Unaudited Interim Results

Eurovestech PLC 13 December 2001 EMBARGOED - NOT TO RELEASED UNTIL 7.00 AM 13th December, 2001 EUROVESTECH PLC ('Eurovestech' or 'the Company') Unaudited interim results for the six months ended 30 September 2001 Summary of Results * Loss for the period £77,915: an improvement in operating performance against expectations, as a result of strong growth in consulting income. * Net asset value £12.9 million (5.8p per share) with cash of £4.0 million. * Portfolio developing well with Boxmind having achieved profitability ahead of expectations. * Charitable donation scheme to date has gifted shares to 32 benevolent organisations with a current value of shares donated in excess of £250,000. Richard Bernstein, Chief Executive of Eurovestech plc, commenting on the results, said: 'Despite the challenging environment, in line with our strategy, we are enhancing shareholder value by providing management development services to our portfolio companies. Our continuing sound financial position also allows us to take advantage of attractive investment opportunities at lower price levels.' Enquiries: Eurovestech plc Richard Bernstein, Chief Executive Tel: 020 7491 0770 Chairman's Statement Operating and Financial Review For the period under review, Eurovestech made a pre-tax loss of £77,915. This result was better than our expectations as strong growth in consultancy income helped offset lower bank interest received. Net assets as at 30 September were £12.9 million, equivalent to 5.8p per share. Cash balances amount to £4.0 million. During the period we provided follow-on funding to three of our investee companies. In May, mykindaplace.com, the UK's leading teen girl publisher completed second round funding, with BSkyB participating in the round. We invested £120,000 in this round of funding. In June, we provided £150,000 to Boxmind Limited ('Boxmind') to fund the broadening of its e-lecture series. In June, we also provided £100,000 to Magenta Corporation plc, the developer of intelligent software agent technology. Portfolio Development We have developed the necessary infrastructure to support our investee companies. In particular, during the period we have worked very closely with Boxmind and CJudge. The performance of both companies has exceeded our expectations. Boxmind, the Oxford based media publisher, software house and online education consultancy has had a successful six months. The company's achievements include reaching operational profitability last month, earlier than our expectations, and signing a co-branding and promotional agreement with Times Newspapers Limited. Boxmind has produced and holds rights in perpetuity to 39 e-lectures by some of the world's most eminent academics including Michael Beloff, QC, Professor Richard Dawkins, Professor Niall Ferguson, Professor Susan Greenfield, Professor Germaine Greer, Professor John Kay, Sir Martin Rees and Nobel prize winner, Amartya Sen. Boxmind's authoring software which enables academic institutions and corporates to produce their own e-lectures within networked environments is in strong demand not only from its target market of universities and corporates, but also from local education authorities and schools. Eurovestech holds a 40.3% equity interest in Boxmind and has conversion rights over a further 4.7% of its share capital. In September, we reported that Boxmind received third party equity funding valuing the company at £8.2 million. CJudge Limited operates in the consumer intelligence market and in recent months has developed sufficient critical mass in terms of panellists to provide corporations with valuable data and market research capabilities. The ability to carry out targeted market research via its website www.toluna.com has enabled CJudge to recently sign a contract with one of Europe's largest market research companies. Eurovestech holds a 49.9% equity interest in CJudge. Investment in D-Pharm Limited In the period under review, we completed one new investment. In September, we invested $165,000 in D-Pharm Limited ('D-Pharm'), as part of a $30 million private placement. D-Pharm focuses on the design and development of innovative drugs for treatment of central nervous system disorders, cancer, and autoimmune diseases. D-Pharm has licensed worldwide rights to develop and market DP-VPA, the company's Phase II product for epilepsy, bipolar disorder and migraine prophylaxis, to Shire Pharmaceuticals. The company has recently started enrolling patients into a Phase II Acute Stroke Study with D-Pharm's proprietary new drug - DP-b99, which was designed and developed by D-Pharm as a novel neuroprotective agent. D-Pharm is also collaborating with Nycomed Amersham Imaging and with Eli Lilly & Company on the application of its lipid vector technologies to their proprietary drug candidates. Charitable