TIDMMDST 
 
RNS Number : 4321X 
Medicsight Plc 
13 August 2009 
 

+-------------------------------------+-------------------------------------+ 
| Press release                       |                      14 August 2009 | 
+-------------------------------------+-------------------------------------+ 
Medicsight PLC 
("Medicsight" or "the Group") 
Interim Results 
for the six months ended 30 June 2009 
 
 
Medicsight PLC, industry leader in the development of Computer-Aided Detection 
(CAD) and image analysis software to assist in the early detection and diagnosis 
of disease, is pleased to announce its interim results for the six months ended 
30 June 2009. 
Highlights 
+-----------------------+--------------------------------------------------------------------+ 
|                   *   | Responded to the US Food & Drug Administration's (FDA) Additional  | 
|                       | Information request letter in March 2009.                          | 
+-----------------------+--------------------------------------------------------------------+ 
|                   *   | Launched ColonCAD(TM) 4.0 which is CE Marked and has received      | 
|                       | approval from the Therapeutic Products Directorate of Health       | 
|                       | Canada.                                                            | 
+-----------------------+--------------------------------------------------------------------+ 
|                   *   | Launched MedicRead(TM) 3.0 Colon in June, available in Europe as   | 
|                       | an online CTC solution.                                            | 
+-----------------------+--------------------------------------------------------------------+ 
|                   *   | Global software licence and distribution agreement with Alma IT    | 
|                       | Systems.                                                           | 
+-----------------------+--------------------------------------------------------------------+ 
|                   *   | Streamlined the business to reduce costs and conserve cash.        | 
+-----------------------+--------------------------------------------------------------------+ 
|                   *   | Group cash balance at 30 June 2009 of GBP13,746,000.               | 
+-----------------------+--------------------------------------------------------------------+ 
 
 
Allan Rowley, Chief Executive of Medicsight PLC commented: "Medicsight has 
expanded its product portfolio with the launch of ColonCAD 4.0 and MedicRead 3.0 
Colon. Both products have significant improvements over previous versions and 
have been CE marked for use in Europe. ColonCAD 4.0 has also been approved in 
Canada. The Group completed a cost reduction program to streamline operating 
costs and conserve its cash position. Medicsight is well positioned for the 
second half of 2009 and beyond." 
 
 
For further information, please contact: 
+-------------------------------------------+----------------------------+ 
| Medicsight PLC                            |                            | 
+-------------------------------------------+----------------------------+ 
| Allan Rowley                              |        +44 (0)20 7605 7950 | 
+-------------------------------------------+----------------------------+ 
|                                           |        www.medicsight.com  | 
+-------------------------------------------+----------------------------+ 
| Daniel Stewart & Company PLC              |                            | 
+-------------------------------------------+----------------------------+ 
| Simon Leathers / Charlotte Stranner       |        +44 (0)20 7776 6550 | 
+-------------------------------------------+----------------------------+ 
|                                           |                            | 
+-------------------------------------------+----------------------------+ 
 
 
Media enquiries: 
+-------------------------------------------+----------------------------+ 
| Abchurch                                  |                            | 
+-------------------------------------------+----------------------------+ 
| Heather Salmond                           |  Tel: +44 (0) 20 7398 7700 | 
| heather.salmond@abchurch-group.com        |  Mob: +44 (0) 7855 018 606 | 
+-------------------------------------------+----------------------------+ 
|                                           |                            | 
+-------------------------------------------+----------------------------+ 
| Stephanie Cuthbert                        |  Tel: +44 (0) 20 7398 7700 | 
| stephanie.cuthbert@abchurch-group.com     |   Mob: +44 (0) 7843 080947 | 
+-------------------------------------------+----------------------------+ 
|                                           |    www.abchurch-group.com  | 
+-------------------------------------------+----------------------------+ 
 
 
  Chief Executive's Review 
I am pleased to report Medicsight's interim results for the six months ended 30 
June 2009. 
 
 
Commercial Partnerships 
In June 2009 Medicsight signed a non-exclusive software license and distribution 
agreement with Alma IT Systems (Alma), for the integration of Medicsight's 
ColonCAD API 4.0 software into Alma's 3D visualisation workstation.Alma is one 
of Spain's market leaders in medical imaging technology with a large and 
well-established installed base of radiology customers. We expect sales to 
commence before the end of the year. 
 
 
Product Development & Regulatory Approvals 
The Company submitted a 510(k) application to the US Food & Drug Administration 
(FDA) for ColonCAD 3.1 in November 2008. In December 2008, Medicsight received 
an Additional Information request letter and, after close collaboration with its 
FDA advisers, sent a comprehensive response in March 2009. We are currently 
awaiting feedback from the FDA on the status of our application. 
 
