Small Cap Wrap: Month: May 2012

AIM Breakfast - Archive

22 May 2012

This week: Chime sounds of an acquisition, Silence speaks out loud and a colourful update from Cyan

A continuing downward trend for the FTSE 100 last week closing 300 points lower at 5,264 points, whilst the AIM All Share fell 45 points to close the week at 692. Ensuing discussions around Greece and its position on the Euro, the OECD providing numerous comments on the threat of the Euro (and its constituent countries) to the global economic outlook and the IMF suggesting that the UK may need fiscal stimulus (a a time when inflation figures have fallen to 3 per cent annualised), have all been particularly troubling. The week ahead sees inflation, retail sales and public finances data, together with MPC minutes being announced.

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Disclaimer- This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only- please refer to the disclaimer in full below.

ABH new contract with ReNeuron, AGL Geomerics Milestone Payment, AKT Completion of Phase I angina study and interim management statement, AGM statement, BEM Drilling Recommences, BMY  Unaudited Preliminary Results, CMH Final Results, CHW Acquisition, CLF First Day of Dealings on AIM, TIDE Contract wins, CYAN Metering Order in India, EDEN patent granted on Africa, EGX Unit Verification, ERUMA Order with Oil Company in Baghdad, RGO New Product Launch, HNT  Interim Management Statement, IKA trading update, MSG Issue of equity, NGG Introduces new generation biomarker products, OMP Response to Plus Market group plc announcement, POL Investment, PGR Sampling results, SLN New data from Phase I trial with Atu027, SEGR Issue of equity, TND Trading update, THAL Partial offer lapses, TRT First customer in India, VGM Interim results and CEO buys shares, VIY Placing, VPHA Trading Update, ZYT Interim Results.

2ergo Group (LON:RGO 55.5p/£19.69m)
2ergo Group, the mobile solutions company, has launched “TikTap™”, its local commerce contactless coupon redemption technology. The Company has also announced its first five key agreements for TikTap™ with councils in Preston, Southport, Skegness, Salford and Blackpool. These agreements are the first in a phased national roll-out in partnership with Local Government, Retailers, Business Forums and City Centre Management Groups, which will ultimately create a network of local loyalty programmes. TikTap™ offers SMEs the ability to generate a brand presence through the TikTap™ mobile application, available on iOS (Apple’s operating system) and Android operating systems. It enables retailers to promote local, relevant, reliable and sustainable offers and to initiate fast, contactless transactions via any smartphone by a consumer simply tapping their smartphone over in-store pods, which are attached to the retailer’s cash till. The system is automatic, requires no manual intervention by the shop staff, and is based on 2ergo’s recently launched podifi™ contactless technology platform, which is fully compatible with the majority of EPoS (electronic point of sales) systems currently in use. It has also been fully endorsed by all major UK EPoS manufacturers and distributors. 2ergo will accrue a one-off fee for each installed pod and further recurring revenues from monthly licence fees per pod, as well as transaction fees.

Angel Biotechnology Holdings (LON:ABH 0.19p/£7.17m)*
Angel Biotechnology Holdings has signed a new contract with ReNeuron Group (RENE 3.5p/£27.12m) to perform GMP manufacturing services in support of the final part of the PISCES Phase 1 clinical trial of its ReN001 stem cell therapy for stroke. Dr Stewart White, Acting CEO, said: “Angel is very proud to be providing ReNeuron with additional manufacturing support to complete this ground breaking Phase 1 clinical trial”. ReNeuron put out a similar announcement on the same day and said that this marketing authorisation represents a positive development for the Company.
Michael Hunt, Chief Executive Officer of ReNeuron, said: “We are pleased to continue our manufacturing partnership with Angel to serve the needs of the ongoing PISCES stroke clinical trial, and we look forward to seeing the higher dose cohorts in the study treated with our ReN001 stem cell therapy over the coming months.”

ANGLE (LON:AGL 46p/£17.40m)
ANGLE, the technology commercialisation company, has announced that its 31 per cent-owned portfolio company, Geomerics, which specialises in computer games middleware, has successfully completed the third and final milestone in its corporate partnership with one of the world’s leading technology companies, resulting in a final milestone payment being received by Geomerics. Geomerics and the undisclosed corporate partner continue to work closely together. The deal included investment in Geomerics of up to £2.3m, of which approximately £1m was subject to the achievement of certain milestones. The total investment of £2.3m has now been received. The corporate partnership has resulted in the development of new capabilities to make Geomerics products ‘next generation technology ready’.

Ark Therapeutics Group (LON:AKT 2.9p/£6.07m)
Ark Therapeutics Group last week announced completion of the dose ranging Phase I section of the academic study of Ark’s VEGF-D adenoviral vector treatment for refractory angina. The Phase IIa stage is expected to enrol its first patient in Q3 2012. Refractory angina is a consequence of insufficient blood supply to the areas of heart muscle damaged by a heart attack. Ark’s adenoviral vector carrying a transgene for expression of pro-angiogenic human VEGF-D is designed to treat the condition by stimulating new blood vessel generation at the ischemic heart muscle to which it is directly administered.
Ark Therapeutics also published its interim management statement for the period from 1 January 2012 to date. The Company intends to report its results for the six months to 30 June 2012 on 29 August 2012. Over the last 18 months, as part of the Company’s overall transformation, an increasing emphasis has been placed on the revenue generating capability of the Company’s manufacturing assets. Then, in April they announced that the Finnish Medicines Agency had, following inspection, extended Ark’s Good Manufacturing Practice (GMP) certification to include GMP3, the Company’s newest and largest manufacturing facility. This certification has greatly increased Ark’s manufacturing capacity, including an automated, high through-put “fill and finish” line. As announced in March, Charles Spicer was appointed to the Board as Non-Executive Director and Dr David Venables was appointed as Executive Director – Manufacturing Services in April. In the full-year results announced on 12 March 2012 the Company had £9.5m in cash at 31 December 2011.

Beacon Hill Resources (LON:BHR 6.38p/£67.03m)
The AGM statement said that this has been a transformational year for Beacon Hill which has seen the Group grow into a significant Mozambican coal producer and developer operating in one of the world’s most exciting developing coking coal regions. During the last 12 months they have delivered on numerous key operational objectives at their primary asset, the Minas Moatize Coal Project in Tete, resulting in Beacon Hill beginning its ramp up of operations targeting production of 4Mpta Run of Mine, ROM coal.  These achievements included the commencement of coking coal production and the publication of a Definitive Feasibility Study which demonstrated the highly attractive economic fundamentals of the project.  Perhaps most importantly, the focus on logistics has culminated in developing an end to end logistics solution which was demonstrated in their first export shipment in December 2011, and they continue to make progress with respect to securing long term rail access which will enable increased capacity and higher margins. Beacon Hill has a marketing agreement with the Vitol Group, the world’s largest private energy trader, which offers Beacon Hill an optimum route to market for its products, in addition to providing the flexibility to meet their existing commitments under the off-take agreement with Global Coke.  Importantly, they remain well funded with access to a US$20m debt facility from the Vitol Group, and revenues from the sale of both coking and thermal coal.

Beowulf Mining  (LON:BEM 13.12p/£27.6m)
Beowulf, the mineral exploration company which owns several exploration projects in Sweden announced that further to the release of 4 May 2012, the Company’s wholly owned subsidiary, Jokkmokk Iron Mines AB (JIMAB), has now received approval from the Mining Inspectorate at Bergsstaten for the work plan filed and notified in respect of the 2012 drilling campaign on its Kallak nr1 permit area. JIMAB intends to file a new work plan shortly in respect of the Parkijaure nr2 permit area as the timetable set out in the original notified work plan has now expired. The Company has, for some considerable time, sought and been in consultations with the Mining Inspectorate and the local Saami community seeking to resolve the Saami’s objections to JIMAB’s work plans on the grounds that such planned operations could potentially affect the community’s seasonal reindeer herding.

Bloomsbury Publishing (LON:BMY 106.5p/£79m)
Bloomsbury announced that total turnover was up 11.5 per cent to £103.2m (2011: £92.6m), with total continuing turnover up 16.9 per cent to £97.4m (2011: £83.3m). Pre-tax profit was up 13.6 per cent to £4.8m (2011: £4.2m) and the total dividend increased by 10.2 per cent to 5.2 pence per share (year to 31.12.10: 4.72 pence per share). The continuing basic earnings per share was up 75 per cent to 9.80 pence (2011: 5.59 pence). Given that the year saw a disposal, major acquisition, restructuring and change of year end, we suggest you look at the actual announcement by Bloomsbury Publishing plc to see how like for like numbers are compared. In the period, Bloomsbury acquired the leading Academic publisher Continuum for net £19.2m and continued strong development of its intellectual property with Continuing Rights & Services revenue up 88 per cent to £12.6m (2011: £6.7m) demonstrating quality of content, includes partnership with IZA in Germany. Bloomsbury also sold the loss-making German subsidiary for €2.6m. Bloomsbury is well placed to benefit from growth of digital sales and had huge ebook growth with sales increasing by 159 per cent to £5.7m (2011: £2.2m). Again, Bloomsbury has a diversified portfolio of bestsellers across the Group with three novels on the shortlist of six for the 2012 Orange Prize for Fiction: Painter of Silence by Georgina Harding, The Song of Achilles by Madeline Miller and State of Wonder by Ann Patchett, four New York Times ebook best sellers:  Kitchen Confidential, Prophet’s Prey, History of the World in Six Glasses and Salt. Commenting on the results, Nigel Newton, Chief Executive, said: “… 2011/12 has been a transformational year for the Group as we continue to see the benefit of our One Global Bloomsbury strategy. The acquisition of Continuum has significantly enhanced our academic business as we continue to focus on robust renewable revenue streams. This area will be a key driver of future growth. We have built a uniquely balanced business between trade and academic publishing. There is also a fundamental shift happening from print to digital and from the high street to the internet. The decision to digitise our backlist several years ago continues to reap benefits and as a result we have seen significant ebook sales, up 159% year on year.”

Chamberlin (LON:CMH 140p/£11.13m)
Chamberlin, the specialist castings and engineering group, has reported revenues and earnings above pre-recession levels for the year ending March 2012, with 70 per cent of sales for export markets. Revenues increased by 14 per cent to £45.5m, while underlying profit before tax was up 107 per cent to £1.7m. Net debt in the period reduced by 46 per cent to £1.6m, and the Company is proposing a final dividend of 2.0p, taking total dividend for year to 3.0p compared with 1.0p in 2011. Growth was seen across all three foundries and this trend is expected to continue.

Chime Communications (LON:CHW143p/£117.05m)
Chime Communications, a leading marketing services group, announced the acquisition of a 51 per cent stake of Harvey Walsh Ltd, a provider of market access and data services to the pharmaceutical industry and the NHS. Total consideration was £2.19m- split into an initial amount of £2.1m and a further £90,000. A further tranche of the initial consideration of up to £1.9 million may be payable depending upon the trading performance of HWL in 2012 and 2013. The existing owner directors of Harvey Walsh will continue to develop HWL as part of Chime’s healthcare division.

Cluff Natural Resources ((LON:CLNR 5.12p/£4.46m)
An investing company founded by natural resources entrepreneur Algy Cluff which focuses on investing in global oil & gas and mining assets is being admitted to trading on AIM today.  The Company has raised £3.75m by way of a placing at 5 pence per share and placing of 35,000,000 Warrants, providing the Company with a market capitalisation of £4.35m on admission to trading on AIM.  The funds raised will be used to identify and acquire natural resource assets in the North Sea and Africa, where the board of CNR believes significant opportunities exist to generate substantial value for shareholders.

