RNS Number:6167E
Zone-IP Limited
27 September 2007
27 September 2007
This announcement replaces the earlier announcement released today at 08.45am
(Number 6013E). This is because there was a typographical error in the 'cost of
revenues' row in the consolidated STATEMENTS OF OPERATIONS FOR THE SIX MONTHS
ENDED 30 JUNE 2007 table. this is the only change.
27 September 2007
Zone-IP Ltd.
("Zone-IP" or the "Company")
Interim Results for the six months ended 30 June 2007
Ra'anana, Israel , 27 September 2007 : Zone-IP Ltd. (LSE: ZIP) announces its
unaudited financial results for six months ended 30 June 2007.
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 for six months ended 30 June 2007 were $3.01
million (H1 2006: $2.86 million*)
* Operating loss for six months ended 30 June 2007 decreased by 32 per cent. to
$1.90 million (H1 2006 $2.80 million)
* Net loss for six months ended 30 June 2007 decreased by 37 per cent. to $1.77
million (H12006: $2.81 million*)
* Total assets as at 30 June 2007 were $11.4 million (H1 2006: $4.89 million*)
* Cash and marketable securities of $6.8 million at 30 June 2007
* Loss per share for six months ended 30 June 2007 of $0.03 (H1 2006 $0.09)
* Under IFRS, the acquisition of Emblaze V CON by Zone-IP was accounted for as a
reverse acquisition, and accordingly, Emblaze V CON was treated as the acquirer
for financial reporting purposes. All 30 June 2007 comparable information
therefore relates to Emblaze V CON solely and does not include Zone-IP or any of
its then subsidiaries.
Enquiries:
Zone-IP
Hagit Gal +972 (0)9 769 339
Emblaze V CON
David Amir, VP Finance & Operations +972 (0)9 7627800
John East & Partners Limited
David Worlidge/Simon Clements +44 (0) 020 7628 2200
Chairman's Statement
In the six months ended 30 June 2007 the Company incurred a loss on continuing operations of
$1.77 million (H1 2006: $2.81 million) on turnover of $3.01 million (H1 2006: $2.86 million).
At that date, the Company had a cash portfolio of $6.8 million.
The first six months of the year have been spent reorganising our existing product line and
introducing the next generations of room systems - a new top of the line room system - xPoint,
featuring ISDN and 4CIF technologies - and a new HD MCU - VCBpro with full audio and video transcoding.
The introduction of xPoint and VCBpro will, assist the Company to re-establish
its position within the market. Having a complete offering for the first time in
many years will enable us to demonstrate a strong presence with leading AV
resellers and take part in tenders for new systems.
In June 2007, the Company's subsidiary signed the first sale of an xPoint system
in China, according to which 250 units were sold for a total consideration of
$800,000.
The Directors intend to extend its range of products and service offering to
customers and enhance the technology of existing products and expect that the
second half of the year will see a considerable number of new product launches
and upgrades in our existing product line.
Emblaze VCON will endeavor 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.
Hans Wagner
Chairman
27 September 2007
Information on Emblaze VCON
Emblaze VCON 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 VCON'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 VCON has worldwide headquarters in Israel and regional offices in
Munich, Rome, London, New Jersey and Beijing.
