30 Mar 2009 17:22
For immediate release 30 March 2009
IMMERSION TECHNOLOGIES INTERNATIONAL PLC
("Immersion" or the "Company")
UNAUDITED INTERIM RESULTS FOR 6 MONTHS
ENDED 31 DECEMBER 2008
CHAIRMAN'S STATEMENT
I am pleased to report Immersion's interim results for the 6 months ended 31 December 2008.
Results
The group made a loss for the six month period ended 31 December of £307,000 on a turnover of £24,000.
Review of Operations
The Technology
The Company has made progress in the evolution of the technology as follows:
Electrostatic Loudspeakers (ESL)
The technology has successfully been tailored towards specific requirements of various large-scale prospect customers. The ongoing customer demonstrations and feedback have provided a deeper insight into the needs and requirements for mainstream applications of ESL in Consumer Electronics markets (ie smaller sizes, higher sound pressure levels, and lower pricing for TV & Home-Theatre). The Company has been able to work within these requirements and has successfully delivered sample units which are currently being evaluated by various prospects.
Conventional Cone Loudspeakers (CCL)
The Company is looking to expand on the new and smaller prototypes of CCL speakers that were demonstrated at the Korea Audio Show in October 2008. These speakers were designed as a cost competitive solution and demonstrated high fidelity/high sound pressure level as well as being a small footprint (3 inch in size). This application is applicable for consumer electronic customers as well as automotive.
Trade Shows
During the year, the Company continued to generate positive interest from various customer demonstrations and trade shows. Company continues to produce sample and prototypes for potential customers in order to obtain a volume order for its products.
Overseas Facilities
The closure of overseas facilities as reported previously are nearing completion. The Company is developing alternatives for cost-efficient production of sample and prototypes. Headcount across the Group has been further reduced to focus on commercialisation of technologies while minimising spend.
Nakamichi
The Company is looking to pursue a commercial negotiation with Nakamichi given Nakamichi's failure to take products pursuant to the supply agreement. The Company is proposing to settle the matter by mediation but if it cannot be resolved by commercial means then the Company will consider legal action in order to preserve the Company's rights.
Outlook
Recent developments in the global markets for Consumer Electronics have unilateral impact on the application of new and innovative technologies for prospect customers. Based however on the ongoing positive interest from potential customers the Management remains confident on the validity and future potential of the Company's technologies, albeit that larger scale applications may suffer further delays due to overall conditions in the global markets.
The Company will look at other opportunities in order to preserve shareholder value within the Company and in the meantime we will actively conserve our cash as much as possible.
CONTACTS:
Immersion Technologies International Plc
Kiran Morzaria Tel: +44 (0)207 016 5100
Beaumont Cornish
Roland Cornish Tel: +44 (0)207 628 3396
| GROUP INCOME STATEMENT | |||||||
| FOR THE INTERIM PERIOD ENDED 31 DECEMBER 2008 | |||||||
| Notes | Six months ended | Six months ended | Year ended | ||||
| 31 December 2008 | 31 December 2007 | 30 June 2008 | |||||
| (Unaudited) | (Unaudited) | (Audited) | |||||
| £ 000's | £ 000's | £ 000's | |||||
| Revenue | 24 | 27 | 69 | ||||
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| Cost of sales | (14) | (82) | (271) | ||||
| Gross profit/(loss) | 10 | (55) | (202) | ||||
| Administrative expenses | (319) | (1,000) | (2,309) | ||||
| Group operating loss | (309) | (1,055) | (2,511) | ||||
| Interest receivable | 2 | 32 | 42 | ||||
| Loss before taxation | (307) | (1,023) | (2,469) | ||||
| Income tax expense | - | - | - | ||||
| Loss for the period | |||||||
| attributable to shareholders | 2 | (307) | (1,023) | (2,469) | |||
| LOSS PER SHARE (pence) | |||||||
| Basic/Diluted | 3 | 0.12 | 0.45 | 1.08 | |||
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| GROUP BALANCE SHEET | |||||||||
| As at | As at | As at | |||||||
| Notes | 31 December 2008 | 31 December 2007 | 30 June 2008 | ||||||
| (Unaudited) | (Unaudited) | (Audited) | |||||||
| £ 000's | £ 000's | £ 000's | |||||||
| Non-current assets | |||||||||
| Intangible assets | 800 | 6,562 | 800 | ||||||
| Plant and equipment | - | 138 | - | ||||||
| 800 | 6,700 | 800 | |||||||
