SOURCE: PuriCore Plc

August 25, 2009 08:10 ET

PuriCore Plc Announces Interim Results

Pennsylvania--(Marketwire - August 25, 2009) -


PuriCore Interim Results for the Six Months Ended 30 June 2009

Record Food Safety Shipments; Operational Cash Flow Positive in Q2



MALVERN, PENNSYLVANIA, AND STAFFORD, UK, 25 August 2009 - PuriCore
(LSE: PURI), the life sciences company focused on developing and
commercialising proprietary, green solutions that safely,
effectively,
and naturally kill infectious pathogens without causing harm to
human
health or the environment, today announces its interim results for
the
six months ended 30 June 2009.


Financial Highlights (unaudited)

  * H1 sales of USD19.1 million, a decrease of 2% (an increase of
8% on
    a constant currency basis) (H1 2008: USD19.5 million)
      - Food Safety sales of USD12.6 million, an increase of 17%
(H1
        2008: USD10.8 million)
      - Endoscopy sales of USD6.1 million, a decrease of 27% (a
decrease
        of 3% on a constant currency basis) (H1 2008: USD8.4
million)
  * Operating expense reductions of 14% (12% net of non-cash share
    compensation, depreciation, and amortisation) compared with H1
    2008
  * USD15.8 million in cash as at 30 June 2009 (increased from the
cash
    balance as at 31 March 2009 of USD15.6 million as a result of
    improved working capital and foreign currency)
      - Q2 operational cash flow positive
      - H1 operational cash outflow of USD2.5 million (H1 2008:
USD4.7
        million)
      - Debt reduced by USD2.7 million in H1 (USD1.3 million in
Q2)


Operational Highlights

  * Record six-month shipments of 614 Sterilox Food Safety Systems
  * Enterprise-wide implementation of Sterilox Food Safety Systems
by
    one of the top-five US supermarket retailers, SUPERVALU (NYSE: SVU)
  * Launched a new Sterilox Endoscopy pass-through AER, the
SAFERplus
  * Effectiveness of Sterilox Solution against H1N1 influenza
confirmed
  * Early traction and positive Vashe Wound Therapy feedback, with
more
    than 100,000 successful treatments to date


Post-Period Developments

  * Acquisition of Labcaire Systems Ltd., a leading UK supplier
and
    manufacturer of endoscope disinfection equipment
  * Fundraising of GBP2 million by way of a Placing through the
issue of
    10,810,811 Placing Shares at an Issue Price of 18.5 pence per
    share
  * Established a new USD2.1 million debt facility consistent with
the
    Company's strategy to utilize debt to fund the installation of
    leased Sterilox Food Retail Systems
  * New FDA 510(k) clearance for Vashe Wound Therapy with extended
    shelf-life claims


Greg Bosch, Chief Executive of PuriCore, said: "PuriCore remains
well positioned to execute on its business plan and meet market
expectations for revenue growth and operating expenditure
improvement for the full year. Looking ahead, we will continue to
expand our market share with leading US national and regional food
retailers, develop our new Vashe Wound Therapy business, and
accelerate
UK Endoscopy sales and profits as we integrate Labcaire Systems
into
our business."


Enquiries:

Ben Brewerton            Greg Bosch, CEO
Susan Quigley            Darren Weiss, VP of Finance
Financial Dynamics       PuriCore
+44 (0) 20 7831 3113     +1 484 321 2700




About PuriCore

PuriCore plc (LSE: PURI) is a life sciences company focused on
developing and commercialising proprietary green solutions that
safely,
effectively, and naturally kill infectious pathogens without
causing
harm to human health or the environment. PuriCore's patented,
proprietary technology mimics the human body's production of the
natural antimicrobial hypochlorous acid, offering a safe and
non-hazardous approach to disinfection and sanitisation. The
Company's
products are used in a broad range of markets that depend upon
controlling contamination, including food retail and foodservice,
medical device disinfection, and wound care. Hypochlorous acid is
proven to be safe, environmentally friendly, and fast acting
against a
broad range of infectious pathogens, including major public health
threats of C.difficile, E.coli, HIV, Human and Animal Influenza
(including H5N1 Avian Influenza), Legionella, MRSA,
M.tuberculosis,
Norovirus, and Salmonella. PuriCore is headquartered
in Malvern, Pennsylvania, with offices in Stafford and Clevedon,
UK.


To receive additional information on PuriCore, please visit our
website
at www.puricore.com, which does not form part of this press
release.