Donations Eurovestech made a commitment in its prospectus issued in March 2000 to donate 4,000,000 shares to charitable organisations within 24 months of Admission. The Company hopes its actions will encourage other companies to support charities in this way. An initial 600,000 shares were issued in March 2001 and in September 2001 a further 1,600,000 shares were issued. The Company announces that it has today issued 1,000,000 new ordinary shares divided equally between ten benevolent organisations, pursuant to the authority granted by a resolution dated 21 February 2000. The nominated organisations are: The American Red Cross Help a London Child Appeal Fund Open Adaptive Rowing (OAR) The Samaritans The Willow Foundation The Jo Weinberg Flute Award Disabled Living Foundation Breast Cancer Campaign Prostrate Cancer Charity Greater London Fund for the Blind It is expected that dealings in the 1,000,000 new ordinary shares of the Company will commence on 24 December 2001. Richard Bernstein, Chief Executive of the Company, has paid the £10,000 nominal value of the ordinary shares to facilitate their issue. In addition, following his own commitment in the prospectus, Richard Bernstein has gifted 1,000,000 existing ordinary shares from his personal shareholding divided equally between the same charitable organisations. As a result, he is now interested in 58,150,000 ordinary shares, representing 26.0 per cent of the issued share capital of the Company. Prospects Against a backdrop of weak public stock markets, declining business confidence and an extremely difficult funding environment, our portfolio has performed well. Our business is that of providing capital, both financial and human, to innovative enterprises and during the period we committed significant resources in assisting our portfolio companies. Our strategy remains unchanged. By its very nature development capital is a medium to long-term business and we remain focused on adding value to our investee companies, so that when both general stock market conditions and the appetite for businesses operating in high growth markets improves, we will be positioned to fully capitalise on our progress to date. Richard Grogan CHAIRMAN 13 December 2001 EUROVESTECH PLC UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2001 Note Six months Period Period ended ended ended 30 30 31 March September September 2001 2000 2001 (unaudited) (unaudited) (audited) £ £ £ Turnover 110,750 62,000 90,585 -------- -------- -------- Gross profit 110,750 62,000 90,585 Administrative expenses (287,071) (233,962) (538,248) -------- -------- -------- Operating loss (176,321) (171,962) (447,663) Income from other fixed and current 3,514 278 - asset investments Other interest receivable and similar 96,213 195,388 353,059 income Interest payable and similar charges (1,321) (761) (2,788) -------- -------- -------- (Loss)/profit on ordinary activities (77,915) 22,943 (97,392) before taxation Tax on (loss)/profit on ordinary (255) - - activities -------- -------- -------- Retained (loss)/profit on ordinary (78,170) 22,943 (97,392) activities after tax ======== ======== ======== Fully diluted and basic (loss)/earnings 2 (0.035)p 0.01p (0.044)p per share (pence) -------- -------- -------- EUROVESTECH PLC UNAUDITED CONSOLIDATED BALANCE SHEET AT 30 SEPTEMBER 2001 At 30 September 2001 At 30 September At 31 March 2001 2000 (unaudited) (unaudited) (audited) £ £ £ £ £ £ Fixed assets Tangible assets 49,931 32,700 46,333 Investments 8,535,213 3,060,391 8,463,652 -------- -------- -------- 8,585,144 8,509,985 3,093,091 Current assets Debtors 431,719 198,233 157,824 Investments 82,521 178,563 960,335 Cash at bank and 3,956,574 6,563,590 3,930,671 in hand -------- -------- -------- 4,470,814 6,940,386 5,048,830 Creditors: (196,306) (168,511) (348,205) amounts falling due within one year -------- -------- -------- Net current 4,274,508 6,771,875 4,700,625 assets -------- -------- -------- Total assets less 12,859,652 9,864,966 13,210,610 current liabilities ======== ======== ======== Capital and reserves Called up share capital 2,229,000 2,207,000 2,213,000 Share premium account 7,614,799 7,635,023 7,614,799 Revaluation reserve 3,297,474 - 3,480,203 Profit and loss (281,621) 22,943 (97,392) account -------- -------- -------- Shareholders' 12,859,652 9,864,966 13,210,610 funds ======== ======== ======== EUROVESTECH PLC UNAUDITED CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2001 Note Six months Period ended Period ended 30 30 September ended 31 September March 2001 2000 2001 (unaudited) (unaudited) (audited) £ £ £ Net cash outflow from operating 3 (781,882) (217,353) (452,174) activities -------- -------- -------- Returns on investments and servicing of finance Interest received 96,213 195,388 353,059 Interest paid (1,321) (761) (2,788) Dividends received 3,514 278 - -------- -------- -------- Net cash inflow from returns on 98,406 194,905 350,271 investments and servicing of finance ======== ======== ======== Taxation (255) - - Capital expenditure and financial investment Purchase of tangible fixed assets (15,281) (38,619) (61,159) -------- -------- -------- Net cash outflow from capital (15,281) (38,619) (61,159) expenditure and financial investment -------- -------- -------- Acquisitions Purchase of fixed asset investments (563,739) (3,060,391) (4,983,449) Sale of fixed asset investments 279,374 - - -------- -------- -------- Net cash outflow from acquisitions (284,365) (3,060,391) (4,983,449) and disposals -------- -------- -------- Management of liquid resources Purchase of current asset (1,609,712) (1,147,238) (5,797,214) investments Sale of current asset investments 2,602,992 990,263 5,046,597 -------- -------- -------- Net cash inflow/(outflow) from 993,280 (156,975) (750,617) management of liquid resources ======== ======== ======== Financing Issue of shares 16,000 10,214,992 10,220,992 Expenses paid in connection with - (372,969) (393,193) share issues -------- -------- -------- Net cash inflow from financing 16,000 9,842,023 9,827,799 -------- -------- -------- Increase in cash 4 25,903 6,563,590 3,930,671 ======== ======== ======== EUROVESTECH PLC NOTES TO THE UNAUDITED INTERIM CONSOLIDATED ACCOUNTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2001 1 BASIS OF PREPARATION The results for the six months ended 30 September 2001, which are unaudited, have been prepared in accordance with applicable accounting standards and under the historical cost convention. The financial information set out in this document does not comprise the statutory accounts of the Company within the meaning of section 240(5) of the Companies Act 1985. BASIS OF CONSOLIDATION The group financial statements consolidate those of the Company and of its subsidiary undertaking, Eurovestech Israel Ltd, a company incorporated in Israel. The results of the subsidiary undertaking have been included for the whole period from the date of incorporation on 1 April 2001 until 30 September 2001. Profits or losses on intra-group transactions are eliminated in full. On establishment of the subsidiary, all of the subsidiary's assets and liabilities which existed at the date of acquisition were recorded at their values reflecting their consideration at that date. 2 (LOSS)/EARNINGS PER ORDINARY SHARE The calculation of the loss per share is based on the loss on ordinary activities for the six month period ended 30 September 2001 of £78,170 and the weighted average number of ordinary shares in issue during the period, being 221,433,333. 3 RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES Six months Period ended 30 Period ended 31 September March ended 30 September 2001 2000 2001 (unaudited) (unaudited) (audited) £ £ £ Operating loss for the period (176,321) (171,962) (447,663) Depreciation of tangible fixed 11,684 5,919 14,826 assets (Profit) on sale of investments (188,705) (21,588) (209,718) (Increase) in debtors (273,895) (198,233) (157,824) (Decrease)/increase in (151,899) 168,511 348,205 creditors Exchange difference on (2,746) - - consolidation -------- -------- -------- Net cash outflow from operating (781,882) (217,353) (452,174) activities ======== ======== ======== EUROVESTECH PLC NOTES TO THE UNAUDITED INTERIM CONSOLIDATED ACCOUNTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2001 4 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Six months Period ended 30 Period ended ended 30 September September 31 March 2001 2000 2001 (unaudited) (unaudited) (audited) £ £ £ Increase in cash in the period 25,903 6,563,590 3,930,671 Cash (outflow)/inflow from current (877,814) 156,975 960,335 asset investments -------- -------- -------- Change in net funds resulting from (851,911) 6,720,565 4,891,006 cash flows Other non-cash items - 21,588 - -------- -------- -------- Movement in net funds in the (851,911) 6,742,153 4,891,006 period Net funds at the beginning of the 4,891,006 - - period -------- -------- -------- Net funds at the end of the period 4,039,095 6,742,153 4,891,006 ======== ======== ======== 5 ANALYSIS OF CHANGES IN NET FUNDS - UNAUDITED At Cash flow At 1 April 30 September 2001 2001 £ £ £ Cash in hand and at bank 3,930,671 25,903 3,956,574 -------- -------- -------- Current asset investments 960,335 (877,814) 82,521 -------- -------- -------- 4,891,006 (851,911) 4,039,095 ======== ======== ======== 6 DIVIDENDS No dividend is proposed for the six months ended 30 September 2001. 7 COPIES OF THE INTERIM FINANCIAL STATEMENTS Copies of the interim financial statements will be sent to shareholders and copies are available on request from the Company's registered office at 29 Curzon Street, London W1Y 7AE.

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