Sosandar Regulatory News (SOS)

MedaVinci plc

("MedaVinci" or the "Company")

Preliminary Results for the nine months ended 31 December 2010

The Company is pleased to announce its preliminary results for the nine months ended 31 December 2010:

CHAIRMAN'S STATEMENT

I highlighted in my interim statement my belief that we have now secured an exciting future for Medavinci plc by re-focussing the Company's investment strategy to that of a gold mineral exploration and production business.

The Deli Jovan gold project in Serbia is progressing well and we are encouraged by the recent report from SRK Consulting (UK) Limited who stated:

"SRK considers likely that a small scale mining operation can be established and sustained at Deli Jovan using handheld pneumatic drilling equipment. The current constraints on operations are the unknown processing recovery and the limited information on the continuation of the ore zone outside the known working areas. The target of 30,000 ounces per annum as set by Deli Jovan Exploration d.o.o could be achieved, on the condition that the historically reported widths and grades can be substantiated by the DE exploration programme."

The Board has today announced that the Company has exercised its option to acquire the remaining 51% interest in Orogen Gold Limited ("Orogen Gold") that it does not currently own, subject to shareholder approval at a General Meeting to be held on 4 March 2011. Orogen Gold will become the Company's main trading subsidiary and the Company will move from being an investing company to a holding company whose main activities (via its subsidiaries) consist of exploring, appraising, and developing gold deposits in Europe. Furthermore the Company has now changed its accounting reference date to 31 December, to coincide with that of Orogen Gold and the operational business. The Company has made a separate announcement relating to the exercise of the option in relation to Orogen Gold and an admission document, prepared pursuant to the AIM Rules, will be published and sent to shareholders shortly.

Upon completion of the acquisition, John Barry, Edward Slowey and Alan Mooney, directors of Orogen Gold, will join the Board as non-executive Chairman, Chief Executive Officer and Finance Director respectively and the name of the Company will be changed to Orogen Gold Plc. Adam Reynolds is to remain on the Board as a non-executive Director and Paul Foulger, Glyn Hirsch and Michael Hough are to stand down from the Board.

Deli Jovan represents our first gold exploration project and in line with our new strategy we are reviewing a number of other mineral exploration opportunities in Europe and Asia that are at varying stages of advancement. Shareholders will be kept fully informed of any new developments.

We have a strong team within the Company and a tremendous project in Deli Jovan. This together with our commitment to introduce new mineral exploration and development projects to the company will ensure an exciting development of our business and presents substantial scope to add value as our work proceeds.

I am looking forward to the coming year with confidence.

Adam Reynolds

Chairman

16 February 2011

For further information, please contact:

STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 31 DECEMBER 2010

STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2010

STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 31 DECEMBER 2010

STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 31 DECEMBER 2010

NOTES

1. GENERAL INFORMATION AND PRINCIPAL ACCOUNTING POLICIES

MeDaVinci plc is a public limited liability company governed by UK law, established in the UK and listed on the Alternative Investment Market (AIM). The company's registered office is in the UK. Its office address is 14 Kinnerton Place South, London, SW1X 8EH.

The principal activity of the company is that of investing in companies involved in mineral exploration and production in Europe. In prior years, the focus of the company was to invest in health and wellness based companies.

The principal accounting policies adopted in the preparation of the financial statements are set out below:

Statement of compliance

The financial statements of MeDaVinci Plc have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, IFRIC interpretations and the Companies Act 2006 applicable to companies reporting under IFRS.

Basis of preparation of the financial statements

The financial statements have been prepared under the historical cost convention, as modified by the measurement at fair value of available-for-sale financial assets and financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

Change of accounting reference date

The financial statements are presented for a period of nine months to 31 December 2010 to align it to those of its associates. The comparatives disclosed in the financial statements and the notes are for the year ended 31 March 2010.

New and amended standards adopted by the Company

The company has adopted the following new and amended IFRSs as of 1 April 2010:

·; IFRS 3 (revised), 'Business combinations' and consequential amendments to IAS 27, 'Consolidated and separate financial statements', IAS 28, 'Investments in associates' and IAS 31, 'Interests in joint ventures', effective prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 July 2009.