H1 2009 Operating and Financial Review


In the first six months of 2009, PuriCore continued to focus on
the
core businesses-US Food Safety and UK Endoscopy-and initiated
commercialisation in therapeutic Wound Care whilst decreasing
operating
costs. Despite the challenging economic environment and
significant
impact of weaker sterling, PuriCore delivered a solid performance
with
record shipments of the Sterilox Food Safety System. PuriCore's
revenues in the period were USD19.1 million, increasing 8% on a
constant
currency basis over H1 2008. Through continued efforts to increase
efficiencies, operating expenses were 14% lower across the
Company.
Gross margins were flat with prior year at 25% and remain a key
area of
focus to improve. In Q2, the Company was operational cash flow
positive
with total cash available as at 30 June 2009 of USD15.8 million
(including restricted cash balances of USD1.6 million).


Business Report


Core Business: US Food Retail

The Directors are pleased with the acceptance of PuriCore's
products by
the leading US food retailers, with two of the top-five retailers
now
using Sterilox Systems enterprise-wide. In H1 2009, PuriCore
increased
sales by 17% to USD12.6 million (H1 2008: USD10.8 million), with
record
shipments in the six months of 614 Systems, many of which were a
result
of the second contract from top-five retailer Safeway for
installations
throughout all of its stores in the United States and Canada. In
May,
another top-fiver retailer, SUPERVALU, announced its plans to
complete
an enterprise-wide implementation of Sterilox Systems, thereby
adding
approximately 190 Systems that are scheduled to be installed in H2
2009.


The Company's total customer base now exceeds 40 US retail
supermarket
chains using Sterilox Food Safety Systems with more than 3,000
Systems
installed as at 30 June 2009. This represents approximately 6.8%
of the
Food Retail target market. PuriCore has identified and is
targeting
additional sales opportunities of a second System for other
applications within its active customer base. For the remainder of
2009, the Company will continue to expand its efforts to gain
further
traction with regional supermarket chains and begin to target
Canadian
retail chains.


Core Business: UK Endoscopy

UK Endoscopy sales in the period were USD6.1 million, down 27% (H1
2008:
USD8.4 million), a 3% decrease on a constant currency basis. H1
sales
growth comparisons were significantly impacted by the weaker
sterling
as well as by the Company's strong H1 2008 performance. Sales
growth
has also been impacted slightly by National Health Service (NHS)
budgetary pressures. The Company endeavours to mitigate such
pressures
of NHS capital purchases by continuing to focus on recurring
revenues
streams from lease contracts, service agreements, and related
consumable products.


In post-period developments, PuriCore acquired Labcaire Systems
Ltd., a
leading provider of endoscope disinfection equipment to UK NHS
hospitals, private hospitals, and primary care networks. The
addition
of Labcaire's complementary skills and products expands the
PuriCore
Endoscopy product portfolio creating critical mass and a
leadership
position in the UK endoscopy market, further strengthening
its UK offering of disinfection chemistry, endoscope reprocessing
systems, and services. The Directors believe that the enlarged
Group is
well placed for growth and that the increase in international
market
opportunities and expansion of service and reagent supply
opportunities, combined with synergistic cost savings will
increase the
Group's cash flow. The combined business raises the number of
hospital
sites from just over 200 to approximately 350, and the combined
unaudited pro-forma Endoscopy division sales for the six months to
30
June 2009 would have been GBP8.5 million. See Post-Period
Developments
below for additional details of the acquisition.


New Market: Wound Care

Following positive feedback from clinicians in the Wound Care
pilot
sites, PuriCore transitioned from an exclusively clinical
development
programme to early commercialisation of the Vashe Wound Therapy
platform. As at 30 June 2009, there have been more than 100,000
successful Vashe treatments, with total period sales of USD0.3
million
(inclusive of Dental revenues). PuriCore has initiated targeted
marketing programmes and has expanded its key opinion leader
network
and activities, including 14 recent publications and symposia
presentations by the PuriCore scientific team and these industry
leaders.


In post-period developments, the Company has received a new FDA
510(k)
clearance for Vashe Wound Therapy, which extends the shelf life to
30
days.



