Mti Wireless Regulatory News (MWE)

8 November 2011

MTI Wireless Edge Ltd

("MTI" or the "Company")

Financial results for the nine months ended 30 September 2011

MTI Wireless Edge Ltd., (ticker: MWE) ("MTI" or the "Company"), a market leader in the manufacture of flat panel antennas for fixed wireless broadband, today announces its unaudited results for the nine months ended 30 September 2011.

Highlights:

·; Nine month revenue up by 16% at US$11.1m (2010: US$9.6m)

·; Nine month gross profits up by 17% at US$3.8m (2010: US$3.3m)

·; Nine month operating profit of US$181k compared to a loss of US$367k on same period in 2010

·; Strong growth in RFID sector

Dov Feiner, Chief Executive Officer commented:

'MTI has continued to make good progress in the third quarter of 2011. Both revenue and profits were up over this time last year and the trend looks to continue into the New Year.

'The Board is particularly pleased with the growth of our Radio Frequency Identification system (RFID) which represented 13% of our business in 2011 year-to-date, compared with 10% in 2010 overall, and is one of our fastest growing business sectors.

We are also progressing with the expansion of our FBWA products into the 60-80GHz frequency range on which much of our R&D spend has been focused.'

MTI Wireless Edge Ltd + 972 3 900 8900

Moni Borovitz, Finance Director

Dov Feiner, CEO

Allenby Capital  +44 203 328 5656

Nick Naylor

Alex Price

Threadneedle Communications +44 20 7653 9850

Graham Herring

Terry Garrett

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

For the Nine months ended September 30, 2011:

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

For the Nine months ended September 30, 2010:

The ac companying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

For the year ended December 31, 2010:

The ac companying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATMENTE OF

FINANCIAL POSITION

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATMENTE OF

FINANCIAL POSITION

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS

The accompanying notes form an integral part of the financial statements.

 INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS

Appendix A - Non-cash activities:

The accompanying notes form an integral part of the financial statements.

Note 1 - General:

A. Corporate information:

M.T.I Wireless Edge Ltd. (hereafter - the Company) is an Israeli corporation. It was incorporated under the Companies Act in Israel on December 30, 1998 as a wholly- owned subsidiary of M.T.I Computers and Software Services (1982) Ltd. (hereafter - the Parent Company) and commenced operations on July 1, 2000 and since March 2006, the Company's shares have been traded on the AIM Stock Exchange.

The formal address of the company is 11 Hamelacha Street, Afek industrial Park, Rosh-Ha'Ayin, Israel.

The Company is engaged in the development, design, manufacture and marketing of antennas and accessories.

B. Assets and Liabilities in foreign currencies

Henceforth are the details of the foreign currencies of the main currencies and the percentage changes in the reporting period:

Note 2 - Significant Accounting Policies:

The interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for the preparation of financial statements for interim periods, as prescribed in International Financial Reporting Standard IAS 34 ("Interim Financial Reporting").

Statutory financial information for the financial year ended December 31, 2010 was approved by the board on November 7, 2011. The report of the auditors on those financial statements was unqualified. The interim consolidated financial statements as of September 30, 2011 have not been audited.

The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2010 are applied consistently in these interim consolidated financial statements, except for the impact of the adoption of the Standards and Interpretations described below.

Note 2 - Significant Accounting Policies (cont.):

- Improvements to International Financial Reporting Standards 2009

- Improvements to IFRSs (issued May 2010)

In May 2010, the IASB issued its third omnibus of amendments to its standards, primarily with a view to removing inconsistencies and clarifying wording. There are separate transitional provisions for each standard. The adoption of the following amendments did not have any material effect on the consolidated financial statements of the Group.

1. IFRS 3 Business Combinations: The measurement options available for non-controlling interest (NCI) have been amended. Only components of NCI that constitute a present ownership interest that entitles their holder to a proportionate share of the entity's net assets in the event of liquidation shall be measured at either fair value or at the present ownership instruments' proportionate share of the acquiree's identifiable net assets. All other components are to be measured at their acquisition date fair value.

2. IFRS 7 Financial Instruments - Disclosures: The amendment was intended to simplify the disclosures provided by reducing the volume of disclosures around collateral held and improving disclosures by requiring qualitative information to put the quantitative information in context.

3. IAS 1 Presentation of Financial Statements: The amendment clarifies that an option to present an analysis of each component of other comprehensive income may be included either in the statement of changes in equity or in the notes to the financial statements.

4. IAS 34 Interim Financial Statements: The amendment requires additional disclosures for fair values and changes in classification of financial assets, as well as changes to contingent assets and liabilities in interim condensed financial statements.

