29 Mar 2007 07:00
Embargoed Release: 07:00hrs Thursday 29 March 2007
iPoint-media plc ("iPoint" or "the Company") Preliminary Results for the year ended 31 December 2006
iPoint , a provider of Broadband 3G/IP video interactive application platforms, is pleased to announce its preliminary results for the year ended 31st December 2006.
Chairman's Statement
During the year ended 31 December 2006, the Company acquired iPoint USA Corporation by way of a reverse takeover. The Company has since raised approximately $3,700,000 by equity fund raisings in November 2006 and March 2007. In February 2007 All New Video Plc ("All New Video") was acquired by the Company.
The acquisition of the iPoint Group
As a result of the iPoint Group acquisition, iPoint USA Corporation and its subsidiary iPoint-media Limited ("iPoint", together the "iPoint Group"), a software company which sells and develops video call handling solutions for telecoms operators and others, achieved its aim and became part of a publicly traded group following the admission to AIM of the Company.
The business of iPoint
2006 was an exciting year for iPoint as it has made the transition from a development company to becoming a leader in the provision of interactive video application technologies and services. iPoint has developed a suite of proprietary software products which enable video calling over IP using 3G networks. iPoint has established its position with major customers in the 3G market, including telecoms operators, aggregators and media broadcasters.
iPoint began to distribute its products towards the end of 2005 and during 2006 received purchase orders and made deliveries worth over $1,800,000.
In the year ended 31 December 2006 the financial statements show a revenue figure of $1,655,965 and gross profit of $1,290,129. Invoiced amounts in the year totalled $2,002,936; of this $346,971 of revenues are related to maintenance contracts and in accordance with the Group's accounting policies are deferred until 2007.
Although revenues were still relatively modest in 2006 and the year ended with a loss of $949,262, the Directors believe that there are strong growth prospects in iPoint's key markets and iPoint's products and capabilities are well-matched to market requirements. The recent acquisition of All New Video and the synergy between the two companies is expected to provide iPoint's products to new opportunities in the media sector.
All New Video offers a wide range of video services across both fixed line and mobile telephony platforms. All New Video was admitted to trading on AIM in August 2005, since when it has won some significant business, in particular a contract with the BBC which has generated significant interest in All New Video's services from other television broadcasters, both in the UK and abroad. On 8 February 2007 the Company's offer for All New Video was declared unconditional and it is anticipated that All New Video's cancellation of admission to trading on AIM will take effect from 11 April 2007.
Key material achievements during 2006
The key material achievements for the Group in the year to 31 December 2006 were:
1. the completion of the development and market introduction of the carrier
grade video application platform branded "Vitrage".
2. successful sales penetration into targeted European telecom operators,
aggregators and media companies including the BBC.
3. the establishment of comprehensive channels with leading blue chip
corporate companies including Ericsson, Siemens, Comverse and Unisys
4. obtaining major reference customers such as Ericsson's hosting center,
Vodacom, Orange and the BBC to name a few.
5. the development of the sales and marketing infrastructure for sales in Asia
Pacific during 2007.
All New Video has also been re-branded "iPoint-media" with the All New Video team focusing on sales and marketing activities in the high growth UK media and broadcast sectors.
Outlook and Strategy
2006 was an encouraging year for iPoint in penetrating new market sectors and in the development of new products. In 2007 iPoint will be focusing on strengthening its position in the broadband mobile and internet value added video calling services market through enlarging its customer base and receiving renewals from existing customers. iPoint is well placed to exploit an improving market for video calling applications through its partnership with key strategic players, including Ericsson, Siemens and Comverse.
A further target for iPoint in 2007 will be to establish itself within the broadcast and media sector. This market is eager to capitalise on the growing popularity of User Generated Content and offer new TV show formats, where viewers can enter live TV sessions or record their own unique content via a unified web/mobile interface. The Board believes that the strategic teaming agreement signed between iPoint and IBM in February 2007 will lead to a number of exciting projects to be announced in due course.
