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Half Yearly Report

28 Sep 2010 07:00

RNS Number : 3968T

Juridica Investments Limited

28 September 2010

Juridica Investments Limited

('JIL' or the 'Company')

Half-yearly results for the six months ended 30 June 2010

Juridica, a leading provider of capital to the law market, today announces its financial results for the six months to 30 June 2010.

Financial highlights and portfolio valuation

§ As at 30 June 2010, the Company has invested or committed approximately $127 million in 23 cases across 16 investments.

§ Net Asset Value of $209.8 million as compared to $216.0 million at 31 December 2009.

§ Court system delays and our previously reported adverse ruling on case 5608-N negatively impacted our current portfolio valuation by a total of $1.1 million.

§ Total comprehensive loss of $5.2 million (income of $553,000 during same period in 2009) resulting from fund expenses of $4.3 million and total negative revenue of $900,000.

§ As at 30 June 2010 the Company had $66.5 million of cash or cash equivalents as compared to $77.1 million at 31 December 2009.

Subsequent to 30 June 2010, the Company realised approximately $4.2 million from two settlements. The first settlement was from case 0408-W with gross proceeds of approximately $3.8 million and was announced by the Company on 31 August 2010. The second related to a partial settlement form only one minor defendant on patent infringement case 0609-V with gross proceeds of approximately $400,000.

Commenting on the results, Juridica's Chairman, Lord Brennan QC, said:

"Although events during the first half of 2010 required us to revalue several cases downward, based on timing, and, in a few instances, other factors, we remain confident in the Manager's view of the Company's expected profit on our investments once the underlying cases come to a full conclusion. Based on the Manager's current valuation, and their view that several cases have the potential to deliver large returns, we believe shareholders will see strong returns once our cases are concluded."

Operational highlights

§ Since inception and through 27 September 2010, the Company has earned total cash returns of approximately $29 million from eight investments in litigation cases of which five have come to a full conclusion and two have had partial settlements.

§ The carrying value of the Company's investment has increased by approximately 4.4% during the six month period ended 30 June 2010. This increase was due to cash investments made on new and existing investments and the net change in valuation of the Company's investments.

§ As at 27 September 2010, the Company's portfolio included 15 investments giving exposure to 22 active litigation cases comprised of: five competition cases (two monopolisation cases and three price-fixing cases); one statutory claim; twelve patent cases; one property damage and insurance subrogation case; two contract disputes (including one trial judgment); and one arbitration case involving a sovereign state through the World Bank's International Centre for Settlement of Investment Disputes (ICSID).

§ Total capital invested or committed as of 27 September 2010 was a maximum of $124.6 million (excluding the fully settled cases). Additional reserves of approximately $21 million have been set aside to fund two investments that the Manager believes will deliver very strong returns. The Company expects to fund these investments prior to end of 2010.

Richard Fields, Chief Executive Officer, Juridica Capital Management Limited, commented:

"We continue to see strong demand for our services as evidenced by a pipeline of potential investments that exceeds our expectations. The high demand for the Company's services is allowing us to be highly selective in determining the best investments for the portfolio and ensuring the transactions are structured with highly favourable terms to reduce transaction risk and maximize the Company's potential return. Since Juridica's inception we have reviewed over 500 cases and thousands of patents for potential investment. During the period from 1 January 2010 to 27 September 2010, Juridica invested in two new patent cases. Both investments involve patents that were developed by Fortune 500 companies. One case, 0609-V, has already delivered a partial settlement from one defendant even though the Company's investment is only a few months old.

Since the Company's admission to AIM in December 2007, it has invested or committed $143.8 million to a total of 20 investments in 27 cases. Eight investments have resulted in cash proceeds to the Company, of which five have completed successfully and are closed. Whilst the recession has caused the litigation process to extend longer than usual, especially in larger cases, the potential gains from Juridica's investments have also increased. We have complete confidence in JIL's portfolio and although the investments remain risky, we believe that they have the potential to deliver significant returns."

- Ends -

The full report can be downloaded at: www.juridicainvestments.com

For further information, please contact:

Juridica Management Limited

Richard W. Fields

+1 (866) 443-1080

Cenkos Securities

Nicholas Wells

Camilla Hume

+44 (0) 20 7397 8900

Pelham Bell Pottinger

David Rydell

Olly Scott

+44 (0) 20 7861 3232

About Juridica Investments Limited

Juridica Investments is a leading provider of strategic capital to the business community and the legal markets for corporate claims. It invests directly and indirectly in a diversified portfolio of corporate claims in litigation and arbitration. Juridica is the premier source of value-added and direct financing for large business claims in the United States and one of the leading sources in the United Kingdom.

Our clients are Fortune 1000 companies, FT Global 500 companies, inventors, major universities, and the leading law firms that represent them. Juridica accepts only cases that have already been carefully vetted and undertaken by leading lawyers.

Juridica works to make the legal system work better for business claims. Juridica does not invest in speculative claims or claims that have not demonstrated economic value and clear merits. Juridica invests only in business claims, and does not invest in class actions, personal injury, product liability, or mass tort claims.

Our goal is to provide business clients with financial choices that reduce risk and assist in maximizing claim value.

Juridica was established on 21 December 2007 as a limited liability, closed-ended investment company registered in Guernsey. It has over US$200 million of assets under management and is listed on AIM, a market operated by the London Stock Exchange (AIM: JIL).

The Company has appointed Juridica Capital Management Limited as its exclusive investment manager to locate, evaluate and manage direct and indirect investments in cases, claims and disputes.

This announcement contains forward looking statements, which are based on the Board's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a number of variables which could cause actual results or trends to differ materially. Each forward looking statement speaks only as of the date of the particular statement. Except as required by the AIM Rules or otherwise by law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

JURIDICA INVESTMENTS LIMITED CORPORATE INFORMATION

Directors of the Company :					Lord Daniel Brennan (Non-executive Chairman)
					Richard Battey (Non-executive Director)
					Kermit Birchfield (Non-executive Director)

Investment Manager :					Juridica Capital Management Limited
					Bordeaux Court
					Les Echelons
					St. Peter Port
					Guernsey, GY1 6AW

Administrator and Company Secretary :					Bordeaux Services (Guernsey) Limited
					Bordeaux Court
					Les Echelons
					St. Peter Port
					Guernsey, GY1 6AW

Registered Office :					Bordeaux Court
					Les Echelons
					St. Peter Port
					Guernsey, GY1 6AW

Independent Auditors :					Pricewaterhouse Coopers CI LLP
					Royal Bank Place
					PO Box 321
					First Floor
					1 Glategny Esplanade
					Guernsey, GY1 4ND

Nominated Adviser and Broker :					Cenkos Securities plc
					6.7.8 Tokenhouse Yard
					London, EC2R 7AS

Registrar :					Capita Registrars (Guernsey) Limited
					2nd Floor, No.1 Le Truchot
					St. Peter Port
					Guernsey, GY1 4AE

Guernsey Advocates :					Mourant Ozannes
					1 Le Marchant Street
					St. Peter Port
					Guernsey, GY1 4HP.

English Solicitors :					Travers Smith LLP
					10 Snow Hill
					London, EC1A 2AL

JURIDICA INVESTMENTS LIMITED

CHAIRMAN'S STATEMENT

As Chairman of the Board of Juridica Investments Limited, I am pleased to present the results of the Company for the six month period ended 30 June 2010.

The Company's investment manager ("JCML" or the "Manager") continues to reinforce Juridica's position as a market leader in the US and UK in the financing of corporate claims. During the reporting period, JCML identified, and Juridica funded, two additional multi-defendant patent cases and purchased an insurance contract on an existing case that provides a minimum return on the related investment.

To date, the portfolio assembled by the Manager includes 15 investments in 22 cases. The plaintiffs in these cases include 19 Fortune 500 or multinational companies, eight small to mid-range businesses, and two major US universities. The plaintiffs in the cases that comprise the Company's investment portfolio are represented by over a dozen leading US law firms.

Since 1 January 2010, the Company has had one case come to a successful conclusion. Case 0408-W, one of Juridica's initial investments, delivered a 34% return on investment despite a negative pre-trial ruling in Q1 2010, as previously reported, that denied certain of the plaintiff claims. I believe Juridica's ability to generate a sizeable return, notwithstanding the negative pre-trial ruling, is a testament to the Manager's ability to structure investments with terms that protect the Company. In addition, Juridica received a partial settlement of approximately $400,000 on case 6409-V which it invested during Q1 2010. This early settlement is typical in multi-defendant cases and is a positive indicator towards the validity of the claims.

