Vycon Inc
27 April 2007
27 April 2007
VYCON, Inc
Results for the year ended 31 December 2006
Vycon Inc ('Vycon' or the 'Company'), the designer and manufacturer of
high-speed flywheel based energy storage systems, today announces its results
for the year ended 31 December 2006.
Highlights:
• Completed development and launched products for the Uninterruptible
Power Systems ('UPS') market and the crane markets
• Established global supply and sales channels for the Company's products
• Certified Vycon's UPS flywheel storage system for compliance with
European safety standards (CE - Conformite Europeenne)
• Installed UPS and crane beta units at various locations globally
• Commenced building a quote backlog for UPS and crane products and
recorded the first commercial orders for both products
• Shipped the Company's first commercial UPS products
• Completed private equity financing transaction raising $7 million
• Prepared the Company for an AIM listing (completed in March 2007)
John Uttley, Chairman, commented:
'These results reflect a period of considerable progression for the business.
The development of new products for both the UPS and crane markets, while
capital intensive, resulted in commercial sales gaining traction in the latter
half of the period. A solid foundation has been built for Vycon and the Company
is now well positioned to focus its efforts on expanding its distribution and
marketing. The new financial year has seen customer interest continuing to gain
momentum and the successful admission of the Company to AIM in March 2007. We
are confident that we will continue to deliver further growth and value to our
shareholders.'
For further information, please contact:
Vycon Inc Tony Aoun 001 562 293 3649
Dennis Whittler 001 562 293 1366
Smith & Williamson Corporate Nick Reeve +44 (0) 117 933 3344
Finance Limited Martyn Fraser
Cardew Group Rupert Pittman +44 (0) 20 7930 0777
Shan Shan Willenbrock
Emma Consett
CEO's Statement:
In 2006 the Company made significant progress in all aspects of the business.
New UPS and crane products were introduced during the year, with commercial
sales beginning in the latter half of the period. A solid foundation has been
built for Vycon and the Company is now positioned to focus its efforts on
expanding its distribution and marketing activities. The year ended 31 December
2006 was a capital intensive time for the Company, the rewards of which are
expected to be seen during the current financial year.
VDC 140 UPS flywheel
The VDC 140 UPS product is aimed at the premium segment of the UPS market where
power quality and reliability are of primary importance to targeted end users
which include hospitals, data centers, internet transactional sites and critical
automated manufacturing processes. The products are designed for 'plug and play'
compatibility with many leading back-up power products and brands, a 20 year
life with an overall lower cost of ownership and lower maintenance requirements
than competitive lead-acid battery backup systems.
After successful completion of extensive in-house design validation and
reliability testing, in October 2006, the successful installation and
performance of the VDC 140 UPS flywheel system at SunGard Availability Services
('SunGard') in the UK was announced. SunGard, the pioneer and leading provider
of information availability solutions, is using the flywheel system to help
ensure full power protection to the entire facility. The system is being
monitored remotely from Vycon's offices in California.
During the testing phase, the Company established alliances with global
distribution channel partners and independent representatives. Commercial sales
began in late 2006, and the Company, through its distribution partners, built a
significant quote backlog which resulted in new UPS orders from the US, UK, New
Zealand and Korea.
REGEN 120
The REGEN 120 product is targeted for use with mobile shipyard cranes, powered
by on-board diesel generators that move shipping containers in ports located
around the world. The REGEN 120 is ideally suited for mobile cranes as the
flywheel captures electrical power generated on the lowering cycle that is
currently dissipated as heat.
In late 2006, the REGEN 120, which underwent similar testing procedures to that
of the VDC 140 flywheel system, was also introduced to the market. Throughout
the testing phase, the Company focused on developing strong relationships with
leading shipyard crane manufacturers and port operators with global operations.
As a result of these relationships, the Company developed a strong quote backlog
with potential customers in the US, Korea, Singapore, Thailand, India, and China
and recorded new orders from customers located in the US and Korea.
The REGEN 120 beta units were installed on mobile cranes at the Port of Long
Beach and the Port of Los Angeles in late 2006. Independent tests indicated a
20-25% reduction in fuel consumption, a 25% reduction in NOx emissions and a 65%
reduction in particulate matter emissions.
