7th Sep 2006 07:01
Amphion Innovations PLC07 September 2006 FOR RELEASE 7 September 2006 Amphion Innovations plc Interim results show 21 percent gain in fair value of investments New York--Amphion Innovations plc (LSE:AMP) ("Amphion" or "the Company"), thedeveloper of technology and life sciences businesses, today announces itsunaudited interim results for the period from 1 January 2006 to 30 June 2006. Financial Highlights • Revenues of US $455,377 • Net profit of US $1.8 million • Earnings per share of US $.02 • Fair value* of Amphion's investment portfolio increased 21 percent (US $4.4 million) from US $21.2 million to US $25.6 million • Net asset value per share grew by 8 percent from $.26 at 31 December 2005 to $.28 at 30 June 2006, but the corresponding increase in Sterling was a more modest 2 percent (14.98p to 15.28p) as a result of the adverse movement in the US Dollar against Sterling over the six-month accounting period * Fair value refers to the aggregate value of Amphion's holdings based on thelast quoted closing price for publicly held Partner Companies and the offeringprice on the most recently executed financing transactions for privately heldPartner Companies. Of the US $4.4 million increase in fair value, $2.2 millionwas attributable to the increase in the offering price of SupertronTechnologies, Inc. and $1.5 million was attributable to new investingactivities. Operating Highlights (Pre-30 June) • Amphion announced a memorandum of understanding with Myconostica Ltd, a spin-out from the University of Manchester to become Amphion's next Partner Company • Supertron Technologies, Inc. successfully raised US $3.5 million in an over-subscribed Series C financing • Axcess International, Inc. raised US $2.3 million in a preferred stock offering • Motif BioSciences, Inc. hired Zaki Hosny, former vice president of marketing, European, Middle Eastern and African operations for Merck, as chief executive officer • Amphion sold 132,500 shares of Beijing Med-Pharm Corp. for a total of US $585,886 prior to June 30 and has sold 171,400 shares for a total of US $696,000 since 30 June. The average sales price of US $4.21 represents a 3.66-fold increase over the original purchase price of US $1.15 Operating Highlights (Post-30 June) • Amphion raised £1.04 million through an issuance of 4,010,769 ordinary shares at 26p • FireStar Software, Inc raised US $2 million in a Series E-1 financing Amphion Chief Executive Officer Richard C. E. Morgan, said: "During this period we have seen tremendous momentum in the key areas of ourbusiness model, which is to develop thriving companies. "There has been significant activity in capital raising and we have continued toacquire groundbreaking intellectual property (IP) in life sciences. These arethe key factors fuelling our underlying engine of growth as indicated by the 21percent increase in fair value of our investment portfolio. The successfulfundraisings, in excess of US $8 million, along with the acquisition of talentand IP, have underpinned our commitment to growth and are a true validation ofour strategy to continue to grow our seven Partner Companies. The latest plannedaddition to our portfolio, Myconostica Ltd. shows our continued dedication tofinding new commercial opportunities in the universities and adding one companyto the Amphion portfolio per year, while maintaining a portfolio of 7 to 10Partner Companies at any one time." For further information please contact: Amphion Innovations 001-646-747-7158Josh Berkman Financial Dynamics 44-207-831-3113Ben AtwellJohn Gilbert Notes to editors About Amphion Innovations Working in partnership with universities and corporations seeking tocommercialise their intellectual property, Amphion Innovations plc utilises aproven company creation and building process, staying deeply involved with itsPartner Companies before seeing them through a public offering or trade sale. Amphion currently holds a significant stake in each of its Partner Companies, iscontinually evaluating new opportunities, and expects to add Myconostica Ltd asa Partner Company in 2006. On the Web: www.amphionplc.com Overview for 1 January 2006 - 30 June 2006 Amphion has made excellent progress so far this year. We have seen successfulfund raisings for Supertron and Axcess during the period ended 30 June 2006 andFireStar post 30 June 2006. Also, we have hired a new chief executive officerfor our Partner Company, Motif BioSciences. In addition to our goal of developing thriving companies, part of our strategyis to liquidate our position once a company reaches a certain level of sustainedgrowth and has generated a significant return on investment. For