YGEN.L Regulatory News (YGEN)

28 Sep 2007 16:15

ViaLogy PLC28 September 2007 ViaLogy plc Final results for the year ended 31 March 2007 ViaLogy plc (LSE: VIY), a leading innovator of real-time network-centric signalprocessing platforms, is pleased to report its final results for the year ended31 March 2007. Chairman's statement I am pleased to report the financial results for your Company for the yearending 31 March 2007 and to comment on progress during the period. It has been amomentous year for us. The Company has been transformed from a UK-basedinvestment business to a sophisticated technology company with its principalplace of business in California, USA. THE BACKGROUND The Company made its initial investment in ViaLogy in 2001. The Directors wereimpressed by the ViaLogy technology, which is based on an invention byscientists from Caltech/NASA's Jet Propulsion Laboratories ("JPL"). Usingadvanced computer algorithms based on principles of quantum mechanical systemsthe team, led by Chief Technical Officer Dr Sandeep Gulati, was able to detect,enhance and interpret weak sound signals. ViaLogy invented and patented QuantumResonance Interferometry (QRI) for a very broad class of applications. ViaLogyhas implemented and demonstrated QRI applications ranging from life sciences andmedical diagnostics to video surveillance. QRI is the underlying computationalfabric that powers all of ViaLogy products and signal processing applications. The technology was validated first with microarrays and then in the field ofmass spectrometry. Successful prototype work was also conducted in otherindustrial areas. With development work at an advanced stage and prototypecollaboration being undertaken with international companies and governmentestablishments, it was time for a major change in ViaLogy's overall approach.Today the Company is concentrating on developing commercial products for safety,security, surveillance and remote monitoring applications in clearly definedareas: defence, oil and gas, and enterprise operations and facilitiesmanagement. THE FINANCIAL SITUATION For five years the Company, together with First Ventury in Germany and otherventure capital and private investors, financed ViaLogy's research anddevelopment activities. In October 2006 the Company owned, on a fully diluted basis, 43.76% of ViaLogy's shares. At the lastAGM shareholders approved the acquisition of the remainder of the issued sharecapital of ViaLogy valuing the entire share capital of ViaLogy Corp at US$15million. At the AGM it was also agreed that the Company's name would be changedto ViaLogy PLC. The loss for the year to 31 March 2007 is £1.8m after depreciation andamortisation costs of £0.9m. The acquisition of ViaLogy together with deferredtax adjustments created an asset in the accounts which values the IntellectualProperty and associated Research and Development at £12m. Like all suchresources this asset is amortised over a period of time, in this case six years,which gives rise to the amortisation charge in the accounts. THE DIRECTORS AND STAFF During this year of change and progress the directors of ViaLogy, both in US andEurope, have put in valuable time and effort above and beyond the call of duty.In particular our thanks go to Michael Kelly, a non-executive director ofViaLogy Corp who took on the mantle of President and Interim CEO for the periodleading up to and immediately after the merger. As a former banker and directorof a global investment company he proved ideally suited to integrate thebusinesses and establish the basis of our new operation. Also I want to pay tribute to our excellent staff, a team of 30 people who areworking long hours at our headquarters in Pasadena, California, to ensure ourproposed new products become a successful reality. To illustrate their calibrelet me quote the senior vice-president of a Fortune 50 company who is workingwith us in beta-testing one of our products: "Whenever I visit ViaLogy and seethe enthusiasm and ability of the people who work there I feel humble in theirpresence." You will not be surprised to learn that we have adopted a newEmployee Option Plan to encourage and reward their creativity and commitment. ACROBOT For the time being the directors have decided to retain the Company's holding inThe Acrobot Company, a spinout company from Imperial College, London. Acrobottechnology is being developed to provide speed, accuracy and reproducibility inminimally-invasive, bone-conserving surgery. It includes 3-D planning, surgicalnavigation and surgeon-controlled robotic surgery. Acrobot plans to announce the first of its commercial products