 
In November 2007 the Company submitted an application for MedicRead 1.0 to the 
Ministry of Health, Labour and Welfare (MHLW) of Japan. We recently had a 
meeting with the MHLW authorities, and are in the process of responding to their 
queries, and await their feedback. 
 
 
Medicsight's product development program continues on track. In the six months 
ended 30 June 2009 the Group released ColonCAD 4.0, the most accurate version of 
the Medicsight ColonCAD to date. The updated software demonstrates a 50% 
reduction in the number of false positive CAD markings per patient case, whilst 
maintaining high levels of sensitivity for the detection of colorectal polyps. 
ColonCAD 4.0 has been granted regulatory approval in Europe (CE marked) and also 
from the Therapeutic Products Directorate of Health Canada. 
 
 
The Group also launched MedicRead 3.0 Colon, Medicsight's CAD-enabled 
CT colonography reviewing tool, which is available online via the Medicsight 
website (www.medicsight.com).  MedicRead 3.0 Colon has been CE marked, and other 
regulatory approvals are in progress. 
As part of a CTC scan examination, the patient's colon has to be distended with 
gas or air to enable accurate imaging diagnosis. Following market demand, 
Medicsight has started development of a CO2 insufflation device, MedicCO2lon, 
for this purpose. The Group is also exploring new image processing and analysis 
tools for optical colonoscopy.  Both of these new applications will bolster the 
existing CTC portfolio. 
 
 
Clinical Progress 
Doctors Perry Pickhardt and David Kim (from the University of Wisconsin Medical 
School, in the United States) are undertaking a retrospective comparative 
analysis of Medicsight's ColonCAD 4.0 performance against the performance of 
expert radiologists interpreting CTC image data. Early results from this study 
of more than 3,000 patient datasets show excellent ColonCAD performance and more 
detailed study results are expected to be presented later in 2009. 
 
 
Clinical research incorporating Medicsight's ColonCAD was published in the 
peer-reviewed American Journal of Roentgenology in June 2009. The Group, in 
collaboration with Dr. Stuart Taylor  (of University College Hospital, London) 
also received notice in July of acceptance of a second peer-reviewed paper for 
publication in Radiology journal. 
 
 
Both these studies demonstrate the positive benefit of Medicsight's ColonCAD to 
radiologists when interpreting CT colonography datasets. 
 
 
Financial Review 
Revenue for the six months ended 30 June 2009 was GBP67,000 (2008: GBP44,000). 
In line with management's expectations the Group incurred total operating costs 
of GBP4,913,000 in the six months to June 30 2009 (2008: GBP4,892,000). Research 
and development costs were higher in the period due to a renegotiation of terms 
with a development partner. 
 
 
Following the streamlining of business operations and reduction of headcount 
earlier in the year, Medicsight remains in a strong financial position with cash 
and cash equivalents of GBP13,746,000 and expects future operating costs to be 
significantly lower as we realise the full benefit of the cost reduction 
program. 
 
 
Conclusion 
With significant financial resources at the Group's disposal Medicsight 
continues to make progress on all fronts and is well positioned for the second 
half of 2009 and beyond. 
 
 
+------------------------------------+ 
| Allan Rowley                       | 
+------------------------------------+ 
| Chief Executive Officer            | 
+------------------------------------+ 
|                                    | 
+------------------------------------+ 
| 14 August 2009                     | 
+------------------------------------+ 
  INTERIM FINANCIAL STATEMENTS 
CONSOLIDATED INCOME STATEMENTS 
 
 
 
