Interim Results
Adamind Ltd
28 September 2007
28 September 2007
Adamind Ltd
("Adamind" or "the Company")
Interim Results for the period ended 30 June 2007
Adamind Ltd announces its financial results for the six months ended 30 June
2007.
Summary
• Revenues amounted to $691,000 (H1 2006: $1.7m) reflecting the sale of
assets in the first half
• Profit before tax was $544,000 (H1 2006: $3,998 (loss))
• Basic and diluted profit per share of 1cent (H1 2006: 11 cents (loss))
• Cash, Cash equivalents, restricted cash, and Short term
available-for-sale Securities totalled $24.29m in cash plus $550,000 in
escrow (from the Mobixell Networks (Israel) Ltd transaction)
• Sale of assets to Mobixell Networks (Israel) Ltd
• Intention to return monies to shareholders
Orna Berry, Executive Chairperson of Adamind, said: "The Board plans to return
the cash as soon as it can to its shareholders. The Company hedges the funds
against currency fluctuations and keeps a majority of the money in GBP. Should
Adamind be approached by potential buyers for the Company as a going concern,
the Board will explore the offer in order to try and maximize the shareholders'
return and accelerate the time of the return."
Enquiries:
Adamind
Orna Berry, Executive Chairperson +972 9 971 9111
Corfin Communications
Harry Chathli, Neil Thapar +44 20 7977 0020
Landsbanki Securities
Simon Bridges +44 20 7426 9000
Overview
The results reflect the strategic direction taken by the Board in actively
pursuing a range of alternative proposals with a view to maximising shareholder
value after the slower than expected growth in demand for MMS and content
services market, affecting the entire industry. Towards the end of 2006, a
number of parties expressed an interest in exploring a potential deal.
On 21 February 2007, the Company announced that it had entered into an agreement
for the sale of substantially all the Company's assets (excluding, among others,
cash and cash equivalents and marketable securities) and assignment of related
liabilities to Mobixell Networks (Israel) Ltd. The transaction was approved at
an Extraordinary General Meeting held on 12 April 2007.
The Company has taken specific measures to reduce its cash burn. The cost
structure as of October 1st, 2007 following the departure of the CEO and the CFO
will be comprised of the following: board members' payments, the AIM and FSA
related expenses and a limited number of essential service providers.
As of Sept.25th 2007, the Company had $23.9m in cash, cash equivalents and
short-term securities plus $550,000 in escrow (from the Mobixell Networks
(Israel) Ltd transaction).
FSA Investigation
The U.K. Financial Services Authority ("FSA") is investigating the Company, in
respect of circumstances, statements and behaviour occurring prior to an adverse
trading statement made by the Company on 22 June 2006, and with respect to
circumstances suggesting that market abuse may have occurred. The FSA has
interviewed directors and officers of the Company and appears to be in the final
stages of its investigation. It is not possible for management to assess what
impact it may have on the Company's financial statements in the future. The
Company is in discussions with its insurance company, negotiating the
possibility of recovering a portion of the legal expenses incurred pertaining to
the aforementioned FSA investigation. Part of the expenses have been reimbursed
after the balance sheet date and negotiations are continuing with the insurance
company with respect to other expenses. At the present time, management is
unable to determine the additional amounts, if any, that it might receive as
reimbursement.
Outlook
The Board plans to return the cash as soon as it can to its shareholders. The
Company is currently hedging the funds against currency fluctuations and keeping
a majority of the money in GBP. Should Adamind be approached by potential buyers
for the company as a going concern, the Board will explore any interest in order
to try and maximize the shareholders return and accelerate the time of the
return.
