approx.$1.7 million US), for a total raised for the year of £6 million (approx.$10.2 million US). The results to 31 December reflect excellent progress with Amphion's sevencurrent partner companies. Amphion expects to add an additional partner companyduring 2006 and is actively evaluating a number of candidates in the UK and theUS. Partner Companies WellGen, Inc. (WellGen) is a nutrigenomics company using proprietary technologyto discover and develop food and dietary supplement ingredients from plants andfoods to market into the health and wellness markets. WellGen is a spin out ofRutgers University and has an exclusive worldwide license to a proprietaryscreening technology that screens food and plant extracts for their impact ongene expression associated with the onset or proliferation of cancer, arthritis,obesity, and other human diseases. WellGen received an additional $1 million investment from Amphion in August2005. This was part of a $3 million Series B financing that completed after theclose of the reporting period. This financing has allowed WellGen to advanceits Obesity and Inflammation Programmes, testing compounds regulating genesknown to be associated with these two conditions. Functional food ingredients coming out of these programmes are anticipated tocontrol weight or reduce pain via a gene-regulating mechanism of action that isdifferent from those of other products on the market. Pre-clinical studies werecompleted in 2005 and WellGen anticipates human clinical studies commencing in2006. WellGen is expected to seek additional capital in 2006 to advance these humanclinical trials. WellGen has hired industry veteran Arthur H. Finnel to serveas CFO. Mr. Finnel offers more than thirty years of leadership experience withboth public and privately held companies such as Bionova Holding Corporation,Mars, Inc. and the Wharton Applied Research Center. Amphion's fully-diluted ownership stake in WellGen was 17.92% as of 31 December2005. Durham Scientific Crystals, Ltd. (DSC) is a spin out from Durham University (UK)focused on the application of patented, unique semi-conducting materials to thefield of medical imaging. DSC produces radically improved and more costeffective semiconductor materials than are currently available, which are usedin detectors for medical, security and defence digital x-ray imaging. Thesematerials have the potential to revolutionise the medical x-ray imaging marketby enabling the transition from analogue to digital, dramatically improving thescreening of baggage in airports and railways, and allowing the manufacture ofin-demand handheld scanners. DSC has a strong and growing IP (patent)portfolio. The diagnostic imaging market is a $70 billion industry in the US, representingapproximately 10% of all expenditures for medical care. X-ray based systemsdominate the diagnostic imaging market in terms of growth and revenue, with overa 50% share, so the transition to digital X-ray imaging represents enormousmarket potential. DSC received an additional £1 million ($1.8 million) investment fromAmphion in September 2005. This has allowed DSC to greatly expand its patentportfolio by filing five new key semiconductor patents to add to DSC's issuedmaterial processing patents. These will extend DSC's lead in materials scienceand allow new and advanced x-ray detectors and scanners to be developed. DSCsuccessfully completed its first European Space Agency contract in December andhas been rewarded with a second contract, set to begin after the reportingperiod, in 2006. An exemplar of the high-growth companies in Sedgefield'sNetPark technology park, DSC was visited by the Prime Minister in December 2005. Amphion's fully-diluted ownership stake in DSC was 28.60% as of 31 December2005. Motif BioSciences (Motif) is a population genetics company focused ondiscovering genes causing common diseases by utilising human genetic data fromthe Persian/Arabian Gulf region. Amphion made a $500,000 investment in Motif during the reporting period, on 30December 2005, and the investment was announced on 3 January 2006. Thisinvestment was part of a $1.875 million financing that has completed since theclose of the reporting period and was oversubscribed. The monies raised are being spent on sample collection and analysis. Motif hashired Dr. Kevin Arnold, formerly the Executive Director of Operations ofGenaissance Pharmaceuticals, who now serves as the Executive Director of GenomicOperations at Motif. Manish Pungliya, formerly a Bioinformatics Scientist atGenaissance Pharmaceuticals, has been hired to lead Motif's bioinformaticseffort. Amphion's fully-diluted ownership stake in Motif was 51.28% as of 31 December2005. Supertron Technologies, Inc. (Supertron) develops, manufactures and marketselectronic components and systems based upon superconductors for the MagneticResonance Imaging (MRI) markets for both clinical and pre-clinical markets,including neurological, orthopaedic, cardiac, drug discovery and image guidedtherapy applications. Supertron, founded in 1999, is a spin out from Columbia University and is basedin Newark, New Jersey (USA). The company is developing next-generationhigh-performance medical imaging products that dramatically improve the imagingcapabilities of all MRI scanners. Amphion made an additional $1 million investment in October 2005. Amphion's fully-diluted ownership stake in Supertron was 27.38% as of 31December 2005. FireStar develops software that assists institutions in automating businesstransactions between multiple companies. FireStar addresses a very large,existing market for connectivity products. Their product automatically enablesvarious types of software systems (both new and legacy, and within and acrossbusinesses) to speak to each other and pass data back and forth without costlyand time-consuming maintenance or new software development. FireStar in December 2005 announced the release of EdgeNode, a software productdesigned to simplify the integration of back-office transactions betweenmultiple enterprises. FireStar also booked its first customer for EdgeNode andfiled a broad patent for the technology, with detail examples of 17 differentapplications. Additionally, Raymond Mackenzie, formerly of Lazard Freres andMorgan Stanley, has been named to the Board of Directors. Amphion made an additional $980,000 investment in December 2005. Amphion's fully-diluted ownership stake in FireStar was 9.80% as of 31 December2005. Axcess (AXSI.OB) provides active systems including enterprise efficiencies,physical security, and transportation logistics, utilising Radio FrequencyIdentification (RFID) technologies. The battery-powered (active) tags locate,track, monitor, count and protect