The revised standard continues to apply the acquisition method to business combinations, with some significant changes. For example, all payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the statement of comprehensive income. There is a choice on an acquisition-by-acquisition basis to measure the minority interest in the acquiree either at fair value or at the minority interest's proportionate share of the acquiree's net assets. All acquisition-related costs should be expensed.

·; IAS 27 (revised), 'Consolidated and separate financial statements', (effective from 1 July 2009). The revised standard requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is remeasured to fair value, and a gain or loss is recognised in profit or loss. The company will apply IAS 27 (revised) prospectively to transactions with non-controlling interests from 1 April 2010.

1. PRINCIPAL ACCOUNTING POLICIES (continued)

·; IAS 38 (amendment), 'Intangible assets'. The amendment is part of the IASB's annual improvements project published in April 2009 and the company will apply IAS 38 (amendment) from the date IFRS 3 (revised) is adopted. The amendment clarifies guidance in measuring the fair value of an intangible asset acquired in a business combination and it permits the grouping of intangible assets as a single asset if each asset has a similar useful economic life. The amendment will not result in a material impact on the company's financial statements.

·; IAS 32 (amendment), 'Financial instruments: presentation - classification of rights issue', is effective from annual periods beginning on or after 1 February 2010 and amended the definition of a financial liability in order to classify rights issues (and certain options or warrants) as equity instruments in cases where such rights are given pro-rata to all of the existing owners of the same class of an entity's non-derivative equity instruments, or to acquire a fixed number of the entity's own equity instruments for a fixed amount in any currency. This amendment will have no impact on the company after initial application.

·; IFRS2, Share-based Payment: Group Cash-settled Share-based Payment Transactions effective 1 January 2010. The IASB issued an amendment to IFRS2 that clarified the scope and the accounting for group cash-settled share-based payment transactions. The company adopted this amendment as of 1 January 2010. It did not have an impact on the financial position or performance of the company.

·; IAS 39 Financial Instruments: Recognition and Measurement - Eligible Hedged Items effective 1 July 2009. The amendment clarifies that an entity is permitted to designate a portion of the fair value changes or cash flows variability of a financial instrument as a hedged item. This also covers the designation of inflation as a hedged risk or portion in particular situations. The company has concluded that the amendment will have no impact on the financial position or performance of the Company, as the Company has not entered into such hedges.

The following new standards, amendments to standards and interpretations are mandatory for the first time for the financial year beginning 1 April 2010, but are not currently relevant for the company:

·; IFRIC 17, 'Distributions of non-cash assets to owners', effective for annual periods beginning on or after 1 July 2009. This is not currently applicable to the company, as it has not made any non-cash distributions.

·; IFRIC 18, 'Transfers of assets from customers', effective for transfers of assets received on or after 1 July 2009. This is not relevant to the company, as it has not received any assets from customers.

Standards, interpretations and amendments to published standards that are not yet effective

The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial year beginning 1 January 2011 and have not been early adopted:

·; IAS 24 (Amendment), 'Related party transactions'. The amended standard is effective for annual periods beginning on or after 1 January 2011. It clarified definition of a related party to simplify the identification of such relationships and to eliminate inconsistencies in its application. The revised standard introduces a partial exemption of disclosure requirements for government-related entities. The company does not expect any impact on its financial position or performance.

·; IFRIC 14 (Amendment), 'Prepayments of a minimum funding requirement'. The amendment to IFRIC 14 is effective for annual periods beginning on or after 1 January 2011 with retrospective application. The amendment provides guidance on assessing the recoverable amount of a net pension asset. The amendment permits an entity to treat the prepayment of a minimum funding requirement as an asset. The amendment is deemed to have no impact on the financial statements of the company.

1. PRINCIPAL ACCOUNTING POLICIES (continued)

·; IFRS 9, 'Financial instruments: classification and measurement', as issued reflects the first phase of the IASB work on the replacement of IAS 39 and applies to classification and measurement of financial assets as defined in IAS 39. The standard is effective for annual periods beginning on or after 1 January 2013. In subsequent phases, the IASB will address classification and measurement of financial liabilities, hedge accounting and derecognition. The completion of this project is expected in early 2011. The adoption of the first phase of IFRS 9 might have an effect on the classification and measurement of the company's assets. At this juncture it is difficult for the company to comprehend the impact on its financial position and performance.