 
+-----------------------------------+--+----------------+--------------+----------------+ 
|                                   |  | 6 months ended |     6 months |     Year ended | 
|                                   |  |   30 June 2009 |        ended |    31 December | 
|                                   |  |                | 30 June 2008 |           2008 | 
+-----------------------------------+--+----------------+--------------+----------------+ 
|                                   |  |    (unaudited) |  (unaudited) |      (audited) | 
+-----------------------------------+--+----------------+--------------+----------------+ 
|                                   |  |         GBP000 |       GBP000 |         GBP000 | 
+-----------------------------------+--+----------------+--------------+----------------+ 
|                                   |  |                |              |                | 
+-----------------------------------+--+----------------+--------------+----------------+ 
| Revenue                           |  |                |              |                | 
+-----------------------------------+--+----------------+--------------+----------------+ 
| License and support fees          |  |             67 | 44           |            103 | 
+-----------------------------------+--+----------------+--------------+----------------+ 
| Cost of sales                     |  |              - |            - |              - | 
+-----------------------------------+--+----------------+--------------+----------------+ 
|                                   |  |       ________ |     ________ |       ________ | 
+-----------------------------------+--+----------------+--------------+----------------+ 
| Gross profit                      |  |             67 |           44 |            103 | 
+-----------------------------------+--+----------------+--------------+----------------+ 
|                                   |  |       ________ |     ________ |       ________ | 
+-----------------------------------+--+----------------+--------------+----------------+ 
|                                   |  |                |              |                | 
+-----------------------------------+--+----------------+--------------+----------------+ 
| Sales and marketing expense       |  |          (724) |        (696) |        (2,095) | 
+-----------------------------------+--+----------------+--------------+----------------+ 
| Administrative expenses           |  |        (2,970) |      (3,005) |        (5,839) | 
+-----------------------------------+--+----------------+--------------+----------------+ 
| Research and development          |  |          (860) |        (574) |        (1,822) | 
+-----------------------------------+--+----------------+--------------+----------------+ 
| Share-based expense               |  |          (359) |        (617) |        (1,253) | 
+-----------------------------------+--+----------------+--------------+----------------+ 
|                                   |  |       ________ |     ________ |       ________ | 
+-----------------------------------+--+----------------+--------------+----------------+ 
| Operating loss                    |  |        (4,846) |      (4,848) |       (10,906) | 
+-----------------------------------+--+----------------+--------------+----------------+ 
|                                   |  |       ________ |     ________ |       ________ | 
+-----------------------------------+--+----------------+--------------+----------------+ 
|                                   |  |                |              |                | 
+-----------------------------------+--+----------------+--------------+----------------+ 
| Finance income                    |  |             37 |          371 |          2,664 | 
+-----------------------------------+--+----------------+--------------+----------------+ 
|                                   |  |       ________ |     ________ |       ________ | 
+-----------------------------------+--+----------------+--------------+----------------+ 
| Loss before taxation              |  |        (4,809) |      (4,477) |        (8,242) | 
+-----------------------------------+--+----------------+--------------+----------------+ 
|                                   |  |                |              |                | 
+-----------------------------------+--+----------------+--------------+----------------+ 
| Taxation                          |  |              - |            - |              - | 
+-----------------------------------+--+----------------+--------------+----------------+ 
|                                   |  |       ________ |     ________ |       ________ | 
+-----------------------------------+--+----------------+--------------+----------------+ 
| Loss on ordinary activities after |  |        (4,809) |      (4,477) |        (8,242) | 
| taxation attributable to equity   |  |                |              |                | 
| holders of the parent             |  |                |              |                | 
+-----------------------------------+--+----------------+--------------+----------------+ 
|                                   |  |       ________ |     ________ |       ________ | 
+-----------------------------------+--+----------------+--------------+----------------+ 
|                                   |  |                |              |                | 
+-----------------------------------+--+----------------+--------------+----------------+ 
| Loss per share - basic and        |  |           (3p) |         (3p) |           (5p) | 
| diluted                           |  |                |              |                | 
+-----------------------------------+--+----------------+--------------+----------------+ 
|                                   |  |       ________ |     ________ |       ________ | 
+-----------------------------------+--+----------------+--------------+----------------+ 
  INTERIM FINANCIAL STATEMENTS 
CONSOLIDATED BALANCE SHEETS 
 
 
 
 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |  30 June 2009 |  30 June 2008 |    31 December | 
|                                  |  |               |               |           2008 | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |   (unaudited) |   (unaudited) |      (audited) | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |        GBP000 |        GBP000 |         GBP000 | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| ASSETS                           |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Non-current assets               |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Property, plant and equipment    |  |           180 |           221 |            273 | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |      ________ |      ________ |       ________ | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |           180 |           221 |            273 | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |      ________ |      ________ |       ________ | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Current assets                   |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Trade and other receivables      |  |           890 |         1,033 |          1,298 | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Marketable securities and        |  |             - |         1,076 |              - | 
| treasury deposits                |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Cash and cash equivalents        |  |        13,746 |        20,314 |         18,387 | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |      ________ |      ________ |       ________ | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |        14,636 |        22,423 |         19,685 | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |      ________ |      ________ |       ________ | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Total assets                     |  |        14,816 |        22,644 |         19,958 | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |      ________ |      ________ |       ________ | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| LIABILITIES                      |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Current liabilities              |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Trade and other payables         |  |       (1,791) |       (2,007) |        (2,483) | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |      ________ |      ________ |       ________ | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Total liabilities                |  |       (1,791) |       (2,007) |        (2,483) | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |      ________ |      ________ |       ________ | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Net assets                       |  |        13,025 |        20,637 |         17,475 | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |      ________ |      ________ |       ________ | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| SHAREHOLDERS' EQUITY             |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Ordinary shares                  |  |         7,776 |         7,776 |          7,776 | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Share premium                    |  |        57,306 |        57,306 |         57,306 | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Share-based payment reserve      |  |         2,848 |         1,853 |          2,489 | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Currency translation reserve     |  |             - |            33 |              - | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Retained earnings                |  |      (54,905) |      (46,331) |       (50,096) | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |      ________ |      ________ |       ________ | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Equity attributable to equity    |  |        13,025 |        20,637 |         17,475 | 
| holders of the parent            |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |      ________ |      ________ |       ________ | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
 