Juridica continues to feel the effects of the ongoing recession which has had a negative impact on the timing of settlements. This is especially true for cases with larger damage claims as defendants are continuing to choose to take additional risk and litigate, rather than settle early. Although this pattern has lengthened the holding period for the Company's investments, the average age of its investments, as of 27 September 2010 is only 1.61 years. Whilst the longer holding period impacts upon the Company's ability to recycle its cash, it may also drive higher returns in those investments where the underlying cases are successful.

Juridica, through its Manager, invests in litigation matters that, like all litigation events, are subject to significant intrinsic and extrinsic risk. No assurances can be made that the Company will earn any future return on its investment in any particular case and the risk of loss of investment remains until each case reaches its final conclusion. However, I believe the Manager is adept at identifying cases with strong merits and is able to structure favourable transaction terms so as to minimise this risk. I and the other Directors of JIL believe that there is an opportunity to earn highly attractive returns on the Company's portfolio.

This belief is supported by a valuation analysis performed by JCML on terminal values for each case that reflects a high confidence total return on the invested portfolio of 50%. The Manager believes that as the cases progress and clear their various legal hurdles, there is potential for significantly greater returns than those indicated in this analysis. JCML revisits the valuation on its investments continuously and formally adjusts its stated value every six months. The high confidence level of expected return could rise or fall depending on the development of the various cases.

This report covers trading from 1 January 2010 to 27 September 2010 and the reviewed results below cover the six-month trading period ended 30 June 2010.

Highlights from the six months to 30 June 2010 include the following:

·; As at 30 June 2010, Juridica has invested or committed approximately $127 million in 23 cases across 16 investments (excluding settled cases). Since 1 January 2010 the Company has made two additional investments. Each of these investments relates to patent infringement cases.

·; The underlying cases funded by the facility that Juridica has in place with Fields Scrantom Sullivan PLLC ("FSS") continue to progress through the litigation cycle As announced in the 2009 Annual Report and Accounts, case 1208-A successfully concluded a jury trial in Q3 2009 and continues to await damages assessment. These damages are subject to trebling by the court after a jury award and could result in a sizeable return. The Manager believes this case could be resolved within the next 12 to 18 months. Several of the other cases within this facility have progressed favourably including 8008-L which the Manager also believes has significant potential for a sizeable return. The one notable exception is case 5608-N which, as announced in the 2009 Annual Report and Accounts, had a negative ruling from the court that jeopardizes the potential success of the related investment. The ruling is currently under appeal and should be determined within the next six to nine months. If the appeal is unsuccessful, the case would be declared a loss. However, since the case is valued in combination with the other cases funded by the facility, the Board does not expect the impact of a loss to be as great as if it were an individual investment.

·; Since inception and through 30 June 2010, the Company has earned cash returns from four investments in litigation cases that came to a full conclusion and two investments in cases that have had partial settlements (of which one relates to a case that is part of the loan facility which the Company has with FSS).

·; Case 0608-S remains suspended and continues to reflect a value equal to 25% of Juridica's initial investment. This suspension was originally announced on 2 November 2009 and the 75% write-down was taken at 31 December 2009. The Company is pursuing claims against third parties connected to the investment and hopes to announce further progress on this within the next 12 months.

·; The carrying value of the Company's investments has increased by approximately 4.4% during the six-month period ended 30 June 2010. This increase was due to cash investments made on new and existing investments and the net change in valuation of the Company's investments. Changes in valuation of the Company's portfolio are caused by continuing use of effective interest that systematically increases the valuation of Juridica's investments over time towards their expected terminal value. Additional unrealised income or loss is reflected for each investment based on a combination of changes in the Manager's view of settlement ranges and expected timing. During the six month period ended 30 June 2010, several of Juridica's cases had an outward shift in expectation of timing due to delays in the court system or changes in the case strategy. These timing delays required the Company's Manager to reduce current valuation even though the extended terminal value remains unchanged. In addition, the negative ruling associated with case 5608-N resulted in a moderate reduction in the FSS facility's expected terminal value.

Results for the Six Month Period Ended 30 June 2010

Income

During the six-month period ended 30 June 2010 the Company and its subsidiaries reported a comprehensive loss of $5.2 million. This loss was driven by fund expenses of $4.3 million, and revenue components that included: interest income of $183,000; a realised gain of $41,000; other income arising on contractual interests of $183,000; and a loss arising on available for sale debt securities of $1.3 million.

·; Fund expenses consist of all operating expenses required to operate the Company and primarily consist of the management fee and due diligence and transaction costs.

·; Interest income of approximately $183,000 is generated from the Company's cash balances held in highly liquid investment or demand accounts. Interest income dropped substantially in the six-month period ended 30 June 2010 as compared to the six-month period ended 30 June 2009 due to the substantial drop in market interest rates paid on cash accounts and short-term investments; and the decrease in the Company's cash balance caused by the Company making additional investments and funding the Company's operating expenses. Given the prevailing interest rate environment, the Manager expects interest income to remain low.

·; Realised gain on investment of approximately $41,000 relates to residual gains from case 6308-F that came to full conclusion in 2009. Approximately $915,000 in profit related to this case was recognised in 2009.

·; Other income arising on contractual interests of $183,000 is derived from the sum total of (i) year-to-date income of $3.3 million generated from the effective interest rate on Juridica's investments calculated in accordance with the Company's accounting policies; and (ii) a fair value decrease of $3.1 million due to changes in estimated future cash flows. The effective interest rate impact remains constant throughout the life of the investment and is derived from the Manager's initial estimate of expected outcome for each individual investment in the absence of an established market for the Company's assets. The fair value movement due to changes in estimated future cash flows may change significantly throughout the life of the investment depending on how case spending, timing and expectations change.

·; The loss arising from available for sale debt securities of $1.3 million relates to the investments made under the Company's loan facility with FSS and is derived from the sum total of (i) year-to-date income of $5.7 million generated from the effective interest rate on the loan facility calculated in accordance with the Company's accounting policies; and (ii) fair value decrease of $7.0 million due to changes in estimated future cash flows of which most relate to the reported ruling on case 5608-N; however, it is important to emphasize that this ruling is not final and is presently on appeal.

Cash

Over the reporting period, the Company reviewed its position on currency holdings and determined that it was most appropriate for the predominance of cash holdings to remain dollar denominated.

As at 30 June 2010 the Company had $66.5 million of cash or cash equivalents comprising $64.1 million in dollar denominated holdings and the balance in sterling. The Company expects additional money to be deployed in new cases but will continue to reserve enough cash to fully fund existing investments and cover certain fund expenses.

Net asset value

Over the reporting period, the Company reported a net loss of $5.2 million which resulted in a net asset value of $209.8 million or $1.8956 per ordinary share.

Dividend

Through 30 June 2010, the Company has not generated sufficient realised gains in 2010 to justify paying a dividend.

The portfolio

As at 27 September 2010, the Company's portfolio included 15 investments giving exposure to 22 active litigation cases comprised of: five competition cases (two monopolisation cases and three price-fixing cases); one statutory claim; 12 patent cases; one property damage and insurance subrogation case; two contract disputes (including one trial judgment); and one arbitration case involving a sovereign state through the World Bank's International Centre for Settlement of Investment Disputes (ICSID).

The total capital invested or committed by the Company as of 27 September 2010 in these investments was a maximum of $124.6 million (excluding the fully settled cases). Of the total amount committed or invested, $80.5 million was committed through the loan facility to FSS enabling it to finance five competition cases and one statutory claim; $37.4 million is invested in patent litigation and licensing enforcement activities; $2.8 million is invested in an international arbitration (ICSID) case; $3.4 million is invested in two contract disputes (including an insurance premium associated with one of the cases); and $0.5 million is invested in a property damage and subrogation claim.

Outlook

The Board remains convinced that Juridica has developed a strong portfolio of investments. The Manager performs significant due diligence prior to recommending an investment and structures each transaction to ensure Juridica is well rewarded in the event of a favourable outcome. However, the legal process has many variables associated with it. As such, the outlook for the Company's cases can improve or degrade at each reporting period. Although events during the first half of 2010 required us to revalue certain cases downward resulting in negative revenue, this is not indicative of our ongoing expectations for the terminal value of our investments. The second half of 2010 has already provided us with two settlements and the potential remains for other positive activity in the near future.

Although our investments continue to involve inherent risk, the Board remains encouraged by the progress to date and confident in JIL's portfolio and believe some of the investments in the portfolio have the potential to generate highly attractive returns because of the size of the claims involved.

