TIDM3DD
RNS Number : 7614O
3D Diagnostic Imaging PLC
22 September 2011
For immediate release 22 September 2011
3D DIAGNOSTIC IMAGING PLC
("3D" or the "Company")
(AIM ticker 3DD)
Preliminary Results for the year ended 30 June 2011
3D, which owns the protected rights to a technology platform
with a number of significant potential commercial applications,
today announces its unaudited preliminary results for the year
ended 30 June 2011.
Highlights
-- Results in line with trading statement in May 2011
-- New sales and marketing model in place
-- Distribution partners appointed covering 11 key
territories
-- Significant cost savings achieved
-- Product relaunched - positive industry feedback
-- GBP1.41 million of funding secured to finance development of
the Company - see separate announcement of today
James Noble, Non-executive Chairman of 3D Diagnostic Imaging
said:
"The year to June was challenging for 3D as we made progress in
the transition towards commercialising the Company's key product,
the CarieScan PRO. During the period a number of measures were
taken to strengthen the business and provide it with a firm
foundation for future growth as the CarieScan PRO rolled out to
more territories. The Board is confident that, with the additional
funds, the business is now well placed to exploit its underlying
technology as it continues to expand."
Contact Details:
3D Diagnostic
Imaging Plc
Graham Lay, CEO +44 (0) 1624 679 000
Oliver Cooke, CFO +44 (0) 1624 679 000
finnCap: NOMAD & Broker
Geoff Nash, Henrik Persson
(corporate finance) Stephen
Norcross (corporate broking) +44 (0)20 7600 1658
Buchanan Communications
Diane Stewart, Carrie Clement +44 (0) 131 226 6150
It should be noted that the following information has been
extracted without adjustment from the final accounts of the Company
for the year ended 30 June 2011 and this extract does not
constitute Statutory Accounts for the purposes of Section 435 of
the Companies Act 2006. Neither the Directors nor the Company's
auditors anticipate any material change to the numbers so
extracted.
Chairman's Statement
The year ended 30 June 2011 was one of mixed fortunes for 3D.
Whilst, sales of the CarieScan PRO in the USA were negatively
impacted following the identification of a manufacturing defect,
the management team responded well and I am pleased to report that
this defect was quickly rectified and that the product has been
re-launched in the USA with an enhanced sales support operation. In
the meantime, the Company has been focusing on territories outside
the USA and has now signed a number of distribution agreements in
Europe, China and India.
The Company has also taken a number of other measures to
strengthen the business, including the appointment of Stefan
Kaltenbach, a well known and highly respected businessman in the
field of dental diagnostics, to the Board of CarieScan Limited
("CarieScan").
I am pleased to report that, since the year-end, the Company has
launched its RemoteView software, signed agreements with further
distribution partners and secured GBP1.41 million before costs of
further equity funding, subject to shareholder and Takeover Panel
approval, to enable the business to implement its future
development strategy.
Results for the year
Revenue for the twelve months to 30 June increased to GBP715,000
(2010: GBP2,800), reflecting the launch of the CarieScan PRO in the
USA and Canada. Operating expenses also increased to GBP2.9 million
(2010: GBP1.2 million), principally reflecting the cost of building
up a sales support operation in the USA. This led to an operating
loss and loss before tax of GBP2.4 million (2010: GBP1.2 million).
These results are in line with the trading statement issued by the
Company in May 2011.
Revenue in the year comprises sales to North America
(GBP553,000), UK and Europe (GBP139,000) and Rest of World
(GBP23,000).
Cash at 30(th) June 2011 amounted to GBP520,000 (2010:
GBP67,000).
CarieScan
3D's principal asset is its IP protected alternating current
impedance spectroscopy technology ("ACIST") platform which enables
the accurate measurement of the integrity of a structure. CarieScan
is 3D's main operating subsidiary, with responsibility for
exploiting the dental applications of the ACIST technology, which
have been developed into an integrated Caries Management Support
System ("CMSS"). The CMSS comprises of the CarieScan PRO a handheld
device for the early detection of tooth decay, and RemoteView, a
software package which captures data gathered by the PRO for
instant display on a PC screen and for recall at a later date,
allowing monitoring of the progression or regression of hidden
caries (tooth decay).
The presence of caries causes a detectable deterioration in the
integrity of a tooth's structure even before such decay becomes
apparent by visual inspection. If detected sufficiently early the
effects can be reversed through treatment and the integrity of the
tooth restored. The CMSS enables the comprehensive monitoring of
tooth decay and the efficacy of the treatment being applied to
treat the condition. The Directors believe the system is the
world's first integrated caries management system.