 
  INTERIM FINANCIAL STATEMENTS 
CONSOLIDATED CASH FLOW STATEMENTS 
 
 
 
 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |      6 months |      6 months |     Year ended | 
|                                  |  |         ended |         ended |    31 December | 
|                                  |  |  30 June 2009 |  30 June 2008 |           2008 | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |   (unaudited) |   (unaudited) |      (audited) | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |        GBP000 |        GBP000 |         GBP000 | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Cash flows from operating        |  |               |               |                | 
| activities                       |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Cash used in operations          |  |       (4,700) |       (4,157) |        (9,437) | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Interest received                |  |             - |           371 |              - | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |      ________ |      ________ |       ________ | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Net cash from operating          |  |       (4,700) |       (3,786) |        (9,437) | 
| activities                       |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |      ________ |      ________ |       ________ | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Cash flows from investing        |  |               |               |                | 
| activities                       |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Purchase of equipment            |  |           (7) |         (106) |          (207) | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Interest received                |  |            37 |             - |          2,672 | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Purchase of marketable           |  |             - |         (574) |          (890) | 
| securities                       |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Sale of marketable securities    |  |             - |             - |          1,030 | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Investment in treasury deposits  |  |             - |         (502) |              - | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |      ________ |      ________ |       ________ | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Net cash used in investing       |  |            30 |       (1,182) |          2,605 | 
| activities                       |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |      ________ |      ________ |       ________ | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Effects of exchange rate changes |  |            29 |            36 |           (27) | 
|                                  |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |      ________ |      ________ |       ________ | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Net (decrease) in cash and       |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| cash equivalents                 |  |       (4,641) |       (4,932) |        (6,859) | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Cash and cash equivalents at 1   |  |        18,387 |        25,246 |         25,246 | 
| January                          |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
| Cash and cash equivalents        |  |      ________ |      ________ |       ________ | 
+----------------------------------+--+---------------+---------------+----------------+ 
| at period end                    |  |        13,746 |        20,314 |         18,387 | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |      ________ |      ________ |       ________ | 
+----------------------------------+--+---------------+---------------+----------------+ 
|                                  |  |               |               |                | 
+----------------------------------+--+---------------+---------------+----------------+ 
 
 
  INTERIM FINANCIAL STATEMENTS 
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY 
 
 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
|                            |          |    Share |    Share | Share-based |    Currency | Retained |    Total | 
|                            |          |  Capital |  Premium |     payment | translation | earnings |          | 
|                            |          |          |          |     reserve |     reserve |          |   Equity | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
|                            |          |   GBP000 |   GBP000 |      GBP000 |      GBP000 |   GBP000 |   GBP000 | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
|                            |          |          |          |             |             |          |          | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
| At 1 January 2008          |          |    7,776 |   57,306 |       1,236 |         (6) | (41,854) |   24,458 | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
| Loss for the period        |          |        - |        - |           - |           - |  (4,477) |  (4,477) | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
| Net exchange adjustments   |          |        - |        - |           - |          39 |        - |       39 | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
|                            |          | ________ | ________ |    ________ |    ________ | ________ | ________ | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
| Total recognised income    |          |        - |        - |           - |          39 |  (4,477) |  (4,438) | 
| and expense                |          |          |          |             |             |          |          | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
|                            |          |          |          |             |             |          |          | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
| Share-based payments       |          |        - |        - |         617 |           - |        - |      617 | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
|                            |          | ________ | ________ |    ________ |    ________ | ________ | ________ | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
| At 30 June 2008            |          |    7,776 |   57,306 |       1,853 |          33 | (46,331) |   20,637 | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
| Loss for the period        |          |        - |        - |           - |           - |  (3,765) |  (3,765) | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
| Net exchange adjustments   |          |        - |        - |           - |        (33) |        - |     (33) | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
|                            |          | ________ | ________ |    ________ |    ________ | ________ | ________ | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
| Total recognised income    |          |        - |        - |           - |        (33) |  (3,765) |  (3,798) | 
| and expense                |          |          |          |             |             |          |          | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
|                            |          |          |          |             |             |          |          | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
| Share-based payments       |          |        - |        - |         636 |           - |        - |      636 | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
|                            |          | ________ | ________ |    ________ |    ________ | ________ | ________ | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
| At 31 December 2008        |          |    7,776 |   57,306 |       2,489 |           - | (50,096) |   17,475 | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
| Loss for the period        |          |        - |        - |           - |           - |  (4,809) |  (4,809) | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
| Net exchange adjustments   |          |        - |        - |           - |           - |        - |        - | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
|                            |          | ________ | ________ |    ________ |    ________ | ________ | ________ | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
| Total recognised income    |          |        - |        - |           - |           - |  (4,809) |  (4,809) | 
| and expense                |          |          |          |             |             |          |          | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
|                            |          |          |          |             |             |          |          | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
| Share-based payments       |          |        - |        - |         359 |           - |        - |      359 | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
|                            |          |          |          |             |             |          |          | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
|                            |          | ________ | ________ |    ________ |    ________ | ________ | ________ | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
| At 30 June 2009            |          |    7,776 |   57,306 |       2,848 |           - | (54,905) |   13,025 | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
|                            |          | ________ | ________ |    ________ |    ________ | ________ | ________ | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
|                            |          |          |          |             |             |          |          | 
+----------------------------+----------+----------+----------+-------------+-------------+----------+----------+ 
  NOTES TO INTERIM FINANCIAL STATEMENTS 
 