Post-Period Developments


Acquisition of Labcaire

In early August, PuriCore announced it had acquired the entire
issued
share capital of Labcaire Systems Ltd., a leading UK supplier and
manufacturer of endoscope disinfection equipment and air
filtration
systems and a wholly owned subsidiary of Misonix Inc. (NASDAQ: MSON).
The shares were acquired in exchange for an upfront payment of
USD3.6
million in cash and a further USD1 million to be paid in equal
instalments over the next four years. Additional amounts may
become
payable at the end of each year through to 31 December 2013, based
on
the future annual sales of certain Labcaire products, such
additional
amounts in aggregate not to exceed USD1 million.


As at 30 June 2009, Labcaire Systems had gross assets of
approximately
GBP6.5 million (unaudited) (2008: GBP5.9 million, UK GAAP,
audited), and
for the year ended 30 June 2009 it reported revenues of
approximately
GBP8.7 million (unaudited) (2008: GBP6.8 million, UK GAAP,
audited) and
made a loss of approximately GBP4.5k (unaudited) (2008: loss of
GBP284k,
UK GAAP, audited).


GBP2 Million Placing

Also in early August, PuriCore announced that it has raised GBP2
million
by way of a non pre-emptive Placing through the issue of
10,810,811
Placing Shares to institutional investors, representing 5% of the
Company's existing issued share capital, at an Issue Price of 18.5
pence per share (being the closing bid price and a 3.9% discount
to the
closing mid-market price on 4 August 2009). The net proceeds of
approximately GBP1.9 million were used to fund the upfront
consideration
for the Labcaire acquisition.


USD2.1 Million Debt Raise

PuriCore also announced today that it closed on a new USD2.1
million
debt facility with Republic First Bank 24 August 2009. The debt
will be
drawn down through the fourth quarter and is structured as a 36-
month
promissory note with an imputed interest rate of 5.9%. This
financing
is consistent with the Company's strategy to utilize debt to fund
the
installation of leased Sterilox Food Retail Systems.


New Regulatory Approval

On 21 August 2009, PuriCore received a new 510(k) medical device
clearance from the US FDA for Vashe Wound Therapy with extended
shelf-life claims.


Financial Report


Income Statement

For the half year to 30 June 2009, PuriCore's sales were USD19.1
million, a decrease of 2% over H1 2008 (an increase of 8% on a
constant
currency basis), and operating expenses decreased by 12% (net of
depreciation, amortisation, and non-cash share option expense)
compared
with H1 2008. Recurring revenues, which are generated from rental
agreements, service contracts, and the sale of consumables, were
USD8.6
million and accounted for 44.9% of total revenue for H1 2009 (H1
2008:
USD8.5 million, 44.2% of total revenue).


Gross profit margin as at 30 June 2009 remained unchanged over H1
2008.
The Directors anticipate that margin growth will be achieved
through
increased volumes yielding a more effective leverage of the field
service organisations in both core businesses and by increasing
field
service efficiencies, product mix, and continued focus on reducing
product cost.


Operating Expense Controls

The Company continued to make significant progress in its efforts
to
reduce operating costs. The result was operating expenses
(comprising
sales & marketing, research & development, and general &
administrative
expenses) as at 30 June 2009 totaling USD10.0 million, 14% below
prior
year (H1 2008: USD11.6 million). Excluding depreciation,
amortisation,
and non-cash share option charges, operating expenses totaled
USD9.2
million, a 12% reduction (2008: USD10.4 million). Following last
year's
10% reduction, PuriCore continues to anticipate a 10% reduction in
operating expenses for the full year 2009.


Operating expense reductions have resulted from the Company's
growing
experience in increasing efficiency in operating as a public
company
and prudent cost control, especially with respect to general &
administrative expenses. Reductions have been achieved despite an
increase in research & development costs in H1 2009 of USD1.0
million to
USD2.2 million (increase primarily due to non-cash amortisation of
development costs). Cash expenditures have been reduced,
appropriately
reflecting the Company being predominantly in a commercialisation
phase
and focusing its investments in core areas. The Company continues
to
balance its investment in engineering, clinical development,
chemistry,
and microbiology with a focus on projects with near-term revenue
and
profitability.


Balance Sheet and Cash Flow

Despite the challenging financial markets, PuriCore was
operational
cash flow positive in Q2 2009 improving its balance sheet. As at
30
June 2009, the Company's cash position was at USD15.8 million
(including
restricted cash balances of USD1.6 million), which increased from
the
cash balance of USD15.6 million as at 31 March 2009 as a result of
improved working capital and foreign currency. H1 operational cash
outflow was USD2.5 million (compared with USD4.7 million in H1
2008),
and as at 30 June 2009, PuriCore had reduced its debt by USD2.7
million
(debt as at 31 December 2008: USD9.0 million).