people, assets, inventory and vehicles. Axcess booked record RFID revenue of $986,377 for the twelve months ended 31 Dec2005 (of $1,080,240 in total revenue), an increase of 28% from $772,475 in 2004. RFID revenue during 4Q2005 represented an increase of 177% from 4Q2004 and 139%from 3Q2005. For the full year 2005, gross margin was 40%. Axcess alsoannounced a fourth patent award. Amphion made an additional $750,000 investment during the reporting period, on30 December 2005, and the investment was announced on 3 January 2006. Amphion's fully-diluted ownership stake in Axcess was 6.68% as of 31 December2005. Beijing Med-Pharm Corp. (BJGP.OB) (BMP) is the first-ever foreign company toacquire a Chinese pharmaceutical distribution enterprise. By combiningpharmaceutical distribution assets with BMP's existing sales and marketingoperations in nine offices throughout China, BMP is able to offer end-to-endservices to Western companies wishing to register and sell their pharmaceuticalsproducts into this large and growing market. BMP saw a rise in share price from $1.65 per share as of Amphion's offering to$3.87 per share at the close of 4Q2005. Amphion's investment in BMP experiencedan attendant increase in value from $1.1 million as of 23 August 2005 to $2.6million at the close of 4Q2005. During the period, BMP announced agreements to distribute several newpharmaceutical products into China, including Cytokine PharmaSciences' Cervadilin August 2005 and pSivida's BrachySil in October 2005. BMP was notified inOctober 2005 by the People's Republic of China Ministry of Commerce that theiracquisition of a Beijing distributor, Beijing Wanwei Pharmaceutical Co., Ltd.,was approved. This is the first-ever acquisition of a Chinese distributor by anon-Chinese company, made possible by recent statute resulting from China'sentry into the WTO. BMP also announced their intention to acquire a majorityinterest in a second distributor, Shanghai-based Rongheng Corp. In October2005, BMP raised $6.3 million in a private placement. Amphion's fully-diluted ownership stake in BMP was 2.72% as of 31 December 2005. Announcement based on audited accounts The financial information set out below does not constitute the Company'sstatutory accounts, but is derived from its audited consolidated financialstatements for the period from incorporation on 7 June 2005 to 31 December 2005.The auditor's report on those financial statements was qualified due to thedecision not to consolidate its subsidiary, Motif BioSciences, Inc., as requiredby International Accounting Standard 27 "Consolidated and separate financialstatements." Financial Review The total profit for the period was $2,275,419. This resulted in earnings pernormal share of $.02 and is based on revenues of $319,673 and a fair value gainon investments of $3,550,094. Earnings per Ordinary Share Earnings per Ordinary Share were $.02 during the reporting period. Dividend The Directors do not recommend the payment of a dividend. Increase In Net Asset Value Per Share On the 23 August 2005 date of admission, Amphion had net assets of $19.6million, inclusive of proceeds from the offering. Net Asset Value Per Share was12.10p ($0.22). At the 31 December 2005 close of the period, Amphion had net assets of $24.1million. Per Share Net Asset Value was 14.98p ($0.26). This represents a gain of 24% in Net Asset Value Per Share during the reportingperiod, rooted in solid progress with Amphion's seven partner companies. Post Year-End Developments It was with sadness that we reported that Frank Cary, Non-Executive Director ofAmphion, passed away on 1 January 2006. We will miss his leadership andtremendous support of Amphion and its partner companies. Amphion Innovations plcConsolidated income statementFor the period from 7 June 2005 (date of incorporation) to 31 December 2005 Period from Notes 7 June 2005 (date of incorporation) to 31 December 2005Continuing operations US $ Revenue 3 319,673 Other operating income 8,729Administrative expenses (1,632,139) ______ Operating loss (1,303,737) Fair value gains on investments 12 3,550,094Interest income 7 90,966Other gains and losses (34,904) ______ Profit before tax 5 2,302,419 Income tax expense 8 (27,000) ______ Profit for the period 2,275,419 ______ Earnings per share 9 Basic US $0.02 ______ Diluted US $0.02 ______ Amphion Innovations plcCompany income statementFor the period from 7 June 2005 (date of incorporation) to 31 December 2005 Period from 7 June 2005 to Notes 31 December 2005 US $Continuing operations Administrative expenses (1,524,033) ______ Operating loss (1,524,033) Fair value gains on investments 12 3,527,870Interest income 7 90,760Other gains and losses (35,287) ______ Profit for the period 5 2,059,310 ______ Amphion Innovations plcConsolidated balance sheetAt 31 December 2005 Notes 31 December 2005 US $ Non-current assetsFixtures, fittings and equipment 10 26,427Security deposit 18 121,694Investments 12 21,178,415 ______ 21,326,536 ______ Current assetsPrepaid expenses and other receivables 643,488Cash and cash equivalents 2,448,422 ______ 3,091,910 ______ Total assets 24,418,446 ______ Current liabilitiesTrade and other payables 14 354,319 ______ Total liabilities 354,319 ______ Net assets 24,064,127 ______ EquityShare capital 15 1,685,160Share premium account 20,101,328Translation reserve 2,220Retained earnings 2,275,419 ______ Total equity 24,064,127 ______ The financial statements were approved by the board of directors and authorisedfor issue on 7 March 2006. They were signed on its behalf by: Director DirectorRichard M. Mansell-Jones Robert J. Bertoldi Amphion Innovations plcCompany balance sheetAt 31 December 2005 Notes 31 December 2005 US$ Non-current assetsFixtures, fittings and equipment 10 15,942Security deposit 18 121,694Investments 12 21,102,423Investment in subsidiaries 3 ______ 21,240,062 ______ Current assetsPrepaid expenses and other receivables 23 579,807Cash and cash equivalents 2,304,365 ______ 2,884,172 ______ Total assets 24,124,234 ______ Current liabilitiesTrade and other payables 24 278,436 ______ Total liabilities 278,436 ______ Net assets 23,845,798 ______ EquityShare capital 15 1,685,160Share premium account 20,101,328Retained earnings 2,059,310 ______ Total equity 23,845,798 ______ The financial statements were approved by the board of directors and authorisedfor issue on 7 March 2006. They were signed on its behalf by: Director DirectorRichard M. Mansell-Jones Robert J. Bertoldi Amphion Innovations plcConsolidated statement of changes in equityFor the period from 7 June 2005 (date of incorporation) to 31 December 2005 Share Share premium Translation Notes capital account reserve US $ US $ US $ Issue of share capital 15 1,685,160 