Evaluation of the CarieScan PRO by respected industry
commentators has been undertaken at a number of locations in the
USA and the product has received a number of plaudits, including
the award for "Best Dental Diagnostic Device 2011" from the
industry driver "Dr Bicuspid".
The Company has implemented a strategy of appointing
distributors in relevant territories and this process originally
started with the appointment of Patterson Dental in the USA and
Canada, supported by staff directly employed by CarieScan in the
USA. With the issues relating to the manufacturing defect mentioned
above, sales were not sufficient to support this model and the
Company has since announced a series of measures to improve its
position, which include:
1. The manufacturing defect has now been resolved and the
product has been re-launched in the USA with greatly improved
marketing and educational materials;
2. The Company has replaced its own sales force with the
appointment of a highly experienced dental sales company,
CoreStrength Inc, which will provide over 20 sales support
representatives in the USA; and
3. The Company has signed a series of distribution agreements
with companies outside the USA, covering major European countries,
India and China. These are positive and unanticipated opportunities
for CarieScan.
As at 30 June 2011, agreements have now been signed with
distribution partners covering the following countries:
North Europe Asia
America
USA UK India
Canada Germany China
Austria
Switzerland
Belgium
Luxembourg
Netherlands
Funding
As a consequence of the poor sales performance noted above, the
Company has implemented a series of cost-cutting measures,
including:
1. The elimination of the US sales force as described above and
the effective closure of the US office;
2. A decision to terminate the Company's offshore status in the
Isle of Man. While this offshore status had been seen as a
tax-efficient way of exploiting the ACIST technology, it has become
clear that it is unlikely to deliver the anticipated benefits to
the Company or to shareholders. As a consequence of his other
business interests James Cunningham-Davis, one of the Isle of Man
non-executive Directors, has today stepped down from the Board and
we would like to extend our thanks to James for all of his hard
work on the Company's behalf. The other two Isle of Man
non-executive Directors, Tina Rawlinson and Pritesh Desai, will
step down from the Board at the close of the Company's forthcoming
general meeting. The Board will consider the appointment of a
suitable non-executive director in due course;
3. Deferral of part or all of Directors' remuneration.
In all, it is expected that these savings amount to over
GBP750,000 in a full year.
Despite these measures, the business required further equity
funding and, as announced today, has secured the necessary funding
to move forward. The details of the funding are set out in a
separate announcement, but, in summary:
1. The Company has secured conditional commitments to in excess
of GBP1.41 million in equityat 2p per share;
2. This is conditional upon a number of approvals. In
particular, the largest shareholder, Evolve Capital Plc (together
with those deemed to be acting in concert with them) will, as a
result of the fundraise, increase their interest which would, in
normal circumstances and without requisite approvals, lead to a
compulsory offer being required to be made for the entire issued
share capital of the Company under the Takeover Code. For the
fundraising to proceed without a requirement for such offer,
independent shareholders are being asked to approve the waiver of
such obligation at the forthcoming shareholder meeting.
Outlook
3D has changed radically during the period under review. Many of
the problems of the last year are typical of those affecting
companies moving from a technically excellent invention to the
reality of the marketplace. I am confident that the manufacturing
issues are now solved and that the product is now sufficiently
robust to achieve market success. The Company is now focused on
delivering the current business model, which depends entirely on
sales performance in a number of territories.
I look forward to reporting further progress over the next year
and beyond.
James Noble
Non-executive Chairman
22 September 2011
Group Income Statement
for the year ended 30 June 2011
Year ended Year ended
30 June 30 June
2011 2010
Unaudited Audited
Note GBP GBP
Revenue 714,925 2,838
Cost of sales (257,739) (2,624)
---------------------------------- ----- ------------ ------------
Gross profit 457,186 214
---------------------------------- ----- ------------ ------------
Operating expenses (2,891,566) (1,233,146)
---------------------------------- ----- ------------ ------------
Operating loss (2,434,380) (1,232,932)
Finance income - Interest
receivable 96 263
Finance costs - Loan note
interest (9,410) -
---------------------------------- ----- ------------ ------------
Loss before tax (2,443,694) (1,232,669)
Tax 4 25,124 -
---------------------------------- ----- ------------ ------------
Loss and total comprehensive
income (2,418,570) (1,232,669)
---------------------------------- ----- ------------ ------------
Loss for the period attributable
to equity holders of the
parent (2,418,570) (1,232,669)
Loss per share (p) 5
- Basic (1.59p) (1.02p)
---------------------------------- ----- ------------ ------------
All of the revenue and profit/(loss) above is derived from
continuing operations.
There is no other income for this period, and therefore no
separate statement of comprehensive income has been presented.