example one ofour Partner Companies, Beijing Med-Pharm, has become a leading distributor ofwestern pharmaceutical products in China. Since 1 January 2006, Amphion has sold303,900 shares of Beijing Med-Pharm stock for US $1.28 million. Over the courseof Amphion's two-year investment in Beijing Med-Pharm, it realised a 3.66-foldreturn on its original investment. We have also successfully begun the process of replacing our investment inBeijing Med-Pharm with an investment in Myconostica, a Manchester Universityspin-out that develops molecular probes for diagnosing infectious diseases.Currently there is no clinical solution on the market that allows for as fastand precise a diagnosis, and we look forward to adding Myconostica to ourportfolio of companies. The fair value of Amphion's investment portfolio increased 21 percent for theperiod, signifying that Amphion is a company propelled by a strong underlyingengine of growth. This continued growth allows Amphion to welcome one PartnerCompany per year to its portfolio while maintaining a portfolio of 7 to 10Partner Companies at any one time. Amphion's steady growth is attributable toits proven ability to identify market demands and Partner Companies that arepositioned to answer those demands. Amphion has addressed its capital needs with the close of a successful round offinancing in August in which it raised gross proceeds of £1.04 million. TheCompany continues to hold US $1.7 million in Beijing Med Pharm stock, which isavailable to the Company to supplement its capital needs. Partner Company Highlights • WellGen, Inc. is a nutrigenomics company using proprietary technology to discover and develop food and dietary supplements from plants and foods tomarket into the health and wellness markets. A spin-out of Rutgers University,WellGen has the exclusive worldwide license to a proprietary technology thatscreens food and plant extracts for their impact on gene expression associatedwith the onset or proliferation of cancer, arthritis, obesity and other humandiseases. WellGen's leading anti-cancer and obesity compound extracted from orange peel,has its patents pending. The anti-cancer/obesity product has completed a shortclinical trial in human patients with high-risk for colon cancer while a longerclinical trial is planned. Further pre-clinical and human studies of obesity andmetabolic syndrome are being planned as well. There is a supply agreement inplace for this product with Danisco, a Danish food ingredients company. Clinical trials for the black tea extract in combination with glucosamine, anutraceutical known to slow the progression of osteoarthritis, have been plannedfor 2006. The pilot studies will include 16 patients divided into three groups.Results of the trial are expected by year's end. During this period, we sadly reported the loss of WellGen's CEO, David Evans,who unexpectedly passed away. WellGen's management team, staff and all of itsstakeholders honour his memory through their commitment to pushing the companyhe built to new heights. • Durham Scientific Crystals, Ltd. (DSC) is commercialising a patentedprocess to produce single crystal wafers of the semi-conducting materialscadmium telluride and cadmium zinc telluride, which are used in digital X-raycameras. In addition to medical use, DSC is targeting the security industry for the useof its process. The recent scare at Heathrow International Airport in Londondemonstrated the urgency for enhanced X-ray technology. Currently, enhancedX-ray machines use a process that produces crystals from a liquid base. Thisprocess is characterised by poor yield and thus high costs. DSC's process uses avapour base, which achieves a higher yield, thus driving down the cost andallowing for widespread use. DSC is working with non-commercial partners to optimise its crystals with anelectrode edge that makes it easier to integrate them into the electronicinfrastructure of scanners. • AXCESS International, Inc. is a leading provider of security andtransportation logistics solutions that utilise radio frequency identification(RFID) technology. Its share price during the period increased US $0.45, from US$0.82 to US $1.27. The company raised US $3.5 million this year, including US$2.3 million during the period 1 January 2006 - 30 June 2006, and is using thiscapital for product development. • Motif BioSciences, Inc. is a population genetics company focused ondiscovering genes causing common diseases by utilising human genetic data fromthe Persian Gulf region. During this period, Zaki Hosny, former vice president of marketing andoperations for Europe, Middle East and Africa for Merck, was appointed chiefexecutive