| Current assets | |||||||||
| Trade and other receivables | 54 | 273 | 49 | ||||||
| Inventories | 48 | 121 | - | ||||||
| Cash and cash equivalents | 24 | 919 | 272 | ||||||
| 126 | 1,313 | 321 | |||||||
| Total assets | 926 | 8,013 | 1,121 | ||||||
| Current liabilities | |||||||||
| Trade and other payables | (186) | (117) | (273) | ||||||
| Provisions | (2) | - | (2) | ||||||
| Prepayments | - | (86) | - | ||||||
| Total liabilities | (188) | (203) | (275) | ||||||
| Net assets | 738 | 7,810 | 846 | ||||||
| Equity | |||||||||
| Share capital | 4 | 1,857 | 1,586 | 1,598 | |||||
| Share premium reserve | 2,950 | 2,855 | 2,869 | ||||||
| Unissued Share Capital | - | - | 185 | ||||||
| Foreign exchange reserve | 84 | 64 | 60 | ||||||
| Other reserves | 20 | 5,730 | - | ||||||
| Share-based payments | 80 | 75 | 80 | ||||||
| Accumulated loss | (4,253) | (2,500) | (3,946) | ||||||
| 738 | 7,810 | 846 | |||||||
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| GROUP CASH FLOW STATEMENT | ||||||
| FOR THE INTERIM PERIOD ENDED 31 DECEMBER 2008 | ||||||
| Six months ended | Six months ended | Year ended | ||||
| 31 December 2008 | 31 December 2007 | 30 June 2008 | ||||
| (Unaudited) | (Unaudited) | (Audited) | ||||
| £ 000's | £ 000's | £ 000's | ||||
| OPERATING ACTIVITIES | ||||||
| Loss after tax for the period | (309) | (1,055) | (2,511) | |||
| Adjustments for: | ||||||
| Depreciation | - | 9 | 172 | |||
| Amortisation | - | 121 | 246 | |||
| Loss on disposal of assets | - | - | (5) | |||
| Share-based payments | - | 15 | 46 | |||
| Increase in Provisions | - | - | 2 | |||
| Decrease/(Increase) in receivables | (5) | (13) | 210 | |||
| Decrease/(Increase) in inventories | (48) | (121) | - | |||
| (Decrease)/Increase in payables | (87) | (157) | (87) | |||
| CASH USED IN OPERATING ACTIVITIES | (449) | (1,201) | (1,927) | |||
| Income tax paid | - | (12) | (12) | |||
| NET CASH USED IN OPERATING ACTIVITIES | (449) | (1,213) | (1,939) | |||
| INVESTING ACTIVITIES | ||||||
| Interest received | 2 | 32 | 42 | |||
| Proceeds from disposal of assets | - | - | 5 | |||
| Purchase of patents | - | - | (44) | |||
| Purchase of plant and equipment | - | (78) | (112) | |||
| NET CASH USED IN INVESTING ACTIVITIES | 2 | (46) | (109) | |||
| FINANCING ACTIVITIES | ||||||
| Proceeds on issuing of ordinary shares | 175 | 43 | 43 | |||
| Proceeds on share capital un-issued | - | - | 185 | |||
| NET CASH FROM FINANCING ACTIVITIES | 175 | 43 | 228 | |||
| NET DECREASE IN CASH AND CASH EQUIVALENTS | (272) | (1,216) | (1,820) | |||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 272 | 2,122 | 2,122 | |||
| Exchange loss on cash and cash equivalents | 24 | 13 | (30) | |||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | 24 | 919 | 272 | |||
GROUP STATEMENT OF CHANGES IN EQUITY FOR THE INTERIM PERIOD ENDED 31 DECEMBER 2008
| Unissued | Share | |||||||
| Share | Share | Share | Based | Foreign | Other | Accumulated | ||
| Capital | Premium | Capital | Payments | Exchange | Reserves | Losses | Total | |
| £ 000's | £ 000's | £ 000's | £ 000's | £ 000's | £ 000's | £ 000's | £000's | |
| Group | ||||||||
| Balance at 1 July 2007 | 1,574 | 2,824 | - | 60 | 51 | 5,730 | (1,477) | 8,762 |
| Foreign translation differences | - | - | - | - | 9 | - | - | 9 |
| Loss for the period | - | - | - | - | - | - | (2,469) | (2,469) |
| Total recognised income and expense for the period | - | - | - | - | 9 | - | (2,469) | (2,460) |
| Share issue | 24 | 45 | 185 | - | - | - | - | 254 |
| Cancelled share based payment | - | - | - | (7) | - | - | - | (7) |
| Share-based payments | - | - | - | 27 | - | - | - | 27 |
| Impairment charge | - | - | - | - | - | (5,682) | - | (5,682) |
| Foreign translation differences | - | - | - | - | - | (48) | - | (48) |
| Balance at 30 June 2008 | 1,598 | 2,869 | 185 | 80 | 60 | - | (3,946) | 846 |
| Foreign translation differences | - | - | - | - | 24 | - | - | 24 |
| Loss for the period | - | - | - | - | - | - | (307) | (307) |
| Total recognised income and expense for the period | - | - | - | - | 24 | - | (307) | (283) |
| Share issue | 259 | 112 | (185) | - | - | - | - | 186 |
| Cost of share issue | - | (11) | - | - | - | - | (11) | |
| Warrants subscribed | - | (20) | - | - | - | 20 | - | - |
| Balance at 31 December 2008 | 1,857 | 2,950 | - | 80 | 84 | 20 | (4,253) | 738 |
NOTES TO THE INTERIM REPORT FOR THE PERIOD ENDED 31 DECEMBER 2008
| 1 | SIGNIFICANT ACCOUNTING POLICIES |
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| Basis of preparation | |