The Company also reduced inventory by USD0.4 million to USD3.2
million
as at 30 June 2009 (USD3.6 million as at 31 December 2008),
resulting
from improved supply chain processes and a higher visibility of
the
sales pipeline that enabled more accurate inventory forecasting.

Outlook


PuriCore expects to complete the successful integration of
Labcaire
Systems into the business this year. The Company anticipates
delivering
full-year results for legacy PuriCore in line with market
expectations
for revenue growth and operating expenditure improvement. The
Directors
believe PuriCore is well positioned for further growth.



Certain statements made in this announcement are forward-looking
statements. These forward-looking statements are not historical
facts
but rather are based on the Company's current expectations,
estimates,
and projections about its industry; its beliefs; and assumptions.
Words
such as
'anticipates,''expects,''intends,''plans,''believes,''seeks,''esti
mates,' and similar expressions are intended to identify
forward-looking statements. These statements are not guarantees of
future performance and are subject to known and unknown risks,
uncertainties, and other factors, some of which are beyond the
Company's control, are difficult to predict, and could cause
actual
results to differ materially from those expressed or forecasted in
the
forward-looking statements. The Company cautions shareholders and
prospective shareholders not to place undue reliance on these
forward-looking statements, which reflect the view of the Company
only
as of the date of this announcement. The forward-looking
statements
made in this announcement relate only to events as of the date on
which
the statements are made. The Company will not undertake any
obligation
to release publicly any revisions or updates to these forward-
looking
statements to reflect events, circumstances, or unanticipated
events
occurring after the date of this announcement except as required
by law
or by any appropriate regulatory authority.



Condensed Consolidated Statement of Comprehensive Income

For the six-month periods ended 30 June 2009 (unaudited) and 30
June
2008 (unaudited) and the year ended 31 December 2008.
                                     30 June      30 June  31
December
                                        2009         2008
2008
                                         USD          USD
USD


Revenue                           19,050,400   19,475,237
33,717,650
Cost of sales                    (14,224,364) (14,563,184)
(26,207,658)


Gross Profit                      4,826,036    4,912,053
7,509,992
Sales and marketing expenses     (3,425,471)  (3,799,461)
(7,614,128)
General and administrative
expenses                         (4,306,609)  (6,544,731)
(11,871,858)
Research and development
expenses                         (2,244,085)  (1,280,845)
(3,907,489)


Loss before Interest and Tax     (5,150,129)  (6,712,984)
(15,883,483)
Finance costs                      (338,001)    (289,657)
(635,235)
Finance income                      139,551      178,960
420,963
Net Finance Loss                   (198,450)    (110,697)
(214,272)
Loss before Taxation             (5,348,579)  (6,823,681)
(16,097,755)
Taxation                                  -      218,510
305,539


Loss for the Period              (5,348,579)  (6,605,171)
(15,792,216)


Other Comprehensive Income:
Foreign currency translation for
foreign operations                1,594,065      (26,542)
(3,929,298)
Total comprehensive income for
the period                       (3,754,514)  (6,631,713)
(19,721,514)


Profit Attributable to:
Equity Holders of the Parent     (5,348,579)  (6,605,171)
(15,792,216)


Total comprehensive income
attributable to:
Equity holders of the Parent     (3,754,514)  (6,631,713)
(19,721,514)


Basic and Diluted Loss Per Share      (0.02)       (0.04)
(0.09)




Consolidated Statement of Recognized Income and Expense

For the six-month periods ended 30 June 2009 (unaudited) and 30
June
2008 (unaudited) and the year ended 31 December 2008.


                                     30 June    30 June    31
December
                                        2009       2008
2008
                                         USD        USD
USD

Exchange differences on
translation of foreign operations  1,594,065    (26,542)
(3,929,298)


Net Income Recognised In Equity    1,594,065    (26,542)
(3,929,298)
Loss for the financial year       (5,348,579)(6,605,171)
(15,792,216)


Total Recognised Income And
Expense                           (3,754,514)(6,631,713)
(19,721,514)


Total Recognised Income And
Expense Is Attributable To:
Equity holders of the parent      (3,754,514)(6,631,713)
(19,721,514)




Condensed Consolidated Statement of Financial Position

For the six-month periods ended 30 June 2009 (unaudited) and 30
June
2008 (unaudited) and the year ended 31 December 2008.

