20th Mar 2008 07:01
Artilium PLC20 March 2008 20 March 2008 Artilium plc ("Artilium" or the "Company") Interim Results for the six months ended 31 December 2007 Three-year agreement with KPN Mobile also announced Artilium plc (LSE/AIM: ARTA), the AIM listed provider of mobile telecomssoftware, announces its interim results for the six months ended 31 December2007. Financial Highlights • Revenue for the six months to 31 December 2007 was £907,000 (2006: £1.7 million) • The Company recorded a loss in the period of £3.3 million (2006: £1.4 million), which includes a £615,000 non-cash, share-based payment • Cash at the end of the period was £4.0 million (30 June 2007: £3.2 million) including a cash inflow of £3.0 million received during the period on the exercise of share warrants Operational Highlights • The Company announces today that it has signed a software licensing deal with KPN Mobile International, estimated to be worth €15 million over the 3-year term of the agreement • After the end of the period under review, and as announced on 11 February 2008, the Company acquired Trisent Communications Limited for up to £1.7 million • The Company has disposed of its 31 percent stake in Seattle-based Chinook Hosting Corporation to Implement.com Corporation in exchange for Implement's investment in software development and related activities • The Company continues to invest heavily in R&D and the expansion of its development capacity with related quality-control systems and processes • The Company has made significant progress in advancing the quality and depth of its engagement with Microsoft Commenting on the results Robert Marcus, Chief Executive Officer of Artiliumsaid: "The Board believes the agreement announced today with KPN marks an inflectionpoint for Artilium. It brings significant new revenue and serves as aproof-point for our Artilium Real-Time Architecture (ARTA) Connected MobileServices technology as an activation platform that opens mobile networks toapplication development and innovation. The Board is pleased by the opportunities open to the Company and believes thattrading for the current year will be in line with market expectations, albeitweighted more heavily towards the second half of the year. During the first halfof this fiscal year we focused our energy and resources on R&D together with acomplete overhaul of our sales processes. We are delighted that we can nowreport the first fruits of success in this strategy with today's announcement ofthe agreement with KPN which will underpin our revenue expectations for the fullyear." For further information please contact: Financial Dynamics T. +44 20 7831 3113 Harriet Keen/Matt Dixon Deloitte Corporate Finance (NOMAD) T. +44 20 7936 3000 Jonathan Hinton/David Smith Panmure Gordon & Co. T. +44 20 7459 3600 Dominic Morley/Giles Stewart About Artilium Artilium develops carrier-grade software that unifies communications and opensmobile networks to third-party application development and innovation. Artilium's Real-Time Architecture (ARTA) for Connected Mobile Servicesfacilitates rapid creation of new mobile applications, packaged as services.ARTA is an open, modular and highly extensible Service-Oriented Architecturethat includes a Service Creation Environment, a real-time Service DeliveryPlatform with an Intelligent Network, and a Mobile Presence Server. The MobilePresence Sever combines highly accurate, continuous real-time location and stateawareness to enable a vast range of new mobile commerce, advertising and socialnetworking services based on the company's Tri-Cell Intelligent Location System(TILS). Founded in 1995 and recognized for advanced and innovative engineering, Artiliumhas completed more than 40 installations serving tens of millions of end-usersin 11 countries. Artilium plc is a publicly listed company with AIM on the London Stock Exchange(LSE/AIM: ARTA). The company is based in Belgium. For more information, pleasevisit: www.artilium.com Chief Executive's Statement Overview During the period under review, the Company has invested heavily in and beenprimarily focused on research and development, the expansion of its softwaredeveloper workforce, and the implementation of software development disciplines,processes and systems. Strategy Artilium develops carrier-grade software that unifies communications and opensmobile networks to third-party and user-generated applications packaged asservices that are able to interface with the mobile network in real-time. The wave of innovation inspired by the Internet has created an empoweredconsumer and a community of developers dedicated to personalising and enhancingthe Web experience. Moving forward, the Directors believe that mobile operatorshave the opportunity to open their networks to the same degree of innovation asseen online, whilst also exploiting