In late 2006, the REGEN 120 was submitted for certification testing by the
California Air Resources Board ('CARB'). Certain US ports have implemented
emissions compliance restrictions and the Company believes that successful
completion of the CARB certification will significantly enhance its sales
efforts.
Funding
In 2006, the Company completed a Series B private equity financing raising
approximately US$7 million primarily from Series A participants. Funds raised in
the private equity financing were primarily used to complete the development of
the Company's UPS and crane flywheel products.
Also, during the period under review, the Company prepared for an AIM listing
which was completed in March 2007. A placing undertaken at the same time raised
US$18 million and attracted investors from the US, UK, New Zealand, Hong Kong
and Denmark. Admission to AIM will help Vycon to raise its profile and the
placing will provide further equity financing to assist in funding development
of higher capacity products. These higher capacity products will utilise the
Company's existing technology but are expected to be capable of storing over
five times more useable energy than the current products. This will enable Vycon
to satisfy demand from existing markets for a larger product capable of
providing greater power, together with opening new markets, such as rail, which
are only accessible to a higher capacity product.
It is a very exciting time for the Company and we look forward to the year ahead
with confidence.
Tony Aoun
President and Chief Executive Officer
Operating Statement
For the year ended 31 December 2006
Note Year ended Year ended
31 December 2006 31 December 2005
US $ US $
---------- ----------
Revenue 193,006 55,000
Cost of sales (177,159) (25,000)
---------- ----------
Gross profit 15,847 30,000
Operating
expenses (6,316,023) (4,318,585)
---------- ----------
Operating loss (6,300,176) (4,288,585)
Other gains
and losses 4,616 -
Finance costs (1,212,094) (799,526)
---------- ----------
Loss before tax (7,507,654) (5,088,111)
Tax (800) (800)
---------- ----------
Loss for the period
attributable to
equity stockholders (7,508,454) (5,088,911)
========== ==========
Loss per share:
Basic and diluted 2 (1.47) (1.01)
========== ==========
Balance Sheet
As at 31 December 2006
-------------- ------------
As at As at
31 December 2006 31 December 2005
US $ US $
-------------- ------------
Assets
Non-current assets
Property, plant and equipment 280,103 395,972
-------------- ------------
Current assets
Inventories 1,253,020 680,778
Trade receivables 196,200 84,624
Deferred offering costs and other
prepaid expenses 966,671
Cash and cash equivalents 1,589,354 1,647,787
-------------- ------------
4,005,245 2,413,189
-------------- ------------
Total assets 4,285,348 2,809,161
-------------- ------------
Liabilities
Current liabilities
Trade and other payables 1,343,324 675,696
Obligations under finance leases 38,762 33,261
-------------- ------------
1,382,086 708,957
-------------- ------------
Non-current liabilities
Obligations under finance leases 31,504 70,731
Series A convertible 8% preferred stock 12,095,612 11,080,206
Series B convertible 8% preferred stock 7,146,369 -
-------------- ------------
19,273,485 11,150,937
-------------- ------------
Total liabilities 20,655,571 11,859,893
-------------- ------------
Equity
Par 533 503
Additional paid in capital 733,685 544,752
Retained deficit (17,104,441) (9,595,987)
-------------- ------------
Total equity deficit (16,370,223) (9,050,732)
-------------- ------------
Total equity and liabilities 4,285,348 2,809,161
============== ============
Statement of Cash Flow
For the year ended 31 December 2006
Note Year ended Year ended
31 December 2006 31 December 2005
US $ US $
-------------- ------------
Net cash flow from
operating activities 3 (7,024,553) (4,675,631)
-------------- ------------
Investing activities
Proceeds on disposal of
property and equipment 24,164 -
Purchases of property
and equipment (80,290) (132,204)
-------------- ------------
Net cash (used in) / from
investing activities (56,126) (132,204)
-------------- ------------
Financing activities
Capital lease payments (33,726) (27,321)
Proceeds from issue of convertible notes
payable - -
Proceeds from the issue of
Series A convertible 8%
preferred stock - 3,729,769
Proceeds from the issue of
Series B convertible 8%
preferred stock 6,905,972 -
Proceeds from the issue of
common shares 150,000 1,500
-------------- ------------
Net cash from financing
activities 7,022,246 3,703,948
-------------- ------------
Net (decrease)/ increase
in cash and cash
equivalents (58,433) (1,103,887)
Cash and cash equivalents
at beginning period 1,647,787 2,751,674
-------------- ------------
Cash and cash equivalents
at end of period 1,589,354 1,647,787
============== ============
Notes
1. General
Vycon is a company incorporated in and under the laws of the State of Delaware.
