SPE.L Regulatory News (SPE)

23 Dec 2005 07:00

Embargoed Release: 07:00hrs Friday 23rd December 2005 SOPHEON PLC Conversion of loan stock Extension of Equity Line Agreement International Financial Reporting Standards Change of Auditors Sopheon plc announces that it has issued 10,197,327 ordinary shares inconnection with the maturity of its remaining balance of ‚£1,223,679 ofconvertible loan stock. The convertible loan stock is now fully converted, asforeseen in Sopheon's annual report and other announcements. The conversion hasresulted in the issue of 3,250,000 ordinary shares to Mr B K Mence, a director,changing the total holding in which Mr Mence is beneficially interested to14,423,847 ordinary shares, representing 10.8% of the Company's issued sharecapital. The conversion has also resulted in the issue of 5,416,667 ordinaryshares to Norman Nominees Limited, changing its total shareholding to 9,891,260ordinary shares, representing 7.4% of the Company's issued share capital.Application has been made for the new ordinary shares, which are subject tocertain lock-in requirements, to be admitted to trading on AIM. Dealings areexpected to commence on 3 January 2006.Sopheon is also pleased to advise that its equity line of credit facility withGEM Global Yield Fund Limited ("GEM") due to expire today has been extended fora two year period through to 23 December 2007. As part of the agreement, thecosts of the extension, as well as outstanding commitment fees relating to theinitial term, have been satisfied by the issue of 400,000 ordinary shares toGEM at a price of 18p per ordinary share. Over 90% of the original ¢â€š¬10mfacility remains available under the extended agreeement. Application has beenmade for the new ordinary shares to be admitted to trading on AIM, and dealingsare expected to commence on 3 January 2006.Although Sopheon's AIM listing provides for an exemption from the adoption ofInternational Financial Reporting Standards ("IFRS") until the financialstatements for the year 2007, the board has continued to evaluate the relativemerits of early adoption of IFRS as opposed to continued application of UKGAAP. In view of the increasing importance of the group's shareholders thattrade through Euronext, coupled with the effect of extensive changes comingthrough in UK GAAP relating to its convergence with IFRS, the board has nowconcluded in consultation with its advisers that adoption of IFRS as of the2005 financial statements is appropriate.A detailed evaluation of the effects of the adoption of IFRS on Sopheon'sfinancial statements is ongoing but the preliminary conclusions as to the keyareas likely to be materially affected are (i) an option pricing model will beused to work out the fair value of share options granted during a period, withthis value being charged to the profit and loss account over the expectedvesting period; (ii) certain research and development expenditure may becapitalised and amortised based on detailed technical criteria, rather thanautomatically charging such costs in the profit and loss account as they arise;(iii) certain short term non-trade payables and receivables may requirerestatement or reclassification and (iv) certain acquired goodwill may requirereclassification as an intangible asset. It is not expected that the treatmentand reporting of Sopheon's revenues will be affected by the adoption of IFRS.Finally, the Sopheon board wishes to announce that BDO Stoy Hayward hasreplaced Ernst & Young as auditors with immediate effect. BDO is the world'sfifth largest accountancy network. Its focus on growth oriented companiesaligns well with Sopheon's business characteristics, and will deliver a morecost effective audit service. The BDO member firms in the Netherlands and inthe USA are respectively BDO CampsObers Accountants & Belastingadviseurs, andBDO Seidman LLP. Ernst & Young remain Sopheon's tax advisers.For further information contact:Barry Mence, Chairman Sopheon plc Tel : + 44 (0) 1483 685 735 Arif Karimjee, CFO Adam Reynolds Hansard Communications Tel : + 44 (0) 207 245 1100 Andrew Tan + 44 (0) 7957 203 685 Floor van Maaren Citigate First Financial Tel : + 31 (0) 205 754 010 ENDSOPHEON PLC