YGEN.L Regulatory News (YGEN)

16 Aug 2005 07:00

BioProjects International PLC16 August 2005 BioProjects International PLC ("BioProjects" or "the Company") Financial results for the financial year ended 31 March 2005 Chairman's Statement I am pleased to report on the financial results and the progress of BioProjectsInternational PLC (BioProjects) during the financial year ended 31 March 2005. It has been an interesting time for BioProjects. At the beginning of the year wewere almost fully invested, with our faith and our funds in three companies. Wecompleted the year having sold one of our investments at a satisfactory profitand with our two remaining investments having made considerable progress. Duringthe year their technologies advanced and were independently validated by theirpotential customers and they have now taken the first steps on the road tocommercialising their products. In addition, in July 2004, £1million was raised in a private placing of sharesin BioProjects, principally to provide an additional loan to our maininvestment, ViaLogy Corp. ACOLYTEFirst I will deal with the sale of our holding in Acolyte Biomedica, which isdeveloping a testing process for speeding up the detection of infections inhospitals. We received £2.5 million (net) for our shareholding which is a profitof approximately £500,000 over cost and approximately £750,000 over book value.Your board considered this was an acceptable premium on our investment. Moreimportantly, it increased our cash resources to give us capacity to support ourother investments if necessary and also to investigate further opportunities forBioProjects to increase shareholder value. VIALOGY ViaLogy Corp, based in Pasadena, California, is BioProjects' biggest investment.It owns a remarkable technology, with its origins in Caltech/NASA's jetpropulsion laboratory. In essence, it is a revolutionary process for identifyingand understanding information contained in weak signals, hitherto undetectablebecause of 'background noise'. BioProjects has supported ViaLogy almost from its inception because we havealways believed that the potential is very considerable and we have remainedconvinced that we are funding a pioneering breakthrough technology, which willhave wide-ranging effects in a number of international industries. During theyear several global businesses worked closely and successfully with ViaLogyscientists to validate the process for use in the microarray industry. TheViaLogy patented VMAxS technology is now being offered as an online DNAmicroarray analysis service. The really exciting news is that in recent weeks it has been verified that thetechnology can be adapted to provide substantial benefits in several otherindustries including, for instance, geo-seismology, defence and communications.Detailed discussions with companies in these fields are already well advanced. Anon-exclusive licensing deal has just been signed with a Texas-based oil companywhich has 80 producing wells and, when the development of the technology iscompleted, there are plans to provide the service to oil exploration companiesaround the world. In addition the technology has been successfully validated bya leading international mass spectrometry company and commercial terms are beingdiscussed which should produce substantial revenues for ViaLogy. The expansion of ViaLogy's business will need considerable additional financeboth for research and development and to strengthen the management andscientific teams. Although, during the year, BioProjects and its fellowinvestor, Aeris Holdings AG of Switzerland, provided additional loans to supportthe ViaLogy investment, we are essentially an early-stage funder and we acceptthat, in order to realise ViaLogy's full potential, substantial new money willhave to come from other sources. The ViaLogy board is currently examiningvarious ways to secure this funding. ACROBOT During the financial year Acrobot, BioProjects' other investment, which developsprecision surgical systems for minimally invasive, bone conserving, orthopaedicsurgery, made considerable progress. The company signed a collaborationagreement to work with prosthesis manufacturer Corin PLC on a majorhip-resurfacing project. Acrobot also took the brave step of moving from thesafe confines of academia (it had its origins in the laboratories of ImperialCollege, London) to a new independent laboratory in London's Leathermarket. Theboard and the management of the company is being strengthened to keep pace withthe expansion. VALUATION In the interim figures we provided £1.8 million as a provision for diminution inthe value of ViaLogy. The recent excellent commercial news from the company hasencouraged your board to reappraise the position. As a result we have concludedthat our investment in ViaLogy is now worth at least our original cost. The£1.8m provision is therefore no longer required. OUTLOOK To sum up, BioProjects has two investments