Group Statement of Changes in Equity
for the year ended 30 June 2011
Share-based
Share Share Payments Retained
Capital Premium Reserve Earnings Total
GBP GBP GBP GBP GBP
Balance at 1
July 2009 97,929 1,605,025 - (1,119,390) 583,564
New share
capital
subscribed 10,075 798,925 - - 809,000
Expenses of
share issue - (31,530) - - (31,530)
Loss and total
comprehensive
income for
the period - - - (1,232,669) (1,232,669)
Provision for
share-based
payments - - 16,650 - 16,650
Balance at 30
June 2010 108,004 2,372,420 16,650 (2,352,059) 145,015
--------------- -------- ---------- ------------ ------------ ------------
New share
capital
subscribed 45,915 2,708,984 - - 2,754,899
Conversion of
loan notes to
share
capital 16,556 728,444 - - 745,000
Expenses of
share issue - (442,882) - - (442,882)
Loss and total
comprehensive
income for
the period - - - (2,418,570) (2,418,570)
Provisions for
share-based
payments - - 51,570 - 51,570
--------------- -------- ---------- ------------ ------------ ------------
Balance at 30
June 2011 170,475 5,366,966 68,220 (4,770,629) 835,032
--------------- -------- ---------- ------------ ------------ ------------
Group Statement of Financial Position
At 30 June 2011
30 June 2011 30 June 2010
Unaudited Audited
GBP GBP
Non-current assets
Other intangible assets - -
Property, plant and equipment 173,336 153,469
173,336 153,469
Current assets
Inventories 182,310 156,528
Trade and other receivables 191,498 95,759
Cash and cash equivalents 520,145 67,446
---------------------------------- ------------- -------------
893,953 319,733
Total assets 1,067,289 473,202
---------------------------------- ------------- -------------
Current liabilities
Trade and other payables (232,257) (328,187)
(232,257) (328,187)
Net current assets/(liabilities) 661,696 (8,454)
---------------------------------- ------------- -------------
Net assets 835,032 145,015
---------------------------------- ------------- -------------
Equity
Share capital 170,475 108,004
Share premium account 5,366,966 2,372,420
Share-based payments reserve 68,220 16,650
Retained earnings (4,770,629) (2,352,059)
---------------------------------- ------------- -------------
Total equity 835,032 145,015
---------------------------------- ------------- -------------
Group Statement of Cash Flows
For the year ended 30 June 2011
Year ended Year ended
30 June 30 June
2011 2010
Unaudited Audited
Note GBP GBP
Cash flows from operations
Cash used in operations 6 (2,516,278) (855,802)
Taxation received 25,124 -
--------------------------------------- ----- ------------ -----------
Net cash used in operating activities (2,491,154) (855,802)
--------------------------------------- ----- ------------ -----------
Investing activities
Interest received 96 263
Expenditure on intangible assets (68,164) (91,817)
Grants received 26,664 -
Purchases of property, plant and
equipment (62,350) (136,622)
--------------------------------------- ----- ------------ -----------
Net cash used in investing activities (103,754) (228,176)
--------------------------------------- ----- ------------ -----------
Financing activities
Issue of share capital 62,471 10,075
Cash element of share premium 3,437,428 777,425
Issue costs (442,882) (28,030)
Loan interest paid (9,410) -
Net cash from financing activities 3,047,607 759,470
--------------------------------------- ----- ------------ -----------
Net increase/(decrease) in cash
and cash equivalents 452,699 (324,508)
Cash and cash equivalents at the
beginning of period 67,446 391,954
--------------------------------------- ----- ------------ -----------
Cash and cash equivalents at the
end of period 520,145 67,446
--------------------------------------- ----- ------------ -----------
Notes to the Preliminary Statements
1. General Information
The preliminary statements for the year ended 30 June 2011 have
been extracted without adjustment from the Group's final accounts
for the period. The final accounts have been prepared in accordance
with International Financial Reporting Standards as adopted by the
European Union and those parts of the Companies Act 2006 applicable
to companies reporting under IFRS. The accounting policies adopted
in the final accounts are consistent with those used in the last
published annual financial statements.
The preliminary statements for the year ended 30 June 2011 do
not constitute statutory accounts for the purposes of Section 435
of the Companies Act 2006. Neither the Directors nor the Company's
auditors anticipate any material changes to the numbers so
extracted. The 2010 statutory accounts have been filed with the
Registrar of Companies.
The preliminary statements may be viewed on the Company's
website at www.3ddiagnosticimaging.com.
The Company currently anticipates posting its accounts for the
year to 30 June 2011 to shareholders soon after the forthcoming
general meeting.
2. Accounting Policies
Basis of Preparation
The final accounts have been prepared on the historical cost
basis.