21,568,320 - Incremental costs directly attributable to issue 16of shares - (1,597,807) - Recognition of share-based payments 19 - 130,815 - Exchange differences arising on translation offoreign operations - - 2,220 Profit for the period - - - ______ ______ ______ Balance at 31 December 2005 1,685,160 20,101,328 2,220 ______ ______ ______ Consolidated statement of changes in equityFor the period from 7 June 2005 (date of incorporation) to 31 December 2005(continued) Retained Notes earnings Total US $ US $ Issue of share capital 15 - 23,253,480 Incremental costs directly attributable to issue 16of shares - (1,597,807) Recognition of share-based payments 19 - 130,815 Exchange differences arising on translation offoreign operations - 2,220 Profit for the period 2,275,419 2,275,419 ______ ______ Balance at 31 December 2005 2,275,419 24,064,127 ______ ______ Amphion Innovations plcCompany statement of changes in equityFor the period from 7 June 2005 (date of incorporation) to 31 December 2005 Share Share premium Retained Notes capital account earnings Total US $ US $ US $ US $ Issue of share capital 15 1,685,160 21,568,320 - 23,253,480 Incremental costs directly attributable to 16 - (1,597,807) - (1,597,807)issue of shares Recognition of share-based payments 19 - 130,815 - 130,815 Profit for the period - - 2,059,310 2,059,310 ______ ______ ______ ______ Balance at 31 December 2005 1,685,160 20,101,328 2,059,310 23,845,798 ______ ______ ______ ______ Amphion Innovations plcConsolidated cash flow statementFor the period from 7 June 2005 (date of incorporation) to 31 December 2005 Period from 7 June 2005 (date of incorporation) to 31 December 2005 US $ Operating activities Operating loss (1,303,737) Adjustments for: Depreciation of fixtures, fittings and equipment 2,333 Advisory fees received in equity instruments 49,192 Advisory fees settled in equity instruments 20,655 Net working capital acquired 162,847 Increase in prepaid & other receivables (643,488) Increase in security deposits (121,694) Increase in trade & other payables 302,839 Income tax (27,000) ______ Net cash used in operating activities (1,558,053) ______ Investing activities Interest received 90,966Cash received from acquisition of business 325,011Purchases of investments (5,660,826)Purchases of equipment (15,714) ______ Net cash used in investing activities (5,260,563) ______ Financing activities Proceeds on issue of shares, net of share issuance costs 9,299,723 ______ Net cash from financing activities 9,299,723 ______ Net increase in cash and cash equivalents 2,481,107Cash and cash equivalents at the beginning of the period -Effect of foreign exchange rate changes (32,685) ______ Cash and cash equivalents at the end of the period 2,448,422 ______ Amphion Innovations plcCompany cash flow statementFor the period from 7 June 2005 (date of incorporation) to 31 December 2005 Period from 7 June 2005 to 31 December 2005Operating activities US $ Operating loss (1,524,033) Adjustments for: Depreciation of fixtures, fittings and equipment 1,781 Advisory fees settled in equity instruments 20,655 Net working capital acquired 214,326 Increase in prepaid & other receivables (579,807) Increase in security deposits (121,694) Increase in trade & other payables 278,433 ______ Net cash used in operating activities (1,710,339) ______ Investing activities Interest received 90,760Cash received from acquisition of business 325,011Purchases of investments (5,660,826)Purchases of equipment (4,677) ______ Net cash used in investing activities (5,249,732) ______ Financing activities Proceeds on issue of shares, net of share issuance costs 9,299,723 ______ Net cash from financing activities 9,299,723 ______ Net increase in cash and cash equivalents 2,339,652 Cash and cash equivalents at the beginning of the period - Effect of foreign exchange rate changes (35,287) ______ Cash and cash equivalents at the end of the period 2,304,365 ______ Amphion Innovations plcNotes to the consolidated financial statements For the period from incorporation on 7 June 2005 to 31 December 2005 1. General information Amphion Innovations plc (the "Company") is a public limited company incorporatedin the Isle of Man under the Companies Acts 1931-2004 on 7 June 2005 withregistered number 113646C. The address of the registered office is 15-19 AtholStreet, Douglas, Isle of Man, IM1 1LB. The principal place of business is 330Madison Avenue, New York, NY, USA, 10017. The principal activities of theCompany and its subsidiaries (the "Group") are to create, build, operate andfinance market-leading technology companies in partnership with corporations,governments, universities and entrepreneurs seeking to commercialise theirintellectual property. The consolidated financial statements include the accounts of AmphionInnovations plc and its two wholly owned subsidiaries, Amphion Innovations USInc., which is incorporated in the United States, and Amphion Innovations UKLimited, which is incorporated in the United Kingdom. These financial statements are presented in US dollars because that is thecurrency of the primary economic environment in which the Company operates. 2. Significant accounting policies The financial statements have been prepared in accordance with InternationalFinancial Reporting Standards (IFRS) as adopted for use in the European Union.However, the directors have departed from IAS 27 Consolidated and SeparateFinancial Statements and have not consolidated the Company's subsidiary, MotifBioSciences, Inc., in the financial statements of the Group. The Directorsbelieve that the presentation of this subsidiary on an unconsolidated basisprovides a fairer presentation of the Group's position. The financial statements have been prepared on the historical cost basis, exceptfor the revaluation of investments. The principal accounting policies adoptedare set out below. Basis of consolidation The consolidated financial statements incorporate the financial statements ofthe Company and entities controlled by the Company (its subsidiaries) with theexception of Motif BioSciences Inc. which is not consolidated, as describedabove. Control is achieved where the Company has the power to govern thefinancial and operating policies of any entity so as to obtain benefits from itsactivities. The results of subsidiaries acquired during the year are included in theconsolidated income statement from the effective date of acquisition. Where necessary, adjustments are made to the financial statements ofsubsidiaries to bring the accounting policies used into line with those used bythe Group. All intra-group transactions, balances, income and expenses are eliminated onconsolidation. Cash and cash equivalents Cash and cash