the unique location-based and userinteractivity assets of the mobile phone environment. The Board believes thatthis innovation will create an unprecedented level of business model originalityand value-chain diversity. Artilium's ARTA is an open, modular and highly extensible Service-OrientedArchitecture that includes a Service Creation Environment, a real-time ServiceDelivery Platform with an Intelligent Network, and a Mobile Presence Server thatcombines highly accurate, continuous real-time location and state awareness toenable a wide range of new mobile commerce, advertising and social networkingservices based on the company's Tri-Cell Intelligent Location System (TILS). Key developments during the period The Company has been focused primarily on research and development, theexpansion of its software developer workforce and the implementation of softwaredevelopment disciplines, processes and systems. In October 2007, Artiliumunveiled its technology roadmap and vision for the future: a mobile servicesframework built entirely on Microsoft's .NET Framework, running on the WindowsServer operating system, using Microsoft SQL Server database technology. In order to further accelerate innovation, Artilium announced on 11 February2008 the acquisition of Trisent Communications Limited for up to £1.7 million.The consideration was satisfied by cash of £460,000 and the issue of 1.24million ordinary shares in Artilium plc, 301,875 of which have been deferred andare subject to performance conditions. Trisent is an expert in the delivery ofgeospatial "Location Aware Services," a key enabling technology for MobilePresence, and the new wave of mobile Internet innovation, particularly aroundmobile commerce, advertising and social networks. The Trisent technology isunique, has patents pending and delivers significantly improved accuracy overtraditional 'cell-ID' location awareness. It also delivers this at a fractionof the cost of GPS services and also through the consumption of less batterypower. The technology is already being used successfully by MAX Telecom, amobile operator in Bulgaria. Following Microsoft's announcement that it intends to deliver its own end-to-endhosted unified communications solution to small-and-midsize businesses, theCompany discontinued that part of its R&D activities and has since disposed ofits 31 percent stake in Seattle-based Chinook Hosting Corporation to itsmajority shareholder, Implement.com Corporation in exchange for Implement'sinvestment in software development and related activities to build an end-to-end(mobile voice, data, email, voicemail) Artilium service designed forsmall-and-midsize companies. KPN agreement Artilium announces today that it has entered into a software licensing andtechnology agreement with KPN Mobile International. The software license allowsKPN to deploy ARTA as a platform for next-generation converged services acrossits entire growing subscriber base of over 27 million subscribers. It isestimated that the agreement will generate revenues of €15 million for theCompany during the initial license period of three years in license, hardwareand services fees. KPN will pay Artilium €5 million for a three-year license to utilise ARTA. Inaddition, KPN will pay the Company additional amounts in respect of hardware,maintenance and professional services. The initial term of the license is threeyears. Upon expiry of the initial term and any subsequent terms, KPN Mobile willhave the option to extend the arrangement for a further three-year period. A newlicense fee will be payable by KPN, the quantum of which may be increased by nomore than 20 percent upon any extension. To allow for the development of services, KPN has the right to connect or permitthird-parties to connect to ARTA. If KPN seeks to deploy a service developed byArtilium itself then it will have the exclusive right to deploy such a servicein the Benelux and Germany and non-exclusively in other jurisdictions. Artiliumwill receive three percent of any revenues derived by KPN from servicesdeveloped by Artilium. If KPN exercises its options to renew, the deal is estimated to be worth between€30 and €50 million to the Company over the next 10 years. Financial Results As stated, revenue for the six months to 31 December 2007 was £907,000 (2006:£1.7 million). The Company recorded a loss in the period of £3.3 million (2006:£1.4 million) including a £615,000 non-cash, share-based payment. The reason forthe reduced revenue and increased loss is, as alluded to above, the investmentin and focus on research and development activities during this period. Cash at the end of the period was £4.0 million (30 June 2007: £3.2 million)including £3.0 million received during the period on the exercise of outstandingshare warrants. A further £1.0 million in share warrants payment is due