CONSOLIDATED BALANCE SHEETS AS AT 30 JUNE 2007
Six months Six months Year ended 31
ended 30 June ended 30 June December 2006
2007 2006 (Audited)
(Unaudited) (Unaudited) $000
$000 $000
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents 2,501 285 1,613
Restricted cash 543 - 237
Short-term
available-for-
sale
marketable
securities 2,135 - 3,974
Trade
receivables 1,219 1,191 1,660
Other accounts
receivable and
prepaid
expenses 279 329 387
Inventories 1,854 1,508 1,407
--------- --------- ----------
Total current
assets 8,531 3,313 9,278
--------- --------- ----------
NON CURRENT ASSETS
Long-term
available-for-
sale
marketable
securities 1,665 - 1,505
Property and
equipment, net 448 566 501
Intangible
assets, net 772 1,016 894
--------- --------- ----------
Total
non-current
assets 2,885 1,582 2,900
--------- --------- ----------
Total assets 11,416 4,895 12,178
========= ========= ==========
LIABILITIES AND EQUITY
CURRENT LIABILTIES:
Short-term
bank credit 1,153 370 515
Trade payables 2,057 1,061 1,549
Related party 576 717 513
Government
grants 643 474 577
Employees and
payroll
accruals 501 662 628
Deferred
revenues 229 356 471
Other accounts
payable and
accrued
expenses 631 331 639
--------- --------- ----------
Total current
liabilities 5,790 3,971 4,892
--------- --------- ----------
NON CURRENT LIABILTIES
Accrued
severance pay 195 161 149
Government
grant 813 887 847
--------- --------- ----------
Total
liabilities 1,008 1,048 996
--------- --------- ----------
EQUITY (DEFICIENCY):
Share capital:
Ordinary shares 109 66 109
Share premium 13,058 3,539 12,989
Unrealised
gains/(losses)
on marketable
securities 14 - (10)
Foreign
currency
translation
reserve (2) (2) (2)
Accumulated
deficit (8,561) (3,727) (6,796)
--------- --------- ----------
Total
equity/(defici
ency) 4,618 (124) 6,290
--------- --------- ----------
Total
liabilities
and equity 11,416 4,895 12,178
========= ========= ==========
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED 30 JUNE 2007
Six months Six months Year ended
ended 30 June
ended 30 June 2006 31 December
2007 (Unaudited) 2006
(Unaudited) $'000 (Audited)
$'000 $'000
Revenues 3,012 2,856 6,577
Cost of revenues (1,299) (1,474) (3,344)
----------- ----------- -----------
Gross profit 1,713 1,382 3.233
----------- ----------- -----------
Operating expenses:
Research and development 1,557 1,440 3,018
Sales and marketing 1,310 2,014 3,816
General and
administrative 744 733 1,714
----------- ----------- -----------
Total operating expenses 3,611 4,187 8,548
----------- ----------- -----------
Operating loss (1,898) (2,805) (5,315)
Financial income 301 14 175
Financial expenses (168) (23) (212)
----------- ----------- -----------
Loss for the period from
continuing operations (1,765) (2,814) (5,352)
Discontinued operations:
Loss for the period from
discontinued operations - - (531)
----------- ----------- -----------
Loss (1,765) (2,814) (5,883)
=========== =========== ===========
Loss per share:
Basic and diluted loss
per share from continuing
operations (0.03) (0.09) (0.13)
=========== =========== ===========
Basic and diluted loss
per share from
discontinued operations - - (0.02)
=========== =========== ===========
Basic and diluted net
loss per share (0.03) (0.09) (0.15)
=========== =========== ===========
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share Share Net unrealised Foreign Accumulated Total Total
loss reserve currency recognised
translation expenses
adjustments
reserve
capital Premium deficit
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance as of
1January 2006 66 3,539 - (2) (913) 2,690 -
(audited)
Reserve
acquisition of
net assets of
Zone IP, net
of issuance
expenses 43 9,450 - - - 9,493 -
Net loss on
available-for-
sale financial
assets - - (10) - - (10) (10)
Loss - - - - (5,883) (5,883) (5,883)
-------- -------- -------- -------- --------- -------- --------
(5,893)
========
Balance as of
31December
2006 (audited) 109 12,989 (10) (2) (6,796) 6,290 -
Share based
compensation
related to
options issued
to employees - 69 - - - 69 -
Net profit on
available-for-
sale financial
assets - - 24 - - 24 24
Loss - - - - (1,765) (1,765) (1,765)
-------- -------- -------- -------- --------- -------- --------
(1,714)
========
Balance as of
30June 2007 109 13,058 14 (2) (8,561) 4,618 -
======== ======== ======== ======== ========= ======== ========
Share Share Net unrealised Foreign Accumulated Total Total
loss reserve currency recognised
translation expenses
adjustments
reserve
capital Premium deficit
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance as of
1 January 2006 66 3,539 - (2) (913) 2,690 -
Loss - - - - (2,814) (2,814) (2,814)
-------- -------- -------- -------- --------- -------- --------
(2,814)
========
Balance as of
30 June 2006 66 3,539 - (2) (3,727) (124) -
======== ======== ======== ======== ========= ======== ========
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months Six months Year end 31
--- ended 30 June ended 30 June December 2006
2007 2006
(Unaudited)
$'000 (Unaudited) (Audited)
---
$'000 $'000
