SOLO.L Regulatory News (SOLO)

GROUP INCOME STATEMENT

FOR THE INTERIM PERIOD ENDED 31 DECEMBER 2008

Notes

Six months ended

Six months ended

Year ended

31 December 2008

31 December 2007

30 June 2008

(Unaudited)

(Unaudited)

(Audited)

£ 000's

£ 000's

£ 000's

Revenue

24

27

69

Cost of sales

(14)

(82)

(271)

Gross profit/(loss)

10

(55)

(202)

Administrative expenses

(319)

(1,000)

(2,309)

Group  operating loss

(309)

(1,055)

(2,511)

Interest receivable

2

32

42

Loss before taxation

(307)

(1,023)

(2,469)

Income tax expense

-

-

-

Loss for the period

attributable to shareholders

2

(307)

(1,023)

(2,469)

LOSS PER SHARE (pence)

Basic/Diluted

3

0.12

0.45 

1.08

GROUP BALANCE SHEET

As at

As at

As at

Notes

31 December 2008

31 December 2007

30 June 2008

(Unaudited)

(Unaudited)

(Audited)

£ 000's

£ 000's

£ 000's

Non-current assets

Intangible assets

800

6,562

800

Plant and equipment

-

138

-

800

6,700

800

Current assets

Trade and other receivables

54

273

49

Inventories

48

121

-

Cash and cash equivalents

24

919

272

126

1,313

321

Total assets

926

8,013

1,121

Current liabilities

Trade and other payables

(186)

(117)

(273)

Provisions

(2)

-

(2)

Prepayments

-

(86)

-

Total liabilities

(188)

(203)

(275)

Net assets

738

7,810

846

Equity

Share capital

4

1,857

1,586

1,598

Share premium reserve

2,950

2,855

2,869

Unissued Share Capital

-

-

185

Foreign exchange reserve

84

64

60

Other reserves

20

5,730

-

Share-based payments

80

75

80

Accumulated loss

(4,253)

(2,500)

(3,946)

738

7,810

846

GROUP CASH FLOW STATEMENT

FOR THE INTERIM PERIOD ENDED 31 DECEMBER 2008

Six months ended

Six months ended

Year ended

31 December 2008

31 December 2007

30 June 2008

(Unaudited)

(Unaudited)

(Audited)

£ 000's

£ 000's

£ 000's 

OPERATING ACTIVITIES 

Loss after tax for the period

(309)

(1,055)

(2,511)

Adjustments for:

Depreciation

-

9

172

Amortisation

-

121

246

Loss on disposal of assets

-

-

(5)

Share-based payments

-

15

46

Increase in Provisions

-

-

2

Decrease/(Increase) in receivables

(5)

(13)

210

Decrease/(Increase) in inventories

(48)

(121)

-

(Decrease)/Increase in payables

(87)

(157)

(87)

CASH USED IN OPERATING ACTIVITIES

(449)

(1,201)

(1,927)

Income tax paid

-

(12)

(12)

NET CASH USED IN OPERATING ACTIVITIES

(449)

(1,213)

(1,939)

INVESTING ACTIVITIES

Interest received

2

32

42

Proceeds from disposal of assets

-

-

5

Purchase of patents

-

-

(44)

Purchase of plant and equipment

-

(78)

(112)

NET CASH USED IN INVESTING ACTIVITIES

2

(46)

(109)

FINANCING ACTIVITIES

Proceeds on issuing of ordinary shares

175

43

43

Proceeds on share capital un-issued

-

-

185

NET CASH FROM FINANCING ACTIVITIES

175

43

228

NET DECREASE IN CASH AND CASH EQUIVALENTS

(272)

(1,216)

(1,820)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

272

2,122

2,122

Exchange loss on cash and cash equivalents

24

13

(30)

CASH AND CASH EQUIVALENTS AT END OF PERIOD

24

919

272

Unissued

Share

Share

Share

Share

Based

Foreign

Other

Accumulated

Capital

Premium

Capital

Payments

Exchange

Reserves

Losses

Total

£ 000's

£ 000's 

£ 000's 

£ 000's 

£ 000's 

£ 000's 

£ 000's 

£000's 

Group

Balance at 1 July 2007

1,574

2,824

-

60

51

5,730

(1,477)