 
1. Basis of preparation of interim financial information 
 
 
These interim consolidated financial statements are for the six months ended 30 
June 2009. The interim financial report, which is unaudited, has been prepared 
in accordance with the recognition and measurement criteria of International 
Financial Reporting Standards and IFRIC interpretations adopted for use in the 
European Union (IFRS). The accounting policies and methods of computation used 
are consistent with those used in the Group annual report for the year ended 31 
December 2008 and are expected to be used in the Group Annual Report for the 
year ended 31 December 2009. The six month period figures have not been audited. 
 
 
The financial information for the year ended 31 December 2008 does not 
constitute statutory information. A copy of the statutory accounts for that year 
has been delivered to the Registrar of Companies. The auditors' report on these 
accounts was not qualified and did not contain statements under section 237(2) 
and (3) of the Companies Act 1985. 
 
 
The interim consolidated financial statements are presented in pounds sterling 
because that is the currency of the primary economic environment in which the 
group operates. All values are rounded to the nearest thousand pounds (GBP000) 
except when otherwise stated. 
 
 
  NOTES TO INTERIM FINANCIAL STATEMENTS 
 
 
2. Segmental geographical reporting 
 
 
The Group operates in one business area which is the development and 
commercialisation of medical imaging software. 
Operating results are reported to the Group's chief operating decision maker on 
a geographical basis. The following reports financial information on a 
geographical basis and reconciles it to the Group's results. 
 
 
 
 
+--------------------+---+----------+----------+----------+-----------+----------+ 
|                    |   |     UK & |    Japan |      USA | All other |    Total | 
|                    |   |   Europe |   GBP000 |   GBP000 |  segments |   GBP000 | 
|                    |   |   GBP000 |          |          |    GBP000 |          | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
|                    |   | ________ | ________ | ________ |  ________ | ________ | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| 6 months ended     |   |          |          |          |           |          | 
| 30 June 2009       |   |          |          |          |           |          | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Revenue            |   |       67 |        - |        - |         - |       67 | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Interest           |   |       37 |        - |        - |         - |       37 | 
| receivable         |   |          |          |          |           |          | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Depreciation       |   |       34 |       37 |        - |         - |       71 | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Share-based        |   |      312 |       15 |       32 |         - |      359 | 
| expense            |   |          |          |          |           |          | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Loss before tax    |   |  (3,886) |    (687) |     (10) |     (226) |  (4,809) | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
|                    |   |          |          |          |           |          | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Non-current assets |   |       47 |      133 |        - |         - |      180 | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Total assets       |   |   14,388 |      369 |        - |        59 |   14,816 | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Total liabilities  |   |  (1,627) |     (25) |     (59) |      (80) |  (1,791) | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
|                    |   | ________ | ________ | ________ |  ________ | ________ | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
|                    |   |          |          |          |           |          | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
|                    |   |          |          |          |           |          | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
|                    |   |     UK & |    Japan |      USA | All other |    Total | 
|                    |   |   Europe |   GBP000 |   GBP000 |  segments |   GBP000 | 
|                    |   |   GBP000 |          |          |    GBP000 |          | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
|                    |   | ________ | ________ | ________ |  ________ | ________ | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| 6 months ended     |   |          |          |          |           |          | 
| 30 June 2008       |   |          |          |          |           |          | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Revenue            |   |       44 |        - |        - |         - |       44 | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Interest           |   |      371 |        - |        - |         - |      371 | 
| receivable         |   |          |          |          |           |          | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Depreciation       |   |       41 |       23 |        - |         - |       64 | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Share-based        |   |      552 |       20 |       45 |         - |      617 | 
| expense            |   |          |          |          |           |          | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Loss before tax    |   |  (3,226) |    (496) |    (334) |     (421) |  (4,477) | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
|                    |   |          |          |          |           |          | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Non-current assets |   |       70 |      151 |        - |         - |      221 | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Total assets       |   |   22,287 |      337 |        - |        20 |   22,644 | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Total liabilities  |   |  (1,683) |     (39) |     (49) |     (236) |  (2,007) | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
|                    |   | ________ | ________ | ________ |  ________ | ________ | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
|                    |   |          |          |          |           |          | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
|                    |   |          |          |          |           |          | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
|                    |   |          |          |          |           |          | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
|                    |   |     UK & |    Japan |      USA | All other |    Total | 
|                    |   |   Europe |   GBP000 |   GBP000 |  segments |   GBP000 | 
|                    |   |   GBP000 |          |          |    GBP000 |          | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
|                    |   | ________ | ________ | ________ |  ________ | ________ | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| 12 months ended    |   |          |          |          |           |          | 
| 31 December 2008   |   |          |          |          |           |          | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Revenue            |   |      103 |        - |        - |         - |      103 | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Interest           |   |    2,664 |        - |        - |         - |    2,664 | 
| receivable         |   |          |          |          |           |          | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Depreciation       |   |       82 |       61 |        - |         - |      143 | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Share-based        |   |    1,122 |       35 |       96 |         - |    1,253 | 
| expense            |   |          |          |          |           |          | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Loss before tax    |   |  (5,527) |  (1,002) |  (1,291) |     (422) |  (8,242) | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
|                    |   |          |          |          |           |          | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Non-current assets |   |       78 |      195 |        - |         - |      273 | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Total assets       |   |   19,394 |      510 |        - |        54 |   19,958 | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
| Total liabilities  |   |  (1,974) |     (56) |    (148) |     (305) |  (2,483) | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
|                    |   | ________ | ________ | ________ |  ________ | ________ | 
+--------------------+---+----------+----------+----------+-----------+----------+ 
 
