RNS Number:1810U
Zone-IP Limited
02 April 2007
2 April 2007
Zone-IP Ltd
("Zone-IP" or the "Company")
Preliminary results for the year ended 31 December 2006
Ra'anana, Israel , 2 April 2007 : Zone-IP Ltd. (LSE: ZIP), formerly known as
Ki-Bi Mobile Technologies Ltd ("Ki-Bi"), announces its unaudited financial
results for the year ended 31 December 2006.
In April 2006 the Company discontinued its main business activities.
Subsequently, in July 2006, the Company acquired Emblaze V CON Ltd., a company
which offers video over-IP conferencing solutions and changed its name to
Zone-IP Ltd. and began trading under its new name on the AIM Market.
FINANCIAL HIGHLIGHTS:
* Total revenues from operations were $6.6 million (2005: $4.5 million*)
* Net loss was $5.9 million ** (2005: $913,000*)
* Total assets as at 31 December 2006 were $12.1 million (2005: $7.2 million*)
* Cash and marketable securities of $7.2 million at 31 December 2006
* Under IFRS, the acquisition of Emblaze V CON by Zone-IP has been accounted for
as a reverse acquisition, and accordingly, Emblaze V CON is treated as the
acquirer for financial reporting purposes. All 2005 comparable information
therefore relates to Emblaze V CON solely and does not include Zone-IP or any of
its then subsidiaries.
** The results for the year ended 31 December 2006 include the results of
Emblaze V CON for the full year of 2006 and Zone-IP and its subsidiaries with
effect from 13 July 2006, the date the reverse acquisition was completed.
Enquiries:
Zone-IP
Hadas Gazit +972 9 769 9633
Emblaze V CON
David Amir +972 9 762 7800
John East & Partners Limited
David Worlidge/Simon Clements +44 20 7628 2200
CHAIRMAN'S STATEMENT
In the year ended 31 December 2006 the Company incurred a loss on continuing
operations of $5.9 million (2005: profit $0.1 million) on turnover of $6.6
million (2005: $4.5 million). At that date, the Company had a cash portfolio of
$7 million.
The year ended 31 December 2006 was a disappointing year for the Company. In
April 2006, the Company decided to discontinue the card operations (the
Company's principal business at that time) but continued to support its existing
customers. As a result of this decision, 17 employees including the chief
executive officer and chief financial officer ceased employment with the
Company.
On 13 July 2006, the Company acquired Emblaze V CON, a company providing video
over-IP conferencing solutions to corporate customers, Under IFRS, the
accounting treatment requires that the transaction is treated as an acquisition
by Emblaze V CON. Accordingly, the financial statements for the year ended 31
December 2006 reflect the trading results of Emblaze V CON for the full year and
the results of Zone-IP and its subsidiaries for the "post-acquisition" period
from 13 July 2006.
Emblaze V CON develops and manufactures a variety of video conferencing
solutions that enable seamless communication and collaboration using all forms
of interactive media. The company's award-winning technology ensures the highest
audio and video performance for organizations worldwide. Emblaze V CON's meeting
and collaboration solutions include desktop and group videoconferencing
products, audio conferencing products, data conferencing products and management
systems. The company markets its products and services through a network of
reseller partners, OEMS and value-added resellers around the world. Emblaze V
CON has worldwide headquarters in Israel and regional offices in Munich, Rome,
London, New Jersey and Beijing.
In September 2006, the Company announced it had relieved Mr. Moshe Leder of his
duties as chief executive of Emblaze V CON and that Mr. Tal Barnoach, a
non-executive director of the Company, had agreed to take on temporary executive
responsibilities pending the appointment of a new chief executive.
Mr Barnoach conducted a strategic review of the Company's operations and core
technologies. Following the review, the Company appointed a new VP R&D and a new
VP Sales & Marketing and a new strategy plan was put forth. An overall change
took place to maintain focus on the Company's core business, strong execution,
better visibility in the market and strengthened stronghold in emerging markets
As a result, Emblaze V CON is planning a number of new product launches and
upgrades in our existing product line in the first half of the current financial
year. Emblaze V CON intends to extend its range of products and service offering
to customers and enhance the technology of existing products.
Emblaze V CON will endeavour to strengthen its leading position in Video-over-
IP, focus on solution-based selling and enhance its relationships and
partnerships with industry technology and service providers.
Current trading
Trading in the first quarter of the current financial year is in line with
management's expectations, which were approved by the Board of directors in
December 2006, following the strategic review.
Future prospects
The Directors expect that demand for communication tools using IP (Internet
Protocol) standards will increase as corporations worldwide move to replace and
converge their legacy analog systems into more advanced IP based products.
