Amphion Innovations (LON:AMP), which develops medical and technology businesses, told investors today it had secured further loan financing from its chairman James Macaleer.

The company has secured additional unsecured loan financing of US$500,000 from Macaleer, who is interested in 17.43 per cent stake in the company, it said in a stock exchange statement.

The loan is repayable on November 4 this year, and carries interest at 7 per cent per year.

On May 1 this year, the company revealed that a Markman ruling was issued in a Texas patent case involving Axcess International - one of Amphion’s partner companies.

A Markman is a pre-trial hearing in the US District Court, in this instance the Northern District of Texas, Dallas Division. 

It is held so a judge can examine evidence from both sides on the appropriate meanings of relevant key words used in a patent claim.

Axcess is alleging that a firm called Savi Technology infringed its patent on a method of improving the range and sensitivity of radio tags.

The judge essentially upheld the validity of Axcess’ claim and set down the case for trial on November 5.

Amphion described the ruling can as “favourable”, though it cautioned that this does not automatically mean that Axcess will win at trial. 

A Markman is a pretrial hearing in the US District Court, in this instance the Northern District of Texas, Dallas Division. 

It is held so a judge can examine evidence from both sides on the appropriate meanings of relevant key words used in a patent claim.

Axcess is alleging that a firm called Savi Technology infringed its patent on a method of improving the range and sensitivity of radio tags.

The judge essentially upheld the validity of Axcess’ claim and set down the case for trial on November 5.

Amphion described the ruling can as “favourable”, though it cautioned that this does not automatically mean that Axcess will win at trial.  

Axcess chief executive Allan Griebenow said: "Having reached this important milestone, we now look forward to the trial in early November.  We encourage interested parties to read the order.

“Axcess remains fully committed to the protection of this patent and others in our intellectual property portfolio."

Amphion owns 14 per cent of Axcess and holds US$1.8 million of debt.

A copy of the court's ruling can be downloaded from www.axcessinc.com.

Axcess has a portfolio of patents, of which 11 have been issued and 2 are still subject to litigation against a Lockheed Martin Corp subsidiary.

Axcess filed a lawsuit in May 2010 against Savi Technology Inc alleging infringement of 2 US Patents, one titled "High Sensitivity Demodulator For A Radio Tag And Method" and the other "Dual Frequency Radio Tag For A Radio Frequency Identification System". 

The trial is set for the first quarter of 2013 and hearing is scheduled for April 9 2012.

The credit agreement provides for the funding of a patent licensing programme to begin in 2012 designed to provide additional revenue to the company based on the 11 patents in its portfolio. 

The agreement further provides the potential to restructure short-term debt, pay accrued legal bills related to the various patent litigation activities, and to provide funding for overhead and administrative operations. 

The returns to the investors participating in the credit agreement will, in most circumstances, accrue mainly from the patent litigation and patent licensing programmes.

Axcess chief executive Allan Griebenow said: “This credit facility is an important step in the prosecution of our current infringement actions with Savi, which we believe will create potential licensing opportunities and a financial platform in support of our continuing operations."
 
Amphion has a 13.8 per cent stake in Axcess, which excludes approximately US$1.8 million in debt, most of which is convertible into common stock.

Interim results from Amphion Innovations (LON:AMP) show that the technology commercialisation firm moved into the black during the first six months of the year on increased revenues.

The firm’s revenues for the half-year period to June 30 were US$2.6 million, compared with US$1.6 million in H1 2010, while its operating loss was reduced to US$130,244 from US$1.1 million. But gains on investments as well as interest income meant that the firm actually posted a profit on the pre-tax line of £270,403 (H1 2010: £2.7 million).

Amphion’s DataTern intellectual property-licensing subsidiary, with the help of law firm McCarter & English, continues to make progress with its patent-enforcement activities against a number of companies regarding its next-generation business software: ObjectSpark.  DataTern has taken “concrete steps” to combat allegations by Microsoft and SAP and to bolster its own patent rights. The first of these was a filing of a motion in New York to dismiss, or at least stay these actions, while DataTern continues litigations in Texas against users of the patented technology.

Meanwhile, DataTern has filed an application with the US Patent and Trademark Office to re-examine the business’s ‘402 patent. Under this procedure a patent may be maintained as it is, expanded, reduced or even rendered invalid, but Amphion said that DataTern’s confidence in the validity of the patent justifies exposing it to re-examination.