fromCold Investments and has been included in receivables. The Company has receivedassurances from the solicitors to Cold Investments that the £1 million will bepaid out of the sale of assets that it owns. Operational restructuring In order to consolidate and streamline the Company's operations, the Board hasdecided to relocate its corporate function, currently based in London, to itsexisting office in Belgium, which is where the majority of the Company'sworkforce is currently based and therefore makes for greater operationalefficiency. The Chief Executive will operate out of Belgium. The Company willretain a reduced UK PLC presence in London and will expand its productdevelopment group in Edinburgh. Board changes On 14 January 2008 Tony Lynch stepped down from the Board and as Chief FinancialOfficer of the Company and was replaced by Chris Ogle. Chris has over 15 years'experience in managing the finance functions of companies in the technology andmedia arenas, including eight years of public company experience. He joinsArtilium from AIM-listed software solutions provider, Flomerics Group plc, wherehe was Group Finance Director. We thank Tony Lynch for his contribution. Outlook As stated above, the Board believes the agreement announced today with KPN marksan inflection point for the Company. It brings significant new revenue andserves as a proof-point for our Artilium Real-Time Architecture (ARTA) ConnectedMobile Services technology as an activation platform for mobile applicationdevelopment and innovation. The Board is pleased by the opportunities open to the Company and believes thattrading for the current year will be in line with market expectations, albeitweighted more heavily towards the second half of the year. During the first halfof this fiscal year we focused our energy and resources on R&D together with acomplete overhaul of our sales processes. We are delighted that we can nowreport the first fruits of success in this strategy with today's announcement ofthe agreement with KPN which will underpin our revenue expectations for the fullyear. ARTILIUM PLC INTERIM ACCOUNTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2007 CONSOLIDATED INCOME STATEMENT 6 months 6 months Year ended ended ended 31 December 31 December 30 June 2007 2006 2007 Unaudited Unaudited Audited £'000 £'000 £'000Continuing operations Revenue 907 1,712 4,549Cost of sales (125) (900) (1,295) Gross profit 782 812 3,254 Other gains and losses - - 7Administrative expenses (4,213) (2,339) (6,222)Share of results of associate (36) - (30) Operating loss (3,467) (1,527) (2,991) Investment revenues 94 45 124Finance costs - (5) (5) Loss before tax (3,373) (1,487) (2,872)Tax 30 44 (24) Loss for the period from continuingoperations (3,343) (1,443) (2,896) Discontinued operations Loss for the period from discontinuedoperations - (1,337) (1,885) Loss for the period (3,343) (2,780) (4,781) Attributable to:Equity holders of parent (3,343) (2,641) (4,671)Minority Interest - (139) (110) (3,343) (2,780) (4,781) CONSOLIDATED INCOME STATEMENT (continued) 6 months 6 months Year ended ended ended 31 December 31 December 30 June Notes 2007 2006 2007 Loss per share in pence fromcontinuing operations (3) (6.10) (3.35) (6.12) Loss per share in pence fromdiscontinued operations (3) - (3.45) (4.14) Total loss per share in pence (3) (6.10) (6.80) (10.26) The Company's shareholders approved a 1 for 5 share consolidation at the AGM on5 January 2007. Five old 1p shares were replaced by one new 5p share. As aresult the comparative loss per share figures above have been restated using thenumber of issued new shares. Loss per share in pence for 2006 using the numberof issued old shares was 0.67p from continuing operations and 0.69p fromdiscontinued operations. ARTILIUM PLC INTERIM ACCOUNTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2007 CONSOLIDATED BALANCE SHEET 31 Dec 31 Dec 30 June 2007 2006 2007 Unaudited Unaudited Audited £'000 £'000 £'000 Non-current assetsGoodwill 6,211 2,697 6,211Intangible assets 886 808 774Property, plant and equipment 703 496 634Deferred tax asset 51 161 51Interest in associate 363 - 401 8,214 4,162 8,071Current assetsInventories 42 21 58Trade and other receivables 2,603 7,395 2,208Cash at bank and in hand 3,987 1,075 3,162 6,632 8,491 5,428 Total assets 14,846 12,653 13,499 Current liabilitiesTrade and other payables 1,932 2,486 1,884Obligations under finance leases 25 - 25Provisions 477 410 458 2,434 2,896 2,367 Non-current liabilitiesObligations under finance leases 49 - 52Deferred tax liabilities 193 140 226 Total liabilities 2,676 3,036 2,645 Net assets 12,170 9,617 10,854 CONSOLIDATED BALANCE SHEET (continued) 6 months 6 months Year ended ended ended 31 Dec 31 Dec 30 June 2007 2006 2007 NoteEquityShare capital (4) 2,893 2,452 2,625Share premium account 23,731 16,385 