TIDMBGTI 
 
RNS Number : 5424T 
BgenuineTec Inc. 
30 September 2010 
 
 
30 September 2010 
                                BGENUINETEC INC. 
                    ("BgenuineTec", "BGT" or "the Company") 
 
                Interim Results for six months ended 30 June 2010 
 
BgenuineTec (AIM:BGTI), the biometrics business specialising in fingerprint 
authentication, announces its interim results for the six months ended 30 June 
2010. BgenuineTec is based in Tokyo, and is the only Japanese company listed on 
AIM. 
 
+-------------------------+-----------+-----------+-----------+-------------+ 
|                         |     20010 |      2009 |      2010 |        2009 | 
+-------------------------+-----------+-----------+-----------+-------------+ 
|                         |   JPY'000 |   JPY'000 |       GBP |         GBP | 
+-------------------------+-----------+-----------+-----------+-------------+ 
| Continuing operations   |           |           |           |             | 
+-------------------------+-----------+-----------+-----------+-------------+ 
| Revenue                 |   29,674  |   37,053  |  222,997  |    278,446  | 
+-------------------------+-----------+-----------+-----------+-------------+ 
| Gross profit            |   15,975  | (10,602)  |  120,053  |   (79,674)  | 
+-------------------------+-----------+-----------+-----------+-------------+ 
| Loss from operations    | (109,460) | (130,739) | (822,576) |   (982,482) | 
+-------------------------+-----------+-----------+-----------+-------------+ 
| Loss before tax         | (111,552) | (200,385) | (838,297) | (1,505,860) | 
+-------------------------+-----------+-----------+-----------+-------------+ 
|                         |           |           |           |             | 
+-------------------------+-----------+-----------+-----------+-------------+ 
| Basic loss per share    |    (1.38) |    (3.14) |   (0.010) |     (0.024) | 
+-------------------------+-----------+-----------+-----------+-------------+ 
| Diluted loss per share  |         - |         - |         - |           - | 
+-------------------------+-----------+-----------+-----------+-------------+ 
 
 
Highlights 
·      Revenue GBP0.22m (2009: GBP0.28m) 
·      Gross profit of GBP0.12m (2009: gross loss of GBP0.08m) 
·      Loss before tax decreased by 44.3% to GBP0.84m (2009: GBP1.51m) 
·      Continued investment into research and development 
·      Strengthened sales team through a number of key appointments 
 
NOTE: The exchange rate used throughout this announcement: GBP1:JPY133.07 
 
 
 
For further information, please contact: 
 
+-------------------------------+---------------------------------------+ 
| BGENUINETEC INC.              |                                       | 
+-------------------------------+---------------------------------------+ 
| Taketoshi Kashiwabara,        | Tel: +81-3-5652-0321                  | 
| Chairman                      |                                       | 
+-------------------------------+---------------------------------------+ 
| Toshiya Kurita, Chief         | Tel: +81-3-5652-0321                  | 
| Financial Controller          |                                       | 
+-------------------------------+---------------------------------------+ 
|                               |                                       | 
+-------------------------------+---------------------------------------+ 
|                               |                                       | 
+-------------------------------+---------------------------------------+ 
| Charles Stanley Securities    |                                       | 
+-------------------------------+---------------------------------------+ 
| Nominated Adviser             | Tel: +44 (0) 20 7149 6000             | 
+-------------------------------+---------------------------------------+ 
| Russell Cook/Dugald Carlean   |                                       | 
+-------------------------------+---------------------------------------+ 
|                               |                                       | 
+-------------------------------+---------------------------------------+ 
| Walbrook PR Ltd               |                                       | 
+-------------------------------+---------------------------------------+ 
| Paul McManus                  | Tel: +44 (0) 20 7933 8787             | 
+-------------------------------+---------------------------------------+ 
|                               | Mob: +44 (0) 7980 541 893             | 
+-------------------------------+---------------------------------------+ 
|                               | Email: paul.mcmanus@walbrookpr.com    | 
+-------------------------------+---------------------------------------+ 
 
 
 
 
Background on BgenuineTec 
 
On 14 July 2006, BgenuineTec (under its original name of Secure Design) became 
the first Japanese company to be admitted to trading on AIM. It offers 
fingerprint authentication products to companies and individuals that wish to 
establish high levels of security using biometrics. Biometrics uses a 
physical attribute of the body, such as a fingerprint to identify and verify the 
individual with the aim of making individual authentication efficient and 
secure. 
 
The Company offers a range of fingerprint authentication products and systems, 
from an integrated system to a mobile device. The Company designs and outsources 
the production of these products and can tailor them to individual client 
specific needs and applications. 
 
Biometric applications provide convenient and reliable security which reduces 
the cost associated with the failure of conventional authentication methods. The 
principal factor which distinguishes biometrics from conventional password based 
authentication is the enhanced security level it provides while maintaining the 
privacy of individual users. 
 
The worldwide demand for biometrics is estimated to increase from just over $3 
billion in 2007 to over $5.6 billion by 2010 (Biometrics Market and Industry 
Report 2007-2012). 
 
 
 
Chairman's Statement 
 
BGT has continued to explore opportunities in both domestic and international 
security markets during the period. We have maintained our investment in 
developing innovative products and services and have progressed our mobile phone 
business by bringing a feasible and industry proven solution to vendors, in 
partnership with sensor companies. 
 