I should like to thank all of our team for their commitment, professionalism and creativity, which together with the leadership and vision of our Chief Executive, Shmuel (Muki) Geller, placed iPoint as one of the frontier technology pioneers that anticipated the business potential of video applications in the mobile broadband media market.
iPoint remains utterly committed to its core values: total quality and innovation, increasing its revenues and enlarging its mutual relations with the telecom and media broadcast market all over the world. iPoint is constantly striving to deliver the most innovative technology including its unique video solutions platform to the telecom and media markets, together with its premium quality services.
The Board looks forward to the future with confidence.
E SagiChairman28 March 2007GROUP INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
Year ended Year ended 31 December 31 December 2006 2005 Notes $ $ Revenue 1,655,965 676,826 Cost of sales (365,836) (56,930) Gross profit 1,290,129 619,896 Research and development 647,786 505,604 Selling and marketing 677,210 562,569 Administrative expenses 806,333 504,921 Exceptional charge in respect of share - 846,867options granted to employees Loss from ordinary activities before (841,200) (1,800,065)income tax and finance costs Net finance costs (108,062) (40,568) Other income - 2,371 Loss before income tax (949,262) (1,838,262) Tax on loss on ordinary activities 2 - - Net loss from ordinary activities (949,262) (1,838,262) Loss per share - basic 3 (0.012) (0.024) - diluted 3 (0.011) (0.023)GROUP BALANCE SHEETAS AT 31 DECEMBER 2006 2006 2005 Notes $ $ ASSETS Non-current assets Intangible assets 865,341 - Property, plant and equipment 75,930 49,267 Non-current receivables 12,030 8,002 953,301 57,269 Current assets Trade receivables 637,880 167,602 Other receivables 202,124 63,922 Cash and cash equivalents 4 51,056 265,353 891,060 496,877 TOTAL ASSETS 1,844,361 554,146 EQUITY AND LIABILITIES Share capital and reserves Issued capital 889,976 4,069 Share premium 1,364,006 - Other reserves 846,867 846,867 Merger reserve 200,050 - Reverse acquisition reserve 2,134,419 2,616,422 Retained earnings (5,731,114) (4,781,852) Translation reserve (73,023) 51,733 TOTAL EQUITY (368,819) (1,262,761) Non-current liabilities 78,955 21,260 Current liabilities Trade payables and other 630,092 186,754 Related party 166,537 50,898 Deferred income 314,170 139,996 Short-term borrowings 1,023,426 1,417,999 Total current liabilities 2,134,225 1,795,647 TOTAL LIABILITIES 2,213,180 1,816,907 TOTAL EQUITY AND LIABILITIES 1,844,361 554,146
GROUP CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
Year ended Year ended 31 December 31 December 2006 2005 Notes $ $ Cash flows from operating activities Cash receipts from customers 1,250,431 786,288 Cash paid to suppliers and employees (1,986,081) (1,657,002) Cash absorbed by operations (735,650) (870,714) Interest paid (96,626) (66,685) Interest received 1,844 8,761 Net cash outflow from operating (830,432) (928,638)activities Cash flows from investing activities Proceeds from sale of equipment - 12,506 Purchase of equipment (54,782) (23,060) Net cash outflow used in investing (54,782) (10,554)activities Cash flows from financing activities Proceeds from issue of shares 1,900,115 - Less: costs of issue (709,869) - Net cash flows used in financing 1,190,246 -activities Exchange differences (124,756) 51,733 Net increase/(decrease) in cash and cash 180,276 (887,459)equivalents Cash and cash equivalents brought forward (1,152,646) (265,187)
Cash and cash equivalents carried forward 4 (972,370) (1,152,646)
Represented by: Positive cash balances 51,056 265,353 Short term borrowings (1,023,426) (1,417,999) (972,370) (1,152,646)
Group Statement of changes in equity for the year ended 31 December 2006