                                   30 June       30 June   31
December
                                      2009          2008
2008
                                       USD           USD
USD

ASSETS
Non Current Assets
Intangible assets                4,998,427     6,482,674
5,587,558
Property, plant, and
equipment                        3,682,513     6,586,523
4,421,771
Restricted cash                    830,852             -
980,607
Trade and other receivables        181,502       473,528
203,535
Total Non Current Assets         9,693,294    13,542,725
11,193,471


Current Assets
Inventories                      3,255,200     4,472,465
3,627,095
Trade and other receivables      5,185,646    10,061,025
4,310,886
Restricted cash                    783,940     2,033,000
1,085,489
Cash and cash equivalents       14,221,379     6,987,844
18,584,364


Total Current Assets            23,446,165    23,554,334
27,607,834


Total Assets                    33,139,459    37,097,059
38,801,305


LIABILITIES
Current Liabilities


Trade and other payables        (6,961,126) (10,115,436)
(6,486,069)
Loans and borrowings            (4,267,317)  (5,607,532)
(5,024,778)
Provisions                         (95,999)     (93,872)
(93,872)
Total Current Liabilities      (11,324,442) (15,816,840)
(11,604,719)


Non Current Liabilities

Loans and borrowings            (3,045,282)    (484,748)
(5,012,706)


Total Non Current Liabilities   (3,045,282)    (484,748)
(5,012,706)
Total Liabilities              (14,369,724) (16,301,588)
(16,617,425)
Net Assets                      18,769,735   20,795,471
22,183,880


EQUITY
Share capital                    3,933,521    2,777,795
3,933,521
Share premium                  158,255,171  145,455,963
158,255,171
Other Reserves                   7,657,532    6,793,889
7,317,163
Retained earnings             (149,945,730)(135,410,106)
(144,597,151)
Cumulative translation
adjustment                      (1,130,759)   1,177,930
(2,724,824)


Issued capital and reserves
attributable to equity
holders of the parent           18,769,735   20,795,471
22,183,880


Total Equity                    18,769,735   20,795,471
22,183,880




Condensed Consolidated Cash Flow Statement

For the six-month periods ended 30 June 2009 (unaudited) and 30
June
2008 (unaudited) and the year ended 31 December 2008.

                                      30 June      30 June 31
December
                                         2009         2008
2008
                                          USD          USD
USD

Cash Flows From Operating
Activities
Loss for the year                  (5,348,579) (6,605,171)
(15,792,216)
Adjustments for:
Taxation                                    -    (218,510)
(305,539)
Finance costs                         338,001     289,657
635,235
Finance income                       (139,551)   (178,960)
(420,963)
Depreciation and amortisation       2,167,031   2,425,571
5,611,893
Share based payment expense           340,369     551,417
1,112,759
Warrant expense                             -      38,068
-
Loss on disposal of property,
plant, and equipment                  107,834           -
143,581


Operating Loss Before Movement In
Working Capital                    (2,534,895) (3,697,928)
(9,015,250)
Decrease in inventories               371,895   1,211,261
2,056,631
(Increase)/Decrease in trade and
other receivables                    (916,106) (5,436,898)
497,752
Increase/(decrease) in trade and
other payables                        475,057   2,788,691
(840,678)
Increase in provisions                  2,127           -
2


Cash Absorbed By Operations        (2,601,922) (5,134,874)
(7,301,543)
Interest received                     139,551     178,960
420,963
Income tax credit received                  -     218,510
305,539


Net Cash Outflow From Operating
Activities                         (2,462,371) (4,737,404)
(6,575,041)


Cash Flows From Investing
Activities
Purchase of property, plant and
equipment                            (721,752)   (673,443)
(1,444,715)
Cash paid for internally generated
intangibles                                 -    (781,484)
(779,936)


Net Cash Flow From Investing
Activities                           (721,752) (1,454,927)
(2,224,651)


Cash Flows From Financing
Activities
Issue of shares, options, and
warrants                                   -            -
13,954,935
Proceeds from new loan notes               -    3,000,000
-
Proceeds from new bank loans               -            -
9,737,997
Repayment of borrowings           (2,677,707) (6,254,062)
(9,013,862)
Interest paid on borrowings         (274,622)   (210,884)
(470,981)

Repayments of obligations under
finance leases                       (47,178)    (17,474)
(50,467)
Decrease in overdraft                      -    (176,617)
(176,617)