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Chairman's Statement. This statement also
includes a summary of the Group's financial position and its cash
flows.
Overall, the Directors believe the Group is well placed to
manage its business risks successfully despite the current
uncertain economic outlook. The Group's forecasts and projections,
which include the additional funding as per note 8 and, taking
account of reasonably possible changes in trading performance, show
that the Group should be able to operate within the level of its
current facilities.
After making reasonable enquiries, the Directors have a
reasonable expectation that the Company and the Group have adequate
resources to continue in operational existence for the foreseeable
future. Accordingly, they continue to adopt the going concern basis
in preparing the final accounts.
Basis of Accounting
The Group's consolidated financial statements for the year ended
30 June 2011 and 30 June 2010 were prepared in accordance with
International Financial Reporting Standards (IFRSs).
3. Segmental Reporting
All operating activities are conducted from the UK and as such
the Directors consider that there to be only one business segment.
Segmental information in respect of the Group's geographical
activity is presented in the Chairman's statement.
4. Tax
The Group has recognised a taxation credit in relation to
R&D taxation credits relating to the year ended 30 June 2010 of
GBP25,124 which was received in September 2010.
No deferred tax asset has been recognised in respect of tax
losses due to the uncertainty of future profit streams in the
UK.
Notes to the Preliminary Statements (continued)
5. Loss Per Share and Dividends
(a) No dividends have been paid during the year ended 30 June
2011.
(b) Basic Loss Per Share
Basic earnings /(loss) per share is calculated by dividing the
earnings attributable to equity holders of the parent by the
weighted average number of shares in issue during the period.
Year ended Year ended
30 June 30 June
2011 2010
Unaudited Audited
GBP GBP
Loss attributable to equity
holders of the Group (2,418,570) (1,232,669)
Number of shares 000's 000's
Weighted average number of
ordinary shares for the purpose
of basic EPS 152,310,655 120,290,427
Loss per share - basic (1.59p) (1.02p)
--------------------------------------- ------------ ------------
(c) Diluted Loss Per Share
Diluted earnings/ (loss) per share is calculated by adjusting
the weighted average number of ordinary shares outstanding to
assume conversion of all dilutive potential ordinary shares. For
share options a calculation is made to determine the number of
shares which could be acquired at fair value (determined as the
average annual market share price of the Company's shares) based on
the monetary value of the subscription rights attached to
outstanding share options. The number of shares calculated above is
compared with the number of shares that would have been issued
assuming the exercise of the share options.
The directors consider the impact of the shares covered by share
options to be anti-dilutive, as the exercise of the share options
would result in a reduction in the loss per share.
In the current period, the weighted average number of shares has
increased due to the placing of shares on AIM in November 2010. The
weighted average number of shares, and therefore the loss per
share, for the previous periods have been restated to reflect the
impact of this placing.
Notes to the Preliminary Statements
continued
6. Notes to the Cash Flow Statement
Year ended Year ended
30 June 30 June
2011 2010
Unaudited Audited
GBP GBP
Cash used in operating activities
Operating loss (2,434,380) (1,232,932)
Amortisation of intangible costs 68,164 91,817
Release of grants (26,664) -
Depreciation of property, plant
and equipment 42,483 26,867
Share based payment expense 51,570 16,650
Non cash flow movement in share
based payment - 18,000
(Increase)/decrease in inventories (25,782) 4,382
Increase in trade and other receivables (95,739) (21,038)
(Decrease)/increase in trade and
other payables (95,930) 240,452
Cash used in operating activities (2,516,278) (855,802)
----------------------------------------- ------------ ------------
7. Share Based Payments
The Group issues share-based benefits to employees. These
share-based payments have been measured at their fair value at the
date of grant and the fair value of expected shares is being
expensed to the Income Statement on a straight-line basis over the
vesting period. Fair value has been measured using the Black
Scholes model and adjusted to reflect the most likely share vesting
and exercise pattern. The impact on the accounting periods has
been:
Year ended Year ended
30 June 30 June
2011 2010
Unaudited Audited
GBP GBP
Included in operating expenses 51,570 16,650
-------------------------------- ----------- -----------
The cumulative provision for share-based payments of GBP68,220
(2010: GBP16,650) is shown as a reserve in the Group Statement of
Financial Position.
8. Subsequent Events
In September 2011 the Company announced the conditional raising
of an additional GBP1.41 million, before expenses, of equity
capital through a subscription and placing of 70,500,000 new
ordinary shares of 0.1p each at a subscription price of 2 pence per
share. The placing are conditional upon shareholders approval which
is to be sought at a general meeting of the Company to be held in
October 2011. The proceeds are intended to provide additional
working capital for CarieScan as it continues the development of
its business.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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