Crimson Tide (LON:TIDE 1.15p/£5.12m)
Crimson Tide, the leading developer of mpro business applications, on smartphone, tablet and pda, has signed contracts with Brenchley Civil Engineering and Capital Compactors to deliver its mpro smartphone applications. Both contracts are for an initial 3 year period and charged on a monthly subscription. Capital Compactors has signed a 20-user contract with Crimson Tide to equip this team of mobile engineers with the Company’s mpro smartphone application, mpro Gemini. The mpro Gemini application will give Capital Compactors complete management over all of its engineers out in the field through its powerful job scheduling, alerting and reporting functionality. The contract with Brenchley Civil Engineering is for an initial 36 subscribers. Brenchley Civil Engineering check, excavate and survey terrain in preparation for lamppost installations and for the repair of pot-holes. Once on a job, the mpro Gemini system will present engineers with mobilised versions of their forms, which they’ll complete on the smartphone. These mobile forms will include before and after photo capture of every stage of work-completion, which are then automatically synchronised back to the main web-based server, hosted in the cloud by Crimson Tide. Both contracts result from Crimson Tide’s recent partnership with Premier Telecom, Vodafone’s largest B2B partner in the UK. Premier Telecom’s sales executives are now actively reselling the Company’s mpro applications, and with a partner of Premier Telecom’s calibre on its side, Crimson Tide looks set to extend the sales opportunities for its mpro smartphone applications even further.

Cyan Holdings (LON:CYAN 0.54p/£8.79m)
The integrated system design company delivering wireless solutions for lighting control and utility metering, announced an order exceeding US$1m, from a major metering customer in India. Cyan also announced over the past week that the Smart metering industry expert Geoff Sarney had been appointed as VP Strategy. Mr. Sarney joins Cyan from Telefonica/O2 where he was Head of Smart Metering/Smart Architecture. Prior to Telefonica, Mr. Sarney worked for a two year period in China on strategy, clean energy and the smart grid. From 2001 to 2008, Mr. Sarney worked for Siemens, including three years as Head of M&A, Strategy and Planning for Siemens Energy Services, where he led the smart grid initiative on a global basis.

Eden Research (LON:EDEN 17.5p/£19.43m)
The agrochemical and encapsulation development company announced that is has received notification from the African Regional Intellectual Property Organization (ARIPO) of its intention to grant a patent for the use of terpenes encapsulated in hollow glucan particles for killing insects and arachnids. Clive Newitt, Managing Director of Eden said: “The granting of this patent will be useful not only to our existing licensees, but also to other prospective licensees based in Africa. The granting of a patent in such a large and important area of food and crop production inherently adds real value and strength to Eden’s intellectual property and business proposition.”

Energetix (LON:EGX 20.38p/£17m)
Energetix Group which develops and commercialises alternative and efficient energy products, announces that its subsidiary Energetix Genlec Limited has received Unit Verification from the British Standards Institution for the first of its liquefied petroleum gas (LPG) version of the Kingston microCHP Delta unit. As previously announced the Group has been working with Calor Gas to develop an LPG variant. To date trials in Energetix labs have shown that the LPG appliance operates as expected and is very similar in performance to the original Kingston microCHP Delta production engineered units which run on natural gas. The next stage in the development of a commercial LPG version of the Kingston boiler is to commence field trials in homes to assess the performance of the appliance in off-gas grid homes. Initially four LPG units will be used in the field trial. Unit verification has been received for the first LPG unit with certification of the remaining units expected to be completed shortly. Installation of the trial units will then take place in time for the next heating season beginning in September.

Eruma (LON:ERM 8.75p/£1.92m)
The AIM quoted specialist provider of counter terrorism, intruder prevention products and intelligent lighting, today announced that its Security Blinds division has won a significant new order with a multi-national oil company in Baghdad. The order, worth US$176,000, is to provide bomb blast and physical security protection for a new project office, with additional ballistic protection in key areas.

Huntsworth (LON:HNT 41.5p/£102.43m)
The global public relations and healthcare communications group provided an interim management statement in which it stated that it had strong revenue first quarter comparable revenue growth for the Huntsworth group of 3.8 per cent. Grayling, global public relations and public affairs consultancy, achieved 3.8 per cent like-for-like revenue growth in the first quarter driven from digital revenues and strong performance in the Middle East, Huntworth Health delivered 3.3 per cent like-for-like revenue growth, Red grew by 19.4 per cent, though Citigate exhibited a 2.7 per cent decline on the back of the subdued financial markets. The Company also announced the appointment of Terry Graunke as a Non-Executive Director with effect from 21 May 2012, who has 25 years of experience in marketing services, and together with Lake Capital Management LLC which is the Company he founded, owns 9.82 per cent of the voting rights in Huntsworth.

Ilika  (LON:IKA 58p/£26.38m)
Ilika, the advanced cleantech materials discovery company, announced substantial growth in joint development and contract research revenues in the financial year ended 30 April 2012. Total revenues (including other grant income) increased to approximately £2.3m, 21 per cent ahead of the previous year’s total revenues (2011: £1.90m).Turnover from operations increased to approximately £2.0m, 30 per cent ahead of the previous year (2011: £1.54m).  Earnings before Interest, tax, depreciation, amortisation and share based payment charge improved slightly compared with last year’s reported loss of £1.81m and losses before tax for the year improved compared with last year’s reported loss of £3.15m. Cash balances total £5.3m at 30 April 2012, reflecting the placing announced on 4 April 2012 which raised £4.6m after expenses.

Milestone Group (LON:MSG 0.88p/£3.26m)*
Milestone, the AIM-quoted provider of  digital media and technology solutions, announced  that  it  has raised £258,570 by way of a placing  at a price of 1 penny per   share   for  cash  with  new  and  existing shareholders.  Deborah White, CEO of Milestone, commented: “We  are  pleased  to  announce  the  successful  completion  of  this  round of fundraising.  The Company has been through a significant transformation recently and is delighted by the support that has been shown by both our existing and new shareholders.”

NextGen Group (LON:NGG 83p/£12.03m)
AIM listed company developing its own diagnostics product pipeline and providing diagnostic biomarker development services, announced the commercialisation of a new assay for the identification of diagnostic biomarkers in brain disorders. The assay measures protein markers in human cerebrospinal fluid. The new assay will expand the product offering of NextGen’s contract research subsidiary, NextGen Sciences Inc. NextGen uses mass spectrometry (a technique for specifically identifying and quantifying biomarkers in samples) as its core technology to discover highly specific protein biomarkers that can be used for diagnostic purposes. In 2010, the total global market for biomarkers was an estimated $13.5bn and is expected to grow to nearly $33.3bn by the end of 2015 (BCC Research). Adds Barry McAleer: “…Firstly we will develop further assays in humans that will allow us to measure many more hundreds of proteins in CSF. Secondly we will apply these principles to expand the protein numbers we can measure in human plasma. Thirdly, we will introduce assays for the same proteins in rat and monkey species.”

One Media Publishing Group (LON:OMP 3.55p/£27.12m)*
One Media Publishing Group, the PLUS quoted consolidators and acquirers of music and video rights, announced the acquisition by ICAP Holdings Limited of PLUS-SX as a positive move. Michael Infante CEO/Chairman said: “Since the news a week ago that PLUS was being wound down, like many members of this share platform, we considered our options. We will continue to do this despite the news that PLUS-SX may be acquired by ICAP. PLUS in our opinion is, for many `small-caps’, a very important yet fragile exchange, and despite the liquidity issues plays an important role. One Media will continue to monitor the situation with its professionals.”

Polo Resources (LON:POL 2.55p/£58.5m)
Polo Resources, the investment company with interests in coal, gold, iron ore and oil and gas, announced that it subscribed for a further 2,857,143 new shares in Signet Petroleum Ltd for a total consideration of $10 million be exercising a call option granted on 22 August 2011, with Signet using the funds for exploration activities in Tanzania, Burundi, Namibia and Benin and as general working capital. Polo will have shares in Signet representing 21.7 per cent of share capital (or 17.9 per cent on a diluted basis).

Premier Gold (LON: PGR 0.44p/£3.04m)
Premier Gold, the Central Asia-focused gold exploration and development company, has received the results of rock and soil analyses from samples collected during the 2011 exploration programme, which focused primarily on the Talbaital prospect within the Company’s Cholokkaindy licence in Kyrgyzstan. Cholokkaindy is an early stage gold exploration project where four target prospects have been identified, of which Talbaital is the most advanced. Two periods of sampling in 2010-11 have built a picture of a significant gold target, possibly extending southwards to a second prospect identified at Jarkonush, which will be the focus of detailed exploration in 2012, including drilling. At Talbaital, the initial trenches pointed at a single structure but the second sampling programme has demonstrated that it is much wider and therefore of greater potential. Notable new trench assay results from the Talbaital prospect included: 5 metres of 1.9 g/t gold, 3 metres of 2.5 g/t gold, 3.4 metres of 2.07 g/t gold, 5 metres of 0.24 g/t gold.  Significant values have also been obtained in trenching and rock sampling within Jarkonush prospect including 20 metres of 0.036 g/t gold.

Silence Therapeutics (LON:SLN 1.62p/£9.38m)*
Silence Therapeutics announced excellent top line data from its ongoing Phase I trial of Atu027 showing that of the 33 patients treated in the first cohort of the study, 10 patients experienced stable disease after three months. Silence’s open label, single-centre, dose-finding Phase I study of Atu027 in subjects with advanced solid cancer is ongoing where the study was designed to evaluate up to a total of 11 escalating doses of Atu027 and enroll approximately 33-36 patients. The Company will publish the latest data at the 2012 American Society of Clinical Oncology (ASCO) Annual Meeting in Chicago, Illinois,  1-5 June 2012 and they expect to complete the ongoing Phase I clinical trial of Atu027, in July 2012.Tony Sedgwick, CEO of Silence Therapeutics said:”I am delighted that with Atu027 we potentially have a first in class RNAi therapeutic for treating solid tumours. Cancer therapy needs innovative treatments such as Atu027. The new data at ASCO demonstrates that Atu027 can be safely administered at doses above those believed to be effective.”

Specialist Energy Group (LON:SEGR 21.5p/£9.78m)
Further to previous announcements regarding the Company’s re-structuring, Specialist Energy Group announced that 10,000,000 New Ordinary Shares priced at 50 pence have now been issued to MBE Mineral Technologies Pte Ltd (MBE) raising £5m before expenses for the Company. The funds will be used to settle existing derivative instruments and to facilitate the Company’s new borrowing arrangements with Standard Chartered Bank and MBE.  Following this subscription, MBE, which already owns 25.27 per cent of Specialist Energy, will increase its stake to 41.69 per cent  Also sought by Specialist is the authority to issue four million new shares so it can buy between 20 and 24 per cent of MBE Cologne Engineering GmbH – a wholly-owned subsidiary of MBE.

Tandem Group (LON:TND 83p/£3.87m)
Designers, developers and distributors of sports and leisure equipment, provided an update statement at their AGM, explaining that revenue for the 20 weeks to 18 May 2012 was approximately 5 per cent behind last year, with sales of bicycles and accessories in particular falling by 8 per cent. Challenging trading conditions were somewhat further impacted by poor weather conditions, though the Company continues to be optimistic, for reasons including the impact of the London 2012 Olympics. Revenue from the sports, leisure and toys business was slightly ahead, as is revenue from the Company’s brands, Hedstrom and Ben Sayers. Tandem also announced its intention to appoint Phil Ratcliffe to Group Commercial Director, having been Sales & Marketing Director at the subsidiary, MV Sports & Leisure Limited.

Thalassa Holdings (LON:THAL 30.5p/£3m)
On 2 April 2012, Thalassa announced the terms of a Partial Offer for Rock Solid Images Plc (RSI). As at 1.00 p.m. on 21 May 2012, the first closing date of the Partial Offer, it had received valid acceptances in respect of 13,778,753 RSI Shares, representing approximately 8.71 per cent of the existing issued share capital of RSI. There are no outstanding irrevocable commitments or letters of intent to accept the Partial Offer. Thalassa currently owns 6,342,322 RSI Shares, which together with the 13,778,753 RSI Share tendered under the Partial Offer, now represents a total of approximately 12.72 per cent of the issued share capital of RSI. The breakdown as to the current level acceptances for the Cash Offer and Thalassa Shares Alternative is approximately 32 per cent of acceptances received pursuant to the Cash and approximately 68 per cent of acceptances received pursuant to the Thalassa share alternative.

Transense Technologies (LON:TRT 6.38p/£11.26m)*
The provider of sensor systems for the transportation and industrial markets announced that its trading division, IntelliSAW, has successfully completed the installation and full commissioning of a pilot switchgear monitoring system at the Salem Works CPP2 plant of JSW Steel where the pilot is a key component of JSW’s program to implement temperature monitoring in its electrical switchgear cabinets. The ongoing relationship with JSW will be maintained by El PE, IntelliSAW’s exclusive Indian distributor.