19,770Capital redemption reserve 4,493 4,493 4,493Option to acquire minority interest - (1,611) -Share warrant reserve - 336 216Share option reserve 1,320 - 707Share of equity of associate 97 - 97Translation reserve 49 249 16Own shares (2,550) - (2,550)Retained deficit (17,863) (12,629) (14,520) Equity attributable to equity holders of parent 12,170 9,675 10,854Minority interest - (58) -Total equity 12,170 9,617 10,854 Total liabilities and equity 14,846 12,653 13,499 ARTILIUM PLC INTERIM ACCOUNTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2007 CONSOLIDATED CASH FLOW STATEMENT 6 months 6 months Year ended ended ended 31 December 31 December 30 June 2007 2006 2007 Unaudited Unaudited Audited Notes £'000 £'000 £'000 Net cash used in operating activities (5) (1,956) (8,286) (5,051) Investing activitiesInterest received 94 44 124Purchases of property, plant and equipment (358) (541) (712)Proceeds from disposal of property, plant and equipment - - 30Purchase of investments - - (334)Acquisition of subsidiary - - (1,414) Net cash used in investing activities (264) (497) (2,306) Financing activitiesRepayments of obligations underfinance lease - - 73Proceeds on issue of shares 3,012 8,035 11,071Loan to employee benefit trust - - (2,550) Net cash from financing activities 3,012 8,035 8,594 Net increase in cash and cashequivalents 792 (748) 1,237 Cash and cash equivalents atbeginning of period 3,162 1,911 1,911Effect of foreign exchange rate changes 33 (88) 14 Cash and cash equivalents atend of period 3,987 1,075 3,162 ARTILIUM PLC INTERIM ACCOUNTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2007 NOTES TO THE CONSOLIDATED ACCOUNTS 1. Significant accounting policies Basis of accounting The condensed set of financial statements in the half-yearly financial reporthas been prepared in accordance with accounting policies the group intends touse in preparing its next annual financial statements and is represented in anIFRS format, however, is not in compliance with IAS 34 'Interim FinancialReporting'. The condensed set of financial statements has been prepared on the historicalcost basis. Basis of consolidation The consolidated financial statements incorporate the financial statements ofArtilium plc ("the Company") and the entities controlled by the Company(together "the Group"). Control is achieved where the Company has the power togovern the financial and operating policies of an investee entity so as toobtain benefits from its activities. Minority interests in the net assets of consolidated subsidiaries are identifiedseparately from the Group's equity therein. Minority interests consist of theamount of those interests at the date of the original business combination andthe minority's share of changes in equity since the date of the combination.Losses applicable to the minority in excess of the minority's interest in thesubsidiary's equity are allocated against the interests of the Group except tothe extent that the minority has a binding obligation and is able to make anadditional investment to cover the losses. All intra-group transactions, balances, income and expenses are eliminated onconsolidation. 2. Discontinued Activities During the year ended 30 June 2007, the Company disposed of its retail unifiedcommunication operation. Trading activity and cashflows relating to thisdiscontinued operation have been separately disclosed on the face of the incomestatement and notes to the cashflow statement for the six months ended 31December 2006 and the year ended 30 June 2007. There were no results from discontinued operations included in the period to 31December 2007. 3. Loss per share The warrants and share options on issue do not have a dilutive effect as themarket price of ordinary shares exceeded the exercise price of the warrantsduring the financial period. As a result, diluted loss per share is the same asbasic loss per share. Six months Six months Year ended ended ended 31 December 31 December 30 June 2007 2006 2007 Unaudited Unaudited Audited £'000 £'000 £'000LossesLosses from continuing operations for thepurposes of basic loss per share being netloss attributable to equity holders of the parent (3,343) (1,304) (2,786) Losses from discontinued operations for thepurposes of basic loss per share being net lossattributable to equity holders of the parent - (1,337) (1,885) Number Number NumberNumber of sharesWeighted average number of ordinary sharesfor the purposes of basic loss per share 54,799,528 38,788,458* 45,525,727 * The Company's shareholders approved a 1 for 5 share consolidation at the AGMof 5 January 2007. Five old 1p shares were replaced by one new 5p share. As aresult these new shares are equivalent to 193,942,290 old shares. 