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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

DataTern Inc, Amphion’s wholly-owned intellectual property business, has received confirmation that 20 of its original clAIMs can be patented. It has also clarified three patent clAIMs that were added during the re-examination process.

The group has been working to reinforce its IP position in recent years. In 2009, it had its group of ‘501’ patents re-examined and approved – this kept all original patents intact and added 26 new ones.

It says today’s determination by the USPTO is an important part of the further validation of the group’s outstanding patents.

"This outcome is an important validation of the strength of DataTern’s IP,” said Amphion chief executive Richard Morgan.

“Both key patents 402 and 502 have now been re-examined by the USPTO with positive outcomes.” 

DataTern said that the positive outcomes for both the ‘402’ and ‘502’ patent re-examinations increases its confidence in the fundamental strength of the technologies and patents.  

Furthermore, Ampion explained that DataTern is currently enforcing its patents against companies that are using the patented technology without permission.

“The result is another important milestone for the development of our IP program with our new legal partners McCarter & English LLP. 

“We look forward with increased confidence to positive results in the existing cases and gaining additional licensing revenues from these and other companies using our technology in the future."

In a note to clients today Seymour Pierce analyst Dr Mike Mitchell said that today’s news is an important event in the context of DataTern’s IP licensing programme, although he says investors unfamiliar with the group may not see the immediate significance.

“In a nutshell, DataTern owns two key patents in the field of relational databases (the ObjectSpark patents, commonly referred to as the '402 and '502 patents) which are fundamental elements in the company's IP licensing model which has been delivering license income from a host of well-known customers/developers,” the analyst explained.

He added: “The successful re-examination of both the '502 and '402 patents is not only a general reflection of the quality of the ObjectSpark IP, it also signficantly strengthens the company's position in terms of its platform to pursue licensing agreements with large players within the field. 

“We highlight the fact that the filing of a Declaratory Judgement by Microsoft and SAP effectively placed the burden on DataTern to demonstrate the validity of its IP: today's announcement significantly underpins DataTern's position and, we believe, potentially significantly increases the chance of delivering fair license agreements where it has legitimate clAIMs against infringing parties.”

Mitchell says Amphion is fundamentally undervalued. Seymour Pierce rate Amphion as a ‘buy’ with a 10p a share target price.

Shares in the AIM-listed group rose 0.62p, or 16 per cent, to 4.38p.

DataTern Inc, Amphion’s wholly-owned intellectual property business, has received confirmation that 20 of its original clAIMs can be patented. It has also clarified three patent clAIMs that were added during the re-examination process.

The group has been working to reinforce its IP position in recent years. In 2009, it had its group of ‘501’ patents re-examined and approved – this kept all original patents intact and added 26 new ones.

It says today’s determination by the USPTO is an important part of the further validation of the group’s outstanding patents.

"This outcome is an important validation of the strength of DataTern’s IP,” said Amphion chief executive Richard Morgan.

“Both key patents 402 and 502 have now been re-examined by the USPTO with positive outcomes.” 

DataTern said that the positive outcomes for both the ‘402’ and ‘502’ patent re-examinations increases its confidence in the fundamental strength of the technologies and patents.  

Furthermore, Ampion explained that DataTern is currently enforcing its patents against companies that are using the patented technology without permission.

“The result is another important milestone for the development of our IP program with our new legal partners McCarter & English LLP. 

“We look forward with increased confidence to positive results in the existing cases and gaining additional licensing revenues from these and other companies using our technology in the future."

In a note to clients today Seymour Pierce analyst Dr Mike Mitchell said that today’s news is an important event in the context of DataTern’s IP licensing programme, although he says investors unfamiliar with the group may not see the immediate significance.

“In a nutshell, DataTern owns two key patents in the field of relational databases (the ObjectSpark patents, commonly referred to as the '402 and '502 patents) which are fundamental elements in the company's IP licensing model which has been delivering license income from a host of well-known customers/developers,” the analyst explained.

He added: “The successful re-examination of both the '502 and '402 patents is not only a general reflection of the quality of the ObjectSpark IP, it also signficantly strengthens the company's position in terms of its platform to pursue licensing agreements with large players within the field. 

“We highlight the fact that the filing of a Declaratory Judgement by Microsoft and SAP effectively placed the burden on DataTern to demonstrate the validity of its IP: today's announcement significantly underpins DataTern's position and, we believe, potentially significantly increases the chance of delivering fair license agreements where it has legitimate clAIMs against infringing parties.”

Mitchell says Amphion is fundamentally undervalued. Seymour Pierce rate Amphion as a ‘buy’ with a 10p a share target price.

Shares in the AIM-listed group rose 0.62p, or 16 per cent, to 4.38p.

