METALINK LTD.
CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31,
--------- ---------
2007 2006
--------- ---------
(UNAUDITED)
---------
(IN THOUSANDS EXCEPT SHARE DATA)
------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 3,917 $ 4,775
Short-term investments 9,389 18,317
Trade accounts receivable 2,098 2,025
Other receivables 1,593 422
Prepaid expenses 616 584
Inventories 1,836 3,171
--------- ---------
Total current assets 19,449 29,294
--------- ---------
LONG-TERM INVESTMENTS 6,036 5,520
--------- ---------
SEVERANCE PAY FUND 2,065 1,955
--------- ---------
PROPERTY AND EQUIPMENT, NET 3,428 3,517
========= =========
$ 30,978 $ 40,286
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $ 1,715 $ 2,280
Other payables and accrued expenses 4,185 4,058
--------- ---------
Total current liabilities 5,900 6,338
--------- ---------
ACCRUED SEVERANCE PAY 3,238 3,065
--------- ---------
SHAREHOLDERS' EQUITY
Ordinary shares of NIS 0.1 par value (Authorized
- 50,000,000 shares, issued and outstanding 20,848,039
and 20,653,826 shares as of June 30, 2007 and December
31, 2006, respectively) 618 614
Additional paid-in capital 134,613 133,119
Accumulated other comprehensive loss (18) (52)
Accumulated deficit (103,488) (92,913)
--------- ---------
31,725 40,768
--------- ---------
Treasury stock, at cost; 898,500 as of
June 30, 2007 and December 31, 2006 (9,885) (9,885)
--------- ---------
Total shareholders' equity 21,840 30,883
========= =========
Total liabilities and shareholders' equity $ 30,978 $ 40,286
========= =========
2
METALINK LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------- -------------------------
2007 2006 2007 2006
---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
------------------------- -------------------------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
Revenues $ 2,539 $ 3,540 $ 4,885 $ 6,614
Cost of revenues:
Costs and expenses 1,312 1,864 2,406 3,333
Royalties to the Government of Israel 68 104 140 199
---------- ---------- ---------- ----------
Total cost of revenues 1,380 1,968 2,546 3,532
========== ========== ========== ==========
GROSS PROFIT 1,159 1,572 2,339 3,082
---------- ---------- ---------- ----------
Operating expenses:
Gross research and development 5,542 5,253 10,722 10,114
Less - Royalty bearing and other grants 506 835 1,090 1,468
---------- ---------- ---------- ----------
Research and development, net 5,036 4,418 9,632 8,646
---------- ---------- ---------- ----------
Selling and marketing 1,391 1,267 2,707 2,498
General and administrative 614 511 1,145 972
---------- ---------- ---------- ----------
Total operating expenses 7,041 6,196 13,484 12,116
========== ========== ========== ==========
OPERATING LOSS (5,882) (4,624) (11,145) (9,034)
Financial income, net 256 305 570 629
---------- ---------- ---------- ----------
NET LOSS $ (5,626) $ (4,319) $ (10,575) $ (8,405)
========== ========== ========== ==========
Loss per ordinary share:
Basic $ (0.28) $ (0.22) $ (0.53) $ (0.43)
========== ========== ========== ==========
Diluted $ (0.28) $ (0.22) $ (0.53) $ (0.43)
========== ========== ========== ==========
Shares used in computing loss per
ordinary share:
Basic 19,916,856 19,608,626 19,864,665 19,571,681
========== ========== ========== ==========
Diluted 19,916,856 19,608,626 19,864,665 19,571,681
========== ========== ========== ==========
3
METALINK LTD.
STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE LOSS
(IN THOUSANDS, EXCEPT SHARE DATA)
ACCUMULATED
OTHER
NUMBER OF NUMBER OF ADDITIONAL DEFERRED TREASURY COMPREHENSIVE TOTAL
OUTSTANDING TREASURY SHARE PAID-IN STOCK-BASED STOCK (AT INCOME ACCUMULATED COMPREHENSIVE
SHARES SHARES CAPITAL CAPITAL COMPENSATION COST) (LOSS) DEFICIT INCOME (LOSS) TOTAL
---------- ------- -------- --------- ----- -------- ----- ---------- --------- --------
BALANCE AT DECEMBER 31, 2005 20,358,373 898,500 $ 607 $ 130,810 $ (6) $ (9,885) $(228) $ (76,693) $ 44,605
Changes during 2006:
Exercise of employee options 295,453 7 2,309 2,316
Deferred stock-based compensation
related to stock option grants to
consultants -
Amortization of deferred
stock-based
Compensation 6 6
Other comprehensive income:
Unrealized loss on marketable
securities 176 176 176
Loss for the year (16,220) (16,220) (16,220)
---------- ------- -------- --------- ----- -------- ----- ---------- --------- --------
Total comprehensive loss (16,044)
=========
BALANCE AT DECEMBER 31, 2006 20,653,826 898,500 614 133,119 - (9,885) (52) (92,913) 30,883
Changes during 2007:
Exercise of employee options 194,213 4 1,494 1,498
Other comprehensive income:
Unrealized loss on marketable
securities 34 34 34
Loss for the period (10,575) (10,575) (10,575)
---------- ------- -------- --------- ----- -------- ----- ---------- --------- --------
Total comprehensive loss $ (10,541)
=========
BALANCE AT JUNE 30, 2007 20,848,039 898,500 $ 618 $ 134,613 $ - $ (9,885) $ (18) $ (103,488) $ 21,840
4
METALINK LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS, EXCEPT SHARE DATA)
SIX-MONTH
PERIOD
ENDED JUNE 30
-----------------------
2007 2006
-------- --------
(UNAUDITED)
-----------------------
(IN THOUSANDS)
-----------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss (10,575) (8,405)
Adjustments to reconcile net loss to net cash
used in operating activities (Appendix) 1,087 3,494
-------- --------
NET CASH USED IN OPERATING ACTIVITIES (9,488) (4,911)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable debt securities and
certificates of deposits (13,235) (23,048)
Proceeds from maturity and sales of marketable debt
securities and certificates of deposits 21,578 23,336
Purchase of property and equipment (571) (288)
-------- --------
NET CASH PROVIDED BY INVESTING ACTIVITIES 7,772 -
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of shares and exercise of options, net 858 642
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 858 642
======== ========
Decrease in cash and cash equivalents (858) (4,269)
Cash and cash equivalents at beginning of year 4,775 7,134
-------- --------
Cash and cash equivalents at end of year 3,917 2,865
======== ========
5
METALINK LTD.
APPENDIX TO CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS, EXCEPT SHARE DATA)
SIX-MONTH
PERIOD
ENDED JUNE 30
-----------------------
2007 2006
-------- --------
(UNAUDITED)
-----------------------
(IN THOUSANDS)
-----------------------
ADJUSTMENTS TO RECONCILE NET LOSS TO NET
CASH USED IN OPERATING ACTIVITIES:
Depreciation and amortization $ 660 $ 842
Amortization of marketable debt securities and deposit
premium and accretion of discount 34 53
Increase in accrued severance pay, net 63 102
Stock-based compensation 640 663
Capital loss 40 -
CHANGES IN ASSETS AND LIABILITIES:
Decrease (increase) in assets:
Trade accounts receivable (73) 210
Other receivables and prepaid expenses (1,174) (361)
Inventories 1,335 754
Increase (decrease) in liabilities:
Trade accounts payable (565) 17
Other payables and accrued expenses 127 1,214
-------- --------
$ 1,087 $ 3,494
======== ========
6
METALINK LTD.