 
 
 
 
 
 
 
 
 
  NOTES TO INTERIM FINANCIAL STATEMENTS 
 
 
3. Earnings per share 
 
 
 
 
+-------------------------+---+----------------+----------------+----------------+ 
|                         |   | 6 months ended |       6 months |     Year ended | 
|                         |   |   30 June 2009 |          ended |    31 December | 
|                         |   |                |   30 June 2008 |           2008 | 
+-------------------------+---+----------------+----------------+----------------+ 
|                         |   |    (unaudited) |    (unaudited) |      (audited) | 
+-------------------------+---+----------------+----------------+----------------+ 
|                         |   | ______________ | ______________ | ______________ | 
+-------------------------+---+----------------+----------------+----------------+ 
|                         |   |                |                |                | 
+-------------------------+---+----------------+----------------+----------------+ 
|                         |   |                |                |                | 
+-------------------------+---+----------------+----------------+----------------+ 
| Loss for the period     |   |        (4,809) |        (4,477) |        (8,242) | 
| (GBP000)                |   |                |                |                | 
+-------------------------+---+----------------+----------------+----------------+ 
| Weighted average number |   |                |                |                | 
+-------------------------+---+----------------+----------------+----------------+ 
| of ordinary shares      |   |        155,525 |        155,525 |        155,525 | 
| (000)                   |   |                |                |                | 
+-------------------------+---+----------------+----------------+----------------+ 
| Loss per ordinary share |   |                |                |                | 
+-------------------------+---+----------------+----------------+----------------+ 
| - basic and diluted     |   |           (3p) |           (3p) |           (5p) | 
+-------------------------+---+----------------+----------------+----------------+ 
|                         |   | ______________ | ______________ | ______________ | 
+-------------------------+---+----------------+----------------+----------------+ 
|                         |   |                |                |                | 
+-------------------------+---+----------------+----------------+----------------+ 
 
 
The loss per share is based on the weighted average number of ordinary shares in 
issue during the year.  The Group has recorded a loss in all periods.  No 
adjustment has been made to the basic loss per share, as the exercise of the 
share options would have the effect of reducing the loss per ordinary share and 
is anti-dilutive. 
 
 
4. Share options 
 
 
The Group has granted share options to eligible employees since 2003. 
A summary of the movement on the Group's share option plans is: 
 