The Company's registered office is 615 South DuPont Highway Dover, DE, United
States. The Company's principal activity is the development and manufacture of
flywheel-based energy storage systems.
The financial information set out above does not represent full accounts within
the meaning of s.240 of the Companies Act 1985. The Annual Report and Accounts
for the year ended 31 December 2006 will be posted to shareholders shortly.
This financial information has been presented in United States dollars, the
currency of the primary economic environment in which the Company operates.
The financial information has been prepared by Company management in accordance
with International Financial Reporting Standards ('IFRS') as adopted for use in
the EU. At the date of authorisation of this financial information, certain
Standards and Interpretations which have not been applied to this financial
information were in issue but not yet effective. The directors anticipate that
the adoption of these Standards and Interpretations in future periods will have
no material impact on the financial statements of the Company except for
additional disclosures required when the relevant Standards and Interpretations
come into effect.
2. Loss per share
The calculation of basic and diluted loss per share is based on the following
data:
Year ended Year ended
31 December 31 December
2006 2005
US $ US $
---------------- -----------------
Loss for the year attributable to equity
stockholders (7,508,454) (5,088,911)
================ =================
Number Number
---------------- -----------------
Weighted average number of common shares in
issue 5,117,000 5,031,295
================ =================
US $ US $
---------------- -----------------
Basic and diluted loss per share (1.47) (1.01)
================ =================
Basic loss per share is calculated by dividing the loss for the year
attributable to equity shareholders by the weighted average number of shares in
issue during the year.
Diluted loss per share is calculated by dividing the loss for the year
attributable to equity shareholders by the weighted average number of shares in
issue plus the number of shares which could be issued on conversion of dilutive
instruments.
3. Net cash flow from operating activities
Year ended Year ended
31 December 2006 31 December 2005
US $ US $
---------- -------------
Loss before tax (7,507,654) (5,088,111)
Depreciation and amortisation 194,150 282,638
Inventory write off - 38,125
Stock compensation 38,963 6,300
Net Gain on disposal of fixed
assets (4,416) -
Interest converted into series A
and B 8% preferred stock 1,255,804 821,788
---------- ----------
Operating loss before changes
in working capital (6,023,153) (3,939,260)
Decrease / (increase) in
trade/other receivables (135,848) (69,424)
Increase in deferred
offering costs (942,399) -
Increase in inventory (572,242) (668,977)
Increase / (decrease) in
accounts payable 656,013 (108,636)
Increase / (decrease) in
accruals (6,125) 111,466
Tax paid (800) (800)
---------- ----------
Cash outflow from
operating activities (7,024,553) (4,675,631)
========== ==========
This announcement does not constitute or form part of any offer or invitation to
sell or issue or any solicitation of any offer to purchase or subscribe for any
securities in any jurisdiction, nor shall it (or any part of it) or the fact of
its distribution form the basis of, or be relied upon in connection with, or act
as any inducement to enter into, any contract or commitment therefor.
Recipients of this announcement who intend to purchase or subscribe for shares
in the Company are reminded that any such purchase or subscription must only be
made solely on the basis of the information contained in the admission document
relating to the Company in its final form.
This document does not constitute an offer of securities in the United States,
nor may shares be offered or sold in the United States absent registration or an
exemption from registration under the U.S. Securities Act of 1933. as amended
(the 'Securities Act'), and the rules and regulations thereunder; and any public
offering of shares in the United States will be made by means of a Prospectus
that will contain detailed information about the Company and management, as well
as financial statements. The Company does not presently intend to register any
securities under the Securities Act.
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