officer of Motif. The Company also established a joint venture withthe Shafallah Centre for Children with Special Needs, located in Doja, Qatar.Motif is playing a key role in the development of a state-of-the-art laboratoryfor the study of genetics. The region's founder population (people descended from a small number of commonancestors) provides a unique resource for the discovery of disease-relatedgenes. Motif is recruiting 120 individuals for a pilot study that will help itunderstand the genetic architecture of this population and, in turn, identifythe genetic pathways through which common disease-causing genes (i.e. raremonogenetic diseases, type 2 diabetes, obesity and asthma) pass from generationto generation. Motif is also studying and comparing the genetic architecture ofwhole families that have a high prevalence of these disorders. • FireStar Software, Inc. develops solutions that allow for the seamlessautomation of cross-platform transactions between multiple companies. FireStar'sflagship product, EdgeNode, began shipping in December 2005. In August, FireStar raised US $2 million through an over-subscribed, Series E-1preferred stock offering. It plans to use this capital to accelerate sales andmarketing efforts for EdgeNode and for application development in paymentsystems, trading and health records exchange. In addition, the company is working to extract value from its intellectualproperty portfolio. • Supertron Technologies, Inc. develops, manufactures and marketselectronic components and systems for the magnetic resonance imaging (MRI)industry. Its products are based on superconductors and are designed for use inpre-clinical, clinical and research settings, including neurological,orthopaedic, cardiac, drug and image guided therapies. Supertron's MRI coils, the scanner's "camera", have demonstrated that they arecapable of dramatically improving the imaging capabilities of a MRI scanner. Thecompany is developing a cryogenic coil that increases speed and allows forimaging of body parts in motion. The cryogenic coil also improves resolution,which enables doctors to see smaller structures. In July, Supertron closed on a US $3.5 million Series C financing, which wasover subscribed. Outlook and Summary In 2006, Amphion has delivered strong progress in all of its Partner Companies,as is seen with the rise in net asset value and fair value. The year has shownsuccessful investments of more than $8 million in the portfolio, and alsoAmphion has continued to build up Partner Company management teams with the hireof a new chief executive for Motif Biosciences. The latest planned addition tothe portfolio of Myconostica Ltd. has shown Amphion's commitment in finding newand exciting opportunities within the universities and dedication to thestrategy of continuing to invest in 7 to 10 companies. The strong start to the year has provided Amphion with a solid base to continueto deliver on its strategy, and the prospects look encouraging with strongnewsflow and exciting developments coming from the Partner Companies and furtherinvestments expected. Amphion Innovations plcCondensed consolidated income statementFor the six months ended 30 June 2006 Unaudited Period from Notes Six months 7 June 2005 Six months ended (date of ended incorporation) 30 June to 30 June 31 December 2005 2006 2005 ______ ______ ______Continuing operations US $ US $ US $ Revenue 455,377 - 319,673 Other operating income 1,650 - 8,729Administrative expenses (1,917,682) - (1,632,139) ______ ______ ______ Operating loss (1,460,655) - (1,303,737) Fair value gains on investments 6 2,849,016 - 3,550,094Realized gains on sale of investments 367,261 - -Interest income 78,880 - 90,966Other gains and losses 26,535 - (34,904) ______ ______ ______ Profit before tax 1,861,037 - 2,302,419 Income tax expense 4 (53,750) - (27,000) ______ ______ ______ Profit for the period 1,807,287 - 2,275,419 ______ ______ ______ Earnings per share 5 Basic US $ 0.02 US $ - US $ 0.02 ______ ______ ______ Diluted US $ 0.02 US $ - US $ 0.02 ______ ______ ______ Amphion Innovations plcCondensed consolidated balance sheetAt 30 June 2006 Unaudited Audited Notes 30 June 2006 31 December 2005 ______ ______ US $ US $Non-current assetsFixtures, fittings and equipment 27,318 26,427Security deposit 121,694 121,694Investments 6 25,566,572 21,178,415 ______ ______ 25,715,584 21,326,536 ______ ______Current assetsPrepaid expenses and other receivables 601,837 643,488Cash and cash equivalents 182,392 2,448,422 ______ ______ 784,229 3,091,910 ______ ______ Total assets 26,499,813 24,418,446 ______ ______ Current liabilitiesTrade and other payables 594,850 354,319 ______ ______ Total