before the end of2007. FUND RAISING Since the end of the last financial year the Company has raised £4.4 million byway of a placing of new ordinary shares. The decision to establish a strongsales and marketing team for ViaLogy requires an additional expenditure and itwas mainly for this reason that the directors decided in June 2007 to arrange aplacing of 55 million new ordinary shares in the Company at a placing price of 8pence per share. In addition, subject to shareholder approval at the AnnualGeneral Meeting, the placees will receive one warrant for every two ordinaryshares purchased in the placing. Each warrant will entitle the holder topurchase an additional ordinary share at 10 pence at any time during thefollowing two years. We decided on a placing rather than an open offer or rights issue to existingshareholders for two main reasons. The first is cost, it is much less expensivefor the Company to raise funds via a restricted placing, and the second was theopportunity to strengthen the institutional side of our shareholder register. NEW PRESIDENT AND CHIEF EXECUTIVE OFFICER We are absolutely delighted to confirm that from the beginning of October Dr.Robert Dean has agreed to accept the positions of President and Chief ExecutiveOfficer of ViaLogy LLC, our wholly-owned American subsidiary company. He willalso remain as a director on the main board of ViaLogy PLC. Bob has had a remarkable career, ranging from special adviser to Ronald Reaganat the White House to a senior executive position with a number of Fortune 50companies. Bob leaves a senior position with one on America's leading defenceresearch and science application companies to join us as our CEO and we areconfident that he is exactly the right person to lead ViaLogy during this mostexciting time in its history. Terry Bond Chairman 28 September 2007 PROGRESS AND PRODUCTS ViaLogy is a recognised innovator and leader in network-centric signalprocessing and senor operability. All our computational solutions are powered byour patented and proprietary technology - Quantum Resonance Interferometry(QRI). During the year we have accomplished significant technical and productmilestones. • Sensor Policy Manager (SPMTM) launched - a software product for sensor processing and interoperability. • MicroSPMTM field trials initiated - small footprint embedded hardware platform for real-time video and sensor data processing. • MPEX Electronic EyeTM successfully demonstrated - platform for 360 o panoramic video processing. Commercial release planned for 2008. • Commercial collaboration signed for undersea and geoseismic sensing - Agreement with leading fibre optic company for undersea intrusion detection and geoseismic processing. • Microelectromechanical systems (MEMS) sensor performance improvement - successful demonstration achieves a 10X improvement in stability and performance of JPL/Boeing miniature vibratory gyroscope. • REPAS, an exclusive licence for spectroscopy application - QRI will combine with US Dept of Energy technology for remote detection of dangerous compounds. SPMTM Today, systems of multiple connected sensors (cameras, lasers, radars, andacoustics) deployed for commercial, military or public security purposes posesevere interoperability problems. It has proved difficult to connect thesedisparate sensors in an integrated network where they can communicate,effectively exchange and combine signal data for near real-time transmission forevaluation and response in remote operations command and response centres.These difficulties result in high operational and deployment costs, inefficientuse and suboptimal response characteristics. SPMTM solves all these problems,exploiting the internet protocol and ViaLogy's patented signal processingtechniques. SPMTM is an enterprise-grade software policy manager for large-scale sensorapplications. It is sensor agnostic, policies are prescribed plans or courses ofaction in response to events detected by any sensor. SPMTM enables rapiddetection of events, and accurate analysis and communication of signals ofinterest, for mitigation and directed response. SPMTM allows users to integratetens to thousands of different types of sensors attached to wired and wirelessnetworks to securely meet their real-time monitoring, operations, security andbusiness continuity requirements from a single control point. Operators ofnetworked sensor systems are constantly challenged to integrate their legacyinfrastructure with new sensors and video, and simultaneously required toincorporate new event based threats. SPMTM provides a complete programmingenvironment and toolkit solution