Vatakoula Gold Mines (LON:VGM 46.5p/£45.36m)
Vatukoula yesterday announced its interim results for the half-year ended 29 February 2012 with cash generated from operations up 57 per cent to £4.38m. During the period the Company benefited from an increased gold price, which resulted in a higher turnover figure. The increase in the gold price offset the increases in mining, processing and overheads, to give a gross profit of £4.9m. The net profit for the period was £1.0m. Vatukoula also announced that David Karl Paxton, CEO, has on the 21 May 2011 acquired 40,000 ordinary shares in the company at £0.47 each.

ViaLogy (LON:VIY 3p/£25.6m)
ViaLogy, a provider of reservoir characterisation, geophysical imaging and hydrocarbon sizing services to global oil and gas Exploration and Production companies based on proprietary, patented active signal processing technology, announced that following a number of new contract wins, it has raised a total of £2,045,000 (before expenses) through the placing of 74,363,637 ordinary shares at a price of 2.75p each with existing and new institutional investors. The Placing is completing in two tranches of around £1m each. The first tranche is expected to take place on 23 May 2012. The second tranche is conditional upon shareholder approval at a general meeting of the Company to be held on or around 15 June 2012. The net proceeds of the Placing will be used to strengthen the balance sheet and provide additional working capital to support ViaLogy’s strategy.

VPhase (LON:VPHA 0.78p/£9.9m) Trading Update
VPhase, which develops energy saving products for residential and commercial properties, has seen a significant increase in demand in the first 20 weeks of 2012 with total sales up by 292 per cent and sales volumes 333 per cent higher than the corresponding period in 2011. This growth is in line with expectations and the Company continues to drive for the additional growth necessary to meet full year expectations. The Company has a strong order book of over £200,000 and a significant pipeline of potential orders. Demand in the Social Housing Sector, which has been the main driver of growth in this period, remains strong and continues to grow. The management expects further opportunities will arise in this important segment. Margin pressure remains but the process of establishing a low cost manufacturing capability should, once implemented, return margins to expected levels later in the year. The Company continues to lobby the UK Government for inclusion of Voltage Optimisation under the Green Deal; although additional support is being gained, the Board has agreed with Enact Energy to temporarily postpone promotion of its product through the Tesco website until this is clarified.

Zytronic (LON:ZYT 285p/£42.21m)
AIM listed specialist manufacturer of internationally award-winning touch sensor products last week announced interim results for the 6 months to 31 March 2012. Revenues increased by 17 per cent to £10.6m (2011: £9.1m), and profit before tax was up by 68 per cent to £2.1m (2011: £1.3m). Having continued to develop sales of its touch sensor products, the Company has diversified away from the original electronic display products to the development and marketing of Projective Capacitive Technology (PCT products), now taking touch to about 70 per cent of its overall revenue.  The period has also seen the extension to the cleanroom at the main factory become operational in February 2012, as well as the splitting of the main website into two separate sites- one exhibiting an investor focus and the other designed to target customers. A 24 per cent increase in the interim dividend was also announced at 2.6p (2011: 2.1p) perhaps in part as a result of increased confidence going forwards.

*A corporate client of Hybridan LLP

The Hybridan Small Cap Wrap is a weekly review of some of the most interesting small cap stories of the past week.  Our review will usually be of those companies whose market capitalisations are less than £50m although we may occasionally cover larger companies.

15 May 2012

This week: Angel spreads its wings, a healthy announcement for Fitbug and Corero secures new business wins

A very tough week in the financial markets with the FTSE 100 closing the week almost 100 points lower at 5,560 and the AIM All Share closing 25 points lower at 740 points. The most junior market in London, PLUS Markets, this week announced that it has now ended the formal sale process which was announced in February and that it intends to start a process of orderly closure. The Greek crisis continued to worsen with the political uncertainty there exacerbating the continuing difficulties (also heightening questions over whether Greece will leave the Euro), whilst US retail sales are said to have faced a slowdown in April, rising at 0.1 per cent compared to 0.7 per cent in March. The week ahead sees BoE economic forecasts and outlook, together with trade, unemployment and average earnings data from the Office for National Statistics and a BoE Inflation Report.

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Disclaimer- This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only- please refer to the disclaimer in full below.

ABH Acquisition and Contract, ATC Preliminary Results, AVN Interim Management Statement, CNS Business Wins, CRG Interim Management Statement, DDD TriDef 3D sales top 1m, EDEN Admission to trading to AIM, ENEG Operational update, FITB Appointed partner to Healthrageous, Inc.,  GOLDPLAT Progress update, JDG placing, LID Technologies endorsed, MSYS New Agreement, OMP Acquisition and Comment on plus, OXB Announced Clinical data, PYM Update on preclinical study, PMG ended formal sale process, PRX FDA Positive, PVR Barryroe update, SID Contract Wins, TRS Interim Management Statement, THAL RSI Response, VAL Potent Approval, VIY Business Update, XEN Appointment of VP and ZCGP on PLUS.

Angel Biotechnology Holdings (LON:ABH 0.2p/£7.45m)*
Angel Biotechnology this week made two announcements; an acquisition and a first contract since the acquisition was made. Angel acquired the assets of an established biomaterial and collagen manufacturing business, through its newly formed and wholly owned subsidiary, Angel Biomedical Ltd (ABL). ABL has been formed to enable the Group to become an active service provider and manufacturer of collagen products in the medical device, in-vitro diagnostic and regenerative medicine markets. The formation of this subsidiary also heralds a significant expansion of Angel’s capabilities by supplying specialised high value products and services that will allow access to new clients, whilst synergising with Angel’s existing GMP bio-manufacturing business. The assets of the business have been acquired under favourable terms for a total cash consideration of £200,000. ABL will take ownership of the manufacturing plant, equipment and raw material stock based in premises in Glasgow. This, as well as a separate five year property lease on the premises which has also been negotiated on advantageous terms.
ABL, coupled with Angel’s expertise and knowledge of the stem cell market, will also seek to identify opportunities to develop its own products. The opportunities within ABL’s target market can be quicker to realise than Angel’s core business and it is therefore anticipated that ABL will make a positive contribution to the Group’s earnings within the short to medium term. The Group is already in discussions with a number of companies who recognise the potential in ABL’s extended value offering and looks forward to communicating these in due course. Dr Paul Harper, Executive Chairman, Angel Biotechnology Holdings, said: “The formation of ABL provides significant strategic advantages to the Group, and the distinctive competencies offered will provide a one-stop shop for companies in the regenerative medicine space….ABL will also provide access to a range of new markets by offering customers the means by which to convert advanced biologics and cell therapies currently being manufactured by Angel into formulated, finished products such as medical devices and in vitro diagnostics.” Separately, Angel today announced that this new subsidiary, ABL, has signed an agreement with Cardium Therapeutics (NYSE Amex: CXM).  The contract value will be in excess of £400,000 over the initial twelve month period, and will cover the manufacture of formulated collagen for Cardium’s Excellagen® product, which has recently been cleared for marketing by the FDA. Excellagen is a professional-use high molecular weight fibrillar bovine Type I topical gel (2.6 per cent) specifically engineered as an adjunct to debridement for the management of diabetic foot ulcers and other dermal wounds. In addition to the manufacturing of Excellagen’s formulated collagen, Angel Biomedical will assist Cardium to facilitate filing for a CE Mark for Excellagen for marketing and sale in the European Union and in other countries recognising CE Mark approval.
Additionally, Angel Biomedical will assist Cardium in establishing its own Device Master File with the FDA’s Center for Devices and Radiological Health covering the process for manufacturing the Company’s Excellagen formulated fibrillar collagen gel.

Atlantic Coal (LON:ATC 0.35p/£13.54m)
Atlantic Coal, an open cast coal production and processing company, announced unaudited preliminary results for the year ended 31 December 2011 in which it saw an increase in revenue to $13,991,971 (2010: $10,720,103) and a reduced pretax loss of $3.15m (2010: loss of $5.09m). Significant episodes during the period include the purchase of a Komatsu PC2000 Hydraulic Excavator and a Reichdrill blasthole drill rig and shares being admitted to trading on the OTCQX Market International platform of the Pink Sheets LLC in New York to broaden the investor base. Production and sales at Stockton increased during 2011 to 207,005 tons of run-of mine coal mined and sales of 106,403 tons were reached (2010: 207,873 and 97,342 respectively). Post period end, in January 2012, the Company announced it had entered into a lease option agreement with Pennsylvania based Reading Anthracite Company which holds a permitted 410 acre anthracite mining property- the acquisition would see a consideration of c. $6m in cash and shares being paid to Reading Anthracite Company along with the grant of $3.0m of warrants in Atlantic at 0.75 pence per share. An additional option agreement has been entered into for further anthracite mining assets in Pennsylvania which has an exercise price of US$35m for the period ending on 31 October 2012.

Avanti Communications (LON: AVN 313.75p/£350.57m)
The broadband satellite provider provided an interim management statement for the four months to 30th April 2012 stating that revenue is currently in-line with house broker estimates for the financial year to 30 June 2012. £42.3m of order backlog has been added taking the Company to £213m in total, with a pipeline of potential sales standing at £529m. This excludes £170m of options on HYLAS 2, which remains on target for a launch in the 30-day window from 30 June 2012 having successfully completed one of its last key technical milestones – thermal vacuum testing – during the period.

Corero Network Security (LON:CNS 51p/£29.75m)
Corero Network Security, the network security and business software provider, has announced a number of key business wins and the appointment of Ashley Stephenson as Executive Vice President. CNS has secured twenty two customers during the four months to 30 April 2012 with sales order intake up 25 per cent on the comparative period in 2011. CNS is also seeing an increase in orders and opportunities for its DDoS Defence System (DDS) launched in Q4 2011, as awareness and the number of DDoS attacks increases. New customer wins include material orders from Agarik (a leading French web hosting and managed service provider). In addition, CNS has received material orders from several existing customers including the world’s leading online gaming company, the global leader in gases for industry, health and the environment, a leader in online payment processing with offices in the United States, Canada and Europe, and CNS has also appointed veteran IT industry expert and entrepreneur, Ashley Stephenson, as Executive Vice President of the Network Security division with responsibility for CNS’s product and solutions strategy. Mr Stephenson has co-founded or led several IT companies including Reva Systems (acquired by ODIN) and Xedia Corporation (acquired by Lucent).

Corin Group (LON:CRG  44.5p/£19.04m)
Corin Group, a manufacturer and supplier of orthopaedic devices, published an Interim Management Statement for the period from 1 January 2012 to 10 May 2012. Corin has made a strong start to the 2012 financial year.  For the four months ended 30 April, constant currency sales growth was 24 per cent.  This strong growth was helped by the final phase of stocking orders to Mako in the US.  Excluding these stocking orders, constant currency sales growth was 10 per cent.  This growth continues to be led by sales of the Group’s new hip products.  Knee sales, which have in recent years declined, were broadly flat in the period   LARS sales have shown good growth in the UK, but have in aggregate declined on the back of weaker Australian sales. There has been double digit sales growth in the UK, US, Japanese and German and Austrian markets, with only the Australian business among Corin’s direct markets declining compared to the prior year.  The order book for export markets is strong, and there has been no material change in the financial position of the group since 31 December 2011. Looking forward, initial implantations of the new Unity Knee have gone well and the product remains on track for commercial launch early in 2013.

DDD Group (LON:DDD 22.75p/£30.53m)
The 3D solutions company today announce that sales of TriDef®3D for PCs and TriDef 3D Mobile have each topped one million units. TriDef 3D is DDD’s solution for automatic 2D to 3D conversion of games, videos and photos on 3D PCs, TVs and mobile phones. Sony, Intel, LG, Samsung and HP are among the leading manufacturers that have licensed TriDef 3D for their PC products. Total shipments of TriDef 3D for PCs exceeded 1.3 million licenses as of March 31 2012. In mobile phones, LG uses the TriDef 3D Mobile Android™ app for 2D to 3D video conversion on its Optimus 3D range of handsets. As of March 31 2012, shipments of TriDef 3D Mobile have exceeded one million within the first nine months of launch.