DataTern saw a substantial increase in income from its licensing activities during the first half, with its revenues increasing to US$2 million (H1 2010: $732,050).

Among Amphion’s ‘Partner Companies’ Kromek, its digital X-ray business, continues to make progress and recently received additional orders for its GR1 instrument, which is being used in Japan for the decommissioning of the Fukushima nuclear power plant. Meanwhile, Motif BioSciences is progressing towards the consummation of an “important and exciting” partnership with one of the leading Indian pharmaceutical services companies and other Partner Companies are also doing well, the firm said.

“We are pleased to be reporting an improved set of results for the company,” said Richard Morgan, Amphion’s chairman and chief executive officer. “Alongside the progress being made by each of the Partner Companies, we believe DataTern is starting to benefit from the support of our new IP litigation partner and as a result the potential of this business has increased substantially.  Improved performance by DataTern should in due course lead to an improvement in Amphion's results, with a positive impact on Amphion's financial condition and its ability to fund and grow its Partner Companies.”

DataTern has also been making progress with its patent disputes with a number of companies regarding its next-generation business software.

Amphion expects to report revenue of US$2.6 million for the six months to 30 June, compared to US$1.6 million for H1 2010. The firm said the increase in revenue is mainly due to the improved performance of DataTern, which increased revenue from US$700,000 during H1 2010 to US£$2 million in H1 2011.

Amphion’s profitability benefited from this increase in revenue, with its operating loss reducing to US$130,000 from US$1.1 million in H1 2010. Admin expenses were also reduced, to US$1.9 million from US$2.4 million in H1 2010.

Meanwhile, the firm said it expected to have a net profit of US$190,000 for H1 2011, compared to a loss of US$2.9 million for H1 2010.

The firm's net asset value stood at US$29.6 million (some 22 US cents per share) at 30 June, up from US$29.2 million six months earlier.

Amphion also reported that its DataTern subsidiary has taken “concrete steps” to combat actions filed against it by Microsoft and SAP in April concerning its ‘402 and ‘502 patents. The two business software firms assert that these patents are invalid and not infringed by companies that DataTern has itself taken action against.

DataTern has retained law firm McCarter & English, and has filed a motion in New York to dismiss, or at least stay, the actions by Microsoft and SAP, while it also intends to file an application in the US Patent and Trademark Office to re-examine the ‘402 patent. The ‘502 patent has already successfully completed re-examination by the USPTO with all 18 original claims intact and 26 new claims added.

DataTern’s patent-protected offerings include ObjectSpark Technologies – which can be used across a range of industries to allow business users to develop their own customised data service layers. The business provides non-exclusive licences for its technologies on what it describes as reasonable and non-discriminatory terms.

In January this year, DataTern announced it had settled five patent infringement lawsuits involving the ‘402 and ‘502 patents, generating total revenues of US$1.125 million.

Amphion said that the market for financing of private emerging technology and med-tech companies remains “extremely challenging”.  However, it said that provided its IP programme continues to make progress its need for capital at the parent company level should remain relatively small.

During the last 10 trading days, Amphion’s shares have more than doubled their price from 2.12 pence each to 4.25 pence.

Amphion expects to announce its complete interim results on 23 September.

Directors at Amphion Innovations (LON:AMP) are continuing to acquire shares in the business.

CEO Richard Morgan remains a believer in the technology business builder, buying 400,000 more shares at 2.375 pence each in Amphion on Wednesday. Morgan’s total stake in the firm is now more than 18 per cent since he holds 24,192,499 shares.

Meanwhile, today the firm confirmed that directors James Macaleer and Gerard Moufflet continue to be compensated in shares. Amphion issued 727,107 shares to the two directors: Macaleer, who received 577,107 new shares, saw his total shareholding increase to 23,318,019 shares; Moufflet’s holding grew to 450,000 shares after receiving 150,000 new shares.

Fellow director Anthony Henfrey waived his fees for Q4 2010 and Q1 and Q2 2011.

Amphion Innovations starts and builds companies based on proprietary (patented) technologies developed by universities and academic institutions in the UK and US. Each one of the companies the firm has chosen to invest in and develop was carefully selected to address established markets worth in excess of US$1 billion each, and Amphion also believes that many of them can achieve exit values of more than US$100 million each.

The firm has struggled from difficulties in raising capital for its partner companies ever since the financial crisis began a few years ago. But Amphion’s recent annual results, released at the end of June, reported that investee company Kromek – a UK business developing digital X-ray systems for applications in security, industrial production, medicine and defence – is continuing to enjoy success in raising capital and continuing to make good progress. 