4 Share capital 31 December 31 December 30 June 2007 2006 2007 Unaudited Unaudited Audited £'000 £'000 £'000Fully paid ordinary shares: Authorised:1,050,676,947 (31 December 2006 and 30 June2007: 1,050,676,947) old ordinary shares of1 pence each now replaced by new sharesas outlined above 10,507 10,507 10,507210,135,390 (31 December 2006 and 30 June 2007:210,135,390) ordinary shares of 5 pence each 10,507 10,507 10,507 Issued and fully paid:289,249,000 (31 December 2006: 245,249,000,30 June 2007: 262,499,000) ordinary shares of1 pence each now replaced by new 5p sharesas outlined above 2,893 2,452 2,625 57,849,800 (31 December 2006: 49,049,800,30 June 2007: 52,499,800) ordinary shares of5p each 2,893 2,452 2,625 Old 1p Shares 31 December 2007 31 December 2006 30 June 2007 Unaudited Unaudited Audited No. '000 £'000 No. '000 £'000 No. '000 £'000Fully paid ordinary shares:Balance at beginning of period: 262,499 2,625 176,900 1,769 176,900 1,769Shares issued by placement - - - - 15,000 150Shares issued for acquisitionconsideration - - - - 2,000 20Series 1 warrant conversion - - 53,349 533 53,349 533Series 2 warrant conversion 26,750 268 15,250 153 15,250 153Issued and fully paid at endof period: 289,249 2,893 245,499 2,455 262,499 2,625 New 5p Shares 31 December 2007 31 December 2006 30 June 2007 Unaudited Unaudited Audited No. '000 £'000 No. '000 £'000 No. '000 £'000Fully paid ordinary shares:Balance at beginning of period: 52,500 2,625 35,380 1,769 35,380 1,769Shares issued by placement - - - - 3,000 150Shares issued for acquisitionconsideration - - - - 400 20Series 1 warrant conversion - - 10,670 533 10,670 533Series 2 warrant conversion 5,350 268 3,050 153 3,050 153Issued and fully paid at endof period: 57,850 2,893 49,100 2,455 52,500 2,625 Fully paid ordinary shares carry one vote per share and carry the rights todividends. There remains an amount due to the Company of £1 million following the exerciseof the share warrants. These shares have been treated as fully paid and theamount owed has been included in debtors. The Company has received confirmationfrom the solicitors acting for Cold Investments that they have received anirrevocable instruction to pay £1 million to the Company out of the proceeds ofthe sale of a property. 5 Notes to the consolidated cash flow statement Six months Six months Year ended ended ended 31 December 31 December 30 June 2007 2006 2007 Unaudited Unaudited Audited £'000 £'000 £'000 Loss from continuing operations (3,343) (1,443) (2,896)Loss from discontinued operations - (1,337) (1,885) Adjustments for:Investment revenues (94) (44) (124)Share of results of associate 38 - -Tax - - -Depreciation of property, plant and equipment 76 156 102Amortisation of intangible assets 101 90 179Share based payment expense 615 - 707Gain on disposal of property, plant and equipment - - 30Decrease in provisions (14) (15) (68) Operating cash flows before movements inworking capital (2,621) (2,593) (3,955) Decrease in inventories 16 97 60Decrease/(increase) in receivables - continuingoperations 604 (6,337) (989)Decrease in receivables - discontinued operations - 825 825Increase/(decrease) in payables - continuingoperations 45 409 (305)Decrease in payables - discontinued operations - (687) (687) Cash used in operations (1,956) (8,286) (5,051) Income taxes paid - - - Net cash used in operating activities (1,956) (8,286) (5,051) Cash and cash equivalents (which are presented as a single class of assets onthe face of the balance sheet) comprise cash at bank and other short-term highlyliquid investments with a maturity of three months or less. 6 Events after the balance sheet date The Company completed the acquisition of 100% of the share capital of TrisentCommunications Limited on 8 February 2008. Trisent is based in Scotland andManagement believe that its technology will effectively complement Artilium'sown ARTA Service Delivery Platform. The consideration for the acquisition was£1.7million, which was satisfied via a cash element of £460,000 and via theissue of 1.24 million ordinary shares of Artilium to the previous Trisentshareholders. The issue of 301,875 of these shares has been deferred and aresubject to performance conditions. The Company has sold its investment in Chinook Hosting Corporation to themajority shareholder in the company, in return for development and other salesand marketing work related to the launch of a new product. The Board believethat the fair value of this work is at least equal to the cost of the investment(£363,000) and that no impairment of this asset is required. 7 Related party transactions The Company did not have any related party transactions during the period. 