which are technically proven andwhich we believe have considerable commercial potential. We have a strong cashposition and it is still a possibility that we might invest a furthersubstantial amount of our available funds in ViaLogy to assist with its futureplans. This will depend upon technological developments and the success ViaLogyachieves in commercialising current projects.While we are constantly and diligently examining new investments in thebio-technology field, we are being ultra-careful because hard experience duringthe last few years has taught us that in this area the road to commercialsuccess is long and unpredictable. With this in mind, the directors propose thatwe should not restrict our future investment policy to bio-technology. Webelieve that the interests of shareholders would be better served if we wereable to consider a wider range of investment opportunities, particularly inundervalued quoted companies or established unquoted companies that are planningto change to public company status. The Directors will focus in particular onthe following sectors in their investment and acquisition considerations: energyand resources, leisure, healthcare, support services, media and technology. AResolution to this effect will therefore be proposed at the annual meeting. We are also proposing a further change. Neither of our two residual investments,ViaLogy and Acrobot, is an exclusively biotechnology business. With this inmind, coupled with our suggested change of strategy to enable us to consider awider range of future investments, your directors believe that your company'spresent name is inappropriate. We therefore propose to change it to OriginalInvestments PLC and a resolution to this effect will be proposed at the annualgeneral meeting. Jim SlaterChairman 15 August 2005 BioProjects International PLC Profit and Loss Account for the year ended 31 March 2005 2005 2004 £ £ Turnover 19,110 46,947Administrative expenses 271,035 370,414 _______ _______Operating loss (251,925) (323,467) Provision for diminution in value of investments - (111,407)Profit on disposal of investments 746,117 - _________ ________Profit/(Loss) on ordinary activities before interestand other income 494,192 (434,874)Interest receivable 99,114 31,387Interest payable and similar charges - (41) _________ _________Profit/(Loss) on ordinary activities before and aftertaxation 593,306 (403,528) _________ _________Earnings/(Loss) per shareBasic earnings/(loss) per share 0.21p (0.16p) _________ _________Diluted earnings/(loss) per share 0.19p (0.16p) _________ _________ All amounts relate to continuing activities.All recognised gains and losses are included in the profit and loss account. Balance Sheet at 31 March 2005 Note 2005 2005 2004 2004 £ £ £ £Fixed assetsTangible assets 3,809 2,180Investments 3,535,056 5,284,684 ________ ________ 3,538,865 5,286,864Current assetsDebtors 749,066 159,641Cash at bank and in hand 3,176,484 449,628 ________ ______ 3,925,550 609,269 Creditors: amounts falling due within one year 38,185 54,514 ________ ________Net current assets 3,887,365 554,755 ________ ________Total assets less current liabilities 7,426,230 5,841,619 ________ ________Capital and reservesCalled up share capital 2,882,222 2,650,000Share premium account 7,601,513 6,824,930Share scheme reserve 87,500 87,500Warrant reserve 66,240 83,740Profit and loss account (3,211,245) (3,804,551) _________ _________Shareholders' funds - equity 7,426,230 5,841,619 _________ _________ Cash Flow Statement for the year ended 31 March 2005 Note 2005 2005 2004 2004 £ £ £ £ Net cash outflow from operating activities (310,842) (447,985) Returns on investmentsand servicing of financeInterest received 99,114 31,387Interest paid - (41) ______ ______ 99,114 31,346TaxationUK corporation tax refunded - 673 Capital expenditure andfinancial investmentIncrease in loans to Investee Company (542,936) -Payments to acquire tangible fixed assets (2,581) -Payments to acquire fixed assets investments - (1,873,723)Receipt from sale of fixed asset investments 2,495,745 51,199 ________ _________ 1,950,228 (1,822,524)Management of liquidresourcesCash (outflow)/inflowfrom increase in liquid resources (9,393) 271,463 ________ _________Cash inflow/(outflow) before financing 1,729,107 (1,967,027) FinancingCash inflow from issue of shares 1,010,000 264,000Issue costs incurred on issue of shares (18,695) (3,795) ________ _______ 991,305 260,205 _______ _______ Increase/(decrease) in cash 2,720,412 (1,706,822) ======= ======== Notes forming part of the Financial Statements for the year ended 31 March 2005 1 Accounting policies The financial statements have been prepared under the historical cost conventionand are in accordance with applicable accounting standards. The followingprincipal accounting policies have been applied: Turnover Turnover represents sales to outside customers at invoiced amounts less valueadded tax. Depreciation Depreciation