liabilities 594,850 354,319 ______ ______ Net assets 25,904,963 24,064,127 ______ ______ EquityShare capital 7 1,685,160 1,685,160Share premium account 20,128,868 20,101,328Translation reserve 8,229 2,220Retained earnings 4,082,706 2,275,419 ______ ______ Total equity 25,904,963 24,064,127 ______ ______ Amphion Innovations plcCondensed consolidated statement of changes in equity Unaudited Share Share premium Translation capital account reserve ______ ______ ______ US $ US $ US $ Issue of share capital 0.04 - - Profit for the period - - - ______ ______ ______ Balance at 30 June 2005 0.04 - - Issue of share capital 1,685,160 21,568,320 - Incremental costs directly attributable to issue of shares - (1,597,807) - Recognition of share-based payments - 130,815 - Exchange differences arising on translation of foreign operations - - 2,220 Profit for the period - - - ______ ______ ______ Balance at 31 December 2005 1,685,160 20,101,328 2,220 Recognition of share-based payments - 27,540 - Exchange differences arising on translation of foreign operations - - 6,009 Profit for the period - - - ______ ______ ______ Balance at 30 June 2006 1,685,160 20,128,868 8,229 ______ ______ ______ Condensed consolidated statement of changes in equity (continued) Unaudited Retained earnings Total US $ US $ Issue of share capital - 0.04 Profit for the period - - Balance at 30 June 2005 - 0.04 Issue of share capital - 23,253,480 Incremental costs directly attributable to issue of shares - (1,597,807) Recognition of share-based payments - 130,815 Exchange differences arising on translation of foreign operations - 2,220 Profit for the period 2,275,419 2,275,419 Balance at 31 December 2005 2,275,419 24,064,127 Recognition of share-based payments - 27,540 Exchange differences arising on translation of foreign operations - 6,009 Profit for the period 1,807,287 1,807,287 Balance at 30 June 2006 4,082,706 25,904,963 Amphion Innovations plcCondensed consolidated cash flow statementFor the six months ended 30 June 2006 Unaudited Period from Six months 7 June 2005 Six months ended (date of ended incorporation) 30 June to 30 June 31 December 2006 2006 2005 US $ US $ US $Operating activities Operating loss (1,460,655) - (1,303,737) Adjustments for: Depreciation of fixtures, fittings and equipment 4,209 - 2,333 Advisory fees received in equity instruments (3,432) - 49,192 Advisory fees settled in equity instruments 27,540 - 20,655 Net working capital acquired - - 162,847 Decrease (increase) in prepaid & other receivables 41,652 - (643,488) Increase in security deposits - - (121,694) Increase in trade & other payables 240,531 - 302,839 Income tax (53,750) - (27,000) ______ ______ ______ Net cash used in operating activities (1,203,905) - (1,558,053) ______ ______ ______ Investing activities Interest received 78,880 - 90,966Cash received from acquisition of business - - 325,011Proceeds on disposal of investments 585,886 - -Purchases of investments (1,954,334) - (5,660,826)Proceeds from repayment of note 200,000 - -Purchases of equipment (5,101) - (15,714) ______ ______ ______ Net cash used in investing activities (1,094,669) - (5,260,563) ______ ______ ______ Financing activities Proceeds on issue of shares, net of share issuance costs - 0.04 9,299,723 ______ ______ ______ Net cash from financing activities - 0.04 9,299,723 ______ ______ ______ Net increase (decrease) in cash and cash equivalents (2,298,574) 0.04 2,481,107 Cash and cash equivalents at the beginning of the period 2,448,422 - 0.04 Effect of foreign exchange rate changes 32,544 - (32,685) ______ ______ ______ Cash and cash equivalents at the end of the period 182,392 0.04 2,448,422 ______ ______ ______ Amphion Innovations plc Notes to the condensed consolidated financial statements (Unaudited) For the six months ended 30 June 2006 1. General information The condensed consolidated interim financial statements for the six months ended30 June 2006 are unaudited and do not constitute statutory accounts within themeaning of the Isle of Man Companies Acts 1931 to 2004. The statutory accountsof Amphion Innovations plc for the period ended 31 December 2005 have been filedwith the Registrar of Companies and contain a qualified audit report. Copiesare available on the company's website at www.amphionplc.com/ir_results.htm. 2. Accounting policies These condensed consolidated interim financial statements have been prepared inaccordance with the recognition and measurement requirements of InternationalFinancial Reporting Standards (IFRS). The accounting policies applied by the Group are consistent with those followedin the preparation of the Group's annual financial statements for the periodended 31 December 2005. 