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 (LSE:IPNT), 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 Sagi
Chairman
28 March 2007
GROUP 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 - 846,867
options 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 SHEET
AS 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 - - - 1,900,115
period for cash
Shares issued on - 12,020,719 - 12,374,586
acquisition
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 operating
activities using the direct method that requires the disclosure of gross cash
receipts and gross cash payments to be disclosed. Additionally, IAS 7
encourages the use of the direct method for the reporting of operating cash
flows.
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 72,073 323,921
purposes
Unrelieved tax losses and other 231,691 301,088
deductions 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
END
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