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

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

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

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

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

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

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

Before the latest round of stock market turbulence began two weeks ago shares in Amphion Innovations (LON:AMP) had only recently bounced from an all-time low of 2.12 pence each. Between mid-July and the beginning of August the shares rose as high as 7.25 pence each and currently they are changing hands for 4.5 pence each.

Richard Morgan, chief executive officer, is pleased by Amphion’s recent share price recovery but the increase had followed a long decline. “The volumes had been pitiful,” he says, putting the share price fall down to a long period of no news from the company and a few sales of shares.

However, Morgan’s July 21 purchase of 400,000 shares, just a fraction of the approximately 24.2 million shares he now owns, appears to have been the catalyst that turned the firm’s share price progress around.

Amphion had announced in its annual report at the end of June that “the recovery seen in the second half has continued in the first few months of the current year”. Then, on August 2, the firm issued a trading update that showed revenue and profitability had been boosted during the first half of its current financial year thanks to improved performance from its DataTern intellectual property licensing business.

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

The DataTern subsidiary has been making progress with its patent-enforcement activities against a number of companies regarding its next-generation business software: ObjectSpark. DataTern has taken “concrete steps” to combat actions filed against it by Microsoft and SAP in April concerning its ’402 and ’502 patents. The two business software firms assert that these patents are invalid and not infringed by companies that DataTern itself has taken action against.

ObjectSpark, a form of what the enterprise software industry calls ‘business objects software’, is based on processes identified in the ’402 and ’502 patents to do with how business data is stored. “’402 and ’502 are sister patents. They are distinct but very complementary,” says Morgan. “Companies are routinely getting data from the real world, and that data needs to be stored. The place they store it is in a relational database.”

DataTern’s case is that it developed the key steps to all this work. “We figured out, before anyone else did, how to do the mapping process,” he says. “Now it has become state of the art and a completely routine, ubiquitous thing that’s used by everybody. And big software companies have incorporated this process into their tools.”

DataTern’s ObjectSpark can be used across a range of industries to allow business users to develop their own customised data service layers, and the business provides non-exclusive licences for its technologies on what it describes as “reasonable and non-discriminatory terms”.

And since DataTern has taken a more robust approach concerning its patents it has managed to boost revenues from the software. For example, in January this year DataTern announced it settled five patent infringement lawsuits involving the ’402 and ’502 patents, generating total revenues of US$1.125 million.

Now, the business has retained law firm McCarter & English, and on July 22 filed a motion in New York to dismiss, or at least stay, the actions by Microsoft and SAP. Around the same time it also filed an application in the US Patent and Trademark Office to re-examine the ’402 patent. The ’502 patent already successfully completed re-examination by the USPTO with all 18 original claims intact and 26 new claims added.

However, it should be remembered that Amphion is primarily a technology commercialisation company. Originally its purpose was and, according to Morgan, remains the starting and building of businesses that are based on proprietary (patented) technologies developed by UK and US universities and academic institutions. Each one of the businesses that Amphion has chosen to invest in and develop has been selected to address established markets worth in excess of US$1 billion, with the firm aiming to achieve exit values of more than US$100 million for each company.

Amphion, and its share price, has suffered in recent years because the progress of its ‘Partner Companies’ has been adversely affected by difficulties in raising capital from external investors.

In spite of this, Amphion’s eight Partner Companies still managed to raise US$16.3 million last year, with the lion’s share of this (US$10.6 million) being raised by Kromek – a UK firm that is developing digital X-ray systems for applications in security, industrial production, medicine and defence.

Myconostica, one of Amphion’s other Partner Companies, did not enjoy similar success so in May 2011 Amphion sold its 16 per cent stake in the company to Cambridge-based Lab21, a privately-owned medical diagnostics business, in return for US$200,000 of Lab21 equity. Amphion’s stake in Myconostica was valued at US$2.3 million at the end of 2010, so Amphion’s net asset value was reduced by around US$2 million as a result of the deal.

For now, Kromek is probably the best bet in terms of an exit opportunity for Amphion in the short-to-medium term, with the next most likely to achieve an exit being Motif BioSciences – which exploits population genetics, and novel clinical chemistry, for pharmaceuticals and diagnostics applications. “We have been talking about doing an IPO for one or two of the businesses since early 2008,” says Morgan. “If the stock market as a whole is supportive I think we should have a great opportunity to IPO Kromek and perhaps Motif during the next one to two years.”

Meanwhile, the firm’s Partner Company FireStar Software has made great progress despite what Amphion has described as “severe financial challenges”. FireStar succeeded in getting key products and technology adopted as standard by the Object Management Group – a standards setting body for enterprise software – while managing to be included in a consortium that is developing important software products for the US government.

FireStar’s key technology assets remain intact and this company has now had its patent application covering some of its critical messaging technologies granted by the US Patent Office. The business is starting to attract additional capital from investors other than Amphion to supplement cash flow expected from contract awards.