Eden Research (LON:EDEN 19.5p/£21.65m)
Eden Research announced the successful admission to trading on AIM on 11th May 2012 with the withdrawal from trading on PLUS. The market capitalisation of the Company at Admission is approximately c. £21.65m, based on the middle market price of 19.5p at the close of business on 10 May 2012. The Company has a number of patents and has a pipeline of products at differing stages of development targeting specific areas of the global agrochemicals industry and has invested in the region of £12m in development and now has modest revenues (2011: £91,000; 2010: £172,000) whilst the Company has concentrated on securing patent protection for its intellectual property, identifying suitable industrial partners and entering into licence agreements. Given the recent news from PLUS Markets Group PLC, Eden made a good move at the right time.

Enegi Oil (LON:ENEG 16.62p/£20.89m)
Enegi Oil, the independent oil & gas company focused on Canada and Ireland, has announced that the latest test results confirm that the connected oil in place associated with Garden Hill South is in excess of those stated in Enegi’s 2007 Competent Persons Report. McCaffrey Consulting Services Ltd., an independent consultant engaged by the Company, has advised that results from the last series of testing indicate that the Well is in contact with a larger than anticipated reservoir. Despite producing from the Well since commencement of a flow test on 3rd February 2012, there are no signs of pressure depletion in the reservoir. To accurately assess the reserves associated with Garden Hill South, signs of pressure depletion at the reservoir are required. Therefore, the Well will be flowed further to provide the required data. The management believes the latest results, the presence of a live petroleum system, and the size of the Green Point Shale justify further development activity in the Company’s acreage.

Fitbug (LON:FITB 1.5p/£2.40m)
Fitbug Holdings has signed a supply partnership agreement of three years with leading US digital health engagement and management company, Healthrageous, where Fitbug will supply   Healthrageous customers with its proprietary activity tracking technology.  Both businesses are now seeing strong and growing interest in connected health capability across the US health market.  This supply partnership will better position both Fitbug and Healthrageous to play a bigger part in this growing market.

Goldplat (LON:GDP 11.88p/£19.93m)
Goldplat yesterday provided a positive operations update on its three main gold projects: the Kilimapesa Gold operating mine in Kenya; the Nyieme gold development project in Burkina Faso; and the Anumso gold exploration project in Ghana and its two gold recovery operations in South Africa and Ghana. Goldplat CEO Demetri Manolis said: “With the commencement of production of mining at Kilimapesa and gold recovery performing strongly in South Africa and ahead of management’s expectations in Ghana, we expect to easily exceed our production of 28,185 ounces gold last year. This is against a current market cap of circa £19 million. We were delighted to report our first gold pour and sales at our high grade quartz vein project at Kilimapesa earlier this month, and we look forward to continuing underground and surface development to bring the resource to in excess of circa 500,000 ounces of gold”.

Judges Scientific (LON:JDG 633.5p/£27.44m)
Aim listed company engaged in the design, manufacture and sale of scientific instruments, announced a £3m placing at a price of 600p per share. The Placing was almost three times subscribed, and net proceeds enable the Company to make further acquisitions, having financed the March acquisition of Global Digital Systems (GDS) entirely via debt (GDS was acquired for a cash consideration of £7.65m with an additional payment to be made to reflect the working capital available at completion in excess of the ongoing requirements of the business). Back in March, the Company announced results for the year ended December 31 2011 in which revenues increased by 15 per cent to £21m and pre-tax profits of £2.89m (2010:£16m) were achieved.

LiDCO Group (LON:LID 19.12p/£ 33.32m)
The cardiovascular monitoring company this week announced that its technologies are highlighted in the latest NHS report, published on 8 May, on the adoption of Intraoperative Fluid Management Technologies. The report, which highlights LiDCO’s fluid management technology among others, informs all NHS organisations of the steps they need to take in order to start using or increase their use of these technologies. The report reiterates that full adoption across the NHS is forecast by NICE to benefit 837,000 patients and generate net financial savings of £400m per annum. Of the 800,000 patients a year in the UK who are applicable for such advanced monitoring, less than 10 per cent are currently monitored. This illustrates the potential size of the UK market and the very substantial opportunity available to LiDCO.

Microsaic Systems (LON:MSYS 41.5p/£16.05m)
Microsaic Systems last week announced the signing of a significant agreement to provide its miniature mass spectrometer – the Microsaic MiD –to an international supplier of laboratory equipment. Eric Yeatman, Chief Executive of Microsaic Systems, commented: “One of Microsaic’s key strategic aims is to grow sales of our innovative products as an OEM partner with leading international suppliers of scientific instruments in specified application areas of chemical separation and purification.”

One Media Publishing Group (LON:OMPP 3.55p/£1.54m)*
The listed consolidators and acquirers of music and video rights yesterday announced that it has acquired the rights to an audio catalogue and a deal to create new tracks for its growing library of popular music. The USD$33,000 deal will deliver up to 3000 music tracks in the ‘easy listening’, ‘instrumental’ and ‘TV & Film’ music genres. Whilst some of the music library already exists, One Media will retain the additional right to select new tracks (not yet recorded) over the forthcoming 36 months. This allows One Media to keep its library populated with new tunes as required at a fixed price. One Media also today announced that following the announcement by PLUS Markets Group plc yesterday at 7am, the Board of One Media would like to reassure its shareholders that they have been reviewing their position on the PLUS markets for some time now. Following yesterday’s announcement, the Directors believe that additional advantages can be achieved through being listed on another market; notably in the areas of share liquidity, visibility of the business within its industry and greater investor interest. Michael Infante CEO/ Chairman said: “We have always been committed to shareholder communication and the delivery of solid results, as evidenced by our recent communication only yesterday of yet another acquisition. We have made 19 acquisitions over the past 18 months and I am increasingly of the view that there would be advantages to remaining on a market, although we are undertaking a full review of all alternatives.” One Media Publishing still intends to release its unaudited half yearly report on Monday 11th June 2012.

Oxford Biomedica (LON:OXB 4p/£37.80m)
Oxford BioMedica announced that data from its ocular programmes partnered with Sanofi (EURONEXT: SAN and NYSE: SNY) were presented at the 2012 Annual Meeting of the Association for Research in Vision and Ophthalmology (ARVO) in Florida (USA).  Dr Stuart Naylor, Chief Scientific Officer of Oxford BioMedica, said: “The RetinoStat(R) Phase I study is the first US clinical study to directly administer a lentiviral vector-based treatment to patients, and we believe this is the first time that therapeutic protein expression has been directly demonstrated in the eye following the administration of a gene therapy.”

Phytopharm (LON:PYM  7.12p/£24.71m)
Phytopharm announced that a study in an animal model of glaucoma was inconclusive. The study did not yield a valid result because of a failure to induce sufficient neuronal cell death in both treatment and control groups. The study was designed to evaluate the neuroprotective effects of treatment with Myogane(TM) in an established model of glaucoma. Mr Tim Sharpington, CEO, Phytopharm, said: “It is disappointing that this study did not produce a definitive result which would have given us further insight into the potential of Myogane(TM) in glaucoma. We will analyse the results from this study in consultation with our scientific advisors before deciding on the next steps for this programme. “The share price fell from 7.75p to 7.125p on the news.

PLUS Markets Group (LON:PMK 0.25p/£0.97m)
PLUS Markets this week announced that it has now ended the formal sale process which was announced in February as it has been unable to agree any potential deal, adding that due to the ongoing operating costs of its business in the context of its regulatory status, the Company’s cash balance has reached a level at which the Board has informed the FSA that it intends to start a process of orderly closure. Activities undertaken by the Group are to be wound down over the next six months in order to minimise market disruption and PLUS Markets will continue to explore all possible avenues including any offers for the Company’s remaining assets.

Proximagen Group (LON:PRX  278.5p/£175.79m)
Proximagen Group, whose focus is on the treatment of disorders of the central nervous system and inflammatory diseases, welcomed an announcement by Arena Pharmaceuticals, Inc. that the US FDA Endocrinologic and Metabolic Drugs Advisory Committee had voted in favour of the available data demonstrating that the potential benefits of Lorcaserin outweigh the potential risks when used long-term in a population of overweight and obese individuals. The committee voted 18-4 in favour of Lorcaserin, which is a 5-HT2c agonist intended for weight management, including weight loss and maintenance of weight loss, in patients who are obese or overweight and have at least one weight-related co-morbid condition. Proximagen owns the worldwide rights to PRX00933, an oral 5-HT2c agonist for treating obesity. In Phase II trials, PRX00933 showed a dose-dependent and statistically significant decrease in body weight that falls within FDA guidelines for this condition. PRX00933 has been shown to be safe and well tolerated and has been administered to approximately 400 patients. The Company will continue to evaluate the commercial opportunities that PRX00933 presents, whilst awaiting the final decision of the FDA on Lorcaserin which is due next month.

Providence Resources (LON:PVR 520p/£335m)
Providence Resources, the Irish oil and gas exploration and production Company, has provided a technical update on the Barryroe oil discovery in the North Celtic Sea Basin. Providence operates Barryroe on behalf of its partner Lansdowne Oil and Gas plc. The area lies in around 100 metre water depth and is around 50 kms off the south coast of Ireland. Geokinetics, a US based seismic processing company, has carried out an evaluation of the seismic response of the main basal hydrocarbon bearing reservoir interval. This modelling has confirmed that the basal reservoir sandstone package has a defined seismic response which can be detected clearly within the inverted 3D seismic volume. A preliminary review of the inverted 3D seismic volume indicates that the reservoir sequence is widely developed in the Barryroe area. Detailed interpretation of the inverted seismic data has now commenced and will be used to better define the static oil in place estimates for the Barryroe accumulation. The results from this work are expected later this summer.

Silverdell (LON:SID 10.12p/£18.31m)
Silverdell, the Specialist Environmental Support Services group, has been awarded a number of contracts in May totalling £3.58m, including a contract in Canada for an International Specialist Material Company which will deliver £1.25m of revenues in the second half of the current financial year. This contract is expected to be an important step in Silverdell’s broader strategic initiative to penetrate a number of regulated international markets. Under the terms of the contract the Company will carry out asbestos removal works as sole provider to a major decommissioning project. In addition, the Company has confirmed that the £0.5m of major rail infrastructure works in the South East, announced on 3 April 2012 is likely to be for a materially higher contract value and is now anticipated to form part of a larger framework contract to include up to 72 stations over the next 7 years. These contracts have boosted the Company’s order book to a record high of £133m as of 31 March 2012.

Tarsus Group (LON:TRS 155p/£147.28m)
The international business-to-business media group today published its Interim Management Statement for the 8th March to 14th May 2012. Trading for the period has been in line with the Board’s expectations and forward bookings for the year to end December 2012 now stand at 65 per cent of anticipated full year revenues, compared to 61 per cent at the same time in 2010.
Bookings are tracking 15 per cent ahead of last year (as adjusted for biennial events). Revenues are heavily weighted towards the second half of the year owing to the timing of exhibitions. The Group’s growth prospects have been transformed over the last 12 months.  A number of lower growth businesses have been sold whilst the Group has made key acquisitions in China and Turkey. Tarsus has developed a high quality portfolio of international fast growth events in emerging markets and the Board is confident of reaching its 50/13 target to derive 50 per cent of revenues from emerging markets in 2013.  The Group’s emerging markets businesses continues to gain momentum through a combination of strong revenue growth and the successful integration of recent acquisitions. IFO in Turkey, acquired in June 2011, is performing well. The integration of Life Media in Turkey, acquired in March 2012, is on track. Trading in the Chinese business continues to be very strong. The Group’s exposure to China will be increased significantly by the acquisition of 50 per cent of the China International Automotive Aftermarket Industry and Tuning (Guangzhou) Trade Fair and other associated business assets, which is expected to complete in the next three months. The Group’s largest event in Dubai in 2012 is MEBA (business aviation). Forward bookings for this event are tracking ahead of the previous event. In the US, the Medical division continues to grow strongly.  Trading in the Group’s French division has been slightly better than expected. However, given the current economic and political uncertainty in Europe, Tarsus remains cautious for the full year, particularly given the occurrence of the largest French shows in the second half of 2012 and the current weakness of the Euro.