Net Cash Flow From Financing
Activities                         (2,999,507)(3,659,037)
13,981,005


Net (Decrease)/Increase In Cash
And Cash Equivalents               (6,183,630)(9,851,368)
5,181,313
Cash and cash equivalents at
beginning of year                  20,650,460 18,894,207
18,894,207
Effect of foreign exchange rate
changes on cash held                1,369,341    (21,995)
(3,425,060)


Restricted cash                     1,614,792  2,033,000
2,066,096
Cash and Cash Equivalents          14,221,379  6,987,844
18,584,364
Total Cash at End of Period        15,836,171  9,020,844
20,650,460




Basis of Preparation

PuriCore plc (the "Company") is a company domiciled in the United
Kingdom. The condensed consolidated interim financial statements
of the
Company as at and for the six months ended 30 June 2009 comprise
the
Company and its subsidiaries (together referred to as the "Group")
and
the Group's interests in associates and jointly controlled
entities.


The consolidated interim financial statements are the
responsibility of
the Directors and were authorised and approved by the Board of
Directors for issuance 25 August 2009.


The interim financial statements for the period ended 30 June 2009
are
unaudited and do not comprise statutory accounts within the
meaning of
Section 240 of the Companies Act of 1985.


Statement of Compliance

These interim financial statements have been prepared in
accordance
with IAS 34, 'Interim Financial Reporting,' as adopted by the EU.
They
do not include all of the information required for full annual
financial statements and should be read in conjunction with the
consolidated financial statements of the group for the year ended
31
December 2008.


The comparative figures for the financial year ended 31 December
2008
are not the Company's statutory accounts for the financial year.
The
statutory accounts for the year ended 31 December 2008, which were
prepared under International Financial Reporting Standards adopted
by
the EU ("Adopted IFRS"), have been reported on by the Company's
auditors and delivered to the Registrar of Companies. The report
of the
auditors was (i) unqualified in accordance with section 235 of the
Companies Act 1985 and (ii) did not contain a statement under
section
237 (2) or (3) of the Companies Act 1985.


The accounting policies set out in the annual report and accounts
for
the year ended 31 December 2008 have been applied consistently
throughout the Group for the purpose of these consolidated interim
financial statements.


Significant Accounting Policies


As required by the Disclosure and Transparency Rules of the
Financial
Services Authority, this condensed set of financial statements has
been
prepared by the Group by applying the same accounting policies as
were
applied by the Group in its published consolidated financial
statements
as at and for the year ended 31 December 2008 except for the
policies
stated below.


Changes in Accounting Policy

The Group applies IAS 1 "Presentation of Financial Statements"
(2007),
which became effective as at 1 January 2009. As a result, the
Group
presents in the consolidated statement of changes in equity all
owner
changes in equity, whereas all non-owner changes in equity are
presented in the consolidated statement of comprehensive income.
This
presentation has been applied in these consolidated interim
financial
statements as of and for the six-month period ended as at 30 June
2009.
Comparative information has also been restated and there has been
no
significant impact on the presentation of the financial
statements.
As at 1 January 2009, the Group determines and presents operating
segments based on the information that internally is provided to
the
Chairman, who is the Group's chief operating decision maker. This
change in accounting policy is due to the adoption of IFRS 8
"Operating
Segments." The adoption of IFRS 8 has made no significant impact
on the
presentation of the financial statements.


Use of Estimates and Judgements

The preparation of interim financial statements required
management to
make judgements, estimates and assumptions that affect the
application
of accounting policies and the reported amounts of assets and
liabilities, income and expenses. Actual results may differ from
these
estimates.


In preparing these consolidated interim financial statements, the
significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were
the same as those that applied to the consolidated financial
statements
as at and for the year ended 31 December 2008.


Going Concern

The financial statements are prepared on a going concern basis,
which
the Directors believe to be appropriate for the reasons set out
below.


The Group meets its day-to-day working capital requirements
through
cash reserves and external funding facilities. At 30 June 2009,
cash
held was USD15.8 million (including USD1.6 million restricted
cash) and
outstanding loan notes payable were USD4.3 million.


Given the research and development and sales and marketing phase
of the
Group's life cycle and the continual work to develop further
applications of PuriCore Systems, the Group has incurred a loss
before
taxation of USD5.3 million in the six months ended 30 June 2009
(year
ended 31 December 2008: loss before taxation of USD16.1 million).
In
addition, given the nature of the Group's operations, future
income is
dependent on securing additional contracts within the markets in
which
it currently operates and on developing new applications for
PuriCore
Systems and penetrating those related markets.