equivalents include balances with banks and demand deposits, whichhave maturities of less than three months at the date of acquisition. Investments Investments are recognised and derecognised on a trade date where a purchase orsale of an investment is under a contract whose terms require delivery of theinvestment within the timeframe established by the market concerned, and areinitially measured at cost, including transaction costs. Investments are classified as fair value through profit and loss. Investmentsare carried at value as determined by management using the International PrivateEquity and Venture Capital Valuation Guidelines. The following broad guidelinesare generally used in security valuations: a) marketable securities which arefreely tradable and for which quotations are readily available are valued usingtheir last closing prices, (b) all other securities are valued at fair value asestimated by management in good faith. Factors generally considered indetermining fair value are the latest offering price from recently executedfinancing transactions related to the investee companies and comparison tosimilar instruments of similar companies. Investments that do not have a quotedmarket price in an active market and whose fair value cannot be reliablymeasured are valued at cost until such time as a fair value can be determined. Revenue recognition Revenue is measured at the fair value of the consideration received orreceivable and represents amounts receivable for and services provided in thenormal course of business. Leasing Leases are classified as finance leases whenever the terms of the lease transfersubstantially all the risks and rewards of ownership to the lessee. All otherleases are classified as operating leases. Foreign currencies Transactions in currencies other than US dollars are recorded at the rates ofexchange prevailing on the dates of the transactions. At each balance sheetdate, monetary assets and liabilities that are denominated in foreign currenciesare retranslated at the rates prevailing on the balance sheet date.Non-monetary assets and liabilities carried at fair value that are denominatedin foreign currencies are translated at the rates prevailing at the date whenthe fair value was determined. Gains and losses arising on retranslation areincluded in net profit or loss for the period, except for exchange differencesarising on non-monetary assets and liabilities where the changes in fair valueare recognised directly in equity. On consolidation, the assets and liabilities of the Group's overseas operationsare translated at exchange rates prevailing on the balance sheet date. Incomeand expense items are translated at the average exchange rates for the periodunless exchange rates fluctuate significantly. Exchange differences arising, ifany, are classified as equity and transferred to the Group's translationreserve. Such translation differences are recognised as income or as expensesin the period in which the operation is disposed of. Retirement benefit costs Payments to defined contribution retirement benefit schemes are charged as anexpense as they fall due. Taxation Income tax expense represents the sum of the tax currently payable and deferredtax. The tax currently payable is based on taxable profit for the period. Taxableprofit differs from net profit as reported in the income statement because itexcludes items of income or expenditure that are taxable or deductible in otheryears and it further excludes items that are never taxable or deductible. TheGroup's liability for current tax is calculated using tax rates that have beenenacted or substantively enacted by the balance sheet date. Deferred taxation is the tax expected to be payable or recoverable ondifferences between the carrying amount of assets and liabilities in thefinancial statements and the corresponding tax basis used in the computation oftaxable profit. Deferred tax is calculated at the tax rates that are expected to apply to theperiod when the liability is settled or the asset realised. Deferred tax assetsand liabilities are not discounted. Fixtures, fittings and equipment Fixtures, fittings and equipment are stated at cost less accumulateddepreciation and any recognised impairment loss. Depreciation is charged so as to write off the cost or valuation of assets overtheir estimated useful lives of 3-5 years, using the straight-line method. Financial instruments Financial assets and financial liabilities are recognised on the Group's balancesheet when the Group becomes a party to the contractual provisions of theinstrument. Financial liabilities and equity Financial liabilities and equity instruments are classified according to thesubstance of the contractual arrangements entered into. An equity instrument isany contract that evidences a residual interest in the assets of the Group afterdeducting all of its liabilities. Trade payables Trade payables are not interest bearing and are stated at their fair value andsubsequently measured at amortised cost using the effective interest ratemethod. Trade payables are measured at fair value. Equity instruments Equity instruments issued by the Group are recorded at the proceeds received,net of direct issue costs. Share based payments The Group has applied the requirements of IFRS 2 Share-based Payment. The Group issues equity-settled share-based payments to certain consultants.Equity-settled share-based payments are measured at fair value at the date ofgrant. The fair value determined at the grant date of the equity-settledshare-based payments is expensed on a straight-line basis over the vestingperiod, based on the Group's estimate of the shares that will eventually vest.The fair value of equity-settled share-based payments attributable to the issueof equity instruments is charged against equity. Fair value is measured using the Black-Scholes pricing model. Use of estimates The preparation of the Group's financial statements requires management to makeestimates and assumptions that affect the reported amounts of assets,liabilities and contingencies at the date of the Group's financials statements,and revenue and expenses during the reporting period. Actual results coulddiffer from those estimated. Significant estimates in the Group's financialstatements include the amounts recorded for the fair value of the investments.By their nature, these estimates and assumptions are subject to measurementuncertainty and the effect on the Group's financial statements of changes inestimates in future periods could be significant. 