Other firms that Amphion is invested in include: publically traded Axcess International – a developer of RFID systems for a range of applications, mostly revolving around “advanced workforce management” which embraces safety, efficiency and security; m2m Imaging – MRI (magnetic resonance imaging) coils and tools for clinical and research applications; PrivateMarkets – online energy trading marketplace; and WellGen – a firm developing medical foods and nutritional supplements for the health market.

In the meantime, Morgan says that financial progress at the firm appears to be on a more positive trend. “If you look at the last three halves you will see a poor half to start with, moving to a better half  in H2 2010 and then an even better half  in H1 2011,” he says. “Now we’ve got a new leg to the business in the shape of Datatern, which is in a better situation, although we never expected it to become a P&L business.”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Net asset value per share fell to 14 pence during the 12 months to 31 December, from 26 pence per share a year earlier. Revenues fell 53 percent to US$4.1 million and the group booked a US$1.9 million loss.

DataTern – the New York-based business wholly owned by Amphion that was established in order to commercialise selected intellectual property opportunities from the group’s partner companies – has had its licensing activities restructured, enhancing gross margins.  

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

“The recovery of our IP licensing activities in the second half of the year has continued into the current year,” said Richard Morgan, Amphion’s chief executive officer. “This programme has become a central part of Amphion's business and the key source of revenue and cash flow, allowing the group to continue to provide some support for our partner companies, despite the difficult overall funding environment. We continue to explore new ways of extracting value from the intellectual property assets in DataTern and elsewhere in the group.”

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

The firm and its share price has suffered in recent years because the progress of these partner companies has been affected by difficulties in raising capital from external investors and today’s results confirmed that the environment for raising capital directly into Amphion’s partner companies remained negative throughout the year.

In spite of this, Amphion’s eight partner companies still managed to raise US$16.3 million, with the lion’s share of this (US$10.6 million) being raised by Kromek – a UK firm developing digital X-ray systems for applications in security, industrial production, medicine and defence.

“Kromek continues to be the company which has enjoyed some success in raising capital and it continues to make good progress,” said Morgan.

Myconostica, one of Amphion’s other partner companies, has not enjoyed similar success so in May Amphion sold its 16 percent stake in the company to Cambridge-based Lab21, a privately-owned medical diagnostics business, in return for US$200,000 of Lab21 equity. Amphion’s stake in Myconostica had been valued at US$2.3 million at the end of last year, so Amphion’s net asset value was reduced by around US$2 million as a result of the deal.

At the time, CEO Richard Morgan said: “The lack of sufficient further capital to support Myconostica’s continued progress as a standalone company required exiting at a relatively early stage in its growth which ended in a disappointing outcome.”

For now, Kromek is probably the best bet in terms of an exit opportunity for Amphion in the short-to-medium term. 

Meanwhile, the firm’s partner company FireStar Software has made great progress despite what Amphion describes as “severe financial challenges”. FireStar has managed to get key products and technology adopted as standard by the Object Management Group – a standards setting body for enterprise software – while managing to be included in a consortium that is developing important software products for the US government.

FireStar’s key technology assets remain intact and it has been informed that its patent application covering some of its critical messaging technologies has been granted by the US Patent Office. The business is now starting to attract additional capital from investors other than Amphion to supplement cash flow expected from contract awards.

Other firms that Amphion is invested in include: Axcess International – a developer of RFID systems for a range of applications, mostly revolving around “advanced workforce management” which embraces safety, efficiency and security; Motif BioSciences – using population genetics for pharmaceuticals and diagnostics; m2m Imaging – MRI (magnetic resonance imaging) coils and tools for clinical and research applications; PrivateMarkets – online energy trading marketplace; and WellGen – a firm developing medical foods and nutritional supplements for the health market.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Macaleer has a 17.12 percent stake in Amphion.

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

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

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

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

Kromek and UMASS will develop an advanced system for breast cancer detection and diagnosis, which it said could change the way this disease is detected.

The contract, which is worth US$1.5 million to Kromek, was funded via US$4 million from the US National Institute for Health (NIH).

X-ray mammography, which is considered the imaging mode of choice for early detection of breast cancer, records images that represent a three-dimensional (3D) object in a two-dimensional (2D) plane, meaning that normal breast tissue versus tumour tissue can be difficult to distinguish.

Kromek claims its technology can achieve better resolutions of breast tissue without increasing doses of radiation for patients, while the contract has potential to “significantly advance clinical diagnostics, in the field of breast cancer detection, and potentially way beyond”.

"Kromek and NOVA possess a unique technological answer to the challenge of achieving better resolutions of breast tissue, without increasing doses of radiation for patients," Amphion said in the statement.

