YGEN.L Regulatory News (YGEN)

27 Dec 2007 07:00

ViaLogy PLC27 December 2007 ViaLogy plc Interim results for the six months ended 30 September 2007 ViaLogy plc (LSE: VIY), a leading innovator of real-time network-centric signalprocessing platforms, is pleased to report its interim results for the six monthperiod to 30 September 2007. Chairman's Statement During the period the Company made substantial progress on several fronts. InJune, in order to provide funding for a sales and service infrastructure for ourcommercial activities, we raised £4.4 million by way of a placing of 55 millionnew ordinary shares at 8p per share. In addition, subject to shareholderapproval, which was subsequently given at the AGM, the placees received onewarrant for every two ordinary shares purchased in the placing. Each warrantentitles the holder to purchase an additional ordinary share at 10p at any timeup to 30 October 2009. For the scientists at our head office in Pasadena, California, the six monthscovered by the Report was a time of intense activity as the Group's patentedtechnology was incorporated into ViaLogy's first-ever commercial product, theSensor Policy Manager (SPMTM). This is an enterprise-grade software policymanager for large-scale sensor applications. The target date for completion ofthe product was 15 September and I am delighted to say that the team deliveredon time and we were able to demonstrate SPM to potential customers. Althoughonly a couple of months have passed since the launch we can say that all initialindications are favourable. The product has been accepted for beta-testing insensors and sensor systems by a number of global organisations. The figures show a loss for the period of £1,997,656, which includes £1,056,048for amortisation and depreciation. As I explained in the last annual report, theamortisation charge relates to the value of ViaLogy's Intellectual Property andassociated Research and Development, which is amortised over a total of sixyears. The cash outflow from operations during the period was £889,791. Since the end of the period to which this Interim Report relates we haveconsiderably strengthened our management team. In particular, we have a newChief Executive Officer, Dr. Robert W. Dean, who is also President of ourwholly-owned US subsidiary, ViaLogy LLC. Robert comes to us from ScienceApplications International Corporation (SAIC), where he was a Senior VicePresident. He brings a wealth of experience and business acumen to ViaLogy. Inaddition, we welcome Robert Kern as Vice President, Sales and Marketing, andHugo Freuhof as Vice President, Operations. We have also strengthened our Board of Directors, with Peter Reynolds joining usas a non-executive director. An international businessman, Peter is on theboards of a number of quoted companies and has considerable City experience. In the Spring of 2008 we intend to launch ViaLogy's second product, MicroSPMTM.This is a hardware platform for autonomous high definition digital videoprocessing. It is powered by ViaLogy's patented signal processing technology,Quantum Resonance Interferometry ('QRI'). Other products, including MPEXElectronic EyeTM which we are developing with the Boeing Corporation, willfollow. We are dealing with international customers, who have long establishedreputations for quality to protect, so the testing process is rigorous anddetailed. In each case the incorporation of SPM has so far proved entirelysuccessful and in two instances we are in detailed pricing negotiations, whichwe are confident will lead to profitable contracts for ViaLogy. Terry Bond Executive Chairman ViaLogy PLC Consolidated income statement Unaudited Unaudited Audited 6 months 6 months Year to to 30 Sep to 30 Sep to 31 Mar 2007 2006 2007 Notes £ £ £ Revenue 22,567 3,204 273,478Cost of sales 408 - 8,410 -------- -------- --------Gross profit 22,159 3,204 265,068 Administrative expenses 2,266,459 170,190 1,848,450 -------- -------- --------Loss from Operations (2,244,300) (166,986) (1,583,382) Share of losses of associate - (315,888) (526,481)Finance costs (1,275) - (353)Finance income 52,776 65,834 106,373 -------- -------- --------Loss for the year before taxation (2,192,799) (417,040) (2,003,843) -------- -------- -------- Taxation 195,143 - 171,524 -------- -------- --------Loss for the year attributable to equityholders of the parent (1,997,656) (417,040) (1,832,319) -------- -------- -------- £ £ £Loss per shareBasic and diluted (0.46)p (0.13)p (0.52)p Consolidated statement of changes in equity for the six months ended 30September 2007 Share Share Warrant Foreign Retained Total capital premium reserve exchange earnings account reserve £ £ £ £ £ £ At 1 April 2007 4,031,255 10,970,508 - 20,075 (4,345,317) 10,676,521 Loss for period - - - - (1,997,656) (1,997,656)Exchange differences arising ontranslation of foreign