·; IFRIC 19, 'Extinguishing financial liabilities with equity instruments', is effective for annual periods beginning on or after 1 July 2010. The interpretation clarifies that equity instruments issued to a creditor to extinguish a financial liability qualify as consideration paid. The equity instruments issued are measured at their fair value. In case that this cannot be reliably measured, the instruments are measured at the fair value of the liability extinguished. Any gain or loss is recognised in profit or loss. The adoption of this interpretation will have no effect on the financial statements of the company.

·; Improvements to IFRS (issued in May 2010). The IASB issued improvement to IFRSs, an omnibus of amendments to its IFRS standards. The amendments have not been adopted as they become effective for annual periods on or after 1 January 2011 or 1 July 2010. The amendments listed below, are considered to have a reasonable possible impact on the company:

- IFRS 3 Business combinations

- IFRS 7 Financial instruments: disclosures

- IAS 1 Presentation of financial statements

- IAS 27 Consolidated and separate financial statements

The company expects no impact from the adoption of the above amendments on its financial position or performance.

Going concern

The company has changed its investment strategy to investing in companies involved in mineral exploration and has also successfully completed couple of fundraisings. The directors confirm that, after giving due consideration to the financial position and cash flows of the company they have reasonable expectation that the company has adequate resources to continue in operational existence of the foreseeable future. For this reason the company adopted the going concern basis in preparing the financial statements.

Critical Judgments and Key Sources of Estimation Uncertainty

MeDaVinci makes estimates and assumptions regarding the future. The resultant budgeted and accounting outcomes will rarely be the same as the actual results. Estimates and assumptions are evaluated on an on-going basis and are based on experience and other factors, including expectations of future events that are perceived as reasonable based on the circumstances. The following estimates and assumptions bear a significant inherent risk, which could result in material adjustments to the carrying amount of assets and liabilities in the coming year:

 (a) Impairment of Financial Assets (Non-current)

Where there are indications of impairment and at least once a year, MeDaVinci tests financial assets for impairment. The realisable value of financial assets is determined using generally accepted valuation techniques, including value-in-use calculations. These calculations and valuations require the use of estimates.

Based on these tests, possible impairment must be reported. However, where the actual performance of the underlying activities, businesses and cash-generating units is substantially worse, actual impairment losses could be incurred and/or differ from the reported impairment losses. These impairment losses could have a material impact on the carrying amount of financial assets.

(b) Carrying Value of Deferred Tax Assets and Deferred Tax Liabilities

Assumptions play a major role in the determination of deferred tax assets and deferred tax liabilities. Many uncertain factors can affect the amount of carry-forward tax losses. MeDaVinci values the carrying amounts of deferred tax assets relating to carry-forward tax losses, and the carrying amount of deferred tax liabilities relating to carry-back tax losses on the basis of its best estimates. Where actual outcomes differ from the original estimates, the differences will affect taxes and the income statement, as well as the deferred tax assets and/or deferred tax liabilities in the period in which these differences occur.

 (c) Determination of Significant Influence

Where the group holds investments in associates the directors must consider whether a significant influence is held over the ability for the investee company to operate. This consideration determines how the investment is accounted for in the financial statements.

(d) Determination of power to control of investments in Orogen Limited and Emotion Fitness Mag Kft

The investment in Orogen Limited directly and Emotion Fitness Mag Kft, through it subsidiary undertaking Emotion Fitness Limited, both are stated as 49% shareholding in line with a shareholders agreement that details this holdings respectively. Additionally the company has an option to acquire an additional 51% and 14.7% in Orogen Limited and Emotion Fitness Mag Kft respectively. However, the directors have concluded that they do not have the power to control both companies due to the terms described in the shareholders' agreements. Consequently, Orogen Limited and Emotion Fitness Mag Kft have not been consolidated and have been treated as investments in the financial statements.

(e) Share-based payments

Share options are valued by management utilising the intrinsic method of valuation.