However, the current recession in Japan, combined with a need to expand our 
sales resources, has negatively impacted our financial performance during the 
period. Our 'door lock and chip' offering generated a steady stream of sales 
throughout the six months but failed to generate sufficient revenues to enable 
us to successfully penetrate our other target markets.   As a result the Company 
has reported turnover in the period of JPY 29.67 million (GBP222,997) and a loss 
before tax of JPY 111.6 million (GBP838,297). 
 
These interim results have been prepared by management on a "going concern" 
basis, as set out in Note 2 below.  This is based upon an expectation that the 
Company can successfully raise sufficient funds later this year to execute the 
Company's business plan.  Further details of such a fundraising are expected to 
be announced shortly. 
 
On a more positive note we enjoyed considerable success in reducing our cost 
base, without impacting our ability to do business, such that we were able to 
report a 46% decrease in pre-tax losses when compared to the same period last 
year. We are currently implementing a business plan focussing on the use of 
lower cost core components and modules for our technology platform. This will 
enable us to reduce our operating costs while simultaneously allowing us to 
lower the pricing of our solutions, ultimately leading to improvements in sales. 
 
In addition, we plan to incorporate a wholly owned subsidiary, for our planned 
operations based in China, with a view to developing this market in co-operation 
with local Chinese companies. We are still looking at opportunities to exploit 
our leading edge technology in this prospective market and believe that the 
strategic progress we are making in reducing the pricing of our solutions, while 
maintaining quality, will provide us with a significant competitive advantage in 
China. 
 
Finally, we are delighted to announce the appointments of Mr. Yoshiro Kido and, 
Mr. Takashi Kusube as operating advisors to the Companyand Mr. Nishitani as a 
financial advisor. Mr. Kido is a former president of Sony Ericsson Mobile 
Communication Japan Inc. where he introduced the first smart phone "XPERIA" 
through NTT-docomo; Mr. Kusube is a former president of Artist House Inc., 
publishers of several successful magazines and films; and Mr. Nishitani has 
considerable experience in the financial sector , having worked at Kasumigaseki 
Audit Corporation, Japan. 
 
Mr. Kido and Mr. Kusube will focus on selling our fingerprint products through 
their established business channels. Their efforts have already resulted in us 
commencing negotiations with both existing and potential customers across the 
globe. These appointments will add considerable strength to our sales resources 
allowing us to more rapidly penetrate the growing global demand for fingerprint 
based security solutions. 
 
Results 
 
Turnover in the period was JPY 29.67 million (GBP222,997), which was 19.91% 
lower compared to the results achieved in first half of 2009 when the Company 
reported sales of JPY37.05 (GBP 278,446).  The loss before tax decreased by 
44.3% to JPY 111.6 million (GBP838,297) compared to JPY 200.4 million 
(GBP1,505,860).  The loss per share improved by 56.1% to JPY 1.38 (0.01p) 
compared to JPY 3.14 (0.024p) in first half of 2009. 
 
Operating review 
 
In the first six months of the year, we have focused on improving our algorithms 
for our mobile phone fingerprint product and a flexible design of a new LSI at a 
competitive cost. Although we were not able to achieve our revenue targets for 
the period, our R&D results have delivered powerful algorithms for future 
products and improved design of new fingerprint LSI. We are actively looking to 
increase the sales of our products based on the new business model while at the 
same time developing a range of innovative products for international markets. 
 
Operating expenses 
 
Operating expenses in the period were JPY 125 million (GBP 942,628), which were 
slightly lower compared to those for the first half of 2009 mainly due to a 
decrease in personnel expenses. 
 
Cash Balance 
 
The cash balance at the end of the period was JPY 0.4 million (GBP2,970), 
reflecting poor sales activity. The Company will be  seeking to raise further 
funds during the second half of the year for working capital and the continued 
development of the Company. The details of which will be announced in due 
course. 
 
Dividend 
 
At this stage in the Company's development, the directors do not intend to 
declare a dividend. 
 
Employees 
 
I would like to take this opportunity to thank all our employees for their hard 
work, dedication and commitment during this period. 
 
Commercial Initiatives 
 
We are currently focusing our efforts on developing physical and logical locks 
to control access to houses and servers. In cooperation with Hori Lock, we are 
developing fingerprint locks that combine higher quality and lower cost than has 
been achieved before by any of our competitors. These new locks will be branded 
as "high quality and low cost"and we expect to start volume production within 
the current year. 
 
The successful deployment of our fingerprint technology on Sharp mobile phones 
has led us to commence a "mobile cloudwith fingerprint mobile phones" initiative 
in cooperation with various system integrators, to attempt to address the mobile 
and wireless environment security issues. Our mobile phone technology offers a 
simplistic and secure solution to accessing cloud services such as SaaS, PaaS 
and IaaS. 
 
The initiatives we are taking are discussed in greater detail below: 
 
Mobile Phones 
 
Our core business for mobile phones is to provide software or hardware 
solutions, which consist of an algorithm (or chip), sensors and middleware, to 
embedded systems such as mobile phones. BGT works as a solution provider to 
those embedded fingerprint systems in cooperation with a variety of sensor 
suppliers. 
 
The success we have experienced to date with Sharp's mobile phone provides us 
with a platform from which to offer these industry proven solutions to other 
mobile phone companies using swipe sensors. We currently provide the software 
element of these solutions to mobile phone companies in Japan and China for 
basic user authentication and data protection only. However, we expect to 
implement our full solution together with sensors or chipswith these customers 
in the spring of 2011. 
 