8,762

Foreign translation differences

-

-

-

-

9

-

-

9

Loss for the period

-

-

-

-

-

-

(2,469)

(2,469)

Total recognised income and expense for the period

-

-

-

-

9

-

(2,469)

(2,460)

Share issue

24

45

185

-

-

-

-

254

Cancelled share based payment

-

-

-

(7)

-

-

-

(7)

Share-based payments

-

-

-

27

-

-

-

27

Impairment charge

-

-

-

-

-

(5,682)

-

(5,682)

Foreign translation differences

-

-

-

-

-

(48)

-

(48)

Balance at 30 June 2008

1,598

2,869

185

80

60

-

(3,946)

846

Foreign translation differences

-

-

-

-

24

-

-

24

Loss for the period

-

-

-

-

-

-

(307)

(307)

Total recognised income and expense for the period

-

-

-

-

24

-

(307)

(283)

Share issue

259

112

(185)

-

-

-

-

186

Cost of share issue

-

(11)

-

-

-

-

(11)

Warrants subscribed 

-

(20)

-

-

-

20

-

-

Balance at 31 December 2008

1,857

2,950

-

80

84

20

(4,253)

738

1

SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation

The financial information has been prepared under the historical cost convention and on a going concern basis and in accordance with International Financial Reporting Standards and IFRIC interpretations adopted for use in the European Union ("IFRS") and those parts of the Companies Act applicable to companies reporting under IFRS.

The financial information for the period ended 31 December 2008 has not been audited or reviewed in accordance with the International Standard on Review Engagements 2410 issued by the Auditing Practices Board. The figures were prepared using applicable accounting policies and practices consistent with those adopted in the statutory accounts for the period ended 30 June 2008. 

The financial information contained in this document does not constitute statutory accounts as defined by Section 240 of the Companies Act 1985 (England & Wales). In the opinion of the directors the financial information for this period fairly presents the financial position, result of operations and cash flows for this period.

This Interim Financial Report was approved by the Board of Directors on 30 March 2009.

Statement of compliance

These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard ('IAS') 34 - Interim Financial Reporting as adopted by the European Union. Accordingly the interim financial statements do not include all of the information or disclosures required in the annual financial statements.

Basis of consolidation

The consolidated financial statements comprise the financial statements of Immersion Technologies International Plc and its controlled entities. The financial statements of controlled entities are included in the consolidated financial statements from the date control commences until the date control ceases.

The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.

All inter-company balances and transactions have been eliminated in full.

Foreign currencies

The functional currency of each entity is determined after consideration of the primary economic environment of the entity. The group's presentational currency is Sterling (£).

2

SEGMENT REPORTING

For management purposes the Group is organised into 4 operating divisions: Corporate; Product Research, Development and Design; Product Manufacture, and; Sales. These divisions are the basis on which the Group reports its primary segment information. Secondary segment information is presented on a geographic basis. The primary segment information corresponds closely to geographical segments as operational segments reside in distinct locations of the United Kingdom, Australia and Asia.

Business segments

Corporate

Product

Product

Sales

Unallocated

Total

R&D and

Manufacture

Design

Six months ended 31 December 2008

(Unaudited)

£ 000's

£ 000's

£ 000's

£ 000's

£ 000's

£ 000's

Segment Revenue

-

9

-

15

-

24

Segment loss from operations

(142)

(123)

(32)

(12)

-

(309)

Interest receivable

2

-

-

-

-

2

Loss for the period before taxation

(307)

2

SEGMENT REPORTING (CONTINUED)

Corporate

Product

Product

Sales

Unallocated

Total

R&D and

Manufacture

Design

Year ended 30 June 2008

(Audited)

£ 000's

£ 000's

£ 000's

£ 000's

£ 000's

£ 000's

Segment Revenue

6

45

-

18

-

69

Segment loss from operations

(1,178)

(796)

(192)

(345)

-

(2,511)

Interest receivable

42

Loss for the period before taxation

(2,469)