Lord Daniel Brennan QC

Chairman

Guernsey, 27 September 2010

JURIDICA INVESTMENTS LIMITED

Investment Manager's Report

As the Company began its third year of operations, the Manager continued to see strong demand in the market for corporate claims finance. The Manager believes that this is, in part, due to continued development and marketing within the industry. In addition, the Manager believes that the ongoing recession is causing the litigation process to extend longer than usual, especially in larger cases. Although this situation has delayed potential gain from Juridica's investments, it is also making it difficult for some plaintiffs and their firms to fund the prosecution of their claims for this extended period. As a result, many are looking to strategic capital firms, like Juridica, to fund their claims. The growth in the Company's pipeline of potential investments far exceeds expectations and allows the Manager to be highly selective in determining the best investments for the portfolio. In addition, the strong demand provides for significant latitude in structuring highly favourable terms that reduces transaction risk and maximizes the Company's potential return.

Although the continuing recessionary environment is extending the holding period for investments longer than expected, if Juridica's underlying cases are successful, the Manager expects that the longer holding period may drive larger returns. This has already been evidenced in cases 1208-A and 0808-C(1), both of which have already realised success on key issues through the legal cycle. The Manager believes that in a normal economic environment these cases would have already reached settlement. Because these cases did not settle earlier in their legal cycle and because the cases have successfully achieved certain milestones, the Manager believes the settlement value of each case should increase. This in turn potentially drives greater shareholder return.

Since Juridica's inception, the Manager has reviewed over 500 cases and thousands of patents for potential investment. During the period from 1 January 2010 to 27 September 2010, Juridica invested in two new patent cases. Both investments involvepatents that were developed by Fortune 500 companies. One case, 6409-V, has already delivered a partial settlement from one defendant even though the Company's investment is only a few months old.

Highlights

Since the Company's admission to AIM in December 2007, it has invested or committed $143.8 million in a total of 20 investments in 27 cases. Eight investments have resulted in cash proceeds to the Company, of which five have completed successfully and are closed. The total gross proceeds received or owed to Juridica relating to these settlements is approximately $29 million.

To date in 2010, and subsequent to 30 June 2010, Juridica has realised approximately $4.2 million relating to two settlements. Firstly, a successful conclusion to case 0408-W was obtained which will deliver gross receipts of approximately $3.8 million back to the Company. A portion of these receipts were received in Q3 of this year and the remainder will be remitted in early Q1 2011. Juridica's return on this investment was 34% despite a negative pre-trialruling in Q1 2010, as previously reported, that denied certain of the plaintiff claims. The Company's return remained strong despite this ruling because the transaction was structured so as to provide a minimum level of return. Secondly, case 6409-V delivered approximately $400,000 in a partial settlement from one defendant even though JIL's investment is only a few months old. Obtaining an early settlement on a new case is important because it helps validate the claims that may drive future settlements. The Manager sees an increased probability of additional settlements in 6409-V over the next twelve months.

As of 27 September 2010, the Company has invested or committed a substantial portion of its capital (approximately $124.6 million) in 22 cases across 15 investments. Since 31 December 2009 the Company has made two investments, both of which relate to multi-defendant patent infringement cases.

Juridica's Net Asset Value ("NAV") decreased slightly during the six month period ended 30 June 2010 as a result of fund expenses being greater than fund income, causing the Company to report a comprehensive loss of $5.2 million. Fund expenses during this period were approximately $4.3 million and consisted primarily of contractual management fees and due diligence and transaction costs. Revenue totalled negative $900,000 and was comprised of the following: interest income of $183,000; a realised gain of $41,000; other income arising on contractual interests of $183,000; and a loss arising on available for sale debt securities of $1.3 million. The negative level of income is driven by changes in the timing of certain investments and changes in estimated future cash flows for certain investments.

Valuation

The Manager values Juridica's investments using valuation methods that are recognised as standard within the industry and in a manner that follows International Financial Reporting Standards' ("IFRS") fair value accounting rules. Under fair value accounting, an initial valuation is established by the Manager from its valuation model that is based on the merits of the case and the Manager's high confidence view of the probability and timing of various settlement scenarios and trial outcome and the potential of profit to the Company ("Case Terminal Value"). The scenarios are assigned a probability that incorporates all risks intrinsic to the case. The Manager also identifies risks that are extrinsic to the case, including such items as: claimholder risk; counsel risk; defendant risk; judicial risk; and other risks that are present in all legal cases but not directly related to the merits of the case. The Manager then uses the effective interest method of calculation to generate an interest rate ("Initial Interest Rate") that systematically increases the invested basis up to its Case Terminal Value in the expected timeframe.

The Manager revisits the assumptions behind each investment's valuation on a bi-annual basis and if needed, will rerun the investment's valuation. If a new valuation is prepared, it will generate a revised expectation towards the investment's future cash flow. In accordance with the effective interest method of calculation, the Manager will then discount the revised stream of cash flow by applying a discount rate equal to the investment'sInitial Interest Rate. The carrying value of the investment will then either be increased or decreased in order to equal the value of the discounted stream of future cash flows. Changes in expected future cash flows are expected to occur frequently given the uncertainty surrounding each investment. Examples of factors that will change the Manager's view of expected future cash flows include:

·; A specific case achieves certain milestones or survives certain legal challenges within the legal process. This would likely increase the expected future cash flows and hence increase the investment's valuation.

·; The legal process is moving more rapidly than expected which would likely result in the Company receiving expected proceeds earlier than initially expected. This would likely increase the investment's valuation.

·; A specific case loses certain legal challenges which may cast increased doubt on the Company's ability to generate the same level of proceeds as originally anticipated. This would likely reduce the investment's valuation.

·; The legal process is moving slower than expected which would likely result in Juridica receiving expected proceeds later than initially expected. This would likely decrease the investment's valuation.

·; The actual timing of cash outflow related to a specific case diverging from what was initially expected. This would likely increase or decrease the investment's valuation depending on whether the timing of spend was slower or faster than expected.

The magnitude of change in valuation based on any of the above factors is highly dependent on the specific investment's Initial Interest Rate. The higher the Initial Interest Rate, the greater the impact any change in expected cash flow or timing will have on the investment's valuation.

As of 30 June 2010, the Manager examined the valuation for all of Juridica's investments. In doing so, several cases were faced with an outward shift in timing due to changes in legal strategy or delays within the court system. For each of these cases, a downward shift in the valuation occurred from discounting future cash flows. This downward shift in valuation is netted against the investment's systematic increase in valuation as determined by the Initial Interest Rate from the effective interest method. A similar result occurs (either positive or negative) when case spending differs from expectation. A large increase in valuation was recognised for case 0408-W that, as of 30 June 2010, had reached a settlement agreement that had not yet received court approval. The high confidence of approval enabled the Manager to adjust the expected cash flows and hence increase the valuation.

For the debt facility Juridica has in place with FSS, case 5608-N received a negative ruling that jeopardizes the potential success of the specific case. Although the ruling is being appealed and there is a chance it will be reversed, the Manager sharply increased the probability of losing the specific case in the valuation assumptions. As a result, the present value of future cash flows from the facility decreased and when netted against the facility's systematic increase in valuation as determined by its Initial Interest Rate, resulted in a net decrease in the valuation of the facility as compared to 31 December 2009.

In total, the value of JIL's direct investments in contractual interests increased by $3.3 million due to the systematic application of each investment's effective interest rate. This increase was offset by $3.1 million due to a decline in the present value of changes in estimated cash flows. The net increase of $183,000 is reflected on the Consolidated Statement of Comprehensive Income under the caption "other income/(loss) arising on contractual interests". The value of JIL's facility with FSS increased in value by $5.7 million due to the systematic application of the facility's effective interest rate. This increase was offset by $7.0 million dueto a decline in the present value of changes in estimated cash flows. The net decrease of $1.3 million is reflected on the Consolidated Statement of Comprehensive Income under the caption "other (loss)/income arising on available for sale debt securities".

The process of systematically increasing our investments in accordance with the effective interest method and then periodically increasingor decreasing the valuation based on changes in expected cash flows does not impact cash. In addition, given that certain events in the legal cycle can be severely damaging in one period only to be reversed in a future period, Juridica's investments may move dramatically up or down from one period to the next as a result of the IFRS accounting treatment.

Overall, the current valuation analysis performed by the Manager reflects a Case Terminal Value that is based on an average rate of return exceeding 50%. Although this rate of return is strong, the Manager believes individual investment returns could prove to deliver proceeds that are much higher than their current Case Terminal Value.

Competition

We are not aware of any new companies entering Juridica's market in the United States during the last six months. Nonetheless, many smaller ventures have begun to move into the market and we estimate that as at 30 June 2010 there were at least six entities operating in competition to Juridica. In the United Kingdom, although numerous competitors have entered the market, the Company remains the largest in terms of market capital. The Manager expects to see more competition in both markets as the industry continues to mature and as investors seek alternative investments that have the potential to generate substantial returns.