| The financial information has been prepared under the historical cost convention and on a going concern basis and in accordance with International Financial Reporting Standards and IFRIC interpretations adopted for use in the European Union ("IFRS") and those parts of the Companies Act applicable to companies reporting under IFRS. The financial information for the period ended 31 December 2008 has not been audited or reviewed in accordance with the International Standard on Review Engagements 2410 issued by the Auditing Practices Board. The figures were prepared using applicable accounting policies and practices consistent with those adopted in the statutory accounts for the period ended 30 June 2008. The financial information contained in this document does not constitute statutory accounts as defined by Section 240 of the Companies Act 1985 (England & Wales). In the opinion of the directors the financial information for this period fairly presents the financial position, result of operations and cash flows for this period. This Interim Financial Report was approved by the Board of Directors on 30 March 2009. | |
| Statement of compliance
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| These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard ('IAS') 34 - Interim Financial Reporting as adopted by the European Union. Accordingly the interim financial statements do not include all of the information or disclosures required in the annual financial statements. | |
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| Basis of consolidation | |
| The consolidated financial statements comprise the financial statements of Immersion Technologies International Plc and its controlled entities. The financial statements of controlled entities are included in the consolidated financial statements from the date control commences until the date control ceases. The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All inter-company balances and transactions have been eliminated in full. | |
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| Foreign currencies | |
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| The functional currency of each entity is determined after consideration of the primary economic environment of the entity. The group's presentational currency is Sterling (£).
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| 2 | SEGMENT REPORTING | |||||||||||
| For management purposes the Group is organised into 4 operating divisions: Corporate; Product Research, Development and Design; Product Manufacture, and; Sales. These divisions are the basis on which the Group reports its primary segment information. Secondary segment information is presented on a geographic basis. The primary segment information corresponds closely to geographical segments as operational segments reside in distinct locations of the United Kingdom, Australia and Asia. | ||||||||||||
| Business segments | Corporate | Product | Product | Sales | Unallocated | Total | ||||||
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| R&D and | Manufacture | ||||||||||
| Design | ||||||||||||
| Six months ended 31 December 2008 (Unaudited) | £ 000's | £ 000's | £ 000's | £ 000's | £ 000's | £ 000's | ||||||
| Segment Revenue | - | 9 | - | 15 | - | 24 | ||||||
| Segment loss from operations | (142) | (123) | (32) | (12) | - | (309) | ||||||
| Interest receivable | 2 | - | - | - | - | 2 | ||||||
| Loss for the period before taxation | (307) | |||||||||||
| 2 | SEGMENT REPORTING (CONTINUED) | Corporate | Product | Product | Sales | Unallocated | Total |
| R&D and | Manufacture | ||||||
| Design | |||||||
| Year ended 30 June 2008 (Audited) | £ 000's | £ 000's | £ 000's | £ 000's | £ 000's | £ 000's | |
| Segment Revenue | 6 | 45 | - | 18 | - | 69 | |
| Segment loss from operations | (1,178) | (796) | (192) | (345) | - | (2,511) | |
| Interest receivable | 42 | ||||||
| Loss for the period before taxation | (2,469) |
| Six months ended 31 December 2007 (Unaudited) | |||||||
| Segment Revenue | 5 | 22 | - | - | - | 27 | |
| Segment loss from operations | (471) | (408) | (130) | (46) | - | (1,055) | |
| Interest receivable | 32 | ||||||
| Loss for the period before taxation | (1,023) |
| United | Australia | Asia | Unallocated | Total | ||
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| Geographical segments | Kingdom |
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| £ 000's | £ 000's | £ 000's | £ 000's | £ 000's | ||
| Six months ended 31 December 2008 (Unaudited) | ||||||
| Segment Revenue | - | 9 | 15 | - | 24 | |
| Segment loss from operations | (136) | (118) | (55) | - | (309) | |
| Interest receivable | 2 | - | - | - | 2 | |