3. Segment information For management purposes, the Group is currently organized into two businesssegments - advisory services, and investing. These business segments are thebasis on which the Group reports its primary segment information. The Companydid not commence business operations as of 30 June 2005, therefore no segmentinformation is shown for that period. Segment information about these businesses is presented below. Advisory services Investing Eliminations Consolidated Six months Six months Six months Six months ended ended ended ended 30 June 2006 30 June 2006 30 June 2006 30 June 2006 US $ US $ US $ US $REVENUEExternal advisory fees 455,377 - - 455,377Inter-segment fees 152,895 - (152,895) - ______ ______ ______ ______ Total revenue 608,272 - (152,895) 455,377Other operating income 1,650 - 1,650Administrative expenses (533,842) (1,536,735) 152,895 (1,917,682) ______ ______ ______ ______ Segment result 76,080 (1,536,735) - (1,460,655) Fair value gain on investments 109,136 2,739,880 - 2,849,016Realized gains on sale of investments - 367,261 - 367,261Interest income 1,950 76,930 - 78,880Other gains and losses - 26,535 26,535 ______ ______ ______Profit before tax 187,166 1,673,871 - 1,861,037Income taxes (53,750) - - (53,750) ______ ______ ______ ______ Profit after tax 133,416 1,673,871 - 1,807,287 Advisory services Investing Eliminations Consolidated Six months Six months Six months Six months ended ended ended ended 30 June 2006 30 June 2006 30 June 2006 30 June 2006 US $ US $ US $ US $OTHER INFORMATIONSegment assets 585,577 26,038,956 (124,720) 26,499,813 Segment liabilities 227,093 491,746 (123,989) 594,850 Capital additions 5,101 - - 5,101Depreciation 1,440 2,769 - 4,209Advisory fees settled in equity - 27,540 - 27,540instruments Geographical segments The Group's operations are located in the United States and the United Kingdom. The following table provides an analysis of the Group's advisory fees bygeographical location of the investment. Advisory fees by geographical location US $ United States 424,833United Kingdom 30,544 ______ 455,377 ______ The following is an analysis of the carrying amount of segment assets, andadditions to fixtures, fittings and equipment, analysed by the geographical areain which the assets are located: Carrying Additions to amount of fixtures, fittings segment assets and equipment US $ US $ United States 26,463,208 1,821United Kingdom 36,605 3,280 ______ ______ 26,499,813 5,101 ______ ______ 4. Income tax expense Six months Period from Six months ended 7 June 2005 to ended 30 June 2006 30 June 2005 31 December 2005 ______ ______ ______ US $ US $ US $ Isle of Man income tax - - -Tax on US subsidiary 53,750 - 27,000Tax on UK subsidiary - - - ______ ______ ______ Current tax 53,750 - 27,000 ______ ______ ______ From 6 April 2006, a standard rate of corporate income tax of 0% applies to Isleof Man companies, with exceptions taxable at the 10% rate, namely licensed banksin respect of deposit-taking business, companies that profit from land andproperty in the Isle of Man and companies that elect to pay tax at the 10% rate. Notwithstanding the fact that the general rate of 0% would apply to theprofits for the six month period ended 30 June 2006, the company has beengranted exemption from Isle of Man income tax for the fiscal year 2006/2007under the terms of the Income Tax (Exempt Companies) Act 1984. No provision forIsle of Man taxation is therefore required. The Company is treated as aPartnership for U.S. federal and state income tax purposes and, accordingly, itsincome or loss is taxable directly to its partners. Local taxes are payable bythe Company based on its New York City taxable net income. The Company has two subsidiaries in the USA and UK, respectively. The USsubsidiary, Amphion Innovations US Inc., is a Corporation and therefore taxeddirectly. The UK subsidiary, Amphion Innovations UK Limited, is liable to UKCorporation tax at rates up to 30% on its taxable profits and gains. The charge for the period can be reconciled to the profit per the consolidatedincome statement as follows: US $ Profit before tax 1,861,037 ______ Tax at the Isle of Man income tax rate of 0% - Effect of different tax rates of subsidiariesoperating in other jurisdictions 53,750 ______ Current tax 53,750 ______ 5. Earnings per share The calculation of the basic and diluted earnings per share is based on thefollowing data: Earnings Six months Period from Six months ended 7 June 2005 to ended 30 June 30 June 31 December 2006 2005 2005 ______ ______ ______ US $ US $ US $Earnings for the purposes of basic and diluted earnings pershare (profit for the year