It is our intention to identify the final end customer who will accept our 
solution in conjunction with a major sensor company. Upon approval from a major 
sensor company, BGT intends to create a project team consisting of engineers 
dedicated to the development of our solutions for both embedded and application 
software on the mobile platform. The team will work in conjunction with device 
engineers from the major sensor company in question, as well as application 
engineers from mobile application software companies in Japan. Our target market 
for this year includes mobile handset providers including Sharp, Panasonic and 
Fujitsu. 
 
Note PCs 
 
It is our belief that Note PCs are expected to require  fingerprint user 
authentication not only for PC access security, but also network / web security. 
. Currently available  on Note PCs for enterprise usage, fingerprint 
authentication security functions are expected to  be pre-installed as standard 
on all new Note PCs in the future according to many Note PC vendors. Currently, 
our software solution for the Note PC platform is well recognised and well used. 
We work with Validity and other sensor companies so to bring our various 
software solutions to Note PC / Net PC companies. 
 
The main application field of Validity sensors is Note PCs, especially for 
enterprise use. BGT intends to partner with sensor suppliers on the sale of 
solutions to the global Note PC market, where we are requested to customise our 
solutions according to the demands of the PC vendors. We expect this business 
will deliver a profit within the next twelve months following an extensive sales 
promotion. 
 
Network Business 
 
The demands of marketing high security fingerprint authentication solutions for 
IC cards are increasing in the Japanese market. Many information security 
applications require fingerprint modules with different kinds of area sensors. 
As a growing sector worldwide, we aim to focus on this growing market, 
particularly in China. The sensors of our partner company, Fingerprint cards AB 
(FPC), located in Sweden, are highly rated for their durability against ESD 
(Electrostatic discharge) and physical damage. We are working closely with FPC 
and our innovative technology will enable us to market the new modules outside 
Japan. 
 
There are currently two projects being planned. One is to develop and sell a 
wireless handheld fingerprint authenticator for the iPhone, to be used by 
internal staff at local banks. The other is to develop a model of a total 
security system, consisting of fingerprint security boxes and hotel room locks, 
for golf resort complexes. In cooperation with TM link and Silex, we will 
provide solutions for wireless modules for portable authenticators and control 
modules for fingerprint authentication. 
 
If these two projects are successfully launched, we will develop PC security 
software with the Validity capture box and bring these solutions to the Japanese 
market. Two factor authentication, including both fingerprint and smart card 
authentication, is currently in demand from financial sectors and many big 
enterprises. Even through the use of low cost chips, we are able to provide 
device solutions, which are far more secure than those currently found on PCs. 
 
Door Lock 
 
Door Locks are a traditional application for our fingerprint module business. 
However, there have been very few successful fingerprint door lock businesses 
that have managed to balance the demand for quality with the need for reasonable 
pricing. 
 
We have been planning a new project to provide a solution to this problem in 
conjunction with the Japanese Lock Association and a major Chinese fingerprint 
door lock company, Changchun Hongda Opto-electron Co., Ltd. We will work 
together with these partners, not only in developing a high quality door lock at 
a competitive price, but also on sales and marketing and exploiting their sales 
channels to house builders. 
 
Furthermore, we aim to identify high quality distributors capable of introducing 
the fingerprint door locks into various new markets, from OA door locks to hotel 
door locks and high security entrance door locks. 
 
Sensor Distribution 
 
Sensors are the device interface and are a key component in any fingerprint 
authentication business.  BGT's technology has been adapted to work with a wide 
variety of sensors such that we are able to provide low cost, high performance 
solutions to numerous problems. As a distributor of Fingerprint Cards (FPC 
sensors in Japan), we have developed a new fingerprint module, with FPC area 
sensors, which has initially been well received by Chinese market. 
 
Validity Sensors Inc., which is currently the second largest fingerprint sensor 
company focusing on Note PC business, is evaluating BGT's algorithm for use in 
its new embedded systems business. Negotiation for business cooperation and 
alliance is currently being undertaken between BGT and Validity Sensors with 
regard to Validity Sensors, mobile phone and other embedded business. 
 
Sensor distribution is not BGT's core business, but through running a sensor 
distribution business alongside our module business we expect to be able to 
reduce costs for the sensors used in our modules. 
 
Module Business 
 
Our core business is to provide a software or a hardware solution which 
integrates various embedded fingerprint authentication systems with various 
kinds of sensors. These authentication systems will typically be for use on Note 
PCs or mobile phones, and consist of an algorithm (or chip), sensors and 
middleware. BGT is able to design and provide more sophisticated LSI (Large 
Scale Integrated circuit) at a lower price. 
 
New LSI Fchip3 will integrate more chips such as flashROM and SRAM etc, so as to 
reduce both cost and size of modules, which will enable more applications to use 
the modules and expand the market place. 
 
Many sensor makers intend to develop sensor modules which will combine both a 
sensor and an authentication engine together. We intend to provide Engine IP 
with our fingerprint algorithm for various sensors , so that they can develop 
their one-chip sensor with a fingerprint authentication function. BGT can expect 
to receive both an initial payment for provision of the engine IP along with a 
percentage of revenues from volume sales of the chips to those sensor makers. 
 