The Board has prepared projected cash flow information for the
period
to 31 December 2010. Given the nature of the business and
operating
losses incurred to date, management has sensitized these forecasts
for
a number of stress-case scenarios, including a downturn in
forecast
trading, a similar cost structure to that in the year ended 31
December
2008, and reduced new borrowings. Based on the information above
and
the projected cash flow information, including the stress-case
forecasts, the Directors believe that it remains appropriate to
prepare
the financial statements on a going concern basis.


Segmental Analysis

The PuriCore Group is managed by type of business. The Group has
two
main trading segments that are the Group's strategic business
units.
The strategic business units offer different products and services
and
are managed separately because they require different market
knowledge
and strategies. For each of the strategic business units, the
Board
reviews internal management reports on a monthly basis. For the
purposes of IFRS 8, it is these strategic business units that form
the
Group's reportable segments and is in line with the basis of
segmentation adopted in the consolidated Group financial
statements for
the year ended 31 December 2008. Under 'other,' we have identified
the
Group's Global Dental business and certain business development
activities not yet generating significant revenues.



Primary Reporting Format - Business Segments

For the period ended 30 June 2009



Total as

Reported
                                                Corporate,     for
the
                                 Food                   &
PuriCore
                 Endoscopy     Safety    Other Unallocated
Group

Revenue          6,146,274 12,638,019  266,107           -
19,050,400
(Loss)/Profit
Before Interest,
Tax, Depreciation
and
Amortisation      (516,029)   562,781 (335,451) (2,694,399)
(2,983,098)
Depreciation and
Amortisation      (338,876)  (939,534) (20,247)   (868,374)
(2,167,031)
(Loss)/Profit
Before Interest
and Tax           (854,905)  (376,753)(355,698) (3,562,773)
(5,150,129)


  Total Assets   6,572,120  4,631,602        -  21,935,737
33,139,459



For the period ended 30 June 2008



Total as

Reported
                                                               for
the
                                               Corporate, &
PuriCore
              Endoscopy    Food Safety   Other  Unallocated
Group

Revenue       8,369,788    10,848,233  257,216            -
19,475,237

Profit/(Loss)
Before
Interest,
Tax,
Depreciation
and
Amortisation    466,393       254,007   41,087
(5,048,900)(4,287,413)
Depreciation
and
Amortisation   (410,165)   (1,577,561)       -
(437,845)(2,425,571)

Profit/(Loss)
Before
Interest and
Tax             56,228     (1,323,554)  41,087
(5,486,745)(6,712,984)


  Total
  Assets    10,372,971      4,565,916        -   22,158,172
37,097,059



For the period ended 31 December 2008



Total as
                                                Corporate,
Reported for& the PuriCore
              Endoscopy Food Safety      Other Unallocated
Group

Revenue      13,842,186  19,413,678    461,786          -
33,717,650

Loss Before
Interest,
Tax,
Depreciation
and
Amortisation (1,193,933)   (522,623)(1,004,799) (7,550,235)
(10,271,590)


Depreciation
and
Amortisation   (895,104) (3,102,476)         -  (1,614,313)
(5,611,893)

Loss Before
Interest and
Tax          (2,089,037) (3,625,099)(1,004,799) (9,164,548)
(15,883,483)



  Total
  Assets     11,324,478  4,646,974     344,801  22,485,052
38,801,305





                           Six months      Six months
Year
Sales by Geographic             ended           ended
ended
Segment                       30 June            June          31
Dec
                                 2009            2008
2008

United Kingdom              6,146,274       8,369,788
13,842,186
United States              12,904,126      11,105,449
19,875,464
                           19,050,400      19,475,237
33,717,650



The geographic segments above are segregated based upon the
location of
the respective operating division of the company.


Share Based Payments

During the periods ended 30 June 2009 and 2008 and the year ended
31
December 2008, PuriCore plc operated an Employee Share Option
Scheme.
The exercise period is up to 10 years with options becoming vested
at
various points in time following the completion of one year's
employment with PuriCore plc. The share options granted under the
scheme are not subject to performance conditions and have no
vesting
conditions other than completion of service with the exception of
certain options granted to the Executive Director in 2008 and 2009
and
certain options granted to employees in February 2009.


