Afriag Global Regulatory News (AFRI)

3D Diagnostic Imaging plc

("3D" or the "Company")

Rising Sales Trend, Major Cost Cutting Exercise, Proposed De-listing from AIM, Ongoing Corporate Governance

The Directors are pleased to advise that the Company's wholly owned subsidiary, CarieScan Limited ("CarieScan"), has experienced an increase in sales revenues, albeit from a modest base, in each of the first six months of the current year. The Directors believe that an upward trend in sales revenues will continue in the second half of the year.

Notwithstanding this rising trend the Directors have begun to implement a major cost cutting exercise which they anticipate will reduce the Company's monthly overhead base to less than £60,000.

As a part of this exercise the executive Directors, Graham Lay (Chief Executive Officer) and Oliver Cooke (Chief Financial Officer), have agreed to reduce their annual remuneration by 60% and 80% respectively and David Snow, the Company's Non-Executive Chairman, has waived 100% of his annual remuneration. A small number of redundancies have also been made and all remaining members of staff have agreed to reduce their annual remuneration by an average of 25%.

Over the past fifteen month period the executive Directors have deferred one third of their salaries and both the current and the previous Non-Executive Chairman have deferred the whole of their remuneration. Each of the Directors has now agreed to waive the amount due to him by the Company. As a consequence the amounts that had previously been accrued to the Company's profit and loss account will now be written back and the cash liability expunged.

In recognition of these considerable sacrifices the Directors intend in due course to make additional grants of share options to the individuals concerned and to rebase the exercise price of any existing options that they currently hold.

As a consequence of this reduction in the Company's liabilities, the significant reduction in its overhead base and of the rising sales trend, the Directors believe that the Company currently has sufficient cash resources to meet its immediate requirements. However, for the sake of prudence, the Directors will continue to explore various options by which the Company's balance sheet can be strengthened. The Directors believe that with only a relatively small amount of additional capital the Company will be robustly positioned to grow into the future.

One of the principal objectives of the Company's listing on AIM was to provide it with access to development capital as the business grew. However, it has become apparent that in the current market environment this objective cannot be met and as a consequence the Board no longer feels able to justify the continued costs associated with the Company's admission to AIM. The Directors therefore intend to write to shareholders in the near future to convene an extraordinary general meeting of the Company at which they will propose a resolution to cancel the admission of the Company's ordinary shares to trading on AIM. Under the AIM Rules it is a requirement that cancellation of admission to trading on AIM requires approval by not less than 75 per cent of votes cast by shareholders in a general meeting.

If the resolution is passed in an extraordinary general meeting by the requisite majority and the Company de-lists from AIM it would be the Directors' intention that the Company continues to maintain an appropriate level of corporate governance by, inter alia, retaining the services of a non-executive director on the Board, and by keeping shareholders informed by sending them copies of the interim and the final accounts and through periodic updates on the Company's website at www.3ddiagnosticimaging.com.

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