| Loss for the period | (307) | |||||
| Year ended 30 June 2008 (Audited) | ||||||
| Segment Revenue | 6 | 45 | 18 | - | 69 | |
| Segment loss from operations | (1,260) | (588) | (663) | - | (2,511) | |
| Interest receivable | 42 | |||||
| Loss for the period before taxation | (2,469) | |||||
| Six months ended 31 December 2007 (Unaudited) | ||||||
| Segment Revenue | 5 | 22 | - | - | 27 | |
| Segment loss from operations | (597) | (282) | (176) | - | (1,055) | |
| Interest receivable | 31 | |||||
| Loss for the period before taxation | (1,024) |
| 3 | LOSS PER ORDINARY SHARE
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| The calculation of earnings per share is based on the loss after taxation divided by the weighted average number of share in issue during the period: | ||||
| Six months ended 31 December 2008 (Unaudited) | Six months ended 31 December 2007 (Unaudited) | Year ended 30 June 2008 (Audited)
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| Net loss after taxation (£ 000's) | (307) | (1,023) | (2,469) | |
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| Weighted average number of ordinary shares used in calculating basic earnings per share (millions) | 259.2 | 226.8 | 226.6 | |
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| Basic loss per share (pence) | (0.12) | (0.45) | (1.08) | |
As the inclusion of the potential ordinary shares would result in a decrease in the loss per share they are considered to be antidilutive and, as such, a diluted loss per share is not included.
| 4 | SHARE CAPITAL ISSUED | |
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| The authorised share capital of the Company and the called up and fully paid amounts at 31 December 2008 were as follows: | ||
| Authorised | Number of shares | £'000 |
| Ordinary shares of £0.007 each | 1,000,000,000 | 7,000 |
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| Called up, allotted, issued and fully paid | Number of shares | Nominal value £000's |
| Balance at 1 July 2006 | 342,761,601 | 343 |
| Consolidation of share capital | (293,795,658) | |
| 12 April 2007 for cash at 10.25p per share | 175,903,671 | 1,231 |
| 1 July 2007 for non-cash consideration | 1,731,645 | 12 |
| 6 May 2008 for non-cash consideration at 1.54p per share | 1,623,375 | 11 |
| 16 July 2008 for cash at 1p per share | 18,500,000 | 130 |
| 14 August 2008 for cash at 1p per share | 17,500,000 | 122 |
| 14 August 2008 for non-cash consideration at 1p per share | 1,100,000 | 8 |
| As at 31 December 2008 | 265,324,634 | 1,857 |
Total share options and warrants in issue
As at 31 December 2008 the options and warrants in issue were;
| Exercise Price | Expiry Date | Options in Issue 31 December 2008 |
| 21p | 19 May 2011 | 734,489 |
| 1.54p | 30 April 2018 | 17,550,000 |
| 1.5p (1) | 16 July 2013 | 9,250,000 |
| 1.5p (1) | 14 August 2013 | 9,300,000 |
| 36,834,489 |
(1): warrants issued in connections with shares issued during the period.
No options lapsed or were cancelled and no options were exercised during the period ended December 2008.
| 5 | INVESTMENT IN GROUP COMPANIES | ||
| Company name | Country of incorporation | Proportion of ownership interest | |
| Immersion Technologies UK Limited | UK | 100% | |
| Immersion Technology Property Limited | UK | 100% | |
| Immersion Technology International Limited | UK | 100% | |
| Immersion Technologies (Singapore) Pte Limited | Singapore | 100% | |
| Immersion Technology (Nanjing) Co. Limited | China | 100% | |
| Immersion Technologies Australia Pty Limited | Australia | 100% | |
| Whise Acoustics Limited | Australia | 100% | |
| Whise Technologies Pty Limited | Australia | 100% |
| 6 | EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE |
| On 6 February 2009 at the Annual General Meeting of the Company, a resolution to subdivide each existing issued and unissued ordinary shares of 0.7p each into one ordinary share of 0.01p each and one deferred share of 0.69p each was approved . The deferred shares have effectively no value and no share certificate in respect of these shares was issued. Share certificates for the existing ordinary shares remains valid. Accordingly, application was made for a total of 265,324,634 ordinary share of 0.01p each to be admitted to trading on AIM and such admission commenced trading on 12 February 2009. | |
| 7 | The financial information set out above does not constitute the Group's statutory accounts for the period ended 30 June 2008, but is derived from those accounts. |
| 8 | A copy of this interim statement is available on the Company's website www.iti-plc.com |