Portfolio update and cash available

As at 30 June 2010, Juridica had a total of 16 investments involving 23 cases. The Company's portfolio comprised the investments in the table below:

Portfolio diversification as at 30 June 2010

Type of claim or litigation	Cases	Total Commitment	Investments
Antitrust (monopolization)	2	$80.5m	1
Antitrust (price-fixing)	3
Statutory claims	1
Patents	12	$37.3m	10
Property damage and insurance subrogation	1	$0.5m	1
Shareholder disputes	1	$2.8m	1
Contract claims	2	$3.4m	2
Arbitration	1	$2.9m	1
Total	23	$127.4m	16

The portfolio has the following features:

Certain investments include ancillary rights to finance future cases

Number of subject matters: 7

Number of jurisdictions: 11

Number of plaintiff law firms: 13

Average exposure per case: $5.54 million

The above investments represent a significant portion of Juridica's available investable cash. In addition to the above amounts, an additional $9 million and $12 million have been reserved for investment options relating to two different investments. These investments, while incorporating the usual risk of loss, have been identified through the Manager's due diligence and valuation process as having the potential to deliver significant returns to the Company. Such transactions were structured to maximize protection to JIL. Options to provide additional investment capital are dependent on the Manager's assessment on how each case is progressing.

The Manager has also reserved approximately $10 million for the Company to take a significant position in an investment that will provide ongoing revenue and the potential to provide significant gain to shareholders. This investment, if completed, will likely occur in Q4 2010.

After reserving for the above amounts, and not including any estimate of cash received from near-term settlements, Juridica has between $25 million and $35 million of cash remaining. A portion of this amount is reserved to cover critical fund operating expenses through 2013. The unreserved portion is available for new investments.

Key schedule dates in invested cases

Period	Investment	Event
No scheduled dates	0409-C	Recently filed
No scheduled dates	2709-E	Re-exam recently filed
No scheduled dates	1608-T	Administrative tribunal is determining rights to settlement proceeds
No scheduled dates	5208-E	Recent appeal victory on jurisdiction; discovery underway
No scheduled dates	1208-A	Damages trial not yet scheduled
No scheduled dates	0210-M	Recently filed
Q3 2010	6409-V	Settlement reached with one defendant; mediation scheduled with others prior to year end
Q3 2010	0808-C (TX)	Markman hearing scheduled
Q4 2010	7508-O	Further licenses expected to be signed and funded
Q4 2010	0209-S	New complaint expected to be filed
Q4 2010	0708-B (CA)	Claim construction hearing
Q4 2010	8008-L	Hearing on defendant's motion to dismiss amended complaint
Q4 2010	1008-A	Discovery to be completed
Q1 2011	0408-W	Settlement proceeds expected
Q2 2011	7608-A	Markman hearing scheduled
Q3 2011	0808-C (TX)	Trial scheduled
Q3 2011	6509-A	Decision on appeal anticipated
Q4 2011	0108-S	Trial scheduled
Q4 2011	5009-S	Trial anticipated
Q4 2011	5608-N	Hearing on appeal anticipated
Q1 2012	5308-U	Trial scheduled in related class case

In addition to the events described above, cases 0708-B, 8008-L, 5308-U, 7608-A and 5208-E and 6409-V are multi-defendant cases, which are expected to have a laddered settlement profile.

As of 27 September 2010, the average age of the cases in the portfolio was 2.90 years (measured from the date of first filing of any litigation) and the average age of all of the Company's investments is 1.61 years (measured from the date of investment). The table below provides this information for each individual case.

Matter Number	Age of Case (yrs)	Age of Investment (yrs)
0108-S	2.46	2.50
0408-W	Settled	Settled
0708-B (2 matters)	1.90	2.21
0808-C (2 matters)	10.21	2.08
1608-T	10.15	2.14
7608-A	1.12	1.56
7508-O	0.97	1.24
0209-S	1.76	1.11
0409-C	0.95	0.99
2709-E	0.84	1.11
5009-S	6.26	0.75
6509-A	1.11	0.76
6409-V	0.67	0.53
1008-A	6.24	1.87
5608-N	5.88	1.87
1208-A	3.98	1.87
5208-E	2.59	1.87
5308-U	1.94	1.87
8008-L	0.94	1.16
0210-M	N/A	0.32
Average	2.90	1.61

Developments in invested cases

As the cases in the portfolio age, the Company has seen increasing activity across its investments. This section reports on recent developments and the status of each case.

Antitrust cases

Juridica presently has an investment in five antitrust (two monopoly and three cartel) cases through the loan facility to FSS. Developments in these cases are described in this section.

JIL's reporting on Case 1208-A has not changed since that which was reported in our Annual Report and Accounts for 2009. Although this case successfully concluded a jury trial on certain issues in Q3 2009, damages have not yet been assessed partly due to an overloaded court schedule. The defendant filed post-trial motions to overturn the jury verdict and the parties are waiting for a ruling by the court on these motions. If the motions are denied, an appeal may be taken on the issues that have been resolved at the trial court level. An appeal is expected to last from four to eighteen months from the date of a ruling by the trial court on the pending post-trial motions. If the trial results are upheld on appeal or the appeal is deemed to be premature, the case is expected to return to the trial court for a jury trial on the remaining issues and conclusion at the trial level. The case could be subject to further appeals after the trial of remaining issues if settlement is not concluded at some point in the process described above. The plaintiff is a Fortune 500 company. The trial court must automatically treble any damages awarded by the jury. Through the FSS loan facility Juridica has the potential to receive 18% to 20% (depending on the timing of other settlements) of any settlement or collected judgment award.

Case 5608-N is one of two monopoly cases. The status on this case has not changed since that which was reported in our Annual Report and Accounts for 2009. The court made a ruling on a threshold issue that, absent reversal on appeal, results in dismissal of the plaintiff's claims. The court, however, also ruled in the plaintiff's favour on the primary substantive claims. Consequently, if the threshold ruling is reversed, Case 5608-N will proceed to jury trial on the merits. The appeal has been filed and is expected to take at least 12 to 18 months. The Manager believes settlement prior to conclusion of the appeal is unlikely.

Case 5308-U is a price-fixing cartel case brought by several major companies against multiple defendants. The relevant clients are direct purchasers that collectively account for approximately 25% of the US market for the product at issue in the case. In Q1 2010, the court dismissed certain aspects of the plaintiffs' claims, but the dismissals did not affect the bulk of the plaintiffs' damages claims. The case is presently in merits discovery which is scheduled to be completed in Q3 2010. Expert discovery is currently scheduled to close in Q3 2011. Dispositive motions must be fully briefed by Q4 2011. Trial is presently scheduled for Q1 2012. Given that this case is still in its relatively early stages, this schedule may be extended, but trial still is expected to occur in 2012.

Case 5208-E is a price-fixing cartel case against multiple defendants that is pending in the United Kingdom. The European Commission has already found that the defendants engaged in a price-fixing cartel in Europe. As previously reported, the UK court recently decided jurisdictional issues in favour of the plaintiffs and although one defendant has appealed this ruling, the UK court affirmed this decision. Discovery is now underway. As previously reported, one defendant has already settled.

Case 8008-L is the most recent price-fixing cartel case in the portfolio. The case involves antitrust claims brought by several Fortune 500 companies against a group of large predominantly non-US suppliers. Several of the defendants already have pled guilty in the US to violating the Sherman Act. Executives of these companies have either pled guilty or been indicted. The class has been certified and discovery on the merits is ongoing. Various motions to dismiss amended complaints have been filed with hearing scheduled for November 2010.

Patent cases

The Company presently has investments in 11 patent cases one of which is structured as an equity investment in a patent portfolio. Developments in these cases are described in this section.

0808-C(1) involves a patent portfolio that covers computer hardware technology. The patents are being asserted against multiple defendants in this case. In Q1 2010, the court ruled in the plaintiffs' favour on several pending motions, both substantive and procedural. The parties are waiting for additional summary judgment rulings from the court and the setting of a trial date. In addition, certain events have occurred in connection with the development of factual evidence in the case that appear to substantially strengthen the merits of the plaintiffs' claims.

0808-C(2) is a related case to 0808-C(1) and involves the same plaintiffs against different defendants. This case is also against multiple defendants in a jurisdiction that is different from the related case. A motion for change of venue was recently denied. Trial has been scheduled in this case for Q3 2011.

Case 0108-S involves a patent portfolio that covers secure Internet communications. The case is presently in discovery. The Markman hearing is scheduled for Q2 2011 and trial is scheduled for Q4 2011. In the event of recovery, Juridica is entitled to priority repayment of its investment. This case is cross-collateralised with Case 0209-S - meaning that Juridica has priority over any recovery to repay its investment prior to the client receiving proceeds from either case.