attributable to equity holders of 1,807,287 - 2,275,419the parent) ______ ______ ______ Number of shares Six months Period from Six months ended 7 June 2005 to ended 30 June 30 June 31 December 2006 2005 2005 ______ ______ ______ Weighted average number of ordinary shares for the purposes of basic earnings per share 93,639,455 2 91,305,759 Effect of dilutive potential ordinary shares: Share options 600,000 - 600,000 ______ ______ ______ Weighted average number of ordinary shares for the purposes of diluted earnings per share 94,239,455 2 91,905,759 ______ ______ ______ 6. Investments At fair value through profit or loss 30 June 2006 Fair Value Cost Unrealised US $ US $ US $ Public companies:Axcess International Inc. 2,725,300 2,259,521 465,779Beijing Med-Pharm Corporation 2,274,300 893,474 1,380,826 Private companies:Durham Scientific Crystals, Ltd. 1,812,673 1,812,673 -Firestar Software Inc. 3,964,106 4,028,856 (64,750)Motif BioSciences Inc. 6,188,693 4,252,279 1,936,414Myconostica Limited 184,000 184,000 -Supertron Technologies Inc. 3,422,500 1,187,200 2,235,300WellGen, Inc. 4,995,000 4,549,458 445,542 ______ ______ ______ 25,566,572 19,167,461 6,399,111 ______ ______ ______ (continued from table above) 31 December 2005 Fair Value Cost Unrealised US $ US $ US $ Public companies:Axcess International Inc. 1,277,290 1,759,521 (482,231)Beijing Med-Pharm Corporation 2,608,380 1,112,100 1,496,280 Private companies:Durham Scientific Crystals, Ltd. 1,812,673 1,812,673 -Firestar Software Inc. 2,764,356 2,778,856 (14,500)Motif BioSciences Inc. 6,390,859 4,451,945 1,938,914Myconostica Limited - - -Supertron Technologies Inc. 1,212,357 1,183,768 28,589WellGen, Inc. 5,112,500 4,529,458 583,042 ______ ______ ______ 21,178,415 17,628,321 3,550,094 ______ ______ ______ 30 June 2006 Fair Value Cost Unrealised US $ US $ US $ Stocks 17,815,666 13,329,955 4,485,711Promissory notes 1,927,348 1,927,348 -Warrants & options 5,823,558 3,910,158 1,913,400 ______ ______ ______ 25,566,572 19,167,461 6,399,111 ______ ______ ______ (continued from table above) 31 December 2005 Fair Value Cost Unrealised US $ US $ US $ Stocks 15,923,825 13,028,246 2,895,579Promissory notes 693,348 693,348 -Warrants & options 4,561,242 3,906,727 654,515 ______ ______ ______ 21,178,415 17,628,321 3,550,094 ______ ______ ______ At 30 June 2006 the two publicly traded companies, Axcess International Inc. ("Axcess") and Beijing Med-Pharm Corporation ("Beijing"), are valued based ontheir last quoted closing prices. In regard to the Group's valuation of Axcessand Beijing, the directors have assumed an orderly sale of the stock over anextended period of time and have therefore chosen not to apply a discount to thequoted market price. Durham Scientific Crystals Ltd. and Myconostica Ltd. arevalued at cost. FireStar Software Inc., Motif BioSciences Inc., SupertronTechnologies Inc. and WellGen Inc. are valued using the latest offering pricefrom recently executed financing transactions by those companies. Warrants forall companies are valued at the valuation price less the warrant exercise priceplus a factor for the time value of the warrant. The time value factor is basedon the premise that an in-the-money ten year warrant is worth half the exerciseprice. During the six months ended 30 June 2006, the Company sold 132,500 shares ofBeijing Med-Pharm Corporation for total proceeds of $585,886. The Group's ownership percentages of the investments are as follows: Fully-diluted ownership Country of incorporation % Axcess International, Inc. United States of America 8.20Beijing Med-Pharm Corporation United States of America 2.13Durham Scientific Crystals Limited England 27.21Firestar Software, Inc. United States of America 9.80Motif BioSciences, Inc. United States of America 46.98Myconostica Limited England 0.00Supertron Technologies, Inc. United States of America 27.79WellGen, Inc. United States of America 17.42 7. Share capital 30 June 2006 30 June 2006 £ US $ Authorised: 150,000,000 ordinary shares of 1p each 1,500,000 ______ Issued and fully paid: 93,639,455 ordinary shares of 1p each 936,395 1,685,160 ______ ______ Share capital at 30 June 2006 amounted to US$1,685,160. There were no movementsin the share capital of the Company in the current interim reporting period. 8. Share based payments In 2006 the Group established the 2006 Unapproved Share Option Plan and it wasadopted pursuant to a resolution passed on 8 June 2006. Under this plan, theCompensation Committee may grant share options to eligible employees, includingdirectors, to subscribe for ordinary shares of the Company. The number ofShares over which options may be granted under the Unapproved Plan cannot exceedten percent of the ordinary share capital of the Company in issue on a fullydiluted basis. The Plan will be administered by the Compensation Committee. The number ofshares, terms, performance targets and exercise period will be determined by theCompensation Committee. No options were issued during the six months ended 30 June 2006. 