2. SEGMENT INFORMATION

The board of directors does not receive management reports that analyse the performance or financial position of the company by business segment. The main activity of the company is to invest in companies involved in mineral exploration and production in Europe and consequently the only items in the comprehensive income statement that are attributable to these activities are the income and expenditure from these investments. All other amounts are unallocated and relate to the operation of the corporate headquarters.

From the perspective of the statement of financial position, such segment assets would include the carrying value of the investments in associates, loans advanced and the derivatives. All other assets and liabilities are unallocated and relate to the corporate activities undertaken.

The company does not have any external revenues.

3. LOSS BEFORE TAXATION

4. STAFF COSTS

There were no employees except for the directors during the period.

During the year £3,333 (March 2010: £Nil) was paid to J S Consultancy Limited for the services of a director, a company in which M Nolan is a director and shareholder. £3,333 was outstanding at the balance sheet date.

£17,624 (March 2010: £20,000) was paid to Diablo Consulting Limited and Wilton International Marketing Limited, companies in which A Reynolds and P Foulger are directors, for the services of the directors. No amount was outstanding at the balance sheet date.

G Hirsch and M Hough have received no remuneration during the period. They have waived their remuneration entitlement.

The directors are considered to be the key management personnel. Directors' remuneration and fees comprises the whole of the compensation for these individuals. The directors hold no share options.

5. RELATED PARTY TRANSACTIONS

During the period £267,900 (March 2010: £39,250) was paid to Diablo Consulting Limited and Wilton International Marketing Limited, companies in which A Reynolds and P Foulger are directors, for corporate finance, share issue costs and administration services. £26,117 (31 March 2010; £Nil) was outstanding at the balance sheet date.

A further £21,197 (March 2010: £30,109) was paid to Hansard Communications Limited, a company in which A Reynolds and P Foulger are directors, for public relation services, disbursements and related services. The amount outstanding at the balance sheet date was £2,350 (March 2010: £4,875).

At the period end £200,000 (March 2010 - £300,000), as detailed in note 8, relates to the investment and capital contribution recoverable from Emotion Fitness Mag Kft through the company's subsidiary undertaking Emotion Fitness Limited.

Orogen Gold Limited, an associated undertaking, has charged £13,469 (March 2010: £Nil) for costs relating to share issue. The amount is outstanding at the year end.

6. TAXATION

There is no UK Corporation tax charge due to tax losses incurred during the period, subject to agreement with HM Revenue & Customs. There is a potential deferred tax asset of approximately £1,850,000 (March 2010: £1,730,000) relating to the cumulative tax losses totalling approximately £6,590,000 (March 2010: £6,159,000) carried forward. The deferred tax asset is not provided for as the directors are uncertain when the company will generate sufficient profits on capital gains for the losses to be offset against.

The charge per the Statement of Comprehensive Income for the period can be reconciled to the tax losses as follows:

7. LOSS PER SHARE

Basic loss per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of ordinary shares in issue during the period.

The company had no dilutive potential ordinary shares in either year, which would serve to increase the loss per ordinary share. Therefore, there is no difference between the loss per ordinary share and the diluted loss per ordinary share.

8. INVESTMENTS

Details of these investments held are as follows:-

* - indirectly held through Oregon Gold Limited

** - indirectly held through Emotion Fitness Limited

The above companies are incorporated in the following jurisdiction:

Country of incorporation:

On 6 September 2010 the company also completed a 49% acquisition of Orogen Gold Limited and its subsidiary for a total consideration of £370,000, with an option to acquire the remaining 51% over the next 12 months. The consideration of £370,000 was satisfied by issue of 62,500,000 ordinary shares at 0.2p each and cash of £245,000.

As the company is not preparing consolidated accounts on grounds of materiality, it is preparing separate financial statements and therefore its investment in associates is not accounted for under the equity method.

The company's subsidiary undertaking, Emotion Fitness Limited has been dormant throughout the period.

The company has impaired its loan to Emotion Fitness Mag Kft by £100,000. There is no financial information available for Emotion Fitness Mag Kft.