at low cost, which is totally independent ofsensor type and network architecture. MicroSPMTM Video surveillance systems are essential remote monitoring tools for criticalinfrastructure, including airports, train and subway stations, border crossings,ports, dams, rail lines, financial and governmental institutions; power grids,utilities and refining facilities. Currently analysis and decision-making basedon video information is performed largely by human operators staring at multiplevideo consoles and manually controlling cameras. Such centralised "man-in-the-loop" video viewing and security decision making has become a majorchoke-point, severely limiting the utility of video networks. MicroSPMTM enableshigh speed processing at the video source itself each camera is programmed toprioritise and transmit specific events or images of interest to the operatorfor decision and action. This multiplies the effectiveness of the individualcameras in the network. MicroSPMTM is a hardware platform for fully autonomous high definition (HD)digital video processing at the camera source. It is powered by ViaLogy'sproprietary, patented signal processing Quantum Resonance Interferometry ("QRI")technology. QRI, enables detection of weak signals and image features in highbackground clutter, and is 10 to 100 times more effective than standard signalextraction techniques. Applications include: face-recognition in crowds; human, object and vehicledetection and counting and license plate reading, in particular, under difficultenvironmental conditions. Markets include defense, oil and gas, enterprisesafety and security, and, perimeter and border surveillance. The MicroSPMTMplatform addresses three major trends within the global surveillance industry:increasing adoption of network addressable digital video camera and thermalimagers; need for real-time autonomous processing by moving the policy executionand the intelligence to the network edge; and, the accelerated migration to IPv6addressing standards. MPEX Electronic EyeTM Currently in development with a global partner, MPEX is a major advancement incomputer vision and video surveillance technology. It can automatically processimagery from moving cameras in a 360o fields-of-view (FOV). MPEX harnesses thecomputational power of multiple cameras with varying lens and parallaxes tocreate a dynamically allocatable field of view and magnification for softwarecontrolled persistent omni-directional surveillance. MPEX is based on biologicalvision constructs found in insects and reptiles. Most advanced vision systems are limited to only stereo vision with a singleparallax based on the co-registration of frames from two lens (eyes), allowingonly a scan of the horizon. In contrast, MPEX exploits multiple parallaxes toachieve three dimensional perception using multiple, overlapping fields-of-view(FOV). QRI software control allows the sensor to steer in real time betweenlines of sight and change to multiple fields of view for reconnaissanceapplications. This includes wide FOV for surveillance, high resolution narrowFOV for target identification and tracking, and fast electronically addressablepointing for tracking of multiple targets. This construction dramaticallyincreases the probability of target detection and localisation. ViaLogy's initial MPEX Electronic EyeTM applications are geared to detection ofvery fast moving targets such as in missile interceptors, deployment on fastmoving ground vehicles and airborne platforms such as UAVs (unmanned aerialvehicles), and omni-directional tower mounts for border surveillance andcritical infrastructure security. REPAS REPAS is a breakthrough application of photo-acoustic spectroscopy (PAS) fordetection of minute traces of chemical, biological and explosive molecules onrigid surfaces and walls from standoff distances of tens of metres.ViaLogy hasobtained a worldwide exclusive licence for REPAS from the US Department ofEnergy's Oak Ridge National Laboratory (ORNL). Unlike conventional PAStechniques that use light excitation to generate acoustic emission signaturescharacteristic of the substances being irradiated, REPAS measures the change inphase of an externally generated acoustic wave impinging on the area beingsubjected to light absorption. This results in increased sensitivity andspecificity. In developing REPAS, ORNL leveraged advances in acoustic beamformation, detection of acoustic wave phase, and spectrometer miniaturization. ViaLogy plans to deploy REPAS technology in portable detectors for remotedetection of covert and camouflaged buildings where explosives may bemanufactured and stored in