3. Revenue An analysis of the Group's revenue for the period is as follows: Group Company Period from 7 June 2005 Period from 7 June 2005 to 31 December 2005 to 31 December 2005 US $ US $ Settled in warrants 2,288 -Settled in cash 317,385 - ______ ______ Advisory fee income 319,673 - ______ ______ 4. Business and geographical segments Business segments For management purposes, the Group is currently organised into two businesssegments - advisory services, and investing. These business segments are thebasis on which the Group reports its primary segment information. Segment information about these businesses is presented below. Advisory services Investing Eliminations Consolidated Period from Period from Period from Period from 7 June 2005 to 7 June 2005 to 7 June 2005 to 7 June 2005 to 31 December 2005 31 December 2005 31 December 2005 31 December 2005 US $ US $ US $ US $REVENUEExternal advisory fees 319,673 - - 319,673Inter-segment fees - 278,052 (278,052) - ______ ______ ______ ______ Total revenue 319,673 278,052 (278,052) 319,673Other operating income 8,729 - 8,729Administrative expenses (250,048) (1,659,760) 277,669 (1,632,139) ______ ______ ______ ______ Segment result 78,354 (1,381,708) (383) (1,303,737) Fair value gain on 22,224 3,527,870 - 3,550,094investmentsInterest income 84 90,882 - 90,966Other gains and losses - (35,287) 383 (34,904) ______ ______ ______ ______Profit before tax 100,662 2,201,757 - 2,302,419Income taxes (27,000) - - (27,000) ______ ______ ______ ______ Profit after tax 73,662 2,201,757 - 2,275,419 ______ ______ ______ ______ OTHER INFORMATIONSegment assets 420,302 24,278,188 (280,044) 24,418,446 Segment liabilities 346,642 287,721 (280,044) 354,319 Additions to fixtures, 11,037 17,723 - 28,760fittings and equipmentDepreciation 552 1,781 - 2,333Advisory fees settled in - 20,655 - 20,655equity instruments Geographical segments The Group's operations are located in the United States and the United Kingdom. The following table provides an analysis of the Group's advisory fees bygeographical location of the investment. Advisory fees by geographical location US $ United States 304,863United Kingdom 14,810 ______ 319,673 ______ The following is an analysis of the carrying amount of segment assets, andadditions to fixtures, fittings and equipment, analysed by the geographical areain which the assets are located: Carrying Additions to amount of fixtures, fittings segment assets and equipment US $ US$ United States 24,278,486 28,760United Kingdom 139,960 - ______ ______ 24,418,446 28,760 ______ ______ 5. Profit before tax Profit before tax has been arrived at after charging/(crediting): Group Company Period from Period from 7 June 2005 to 7 June 2005 to 31 December 2005 31 December 2005 US $ US $ Net foreign exchange losses/(gains) (34,904) (35,287) ______ ______ Depreciation of equipment 2,333 1,781 ______ ______ Staff costs (note 6) 520,090 335,211 ______ ______ Auditors' remuneration - audit services 86,000 76,000 ______ ______ Auditors' remuneration - advisory services 254,246 254,246 ______ ______ A further US$338,995 of auditors advisory fees relating to the IPO have beencharged directly against the share premium account (note 16). 6. Staff costs The average monthly number of employees (including executive directors) was: 2005 NumberAmphion Innovations plc and Amphion Innovations US Inc. (employees and costs are shared) 6Amphion Innovations UK Limited 1 ______ Total for the Group 7 ______ Group Company 2005 2005Their aggregate remuneration comprised: US $ US $ Wages and salaries 475,301 313,045Social security costs 36,307 22,166Other pension costs 8,482 - ______ ______ 520,090 335,211 ______ ______ 7. Interest income Group Company Period from Period from 7 June 2005 to 7 June 2005 to 31 December 2005 31 December 2005 US $ US $ Interest income 90,966 90,760 ______ ______ 90,966 90,760 ______ ______ 8. Income tax expense Group Period from 7 June 2005 to 31 December 2005 US $ Isle of Man income tax -Tax on US subsidiary 27,000Tax on UK subsidiary - ______ Current tax 27,000 ______ The Company is exempt from Isle of Man taxation under the terms of the IncomeTax (Exempt Companies) Act 1984. No provision for Isle of Man taxation istherefore required. The Company is treated as a Partnership for U.S. federaland state income tax purposes and, accordingly, its income or loss is taxable directly to its partners. Local taxes are payable by the Company based on itsNew York City taxable net income. The Company has two subsidiaries in the USA and UK, respectively. The USsubsidiary, Amphion Innovation US Inc., is a Corporation and therefore taxeddirectly. The UK subsidiary, Amphion Innovations UK Limited, is liable to UKCorporation tax at rates up to 30% on its taxable profits and gains. The charge for the period can be reconciled to the profit per the consolidatedincome statement as follows: US $ Profit before tax 2,302,419 ______ Tax at the Isle of Man income tax rate of 0% - Effect of different tax rates of subsidiariesoperating in other jurisdictions 27,000 ______ Current tax 27,000 ______ 9. Earnings per share The calculation of the basic and diluted earnings per share attributable to theordinary equity holders of the parent is based on the following data:Earnings Period from 7 June 2005 to 31 December 2005 US $Earnings for the purposes of basic and diluted earnings per share (profit for the period attributable to equity holders of the parent) 2,275,419 ______ Number of shares Period from 7 June 2005 to 31 December 2005 Weighted average number of ordinary shares for the purposes of basis earnings per share 91,305,759 Effect of dilutive potential ordinary shares: Share options 600,000 ______ Weighted average number of ordinary shares for the purposes of diluted earnings per share 91,905,759 ______ 10. Fixtures, fittings and equipment Group Company Fixtures, fittings Fixtures, fittings and equipment and equipmentCOST US $ US $ Additions 15,714 4,677Acquisition of business 13,046 13,046 ______ ______ At 31 December 2005 28,760 17,723 ______ ______ ACCUMULATED DEPRECIATION Charge for the period 2,333 1,781 ______ ______ At 31 December 2005 2,333 1,781 ______ ______ CARRYING AMOUNT At 31 December 2005 26,427 15,942 ______ ______ 11. Subsidiaries Details of the Company's subsidiaries at 31 December 2005 are as follows: Place of incorporation Proportion of Proportion ofName of (or registration) ownership voting Principalsubsidiary and operation interest power held activity % %ConsolidatedAmphion Innovations US Inc. Delaware, USA 100 100 Advisory servicesAmphion Innovations UK Limited England & Wales 100 100 Advisory services Unconsolidated (included in Investments)Motif BioSciences Inc. Delaware, USA 51.28* 57.44 Population genetics * Fully diluted. 