ADAMIND LTD. AND ITS SUBSIDIARIES
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF 30 JUNE 2007
U.S. DOLLARS IN THOUSANDS
UNAUDITED
INDEX
Page
---------
Consolidated Balance Sheets 2
Consolidated Statements of Operations 3
Consolidated Statements of Changes in Equity 4
Consolidated Statements of Cash Flows 5 - 6
Notes to Financial Statements 7 - 8
- - - - - - - - -
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
30 June 31 December
ASSETS 2007 2006
--------- ---------
Unaudited Audited
--------- ---------
CURRENT ASSETS:
Cash and cash equivalents $ 22,499 $ 15,213
Restricted cash 237 -
Short-term available-for-sale marketable securities 1,559 7,451
Trade receivables - 1,535
Other accounts receivable and prepaid expenses 729 468
--------- ---------
Total current assets 25,024 24,667
---------------------- --------- ---------
NON-CURRENT ASSETS:
Property and equipment, net - 477
Intangible assets, net - 2,087
--------- ---------
Total non-current assets - 2,564
-------------------------- --------- ---------
Total assets $ 25,024 $ 27,231
-------------- ========= =========
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Trade payables $ 8 $ 577
Employees and payroll accruals 73 936
Accrued expenses and other liabilities 639 1,211
Deferred revenues - 657
--------- ---------
Total current liabilities 720 3,381
--------------------------- --------- ---------
EQUITY:
Share capital -
Ordinary shares of NIS 0.01 par value - Authorized:
50,000,000 shares at 30 June 2007 and 31 December
2006;
Issued and outstanding: 35,688,886 and 35,546,636 81 81
shares at 30 June 2007 and 31 December 2006,
respectively
Additional paid-in capital 31,840 31,768
Net unrealized loss reserve (8) (46)
Accumulated deficit (7,609) (7,953)
--------- ---------
Total equity 24,304 23,850
--------------- --------- ---------
$ 25,024 $ 27,231
========= =========
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except share and per share data
----------------
Six months ended Year ended
30 June 31 December
----------------
2007 2006 2006
--------- --------- ----------
Unaudited Audited
---------------- ----------
Revenues $ 691 $ 1,704 $ 5,946
Cost of revenues 165 323 739
--------- --------- ----------
Gross profit 526 1,381 5,207
--------- --------- ----------
Operating expenses:
Research and development, net 825 1,664 3,002
Sales and marketing 1,014 2,817 5,550
General and administrative 1,590 962 2,137
Amortization of intangible assets 204 420 831
Impairment of intangible assets - - 1,165
--------- --------- ----------
Total operating expenses 3,633 5,863 12,685
--------- --------- ----------
Operating loss 3,107 4,482 7,478
Financial income, net 546 484 960
Other income (note 1b) 3,105 - -
--------- --------- ----------
Profit (loss) before income taxes 544 (3,998) (6,518)
Income taxes 200 - -
--------- --------- ----------
Net profit (loss) $ 344 $ (3,998) $ (6,518)
========= ========= ==========
Basic net profit (loss) per share $ 0.01 $ (0.11) $ (0.18)
========= ========= ==========
Diluted net profit (loss) per share $ 0.01 $ (0.11) $ (0.18)
========= ========= ==========
Weighted average number of shares
used in computing basic net profit
(loss) per share 35,569,056 35,485,231 35,516,186
========= ========= ==========
Weighted average number of shares
used in computing diluted net profit
(loss) per share 35,853,409 35,485,231 35,516,186
========= ========= ==========
The accompanying notes are an integral part of the consolidated financial
statements.
STATEMENTS OF CHANGES IN EQUITY
U.S. dollars in thousands, except share data
Ordinary shares Additional paid-in Net unrealized
shares Amount capital loss reserve
-------- ------ ------------- ---------
Balance as of
January 1,
2006 35,388,636 $ 80 $ 31,285 $ -
(Audited)
Issuance of
shares upon
exercise of
employees'
share options 158,000 1 64 -
Cancellation
of
issuance - - 298 -
expense
Unutilized
losses on
available for
sale
marketable - - - (46)
securities
Share based
compensation - - 121 -
Loss - - - -
-------- ------ -------- --------
Balance as of
31 December
2006 (Audited) 35,546,636 81 31,768 (46)
Issuance of
shares upon
exercise of
employees'
share options 142,250 *) 59 -
Issuance
expenses - - (213) -
Realized
losses
on available
for sale
marketable - - - 38
securities
Share based
compensation - - 226 -
Net profit - - - -
-------- ------ -------- --------
Balance as of
30 June 2007
(unaudited) 35,688,886 $ 81 $ 31,840 $ (8)
======== ====== ======== ========
Total
Accumulated Total recognized
deficit equity income and expenses
-------- ------- --------
Balance as of January 1, 2006
(Audited) $ (1,435) $ 29,930 $ -
Issuance of shares upon
exercise of employees' share
options - 65 -
Cancellation of issuance
expense - 298 -
Unutilized losses on available
for sale marketable securities - (46) (46)
Share based compensation - 121 -
Loss (6,518) (6,518) (6,518)
-------- ------- --------
Balance as of 31 December 2006
(Audited) (7,953) 23,850 (6,564)
========
Issuance of shares upon
exercise of employees' share
options - 59 -
Issuance expenses - (213) -
Realized losses on available
for sale marketable securities - 38 38
Share based compensation - 226 -
Net profit 344 344 344
-------- ------- --------
Balance as of 30 June 2007
(unaudited) $ (7,609) $ 24,304 $ 382
======== ======= ========
*) Represents an amount lower than $ 1.