By partnering with Kunieda LSI laboratory at Tokyo's Institute of Technology, we 
expect to be able to design and provide the aforementioned chips at low cost. We 
will partner with Shenyang BeyondLSI Inc. to sell these modules to the Chinese 
market, opening our own sales and marketing office in Shanghai, China. 
 
Outlook 
 
Our various attempts did not achieve the fruitful results until today, because 
of 
       1) lack of sales efforts, 
       2) lack of new products, 
       3) lack of the cost controls. 
 
 The board is expecting  sales of door locks and chips products along with 
modules .. The Board is anticipating  the China market  to contribute to the 
sales effort..(1) 
 
The Company will continue its R&D efforts so as to penetrate the fingerprint 
technology market both reliably and cost effectively. There are several 
opportunities to be exploited  in  semiconductor technology. (2) 
 
We will continue to manage our costs. We are implementing a business model using 
our existing engineering and technology platform, focusing particularly on both 
core components and low cost modules. (3) 
 
 
Taketoshi Kashiwabara 
Chairman 
30 September 2010 
 
Note: 
Exchange rate per Pound (GBP) for the above conversions is JPY 133.07, which has 
been derived from the TTM rate on June/End, 2010. 
 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Income Statement                           |           |           |             | 
+--------------------------------------------+-----------+-----------+-------------+ 
| for the period from 01 January |           |           |           |             | 
| to 30 June                     |           |           |           |             | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
|                                |      2010 |      2009 |      2010 |        2009 | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
|                                |   JPY'000 |   JPY'000 |       GBP |         GBP | 
|                                |           |           |     (Note |       (Note | 
|                                |           |           |        5) |          5) | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Revenue                        |    29,674 |   37,053  |   222,997 |     278,446 | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Cost of sales                  |  (13,699) |  (47,655) | (102,944) |   (358,120) | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Gross profit (loss)            |    15,975 | (10,602)  |   120,053 |    (79,674) | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Other operating income         |     3,214 |     3,794 |    24,155 |      28,515 | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Sales and marketing expenses   |   (8,030) |  (9,651)  |  (60,346) |    (72,527) | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| General and administrative     |  (91,361) | (95,161)  | (686,567) |   (715,119) | 
| expenses                       |           |           |           |             | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Research and development       |  (22,829) | (19,119)  | (171,560) |   (143,677) | 
| expenses                       |           |           |           |             | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Loss from operations           | (109,460) | (130,739) | (822,576) |   (982,482) | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Finance income                 |       457 |       255 |     3,438 |       1,916 | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Finance costs                  |   (5,178) |     (215) |  (38,908) |     (1,612) | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Net finance income (costs)     |   (4,721) |        40 |  (35,470) |         304 | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Gain recognised on disposal of |     2,628 |         - |    19,749 |           - | 
| interest in former associate   |           |           |           |             | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Impairment loss on equity      |         - |  (64,869) |         - |   (487,480) | 
| accounted investee             |           |           |           |             | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Share of loss of equity        |         - |   (4,817) |         - |    (36,202) | 
| accounted investee             |           |           |           |             | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Loss before tax                | (111,552) | (200,385) | (838,297) | (1,505,860) | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Income tax expenses            |         - |         - |         - |           - | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Loss for the period            | (111,552) | (200,385) | (838,297) | (1,505,860) | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
|                                |           |           |           |             | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Attributable to:               |           |           |           |             | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Owners of the Company          | (111,552) | (200,385) | (838,297) | (1,505,860) | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Non-controlling interests      |         - |         - |         - |           - | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
|                                |           |           |           |             | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Basic loss per share (Note 3)  |    (1.38) |    (3.14) |   (0.010) |     (0.024) | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
| Diluted loss per share (Note   |    (1.38) |    (3.14) |   (0.010) |     (0.024) | 
| 3)                             |           |           |           |             | 
+--------------------------------+-----------+-----------+-----------+-------------+ 
 
 
+--------------------------------+-----------+------------+-----------+-------------+ 
| Statement of comprehensive income                                                 | 
+-----------------------------------------------------------------------------------+ 
| for the period from 01 January |           |            |           |             | 
| to 30 June                     |           |            |           |             | 
+--------------------------------+-----------+------------+-----------+-------------+ 
|                                |      2010 |       2009 |      2010 |        2009 | 
+--------------------------------+-----------+------------+-----------+-------------+ 
|                                |   JPY'000 |    JPY'000 |       GBP |         GBP | 
|                                |           |            |     (Note |       (Note | 
|                                |           |            |        5) |          5) | 
+--------------------------------+-----------+------------+-----------+-------------+ 
| Loss for the period            | (111,552) |  (200,385) | (838,297) | (1,505,860) | 
+--------------------------------+-----------+------------+-----------+-------------+ 
| Other comprehensive income     |           |            |           |             | 
+--------------------------------+-----------+------------+-----------+-------------+ 
| Financial assets available for |           |            |           |             | 
| sale:                          |           |            |           |             | 
+--------------------------------+-----------+------------+-----------+-------------+ 
|    -Change in fair value       |         - |     13,462 |         - |     101,161 | 
+--------------------------------+-----------+------------+-----------+-------------+ 
|    -Income tax expense         |         - |    (5,451) |         - |    (40,960) | 
+--------------------------------+-----------+------------+-----------+-------------+ 
| Other comprehensive income for |         - |      8,011 |         - |      60,201 | 
| the period                     |           |            |           |             | 
+--------------------------------+-----------+------------+-----------+-------------+ 
| Total comprehensive loss for   | (111,552) | (192,374)  | (838,297) | (1,445,659) | 
| the period                     |           |            |           |             | 
+--------------------------------+-----------+------------+-----------+-------------+ 
|                                |           |            |           |             | 
+--------------------------------+-----------+------------+-----------+-------------+ 
| Attributable to:               |           |            |           |             | 
+--------------------------------+-----------+------------+-----------+-------------+ 
| Owners of the Company          | (111,552) | (192,374)  | (838,297) | (1,445,659) | 
+--------------------------------+-----------+------------+-----------+-------------+ 
| Non-controlling interests      |         - |          - |         - |           - | 
+--------------------------------+-----------+------------+-----------+-------------+ 
 