operations - - - (676,847) - (676,847)Share options expense - - - - 217,133 217,133Fundraising costs - (84,320) - - - (84,320) -------- -------- -------- -------- -------- --------Total income and expense - (84,320) - (676,847) (1,780,523) (2,541,690)recognised for the yearArising on issue of shares 555,903 3,595,661 275,000 - - 4,426,564 -------- -------- -------- -------- -------- --------Balance at 30 September 2007 4,587,158 14,481,849 275,000 (656,772) (6,125,840) 12,561,395 ======== ======== ======== ======== ======== ======== Consolidated balance sheet at 30 September 2007 Unaudited Unaudited Audited Notes 30 Sep 30 Sep 31 Mar 2007 2006 2007 £ £ £Assets Non current assets Property, plant and equipment 86,558 2,795 51,730 Intangible Assets 10,390,570 11,649,759 Financial Assets 200,000 200,000 200,000 Investments - associated companies - 2,640,876 - -------- -------- -------- 10,677,128 2,843,671 11,901,489 -------- -------- --------Current assets Inventories 7,363 1,965 Trade and other receivables 45,879 638,777 43,332 Cash and cash equivalents 3,983,337 2,252,359 1,197,855 -------- -------- -------- 4,036,579 2,891,136 1,243,152 -------- -------- --------Total Assets 14,713,707 5,734,807 13,144,641 ======== ======== ========Liabilities Current liabilities Trade and other payables 211,368 192,583 169,695 Non-current liabilities Deferred tax liability 1,940,944 - 2,298,425 -------- -------- --------Total liabilities 2,152,312 192,583 2,468,120 Capital and reserves attributable to equityholders of the Company Share capital 4,587,158 3,112,222 4,031,255 Share premium account 14,481,849 7,639,013 10,970,508 Warrant Reserve 275,000 - - Foreign Exchange translation reserve (656,772) - 20,075 Retained Earnings (6,125,840) (5,209,011) (4,345,317) -------- -------- --------Shareholders' funds 12,561,395 5,542,224 10,676,521 -------- -------- --------Total equity and liabilities 14,713,707 5,734,807 13,144,641 ======== ======== ======== Consolidated cash flow statement for six months ended 30 September 2007 Unaudited Unaudited Audited 30 Sep 30 Sep 31 Mar 2007 2006 2007 £ £ £Operating Activities Loss before tax (2,192,799) (101,152) (2,003,843) Adjustments for :- Share of associate - - 526,481 Finance income (52,776) (65,834) (106,373) Finance cost 1,275 - 353 Depreciation 15,689 311 17,492 Amortisation 1,040,359 - 869,385 Share option expense 217,133 - 126,970 Foreign exchange movements (3,901) (391) 26,426 -------- -------- --------Operating Activities before changes in working capital (975,020) (167,066) (543,109) Reduction/(Increase) in trade and other receivables (2,547) (153,403) 1,023 Increase in inventories (5,398) - (1,965) (Reduction)/Increase in trade and other payables 41,673 156,137 (91,975) Interest received 52,776 65,834 106,373 Interest paid (1,275) - (353) -------- -------- --------Cash generated from operations (889,791) (98,498) (530,006) Investing activities Acquisition of subsidiary, net of cash acquired - - (685,174) Internally generated intangible asset (615,626) - (350,286) Acquisition of tangible fixed assets (51,346) (240) (50,237) Increase in loans to investee companies - (462,875) - -------- -------- -------- (1,556,763) (561,613) (1,615,703)Financing Activities Cash inflow from issue of new shares (net of issuance costs) 4,315,680 - - Cash inflow from exercise of options 26,565 - - -------- -------- --------Decrease in cash and cash equivalents 2,785,482 (561,613) (1,615,703) Cash and cash equivalents at beginning of year 1,197,855 2,813,558 2,813,558 -------- -------- --------Cash and cash equivalents at end of year 3,983,337 2,251,945 1,197,855 ======== ======== ======== Notes forming part of the parent company financial statements 1 Accounting policies Basis of preparation The financial information has been prepared in accordance with InternationalFinancial Reporting Standards (IFRS) and stated in British pounds (£). Inpreparing the interim financial statements, the same accounting policies areapplied as in the preparation of the audited Financial Statements for the yearended 31 March 2007 except for the changes set out below. The above financial information does not constitute statutory accounts withinthe meaning of Section 240, Companies Act 1985. The information relating to thesix months ended 30 September 2007 has been reviewed but not audited.Information relating to the year ended 31 March 2007 has been extracted from thestatutory accounts of the Group which have been audited by the Group's auditorsBDO Stoy Hayward and whose report thereon is unqualified. Changes in accounting policies In the current financial year, the Group will adopt IFRS 7 "Financialinstruments: disclosures" for the first time. As IFRS 7 is a disclosurestandard, there is no impact of that change in accounting policy on thehalf-yearly financial report. Full details of the change will be disclosed inour annual report for the year ended 31 March 2008. 