“The modality we are using, which combines photon counting and cone-beam CT imaging, holds unique promise for the medical imaging market.

“We are looking forward to working together with Kromek and NOVA towards a solution that could change the way breast cancer detection is carried out for many years to come,” said professor of radiology at the University of Massachussets Stephen Glick.

Growth in the mammography market is influenced rising incidence of breast cancer in industrialised as well as developing nations.

The US mammography equipment market is forecast to be worth US$585 million per annum by 2015.

The deal will further expand Kromek’s presence in the medical imaging market, following the announcement earlier this month about our work with Siemens on CT imaging development in Germany and the US.

Just a month ago, Kromek secured official EU certification to provide colour x-ray liquid detection systems to all European airports.

This means that all airports on the continent are free to buy and implement Kromek’s Bottle Scanner product, marking the first time that airports can purchase tested, approved, and secure technology, allowing them to relax the liquid ban.

The technology is set to loosen up security restrictions for air passengers as it will eliminate the ban on carrying liquids on flights by April 2013.

Kromek is seen as the likeliest partner company of Ampion to be the next to become publicly traded.

According to Ampion chief executive Richard Morgan, the earliest the business can be floated would be during the first quarter of 2011, at which point Amphion’s 16% stake should be worth far more than the last valuation of £9 million.

For comparison, Amphion’s current market cap is around £6.4 million.

Meanwhile, Kromek itself managed to raise £12.3 million in an oversubscribed financing in March this year.

Amphion currently has eight partner companies developing proven technologies and targeting substantial commercial marketplaces in excess of US$1bn. Amphion aims to achieve a an exit value in excess of US$100m for each partner company.  Two of Amphion’s more advanced partner companies, Kromek and WellGen, are considered potential IPO candidates.

Last week, digital X-ray device developer Kromek raised £12.3m in an oversubscribed financing. Kromek has developed a family of products for the global aviation and border security markets to combat threats posed by liquid based explosives and smuggling of narcotics dissolved in alcohol. During 2009, Kromek launched its second product in June, the 311+ Scanner, to scan for liquids in quart sized bags as well as a variety of bottles in airport security.

The company was also awarded a US$4m contract from a US Defense Agency to develop Detectors from ‘Vapour Growth Cadmium Zinc Telluride’ material and it completed a UK Government contract to develop new baggage scanning systems. Also during the period Kromek's first product, the Bottle Scanner, underwent successful trials at Newcastle Airport.

During 2009, WellGen introduced its first commercial products range under the TeAmé brand name. According to Amphion, the line of natural food supplements address important health needs of ‘baby-boomers’ such as joint health, stress management, immune defense, and exercise nutrition.  The partner also signed an agreement with RFI Ingredients, to collaborate on a range of opportunities to create and market therapeutic nutrition products. 

In a preclinical study WellGen's proprietary black-tea extract concentrate, demonstrated that it significantly improves glucose control, thereby advancing the company's lead medical food into the final phase of clinical development for diabetes.

Amphion also noted the progress being made among its other partners. Wireless-technology group Axcess International became profitable in the first half of 2009 and achieved record year-end revenues of US$4.9m. Physical commodity-trading platform PrivateMarkets built upon its Q408 launch in the Texas electricity market, growing trading volumes and exceeded expectations with a 25% increase in the customer base by year-end.

Molecular diagnostics company Myconostica, continued to make progress as it began to sell its 2nd generation MycAssay Aspergillus product in Europe. Also during the period, Myconostica successfully raised £1.75m in the summer. In the current financial year, Myconostica recently launched a new version of MycAssay Pneumocystis product.

Amphion said that genetic research group Motif BioSciences' partnership with Imperial College London and Professor Philippe Froguel began to yield results during 2009, with discoveries including specific genetic associations with type 2 diabetes, obesity, hypertension, and dyslipidemia. 

The company also noted that FireStar Software has extended its successful partnership with OMG to include OMG MDMI Labs. Additionally the partner has also developed a partnership with Southeast Michigan Health Information Exchange, to assist them in building their Information Exchange.

Looking ahead through 2010 and beyond, the company expects the IP licensing programme to be a key source of financial support, and if it can meet its revenue generation objectives, Amphion believes it should be able to cover most, if not all, of its direct operating costs.

The company acknowledged that for its business model to work Amphion needs continuous access to capital, which remained very scarce throughout 2009 for early stage emerging technology companies. As such Amphion said it needs to see a return of a viable IPO market, for the broader economic recovery to make a positive impact on its own performance.

As previously stated, Amphion believes that a number of its partner companies should be ready to approach the IPO market, as and when it revives but the company believes that conditions will improve slowly during 2010. Whilst remaining cautious, Amphion believes in the strength of its business model and in the quality of its partner companies.