 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Statement of Financial Position                                                    | 
+------------------------------------------------------------------------------------+ 
|                          |       As at |       As at |        As at |     As at 31 | 
|                          |          30 |          31 |      30 June |     December | 
|                          |        June |    December |              |              | 
+--------------------------+-------------+-------------+--------------+--------------+ 
|                          |        2010 |        2009 |         2010 |         2009 | 
+--------------------------+-------------+-------------+--------------+--------------+ 
|                          |     JPY'000 |     JPY'000 |          GBP |          GBP | 
|                          |             |             |        (Note |     (Note 5) | 
|                          |             |             |           5) |              | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Assets                   |             |             |              |              | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Non-current assets       |             |             |              |              | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Property, plant and      |       2,714 |       3,133 |       20,398 |       23,542 | 
| equipment                |             |             |              |              | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Investment securities    |       3,076 |       6,446 |       23,116 |       48,440 | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Intangible assets        |       4,572 |      19,856 |       34,357 |      149,217 | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Other non-current assets |       2,902 |       4,574 |       21,809 |       34,378 | 
+--------------------------+-------------+-------------+--------------+--------------+ 
|                          |      13,264 |      34,009 |       99,677 |      255,577 | 
+--------------------------+-------------+-------------+--------------+--------------+ 
|                          |             |             |              |              | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Current assets           |             |             |              |              | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Inventories              |       4,459 |      17,680 |       33,514 |      132,865 | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Trade and other          |      11,168 |      14,649 |       83,931 |      110,082 | 
| receivables              |             |             |              |              | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Cash and cash            |         395 |         804 |        2,970 |        6,040 | 
| equivalents              |             |             |              |              | 
+--------------------------+-------------+-------------+--------------+--------------+ 
|                          |      16,022 |      33,133 |      120,415 |      248,987 | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Total assets             |      29,288 |      67,142 |      220,099 |      504,564 | 
+--------------------------+-------------+-------------+--------------+--------------+ 
|                          |             |             |              |              | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Liabilities              |             |             |              |              | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Current liabilities      |             |             |              |              | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Loans and borrowings     |      16,661 |         166 |      125,207 |        1,250 | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Trade and other payables |     171,435 |     143,604 |    1,288,305 |    1,079,158 | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Provision for asset      |           - |       1,600 |            - |       12,024 | 
| retirement obligation    |             |             |              |              | 
+--------------------------+-------------+-------------+--------------+--------------+ 
|                          |     188,096 |     145,370 |    1,413,512 |    1,092,432 | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Net current assets       |   (172,074) |   (112,237) |  (1,293,109) |    (843,445) | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Total liabilities        |     188,096 |     145,370 |    1,413,512 |    1,092,432 | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Net assets               |   (158,808) |    (78,228) |  (1,193,413) |    (587,868) | 
+--------------------------+-------------+-------------+--------------+--------------+ 
|                          |             |             |              |              | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Equity                   |             |             |              |              | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Share capital            |     962,339 |     946,834 |    7,231,826 |    7,115,308 | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Share premium            |     719,218 |     703,750 |    5,404,804 |    5,288,569 | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Share option reserve     |      16,050 |      16,050 |      120,618 |      120,618 | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Deficit                  | (1,856,415) | (1,744,862) | (13,950,661) | (13,112,363) | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Total equity             |   (158,808) |    (78,228) |  (1,193,413) |    (587,868) | 
| attributable to owners   |             |             |              |              | 
| of the Company           |             |             |              |              | 
+--------------------------+-------------+-------------+--------------+--------------+ 
| Total equity             |   (158,808) |    (78,228) |  (1,193,413) |    (587,868) | 
+--------------------------+-------------+-------------+--------------+--------------+ 
 