9. Events after the balance sheet date On August 9, 2006, the Company issued 4,010,769 new ordinary shares at 26 penceper share for a total of £1,042,800. In July 2006, the Company purchased a 10% demand note from FireStar SoftwareInc. for US$125,000. In July and August 2006, the Company purchased 40,500 shares of Series CPreferred Stock in Supertron Technologies, Inc. for $202,500. In July and August 2006, the Company sold 171,400 shares of Beijing Med-PharmCorporation for proceeds of $696,247. In August 2006, the Company purchased 50,000 F Preferred shares in DurhamScientific Crystals Limited for £100,000. 10. Related party transactions Transactions between the Company and its subsidiaries, which are related partiesof the Company, have been eliminated on consolidation and are not disclosed inthis note. Details of transactions between the Group and other related partnersare disclosed below. During the period, the Group paid miscellaneous expenses for Motif BioSciences,Inc. ("Motif") such as payroll and other office expenses. At 30 June 2006,Motif has repaid all of these expenses. A subsidiary of the Company has entered into an agreement with AxcessInternational Inc. ("Axcess") to provide advisory services. Richard Morgan andRobert Bertoldi, directors of the Company, are also directors of Axcess.Amphion Innovations US Inc. will receive US$10,000 per month pursuant to thisagreement, which expires on March 1, 2007. This agreement will renew on anannual basis unless terminated by either party. Amphion Innovations US Inc.received US$40,000 during the period ended 30 June 2005. A subsidiary of the Company provides advisory and consulting services to DurhamScientific Crystals, Ltd. ("DSC"). Richard Morgan, a director of the Company,is also a director of DSC. The monthly fee under this agreement is the lesserof US$10,000 and 50% of the gross compensation paid to directors and managementof DSC in that month and expires on 21 September 2008. Amphion Innovations USInc.'s fee for the period ended 30 June 2006 was US$28,207 of which $4,923 wasstill due at 30 June 2006. A subsidiary of the Company has entered into an agreement with FireStar SoftwareInc. ("FireStar') to provide advisory and consulting services. Richard Morgan,a director of the Company, is also a director of FireStar. The annual fee underthis agreement is US$240,000 in addition to a $100,000 bonus fee and expires 1January 2008. The total of $400,000 is due at 30 June 2006 (this number excludes$80,000 for March through June 2006 as the advisory fee was deferred pendingFireStar financing). A subsidiary of the Company provides advisory and consulting services to MotifBioSciences Inc. ("Motif"). Richard Morgan, a director of the Company, is alsoa director of Motif. The annual fee for the services is US$240,000 and thisagreement will expire on April 1, 2007. The agreement automatically renews onan annual basis unless terminated by either party. Amphion Innovations US Inc.received US$120,000 during the period ended 30 June 2006. A subsidiary of the Company has entered into an agreement with SupertronTechnologies Inc. ("Supertron") to provide advisory and consulting services.Robert Bertoldi, a director of the Company, is also a director of Supertron.The annual fee under this agreement is US$120,000 but will increase to $180,000when Supertron's next financing milestone is met, in addition to receiving stockoptions to purchase common stock of Supertron. The agreement expires on 31December 2007. Amphion Innovations US Inc received US$60,000 during the periodended 30 June 2006. A subsidiary of the Company has entered into an agreement with WellGen Inc. ("WellGen") to provide advisory and consulting services. Richard Morgan, adirector of the Company, is also a director of WellGen. The annual fee underthis agreement is US$180,000 in addition to a one-time payment of US$70,400.The agreement expires December 31, 2006. Amphion Innovations US Inc. received$161,400 during the period ended 30 June 2006. The directors' direct ownership in the partner companies is as follows: Fully diluted % owned byInvestment company directors Axcess International Inc. 4.20%Beijing Med-Pharm Corporation 0.41%Firestar Software, Inc. 1.58%Motif BioSciences, Inc. 4.70%WellGen, Inc. 5.50% This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
AMP.L