RNS Number:7844B
Medicsight Plc
09 August 2007
Press release 09 August 2007
Medicsight PLC
("Medicsight" or "the Company")
Interim Results for the six months ended 30 June 2007
Medicsight PLC (AIM: MDST), industry leader in the development of Computer-Aided
Detection (CAD) and image analysis software to assist in the early detection and
diagnosis of disease, is pleased to announce its Interim Results for the six
months ended 30 June 2007.
Highlights
* Successful AIM IPO which raised #32 million before fees
* New global distribution agreement signed with Barco NV
* Four regulatory approvals granted
* Medicsight CAD technology showcased at 3 radiological conferences
David Sumner, Chief Executive of Medicsight PLC, commented: "I have been
delighted with progress on all fronts. The contract pipeline is building ahead
of schedule, regulatory approvals are on schedule and product development is on
track. In addition, on 21 June 2007 Medicsight made its debut on the AIM Market
of the London Stock Exchange. The capital raised will enable Medicsight to
commercialise its CAD software in all major healthcare markets in the world
today."
For further information, please contact:
Medicsight PLC
David Sumner +44 (0)20 7605 7950
www.medicsight.com
Collins Stewart Europe Limited
Tim Mickley +44 (0)20 7523 8350
Jonny Sloan +44 (0)20 7523 8302
Media enquiries:
Abchurch
Heather Salmond Tel: +44 (0) 20 7398 7700
heather.salmond@abchurch-group.com
Ashley Tapp Tel: +44 (0) 20 7398 7700
ashley.tapp@abchurch-group.com
Stephanie Cuthbert Tel: +44 (0) 20 7398 7700
stephanie.cuthbert@abchurch-group.com www.abchurch-group.com
Chief Executive's Review
Following our successful admission to AIM on 21 June 2007, I am pleased to
report the Group's first set of interim results as a public company.
Financial Review
From our IPO we raised #30,450,000 net new money (after advisor fees) - which
gives us a healthy cash and net assets position at 30 June 2007.
Following the IPO we repaid, in full, the loan of #5,478,000 from our parent
company (MGT Capital Investments, Inc), and terminated by mutual agreement, the
credit facility that we had in place from Asia IT Capital Investments Ltd.
At 30 June 2007 we had #27,928,000 of cash and #27,625,000 of net assets. We
have invested our surplus cash in short term cash deposits.
In the period ended 30 June 2007 we spent a total of #3,566,000 on operating
costs (#3,155,000 for the period ended 30 June 2006) - which is in line with
Company expectations.
Strategy
We have an aggressive strategy in place to increase sales and maximise
shareholder return. We aim to sign new distribution agreements for our ColonCAD
(TM) and LungCAD(TM) products and to drive the use and distribution of existing
products. We have also developed new revenue opportunities with our online 'pay
per use' model. In order to maintain our leading position, we will continue to
invest in new technology and will roll out additional product improvements.
Commercial Partnerships
In accordance with our strategy, we distribute our products through commercial
partnerships with leading 3D visualisation companies and medical equipment
manufacturers. We recently reinforced our global distribution capability and
relationships with key partners and currently have global distribution
agreements in place with Vital Images, Inc., Barco N.V., TeraRecon, Inc.,
Viatronix, Inc. and 3mensio Medical Imaging BV.
Barco is a leading provider of enterprise-wide 3D advanced visualisation
solutions. Our relationship will enable Medicsight's ColonCAD(TM) to be
distributed with Barco's 3D visualisation products and through the Picture
Archiving and Communication Systems (PACS) offered by Barco's partners.
These contracts will enable Medicsight and its partners to accelerate the
penetration of the growing CAD market. Through these channel partners alone
there is a total potential installed base of over 7,500 workstations.
We anticipate completing additional distribution contracts in 2007 that will
give us access to a further 15,000 workstations.
Medicsight estimates the global installed base opportunity is 25,000 MDCT
scanners. Furthermore there are a further 35,000 single detector CT scanners
which it would be reasonable to expect could be upgraded to MDCT scanners after
five years of use.
Regulatory Update
The Company's regulatory applications are progressing as planned. In the period
ending 30 June 2007, we secured the following regulatory approvals for our
products:
* On 30 January 2007, we were granted Medical Device Licenses from the
Therapeutic Products Directorate of Health Canada for our ColonCAD(TM) API
Version 3 and our LungCAD(TM) API Version 3 applications.
* On 4 June 2007, our MedicRead Colon 1.0 and ColonCAD(TM) API 3.2 applications
were CE marked.
* On 5 July 2007, we were granted Medical Device Licenses from the Therapeutic
Products Directorate of Health Canada to allow us to begin marketing and
selling MedicRead Colon 1.0 in Canada.
Our regulatory approval applications in the USA, China, Japan, Australia and
Brazil are on schedule.
Prospects
The Group is in a strong position to take advantage of the health imaging market
and expects to deliver strong growth in both existing and new markets following
approvals.