8 Status of these accounts The condensed set of financial statements in the half-yearly financial reportfor the six months ended 31 December 2007 is unaudited. The comparativeinformation for the year ended 30 June 2007 does not constitute statutoryaccounts as defined in section 240 of the Companies Act 1985. A copy of thestatutory accounts for that year has been delivered to the Registrar ofCompanies. The auditors' report on those accounts was not qualified and did notcontain statements under section 237(2) or (3) of the Companies Act 1985. Theannual financial statements for the year ended 30 June 2007 were prepared inaccordance with IFRSs as adopted by the European Union. The condensed set offinancial statements in the half-yearly financial report has been prepared inaccordance with accounting policies the group intends to use in preparing itsnext annual financial statements and is represented in an IFRS format, however,is not in compliance with IAS 34 'Interim Financial Reporting'. 9 Further Copies Copies of the half-yearly financial report are available from the Company'sregistered office at 7th Floor, City Point, One Ropemaker Street, London, EC2Y9AW. INDEPENDENT REVIEW REPORT TO ARTILIUM PLC We have been engaged by the company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 31December 2007 which comprises the income statement, the balance sheet, the cashflow statement and related notes 1 to 9. We have read the other informationcontained in the half-yearly financial report and considered whether it containsany apparent misstatements or material inconsistencies with the information inthe condensed set of financial statements. This report is made solely to the company in accordance with InternationalStandard on Review Engagements 2410 issued by the Auditing Practices Board. Ourwork has been undertaken so that we might state to the company those matters weare required to state to them in an independent review report and for no otherpurpose. To the fullest extent permitted by law, we do not accept or assumeresponsibility to anyone other than the company, for our review work, for thisreport, or for the conclusions we have formed. Directors' responsibilities The half-yearly financial report is the responsibility of, and has been approvedby, the directors. The directors are responsible for preparing the half-yearlyfinancial report in accordance with the AIM Rules of the London Stock Exchange. As disclosed in note 8, the annual financial statements of the group areprepared in accordance with IFRSs as adopted by the European Union. Thecondensed set of financial statements included in this half-yearly financialreport have been prepared in accordance with the accounting policies the groupintends to use in preparing its next annual financial statements. Our responsibility Our responsibility is to express to the Company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview. Scope of Review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity" issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making inquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly, wedo not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the half-yearly financialreport for the six months ended 31 December 2007 is not prepared, in allmaterial respects, in accordance with the AIM Rules of the London StockExchange. Matters of emphasis - uncertainty relating to asset carrying values Without qualifying our opinion we draw attention to Note 4 and Note 6 to thefinancial statements concerning the carrying value of a debtor and an interestin associate on the Group's balance sheet. On 7 November 2007, 3,250,000 warrants were exercised by Cold InvestmentsLimited ("Cold Investments") for consideration of £2.4 million. The shares wereissued as fully paid for admission to AIM, satisfied by cash of £1.4 million andan undertaking to satisfy a debt of £1 million. As at the date of this reportthe debt has yet to be satisfied, however the Company has been assured bysolicitors acting for Cold Investments that this debt will be paid through thesale of a property that it owns and the directors are pursuing this debt.Significant uncertainty surrounds the ultimate outcome of this matter. After the balance sheet date the Company disposed of its investment in ChinookHosting Corporation ("Chinook") to Chinook's majority shareholder Implement.comCorporation ("Implement"). No cash consideration will be received for thisdisposal. However under the proposed agreement the Company will receive servicesin kind to develop, engineer and market a Hosted Messaging and Collaborationplatform for Artilium. The directors believe that upon the platform beingsuccessfully developed the fair value of the services in kind will support thecarrying value of the investment in Chinook, however, as with any investment ofthis nature, there is some uncertainty regarding the ultimate value of thisplatform to the business. Deloitte & Touche LLPChartered Accountants and Registered Auditors20 March 2008London, UK This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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