 
+----------------+----------+----------+---------+---------+-------------+-----------+-------------+ 
| Statement of Changes in Equity                                         |           |             | 
+------------------------------------------------------------------------+-----------+-------------+ 
| for the period from                  |         |         |             |           |             | 
| 01 January to 30 June                |         |         |             |           |             | 
+--------------------------------------+---------+---------+-------------+-----------+-------------+ 
|                |          |          |         |         |             |           |             | 
+----------------+----------+----------+---------+---------+-------------+-----------+-------------+ 
|                |          |          |         |         |             | JPY'000   |         GBP | 
|                |          |          |         |         |             |           |       (Note | 
|                |          |          |         |         |             |           |          5) | 
+----------------+----------+----------+---------+---------+-------------+-----------+-------------+ 
|                | Attributable to owners of the Company                                           | 
+----------------+---------------------------------------------------------------------------------+ 
|                |    Share |    Share |    Fair |   Share |     Deficit |     Total |       Total | 
|                |  capital |  premium |   value |  option |             |    equity |      equity | 
|                |          |          | reserve | reserve |             |           |             | 
+----------------+----------+----------+---------+---------+-------------+-----------+-------------+ 
| Balance at 1   |  867,614 | 625,164  |       - | 25,967  | (1,364,195) |  154,550  |   1,161,419 | 
| January 2009   |          |          |         |         |             |           |             | 
+----------------+----------+----------+---------+---------+-------------+-----------+-------------+ 
|                |          |          |         |         |             |           |             | 
+----------------+----------+----------+---------+---------+-------------+-----------+-------------+ 
| Net loss for   |        - |        - |       - |       - |   (200,385) | (200,385) | (1,505,860) | 
| the period     |          |          |         |         |             |           |             | 
+----------------+----------+----------+---------+---------+-------------+-----------+-------------+ 
| Fair value     |        - |        - |  8,011  |       - |           - |    8,011  |      60,201 | 
| adjustments of |          |          |         |         |             |           |             | 
| available-for  |          |          |         |         |             |           |             | 
| sales          |          |          |         |         |             |           |             | 
| investments,   |          |          |         |         |             |           |             | 
| net of tax     |          |          |         |         |             |           |             | 
+----------------+----------+----------+---------+---------+-------------+-----------+-------------+ 
| Total          |        - |        - |   8,011 |       - |   (200,385) | (192,374) | (1,445,659) | 
| comprehensive  |          |          |         |         |             |           |             | 
| loss           |          |          |         |         |             |           |             | 
+----------------+----------+----------+---------+---------+-------------+-----------+-------------+ 
| Share issued   |   51,000 |   51,000 |       - |       - |           - |   102,000 |     766,514 | 
+----------------+----------+----------+---------+---------+-------------+-----------+-------------+ 
| Share issuance |        - |    (310) |       - |       - |           - |     (310) |     (2,329) | 
| costs          |          |          |         |         |             |           |             | 
+----------------+----------+----------+---------+---------+-------------+-----------+-------------+ 
| Share option   |        - |        - |       - |  2,134  |           - |    2,134  |      16,032 | 
| costs charged  |          |          |         |         |             |           |             | 
| to income for  |          |          |         |         |             |           |             | 
| the period     |          |          |         |         |             |           |             | 
+----------------+----------+----------+---------+---------+-------------+-----------+-------------+ 
| Balance as at  | 918,614  | 675,854  |  8,011  | 28,101  | (1,564,580) |   66,000  |     495,977 | 
| 30 June 2009   |          |          |         |         |             |           |             | 
+----------------+----------+----------+---------+---------+-------------+-----------+-------------+ 
| Balance at 1   |  946,834 |  703,750 |       - |  16,050 | (1,744,862) |  (78,228) |   (587,868) | 
| January 2010   |          |          |         |         |             |           |             | 
+----------------+----------+----------+---------+---------+-------------+-----------+-------------+ 
|                |          |          |         |         |             |           |             | 
+----------------+----------+----------+---------+---------+-------------+-----------+-------------+ 
| Net loss for   |        - |        - |       - |       - |   (111,552) | (111,552) |   (838,297) | 
| the period     |          |          |         |         |             |           |             | 
+----------------+----------+----------+---------+---------+-------------+-----------+-------------+ 
| Total          |        - |        - |       - |       - |   (111,552) | (111,552) |   (838,297) | 
| comprehensive  |          |          |         |         |             |           |             | 
| loss           |          |          |         |         |             |           |             | 
+----------------+----------+----------+---------+---------+-------------+-----------+-------------+ 
| Share issued   |   15,505 |   15,505 |       - |       - |           - |    31,010 |     233,035 | 
+----------------+----------+----------+---------+---------+-------------+-----------+-------------+ 
| Share issuance |        - |     (37) |       - |       - |           - |      (37) |       (283) | 
| costs          |          |          |         |         |             |           |             | 
+----------------+----------+----------+---------+---------+-------------+-----------+-------------+ 
| Balance as at  |  962,339 |  719,218 |       - |  16,050 | (1,856,414) | (158,807) | (1,193,413) | 
| 30 June 2010   |          |          |         |         |             |           |             | 
+----------------+----------+----------+---------+---------+-------------+-----------+-------------+ 
 
 
 
 
 