 
+--------------------+--------------+-------------+--+-------------+------------+ 
|                    |        30 June 2009        |  |    31 December 2008      | 
+--------------------+----------------------------+--+--------------------------+ 
|                    |              |             |  |             |            | 
+--------------------+--------------+-------------+--+-------------+------------+ 
|                    |    Number of |    Weighted |  |   Number of |   Weighted | 
|                    |       Shares |     Average |  |      Shares |    Average | 
|                    |              |    Exercise |  |             |   Exercise | 
|                    |              |       Price |  |             |      Price | 
+--------------------+--------------+-------------+--+-------------+------------+ 
|                    |   __________ |  __________ |  |  __________ | __________ | 
+--------------------+--------------+-------------+--+-------------+------------+ 
|                    |              |             |  |             |            | 
+--------------------+--------------+-------------+--+-------------+------------+ 
| Start of period    |   13,312,500 |     GBP0.69 |  |  11,782,500 |    GBP0.76 | 
+--------------------+--------------+-------------+--+-------------+------------+ 
| Granted            |    8,148,750 |     GBP0.09 |  |   2,555,000 |    GBP0.37 | 
+--------------------+--------------+-------------+--+-------------+------------+ 
| Forfeited          | (10,950,000) |     GBP0.69 |  | (1,025,000) |    GBP0.81 | 
+--------------------+--------------+-------------+--+-------------+------------+ 
| Exercised          |            - |           - |  |           - |          - | 
+--------------------+--------------+-------------+--+-------------+------------+ 
|                    |   __________ |  __________ |  |  __________ | __________ | 
+--------------------+--------------+-------------+--+-------------+------------+ 
| At period end      |   10,511,250 |     GBP0.22 |  |  13,312,500 |    GBP0.69 | 
+--------------------+--------------+-------------+--+-------------+------------+ 
|                    |   __________ |  __________ |  |  __________ | __________ | 
+--------------------+--------------+-------------+--+-------------+------------+ 
|                    |              |             |  |             |            | 
+--------------------+--------------+-------------+--+-------------+------------+ 
| Exercisable at     |    1,942,500 |     GBP0.70 |  |   4,504,166 |    GBP0.81 | 
| period end         |              |             |  |             |            | 
+--------------------+--------------+-------------+--+-------------+------------+ 
|                    |   __________ |  __________ |  |  __________ | __________ | 
+--------------------+--------------+-------------+--+-------------+------------+ 
|                    |              |             |  |             |            | 
+--------------------+--------------+-------------+--+-------------+------------+ 
 
 
 
NOTES TO INTERIM FINANCIAL STATEMENTS 
 
 
The following data are a summary of the status of the share options outstanding 
at 30 June 2009: 
 
 
 
 
+------------------+-----------------+------------------+ 
|                  |                 |        Remaining | 
|                  |                 | contractual life | 
+------------------+-----------------+------------------+ 
| Share Option     |          Number |          (years) | 
| Plan             |                 |                  | 
+------------------+-----------------+------------------+ 
| ________________ | _______________ |  _______________ | 
+------------------+-----------------+------------------+ 
|                  |                 |                  | 
+------------------+-----------------+------------------+ 
| A                |         119,000 |              4.0 | 
+------------------+-----------------+------------------+ 
| B                |         196,000 |              5.3 | 
+------------------+-----------------+------------------+ 
| C                |         218,333 |              6.0 | 
+------------------+-----------------+------------------+ 
| D                |         150,000 |              7.0 | 
+------------------+-----------------+------------------+ 
| E                |       1,252,500 |              7.7 | 
+------------------+-----------------+------------------+ 
| F                |          50,000 |              7.9 | 
+------------------+-----------------+------------------+ 
| G                |         241,667 |              8.4 | 
+------------------+-----------------+------------------+ 
| H                |               - |              8.9 | 
+------------------+-----------------+------------------+ 
| I                |         135,000 |              9.5 | 
+------------------+-----------------+------------------+ 
| J                |       7,848,750 |              9.9 | 
+------------------+-----------------+------------------+ 
| K                |         300,000 |              9.9 | 
+------------------+-----------------+------------------+ 
| ________________ | _______________ |  _______________ | 
+------------------+-----------------+------------------+ 
|                  |                 |                  | 
+------------------+-----------------+------------------+ 
|                  |      10,511,250 |                  | 
+------------------+-----------------+------------------+ 
|                  |    ____________ |                  | 
+------------------+-----------------+------------------+ 
|                  |                 |                  | 
+------------------+-----------------+------------------+ 
 
 
On 14 May 2009 the Group offered employees the opportunity to forfeit their 
existing share option plans and, in their place, received 50% of the number of 
forfeited options in a new share option plan J. The options in the new plan have 
an exercise price of 8.5p and one sixth of the options vest every six months for 
three years. Under IFRS 2, the cancellation of existing options and the issue of 
replacement options are accounted for as modifications of the original options. 
4,816,250 options were issued in plan J as replacements for cancelled options 
and a further 3,032,500 new options were issued. 
 
 
The grant date fair value of plan J was GBP875,000, of which GBP35,000 related 
to the modification charge. The expense relating to the modification will be 
expensed over three years; the expense relating to the cancelled options will be 
expensed over the period of the original plans. 
 
 
On 20 May 2009 the Group created a new share option plan K. 300,000 options were 
issued at an exercise price of 10p.  Options under this plan, vest in equal one 
thirds on 30 June, 30 September, and 31 December 2009. 
 