cluttered urban and industrial environments. Thehand-held chemical detection device will also be able to identify dangerouscompounds being carried by people. ViaLogy PLC (Formerly Original Investments PLC) Consolidated income statement Notes 2007 2006 £ £ Revenue 273,478 6,852Cost of sales 8,410 - -------- --------Gross profit 265,068 6,852 Administrative expenses 1,848,450 264,511 -------- --------Loss from Operations (1,583,382) (257,659) Share of losses of associate (526,481) (605,757)Finance costs (353) -Finance income 106,373 186,214 -------- --------Loss for the year before taxation 4 (2,003,843) (677,202) - -------- -------- Taxation 6 171,524 - -------- -------- Loss for the year attributable to equity holders of the parent (1,832,319) (677,202) -------- -------- £ £ Loss per share Basic and diluted 7 (0.523)p (0.220)p ViaLogy PLC (Formerly Original Investments PLC) Consolidated statement of changes in equity for year ended 31 March 2007 Changes in equity for 2006 Share Share Share Warrant Foreign Retained Total capital premium scheme reserve exchange earnings account reserve reserve £ £ £ £ £ £ £ At 1 April 2005 2,882,222 7,601,513 87,500 66,240 - (4,546,896) 6,090,579 Transfer on lapse of shareoptionsand warrants - - (87,500) (66,240) - 116,240 (37,500)Loss for year - - - - - (677,202) (677,202) -------- -------- -------- -------- -------- -------- --------Total income and expenserecognised for the year - - (87,500) (66,240) - (560,962) (714,702)Arising on issue of shares 230,000 37,500 - - - - 267,500 -------- -------- -------- -------- -------- -------- --------Balance at 31 March 2006 3,112,222 7,639,013 - - - (5,107,858) 5,643,377 -------- -------- -------- -------- -------- -------- -------- Changes in equity for 2007 Share Share Share Warrant Foreign Retained Total capital premium scheme reserve exchange earnings account reserve reserve £ £ £ £ £ £ £ At 1 April 2006 3,112,222 7,639,013 - - - (5,107,858) 5,643,377 Loss for year - - - - - (1,832,319) (1,832,319)Reversal of previouslyequity accounted losses - - - - - 2,467,890 2,467,890Exchange differences arisingon translation of foreignoperations - - - - 20,075 - 20,075Share options expense - - - - - 126,970 126,970 -------- -------- ------- ------- -------- -------- --------Total income and expenserecognised for the year - - - - 20,075 762,541 782,616Arising on issue of shares 919,033 3,331,495 - - - - 4,250,528 -------- -------- ------- ------- -------- -------- --------Balance at 31 March 2007 4,031,255 10,970,508 - - 20,075 (4,345,317) 10,676,521 -------- -------- ------- ------- -------- -------- -------- ViaLogy PLC (Formerly Original Investments PLC) Consolidated balance sheet at 31 March 2007 £ £Assets Non current assets Property, plant and equipment 51,730 2,866 Intangible Assets 11,649,759 - Financial Assets 200,000 200,000 Investments - associated companies - 2,640,876 -------- -------- 11,901,489 2,843,742 -------- --------Current assets Inventories 1,965 - Trade and other receivables 43,332 22,523 Cash and cash equivalents 1,197,855 2,813,558 -------- -------- 1,243,152 2,836,081 -------- --------Total Assets 13,144,641 5,679,823 -------- -------- Liabilities Current liabilities Trade and other payables 169,695 36,446 Non-current liabilities Deferred tax liability 2,298,425 - -------- --------Total liabilities 2,468,120 36,446 Capital and reserves attributable to equity holdersof the Company Share capital 4,031,255 3,112,222 Share premium account 10,970,508 7,639,013 Foreign Exchange translation reserve 20,075 - Retained Earnings (4,345,317) (5,107,858) -------- --------Shareholders' funds 10,676,521 5,643,377 -------- --------Total equity and liabilities 13,144,641 5,679,823 -------- -------- ViaLogy PLC (Formerly Original Investments PLC) Consolidated cash flow statement for the year ended 31 March 2007 2007 2006 £ £Operating Activities Loss before tax (2,003,843) (677,202) Adjustments for :- Share of associate 526,481 605,757 Finance income (106,373) (186,214) Finance cost 353 - Depreciation 17,492 716 Amortisation 869,385 - Share option expense 126,970 - Foreign exchange movements 26,426 (47,252) -------- --------Operating Activities before changes in working capital (543,109) (304,195) Reduction in trade and other receivables 1,023 2,686 Increase in inventories (1,965) - Reduction in trade and other payables (91,975) (1,513) Interest received 106,373 186,214 Interest paid (353) - -------- --------Cash generated from operations (530,006) (116,808) Investing activities Acquisition of subsidiary, net of cash acquired (685,174) - Acquisition of intangible asset (350,286) - Acquisition