 
+--------------------------+----------+-----------+-----------+-----------+ 
| Statement of Cash Flows                         |           |           | 
+-------------------------------------------------+-----------+-----------+ 
| for the period from 01 January to   |           |           |           | 
| 30 June                             |           |           |           | 
+-------------------------------------+-----------+-----------+-----------+ 
|                          |     2010 |      2009 |      2010 |      2009 | 
+--------------------------+----------+-----------+-----------+-----------+ 
|                          |  JPY'000 |   JPY'000 |       GBP |       GBP | 
|                          |          |           |     (Note |  (Note 5) | 
|                          |          |           |        5) |           | 
+--------------------------+----------+-----------+-----------+-----------+ 
| Operating Activities     |          |           |           |           | 
+--------------------------+----------+-----------+-----------+-----------+ 
| Cash used in operations  | (48,704) |  (89,855) | (366,005) | (675,245) | 
+--------------------------+----------+-----------+-----------+-----------+ 
| Interest received        |    (506) |       254 |   (3,806) |     1,916 | 
| (paid), net              |          |           |           |           | 
+--------------------------+----------+-----------+-----------+-----------+ 
| Net cash used in         | (49,211) |  (89,601) | (369,811) | (673,339) | 
| operating activities     |          |           |           |           | 
+--------------------------+----------+-----------+-----------+-----------+ 
| Investing activities     |          |           |           |           | 
+--------------------------+----------+-----------+-----------+-----------+ 
| Acquisition of associate |    1,349 |   (3,000) |    10,140 |  (22,545) | 
| company                  |          |           |           |           | 
+--------------------------+----------+-----------+-----------+-----------+ 
| Acquisition of other     |        - |  (25,000) |         - | (187,871) | 
| investments              |          |           |           |           | 
+--------------------------+----------+-----------+-----------+-----------+ 
| Increase of short-term   |        - | (22,888)  |         - | (171,996) | 
| lending                  |          |           |           |           | 
+--------------------------+----------+-----------+-----------+-----------+ 
| Net cash used in         |    1,349 | (50,888)  |    10,140 | (382,412) | 
| investing activities     |          |           |           |           | 
+--------------------------+----------+-----------+-----------+-----------+ 
| Financing activities     |          |           |           |           | 
+--------------------------+----------+-----------+-----------+-----------+ 
| Proceeds from loans and  |   16,661 |    18,000 |   125,207 |   135,267 | 
| borrowings               |          |           |           |           | 
+--------------------------+----------+-----------+-----------+-----------+ 
| Repayments of short-term |    (166) |         - |   (1,250) |         - | 
| loans and borrowings     |          |           |           |           | 
+--------------------------+----------+-----------+-----------+-----------+ 
| Proceeds on issue of new |   30,972 |   101,690 |   232,753 |   764,185 | 
| shares, net of issuance  |          |           |           |           | 
| cost                     |          |           |           |           | 
+--------------------------+----------+-----------+-----------+-----------+ 
| Net cash from financing  |   47,467 |   119,690 |   356,710 |   899,452 | 
| activities               |          |           |           |           | 
+--------------------------+----------+-----------+-----------+-----------+ 
| Net decrease in cash and |    (394) |  (20,799) |   (2,961) | (156,299) | 
| cash equivalents         |          |           |           |           | 
+--------------------------+----------+-----------+-----------+-----------+ 
| Effect of exchange rate  |     (15) |         9 |     (109) |        71 | 
| fluctuations on cash     |          |           |           |           | 
| held                     |          |           |           |           | 
+--------------------------+----------+-----------+-----------+-----------+ 
| Cash and cash            |      804 |   45,237  |     6,040 |   339,948 | 
| equivalents at beginning |          |           |           |           | 
| of year                  |          |           |           |           | 
+--------------------------+----------+-----------+-----------+-----------+ 
| Cash and cash            |      395 |   24,447  |     2,970 |   183,720 | 
| equivalents at end of    |          |           |           |           | 
| period                   |          |           |           |           | 
+--------------------------+----------+-----------+-----------+-----------+ 
1. General Information 
 
This interim report was approved by the Directors on 21September 2010. The 
results for the both of current and comparative half year have not been audited, 
but were the subject of an independent review carried out by independent 
auditors, Chiyoda International CPA Office. Their review confirmed that the 
figures were prepared using accounting policies and practices consistent with 
those adopted in the 2009 annual report. 
The audited results for the year ended 31 December 2009 are an abridged version 
of the company's financial statements which the predecessor auditor, Kainan 
Audit Corporation gave an unqualified report. 
 
2. Going concern 
 
These consolidated financial statements have been prepared by management on the 
basis of generally accepted accounting principles applicable to a "going 
concern", which assumes the Company will continue in operation for the 
foreseeable future and will be able to realise its assets and discharge its 
liabilities in the normal course of operations. 
 
The Company posted a continuing net loss of JPY 111,552 thousand (GBP838,297) in 
the first half ended 30 June 2010, JPY 380,667 thousand in December 2008, and 
JPY 537,923 thousand in December 2008.  Net loss for this period was mainly due 
to poor sales results of JPY 29,674 thousand (GBP222,997) and losses on 
impairment loss on intangible asset and equity accounted investee of JPY 20.6 
million (GBP154,843). 
 
These consolidated financial statements do not reflect adjustments that would be 
necessary if the going concern assumption was not appropriate because management 
believes that for the year ended 31 December 2010 the Company will still declare 
a loss can successfully raise sufficient funds later this year to execute the 
business plan. If the going concern assumption were not appropriate for the 
consolidated financial statements, then an adjustment would be necessary to the 
carrying values of the assets and liabilities, the reported revenues and 
expenses and the balance sheet classification used. 
 
3. Loss per share 
 
Basic loss per share is calculated on loss for the period of JPY111,552 thousand 
(GBP838,297) divided by 80,772,163 weighted average ordinary shares in the 
period ended 30 June 2010 and loss for the period of JPY200,385 thousand 
(GBP1,505,860) divided by 63,744,261 weighted average ordinary shares in the 
period ended 30 June 2009. 
 
There were no factors resulting in a dilution of loss per share. 
 
4. Dividend paid 
 
No dividends were paid and approved for the period. 
 
5. British pound sterling equivalent 
 
The British pound sterling equivalents of the figures shown in these interim 
consolidated financial statements are supplementary information and have been 
translated at JPY133.07 to STG?1.  Such translation should not be construed as 
representation that the Japanese yen amounts represent, or have been or could be 
converted into British pound at that or any other rate. 
 