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
--------------
Six months ended Year ended
30 June 31 December
-------------- --------
2007 2006 2006
-------- -------- ---------
Unaudited Audited
-------------- ---------
Cash flows from operating activities:
Net profit (loss) $ 344 $ (3,998) $ (6,518)
Adjustments to reconcile net
profit (loss) to net
cash used in operating
activities:
Depreciation and amortization 331 545 1,106
Impairment of intangible
assets - - 1,165
Gain on sale of Company's
assets (3,105) - -
Amortization of premiums on
held-to-maturity marketable
securities - 32 -
Decrease (increase) in trade
receivables
and other accounts receivable
and prepaid
expenses 352 (4) (259)
Increase (decrease) in trade
payables, employees and payroll
accruals and accrued
expenses and other liabilities (1,732) 260 (87)
Increase (decrease) in deferred
revenues 615 (132) 84
Share-based compensation 226 141 121
-------- -------- ---------
Net cash used in operating activities (2,969) (3,156) (4,388)
-------- -------- ---------
Cash flows from investing activities:
---------------------------------------
Purchase of equipment (26) (238) (326)
Investment in restricted cash (237) - -
Proceeds from sale of property and
equipment - - 6
Proceeds from short-term
available-for-sale
marketable securities 5,930 3,300 -
Proceeds from short-term
held-to-maturity
marketable securities - - 9,341
Proceeds from long-term
held-to-maturity
marketable securities - - 9,420
Proceeds from the sell
of Company's assets,
net 4,529 - -
Payment for the acquisition
of Senstream
Ltd. (1) - (782) (782)
-------- -------- ---------
Net cash provided by investing activities 10,196 2,280 17,659
-------- -------- ---------
Cash flows from financing activities:
---------------------------------------
Issuance of shares upon exercise of
employees' share options, net 59 56 65
-------- -------- ---------
Net cash provided by financing activities 59 56 65
-------- -------- ---------
Increase (decrease) in cash and cash
equivalents 7,286 (820) 13,336
Cash and cash equivalents at beginning of
period 15,213 1,877 1,877
-------- -------- ---------
Cash and cash equivalents at end
of period $ 22,499 $ 1,057 $ 15,213
======== ======== =========
Supplemental disclosure of cash flow activities:
--------------------------------------------------
Cash received during the period for
interest $ 451 $ 588 $ 1,162
======== ======== =========
Non-cash financing activities:
--------------------------------
Cancellation of accrued for issuance
expense $ - $ 298 $ 298
======== ======== =========
Cancellation of accrued for issuance
expense $ 213 $ - $ -
======== ======== =========
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Cont.)
U.S. dollars in thousands
---------------
Six months ended Year ended
30 June 31 December
--------------- --------
2007 2006 2006
-------- -------- ---------
(1) Payment for the acquisition of
Senstream Ltd. Unaudited Audited
------------------------------------------------------------------------------
Estimated fair value of assets
acquired and liabilities assumed at
the date of acquisition:
Working capital deficiency,
excluding cash and
cash equivalents $ - $ 489 $ 489
Property and equipment - (8) (8)
Intangible assets - (1,280) (1,280)
Accrued severance pay, net - 17 17
-------- -------- ---------
$ - $ (782) $ (782)
======== ======== =========
The accompanying notes are an integral part of the consolidated financial
statements.