of tangible fixed assets (50,237) - Increase in loans to Investee companies - (476,118) -------- -------- (1,615,703) (592,926) Financing Activities Cash inflow from exercise of warrants - 230,000 -------- --------Decrease in cash and cash equivalents (1,615,703) (362,926) Cash and cash equivalents at beginning of year 2,813,558 3,176,484 -------- --------Cash and cash equivalents at end of year 1,197,855 2,813,558 -------- -------- ViaLogy PLC (Formerly Original Investments PLC) Notes forming part of the financial statements for the year ended 31 March 2007 1 Basis of preparation These financial statements have been prepared in accordance with InternationalFinancial Reporting Standards (IFRS and IFRIC interpretations) issued by theInternational Accounting Standards Board (IASB) as adopted by the European Union("IFRSs") and those parts of the Companies Act 1985 applicable to companiespreparing their accounts under IFRS. This is the first time the Group hasprepared its financial statements in accordance with IFRSs having previouslyprepared its financial statements in accordance with UK accounting standards.Details of how the transition from accounting standards to IFRSs has affectedthe Group's reported financial position, financial performance and cash flowsare given in note 2. 2 First time adoption of International Financial Reporting Standards In the restated balance sheet the investment in Vialogy Corp. has been treatedas an associate under IFRS whereby the premium paid on acquisition iscapitalised and then the Group's share of losses is recognised in the incomestatement. Previously, under UKGAAP this was treated as a trade investment. The investment in Acrobot has been reclassified from investments to financialassets under IFRS. The adjustments to prior years are as follows: Consolidated balance sheet reconciliation at 1 April 2005 UK GAAP IFRS IFRS adjustmentNon-current assetsProperty, plant and equipment 3,809 - 3,809Financial assets - 200,000 200,000Investments 3,535,056 (1,535,651) 1,999,405 -------- -------- -------- 3,538,865 (1,335,651) 2,203,214Current assetsTrade and other receivables 749,066 - 749,066Cash and cash equivalents 3,176,484 - 3,176,484 -------- -------- -------- 3,925,550 - 3,925,550 -------- -------- --------Total assets 7,464,415 (1,335,651) 6,128,764 -------- -------- --------Current liabilitiesTrade and other payables 38,185 - 38,185 Capital and reserves attributable to equity holders of the parentShare Capital 2,882,222 - 2,882,222Share premium account 7,601,513 - 7,601,513Share scheme warrant reserve 87,500 - 87,500Warrant reserve 66,240 - 66,240Retained earnings (3,211245) (1,335,651) (4,546,896) -------- -------- -------- 7,426,230 (1,335,651) 6,090,579 -------- -------- -------- -------- -------- --------Total equity and liabilities 7,464,415 (1,335,651) 6,128,764 -------- -------- -------- Consolidated income statement as at 31 March 2006 UK GAAP IFRS IFRS adjustment Revenue 6,852 - 6,852 -------- -------- --------Gross Profit 6,852 - 6,852Administrative expenses (264,511) - (264,511) -------- -------- --------Loss from operations (257,659) - (257,659) Share of losses of associate - (605,757) (605,757)Finance income 186,214 - 186,214 -------- -------- --------Loss before tax (71,445) (605,757) (677,202) -------- -------- -------- Consolidated balance sheet reconciliation at 31 March 2006 UK GAAP IFRS IFRS adjustmentNon-current assetsProperty, plant and equipment 2,866 - 2,866Financial assets - 200,000 200,000Investments 4,782,284 (2,141,408) 2,640,876 -------- -------- -------- 4,785,150 (1,941,408) 2,843,742Current assetsTrade and other receivables 22,523 - 22,523Cash and cash equivalents 2,813,558 - 2,813,558 -------- -------- -------- 2,836,081 - 2,836,081 -------- -------- --------Total assets 7,621,231 (1,941,408) 5,679,823 -------- -------- --------Current liabilitiesTrade and other payables 36,446 - 36,446 Capital and reserves attributable to equity holders of the parentShare Capital 3,112,222 - 3,112,222Share premium account 7,639,013 - 7,639,013Retained earnings (3,166,450) (1,941,408) (5,107,858) -------- -------- -------- 7,584,785 (1,941,408) 5,643,377 -------- -------- -------- -------- -------- --------Total equity and liabilities 7,621,231 (1,941,408) 5,679,823 -------- -------- -------- The investment in Acrobot has been classified as an available for sale financialasset under IFRS. No change in fair value has been identified. 3 Segmental analysis The Group's primary and secondary formats for reporting segment information areshown below. The primary operations segment is based in the USA; the head officeprimary segment is based in the UK. The differing geographical locations beingthe secondary segment overlap completely with the differing nature of thebusiness segments. 