The Directors believe that the growing demand for visual communication solutions
will enable Emblaze V CON to achieve higher sales in 2007.
Dr Hans Wagner
Chairman
2 April 2007
CONSOLIDATED BALANCE SHEET
U.S. dollars in thousands
31 December
-----------------------------------------------
-----------------------------------------------
2006 2005
------------------- ------------------
------------------- ------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 1,521 1,889
Restricted cash 237 -
Short-term available-for-sale marketable securities 3,974 -
Trade receivables (net of allowance of $ 179,000 and $
Nil at 31 December 2006 and 2005, respectively) 1,660 2,102
Other accounts receivable and prepaid expenses 387 330
Inventories 1,407 1,267
------------------- ------------------
------------------- ------------------
Total current assets 9,186 5,588
------------------- ------------------
------------------- ------------------
NON-CURRENT ASSETS:
Long-term available-for-sale marketable securities 1,505 -
Property and equipment, net 501 491
Intangible assets, net 894 1,138
------------------- ------------------
------------------- ------------------
Total non-current assets 2,900 1,629
------------------- ------------------
------------------- ------------------
Total assets 12,086 7,217
=================== ==================
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term bank credit 423 -
Trade payables 1,549 1,264
Related party 513 331
Government grants 577 673
Employees and payroll accruals 628 1,030
Deferred revenues 471 141
Accrued expenses and other liabilities 639 400
------------------- ------------------
------------------- ------------------
Total current liabilities 4,800 3,839
------------------- ------------------
------------------- ------------------
NON-CURRENT LIABILITIES:
Accrued severance pay 149 -
Government grants 847 688
------------------- ------------------
------------------- ------------------
Total non-current liabilities 996 688
------------------- ------------------
Total liabilities 5,796 4,527
------------------- ------------------
------------------- ------------------
EQUITY:
Ordinary shares 109 66
Share premium 12,989 3,539
Net unrealized loss reserve (10) -
Foreign currency translation reserve (2) (2)
Accumulated deficit (6,796) (913)
------------------- ------------------
------------------- ------------------
Total equity 6,290 2,690
------------------- ------------------
------------------- ------------------
Total liabilities and equity 12,086 7,217
=================== ==================
CONSOLIDATED STATEMENT OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
From
For the year 9 August, 2005 (date
ended of inception) to
31 December 31 December
2006 2005
------------------- -------------------------
------------------- -------------------------
Continuing Operations:
Revenues 6,577 4,532
Cost of revenues (3,344) (1,418)
------------------- -------------------------
------------------- -------------------------
Gross profit 3,233 3,114
------------------- -------------------------
------------------- -------------------------
Operating expenses:
Research and development 3,018 841
Selling and marketing 3,816 1,720
General and administrative 1,714 423
------------------- -------------------------
------------------- -------------------------
Total operating expenses 8,548 2,984
------------------- -------------------------
------------------- -------------------------
Operating (loss)/income (5,315) 130
Financial expenses, net (37) (22)
------------------- -------------------------
------------------- -------------------------
(Loss)/Profit for the period from continuing
operations (5,352) 108
------------------- -------------------------
------------------- -------------------------
Discontinued Operations:
Loss for the period from discontinued operations (531) (1,021)
------------------- -------------------------
------------------- -------------------------
Loss for the period (5,883) (913)
=================== =========================
=================== =========================
Loss per share:
Basic and diluted loss per share from
continuing operations $(0.13) $0.00
Basic and diluted loss per share from
discontinued operations $(0.02) $(0.03)
------------------- -------------------------
------------------- -------------------------
Basic and diluted loss per share $(0.15) $(0.03)
=================== =========================
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
U.S. dollars in thousands
Foreign
currency
Net translation Total
Share Share unrealized adjustments Accumulated recognized Total
capital premium loss reserve reserve deficit expense equity
---------------------------------------------------------------------------------------------------------
Balance as
of 9
August
2005 (date
of
inception) - - - - - -
Issuance of
shares by
EVC, net
of
issuance
expenses 66 3,737 - - - - 3,803
Assumption
of net
liabilities
of Esys
Operation - (198) - - - - (198)
Loss for the
period - - - - (913) (913) (913)
Foreign
currency
translation
adjustments - - - (2) - (2) (2)
---------------------------------------------------------------------------------------------------------
Balance as
of 31
December
2005 66 3,539 - (2) (913) (915) 2,690
Assumption
of net
assets of
Zone IP 43 9,450 - - - - 9,493
Net loss on
available-for
-sale
financial
assets - - (10) - - (10) (10)
Loss for the
period - - - - (5,883) (5,883) (5,883)
---------------------------------------------------------------------------------------------------------