12. Investments At fair value through profit and loss Group 31 December 2005 Unrealised Fair Value Cost gain/(loss) US $ US $ US $Public companies:Axcess International Inc. 1,277,290 1,759,521 (482,231)Beijing Med-Pharm Corporation 2,608,380 1,112,100 1,496,280 Private companies:Durham Scientific Crystals, Inc. 1,812,673 1,812,673 -FireStar Software Inc. 2,764,356 2,778,856 (14,500)Motif BioSciences Inc. 6,390,859 4,451,945 1,938,914Supertron Technologies Inc. 1,212,357 1,183,768 28,589WellGen, Inc. 5,112,500 4,529,458 583,042 ______ ______ ______ 21,178,415 17,628,321 3,550,094 ______ ______ ______ (continued from table above) Company 31 December 2005 Unrealised Fair Value Cost gain/(loss) US $ US $ US $Public companies:Axcess International Inc. 1,277,290 1,759,521 (482,231)Beijing Med-Pharm Corporation 2,608,380 1,112,100 1,496,280 Private companies:Durham Scientific Crystals, Inc. 1,812,673 1,812,673 -FireStar Software Inc. 2,764,356 2,778,856 (14,500)Motif BioSciences Inc. 6,390,859 4,451,945 1,938,914Supertron Technologies Inc. 1,136,365 1,130,000 6,365WellGen, Inc. 5,112,500 4,529,458 583,042 ______ ______ ______ 21,102,423 17,574,553 3,527,870 ______ ______ ______ Group 31 December 2005 Fair Value Cost Unrealised US $ US $ US $ Shares 15,923,825 13,028,246 2,895,579Promissory notes 693,348 693,348 -Warrants & options 4,561,242 3,906,727 654,515 ______ ______ ______ 21,178,415 17,628,321 3,550,094 ______ ______ ______ (continued from table above) Company 31 December 2005 Fair Value Cost Unrealised US $ US $ US $ Shares 15,923,825 13,028,246 2,895,579Promissory notes 693,348 693,348 -Warrants & options 4,485,250 3,852,959 632,291 ______ ______ ______ 21,102,423 17,574,553 3,527,870 ______ ______ ______ At 31 December 2005 the two publicly traded companies, Axcess International Inc.("Axcess") and Beijing Med-Pharm Corporation ("Beijing"), are valued based ontheir last quoted closing prices. In regard to the Group's valuation of Axcessand Beijing, the directors have assumed an orderly sale of the stock over anextended period of time and have therefore chosen not to apply a discount to thequoted market price. Durham Scientific is valued at cost. FireStar, Motif,Supertron and WellGen are valued using the latest offering price from recentlyexecuted financing transactions by those companies. Warrants for all companiesare valued at the valuation price less the warrant exercise price plus a factorfor the time value of the warrant. The time value factor is based on thepremise that an in-the-money ten year warrant is worth half the exercise price. The Company owns more than 50% of Motif BioSciences Inc. and should consolidateits financial statements with those of the company under IAS 27 Consolidated andSeparate Financial Statements. However, the directors believe that thepresentation on an unconsolidated basis presents a fairer presentation of theCompany's position. Had the subsidiary, Motif BioSciences Inc., been consolidated, the investment inand the amounts owed by the unconsolidated subsidiary stated in the consolidatedbalance sheet of US$6,390,859 and US$138,008 respectively, would have beenreplaced by increases in various assets and liabilities with a corresponding netdecrease in consolidated reserves of US$5,818,820 and the consolidated profitfor the financial period would have been decreased by US$2,307,689. The Group's ownership percentages of the investments are as follows: Fully-diluted ownership Country of incorporation % Axcess International, Inc. United States of America 6.68Beijing Med-Pharm Corporation United States of America 2.72Durham Scientific Crystals Limited England & Wales 28.60FireStar Software, Inc. United States of America 9.80Motif BioSciences, Inc. United States of America 51.28Supertron Technologies, Inc. United States of America 27.38WellGen, Inc. United States of America 17.92 13. Other financial assets Cash and cash equivalents comprise cash held by the Group and short-term bankdeposits with an original maturity of three months or less. Credit risk The Group's principal financial assets are bank balances and cash, otherreceivables and investments. The credit risk on liquid funds is limited because the counterparties are bankswith high credit-ratings assigned by international credit-rating agencies. The Group has no significant concentration of credit risk. Market and liquidity risk Market risk is the risk that changes in interest rates, foreign exchange rates,equity prices and other rates, prices, volatilities, correlations or othermarket conditions, such as liquidity, will have an adverse impact on the Group'sfinancial position or results. The principal market risk to which the Group isexposed is liquidity risk. Amphion's investments are in Partner Companies that are often development stagecompanies and will likely experience significant negative cash flow. ThePartner Companies may be unable to obtain financing to fund their negative cashflows due to market conditions or lack of operational progress. In theseinstances, though Amphion is not obligated to do so, the Group may feel itnecessary to provide additional investment to the Partner Company. Amphion mayalso be required to spend additional management time on these companies. Adverse market conditions may also delay liquidity events for the PartnerCompanies, thereby requiring additional rounds of financing in which Amphion mayfeel it necessary to participate. During these adverse market conditionsAmphion may also find it difficult to raise additional capital. Amphion seeks to mitigate the risk noted above through its philosophy of workingwith a small number of rigorously selected Partner Companies, assisting them togrow by implementing a consistent and proven methodology developed over themanagement team's 20 years of company building experience. The Group's timetested model of company creation is built on a robust risk management processthat relies on proven, defensible intellectual property sourced from some of theworld's leading corporations and universities. 14. Trade and other payables - Group Trade and other payables principally comprise amounts outstanding for purchasesand ongoing costs. 