NOTE 1:- GENERAL
a. Adamind Ltd. ("the Company") was incorporated in Israel and commenced
operations in 2004. In February 2005, the Company completed an Initial Public
Offering ("IPO") on the London Stock Exchange Alternative Investment Market
("AIM") under the symbol "ADA". The Company issued 11,363,636 Ordinary shares to
institutional and other investors and raised approximately $ 28,000 before
issuance expenses of approximately $ 2,900. In 2006, an accrual of $ 298 for
stamp duty, which was included in issuance expenses, was cancelled based on a
legal opinion received by the Company. The Israeli tax authorities have not
accepted the legal opinion, and insist that the Company pay the abovementioned
amount plus interest and penalty (increasing the amount due to linkage
differentials, penalties and interest to approximately $ 331 as of 30 June,
2007). In July 2007, the Company paid $ 213 to the tax authorities in order to
cease the accumulation of penalties. As of balance sheet date, the stamp duty
was accrued. This amount may be retrieved to the Company depending on the
decision of the Israeli Supreme court on a similar case
b. Sale of Company's assets
In April 2007, Mobixell Networks (Israel) Ltd. (a subsidiary of Mobixell
Technologies Inc.) ("Mobixell Networks") and the Company completed an Asset
Purchase Deal ("Transaction") in which the Company sold to Mobixell Networks
substantially all of the Company's tangible and intangible assets (excluding,
among others, cash and cash equivalents and marketable securities) and related
liabilities, in consideration of $ 5,500. The Transaction was approved by the
shareholders on April 12, 2007. Consummation of this Transaction resulted in a
gain on the sale of $ 3,105 (net of transaction costs of $ 421). As part of the
Transaction, 10% of the consideration ($ 550) was deposited in escrow for a
period of 12 months (until April 2008)
c. Prior to the Transaction, the Company was a provider of software, which
enables mobile multimedia content and converged communications services. The
Company addressed the interoperability challenge that exists between different
mobile devices to receive and process media rich content. The Adamind SpireTM
platform provides media adaptation and enhancement software enabling service
operators to successfully deploy messaging, content and next generation
convergence services.
d. The U.K. Financial Services Authority ("FSA") is investigating the Company,
in respect of circumstances, statements and behavior occurring prior to an
adverse trading statement made by the Company on 22 June 2006, and with respect
to circumstances suggesting that market abuse may have occurred. The
investigation is currently underway and it is not possible for management to
assess what impact it may have on the Company's financial statements in the
future. The Company is in discussions with its insurance company, negotiating
the possibility of recovering a portion of the legal expenses incurred
pertaining to the aforementioned FSA investigation. At the present time,
management is unable to determine the amount, if any, that it might receive as
reimbursement.
e. The Company has certain tax exposures resulting from the operation of the
Company in multiple tax jurisdictions and as a result of the sale of the
Company's assets (see note 1b). The Company is in the process of assessing the
probability and quantification of these tax exposures.
NOTE 1:- GENERAL (CONT')
f. One of the Company's former employees filed a claim in the Labor Court in
Israel for a total amount of approximately $53, claiming the termination of his
employment was negotiated in bad faith. The Company filed a statement of defense
rejecting all his claims and allegation. A hearing is schedule to take place in
January 2008. Currently, the Company and its legal advisors cannot assess the
outcome of this claim, and as a result, the financial statements do not include
any provision with respect of this claim.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
The interim condensed consolidated financial statements for the six months ended
30 June, 2007, have been prepared in accordance with IAS 34, Interim Financial
Reporting. These financial statements should be read in conjunction with the
Company's audited annual financial statements and accompanying notes as of 31
December 2006 ("the annual financial statements"). The significant accounting
policies and methods of computations applied in the preparation of the interim
financial statements are the same as those applied in the annual financial
statements as of 31 December, 2006.
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 23 hours ago The Renewables Infrastructure Group Limited
- 23 hours ago The Renewables Infrastructure Group Limited
- 23 hours ago Smurfit Westrock (DI)
- 23 hours ago Menhaden Resource Efficiency
- 23 hours ago BP