2007 Business Segments Operations Head Office Consolidated £ £ £ Revenue 269,804 3,674 273,478 -------- -------- --------Operating Profit 261,394 3,674 265,068Net Finance Income 1,733 104,640 106,373 -------- -------- --------Net loss for the year 561,391 1,270,928 1,832,319 Segment assets 2,824,115 10,320,526 13,144,641Segment liabilities 2,393,527 74,593 2,468,120 -------- -------- --------Costs to acquire plant property and equipment 48,694 1,543 50,237Costs to acquire intangible assets 350,286 213,836 564,123Depreciation and amortisation 550,926 318,459 869,385Share based payments charged - 126,970 126,970 -------- -------- -------- All sales were to external customers. 2006 Business Segments Operations Head Office Consolidated £ £ £ Revenue - 6,852 6,852 -------- -------- --------Operating Loss - (257,659) (257,659)Net Finance Income - 186,214 186,214 -------- -------- --------Net loss for the year - (677,202) (677,202) Segment assets - 7,621,231 7,621,231Segment liabilities - (36,446) (36,446) -------- -------- --------Costs to acquire plant property and equipment - - -Costs to acquire intangible assets - - -Depreciation and amortisation - 716 716Share based payments charged - - - -------- -------- -------- All sales were to external customers. The operations business segment was acquired by way of acquisition on 26 October2006 thus there are no comparatives for year ended 31 March 2006. 4 Loss for the year before taxation 2007 2006 £ £ This is arrived at after charging:Staff Costs 552,633 148,122Share option expense 126,970 -Depreciation of property , plant and equipment 17,492 716Share of associate losses 526,481 605,757Amortisation of intangible fixed assets 869,385 -Foreign exchange differences 26,426 (47,325)Audit of financial statements of the Group 31,000 11,500Other taxation services 5,000 2,000 -------- -------- Included in the costs of acquisition of Vialogy LLC, are £62,000 of feesrelating to transaction advisory services paid to the Group auditors. 5 Company profit and loss account ViaLogy PLC has taken advantage of section 230(3) of the Companies Act 1985 andhas not included its own profit and loss account in these accounts. TheCompany's loss after tax was £220,138 (2006 - £71,445) 6 Taxation on profits from ordinary activities 2007 2006 £ £Current tax expense UK corporation tax and income tax of overseas - -operations on profits for the yearAdjustments for under/(over) provision in prior - -periods. ________ ________ Deferred tax credit Release of provision (171,524) - ________ ________Total tax credit (171,524) - ________ ________ The reason for the difference between the actual tax credit for the year and the standard rate of corporation tax in the UK applied to profits for the year are as follows: 2007 2006 £ £ Loss before tax 2,003,843 71,455 Expected tax charge based on the standard rate of (601,153) (21,434)corporation tax in the UK of 30% (2006 - 30%)Expenses not deductible for tax purposes 245,632 2,058Capital allowances for year in deficit/(excess) of (74) 214depreciationExercise of share options - (40,499)Increase in losses carried forward 355,592 59,661Deferred tax release (171,524) - ________ ________ Total tax credit for the year (171,524) - ________ ________ The Group is required to estimate the income tax in each of the jurisdictions inwhich it operates. This requires an estimation of the current tax liabilitytogether with an assessment of the temporary differences which arise as aconsequence of different accounting and tax treatments. These temporarydifferences result in deferred tax assets or liabilities which are includedwithin the balance sheet. Deferred tax assets and liabilities are measured usingsubstantially enacted tax rates expected to apply when the temporary differencesreverse. Management judgement is required to determine the total provision forincome tax. Amounts accrued are based on management's interpretation of countryspecific tax law and the likelihood of settlement. Factors that may affect future tax charges Deferred tax assets relating to UK revenue losses and UK capital losses of£1,437,500 and £1,934,399 respectively (2006 - £1,150,000 and £1,934,000) havenot been recognised as these losses can only be offset against future taxableprofits and at present there is insufficient evidence to justify recognition. Deferred tax assets relating to US revenue losses of £364,854 have not beenrecognised as these losses can only be offset against future taxable profits andat present there is insufficient evidence to justify recognition. In additionthe US subsidiary may be entitled to further losses of $6m, which are subject toan annual limitation. 