15. Share capital 2005 2005 £ US $Authorised: 150,000,000 ordinary shares of 1p each 1,500,000 ______Issued for acquisition of business (note 17): 70,000,000 ordinary shares of 1p each 700,000 1,260,000Issued for cash: 23,639,455 ordinary shares of 1p each 236,395 425,160 ______ ______ 936,395 1,685,160 ______ ______ Holders of the ordinary shares are entitled to receive dividends and otherdistributions and to attend and vote at any general meeting. There is a Lock-In Agreement, dated 16 August 2005, between the company,Westhouse (the company's broker), Nabarro Wells (the company's nominatedadvisor), Amphion Capital Partners LLC, the directors and certain applicableemployees holding ordinary shares which states that for a period of 24 monthsimmediately following the admission to AIM, they will not make a sale ordisposal except through the broker of the company to maintain an orderly marketin the ordinary shares. The Company was incorporated with an authorised share capital of £2,000,comprising 200,000 ordinary shares of 1p each. The Company issued two ordinaryshares of 1p each on incorporation on 7 June 2005. On 29 June 2005, the authorised share capital of the Company was increased to£850,000 by the creation of 84,800,000 ordinary shares of 1p each. On 16 August 2005, the authorised share capital of the Company was increased to£1,500,000 by the creation of 65,000,000 ordinary shares of 1p each. Per the Contribution Agreement between Amphion Innovations plc and AmphionCapital Partners LLC dated 16 August 2005, the Company issued 69,999,998ordinary shares to Amphion Capital Partners LLC in return for the transfer ofsubstantially all of Amphion Capital Partners LLC's assets and liabilities (seenote 17). On 23 August 2005, the Company issued 20,000,000 ordinary shares in relation toits initial public offering at 25p per share. On 8 December 2005, the Company issued 3,639,455 ordinary shares from its secondoffering at 27.5p per share. 16. Issue costs The Company incurred costs of US$1,597,807 relating to the issue of shares whichincluded the acquisition of a business and the issue of shares in an IPO on theAlternative Investment Market. The costs were primarily for professionaladvisory fees. These equity transaction costs were deducted from equity inaccordance with IAS 32, Financial Instruments Disclosure and Presentation. 17. Acquisition of business On 23 August 2005, the Group acquired substantially all of the assets andliabilities of Amphion Capital Partners LLC relating to its business ofcreating, operating and financing life science and technology companies inpartnership with corporations, governments, universities and entrepreneurs forconsideration of 70,000,000 ordinary shares of the Company. The Company hasrecorded the transaction and the ordinary shares issued at the carrying value ofthe net assets purchased of US$12,466,111. At the time of the acquisition, Amphion Innovations plc was a wholly ownedsubsidiary of Amphion Capital Partners LLC. Therefore, the Company is applyingthe scope exclusion from IFRS 3 Business Combinations for business combinationsinvolving entities under common control. The relief from the requirements torecord the premium in accordance with section 46 of the Isle of Man CompaniesActs 1931-2004 is provided by the Isle of Man Companies Acts 1931-2004 "Companies (Share Premium Account) Regulations 2001. The regulation allows theissuing company to record the premium on the shares at the minimum premiumvalue, which is the excess of the carrying value of the net assets transferredover the nominal value of the shares. Carrying value US $ Investments 11,965,206Deposits 123,605Equipment 13,046Other receivables 265,685Prepaid expenses 25,243Cash and cash equivalents 325,011Trade and other payables (251,685) ______ Total consideration 12,466,111 ______ Satisfied by: Ordinary shares issued at nominal value (note 15) 1,260,000Share premium 11,206,111 ______ Total consideration 12,466,111 ______ 18. Operating lease arrangements At the balance sheet date, the Group has outstanding commitments undernon-cancellable operating leases, which fall due as follows: 2005 US $ Within one year 225,750In the second to fifth years inclusive 930,090After five years 239,295 ______ 1,395,135 ______ Operating lease payments represent rentals payable by the Company for its officeproperty which was transferred from Amphion Capital Partners LLC in accordancewith the Contribution Agreement, dated 16 August 2005 and rentals payable byAmphion Innovations UK Limited for its office space based in the United Kingdom. The term of the New York lease is seven years. Amphion Capital Partners LLCwas required to give a security deposit of US$106,102 to the landlord which wastransferred to the Company as part of the Contribution Agreement. After threeyears, the amount of the security deposit can be reduced. The Companyrecognised expenses of US$80,105 in respect of operating lease arrangements inthe period from 7 June 2005 to 31 December 2005. The Group was required to givea security deposit of US$15,592 for its office space leased in the UnitedKingdom. 19. Share-based payments The Directors may issue options or warrants to officers, directors, employees,consultants, advisors and/or other persons contributing to the success of theGroup. As of 31 December 2005, 600,000 warrants have been issued with anexpiration date five years from the date of admission to the AIM. Four hundredthousand of the warrants were fully vested when issued. Two hundred thousand ofthe warrants vest on the first anniversary of the date of admission to the AIM. 2005 Warrants Weighted average exercise price (in £) Granted during the period 600,000 0.25Outstanding at the end of the period 600,000 0.25Exercisable at the end of the period 475,000 0.25 The warrants are recorded at fair value on the date of grant using theBlack-Scholes model. The inputs into the model are as follows: 2005 US $ Weighted average share price 0.45Weighted average exercise price 0.45Expected volatility 70%Expected life 5 yearsRisk free rate 4.30%Expected dividends - Expected volatility was determined by the volatility used by comparablecompanies. The Company and Group recognised total costs of US$130,815 related toequity-settled share-based payment transactions in 2005. Of that amount,US$110,160 was charged against equity as the share-based payments were directlyattributable to the issue of the equity instruments. The remaining US$20,655was expensed in the income statement during the period. 20. Retirement benefit plans The Company established a defined contribution plan under Section 401(k) of theInternal Revenue Code. The plan enables qualified employees to reduce theirtaxable income by contributing up to 15% of their salary to the plan. TheCompany may elect to make a matching contribution to the plan. The Company haselected not to make a contribution for the period from 7 June 2005 to 31December 2005. The UK subsidiary is in the process of setting up a pension scheme. The totalpension expense recognised in the income statement of US$8,482 representscontributions payable to this plan. 21. Events after the balance sheet date On 1 January 2006, Frank Cary passed away. He was a director of AmphionInnovations plc. In January and February 2006, the Company purchased four notes from FireStarSoftware Inc. for US$500,000. In February 2006, the Company purchased 10,000 shares of Series B PreferredStock from WellGen Inc. for US$20,000. 