Thalassa  Holdings (LON:THAL 34.5p/£3.36m)
On 23 April 2012, Thalassa posted a Partial Cash Offer to RSI Shareholders to acquire approximately 25.89 per cent. of the share capital of RSI. If the Partial Offer is accepted in full, Thalassa, together with its existing shareholding, will hold approximately 29.90 per cent. After evaluating various factors in relation to the Offer, the Directors of RSI have made no recommendation to their Shareholders to accept or decline the Offer. However they point out that the Cash Offer price appears opportunistic given that it represents a discount of approximately 52.0 per cent to 1.0 pence, being the closing price on AIM on 30 March 2012, and in their opinion, the trading price of the Ordinary Shares on AIM did not reflect the true value of the Company and its business.  The Directors of RSI also noted that their Company needs to raise further capital, though they have yet to conclude on how much, and consequently terms have not been agreed with potential providers of this capital. These terms, once agreed and approved would determine the extent of any future dilution of the interests of existing RSI shareholders. RSI Shares can no longer be traded on a recognised stock exchange although a matched bargain platform for RSI shares is provided by BritDAQ.

ValiRx (LON:VAL 0.4p/£5.04m)*
AIM listed life science Company with a focus on cancer diagnostics and therapeutics for personalised medicine today announced that a method for cancer screening, using specific gene biomarkers in the field of genetics and oncology, has recently received patent approval by the United States’ patent office. The granting of this latest patent means that ValiRx now has biomarker patent protection in both the US and across Europe, alongside granted and pending patents for its therapeutic technologies across Europe, the US, Canada and Australia. This latest patent concerns the method or process by which gene biomarkers can be used in the detection or identification of a patient’s susceptibility to cutaneous T-cell lymphoma (a type of non-Hodgkin’s lymphoma) and also for improving treatment methods.

ViaLogy (LON:VIY 4.12p/£35.14m)
ViaLogy issued a positive business update.  The last two months have marked a major progress milestone in their development, with new commercial contracts signed with three of the largest global Exploration and Production (E&P) firms, including two Supermajors. All are focused on putting the Company’s technology, QuantumRD, to operational use in some of the world’s most important development fields, and aim to improve significantly on industry-standard techniques now in use. The named contracts include the Oil and Natural Gas Corporation of India (ONGC), and Chevron. The contracts also mark the Company’s move into the global geophysical services marketplace, with the objective that success in work underway will lead to widespread use of QuantumRD. The Company is at work on winning other large operators and supermajors as clients, for some of whom difficult pilot projects have been completed. ViaLogy also continues to work with some of its smaller clients.

Xenetic Biosciences (LON:XEN 6.62p/£26.62m)
Xenetic Biosciences, a bio-pharmaceutical company specialising in the development of high-value differentiated biological and vaccines and novel cancer drugs, announced that Dr Henry Hoppe IV has been appointed as Vice President of Drug Development for the Company. Dr Hoppe is a leading biotechnology drug development executive with over 20 years’ experience in recombinant protein, monoclonal antibody and stem cell expression for clinical therapies. His is a key appointment for Xenetic that is a pivotal step in establishing the Company’s new Drug Development Centre in Boston. Dr Hoppe’s principal expertise lies in the processes surrounding regulatory submissions, IND filings and clinical trials, especially in the orphan and rare disease arena, exemplified in his 17 years at Genzyme Corporation where he was instrumental in the development and launch of many of their leading products. The management expects his contribution to be a key driver in unlocking the huge therapeutic potential of Xenetic’s three current patent-protected enabling and platform technologies which, in turn, will generate shareholder value that fully reflects the inherent worth of this Company.

Zeta Compliance Group (LON: ZCGP 37.5p/£3.29m)*
Zeta announced, following the announcement by PLUS Markets Group plc, that the Company is evaluating its options for the future trading of Zeta’s shares. Having achieved approximately £300,000 per annum of cost savings since last year when it took action to ensure that costs were reduced wherever possible, and a new more focused company structure was implemented, the Company intends to communicate further on its options for the future trading of Zeta’s shares in the near future.

*A corporate client of Hybridan LLP

The Hybridan Small Cap Wrap is a weekly review of some of the most interesting small cap stories of the past week.  Our review will usually be of those companies whose market capitalisations are less than £50m although we may occasionally cover larger companies.

08 May 2012

This week: Eluma secures an award, ‘Tou’ director changes at TMZ and ASW advances a new acquisition

The FTSE faced a significant fall at the end of last week, closing at 5,655 points after having opened at 5,777 points, with the AIM All Share facing a more muted fall to 762 points (from 780 points).  News during the week covered Greece’s failure to assemble a coalition, and the continuing difficulties across Europe reflected by announcements such as the growing unemployment problem in the UK (forecast to continue to rise over the next 5 years according to the Centre for Economics and Business Research), a 10 per cent increase in the number of company insolvencies in the UK in the first quarter and the sharp shrinking of the Eurozone private sector in April to 46.7 from 49.2 on the PMI in March. The week ahead sees the MPC interest rate decision for the UK, construction output data, producer prices data and BRC shop price inflation and retail sales reports.

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Disclaimer- This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only- please refer to the disclaimer in full below.

ASW Acquisition, AFF Update on Akonolinga, AKT Grant and Patent Update, BHR seeks partner, BEM Inspector’s Report, CNE Full year results, CFL Directorate change, ERU Security Blinds Award, GBG Notice of Results, IKA US Patent Grant, IDOX Acquisition, LMT Oarflex Launch, NAK Director Relocation, OXP Far east commercial Operations, POS Contract, PGR Fundraise, RMM Record Gold Production, SCLP patient treated in Phase II trial, SEA Final Results, SLN partner extends agreement, SLME Operations Update, TMZ Director changes, VIY Wins Contract, WAS Trading update, XEN Senior Appointment, ZGC  Contract Renewal.

Advanced Computer Software (LON:ASW 56.75p/£202.29m)
Advanced Computer Software, a provider of healthcare and business management software and services, announced the acquisition of Fabric Technologies Limited, which provides managed services and unified communication solutions to approximately 160 UK mid-market customers in banking and other professional services sectors, for a total cash consideration of £4.6m (including a performance related earn-out of up to £0.4m payable in October 2012). ASW sees some of the main highlights of the acquisition being that it is immediately earnings enhancing with strong recurring revenues (accounts to end 2010 showed turnover of £11.2m, of which approximately 58 per cent is recurring, and PBT of £0.5m) and creates opportunities for cross-selling Group products.

Affero Mining (LON:AFF 56.5p/£59m)
Afferro Mining, the exploration and development company focused on iron ore projects in Cameroon, has announced the first operational update for the Akonolinga Iron Ore Project. The total area of the Akonolinga permit is 241.6km2 and is 100 per cent owned by Afferro’s wholly-owned subsidiary, Caminex SARL. The interpretation by Southern Geoscience Consultants of an airborne geophysical survey conducted by New Resolution Geophysics has identified 25 magnetic anomalies at Akonolinga. Two anomalies have been identified as ‘high’ in terms of magnetic character and magnetic amplitude in a 3km x 4km target zone. Additionally, 3,498 line kilometres of airborne geophysical survey work has commenced, and interpretation of these results is expected in Q4 2012. The project is in proximity to an existing rail line to the main port of Douala and to the proposed Congo Basin rail line.

Ark Therapeutics Group (LON:AKT 3.86p/£8.09m)
Ark Therapeutics announced it has received notice of the award of an EU Framework programme 7 Grant of up to €6m to a consortium led by UCL in which Ark is the sole industrial partner engaged in the research. The consortium includes some of the leading fetal medicine centres across Europe. The grant supports, over six years, the consortium’s involvement in a research programme to conclude final pre-clinical toxicology and initiate the clinical development of Ark’s EG013 programme, its adenoviral vector containing a vascular endothelial growth factor gene in the treatment of fetal growth restriction during pregnancy. The grant is subject to the formal process of contract negotiation with the European Commission which is anticipated to reach conclusion in July 2012. Ark has also been notified that the United States Patent and Trademark Office (USPTO) has issued a Notice of Allowance in respect of Ark’s patent covering its EG013 programme. Formal grant of this patent by the USPTO is expected in the next two months.

Beacon Hill Resources (LON:BHR 8.2p/£86.22m)
Beacon Hill Resources is to look for a partner for its Arthur River magnesite project after a scoping study indicated a mine at the Tasmanian site would be economically viable. The study estimated a net present value of A$42m (£27m)  based on a 292,000 dry tonnes per annum run-of-mine (ROM) operation producing on average 100,000d tpa of calcined magnesia with an average grade of 95 per cent MgO (Magnesium Oxide). The study was based on an Inferred JORC Resource estimate of the project area of 25Mt at 42.4 per cent Magnesium Oxide and an average life of mine operating cost, including both mining and processing costs, of approximately A$250/t FOB. Capex is estimated at A$155m, which incorporates the construction of a calcining plant.

Beowulf mining (LON:BEM 13.25p/£27.88m)
Beowulf the traded mineral exploration company which owns several exploration projects in Sweden announced that the Company has now received the decision of the mining Inspector at Bergsstaten in respect of the Company’s technical infringement of the Swedish Minerals Act relating to the historic drilling conducted on its Kallak Project areas without valid workplans being in place. The Mining Inspector has formally reminded the Company’s wholly owned subsidiaries, Jokkmokk Iron mines AB and Iron of Sweden Limited, of the provisions and requirements of the Swedish Minerals Act and the potential consequences of any future breaches, but has also confirmed that the Mining Inspectorate will not be taking any further action or conducting any further investigation into the Company’s historic workplan infringements. Beowulf continues to consult with the Mining Inspector and the local Saami community to seek to resolve the objections raised to its work plans filed and notified in respect of the Company’s 2012 drilling campaign on its Kallak nr 1 and Parkijaure nr 2 permit areas, on the grounds that such operations could potentially affect the Saami community’s seasonal reindeer herding. Drilling operations at both Kallak North and Kallak South will therefore remain suspended until this matter is resolved. A further update will be provided on the 2012 work plans and drilling campaign in due course.

China New Energy Ltd (LON:CNEL 4.38p/£12.98m)
The engineering and technology solutions provider to the bioenergy sector announced audited full year results for the year ended 31 December 2011 last week. Revenue was up by 29.4 per cent to RMB179m (£17.6m) versus 2010 RMB138.4m (£13.6m). Profit before tax increased by 9 per cent to RMB25.8m (£2.5m) versus 2010 RMB23.7m (£2.3m). International business was expanded as a large proportion of revenue (approximately 40 per cent) achieved through EPC contracts outside of China and an agreement of Intent was entered into with JEIC, post year end, to modify and convert an existing ethanol facility into a “second generation” 50,000 tonne plant capable of converting cellulosic plant waste into biofuel. Mr. Weijun Yu, Executive Chairman of CNE, commented: “…In the Board’s view, CNE is poised to capture the opportunities presented by growing demand for second generation biofuel and we remain confident that the Company will continue to deliver and achieve profitable growth in 2012.” The Board believes that prospects for the Company can be significantly advanced by identifying new streams of revenue that can complement and sustain the Company’s turnover and growth, such as the supply of active yeast and biogas recovery, as well as lessen its dependence on the EPC (Equipment, Procurement and Construction) business.

Cluff Gold (LON:CLF 78p/£122m)
Cluff Gold, the West Africa focused gold mining company, has announced the appointment of Anglo American’s Head of Mining, Hendrik Johannes Faul, as an independent non-executive director. Mr Faul brings over 20 years of experience in surface and underground mining, processing, logistics and marketing, both in Africa and across the world. He has previously held several senior roles in the mining industry, including as CEO for Anglo American’s zinc operations, during which time he also served on the boards of various non-listed Anglo American subsidiaries in South Africa, Namibia, and Ireland. Mr Faul is also a non-executive director of JSE-listed Palabora Mining Company. This appointment has been made as a result of the Board’s decision to review its structure following the appointment of John McGloin to the position of Executive Chairman (designate). As part of the Board review, Tim Wadeson has also agreed to step down as a non-executive director of the Company at its next AGM.