                30 June 2009         30 June 2008      31 December
2008

            Weighted             Weighted           Weighted
             average              average            average
            exercise Number of   exercise Number of exercise
Number of
               price   options      price   options    price
options

                 USD                  USD                USD


Outstanding
at
beginning
of period       0.74  23,945,700     1.23 20,390,950    0.90
20,390,950
Granted
during the
period          0.16  12,130,000     0.61  6,405,000    0.42
6,995,000
Exercised
during the
period             -           -        -          -       -
-
Forfeited
during the
period          0.70  (1,793,434)    1.69   (838,750)   1.02
(3,440,250)


Outstanding
at end of
period          0.61  34,282,266     1.06 25,957,200   0.74
23,945,700



Exercisable
at end of
period          0.94  16,514,657     1.23 16,564,049   0.85
16,293,906




The weighted average share price for the six months ended 30 June
2009
was USD0.13. This compares with the weighted average share prices
as at
30 June 2008 of USD0.51 and 31 December 2008 of USD0.27.


For the six months ended 30 June 2009, PuriCore plc has recognised
total expenses of USD340,369 (six months ended 30 June 2008:
USD551,417; year ended 31 December 2008: USD1,112,759) related to
Director and employee equity settled share based payment
transactions
during the year.


Taxation

The Group's effective consolidated tax rate is detailed in the
following table.


              6 months ended   6 months ended       12 months
ended
                30 June 2009     30 June 2008      31 December
2008
                         USD              USD
USD

Loss before
tax               (5,348,579)      (6,823,681)
(16,097,755)
Tax (charge)/
credit                     -          218,510
305,539


Effective tax
rate %                     -            (1.67)%
(1.97)%



The difference in effective tax rate was caused by the following
factors:

  * For the period ended 31 December 2008, a hybrid rate of 28.5%
was
    applied as the corporation tax rate applicable to the Group
changed
    from 30% to 28% on 1 April 2008.
  * The corporation tax rate applicable to the Group for the six
months
    ended 30 June 2009 was 28.5%.
  * Tax on any profits arising in the current or prior period were
    offset by prior period losses and group relief.
  * In the year ended 31 December 2008, a tax credit in relation
to a
    research and development tax credit claim was recognised of
    USD305,539 (30 June 2008: USD218,510).


Property, Plant, and Equipment (including leased equipment)


                                         At 30       At 30
At 31
                                          June        June
December
                                          2009        2008
2008
                                           USD         USD
USD

Cost
At beginning of period              16,668,021  17,362,065
17,362,065
Additions                              721,752     940,065
1,444,715
Disposals                             (335,099)   (266,622)
(782,263)
Effect of movements in foreign
exchange                               562,392      (7,502)
(1,356,496)


At end of period                    17,617,066  18,028,006
16,668,021


Depreciation
At beginning of period              12,246,250   9,359,941
9,359,941
Charged in the period                1,577,900   2,336,385
4,377,863
On disposals                          (227,265)   (251,889)
(638,682)
Effect of movements in foreign
exchange                               337,668      (2,954)
(852,872)


At end of period                    13,934,553  11,441,483
12,246,250



Net book value
At end of period                     3,682,513   6,586,523
4,421,771
                                       _______     _______
_______


At beginning of period               4,421,771   8,002,124
8,002,124
                                       _______     _______
_______



Related-Party Transactions


Transactions with Key Management Personnel

Key management personnel receive compensation in the form of short-
term
employee benefits, post employment benefits, and share based
payment
awards. Key management personnel received total compensation of
USD1,158,770 for the six months ended 30 June 2009 (six months
ended 30
June 2008: USD1,340,400, twelve months ended 31 December 2008:
USD3,118,791).


Post-Period-End Events

Details of post-period-end events are on page 4.



Responsibility Statement of the Directors in Respect of the
Interim
Financial Report

We confirm that to the best of our knowledge:

The condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by
the
EU.

The interim management report includes a fair review of the
information
required by:

a.    DTR 4.2.7R of the Disclosure and Transparency Rules, being
an
indication of important events that have occurred during the first
six
months of the financial year and their impact on the condensed set
of
financial statements; and a description of the principal risks and
uncertainties for the remaining six months of the year; and


b.    DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected
the financial position or performance of the entity during that
period;
and any changes in the related party transactions described in the
last
annual report that could do so.


By order of the Board

Greg Bosch                       Chief Executive Officer



25 August 2009






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