---
Cash flows from operating
activities:
Net loss (1,765) (2,814) (5,883)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Loss from
discontinued
operations - - 531
Depreciation
and
amortisation 266 271 547
Compensation
expense for
share-based
payments 69 - -
Decrease in
trade
receivables 441 911 453
Increase in
severance pay 46 161 149
Decrease in
other accounts
receivable and
prepaid
expenses 108 1 153
Increase in
inventories (498) (282) (221)
Increase/(decr
ease) in trade
payables 508 (203) 155
Decrease in
employees and
payroll
accruals (127) (368) (402)
Increase/(decr
ease) in
accrued
expenses,
other
liabilities
and deferred
revenues (250) 146 571
Increase in
short and long
term
Government
grants
payables 32 - 63
----------- ----------- -----------
Net cash flows
used in
continuing
operating
activities (1,170) (2,177) (3,884)
Net cash flows
used in
discontinued
operating
activities - - (772)
----------- ----------- -----------
Net cash used
in operating
activities (1,170) (2,177) (4,656)
----------- ----------- -----------
Cash flows from investing
activities:
Purchase of
property and
equipment, net (40) (183) (232)
Restricted cash (306) - (237)
Investment in
marketable
securities (1,682) - (3,083)
Proceeds from
sale of
marketable
securities 3,385 - 6,650
----------- ----------- -----------
Net cash
provided
by/(used in)
investing
activities 1,357 (183) 3,098
----------- ----------- -----------
Cash flows from financing
activities:
Increase in
short-term
bank credit 638 3 148
Increase in
cash upon
reverse
acquisition - - 585
Increase in
related party 63 386 182
----------- ----------- -----------
Net cash
provided by
financing
activities 701 389 915
----------- ----------- -----------
Increase/(decr
ease) in cash
and cash
equivalents 888 (1,971) (643)
Cash and cash
equivalents at
the beginning
of the period 1,613 2,256 2,256
----------- ----------- -----------
Cash and cash
equivalents at
the end of the
period 2,501 285 1,613
=========== =========== ===========
(1) Supplemental disclosure of cash
flows activities:
Interest
received 161 - 479
=========== =========== ===========
---
Interest paid 69 25 49
=========== =========== ===========
---
Transfer from
inventories to
property and
equipment 51 41 81
=========== =========== ===========
(2) Net cash flows used in
discontinued operating activities:
Loss
discontinued
operations - - (531)
Less decrease
in accrued
expenses
associated
with
discontinued
operations - - (241)
----------- ----------- -----------
- - (772)
=========== =========== ===========
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1:- GENERAL
a. These financial statements have been prepared as of 30 June 2007 and for the
six months then ended. These financial statements are to be read in conjunction
with the audited annual financial statements of the Company as of 31 December
2006 and their accompanying notes.
b. At the end of May 2006, the Company signed an agreement with Emblaze V Con
Ltd. ("EVC") and its shareholders under which the Company acquired EVC in
exchange for the issuance of shares which represented 60 per cent. of the
outstanding shares of the Company immediately following the completion of the
agreement with EVC's shareholders.
The completion of the agreement was approved by the shareholders of Ki-Bi at the
annual general meeting ("AGM") of the Company which took place on 12 July 2006.
Due to the size of EVC in relation to the size of the Company, the acquisition
constituted a reverse takeover under the AIM Rules and therefore required the
prior approval of the AGM.
As part of a reorganisation and the negotiations for the acquisition of EVC, in
April 2006, the Company's Board of Directors decided to cease the Ki-Bi cards
operations. As part of that decision, the employment of 17 employees including
the Company's CEO and CFO was terminated and an inventory amounting to $295,000
was written off.
c. In July 2006, the Company changed its name from Ki-Bi Mobile Technologies Ltd
to Zone-IP Ltd.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies and methods of computation applied in the
preparation of the interim financial information are the same as those applied
in the annual financial statements of the Company as of 31 December 2006.
The interim condensed consolidated financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting.
NOTE 3:- LOSS PER SHARE
The calculation of loss per share is based on the loss attributable to ordinary
shareholders of $1.77 million (H1 2006: $2.81 million) divided by the weighted
average number of shares in issue during the year, being 51,120,253 (H1 2006:
30,672,152) shares.
NOTE 4:- DIVIDENDS
No dividend is proposed for the six months ended 30 June 2007.
COPIES OF THE INTERIM FINANCIAL STATEMENTS
Copies of the interim results will be available on the Company's website
www.zone-ip.com and at the offices of the Company's nominated adviser, John East
& Partners Limited, 10 Finsbury Square, London EC2A 1AD.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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