Eruma (LON:ERU 9.38p/£2.06m)
Eruma announced that its Security Blinds division has won the top award in the Building and Facilities Protection category at the Counter Terrorism and Specialist Security (CTSS) Awards held in London on 25th April.  The CTSS Awards recognise the outstanding products, services and solutions in the industry. Eruma Chief Executive Wayne Money said: “We are delighted to have won this prestigious award which recognises the quality and effectiveness of Security Blinds’ blast protection products and service at an industry level. This recognition is reflected in the increasing volume of repeat and referral business we have been experiencing and this underpins our growing order book. We are winning substantial contracts in both private and public sectors in the UK and overseas, especially in Asia Pacific, EMEA and the Americas”.

GB Group (LON:GBG 70.75p/£76.38m)
GB Group, the identity management specialist, will be announcing its Annual Results for the year ended 31 March 2012 on Wednesday 30th May 2012. GB Group develops, sells and supports business application software, the provision of marketing database and anti-fraud services and the licensing of technology, enabling clients to make informed business decisions based on a thorough knowledge of consumer identity and behavior for an effective communication and interaction with the customers.

IDOX (LON:IDOX 36.25p/£125m)
IDOX, the supplier of software & services, has acquired Currency Connect Holdings BV, a Holland-based grants advisory business, for a maximum cash consideration of €4.7m (£3.8m). This acquisition will extend IDOX’s current offering, particularly in the growing innovation funding space and is expected to accelerate the Company’s strategy to provide a full grants consultancy service in the UK, the Netherlands and other European Union countries such as Germany and France, utilising its existing infrastructure. Currency Connect provides expertise and knowledge that helps clients obtain funding for innovation projects through grant-based subsidies and research & development tax credits. It monitors and informs customers of innovation subsidies, prepares grant applications and administers the end-to-end process. In addition, Currency Connect provides grants management software and advises clients on process change to enable them to accelerate their innovation and consequent eligibility for related grants. Currency Connect is based in Goor, Netherlands where it employs 34 staff. IDOX will pay an initial consideration of €4.3m (£3.5m), with a further payment of €0.4m (£0.3m) in 2013 dependent on the achievement of certain performance conditions. Currency Connect reported revenue of €2.7m (£2.2m) and operating profit of €1.1m (£0.9m) in the year ended 31 December 2011 and has €0.3m (£0.25m) of cash. The acquisition will be funded from IDOX’s cash and existing debt facilities.

Ilika (LON:IKA 59p/£26.8m)
Ilika, the advanced cleantech materials discovery company, announced that a United States patent has been granted in respect of its unique High-Throughput Vapour Deposition synthesis platform, which is licensed exclusively to Ilika from the University of Southampton. Additionally, the equivalent Japanese and Canadian applications have now been accepted for grant by the respective national patent offices. The application in Europe is ongoing.

Lombard Medical Technologies (LON:LMT 133.5p/£26.9m)
Lombard medical Technologies the specialist medical technology company focused on innovative vascular products, announced the launch of the new Aorflex(Tm) delivery system at the 34th International Charing Cross Symposium. The new system, Aorflex(Tm), combines the clinical excellence of the Aorfix(Tm) stent graft with the new Aorflex(Tm) delivery system which offers a range of clear clinical benefits including, greater deployment control with exceptional one to one torque, improved visibility during deployment due to new radio opaque marker, ease of use with reduced deployment forces, and improved vascular introduction through the use of hydrophilic coating.

Nakama Group (LON:NAK 2.25p/£2.65m)
The London-based international digital media and creative recruitment company with offices in the UK, Australia and Asia,announced that Rob Sheffield, one of the founding directors of Nakama, will be re-locating to Australia to help the existing teams there grow the business further and build foundations for future development. As a founding director, he has considerable experience in building and driving businesses forward. The Company has experienced rapid growth over the past year across its international client portfolio and this has required an equally fast scale-up and growth of the teams there in order to keep pace with the demands of the developing digital, interactive media and mobile sectors.

Oxford Pharmascience (LON:OXP 1.35p/£7.79m)*
The specialty pharmaceutical company that uses advanced pharmaceutic technologies to reposition medicines today announced that it has commenced commercial operations of its first calcium soft chew product to the Far East following the entering into of a licensing and distribution agreement at the end of last year with Mega Lifesciences Ltd (“Mega”). The first order is being dispatched in June, being 6 months ahead of schedule following successful early registration of the calcium chew in Malaysia and Vietnam, with registrations in Thailand, Indonesia, Philippines, Cambodia and Myanmar expected to follow soon. Further, the Company has extended the distribution and licensing agreement to cover Peru, Ecuador, Ukraine, Kazak, Azerbaijan and Uzbekistan where Mega has existing operations.

Plexus Holdings (LON:POS 128p/£106m)
Plexus Holdings, the oil and gas engineering services business and owner of the proprietary POS-GRIP(R) friction-grip method of wellhead engineering, announced a new order worth £1.3m from BG International Ltd, to supply its 20,000 psi extreme high pressure and high temperature (‘X-HP/HT’) POS-GRIP wellhead technology for gas exploration drilling operations in the North Sea. Revenues from the contract are expected to commence in November 2012. This order follows on from a five year framework agreement signed between the two companies in 2006 which saw Plexus develop and supply BG International with the 20,000 psi X-HP/HT POS-GRIP wellhead technology. The original agreement was for several exploration wells in the North Sea, which are now completed/nearing completion, including the Jackdaw well.

Premier Gold (LON:PGR 0.58p/£3.52m)
Premier Gold Resources, the Central Asia-focused gold exploration and development company which recently began trading on AIM, has undertaken a small placing to fund exploration work on its first licence in Kyrgyzstan. It has raised gross funds of £350,000 through a placing of 70,000,000 new ordinary shares at 0.5p per share. The funds will be used to advance exploration work at the Cholokkaindy gold project, and will include further geochemistry, conventional trenching as well as continuous profiling using a bulldozer, which also is needed to prepare sites for diamond drilling.

Rambler (LON:RMM 36.5p/£49m)
Rambler Metals and Mining has reported that on 24th April 2012 the Company completed a record gold pour of 1935 ounces over a two week period from its 100 per cent owned Ming Copper-Gold Mine, in Newfoundland and Labrador’s Baie Verte Peninsula, Canada. In those two weeks, milling throughputs averaged 706 wet metric tonnes per day with an average gold grade of 7.39g/t. This represents the highest continuous throughput and grade seen to date. The modifications to the crushing and grinding circuit at Nugget Pond have allowed for these improvements and as this circuit is common for both gold and copper production, Management is hopeful that these productivity increases will also be seen once it begins copper concentrate production.

Scancell Holdings (LON:SCLP 12.75p/£24.79m)
Scancell Holdings announced the recruitment and treatment of the first patient in the second part of its Phase I/II clinical trial of SCIB1, its DNA ImmunoBody® vaccine being developed for the treatment of melanoma. The Phase II part of the trial will be conducted in five UK centres in thirteen patients with Stage III/IV disease to further assess the safety of treatment and to assess the cellular immune response induced by SCIB1.

SeaEnergy (LON:SEA 31.25p/£21.60m)
Sea Energy announced the results for the year 2011 with a profit of £25.3m, earnings per share 37.08 pence and a proposed return of value to shareholders of 10 pence per share (2010: nil) equating to £6.9m. David Sigsworth, Chairman, said: “2011 was a notable year for SeaEnergy as it realised considerable value by selling SERL – a significant proportion of which is to be returned to shareholders. We are continuing to pursue opportunities for the supply of specialist vessels and associated services in operations and maintenance for offshore wind, as well as the acquisition of complementary businesses and the in-house development of additional services. At the same time, we continue to manage the value of our legacy investments”.

Silence Therapeutics (LON:SLN 1.65p/£9.52m)*
Leading international RNAi therapeutics Company put out an announcement that its partner, Quark Pharmaceuticals, has announced it has amended its existing exclusive Licensing Agreement with Pfizer. This amendment will enable Quark to perform a Phase 2a clinical study to assess the effect of PF-655 in a new indication, looking at visual function in patients with moderate and advanced Open-Angle Glaucoma (OAG). PF-655 incorporates Silence’s AtuRNAi technology and was sub-licensed to Pfizer by Quark in 2006, and on which Silence is entitled to receive a share of milestones and royalties that may be earned by Quark in the future on this compound. The OAG study will be conducted in parallel with a Phase 2b study of PF-655 in diabetic macular oedema. Silence has previously announced that it stood to receive up to $95m from Quark in relation to its licensing agreement with Pfizer. As a result of this amendment to the Quark/Pfizer license, Silence anticipates its share of these payments could now reach $120m. Silence has previously announced the receipt of $6m from Quark in relation to this licence.

Silvermere Energy (LON:SLME 14.75p/£3.1m)
Silvermere, the independent oil and gas company focusing principally on appraisal and production opportunities in the US, provided an update based on information provided by the Operator, Dominion Production Company LLC. Following some weather related delays to lifting operations, load out of the tripod and pilings onto the barge on location at Laredo’s yard in Galveston was completed on 23rd April 2012. On 28th April while the lift-boat was en route to Galveston to take on supplies before heading on to Corpus Christi to commence the mustang Island 818 pile-driving, it struck an unmarked and unreported obstruction which created a three foot hole in its hull. The vessel took on large amounts of water and was completely without engine power as a result. The vessel was towed to Cameron, Louisiana for inspection and the incident, due to its nature, is now the subject of a coastguard investigation. No-one incurred any injuries as a result of the incident. Based on the damage incurred it is believed by Laredo that the lift-boat will be out of commission for at least two months. Laredo, who is contracted by Dominion, is currently attempting to source an alternative lift-boat and an update on progress will be provided as soon as possible.

Toumaz Technology (LON:TMZ 11.12p/£90.72m)
Toumaz, a pioneer in low cost, ultra-low power wireless communications technology, announced a directorate change last week, with Anthony Sethill becoming Chief Executive Officer, and Chris Toumazou moving into the position of Executive Chairman replacing Sir Richard Sykes who is stepping down from the Board. Anthony has considerable experience in the consumer electronic space, having been a founder of Frontier Silicon Ltd, a leading supplier of digital broadcast and network audio products, in 2001 and was CEO until December 2011, and also previously being Managing Director of Consumer & Mobile Phone Products at Amstrad PLC, Sales and Marketing Director at Samsung (UK) Ltd, and has also held positions with ONDigital and Alba Group Plc. This is an important update by Toumaz, reflecting the ongoing intention to ensure the Company is making the right steps as the business evolves.

ViaLogy (LON:VIY 4.5p/£38.3m)
ViaLogy, which provides reservoir characterisation, geophysical imaging and hydrocarbon sizing services to oil and gas companies, announced that it has been awarded a contract with a major oil and gas company to deploy its patented QuantumRD processing technology. At the client’s request, and for commercial reasons, their identity, the location of the prospect and further details of the contract remain confidential.

Wasabi Energy (LON: WAS 1.18p/£28.24m)
Wasabi announced a trading update for Australian Renewable Fuels Limited (in which it has a 13.3 per cent interest) for the quarter ended 31 March 2012. Highlights include 15 tonnes of Recycled Mill Oil (RMO) has been successfully processed at the Barnawartha plant, a second shipment of biodiesel to Gavilon (USA) of 4000 tonnes having been loaded and exported on 24 March 2012, the commencement of discussions with Gavilon (USA) on the continuation of the export program with the next export order expected to cover the next six months for substantial volumes including production from the Picton (WA) plant and that insurers have accepted indemnity for the Largs Bay fire and the rebuild program is in progress with an estimated cost of approximately A$8m with completion expected by November 2012.

Xenetic Biosciences (LON:XEN 6.88p/£27.25)
Xenetic Biosciences announces that Dr. Surender Kharbanda has been appointed as a specialist consultant to accelerate the development of the Company’s OncoHist™ candidate. The OncoHist™ trials, which the Company expects to commence in early 2013 in the USA, are specifically for the treatment of patients of the orphan and rare disease, Acute Myeloid Leukaemia (AML). In 2000-2005, Dr Kharbanda was Head of R&D at ILEX Oncology Inc.. The establishment of a new Drug Development centre in Boston lies at the heart of Xenetic’s drive to independence made possible by the important equity fund raise successfully completed by the Company in November 2011. Xeneticexpects to shortly be announcing further key appointments as to both full time senior posts within the Company as well as a number of appointments to the newly established Scientific Advisory Board.