Case 0209-S involves a patent portfolio that covers secure internet communications and e-commerce. This case is still in the early stages of development and has not yet had a scheduling hearing. This case is cross-collateralized with Case 0108-S.

Case 0708-B involves an internet-related patent. Two defendants in the case have settled to-date for total cash proceeds of $750,000. This investment now involves two related cases, including one in California and one in Texas. A second related Texas case was recently dismissed voluntarily for strategic reasons. There are more than 20 defendants remaining in the two cases. Both related cases are still in the early stages of development. For ease of tracking, in the tables above, the first case filed in Texas will now be tracked as 0708-B(1) and the California case will be tracked as 0708-B(3). The dismissed Texas case was previously tracked as 0708-B(2). In the event of any recovery, Juridica is entitled to priority repayment of its investment.

0409-C involves a patent that covers the treatment of a disease. A complaint was filed in Q4 2009 against one large multi-national defendant and is still in the early stages of development. In the event of recovery, Juridica is entitled to priority repayment of its investment.

2709-E involves a patent portfolio that covers video game controllers. The case was filed in Q4 2009 against three large, multi-national defendants and is in the early stages of development. Recently, the plaintiff voluntarily requested re-examination of two of three patents at issue in the case. This is expected to result in a delay of 12 to 18 months in concluding the case if it does not settle prior to trial. In the event of recovery, Juridica is entitled to priority repayment of its investment.

7508-O involves an equity investment in a broad portfolio of patents in the mobile communications market. To date, one case has been filed against multiple defendants. The case is still in the early stages of development. In the event of recovery, Juridica is entitled to preferred repayment of its investment.

7608-A involves a patent portfolio in the Personal Navigation Device (PND) market. The case was filed in Q3 2009 against more than 15 defendants and is still early in the stages of development. In the event of recovery, Juridica is entitled to preferred repayment of its investment.

6409-V involves a patent that covers video compression technology. The case was filed in Q1 2010 against 10 defendants and is still in the early stages of development. This opportunity was brought directly to Juridica by a Fortune 500 client and is represented by an AM Law 100 firm. As reported above, one defendant recently settled and as a result Juridica will receive approximately $400,000 in proceeds. In the event of recovery, the Company is entitled to priority repayment of its investment.

0210-M involves a patent that covers digital media. The case was filed in August 2010 and is in the early stages of development.

Other Cases

As of 30 June 2010, Juridica has also invested in the following cases:

Case 0408-W involves claims by a group of shareholders against a privately held company. As reported above, the case recently settled and will have delivered gross proceeds to Juridica of $3.8 million.

Case 5009-S involves breach of contract and misappropriation of trade secrets claims in a US federal court. Factual discovery in the case is almost completed and expert discovery is set to begin. Trial is expected in the second half of 2011.

Case 6509-A involves a significant judgment obtained in an action for breach of contract, fraud and related claims in a US federal court. Post-trial motions in the case were decided favourably for the plaintiff in Q4 2009 and the judgment has been appealed. The appeal is scheduled to be fully briefed by Q3 2010.

Case 1608-T involves two related cases for property damage claims by way of subrogation. The plaintiffs are several US and UK insurers. The lawsuits have been moved from trial court to an administrative proceeding as a result of a settlement involving multiple cases. The administrative proceeding will determine the plaintiffs' rights to participate in the settlement and the amount thereof.

Outlook for Remainder of 2010 and Beyond

For the remainder of 2010 the Manager will be locating and proposing investments for the Company's remaining capital. Several opportunities are already under development and the Manager expects that these investments will be completed by the end of 2010. In addition to the Company's existing areas of concentration in antitrust and patents the Manager will be focusing on diversifying the portfolio through new subject matters, law firms and jurisdictions including the UK.

Based on the age and status of the cases in the portfolio, the Manager believes that some cases in the portfolio could reach a positive conclusion or generate settlements with some defendants prior to the end of 2010 and will be closely monitoring the portfolio as the year progresses. Based on the present status of the cases in the portfolio, the Manager expects that most of the cases (with a few exceptions) will be completed within the next 36 months and that the next 12 to 15 months could see the completion of several cases including one or more larger settlements. The Manager remains confident that the portfolio will generate significant returns for shareholders as the cases reach completion.

Richard W Fields
Juridica Capital Management Limited
27 September 2010

JURIDICA INVESTMENTS LIMITED

INDEPENDENT REVIEW REPORT

Introduction

We have been engaged by the directors of the company to review the Group's unaudited condensed financial statements in the half-yearly financial report for the six months ended 30 June 2010, which comprises the unaudited consolidated statement of comprehensive income, the unaudited consolidated statement of financial position, the unaudited consolidated statement of changes in equity, the unaudited consolidated cash flow statement and related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed financial statements.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors of the Company. The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules for Companies which require that the financial information must be presented and prepared in a form consistent with that which will be adopted in the Group's annual financial statements.

As disclosed in note 2, the annual financial statements of the company are prepared in accordance with International Financial Reporting Standards ("IFRS"). The condensed financial statements included in this half-yearly financial report have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting".

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of consolidated financial statements in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of the AIM Rules for Companies and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

The maintenance and integrity of the Juridica Investments Limited website is the responsibility of the directors; the work carried out by us does not involve consideration of these matters and, accordingly, we accept no responsibility for any changes that may have occurred to the unaudited condensed financial statements since they were initially presented on the website.

Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410, 'Review of half yearly Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed financial statements in the half-yearly financial report for the period ended 30 June 2010 is not prepared, in all material respects, in accordance with International Accounting Standard 34 and the AIM Rules for Companies.

Emphasis of Matter

Without qualifying our conclusion, we draw attention to Notes 2(a), 4, 5 and 6 to the condensed financial statements. As indicated in Notes 2(a), 4, 5 and 6, the condensed financial statements include non-current assets stated at their fair value of US$144,031,550. Because of the inherent uncertainty associated with the valuation of such non-current assets and the absence of a liquid market, these fair values may differ from their realisable values, and the differences could be material.

PricewaterhouseCoopers CI LLP

Chartered Accountants Guernsey

Channel Islands

27 September 2010

JURIDICA INVESTMENTS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD FROM 1 JANUARY 2010 TO 30 JUNE 2010

	Notes	For the period from 1 January 2010 to 30 June 2010	For the period from 1 January 2009 to 30 June 2009
		US$	US$
INCOME
Interest income		182,609	308,834
Realised gain on contractual interests		40,610	1,437,260
Realised gain/(loss) on investments		-	(54,704)
Other income/(loss) arising on contractual interests	4	183,023	(566,147)
Other (loss)/income arising on available for sale debt securities	6	(1,303,596)	3,408,485
		(897,354)	4,533,728

EXPENSES
Management fees		2,401,996	2,137,812
Due diligence and transaction costs		596,348	759,884
Foreign exchange loss		224,469	463,263
Directors remuneration		214,714	153,465
Audit fees		196,172	85,124
Legal expenses		161,990	25,967
Administration fees		156,438	134,074
Advisory fees		42,240	32,801
Marketing expenses		21,775	23,528
Options and warrants costs		14,632	13,913
Registrars fees		8,094	8,798
Bank charges		4,290	3,435
Sundry expenses		227,960	139,147
		4,271,118	3,981,211

Comprehensive (loss)/income for the period		(5,168,472)	552,517


Comprehensive (loss)/income attributable to:
Equity shareholders		(4,837,002)	552,517
Non-controlling interests		(331,470)	-
		(5,168,472)	552,517

Earnings per Ordinary Share
Basic	Cents	(4.37)	0.58
Fully diluted	Cents	(4.32)	0.58

JURIDICA INVESTMENTS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2010

		30 June	31 December
	Notes	2010	2009
		US$	US$
Non-current assets
Contractual interests	4	40,354,451	36,080,911
Available for sale financial assets	5	7,545,805	7,505,521
Available for sale debt securities	6	96,131,294	94,370,855
		144,031,550	137,957,287

Current assets
Other receivables and prepayments	7	2,024,059	2,482,888
Cash and cash equivalents	9	66,511,040	77,050,345
		68,535,099	79,533,233

Total assets		212,566,649	217,490,520

Current liabilities
Put option	8	1,518,022	503,729
Other payables	10	1,199,631	969,662
Total liabilities		2,717,653	1,473,391

Net assets		209,848,996	216,017,129


Capital and reserves
Special reserve		199,013,730	199,013,730
Other reserve		(1,735,816)	(736,155)
Revenue reserve		9,706,570	14,543,572
		206,984,484	212,821,147

Non-controlling interests		2,864,512	3,195,982

Total equity Shareholders' funds		209,848,996	216,017,129


Number of ordinary shares		110,701,754	110,701,754

Net Asset value per ordinary share		$1.8956	$1.9513
These half yearly unaudited condensed consolidated financial statements were approved by the Board of Directors on 27 September 2010 and signed on its behalf by:

R J Battey
Director

JURIDICA INVESTMENTS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD FROM 1 JANUARY 2010 TO 30 JUNE 2010

		30 June 2010
		Special		Other	Revenue	Non-controlling
		reserve		reserve	reserve	interests		Total
		US$		US$	US$	US$		US$

Balance at 1 January 2010	199,013,730			(736,155)	14,543,572	3,195,982		216,017,129

Changes in equity for 2010
Loss for the period		-		-	(4,837,002)	(331,470)		(5,168,472)
Total comprehensive income		-		-	(4,837,002)	(331,470)		(5,168,472)
Issue of shares		-		-	-	-		-
New issue expenses		-		-	-	-		-
Put option provision		-		(1,014,293)	-	-		(1,014,293)
Share option payment reserve		-		14,632	-	-		14,632
Dividend paid		-		-	-	-		-
Balance at 30 June 2010		199,013,730		(1,735,816)	9,706,570	2,864,512		209,848,996

		30 June 2009
		Special	Other		Revenue		Non-controlling
		reserve	reserve		reserve		interests	Total
		US$	US$		US$		US$	US$

Balance at 1 January 2009		150,169,960	(261,211)		2,444,766		-	152,353,515

Changes in equity for 2009
Profit for the period		-	-		552,517		-	552,517
Total comprehensive income		-	-		552,517		-	552,517
Issue of shares		51,693,614	-		-		-	51,693,614
New issue expenses		(2,849,844)	-		-		-	(2,849,844)
Share option payment reserve		-	13,913		-		-	13,913
Dividend paid		-	-		(5,069,200)		-	(5,069,200)
Balance at 30 June 2009		199,013,730	(247,298)		(2,071,917)		-	196,694,515

JURIDICA INVESTMENTS LIMITED
UNAUDITED CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD FROM 1 JANUARY 2010 TO 30 JUNE 2010

	For the period from 1 January 2010 to 30 June 2010	For the period from 1 January 2009 to 30 June 2009
	US$	US$
Cash flows from operating activities
Comprehensive (loss)/income for the period	(5,168,472)	552,517

Adjusted for:
Fair value change on contractual interests and available for sale debt securities	1,120,573	(2,904,210)
Realised gains on contractual interests	(40,610)	(1,405,821)
Increase in share option and warrant reserve	14,632	13,913
Interest income	(182,609)	(308,834)
Foreign exchange losses on non-operating activities	-	463,078

Changes in working capital
Purchases of contractual interests, available for sale financial assets and available for sale debt securities	(7,096,541)	(23,000,750)
Settlement of contractual interests	40,610	4,587,692
Decrease in trade and other receivables	458,829	1,912
Increase/(decrease) in trade and other payables	50,980	(244,761)

Cash used in operations	(10,802,608)	(22,245,264)

Interest received	508,342	308,834

Net cash outflow from operating activities	(10,294,266)	(21,936,430)

Financing activities
Dividend paid	-	(5,335,349)
Issue of shares	-	49,059,970
Share issue costs	-	(234,060)

Net cash flow from financing activities	-	43,490,561

Net (decrease)/increase in cash and cash equivalents	(10,294,266)	21,554,131

Cash and cash equivalent at the beginning of the period	77,050,345	82,511,937

Effect of foreign exchange rate changes	(245,039)	(179,069)

Cash and cash equivalent at the end of the period	66,511,040	103,886,999

JURIDICA INVESTMENTS LIMITED

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD FROM 1 JANUARY 2010 TO 30 JUNE 2010

LEGAL FORM AND PRINCIPAL ACTIVITY

The Group consists of the Company which is a closed-ended investment company incorporated under The Companies (Guernsey) Law, 2008 ("the Law") and its wholly owned subsidiaries Riverbend Investments Limited, Somerton Investments LLC and Juridica Ventures KFT. The Law does not make a distinction between private and public companies. Shares in the Company were admitted to trading on AIM, a market operated by the London Stock Exchange, on 21 December 2007. The address of the Company's registered office is Bordeaux Court, Les Echelons, St Peter Port, Guernsey, GY1 6AW. The condensed consolidated interim financial statements have been reviewed, not audited. This consolidated interim financial information has been reviewed, not audited.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of the financial statements are set out below.

Basis of Preparation

These half yearly condensed consolidated financial statements for the six months ended 30 June 2010 have been prepared in accordance with International Accounting Standard 34: Interim Financial Reporting ("IAS 34"). The condensed consolidated financial statements should be read in conjunction with the annual Financial Statements for the year ended 31 December 2009 which have been prepared in accordance with International Financial Reporting Standards ("IFRS"), issued by the International Accounting Standards Board ("IASB"), interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") and applicable legal and regulatory requirements of Guernsey Law.

(a)

Accounting policies

The preparation of financial statements in conformity with IAS 34 requires the use of certain critical accounting estimates. It also requires the Board of Directors to exercise its judgement in the process of applying the Group's accounting policies. The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2009, as described in those annual financial statements.

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 January 2010:

•

IFRS 3 - Business Combinations (revised 2008) The revisions to IFRS 3 introduced major changes to the accounting requirements for business combinations. The adoption of the revised IFRS 3 did not have an impact in the current period financial statements as there were no business combinations during the period

•

IAS 27 - Consolidated and Separate Financial Statements (revised 2008) The adoption of the revisions to IFRS 3 noted above require that the revised IAS 27 is adopted at the same time. The revisions introduce changes to the accounting requirements for transactions with non-controlling interests and the loss of control of a subsidiary. The Group did not have transactions with non-controlling interests in the current period and did not dispose of any of its equity interests in its subsidiaries. Therefore, the adoption of the revisions to IAS 27 did not have an impact in the current period's financial statements.

The following new standards, amendments to standards and interpretations are effective for the period ended 30 June 2010, but are not currently relevant for the group.

•

IFRS 8 - Operating segments;

•

IFRIC 11, IFRIC 2 - Group and share transactions;

•

IFRIC 12 - Service concession arrangements;

•

IFRIC 13 - Customer loyalty programmes;

•

IFRIC 14 - The limit on a defined benefit asset, minimum funding requirements and their interaction;

•

IFRIC 15 - Agreements for the construction of real estate;

•

IFRIC 16 - Hedges of a net investment in a foreign operation;

•

IFRIC 17 - Distributions of non-cash assets to owners; and

•

IFRIC 18 - Transfers of assets from customers.

The following new standards, amendments to standards and interpretations have been issued, but are not yet effective and have not been early adopted:

•

IAS 1 (amendment), Presentation of Financial Statements. Published: May 2010, effective: 1 January 2011;

•

IAS 24 (revised), Related Party Transactions. Published: 4 September 2009, effective: 1 January 2011;

•

IAS 27 (amendment), Consolidated and Separate Financial Statements. Published: May 2010, effective: 1 July 2011;

•

IAS 34 (amendment), Interim Financial Reporting. Published: May 2010, effective: 1 January 2011;

•

IFRS 3 (amendment), Business Combinations. Published: May 2010, effective: 1 July 2010;

•

IFRS 9 (amendment), Financial Instruments Classification and Measurement. Published: November 2009, effective: 1 January 2013;

•

IFRIC 13 (amendment) Customer Loyalty Programmes. Published: May 2010, effective: 1 January 2011;

•

IFRIC 14 (amendment) Prepayments of a Minimum Funding Requirement. Published: 26 November 2009, effective: 1 January 2011; and

•

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments. Published: 26 November 2009, effective: 1 July 2010.