 
The grant date fair value of plan K was GBP20,000, which will be recognised in 
the period from 20 May 2009 to 31 December 2009. 
 
 
Options are fair valued using the Black-Scholes option pricing model.  No 
performance conditions were included in the fair value calculations.  The 
following weighted average assumptions were used to estimate the fair value of 
stock options granted in the period: 
 
 
+------------------------+-----+---------------+ 
| Dividend yield         |     | Nil           | 
+------------------------+-----+---------------+ 
| Expected volatility    |     | 105%          | 
+------------------------+-----+---------------+ 
| Risk free rates        |     | 3.89 %        | 
+------------------------+-----+---------------+ 
| Expected term          |     | 6.75 years    | 
+------------------------+-----+---------------+ 
Expected volatility is based on historical volatility over the last three years 
of MGT Capital Investments, Inc (the parent company).  The expected life is the 
average expected period to exercise. The risk free rate of return is the yield 
on zero-coupon UK government bonds of a term consistent with the assumed option 
life. 
 
 
NOTES TO INTERIM FINANCIAL STATEMENTS 
 
 
In the period ending 30 June 2009 the Group recorded a share option charge of 
GBP359,000 (30 June 2008: GBP617,000). 
 
 
5. Related Parties 
 
 
The Group has related party relationships with its subsidiaries, its parent 
company (MGT Capital Investments, Inc.), directors, employees and subsidiary 
companies of its parent Group. 
Other subsidiary companies of the parent also operate from 66 Hammersmith Road, 
London and some establishment, finance, IT and administration costs are charged 
to, and from, these companies. In the six months to 30 June 2009 Beijing 
Medicexchange China Co. Limited and MGT Capital Investments (UK) Limited charged 
the Group GBP152,000 and GBP384,000 respectively.  In this period the Group 
charged MGT Capital Investments (UK) Limited GBP13,000. 
 
 
 
 
6. Reconciliation of net cash flows from operating activities 
 
 
+----------------------------+--+----------------+--------------+----------------+ 
|                            |  | 6 months ended |     6 months |     Year ended | 
|                            |  |   30 June 2009 |        ended |    31 December | 
|                            |  |                | 30 June 2008 |           2008 | 
+----------------------------+--+----------------+--------------+----------------+ 
|                            |  |    (unaudited) |  (unaudited) |      (audited) | 
+----------------------------+--+----------------+--------------+----------------+ 
|                            |  |         GBP000 |       GBP000 |         GBP000 | 
+----------------------------+--+----------------+--------------+----------------+ 
|                            |  |     __________ |   __________ |     __________ | 
+----------------------------+--+----------------+--------------+----------------+ 
|                            |  |                |              |                | 
+----------------------------+--+----------------+--------------+----------------+ 
| Loss for the period        |  |        (4,809) |      (4,477) |        (8,242) | 
+----------------------------+--+----------------+--------------+----------------+ 
| Adjustments for:           |  |                |              |                | 
+----------------------------+--+----------------+--------------+----------------+ 
| Depreciation               |  |             71 |           64 |            143 | 
+----------------------------+--+----------------+--------------+----------------+ 
| Loss on sale of            |  |              - |            - |              8 | 
| investments                |  |                |              |                | 
+----------------------------+--+----------------+--------------+----------------+ 
| Interest income            |  |           (37) |        (371) |        (2,672) | 
+----------------------------+--+----------------+--------------+----------------+ 
| Interest expense           |  |              - |            - |              - | 
+----------------------------+--+----------------+--------------+----------------+ 
| Foreign currency finance   |  |              - |            - |          (148) | 
| cost                       |  |                |              |                | 
+----------------------------+--+----------------+--------------+----------------+ 
| Share options              |  |            359 |          617 |          1,253 | 
+----------------------------+--+----------------+--------------+----------------+ 
| Changes in working capital |  |                |              |                | 
|                            |  |                |              |                | 
+----------------------------+--+----------------+--------------+----------------+ 
| Trade and other            |  |            408 |        (326) |          (591) | 
| receivables                |  |                |              |                | 
+----------------------------+--+----------------+--------------+----------------+ 
| Trade and other payables   |  |          (692) |          336 |            812 | 
+----------------------------+--+----------------+--------------+----------------+ 
|                            |  |     __________ |   __________ |     __________ | 
+----------------------------+--+----------------+--------------+----------------+ 
| Cash used in operations    |  |        (4,700) |      (4,157) |        (9,437) | 
+----------------------------+--+----------------+--------------+----------------+ 
|                            |  |     __________ |   __________ |     __________ | 
+----------------------------+--+----------------+--------------+----------------+ 
|                            |  |                |              |                | 
+----------------------------+--+----------------+--------------+----------------+ 
 
 
- Ends - 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 IR EAKPDFLKNEFE 
 

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