Zeta Compliance Group (LON:ZCGP 37.5p/£3.29m)*
Zeta announced that its subsidiary, Zeta Compliance Services Ltd, has been re-engaged by a leading university to provide water hygiene services for a further five years.  The value of this contract is approximately £215,000 over 5 years. This contract was won under a competitive tender situation and work on this contract will start immediately.

*A corporate client of Hybridan LLP

The Hybridan Small Cap Wrap is a weekly review of some of the most interesting small cap stories of the past week.  Our review will usually be of those companies whose market capitalisations are less than £50m although we may occasionally cover larger companies.

01 May 2012

This week: A world first for Bglobal, a Quarto-ly update and Ark increases capacity

The FTSE closed last week broadly where it started at around 5,770 points, it had to recover from a significant early week drop (closing last Monday at 5,645 points). The AIM All share had a less troubled week, opening at 780 points and closing at 777. The markets have seen the Spanish economy slip back into recession, having contracted by 0.3 per cent in the first quarter, retail sales sliding in the Eurozone with the PMI for Germany, France and Italy falling from 49.1 to 41.3 and the US economy slowing to an annualised pace of 2.2% in the first quarter of the year, from 3% in the final three months of last year. The week ahead sees manufacturing, construction  and services PMI data being announced, BoE mortgage data and a speech by the BoE governor.

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Disclaimer- This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only- please refer to the disclaimer in full below.

AFF Third Party Access to Congo Basin Infrastructure, AKT manufacturing suite receives GMP approval, AVCT Interim Results, BHR Final Results, BGBL Technological achievement, BIOM Trading Update, BGL Quarterly Activity Report, CWR Strategic Partnership, CNE Agreement to develop £20m biofuel Facility, CSLT Suspension, EGX Data Centre Installation, Goals Soccer Centres AGM Statement, GVC Holdings Final results, HGV Final results, HER Programme update, MSYS preliminary results, NFC Interim Results, QRT Q1 Interim Results, RENE Placing and Open Offer, SYNC Offer Update, SSX Completion of DSS for York potash project, SYNC Offer Update, TRS JV with GZ Auto, TRP Board Changes, VAL Final Results,  VRP appoints new CEO

Affero Mining (LON:AFF 57.5p/ £60.38m)
Afferro Mining, the exploration and development Company focused on iron ore projects in Cameroon, has reported that following discussions with the Cameroon Government it will be provided the opportunity to access the proposed railway line through the south of Cameroon. In a series of meetings with the Directors of the Company recently, the Cameroon Government has emphasised its commitment that the infrastructure should also serve third party mining projects to develop the nascent Cameroonian iron ore industry. The Company is also in discussions with the Government regarding the possibility of participating in the financing of the special purpose vehicle being set up to develop the railway. Accordingly, the Company is revising its Preliminary Economic Assessment (PEA) to take these developments under consideration and shall be disclosing its findings in May.

Ark Therapeutics Group (LON:AKT 3.78p/£7.90m)
Ark Therapeutics Group announced that following inspection of the Company’s manufacturing site, the Finnish Medicines Agency has extended Ark’s Good Manufacturing Practice (GMP) certification to include the Company’s newest and largest production facility, GMP 3. The certification will greatly increase the Company’s manufacturing capacity, including an automated “fill and finish” line capable of handling up to 2,000 product units/hour. In response to growing demand for the Company’s bio-manufacturing expertise, earlier this month Ark appointed Dr David Venables to the Board as Executive Director – Manufacturing Services. David Venables, Ark’s Director of Manufacturing Services commented: “The availability of the GMP 3 suite will allow us to continue to attract high quality clients wishing to avail themselves of Ark’s unrivalled viral-based manufacturing expertise and facilities. At a time when I have been brought in to build the revenue generating aspect of this business I am very excited by this newly validated capacity coming on-line.”

Avacta (LON:AVCT 0.82p/£25.73m)
Avacta, a leading provider of proprietary analytical and diagnostic technology, consumables and re-agents, to the drug development and healthcare sectors, last week announced interim results for the 6 months to 31st January 2012. Revenues for the Company improved by 72 per cent to £1.72m (2011: £1m), and there was a slight narrowing of losses to £0.52m (2011: £0.60m). Significant growth in the revenue was in part due to an improvement in sales of the Company’s Optim 1000 analysing product, which has leapt to an installed base of 27 from 13 last year- each of these systems being sold at c.£100k, and at £240 per test. This is a protein based array system designed to be used at early stage development, eliminating potential failures and thus bringing down wasted development costs. A variation of this product for laboratory standard blood tests is being designed for use in the veterinary space (AX1), which is due to ship later this year potentially providing another boost for the Company. In both cases, the Company believes volume sales will push build-costs down, so we look carefully to see how the market responds to AX1 when it starts shipping. January 2012 saw the Company make an important acquisition, with it now owning the Affimer affinity reagents platform, which it believes has a number of clear advantages over antibodies when producing protein microarrays for drug and biomarker discovery. A very busy period for the Company which could have a very interesting future ahead.

Beacon Hill Resources (LON:BHR 8.65p/£90.95m)
A definitive feasibility study of the Minas Moatize Mine, Mozambique has demonstrated highly compelling economics for the mine expansion, whilst mining of coal has commenced from Upper Chipanga Pit allowing for the production of a high margin hard coking coal product. Continued progress has been made with respect to attaining an allocation on the Sena Rail Line to enable cost reductions and ramp up of production to 4Mtpa Run of Mine coal. A strategic partnership has been finalised with Vitol Group, including marketing agreement and provision of a $20m debt facility to the Group. The revenue is forecasted to increase following the maiden export and shipment of coking coal in mid-2012 and listing a completed on the Australian Securities Exchange (ASX).

Bglobal (LON:BGBL 13.12p/£13.95m)
The smart energy solutions supplier announced a world first this week in the smart metering space having used an unlicensed spectrum in TV white space to read a smart meter. The Company, in conjunction with Neul who are world leaders in ‘white space’ expertise, used the ‘white space’ spectrum, which is the spare frequency of television channels that is no longer in use following the switch over from analogue to digital TV, and the move could mean a major step forwards in the roll out of smart metering technology- meters could in theory be read remotely thereby enabling consumers in remote areas for example to benefit from receiving accurate energy consumption data as well as accurate energy bills. An exciting update from Bglobal who also earlier in the month signed a deal with Energetix, a developer of alternative energy products, to assist them in the process of creating a new energy supply company with the signing of a software licence agreement for the provision of energy data management software with Utilisoft, the subsidiary of Utiligroup which is owned by Bglobal.

Biome Technologies (LON:BIOM 0.16p/£9.4m)
Biome Technologies gave a trading update for the three months ended 31 March 2012. Total Group revenues achieved for the first three months of the year were £4.6m (£5.6m). This is ahead of the final quarter of 2011 and close to the 2011 quarterly average of £4.8m. It anticipates performance to be second half weighted this year and consequently expects sales growth to increase in both divisions as the year progresses. The Group’s cash position at 31 March 2012 was £1.8m (£2.4m). The reduction of £0.6m was due to a mixture of trading performance and further working capital investments. Sales were slower to achieve than expected in the first quarter, although the progress made since Q4 2011 is significant. Biome remains confident of achieving trading objectives and performance for the full year.

Bullabulling Gold (LON:BGL 17p/£49.14m)
The Company which has a 100 per cent interest in the Bullabulling gold project in Western Australia provided a quarterly activity report for the quarter ending 31 March 2012. Significant corporate episodes during the period include the acquisition of GGG Resources plc and the appointment of Brett Lambert as MD of the Company who commenced his new position today. On an operational front, an option agreement to acquire a 100 per cent interest in the Geko Gold Project was signed early in the year, followed by phase II results from the Bullabulling Trend drilling programme (which included new higher grade intersections) and an updated JORC estimate (based on Phase II infill drilling with 3.2 million ounces of gold, of which 2.1 million ounces is in the Indicated category). Initial exploration drilling at Gibraltar totalling 2,805m in 14 holes has also been completed with the first assay results showing new higher grade intersections, and data has also been received from the recently completed 2 D seismic survey that enhances the prospectivity of high grade mineralisation at depth along the Bullabulling Trend.

Ceres Power Holdings (LON:CWR 6.35p/£5.5m)
Ceres provided details of a new commercial partnership for the Itho-Daalderop Group commit technical resources to the Ceres programme for the development of the low cost mass market CHP (Combined Heat and Power) product that will be trialed in 2014 and launched in 2016. Ceres will access Itho-Daalderop’s product value engineering capability, compact and efficient condensing boiler technology and established volume supply chain. Itho-Daalderop will also distribute Ceres fuel cell CHP products into the residential mass market within the Benelux countries, the third largest boiler market in the European Union with over 650,000 units sold annually. This agreement builds on the existing supplier relationship between Ceres and Itho-Daalderop and creates a new partnership that will bring sustainable low cost energy solutions to the residential mass market. Under the new agreement, Ceres grants Itho-Daalderop exclusive distribution rights for the Ceres CHP product in the Benelux countries for a period of four years from initial sales, subject to Itho-Daalderop ordering the minimum volumes of 78,000 units over this period. In addition, Itho-Daalderop will order initial units from Ceres to support field trials in the Netherlands in 2014 and 2015.

China New Energy Ltd (LON:CNEL 4.38p/£12.98m)
The Board of China New Energy Limited yesterday announced that the Company has entered into an Agreement of Intent with a Chinese State-Owned ethanol producer, which has a total of 600,000 tonnes of ethanol production capacity, to convert an existing facility into a more efficient and advanced facility with a capacity of 50,000 tonnes of biofuel per year. Under the Agreement of Intent, CNE will provide technology solutions to modify and convert an existing ethanol production facility which currently converts corn into ethanol into a commercial-scale production facility capable of converting non-edible “cellulosic” plant waste into acetone, butanol and ethanol. The Agreement of Intent was entered into with a wholly owned subsidiary of Jilin Ethanol Industrial Company Limited (JEIC), a State-Owned conglomerate focused on ethanol production with an annual corn processing capacity of 2,000,000 tonnes and an annual ethanol production capacity of 600,000 tonnes. Under the Agreement of Intent, JEIC’s subsidiary has the responsibility to invest 200 million RMB (circa £20m) into the conversion and modification of its existing facility. Should the project proceed in accordance with the Agreement of Intent, CNE could generate up to £20m of revenue by the end of 2013. CNE may, subject to negotiation and funding ability, be able to participate in the Jilin Biofuel Facility on an equity basis through contribution of technology and/or cash funds. Both parties will strive to complete the Project by 31 December 2013. Mr. Weijun Yu, Executive Chairman of CNE, commented: “This facility is a significant component of our plan to advance the Company’s cellulosic ethanol and butanol strategy and maintain a market share of more than 50 per cent in providing technology and engineering solutions to China’s bioethanol and biobutanol industry. The Agreement demonstrates CNE’s fully integrated end-to-end capability, from bioscience research development and deployment through to finalising the capital project”

Cosalt (LON:CSLT 0.82p/£3.34m)
The Financial Services Authority temporarily suspended the securities of Cosalt at the request of the Company pending notification of its Annual financial report for the financial period ended 31 December 2011. Further to the announcement made on 12 April 2012, the Board of Cosalt has agreed with Oval (a Company wholly owned by David Ross) an extension of one month to 31 May 2012 for repayment of the short term £1m credit facility provided by Oval. The Company is continuing discussions with David Ross, and the Group’s pension trustees and its banks to secure a long term financing solution to ensure it has sufficient working capital to sustain the business. Any such solution is expected to involve the issue of new equity share capital. Whilst the Board has continued to progress these discussions, their outcome remains uncertain, and the Group is not yet in a position to publish its Report and Accounts for the 12 months ended 31 December 2011 by 30 April 2012, as required by Disclosure & Transparency Rule 4.1.3. Accordingly the Company has requested that its ordinary shares be suspended from trading pending publication of its audited accounts.