Share capital Share Share-based Translation premium payments reserve $ $ $ $ At 31 December 2004 925 2,619,566 - - At 31 December 2005 4,069 - 846,867 51,733 Shares issued in 536,109 1,364,006 - -period for cash Shares issued on 353,867 - - -acquisition Reverse acquisition (4,069) - - - Less: costs of share - - - -issue Exchange adjustments - - - (124,756) Loss for the year - - - - At 31 December 2006 889,976 1,364,006 846,867 (73,023) Reverse Merger Retained Total equity acquisition reserve earnings reserve $ $ $ $ At 31 December 2004 - - (2,943,590) (323,099) At 31 December 2005 2,616,422 - (4,781,852) (1,262,761) Shares issued in - - - 1,900,115period for cash Shares issued on - 12,020,719 - 12,374,586acquisition Reverse acquisition (482,003) (11,110,800) - (11,596,872) Less: costs of share - (709,869) - (709,869)issue Exchange adjustments - - - (124,756) Loss for the year - - (949,262) (949,262) At 31 December 2006 2,134,419 200,050 (5,731,114) (368,819)
Notes to the financial statements
1 Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting Standards and IFRIC interpretations and with those parts of the Companies Act, 1985 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention and a summary of the more important accounting policies is set out below.
The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates.
During the year, the Group elected to disclose its cash flows from operatingactivities using the direct method that requires the disclosure of gross cashreceipts and gross cash payments to be disclosed. Additionally, IAS 7encourages the use of the direct method for the reporting of operating cashflows.2. Corporation tax 2006 2005 $ $ Income statement
Current tax on income for the period - - Factors affecting the tax charge
2006 2005 $ $
Loss on ordinary activities before taxation (949,262) (1,838,262) Loss on ordinary activities before (303,764) (551,479)taxation multiplied by standard rate of Israel Corporation Tax of 32% (2005: 34%) for the year. Effects of: Expenditure not allowable for tax 72,073 323,921purposes Unrelieved tax losses and other 231,691 301,088deductions arising in the period
Current tax charge - -3. Loss per share
The basic loss per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of shares in issue. In calculating the diluted loss per share, share options outstanding have been taken into account where the impact of these is diluted. Warrants over 625,000 shares and options over 742,875 shares were excluded from the calculation of the total diluted number of shares as the impact of these is anti-dilutive.
The weighted average number of shares in the year was:
2006 2005 Number Number Basic 81,991,356 75,713,743
Dilutive Ordinary Shares from share options/ 2,652,987 3,935,560 warrants
Total diluted 84,644,343 79,649,303 Loss attributable to equity share holders of the (949,262) (1,838,262)parent Basic earnings per share (0.012) (0.024) Diluted earnings per (0.011) (0.023)share 4 Cash and cash equivalents 2006 2005 $ $ Cash at bank and in hand 51,056 265,353
Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates. The Fair value of cash and cash equivalents at 31 December 2006 was $51,056 (2005: $265,353).
For the purpose of the cash flow statement, cash and cash equivalents comprise the following at 31 December 2006:
2006 2005 $ $ Cash at bank and in hand 51,056 265,353 Short term borrowings (1,023,426) (1,417,999) (972,370) (1,152,646)
The Group's short term borrowings are guaranteed by Nisko Projects Electronics and Communications (1990) Ltd, a shareholder of the Company.
5. Dividends
No dividends have been declared for the year ended 31 December 2006.
6. Copies of the Report and Accounts will be sent to shareholders shortly and will be available from the Company's registered office and from John East & Partners Limited at Crystal Gate, 28-30 Worship Street, London EC2A 2AH.
Further Enquiries:iPoint-media plc Muki Geller Tel: (0) 972 544 450 667 Clive Garston Tel: 44 (0) 7802 356614 John East & Partners Limited Tel: 020 7628 2200 David Worlidge/Bidhi Bhoma
IPOINT MEDIA PLC