7 Loss per share Basic The calculation of earnings per share is based on the loss for the year of£1,832,319 (2006 - loss £677,202) and on 350,501,448 (2006 - 307,315,374)ordinary shares, being the weighted average number of ordinary shares in issueduring the year. Diluted Diluted earnings per share dilute the basic earnings per share to take intoaccount share options and warrants. The calculation includes the weightedaverage number of ordinary shares that would have been issued on the conversionof all the dilutive share operations and warrants into ordinary shares.35,553,804 options and 3,693,654 warrants have been excluded from thiscalculation as this would reduce the loss per share. 8 Acquisitions during the period On 26 October 2006 the Group acquired the remaining 56.74% of the share capitalin Vialogy Corp, a company whose principal activity is developing applicationsfor its patented Quantum Resonance Interferometry (QRI) technology. QRI is atechnology which separates the background 'noise' that envelopes weak signals. Prior to the acquisition of the remaining 56.74% of shares, the entity has beentreated as an associate. The investment is now being consolidated in full as asubsidiary and the total acquisition costs are shown below. Book value Fair value Fair Value adjustmentsAcquiree's net assets at the acquisition date £ £ £ Intellectual property - 12,168,858 12,168,858Property plant and equipment 14,144 - 14,144Receivables 9,164 - 9,164Payables (195,428) - (195,428)Other liabilities - (2,478,752) (2,478,752) -------- -------- --------Net identifiable assets and liabilities (172,120) 9,690,106 9,517,986 -------- -------- -------- Consideration paidCash - paid in the past for the investment in the 4,582,284associateCash 685,17491,903,314 shares @ 4.625p 4,250,528 -------- 9,517,986 -------- The fair value adjustment relates to intellectual property at 26 October 2006.The fair values acquired are provisional fair values as the Group needsadditional time to assess the relative values of the intellectual propertycomponents. The accounting policy of the acquired entity was not to recogniseinternally generated intangibles; however, it is the policy of the Group torecognise such an intangible. A deferred tax liability has been recognised in respect of the increase in theintangible asset. Included in the adjustment to other liabilities is a deferred tax liabilities isa deferred tax liability of £2,469,949 The income statement includes the following loss after tax from the acquisitionfor the period from 26 October 2006 to 31 March 2007 Revenue Loss after tax £ £Vialogy LLC 269,804 561,391 The revenue and loss after tax of the acquisition for the full year to 31 March2007 was: Revenue Loss after tax £ £Vialogy LLC 425,888 1,287,781 The cash flow arising from the acquired entity for the period was: Cash flow £Vialogy LLC (715,924) 9 Post Balance Sheet Events The Group raised £4.4m before expenses via a private placing of 55 millionshares at 8 pence per share on 19 June 2007. In June 2007 Acrobot undertook a funding round by issuing shares to thirdparties; as a result the ViaLogy holding was diluted down to 9.75% 10 Report and accounts The Company's report and accounts for the year ended 31 March 2007 will beavailable on www.Vialogy.com today and will be posted to shareholders on 04October 2007. Photocopies of the report and accounts for the year ended 31March 2007 are available from the Company's registered address. For further information please contact: ViaLogyMichael Kelly, CEO - US +1 626-296-6337Terry Bond, Chairman - UK & Europe +44 (0)20 7869 7014 Redleaf CommunicationsEmma Kane / Samantha Robbins +44 (0)20 7822 0200 Seymour Pierce LimitedMark Percy +44 (0)20 107 8000 The financial information set out above does not constitute the company'sstatutory accounts for the years ended 31 March 2007 or 2006, but is derivedfrom those accounts. Statutory accounts for 2006 have been delivered to theRegistrar of Companies and those for 2007 will be delivered following thecompany's annual general meeting. The auditors have reported on those accounts;their reports were unqualified, did not include references to any matters towhich the auditors drew attention by way of emphasis without qualifying theirreports and did not contain statements under the Companies Act 1985, s 237(2) or(3). This information is provided by RNS The company news service from the London Stock Exchange