Energetix Group (LON:EGX 24.75p/£20.6m)
Energetix Group which develops and commercialises alternative and efficient energy products, announced that the three DC100 compressed air batteries supplied to the Co-operative Financial Services, have gone live. This system now provides backup power to the data processing facility (Call Centre) and data centre in the prestigious Co-operative Bank Pyramid building in Stockport UK and is the prime backup system for the site. As part of the agreement Energetix can use this installation for marketing; providing a high profile demonstration site for the Pnu Power data centre solution which is both highly reliable and reduces energy costs and CO2 emissions. To date, the Pnu Power product range has been sold in to the telecommunications and grid switching markets with systems in the 2kW to 20kW range. This installation at the Pyramid Building will increase the product range up to 300 kW and will be the first system deployed in the higher powered data centre market.

Goals Soccer Centres (LON:GOAL 128.5p/£ 62.48m)
The Annual General Meeting of Goals Soccer Centres has been held. At the meeting Sir Rodney Walker, Chairman, made the following statement: “Goals opened its first modular build centre in Chester on 18 March 2012. This centre was delivered on budget and on time. The Board will evaluate all aspects of this during the remainder of 2012 with a view to resuming the rollout of more centres from 2013, economic and market conditions allowing”. Sales and profits at Goals USA have continued to grow steadily and the Board believes there is significant potential for further growth. On 2 April 2012 the Company entered an offer period following the announcement by the Company regarding a possible offer for the Company by Ontario Teachers’ Pension Plan. The Company remains in offer discussions and at this time there can be no certainty that an offer will be made for the Company.

GVC Holdings (LON:GVC 162p/ £51m)
GVC Holdings, the B2B and B2C service provider in the online gaming and sports betting markets, has reported a 17 per cent increase in revenues for the year ending December 2011. EBITDA fell by 19 per cent; however, the final dividend was increased by 10 per cent, reflecting the confidence in 2012 trading. Trading so far in 2012 has been encouraging with a 57 per cent increase in average daily revenues, and with the Latin American business showing sports wagers 165 per cent higher than the same period last year.

Hasgrove (LON:HGV 30.5p/£7.36m)
Hasgrove, the digital and communications services group, has reported a 2.4 per cent increase in revenues for the year ending December 2011. However, due to a combination of delays in client spending and overruns on two significant projects, operating margins came under pressure, falling from 10 per cent in 2010 to 4 per cent in 2011. The Company has completed its restructuring including the disposal of Interel, the public affairs and strategic communications business. With the first quarter of 2012 getting off to a good start, the Board has proposed a doubling of the dividend.

Herencia Resources (LON:HER 1.95p/£29.68m)
Herencia, the Chilean mineral exploration and development Company, provided an operational update with final results from the 2011 drilling programme. The Company said that it returned some of the highest zinc, silver and lead grades ever achieved at its Paguanta Project, with its Managing Director Michael Bohm commenting: “These final results from the 2011 drill program have returned some outstanding grades, particularly near surface. Grades of plus 20% zinc, plus 30% lead and plus 1,400g/t silver are a positive way to round out the 2011 program.” Herencia has chosen Golder and Associates to finalise an updated Mineral Resource Estimate which is due for release in late May/June 2012. The Company also announced last week that Michael Bohm is due to step down and will be succeeded by Graeme Sloan who has over 30 years of experience in the resources sector in Australia and North America.

Microsaic Systems (LON:MSYS 32p/£12.38m)
The developer of chip-based scientific instruments announced its preliminary results for the year ended 31 December 2011: revenues of £267,999 for 2011 (£196,737 for 7 months to 31 December 2010). Microsaic Systems launched its first breakthrough product – the Microsaic 3500 MiD – in January 2011 at a major international trade show. Enthusiasm for the product is high and sales leads continue to grow. The Company is in commercial discussions with six major companies who have confirmed a strong interest in OEM sales channels. Successful admission to the AIM market of the London Stock Exchange, and an institutional placing of £4.0m (gross) took place in April 2011 to fund the development and commercialisation of miniaturised mass spectrometer products based on the Company’s patented chip-based technologies. Microsaic Systems has made significant progress during 2011 with cash and cash equivalents of £1,818,319 at 31 December 2011 compared to £674,212 at 31 December 2010. The year 2011 has been a good one for Microsaic Systems, one in which the Company has taken significant steps in its evolution, and recorded a number of important commercial and technological achievements. The Company launched its first major product, began manufacturing and direct product sales, and took substantial steps towards volume sales through OEM channels.

Next Fifteen (LON:NFC 96p/£55.45m)
Next Fifteen, the worldwide digital communications group, announced interim results for the six months to 31 January 2012, which saw revenues increase by 11 per cent to £45.3m (2011: £40.8m), and a 15 per cent increase in Profit before Tax to £4.3m (2011: £3.7m). This is healthy growth for the Company, which unfortunately saw some client losses during the period- HP (US, UK and APAC) Visa in the US and Boots in the UK were among those, whilst the Company also signed a number of new clients including  Foursquare (US), Nokia (US, UK and APAC), Adobe (APAC) to name but a few. Growth has been seen across all key sectors and territories, and the Company is seeing continuing growth in the opportunity pipeline.

Quarto (LON:QRT 140p/£28.62m)
Quarto, an international co-edition book publisher based in London announced its Q1 Interim Management Statement for the 3 months ended 31 March 2012, in which it announced that it is on track to meet expectations. Though the first quarter is typically no more than about one sixth of annual revenues, revenues came in at $34m (2011: $32.6m) whilst operating profit was ahead by 35 per cent at $666,000 (2011: $494,000). For the Trailing Twelve Months to March 31, 2012, revenues rose by 5 per cent to $187.4m and pretax profit was up by 4.6 per cent at $12.2m. Interestingly, post period end the Company has seen the welcoming of Mr Marcus Leaver, 42, who joins the group in the second quarter as Chief Operating Officer and who is expected to take over the role of CEO next year.

ReNeuron Group (LON:RENE 3.88p/£29.35m)
On 3 April 2012, the Board of ReNeuron Group announced the details of a Placing and Open Offer where the Company had already raised gross proceeds of approximately £5.4m by means of a Placing at 4p per share and in addition they provided all qualifying shareholders with the opportunity to subscribe, also at 4p per share. The Open Offer has now closed in accordance with its terms, representing a take-up of approximately 17.43 per cent of the total Open Offer Shares being offered and providing gross proceeds of approximately £0.7m.

Sirius Minerals (LON:SXX 19.5p/£261m)
Sirius Minerals, the potash development group, has announced the completion of the Detailed Scoping Study (DSS) for the Company’s 100 per cent owned York Potash Project. The DSS has confirmed the technical and economic viability of the project, and the management believes it has potential to be the largest low cost Sulphate of Potash (SOP) mine in the world and towards the bottom of the global potash cost curve after accounting for the potential value of the by-products produced. The phase 1 start-up capital cost has been estimated at US$2.7bn for mining and processing of 5m tpa (tonnes per annum) of Polyhalite ore to produce 1.4m tpa of SOP. The next milestone for the Project is to deliver the maiden JORC resource statement at the end of May 2012.

Synchronica (LON:SYNC 12.88p/£20.43m)
On 7 March 2012, the Board of Myriad AG announced the terms of its recommended increased share offer for the entire issued and to be issued share capital of Synchronica. Under the terms of the Offer, shareholders will receive 4.83 New Myriad Shares for every 100 Synchronica Shares. Myriad announced that as at 30 April 2012, the third closing date of the Offer, it had received valid acceptances under the Offer in respect of approximately 90.34 per cent. of Synchronica. The Offer has been extended to 1.00 p.m. London time (corresponding to 8.00 a.m. Toronto time) on 15 May 2012. As set out in the Offer Document, Myriad confirms that it intends to exercise its rights to acquire compulsorily the remaining Synchronica Shares on the same terms as the Offer. It is anticipated that the last day of dealings in Synchronica Shares will be 15 May 2012 and that such cancellation will take effect at 7.00 a.m. on 16 May 2012.

Tarsus (LON:TRS 146.75p/£139.44m)
Tarsus Group, the international business-to-business media group, has conditionally agreed to acquire 50 per cent of the China International Automotive Aftermarket Industry and Tuning (Guangzhou) Trade Fair (GZ Auto) and other associated business assets. This JV will provide Tarsus with exposure to the rapidly growing automotive industry in China, which overtook the US in 2009 as the largest consumer of new automobiles, and fits neatly into the Company’s strategy of generating half its revenues from emerging markets in 2013.The JV and the exclusive GZ Auto-related support and services fee will be for a maximum sum of RMB112m (£11.2m) payable in cash. The JV is subject to regulatory approval in China and certain other conditions, and completion is expected within the next three months. Upon the agreement becoming unconditional, Tarsus will pay approximately RMB72m (£7.2m) in 2012, with the remaining sum payable in 2013 and 2014, subject to the achievement of certain profit targets related to future performance. The transaction will be funded from the Company’s existing cash resources and available bank facilities.

Tower Resources (LON:TRP 2.82p/£40.3m)
Tower Resources, the oil exploration company, announced the appointment of Philip Swatman as an independent, non-executive director with immediate effect. In addition to serving as Tower’s Senior Independent Director, he will join the Company’s Remuneration Committee and (from May 2012) will chair the Company’s Audit Committee. Under the terms of his contract with the Company, Mr Swatman has been granted 1.5m share options at an exercise price of 2.85p per share. The Company also announces that non-executive Director, Mark Savage has informed the Company of his intention to resign from the Board once the 2011 accounts and annual report are issued and before the upcoming AGM, due to the pressure of other commitments. Mark currently chairs the Audit Committee.

ValiRx  (LON:VAL 0.46p/£5.79m)*
A life science company with a focus on cancer diagnostics and therapeutics for personalised medicine last week announced its final results for the year ended 31 December 2011. Revenue for the year increased by 157 per cent to £455,000 (2010: £177,000). Significant advances were seen in the development and progress of both therapeutic compounds, VAL101 and VAL201, in their respective pre-clinical and translational programmes and towards in-human Phase I clinical trials.  The acquisition from Pharmatest Services Oy of Oulu, Finland, of its biomarkers business unit, patent families and applications and related IP, by subsidiary, ValiRx Finland OY (ValiFinn) was completed. This provides the Company with exposure to both the key and increasingly exciting biomarkers market and to new revenue streams. VAL received $1.1m proceeds from the sale of Belgian subsidiary diagnostic development business, ValiBIO S.A. to Singapore Volition Pte. Ltd. The transaction, which was completed in the 2010 financial year, sees ValiRx satisfactorily exit from its investment whilst retaining a modest shareholding in Volition, whilst also retaining certain rights to use the technologies sold for use in ValiRx’s therapeutic programmes and products. During the period, ValiRx was pleased to have secured several developmental collaborative agreements, with prestigious partners including Oxford University, Imperial College, and Physiomics plc (AIM: PYC).

Verona Pharma (LON:VRP 4.4p/£13.52m)
Verona Pharma, the Company focused on discovering and developing first-in-class drugs for respiratory disease, today announced the appointment of Dr Sven Jan-Anders Karlsson (aged 57) as Chief Executive Officer with effect from 1 June 2012. Dr Karlsson has broad pharmaceutical and biotechnology R&D and corporate experience. He was formerly the CEO at S*BIO, a Singapore and US based biotechnology company focused on the discovery and development of novel small molecule anti-cancer drugs. Before S*BIO, Dr Karlsson was Executive Vice President of Pharma Global Research at Bayer Healthcare after holding senior leadership positions at Rhone-Poulenc Rorer (now Sanofi) and Astra (now
AstraZeneca). The current CEO, Michael Walker, was one of the co-founders of Verona Pharma. Michael will work closely with Jan-Anders to ensure a successful handover of the CEO position and will continue to serve the Company as a Senior Scientific Advisor to the Board.

*A corporate client of Hybridan LLP

The Hybridan Small Cap Wrap is a weekly review of some of the most interesting small cap stories of the past week.  Our review will usually be of those companies whose market capitalisations are less than £50m although we may occasionally cover larger companies.