Six months ended 31 December 2007

(Unaudited)

Segment Revenue

5

22

-

-

-

27

Segment loss from operations

(471)

(408)

(130)

(46)

-

(1,055)

Interest receivable

32

Loss for the period before taxation

(1,023)

United 

Australia

Asia

Unallocated

Total

Geographical segments

Kingdom

£ 000's

£ 000's

£ 000's

£ 000's

£ 000's

Six months ended 31 December 2008

(Unaudited)

Segment Revenue

-

9

15

-

24

Segment loss from operations

(136)

(118)

(55)

-

(309)

Interest receivable

2

-

-

-

2

Loss for the period

(307)

Year ended 30 June 2008

(Audited)

Segment Revenue

6

45

18

-

69

Segment loss from operations

(1,260)

(588)

(663)

-

(2,511)

Interest receivable

42

Loss for the period before taxation

(2,469)

Six months ended 31 December 2007

(Unaudited)

Segment Revenue

5

22

-

-

27

Segment loss from operations

(597)

(282)

(176)

-

(1,055)

Interest receivable

31

Loss for the period before taxation

(1,024)

3

LOSS PER ORDINARY SHARE

The calculation of earnings per share is based on the loss after taxation divided by the weighted average number of share in issue during the period:

Six months ended

31 December 2008

(Unaudited)

Six months ended

 31 December 2007

(Unaudited)

Year ended  30 June 2008

(Audited)

Net loss after taxation (£ 000's)

(307)

(1,023)

(2,469)

Weighted average number of ordinary shares used in calculating basic earnings per share (millions) 

259.2

226.8

226.6

Basic loss per share (pence)

(0.12)

(0.45)

(1.08)

4

SHARE CAPITAL ISSUED

The authorised share capital of the Company and the called up and fully paid amounts at 31 December 2008  were as follows:

Authorised

Number of shares

£'000

Ordinary shares of £0.007 each

1,000,000,000

7,000

Called up, allotted, issued and fully paid 

Number of shares

Nominal value 

£000's

Balance at 1 July 2006

342,761,601

343

Consolidation of share capital

(293,795,658)

12 April 2007 for cash at 10.25p per share

175,903,671

1,231

1 July 2007 for non-cash consideration

1,731,645

12

6 May 2008 for non-cash consideration at 1.54p per share

1,623,375

11

16 July 2008 for cash at 1p per share

18,500,000

130

14 August 2008 for cash at 1p per share

17,500,000

122

14 August 2008 for non-cash consideration at 1p per share

1,100,000

8

As at 31 December 2008

265,324,634

1,857

Exercise Price

Expiry Date

Options in Issue

31 December 2008

21p

19 May 2011

734,489

1.54p

30 April 2018

17,550,000

1.5p (1)

16 July 2013

9,250,000

1.5p (1)

14 August 2013

9,300,000

36,834,489

5

INVESTMENT IN GROUP COMPANIES

Company name

Country of incorporation

Proportion of ownership interest

Immersion Technologies UK Limited

UK

100%

Immersion Technology Property Limited

UK

100%

Immersion Technology International Limited

UK

100%

Immersion Technologies (Singapore) Pte Limited

Singapore

100%

Immersion Technology (Nanjing) Co. Limited

China

100%

Immersion Technologies Australia Pty Limited

Australia

100%

Whise Acoustics Limited

Australia

100%

Whise Technologies Pty Limited

Australia

100%

6

EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE

On 6 February 2009 at the Annual General Meeting of the Company, a resolution to subdivide each existing issued and unissued ordinary shares of 0.7p each into one ordinary share of 0.01p each and one deferred share of 0.69p each was approved . The deferred shares have effectively no value and no share certificate in respect of these shares was issued. Share certificates for the existing ordinary shares remains valid. Accordingly, application was made for a total of 265,324,634 ordinary share of 0.01p each to be admitted to trading on AIM and such admission commenced trading on 12 February 2009.

7

The financial information set out above does not constitute the Group's statutory accounts for the period ended 30 June 2008, but is derived from those accounts. 

8

A copy of this interim statement is available on the Company's website www.iti-plc.com