8. INVESTMENTS (continued)

The audited group financial statements of Orogen Gold Limited as of 31 December 2010 were as follows:

9. TRADE AND OTHER RECEIVABLES 

The directors consider that the carrying amount of trade and other receivables approximates their fair value.

10. CASH AND CASH EQUIVALENTS

11. CALLED UP SHARE CAPITAL

The following ordinary shares have been issued by the company:

- On 6 September 2010 the company issued 421,021,000 shares of 0.1 pence each. The total cash consideration received amounted to £842,000.

- On 6 September 2010 the company issued 62,500,000 shares of 0.1 pence each. The company issued these shares to satisfy the purchase price of £370,000 to acquire 49% of Oregon Gold Limited.

- On 3 December 2010 the company issued 375,000,000 shares of 0.1 pence each. The total cash consideration received amounted to £1.5m.

11. CALLED UP SHARE CAPITAL (continued)

On 6 September 2010 the company granted warrants over 5,000,000 Ordinary Shares of 0.1p each to Zeus Capital Limited in respect of corporate finance advice. The subscription price is 0.2p per Ordinary Share and the exercise period is five years from the date of grant.

On 4 December 2010 the company granted warrants over 5,000,000 Ordinary Shares of 0.1p each to XCap Securities Plc in respect of corporate finance activities. The subscription price is 0.4p per Ordinary Share and the exercise period is five years from the date of grant.

Share based expense

Unexercised warrants existed at the year-end as set out above. These equity instruments were valued using the Black-Scholes option-pricing model. The assumptions used in the calculations were as follows:

Zeus XCap

Weighted average share price in pence 0.4 0.46

Exercise price in pence 0.2 0.4

Expected volatility 85% 85%

Expected life in years 1 1

Risk free rate 4.5% 4.5%

Dividend yield 0% 0%

Expected volatility was determined by calculating the volatility in the share price over a period of 3 years from the date the equity instruments were granted.

12. TRADE AND OTHER PAYABLES

Trade and other payables principally comprise amounts outstanding for on-going overhead costs. The directors consider that the carrying amount of trade payables approximately their fair value.

13. POST BALANCE SHEET EVENTS

As announced on 9 August 2010, the Company entered into the Investment Agreement pursuant to which it acquired 49 per cent. of the issued share capital of Orogen Gold Limited ( "Orogen Gold"), a company formed in April 2010 to explore, appraise and develop one or more gold deposits in Europe, with an initial focus on the Deli Jovan Gold Project in Serbia. Under the terms of the Investment Agreement, the Company had an option to acquire the remaining 51 per cent. of the issued share capital of Orogen Gold within 12 months.

The Board has today announced that the Company has exercised the Option, subject to shareholder approval at a General Meeting on 4 March 2011, for a consideration of £3.0 million satisfied by the issue of 315,351,636 Ordinary Shares. Orogen Gold will become the Company's main trading subsidiary and the Company will move from being an investing company to a holding company whose main activities (via its subsidiaries) consist of exploring, appraising, and developing gold deposits in Europe.

Upon completion of the acquisition, John Barry, Edward Slowey and Alan Mooney, directors of Orogen Gold, will join the Board as non-executive Chairman, Chief Executive Officer and Finance Director respectively and the name of the Company will be changed to Orogen Gold Plc. Adam Reynolds is to remain on the Board as a non-executive Director and Paul Foulger, Glyn Hirsch and Michael Hough are to stand down from the Board.

The Company Unapproved Share option Plan was set up in February 2011. Share options, conditional upon Admission, were granted on 16 February 2011 over 240,000,000 Ordinary shares at 0.95p per share, which vest as to 50 per cent. on the first anniversary and the balance on the second anniversary on the satisfaction of certain performance conditions.

14. CONTROLLING PARTY

There is no controlling party in the issued share capital of the company.

15. ANNUAL REPORT AND ANNUAL GENERAL MEETING

In accordance with Rules 20 and 26 of the AIM Rules for Companies, the Annual Report for the nine months ended 31 December 2010 and notice of annual general meeting have been sent to shareholders today and will be available for download from the Company's website. The Company's annual general meeting will be held at 4 Park Place, London SW1A 1LP on 11 March 2011 at 11:00 a.m.