is provided to write off the cost, less estimated residual values,of all fixed assets, over their expected useful lives. It is calculated at thefollowing rates: Office equipment - 20% per annum, reducing balance Valuation of investments Investments held as fixed assets are stated at cost less any provision forpermanent diminution in value. Deferred taxation Deferred tax balances are recognised in respect of all timing differences thathave originated but not reversed by the balance sheet date except that therecognition of deferred tax assets is limited to the extent that the Companyanticipates to make sufficient taxable profits in the future to absorb thereversal of the underlying timing differences. Options and warrants Where options are issued to employees and directors a profit and loss accountcharge is made equal to the difference between the fair value of shares at thedate the award was made and the exercise price of the options. The charge isspread in accordance with UITF17. Warrants issued by the company are recorded atthe fair value of the consideration received and are reported in thereconciliation of movement in shareholders' funds in the period in which theyare issued. Foreign currency Foreign currency transactions of individual companies are translated at therates ruling when they occurred. Foreign currency monetary assets andliabilities are translated at the rates ruling at the balance sheet dates. Anydifferences are taken to the profit and loss account. Turnover Turnover is wholly attributable to the consultancy activity provided byDirectors of the Company to trade investments and arises within the UnitedKingdom (except for US$12,000 (2004 - US$12,000) relating to the United States).Turnover is recognised when the consultancy services are provided. 2. Dividends The Board is not recommending the payment of a dividend. 3. Earnings per share Basic The calculation of earnings per share is based on the profit for the year of£593,306 (2004 - £403,528 loss) and on 281,785,693 (2004 -257,426,229) ordinaryshares, being the weighted average number of ordinary shares in issue during theyear. Diluted Diluted earnings per share dilutes 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. Theweighted average number of shares for this purpose is 298,970,266. The profitafter taxation was unchanged from the basic figure. In 2004 the effect of all potential shares was anti-dilutive. 4. Reconciliation of operating loss to net cash outflow from operatingactivities 2005 2004 £ £ Operating loss (251,925) (323,467)Depreciation of tangible fixed assets 952 545Amortisation of intangible fixed assets - 187Increase in debtors (61,099) (144,176)(Decrease)/Increase in creditors (16,329) 10,302Foreign exchange movements 17,559 8,624 _______ _______ Net cash outflow from operating activities (310,842) (447,985) ======= ======= Foreign exchange movements include movements of £14,610 relating to loans madeto ViaLogy. 5. Reconciliation of net cash inflow to movement in net funds 2005 2004 £ £ Increase/(Decrease) in cash 2,720,412 (1,706,822)Increase/(Decrease) in liquid resources 9,393 (271,463)Foreign exchange movements (2,949) (8,624)Opening net funds 449,628 2,436,537 ________ ________Closing net funds 3,176,484 449,628 ======= ======= 6. Analysis of net funds At Foreign Cash At 1 April exchange flow 31 March 2004 movements 2005 £ £ £ £ Cash in hand and at bank 449,502 - 2,720,412 3,169,914Liquid resources 126 (2,949) 9,393 6,570 _______ _______ ________ _________ 449,628 (2,949) 2,729,805 3,176,484 ======= ======= ======= ======== 7. Post balance sheet events On 1 June 2005 the Company issued 23,000,000 new 1p Ordinary shares as a resultof the exercise of 23,000,000 warrants. The number of warrants exercised bydirectors is listed below. Director Warrants exercised Exercise price Jim Slater 1,000,000 1pTerry Bond 6,000,000 1pDr John Broome 2,500,000 1pDr Richard Dixey 2,500,000 1p This preliminary announcement does not constitute the company's statutoryfinancial statements. The financial information for the years ended 31 March2005 and 31 March 2004 has been extracted from the company's statutory financialstatements for the years then ended. The statutory financial statements for theyear ended 31 March 2004 have been delivered to the Registrar of Companies andthe statutory financial statements for the year ended 31 March 2005 will bedelivered to the Registrar of Companies in due course. The audit reports on thestatutory accounts to 31 March 2004 and 31 March 2005 were unqualified and didnot contain a statement under s237(2) or 237(3) of the Companies act 1985. Copies of the Company's report and accounts for the year ended 31 March2005 will be despatched to shareholders shortly and will be available from: Mark CollingbourneBioProjects International plcInglisfieldGiffordEast LothianEH41 4JH This information is provided by RNS The company news service from the London Stock Exchange