3.	SUBSIDIARIES
		Date Incorporated	% Share holdings	30 June 2010	31 December 2009
				US$	US$

	Riverbend Investment Limited	8 October 08	92%	1	1
	Juridica Ventures KFT	2 March 09	100%	2,200	-
	Somerton Investments LLC	31 May 09	100%	1	-

				2,202	1

4.	CONTRACTUAL INTERESTS
		Balance at 1 January 2010	Additions	Disposal proceeds	Fair value movement due to effective interest	Fair value movement due to changes in estimated cash flows	Realised (loss) / gain	Balance at 30 June 2010
		US$	US$	US$	US$	US$	US$	US$

	Case 0108-S/0209-S	4,686,616	593,136	-	164,019	116,229	-	5,560,000
	Case 0408-W	1,967,839	568,865	-	151,445	911,851	-	3,600,000
	Case 0608-S	699,743	294	-	-	42,612	-	742,649
	Case 0708-B	3,779,881	438,884	-	148,663	(844,941)	-	3,522,487
	Case 0808-C	11,967,389	4,586	-	360,759	(524,494)	-	11,808,240
	Case 1608-T	1,624,859	-	-	64,624	(381,239)	-	1,308,244
	Case 7608-A	2,426,973	8,304	-	217,509	(5,495)	-	2,647,291
	Case 2709-E	1,173,092	-	-	597,567	(1,066,251)	-	704,408
	Case 0409-C	4,618,445	256,592	-	769,384	(1,034,139)	-	4,610,282
	Case 5009-S	1,091,425	28,475	-	273,762	(45,348)	-	1,348,314
	Case 6308-F(settled)	-	-	(40,610)	-	-	40,610	-
	Case 6509-A	2,044,649	443,558	-	372,447	(159,347)	-	2,701,307
	Case 6409-V	-	701,865	-	165,568	(94,609)	-	772,824
	Case 0210-M	-	1,045,958	-	-	(17,553)	-	1,028,405

	Totals	36,080,911	4,090,517	(40,610)	3,285,747	(3,102,724)	40,610	40,354,451

	Balance at 1 January 2009	Additions	Disposal proceeds	Fair value movement due to effective interest	Fair value movement due to changes in estimated cash flows	Realised (loss) / gain	Balance at 31 December 2009
	US$	US$	US$	US$		US$	US$

Case 0108-S/0209-S	1,071,988	3,491,624	-	123,004	-	-	4,686,616
Case 0408-W	1,156,438	1,169,497	-	169,639	(527,735)	-	1,967,839
Case 0608-S	1,559,215	1,302,879	-	-	(2,162,351)	-	699,743
Case 0708-B	707,180	1,964,147	(750,000)	106,277	1,608,773	143,504	3,779,881
Case 0808-C	3,582,877	2,015,824	-	649,190	5,719,498	-	11,967,389
Case 0908-U(settled)	4,319,371	-	(4,337,692)	-	-	18,321	-
Case 1608-T	518,479	-	-	132,279	974,101	-	1,624,859
Case 6308-F(settled)	1,202,804	333,045	(2,437,642)	-	-	901,793	-
Case 7608-A	-	2,106,298	-	320,675	-	-	2,426,973
Case 2709-E	-	867,747	-	305,345	-	-	1,173,092
Case 0409-C	-	4,275,973	-	342,472	-	-	4,618,445
Case 5009-S	-	1,087,907	-	3,518	-	-	1,091,425
Case 6509-A	-	2,029,582	-	15,067	-	-	2,044,649

Totals	14,118,352	20,644,523	(7,525,334)	2,167,466	5,612,286	1,063,618	36,080,911

Contractual interests have been accounted for using the effective interest rate method of calculation. Effective interest rates on these contractual interests range between 3.62 and 129.39 percent at 30 June 2010. At 30 June 2010 the Company had investments in 13 contractual interests. The terms of case 0108-S were amended during the year 2009 as a result of the Company's investment in Case 0209-S. Although the two cases are separate investments, the value of the two cases are intrinsically linked and are thus valued together in the above chart.

Fair value movements of contractual interests are due to amendments in estimated cash flows arising from changes in expectations surrounding each case. Further explanation on fair value movements is found within the "Valuation" section of the Investment Manager's Report.

5.	AVAILABLE FOR SALE FINANCIAL ASSETS
		30 June	31 December
		2010	2009
		US$	US$

	Balance at start of the period/year	7,505,521	2,400,005
	Additions	40,284	5,105,516
	Disposal proceeds	-	-
	Fair value movement	-	-
	Realised gains	-	-
	Balance at end of the period/year	7,545,805	7,505,521

The Company's Available for Sale Financial Assets include a holding in Juridica Capital Management Limited ("JCML"). The fair value of the Company's investment in JCML was assessed as at 30 June 2010 to be $2,400,005 (31 December 2009: $2,400,005). This static assessment of JCML is deemed appropriate given its investment in the Company, its level of assets (including intellectual property) the quality of its income and earnings, based on the minimal change to the circumstances surrounding JCML.

During 2009, the Company invested $5,105,516 in an entity for the purpose of expanding its interest in contractual claims. The Company is deemed not to have significant influence over the entity and hence does not consider the entity an affiliate. As at 30 June 2010, the carrying value of the Company's investment in this entity was maintained at cost.

AVAILABLE FOR SALE DEBT SECURITIES

Balance at 1 January 2010

Drawdown

Repayment

Movement due to effective interest

Fair value movement due to changes in estimated cash flows

Realised gains

Balance at 30 June 2010

US$

Case 3608-A

94,370,855

3,064,035

5,695,140

(6,998,736)

96,131,294

Balance at 1 January 2009

Drawdown

Repayment

Movement due to effective interest

Fair value movement due to changes in estimated cash flows

Realised gains

Balance at 31 December 2009

US$

Case 3608-A

53,433,408

27,487,305

(1,500,000)

8,878,487

6,071,655

94,370,855

Case 3608-A represents the investments associated with the facility in place between the Company and FSS (see note 13(g)). Fair value movements of Case 3608-A are due to amendments in estimated cash flows arising from changes in expectations surrounding each investment. Further explanation on fair value movements is found within the "Valuation" section of the Investment Manager's Report.

7.	OTHER RECEIVABLES AND PREPAYMENTS
		30 June	31 December
		2010	2009
		US$	US$

	Loan principal repayment	1,500,000	1,500,000
	Debtors	226,044	648,542
	Prepayments and accrued bank interest	298,015	334,346

		2,024,059	2,482,888

PUT OPTION

In October 2009, the Company sold 8% of the interest in its subsidiary, Riverbend Investments Limited, to an unaffiliated party (see Note 3). As part of this transaction, the Company issued a put option to the buyer providing him with the ability to sell back the shares to the Company at a value based on a predetermined formula.

The put option has an increasing strike price based on the number of days from the date of sale of the interest until the third anniversary of the date of sale. On the third anniversary of the date of sale, the put option will have a strike price of $7,000,000 and will expire on the following day.

The Company has fair valued the strike price of the put option by calculating the present value of its maximum stated value from the third anniversary of the date of sale to 30 June 2010. The resulting amount is reflected on the books as a non-current liability with an offset to equity.

	30 June	31 December
	2010	2009
	US$	US$

Stated strike price value of put option at expiration date ("Stated Value")	7,000,000	7,000,000

Fair value of Stated Value at end of period/year	1,518,022	503,729

9.	CASH AND CASH EQUIVALENTS
		30 June	31 December
		2010	2009
		US$	US$

	Cash at bank	66,511,040	77,050,345

		66,511,040	77,050,345

10.	OTHER PAYABLES
		30 June	31 December
		2010	2009
		US$	US$

	Audit fees	214,227	162,200
	Case addition	883,316	602,367
	Sundry creditors	102,088	205,095

		1,199,631	969,662

11.

COMMITTMENTS & GUARANTEES

Under the terms of some of its contracts, JIL provides a line of credit to counterparties. As at 30 June 2010, the maximum commitment under these lines of credit was $11.7 million (31 December 2009: $ 9.5 million).

12.

FUNCTIONAL AND PRESENTATION CURRENCY / EXCHANGE RATES

The financial statements are presented in United States Dollar ("US$") which is also the Company's functional currency. The following rate was applicable as at 30 June 2010.

Closing rate

30 June

31 December

2010

2009

US$

Great Britain pounds (GBP)

1.4944

1.6455

13.

RELATED PARTY TRANSACTIONS

The principals of Juridica Capital Management Limited are Richard Fields and Timothy Scrantom. Each of Tim Scrantom and Richard Fields, Directors of JCML, acquired 50,000 Ordinary Shares in the Company (0.0625 percent equity interest each) as reimbursement of 100,000 pounds sterling of pre IPO costs.

(a)

Management fee

The Company is managed by Juridica Capital Management Limited, an investment management company incorporated in Guernsey in which the Company holds a 15 percent equity interest. Under the terms of the Management Agreement, the Company appointed Juridica Capital Management Limited as an Investment Manager to provide management services to the Company. The Investment Manager receives a fee based on the adjusted net asset value of the Company, payable quarterly in advance using the annual rate of 2.5 per cent. The adjusted net asset value is the net asset value of the Company at the relevant time, after accruing for the annual management fee but not taking into account any liability of the Company for accrued performance fees and after:

(i) deducting any unrealised gains on investments;

(ii) adding the amount of any write downs with respect to investments which have not been written off; and

(iii) deducting the value of the Company's investment in JCML.

In the period to 30 June 2010 management fees totalling $2,401,996 (30 June 2009: $2,137,812) were paid to Juridica Capital Management Limited. As at 30 June 2010 there was a management fee debtor of $21,172 (31 December 2009: $144,356).