Amphion Innovations (LON:AMP) said the recovery of its intellectual property licensing activities seen in the second half of last year has continued into 2011.

It also revealed it is looking at ways of “extracting value” from the IP in its DataTern business as it unveiled its annual results.

They showed that net asset value per fell to 14 pence a share in the 12 months ended December 31 from 26 pence a year earlier. Revenues fell 53 per cent to US$4.1 million and the group booked a US$1.9 million loss.

Amphion, which invests in growth companies in the medical and technology sectors, said the progress of its partner companies was affected by difficulties raising outside capital.

But a restructuring of DataTern’s intellectual property licensing activities has enhanced gross margins and improved controls.

Seven new licence deals were concluded in the second half bringing the total to 28 by the end of December.

Chief executive Richard Morgan said: "The recovery of our IP licensing activities in the second half of the year has continued into the current year.  

“This programme has become a central part of Amphion's business and the key source of revenue and cash flow, allowing the Group to continue to provide some support for our partner companies, despite the difficult overall funding environment.  

“We continue to explore new ways of extracting value from the intellectual property assets in DataTern and elsewhere in the group.”  

The news sent the stock soaring 50 per cent in a frenetic opening hour of trade. However, Amphion eased back a little to settle at 6.25 pence at 10.50am, up 1.75 pence on the day.  

The trigger for today’s movement was an update on litigation. Amphion revealed this morning that its software arm DataTern has settled five patent infringements since September for a total of US$1.125 million.

The medical and technology specialist also reported that DataTern sold 10 licences last year generating US$2.75 million, of which US$2.025 million came in the second half.

Together with proceeds from the licensing programme due this year and the company’s new debt facility Amphion now has sufficient cash to cover its working capital requirements.

Chief executive Richard Morgan said: "We are confident in the quality of the patents owned by DataTern and believe that a very large number of corporations are using this technology and infringing our patents.  

“Our primary goal remains to licence this technology on terms that are fair to the users and in the process to obtain an adequate return on the investment made in the technology.  We expect to see additional settlements over the next few months, and beyond. 

"Following the restructuring of DataTern, Amphion is able to retain a larger share of each settlement and now that the programme is getting back on track we believe that in the year ahead cash flow from licensing agreements should once again cover the direct operating costs of Amphion, including interest on the Convertible Promissory Note. 

"Since inception, DataTern has signed 29 licenses with companies from the financial, credit card, retail, leisure, healthcare, airline, e-commerce, and software industries for a total of about $16 million."

Amphion Innovations (LON:AMP) revealed this morning that its software arm DataTern has settled five patent infringements since September for a total of US$1.125 million.

The medical and technology specialist also reported that DataTern sold 10 licences last year generating US$2.75 million, of which US$2.025 million came in the second half.

Together with proceeds from the licensing programme due this year and the company’s new debt facility Amphion now has sufficient cash to cover its working capital requirements.

Chief executive Richard Morgan said: "We are confident in the quality of the patents owned by DataTern and believe that a very large number of corporations are using this technology and infringing our patents.  

“Our primary goal remains to licence this technology on terms that are fair to the users and in the process to obtain an adequate return on the investment made in the technology.  We expect to see additional settlements over the next few months, and beyond. 

"Following the restructuring of DataTern, Amphion is able to retain a larger share of each settlement and now that the programme is getting back on track we believe that in the year ahead cash flow from licensing agreements should once again cover the direct operating costs of Amphion, including interest on the Convertible Promissory Note. 

"Since inception, DataTern has signed 29 licenses with companies from the financial, credit card, retail, leisure, healthcare, airline, e-commerce, and software industries for a total of about $16 million."

The loan is repayable on 31 January 2012, and it carries 5 percent interest per year.  

Macaleer has a 17.12 percent stake in Amphion.

After being under pressure for a few weeks the stock had something of a relief rally yesterday. The stock gained around 40 percent to an intraday high of 5.125 pence, before closing the session at 4.75 pence.

Amphion nurtures small, high growth companies in the medical and technology sectors through to float.

It has significant shareholdings in eight partner companies and two specialised entities, developing proven technologies targeting substantial commercial marketplaces, each in excess of US$1 billion.  

Each partner company is chosen with the goal of achieving an exit valuation in excess of US$100 million.