YGEN.L Regulatory News (YGEN)

ViaLogy PLC ("ViaLogy" or "the Company")

Interim Report and Unaudited accounts for six months ended 30 September 2011

Chairman's statement for the six months ended 30 September 2011

The Interim Report covers the six-month period to 30 September 2011. The figures show a loss for the period of £2,389,096 which includes a non-cash loss of £1,544,535 for amortisation and depreciation. The amortisation charges relate to the value of ViaLogy's Intellectual Property and associated research and development which is amortised over a period of six years. The cash outflow from operations during the period was £1,031,145.

The results themselves mask the substantial advances ViaLogy has made during the period under review. Our senior personnel were in continuous detailed discussions with a number of global oil and gas operators and our technical team conducted significant pilot projects. This is in line with our strategy of focusing our efforts as much as possible on the larger firms whose endorsement and routine operational use of our technology will ensure the company's mainstream business success. Our proprietary and patented seismic data analysis technology, QuantumRD, is being scrutinised and put to the test by some of the most important and critical E&P companies in the world. Much as we would have wished the examination process to be less onerous and perhaps quicker, it is the potential clients who impose the schedule. We respect the reasons for such a rigorous, detailed and comprehensive approach. Our analysis technology is very different from other systems, and with new drilling prospects often costing tens of millions of dollars these major firms need to be totally convinced of its efficacy before adoption. 

We are pleased to say that our efforts are beginning to bear commercial fruit. We are in advanced talks with multinational E&P organisations on three continents. Client restrictions prohibit us from naming companies without their permission, at least until specific project contracts are signed, but we can confirm the following achievements:

·; Successful completion of a pilot project for a supermajor (the word used to describe one of the world's six biggest O&G companies). The latest news is that our client is "enthusiastic" about the QuantumRD results and confirms that the technology has outperformed their previous analysis techniques.

·; Contract details have been prepared and conditionally agreed with a National Oil Company in Asia for ViaLogy to provide QuantumRD analysis on a major offshore project. Government approval is required, and in process, for export of the seismic data prior to contract completion.

·; Following completion of a successful pilot project on an extensive but difficult exploration field in Asia, ViaLogy has been asked by a Fortune 500 company based in South Asia, the lease operator, to tender for data analysis services on a major section of the prospect. Contract discussions proceed on the basis of set timescales and processes.

·; At the invitation of a European-based supermajor, ViaLogy's founder and Chief Technology Officer, Dr. Sandeep Gulati, recently presented a technical explanation of QuantumRD to a gathering of over 50 of the supermajor's senior geophysicists in five locations around the world. Detailed technical talks are now proceeding with a view to QuantumRD being piloted on one of its large projects.

·; Under contract to Oklahoma-based Samson, one of the largest independent E&P companies in the US, ViaLogy has delivered its QuantumRD analysis for a major redevelopment of a field in Texas. The client's initial evaluation and quality control of ViaLogy's results confirm established field model results. In a double blind exercise ViaLogy seismic signal enhancement technology confirmed known porosities and lithologies (a deliverable the customer described as unique and important in the market and in their critical path of exploration and development) and located new productive zones.

Equally as important as the progress with client recruitment and demonstrating the efficacy of the technology in the field, the company has achieved major development milestones in QuantumRD's software development. Ultimately, and with additional resources, we believe we can progress our automated software analysis of properly conditioned seismic data to determine essential features such as porosity, fluid presence, and lithology features. Our clients acknowledge our unique, ground-breaking approach that implements quantum techniques for the first time successfully (to our knowledge) in geophysical analysis. We are making business and technical progress in a sustained and increasingly difficult economic and financial environment. Everything and everyone, from governments and businesses to professional and private investors, are suffering. ViaLogy is in a large, vital, conservative, and technically sophisticated market where we are doing everything we can to accelerate the uptake of the technology, the growth of the business, and success for our shareholders. 

It is against this background that I want to thank all our investors, large and small, for their continued support, patience and understanding. Also, on behalf of the directors, I express our gratitude to the company's loyal staff for the hours and effort they put in, above and beyond the call of duty, to ensure ViaLogy's success.

Terry Bond

Chairman

ViaLogy PLC

30 December 2011

Enquiries: 

Consolidated income statement for the six months ended 30 September 2011

Consolidated statement of comprehensive income for the six months ended 30 September 2011

Consolidated statement of changes in equity for the six months ended 30 September 2011

Consolidated statement of financial position at 30 September 2011

Consolidated statement of cash flows for the six months ended 30 September 2011

Notes forming part of the parent company financial statements

1 Accounting policies

Basis of preparation

The interim financial information has been prepared using policies based on International Financial Reporting Standards (IFRS and IFRIC interpretations) issued by the International Accounting Standards Board ("IASB") as adopted for use in the EU. The interim financial information has been prepared using the accounting policies which will be applied in the Group's statutory financial information for the year ended 31 March 2012.

The interim financial information for the period 1 April 2011 to 30 September 2011 is unaudited. In the opinion of the Directors the interim financial information for the period presents fairly the financial position, results from operations and cash flows for the period in conformity with the generally accepted accounting principles consistently applied. The interim financial information incorporates comparative figures for the interim period 1 April 2010 to 30 September 2010 and the audited financial year to 31 March 2011.The financial information contained in this interim report does not constitute statutory accounts as defined by section 435 of the Companies Act 2006. The comparatives for the full year ended 31 March 2011 are not the Company's full statutory accounts for that year. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified, and did include references to any matters to which the auditor drew attention by way of emphasis in respect of going concern, without qualifying their report and did not contain a statement under section 498(2)-(3) of the Companies Act 2006.

Going concern

The Group's current pipeline of sales from existing clients and new significant customers will generate cash inflows but in order to continue to develop the Group's assets and fully fund its working capital requirements additional financing will be needed. While the directors are confident that additional funding can be raised in order to meet its development and working capital requirements there is an inherent uncertainty that this funding may not be raised. This condition indicates the existence of a material uncertainty which may cast significant doubt on the Group's ability to continue as a going concern.

The financial information has been prepared on a going concern basis, however the conditions outlined above indicate the existence of material uncertainties which may cast doubt about the Company's and the Group's ability to continue as a going concern. The financial information does not include the adjustments that would result if the Group and Company were unable to continue as a going concern.

2 Segmental analysis

The Group has two reportable segments:

·; Head office - this segment is the head office of the Group.

·; Operations - this segment is involved in sales technology development in the USA.

The operating results of these segments are regularly reviewed by the Group's chief operating decision maker in order to make decisions about the allocation of resources and assess their performance.

All material non-current assets are owned by the USA subsidiary and are located in the USA.

3 Deferred Tax

Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 35%.

4 Loss per share

Basic

The calculation of loss per share is based on the loss for the period of £2,389,096 (2010 - loss £3,108,252, 2011 full year £5,825,344) and on 734,191,944 (2010 - 691,844,101 , 2011 full year 698,322,321) ordinary shares, being the weighted average number of ordinary shares in issue during the period.

Diluted

Diluted loss per share dilutes the basic loss per share to take into account share options and warrants. The calculation includes the weighted average number of ordinary shares that would have been issued on the conversion of all the dilutive share options and warrants into ordinary shares. 97,572,756 options and 1,193,654 warrants (2010 - 104,641,820 options and 1,193,654 warrants, 2011 full year 108,152,274 options and 1,193,654 warrants) have been excluded from this calculation as this would reduce the loss per share.

5 Share capital -unaudited

6 Post Reporting events

The company raised £177,500 via a private placing of 17,750,000 shares at 1 pence per share on 11 October 2011.