(b)

Investment in Juridica Capital Management Limited

The Company acquired 15 percent of Juridica Capital Management Limited on Admission (see Note 5). The investment is measured at fair value. An impairment review has been performed as part of the fair value assessment and an impairment review will be carried out on an semi-annual basis.

Juridica Capital Management Limited acquired 1.5 million shares in the Company on Admission and has acquired a further 153,507 shares under the terms of the placing effective on 6 April 2009 at a price of £1.14. As announced on 28 July 2009 these shares have been sold to certain employees of the Investment Manager.

(c)

Performance fee

The Investment Manager is entitled to a performance fee based on the adjusted net asset value (being the NAV of the Company before taking into account any performance fee payable less any unrealised gains on investments plus the value of any writedowns in any investments that have been written down but not written off) of the Company. The performance fee will equal 20 per cent of the annualised increase in the net asset value between a hurdle rate of 8 per cent and 20 per cent, furthermore a fee of 35 per cent of the increase over a hurdle of 20 per cent and 40 per cent and 50 per cent of the same increase over a hurdle of below 40 per cent. The fees are subject to a high water mark such that no performance fee will be paid if the performance of the Company does not exceed the net asset value at the end of the previous year in which the performance fee was paid. Payment of the performance fee is subject to the condition set out in (d), below.

As at 30 June 2010 the hurdle rate was not achieved, therefore, no performance fee was paid or payable for the period.

(d)

Trust account

Of the performance fee, 50 percent of any payment within the first four years from the date of admission will be retained by the Company in a trust account. During that period if, at any given year end, the annualised increase in net asset value of the Company is less than 8 percent, the Company may claw back 20 percent of the difference between the actual net asset value and the net asset value assuming an 8 percent increase from the net asset value for the previous period. As at 30 June 2010 the balance in the trust account was $ Nil (31 December 2009: $Nil).

(e)

Turtle Bay Technologies Limited

On 20 November 2008 the Company agreed to provide $1.475 million to a US LLC, a company not related to the Company. $525,000 of this was paid to Turtle Bay Technologies Limited, a company ultimately owned and controlled by JCML, for services provided by the US LLC by Turtle Bay Technologies Limited.

(f)

Eleven Engineering Game Control LLC

In August 2009, the Company agreed to provide $817,000 to Eleven Engineering Game Control LLC, a company ultimately owned and controlled by JCML.

(g)

Facility agreement and Collateral Account

The Company has entered into a facility agreement (the "Facility") with which it agrees to loan to FSS money for funding cases in which FSS is to act under a Co-counsel Agreement. The Company expects to enter into loan arrangements with other law firms (which may include other law firms established by the Principals) on terms and conditions similar to those contained in the Facility. The Facility available to FSS will be for up to approximately 50 percent of the net proceeds of the capital raised by the Company less any loans made to other law firms. The Facility will remain outstanding and available until the earlier of (i) the termination of the Management Agreement, (ii) the date on which Richard Fields and Tim Scrantom cease to own a controlling interest in FSS, (iii) the winding up of the Company, (iv) an event of default of the Facility documents, or (v) ten years from Admission. Under the Facility, drawdowns may be requested by FSS from time to time up to the maximum principal amount but subject always to approval by the Company in its sole discretion.

No more than $10 million may be drawn down in respect of the same case investment, unless otherwise approved by the Company.


(h)	Directors' remuneration
		30 June	30 June
		2010	2009
		US$	US$

	Lord Danniel Brennan	117,653	61,625
	Richard Battey	47,061	47,158
	Kermit Birchfield	50,000	44,682

		214,714	153,465

No pension contributions were paid or were payable on behalf of the Directors.

Lord Daniel Brennan has an interest in 416,140 shares under a Share Option Agreement, details of which were disclosed in the Admission Document. The fair value of these options was determined as of the grant date to be $139,138, which is to be provided for over the vesting period of the options of 5 years. As at 30 June 2010, a provision of $71,244 (31 December 2009: $56,613) has been made for these options.

The other Directors have no beneficial interest in the share capital of the Company.

(i)

Cenkos Warrant

Cenkos Securities plc has an interest in 800,000 shares under a Deed of Warrant Grant at a price of 130p exercisable until 21 December 2012. These were fair valued as of the grant date at $246,906 (31 December 2009: $246,906) and a full provision has been made for this in the annual financial statements prepared for the period ended 30 June 2010.

14.

SEASONALITY

The Company's operations are not affected by seasonality or cyclicality and as such they have no impact on the unaudited condensed consolidated financial statements.

15.

SUBSEQUENT EVENTS

In August 2010, the Company's investment in case 0408-W came to a full conclusion. A settlement agreement was reached and approved by the court that will provide for the Company to receive total proceeds of approximately $3.8 million. Funds totaling $2.4 million was received in September 2010 and the remaining $1.4 million will be received in January 2011. The Company invested a total of approximately $2.8 million in this case.

In September 2010, the Company received proceeds of approximately $400,000 form a partial settlement in case 6409-V. Additional defendants in this case remain involved in the matter.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR LFFSIAEIDFII

Date		Source	Headline
20th Dec 2018	12:04 pm	RNS	Result of General Meeting and Cancellation
20th Dec 2018	7:30 am	RNS	Suspension - Juridica Investments Limited
20th Dec 2018	7:00 am	RNS	Suspension of Shares
17th Dec 2018	5:30 pm	RNS	Juridica Investments
14th Dec 2018	11:05 am	RNS	Second Price Monitoring Extn
14th Dec 2018	11:00 am	RNS	Price Monitoring Extension
12th Dec 2018	4:35 pm	RNS	Price Monitoring Extension
11th Dec 2018	2:05 pm	RNS	Second Price Monitoring Extn
11th Dec 2018	2:00 pm	RNS	Price Monitoring Extension
28th Nov 2018	2:41 pm	RNS	Posting of Circular
28th Nov 2018	10:23 am	RNS	Dividend Declaration
22nd Nov 2018	2:06 pm	RNS	Second Price Monitoring Extn
22nd Nov 2018	2:00 pm	RNS	Price Monitoring Extension
22nd Nov 2018	7:00 am	RNS	Winding up, Delisting & Notice of General Meeting
7th Sep 2018	4:40 pm	RNS	Second Price Monitoring Extn
7th Sep 2018	4:35 pm	RNS	Price Monitoring Extension
6th Sep 2018	6:00 pm	RNS	Results for the six months ended 30 June 2018
28th Jun 2018	10:03 am	RNS	Annual Financial Report
13th Jun 2018	10:00 am	RNS	Result of AGM
4th Apr 2018	11:30 am	RNS	Final Results
10th Jan 2018	5:00 pm	RNS	Company Update
22nd Aug 2017	7:00 am	RNS	Results for the six months ended 30 June 2017
20th Jun 2017	12:18 pm	RNS	Annual Financial Report
4th May 2017	5:31 pm	RNS	Result of Annual General Meeting
3rd Apr 2017	7:00 am	RNS	Final Results
18th Jan 2017	7:00 am	RNS	Investment Manager ownership change
16th Dec 2016	3:44 pm	RNS	Total Voting Rights
22nd Sep 2016	10:00 am	RNS	Holding(s) in Company
21st Sep 2016	3:55 pm	RNS	Holding(s) in Company
13th Sep 2016	3:11 pm	RNS	Holding(s) in Company
7th Sep 2016	3:54 pm	RNS	Dividend Payment Date
6th Sep 2016	4:15 pm	RNS	Half-year Report
1st Aug 2016	5:17 pm	RNS	Holding(s) in Company
28th Jul 2016	5:33 pm	RNS	Holding(s) in Company
19th Jul 2016	3:08 pm	RNS	Holding(s) in Company
19th Jul 2016	12:43 pm	RNS	Holding(s) in Company
6th Jul 2016	9:06 am	RNS	Holding(s) in Company
19th May 2016	7:00 am	RNS	Dividend Declaration
10th May 2016	6:07 pm	RNS	Result of AGM
11th Apr 2016	1:15 pm	RNS	Notice of AGM
11th Apr 2016	10:30 am	RNS	Portfolio update
31st Mar 2016	9:42 am	RNS	Final Results
8th Feb 2016	7:00 am	RNS	Statement re: Company costs
4th Dec 2015	3:48 pm	RNS	Holding(s) in Company
19th Nov 2015	9:55 am	RNS	Replacement: Holdings in Company
19th Nov 2015	7:00 am	RNS	Holding(s) in Company
18th Nov 2015	7:00 am	RNS	Corporate update
17th Nov 2015	3:28 pm	RNS	Holding(s) in Company
16th Nov 2015	7:00 am	RNS	Portfolio Update
2nd Oct 2015	12:52 pm	RNS	Holding(s) in Company

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