5. IFRS 3 Business Combinations - Clarification that contingent consideration arising from business combination prior to adoption of IFRS 3 (as revised in 2008) are accounted for in accordance with IFRS 3 (2005)

6. IFRS 3 Business Combinations - Unreplaced and voluntarily replaced share-based payment awards and its accounting treatment within a business combination

7. IAS 27 Consolidated and Separate Financial Statements - applying the IAS 27 (as revised in 2008) transition requirements to consequentially amended standards

The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

The following new standards, new interpretations and amendments to standards and interpretations have been issued but are not effective for the financial year beginning 1 January 2011 and have not been early adopted:

- IFRS 9, 'Financial instruments', In November 2009, the IASB issued IFRS 9, "Financial Instruments", which represents the first phase of a project to replace IAS 39, "Financial Instruments: Recognition and Measurement". IFRS 9 focuses mainly on the classification and measurement of financial assets and it applies to all financial assets within the scope of IAS 39.

According to IFRS 9, upon initial recognition, all the financial assets (including hybrid contracts with financial asset hosts) will be measured at fair value. In subsequent periods, debt instruments can be measured at amortized cost if both of the following conditions are met:

- The asset is held within a business model whose objective is to hold assets in order to collect the contractual cash flows.

- The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent measurement of all other debt instruments and financial assets will be at fair value.

Financial assets that are equity instruments will be measured in subsequent periods at fair value and the changes will be recognized in the statement of income or in other comprehensive income (loss), in accordance with the election of the accounting policy on an instrument-by-instrument basis. Nevertheless, if the equity instruments are held for trading, they must be measured at fair value through profit or loss. This election is final and irrevocable. When an entity changes its business model for managing financial assets it shall reclassify all affected financial assets. In all other circumstances, reclassification of financial instruments is not permitted.

The Standard will be effective starting January 1, 2013. Earlier application is permitted. Early adoption will be made with a retrospective restatement of comparative figures, subject to the reliefs set out in the Standard.

The Company is evaluating the possible effect of the adoption of the new Standard on the consolidated financial statements but is presently unable to assess such effect, if any.

Note 3 - SEGMENTS:

The following table's present revenue and profit information regarding the Group's operating segments for the nine months ended September 30, 2011 and 2010, respectively.

Note 3 - SEGMENTS (cont.):

(*) The Group cannot distinguish between Commercial and Military assets and liabilities, due to the fact that some of the assets and liabilities are used by both segments.

Note 4 -TRANSACTIONS WITH RELATED PARTIES:

The Parent Group and other related party provides certain services to the Group as follows:

Compensation of key management personnel of the Group:

*) Including Management fees for the CEO, Directors Executive Management and other related parties

All Transactions are made at market value.

As of September 30, 2011 the Group owes to the parent group and related party US $19,000 while in September 30, 2010 the parent group and related party owed to the Group  US $41,000. 

Note 5 -TAX LAWS APPLICABLE:

Amendments to the law for the Encouragement of Capital Investments, 1959:

In December 2010, the "Knesset" (Israeli Parliament) passed the Law for Economic Policy for 2011 and 2012 (Amended Legislation), which prescribes, among others, amendments in the Law for the Encouragement of Capital Investments, 1959 ("the Law"). The amendment became effective as of January 1, 2011. According to the amendment, the benefit tracks in the Law were modified and a flat tax rate applies to the Company's entire preferred income. The Company will be able to opt to apply (the waiver is non-recourse) the amendment and from then on it will be subject to the amended tax rates that are: 2011 and 2012 - 15%, 2013 and 2014 - 12.5% and in 2015 and thereafter - 12%.

The Company has decided to apply the amendment from January 1, 2011.And accordingly, it has revised its deferred tax balances by the amount of US $14,000 against tax expense.

Note 6 - EMPLOYEE STOCK OPTION PLAN:

A new option scheme for key Directors and Employees was approved at the Company's Annual General Meeting on May 20, 2011. Under the plan, options to purchase 1.2 million ordinary shares were granted (each option to one ordinary share). This represents approximately 2.3% of the Company's current issued and voting share capital of 51,571,990 ordinary shares. Among those 180,000 and 150,000 options were granted to the C.E.O and to the Finance Director respectively. Each option vest over a period of three years ending June 1, 2014, unexercised options expire eight years after date of the grant. Options are forfeited when the employee leaves the Company. There is no cash settlement of the options.

The weighted average fair value of the options as at the grant date is 7 pence (approximately 11 cents) per option, and was estimated using a Black and Scholes option pricing model based on the following significant data and assumptions:

Share price - 12.75 pence (representing approximately 21 cents)

Exercise price - 13.5 pence (representing approximately 22 cents)

Expected volatility - 39.52%

Risk-free interest rate - 2.74%

Expected dividends - 0%

And expected average life of options 5.5 years

The volatility measured at the standard deviation of expected share price returns is based on the historical volatility of the Company.

 The options were granted as part of a plan that was adopted in accordance with the provision of section 102 of the Israeli Income Tax Ordinance.