Balance as
of 31
December
2006 109 12,989 (10) (2) (6,796) (5,893) 6,290
=========================================================================================================
CONSOLIDATED STATEMENT OF CASH FLOWS
U.S. dollars in thousands
From
9 August, 2005
(date of
Year ended inception) to
31 December 31 December
2006 2005
------------------ ------------------
------------------ ------------------
Cash flows from operating activities:
Loss for the period (5,883) (913)
Adjustments to reconcile the loss for the period to net cash used in
operating activities:
Loss from discontinued operations 531 1,021
Depreciation and amortization 547 219
Decrease/(increase) in trade receivables 442 (2,102)
Increase in other accounts receivable and prepaid expenses (57) (330)
(Increase)/Decrease in inventories (140) 231
Increase in trade payables 285 1,264
(Decrease)/Increase in employees and payroll accruals (214) 468
Increase in accrued expenses and other liabilities 569 521
Increase in short and long term government grants 63 -
Accrued severance pay, net (39) -
------------------ ------------------
------------------ ------------------
Net cash flows provided by (used in) continuing operating activities (3,896) 379
Net cash flows used in discontinued operating activities (3) (531) (780)
------------------ ------------------
------------------ ------------------
Net cash used in operating activities (4,427) (401)
------------------ ------------------
------------------ ------------------
Cash flows from investing activities:
Purchase of property and equipment (313) (110)
Acquisition of assets from VCON - (1,631)
Restricted cash (237) -
Investment in marketable securities (12,139) -
Proceeds from sale of marketable securities 6,650 -
------------------ ------------------
------------------ ------------------
Net cash used in investing activities (6,039) (1,741)
------------------ ------------------
------------------ ------------------
Cash flows from financing activities:
Increase in short-term bank credit 423 -
Issuance of shares, net - 3,803
Issuance of shares in connection with reverse acquisition 9,493 -
Increase in related party 182 230
------------------ ------------------
------------------ ------------------
Net cash provided by financing activities 10,098 4,033
------------------ ------------------
------------------ ------------------
(Decrease)/Increase in cash and cash equivalents (368) 1,891
Effect of exchange rate changes on cash and cash equivalents - (2)
Cash and cash equivalents at beginning of year 1,889 -
------------------ ------------------
------------------ ------------------
Cash and cash equivalents at end of year 1,521 1,889
================== ==================
Notes to the financial statements
1. The financial information for the year ended 31 December 2005 is
extracted from Emblaze VCON's financial statements to that date which received
an unqualified auditor's report. The financial information for the year ended 31
December 2006 is extracted from the Group's unaudited financial statements to
that date.
2. Loss per share
The figures for loss per share are calculated on a loss of $5,883,000 (2005 -
$913,000). The basic earnings per share calculation is based on a weighted
average number of ordinary shares of NIS 0.01 each of 40,083,881 (2005:
30,762,152).
3. Dividends
No dividends have been declared for the year ended 31 December 2006.
4. Copies of the Report and Accounts will be sent to shareholders
shortly and will be available from the offices of the Company's nominated
adviser, John East & Partners Limited, Crystal Gate, 28-30 Worship Street,
London EC2A 2AH.
About Emblaze V CON
Emblaze V CON is a leader in the development and deployment of Video over-IP
Conferencing Solutions, enabling enterprises of all sizes to optimize their
productivity and efficiency through enhanced interaction and communication. The
Company designs, develops, manufactures and markets high-performance,
feature-rich desktop and group videoconferencing systems designed for a variety
of networks, including those based on the Internet Protocol (otherwise known as
"IP") as well as infrastructure servers to manage the video network and
services.
Emblaze V CON offers video conferencing and video communication solutions, which
are designed to meet and adapt to the needs of thousands of customers. The
intuitive, easy-to-use desktop communication tools maximize functionality,
flexibility and control, while maintaining an uncompromising commitment to
flawless audio and video experiences. The software solutions represent the
single greatest deployment flexibility in today's market. Unlike hardware
proprietary products, which are dedicated and costly to implement, Emblaze V
CON's software solutions run on standard hardware platforms and can be simply
integrated into customer's existing network infrastructure.
Emblaze V CON has customers in North America, Europe, Asia and Africa drawn from
a broad range of sectors, including financial institutions, SMEs, large
corporates, universities and colleges, healthcare organizations and governmental
agencies. Emblaze V CON also sells to the ISP and telecommunications market,
offering video-telephony services for the IPTV sector.
Emblaze V CON has wholly-owned subsidiaries operating in the United States,
France and Germany in order to market and sell its products. It also has an
office in China.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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