2 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 22,567 - 22,567 -------- -------- --------Operating Profit 22,159 - 22,159Gross Finance Income 1,672 51,104 52,776 -------- -------- --------Net loss for the period (1,702,560) (493,239) (2,192,799) Segment assets 6,550,473 4,126,655 10,677,128Segment liabilities 2,008,227 144,085 2,152,312 -------- -------- --------Costs to acquire plant property and equipment 50,530 816 51,346Costs to acquire intangible assets 615,626 - 615,626Depreciation and amortisation 1,055,489 556 1,056,048Share based payments charged - 217,133 217,133 -------- -------- -------- All sales were to external customers.2006 Business Segments Operations Head Office Consolidated £ £ £ Revenue - 3,204 3,204 -------- -------- --------Operating Loss - (166,986) (166,986)Net Finance Income - 65,834 65,834 -------- -------- --------Net loss for the period - (101,152) (101,152) Segment assets - 7,676,215 7,676,215Segment liabilities - (192,583) (192,583) -------- -------- --------Depreciation and amortisation - 310 310 -------- -------- -------- 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 the six months ended 30 September 2006. 3 Taxation on profits from ordinary activities The movement on the tax account relates to the release of the provision on thedeferred tax credit. The calculation is shown below: 2007 2006 £ £ At 1 April 2007 2,298,425 Release for the six months to 30 Sept 2007 (195,143) -Foreign exchange translation (162,319) -------- --------At 30 September 2007 1,940,963 - ======== ======== Deferred tax is calculated in full on temporary differences under the liabilitymethod using a tax rate of 35% 4 Loss per share Basic The calculation of earnings per share is based on the loss for the year of£1,997,656 (2006 - loss £417,040) and on 434,204,404 (2006 - 311,222,223)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.38,296,484 options and 3,693,654 warrants have been excluded from thiscalculation as this would reduce the loss per share. 5 Share capital Authorised 2007 2006 2007 2006 Number Number £ £ Ordinary Shares of 1p Each 750,000,000 500,000,000 7,500,000 5,000,000 __________ __________ __________ __________ Allotted, called up and fully paid 2007 2006 2007 2006 Number Number £ £Ordinary Shares of 1p Each At 1 April 403,125,537 311,222,223 4,031,255 3,112,222Shares issued for cash 55,000,000 550,000Employee Share option exercised 590,334 59,033 At 30 September 458,715,871 311,222,223 4,587,158 3,112,222 __________ __________ __________ __________ On 26 October 2006 the Company issued 91,903,314 new ordinary shares of 1p attheir fair value of 4.625p each to purchase the remaining 56.34% of ViaLogyCorp. On 19 June 2007 the Company issued 55,000,000 shares of 1p each at 8p per shareby way of a private placing. On 23 August 2007, the Company issued 590,334 ordinary shares of 1p each uponthe exercise of share options at an exercise price of 4.5 pence per share 6 Reserves 2007 Ordinary Share Warrant Foreign Retained share Premium Scheme Exchange earnings capital account reserve £ £ £ £ £At 1 April 2007 4,031,255 10,970,508 - 20,075 (4,345,317)Arising on issue of 555,903 3,595,661 275,000 - -SharesFundraising costs - (84,320) - - -Loss for the period - - - - (1,997,656)Arising in the period - - - (676,847) -Share option expense - - - - 217,133 -------- -------- -------- ------- --------At 30 September 2007 4,587,158 14,481,849 275,000 (656,772) (6,125,840) _________ _________ _________ _________ _________ 2006 Ordinary Share Warrant Foreign Retained share Premium Scheme Exchange earnings capital account reserve £ £ £ £ £At 1 April 2006 3,112,222 7,639,013 - - (5,107,858)Arising on issue of Shares 919,033 3,331,495 - - -Losses previously recognisedoninvestment in associate - - - - 2,467,890Loss for the year - - - - (1,832,319)Arising in the year - - - 20,075 -Share option expense - - - - 126,970 -------- -------- -------- ------- --------At 31 March 2007 4,031,255 10,970,508 - 20,075 (4,345,317) _________ _________ _________ _________ _________ The following describes the nature and purpose of each reserve withinshareholders equity: Reserve Description and purposes Share premium account Amount subscribed for share capital in excess of nominal value.Retained earnings Cumulative net gains and losses recognised in the consolidated income statement.Foreign Exchange Exchange difference arising on translation of foreign operations. For further information please contact: ViaLogyDr Robert Dean, CEO - US +1 626-296-6330Terry Bond, Chairman - UK & Europe +44 (0)1235 834734 Redleaf CommunicationsEmma Kane / Samantha Robbins +44 (0)20 7822 0200 Seymour Pierce LimitedMark Percy +44 (0)20 7107 8000 This information is provided by RNS The company news service from the London Stock Exchange