6. Change in scope of equity accounted investee 
 
The Company held 24.93% of ownership of Beyond LSI, Inc. and 30.00% of ownership 
of ASD Inc, as of 31 December 2009, which was accounted using equity method 
under IAS 28 through fiscal year ended 31 December 2009.  However, the ownership 
of both companies were decreased to less than 20% and the Company do not have 
significant influence over the investments for the period ended 30 June, 2010. 
Investments in Beyond LSI, Inc and ASD Inc, were re-evaluated at fair value in 
accordance with IAS 28.  This transaction has resulted in the recognition of a 
gain of JPY2,628,000 (?19,749) in profit or loss for the period ended 30 June, 
2010. 
7. Related Party Transactions 
 
+--------------+-------------+------------+------------+------------+---------+--------+ 
| (Unit:       |         Mr. |        Mr. |        Mr. |   Mr.Evans |    Fuji | Techno | 
| JPY'000)     | Kashiwabara |    Kunieda |         Li | (Director) | Digital |        | 
|              |  (Director) | (Director) | (Director) |            | Imaging | Global | 
+--------------+-------------+------------+------------+------------+---------+--------+ 
| Sales of     |           - |          - |          - |          - |       - |    567 | 
| goods in     |             |            |            |            |         |        | 
| the          |             |            |            |            |         |        | 
| period       |             |            |            |            |         |        | 
+--------------+-------------+------------+------------+------------+---------+--------+ 
| Interest     |           - |          - |          - |          - |       - |      - | 
| income       |             |            |            |            |         |        | 
| in the       |             |            |            |            |         |        | 
| period       |             |            |            |            |         |        | 
+--------------+-------------+------------+------------+------------+---------+--------+ 
| Purchase     |           - |          - |          - |          - |       - |      - | 
| of goods     |             |            |            |            |         |        | 
| in the       |             |            |            |            |         |        | 
| period       |             |            |            |            |         |        | 
+--------------+-------------+------------+------------+------------+---------+--------+ 
| Interest     |           - |          - |          - |          - |       - |      - | 
| expense      |             |            |            |            |         |        | 
| in the       |             |            |            |            |         |        | 
| period       |             |            |            |            |         |        | 
+--------------+-------------+------------+------------+------------+---------+--------+ 
| Short-term   |           - |          - |          - |          - |       - |      - | 
| lending      |             |            |            |            |         |        | 
| made in      |             |            |            |            |         |        | 
| the period   |             |            |            |            |         |        | 
+--------------+-------------+------------+------------+------------+---------+--------+ 
| Short-term   |           - |          - |          - |          - |  16,661 |      - | 
| borrowing    |             |            |            |            |         |        | 
| in the       |             |            |            |            |         |        | 
| period       |             |            |            |            |         |        | 
+--------------+-------------+------------+------------+------------+---------+--------+ 
| Stock        |      10,500 |          - |          - |          - |       - |      - | 
| subscription |             |            |            |            |         |        | 
| of the       |             |            |            |            |         |        | 
| Company  in  |             |            |            |            |         |        | 
| the period   |             |            |            |            |         |        | 
+--------------+-------------+------------+------------+------------+---------+--------+ 
| Director's   |       3,000 |      3,600 |      3,000 |      3,461 |       - |      - | 
| remuneration |             |            |            |            |         |        | 
+--------------+-------------+------------+------------+------------+---------+--------+ 
| Amounts      |           - |          - |          - |          - |       - |    595 | 
| owed by      |             |            |            |            |         |        | 
| related      |             |            |            |            |         |        | 
| parties      |             |            |            |            |         |        | 
| at end       |             |            |            |            |         |        | 
| of the       |             |            |            |            |         |        | 
| period       |             |            |            |            |         |        | 
+--------------+-------------+------------+------------+------------+---------+--------+ 
| Amounts      |           - |      3,600 |      3,000 |      3,461 |  16,661 |      - | 
| owed to      |             |            |            |            |         |        | 
| related      |             |            |            |            |         |        | 
| parties      |             |            |            |            |         |        | 
| at end       |             |            |            |            |         |        | 
| of the       |             |            |            |            |         |        | 
| period       |             |            |            |            |         |        | 
+--------------+-------------+------------+------------+------------+---------+--------+ 
Transactions between the Company and its related parties for the period from 
01 January to 30 June 2010 are described as follows: 
 
Copies of the statement are being sent to shareholders.  Further copies are 
available on request from: 
 
+---------------------------------+------------------------------+ 
| Toshiya Kurita                  | Tel: +81.3.5652.0321         | 
| Chief Financial Controller      | Email:kurita@bgenuinetec.com | 
| BGENUINETEC INC.                |                              | 
| Headquarters and R&D Centre     |                              | 
| Takanashi Building 3F           |                              | 
| 2-15-7 Nihonbashiningyoucho,    |                              | 
| Chuo-ku                         |                              | 
| Tokyo 103-0013 Japan            |                              | 
|                                 |                              | 
+---------------------------------+------------------------------+ 
| Paul McManus                    | Tel: +44 (0) 20 7933 8787    | 
| Walbrook PR Ltd                 | Email:                       | 
| 4 Lombard Street                | paul.mcmanus@walbrookpr.com  | 
| London EC3V 9HD                 |                              | 
+---------------------------------+------------------------------+ 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 IR LLFVEALIAFII 
 

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