22. Related party transactions Transactions between the Company and its subsidiaries, which are related partiesof the Company, have been eliminated on consolidation and are not disclosed inthis note. Details of transactions between the Group and other related partiesare disclosed below. During the year, the Group paid miscellaneous expenses for Motif BioSciences,Inc. ("Motif") such as payroll and other office expenses. The Group has alsoentered into an agreement with Motif to rent an office from the Group for whichthey are charged US$550 a month. At 31 December 2005, the amount owed by Motifto the Group is US$82,701. A subsidiary of the Company has entered into an agreement with AxcessInternational Inc. ("Axcess") to provide advisory services. Richard Morgan andRobert Bertoldi, directors of the company, are also directors of Axcess. Amphion Innovations US Inc. will receive an annual fee of US$90,000 pursuant tothis agreement, which expires on 31 December 2005. Amphion Innovations USInc.'s fee for the period ended 31 December 2005 was US$22,500 of which US$7,500was still due at 31 December 2005. A subsidiary of the Company has entered into an agreement with Durham ScientificCrystals Inc. ("DSC") to provide advisory and consulting services. RichardMorgan, a director of the Company, is also a director of DSC. The monthly feeunder this agreement is the lesser of US$10,000 and 50% of the grosscompensation paid to directors and management of DSC in that month and expireson 21 September 2008. Amphion Innovations US Inc. received US$14,810 during theperiod ended 31 December 2005. A subsidiary of the Company has entered into an agreement with FireStar SoftwareInc. ("FireStar") to provide advisory and consulting services. Richard Morgan,a director of the Company, is also a director of FireStar. The annual fee underthis agreement is US$240,000 and expires 31 March 2006. Amphion Innovations USInc.'s fees for the period ended 31 December 2005 were US$185,161 which includesa bonus fee of US$100,000 receivable after FireStar reached a financingmilestone. The total of US$185,161 is still due from FireStar at 31 December2005. A subsidiary of the Company has entered into an agreement with Motif BioSciencesInc. ("Motif") to provide advisory and consulting services. Richard Morgan, adirector of the Company, is also a director of Motif. The annual fee for theservices is currently US$120,000 but will increase to US$240,000 when Motif'snext financing milestone is met. The agreement expires on 1 April 2006. AmphionInnovations US Inc.'s fee for the period ended 31 December 2005 was US$30,000and was not paid as of 31 December 2005. A subsidiary of the Company has entered into an agreement with SupertronTechnologies Inc. ("Supertron") to provide advisory and consulting services.Robert Bertoldi, a director of the Company, is also a director of Supertron.The annual fee under this agreement is currently US$120,000 and expires on 5October 2006. Amphion Innovations US Inc.'s fee for the period ended 31 December 2005 wasUS$43,226 of which US$10,000 was still due at 31 December 2005. A subsidiary of the Company has entered into an agreement with WellGen Inc. ("WellGen") to provide advisory and consulting services. Richard Morgan, adirector of the Company, is also a director of WellGen. The fee under thisagreement will be equal to 3% of the aggregate consideration or strategicpartner relationship that WellGen enters into or commences prior to 31 December2006 in which Amphion Innovation US Inc. participates in as an advisor. AmphionInnovations US Inc. did not receive any fee under this agreement during theperiod ended 31 December 2005, however they did receive US$21,688 as part of aseparate agreement with WellGen. The directors' direct ownership in the partner companies is as follows: Fully diluted % owned byInvestment company directors Axcess International Inc. 2.96%Beijing Med-Pharm Corporation 0.42%FireStar Software, Inc. 1.58%Motif BioSciences, Inc. 4.44%WellGen, Inc. 5.55% Directors' interests The directors who held office at 31 December 2005 had the following interests inthe Company's ordinary share capital: 2005 Ordinary shares Richard M. Mansell-Jones 2,398,163Richard C.E. Morgan 15,716,531Robert J. Bertoldi 5,643,237R. James Macaleer 19,769,248Frank T. Cary 1,082,345Anthony W. Henfrey 833,120 Aggregate directors' remuneration The total amounts for directors' remuneration was as follows: Period from 7 June 2005 to 31 December 2005 US$Emoluments 311,367Compensation for loss of office -Gains on exercise of share options -Amount receivable under long-term incentive schemes - ______ Directors' emoluments and compensation Group Group Group Period ended Fees/Basic Benefits in Annual 31 December salary kind bonuses 2005 total US$ US $ US $ US $Name of directorExecutive - salaryRichard C.E. Morgan 129,519 3,946 - 133,465Robert J. Bertoldi 99,254 5,404 - 104,658Non-executive - feesRichard M. Mansell-Jones 26,250 - - 26,250R. James Macaleer 13,125 - - 13,125Frank T. Cary 13,125 - - 13,125Anthony W. Henfrey 13,250 - - 13,250Ronald E. Thomas 7,494 - - 7,494 ______ ______ ______ ______ Aggregate emoluments 302,017 9,350 - 311,367 ______ ______ ______ ______ 23. Financial assets Other receivables - Company At the balance sheet date other receivables include amounts receivable from thefellow Group companies of US$266,047. 24. Financial liabilities - Company Trade and other payables Trade payables principally comprise amounts outstanding for trade purchases andongoing costs. The directors consider that the carrying amount of trade payables approximatesto their fair value. Notice The financial information set out above does not constitute the company'sstatutory accounts for the period from 7 June 2005 (incorporation) to 31December 2005, but is derived from those accounts. Statutory accounts for theperiod from 7 June 2005 (incorporation) to 31 December 2005 will be delivered tothe Registrar of Companies following the company's annual general meeting. Theauditors have reported on those accounts; their reports were qualified and didnot contain statements under s. 15(4) or (6) Companies Act 1982 of the Isle ofMan. Approval This statement was approved by the Board of Directors on 7 March 2006. Copies of the Annual Report and Accounts Copies of the Annual Report and Accounts will be sent to all shareholders.Further copies will be obtainable from the Company's primary office: AmphionInnovations plc, Attn: Investor Relations, 330 Madison Avenue, New York, NY,10017, USA. This information is provided by RNS The company news service from the London Stock Exchange