David Sumner
Chief Executive Officer
9 August 2007
INTERIM FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENTS
6 months ended 6 months ended Year ended
30 June 2007 30 June 2006 31 December 2006
(unaudited) (unaudited) (audited)
#000 #000 #000
Administrative expenses (3,013) (2,498) (4,817)
Research and development (553) (657) (1,161)
____________ ___________ ____________
Operating loss (3,566) (3,155) (5,978)
Finance income (net) 39 523 1,042
____________ ___________ ____________
Loss before taxation (3,527) (2,632) (4,936)
Taxation - - -
____________ ___________ ____________
Loss on ordinary activities after taxation (3,527) (2,632) (4,936)
____________ ___________ ____________
Loss per share - basic and diluted (3p) (3p) (6p)
____________ ___________ ____________
The notes on pages 9 to 14 form part of these interim financial statements.
INTERIM FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
30 June 2007 30 June 2006 31 December 2006
(unaudited) (unaudited) (audited)
#000 #000 #000
ASSETS
Non current assets
Intangible assets - 174 -
Property plant and equipment 103 104 130
______________ ______________ ______________
103 278 130
______________ ______________ ______________
Current assets
Trade and other receivables 904 792 784
Cash and cash equivalents 27,928 367 6,164
______________ ______________ ______________
28,832 1,159 6,948
______________ ______________ ______________
Total assets 28,935 1,437 7,078
______________ ______________ ______________
LIABILITIES
Current liabilities
Trade and other payables 1,310 938 1,300
Non current liabilities
Debt - 17,444 5,599
Other payables - 9 -
______________ ______________ ______________
Total liabilities 1,310 18,391 6,899
______________ ______________ ______________
Net assets (liabilities) 27,625 (16,954) 179
______________ ______________ ______________
SHAREHOLDERS' EQUITY
Ordinary shares 7,776 4,322 6,322
Share premium 57,306 11,019 28,311
Share based payment reserve 883 260 405
Currency translation reserve 23 (23) (23)
Retained earnings (38,363) (32,532) (34,836)
______________ ______________ ______________
Total shareholders' equity 27,625 (16,954) 179
______________ ______________ ______________
The notes on pages 9 to 14 form part of these interim financial statements.
INTERIM FINANCIAL STATEMENTS
CONSOLIDATED CASH FLOW STATEMENTS
6 months ended 6 months ended Year ended
30 June 2007 30 June 2006 31 December 2006
(unaudited) (unaudited) (audited)
#000 #000 #000
Cash flows from operating activities
Cash used in operations (3,145) (2,458) (4,519)
Interest received 110 54 63
Interest paid (192) - -
______________ ______________ ______________
Net cash from operating activities (3,227) (2,404) (4,456)
______________ ______________ ______________
Cash flows from investing activities
Proceeds on sale of equipment (22) (24) (127)
______________ ______________ ______________
Net cash used in investing activities (22) (24) (127)
______________ ______________ ______________
Cash flows from financing
Net proceeds from issues of
ordinary share capital 30,449 - 6,292
Finance lease principal repayments (4) (5) (10)
Repayment of borrowings (5,478) (1,312) -
New borrowings - - 353
______________ ______________ ______________
Net cash used in financing activities 24,967 (1,317) 6,635
______________ ______________ ______________
Effects of exchange rate changes 46 (15) (15)
Net increase in cash and
cash equivalents 21,764 (3,760) 2,037
Cash and cash equivalents at 1 January 6,164 4,127 4,127
______________ ______________ ______________
Cash and cash equivalents
at period end 27,928 367 6,164
______________ ______________ ______________
The notes on pages 9 to 14 form part of these interim financial statements.
INTERIM FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Share
based Currency
Share Share payment translation Retained Total
Capital Premium reserve reserve earnings Equity
#000 #000 #000 #000 #000 #000
At 1 January 2006 4,322 11,019 114 (8) (29,900) (14,453)
Loss for the period - - - - (2,632) (2,632)
Net exchange adjustments - - - (15) - (15)
Share based payments - - 146 - - 146
_________ _________ _________ __________ __________ _________
Total recognised income and - - - - (2,632) (2,632)
expense
_________ _________ _________ __________ __________ _________
At 30 June 2006 4,322 11,019 260 (23) (32,532) (16,954)
Loss for the period - - - - (2,304) (2,304)
Share based payments - - 145 - - 145
Ordinary Shares issued 2,000 - - 2,000
Premium on Ordinary Shares - 18,000 - - 18,000
issued
Share issue costs - (708) - (708)
_________ _________ _________ __________ __________ _________
Total recognised income and - - - - (2,304) (2,304)
expense
_________ _________ _________ __________ __________ _________
At 31 December 2006 6,322 28,311 405 (23) (34,836) 179
Loss for the period - - - - (3,527) (3,527)
Net exchange adjustments - - - 46 - 46
Share based payments - - 478 - - 478
Ordinary Shares issued 1,454 1,454
Premium on Ordinary Shares - 30,546 - - - 30,546
issued
Share issue costs - (1,551) - - - (1,551)
_________ _________ _________ __________ __________ _________
Total recognised income and - - - - (3,527) (3,527)
expense
_________ _________ _________ __________ __________ _________
At 30 June 2007 7,776 57,306 883 23 (38,363) 27,625
_________ _________ _________ __________ __________ _________
NOTES TO INTERIM FINANCIAL STATEMENTS
1. Basis of preparation of interim financial information
The Group interim financial statements have been prepared in accordance with
International Accounting Standard 34 'Interim financial reporting' on a
consistent basis with the accounting policies set out in the Medicsight PLC
Annual Report and Accounts for the year ended 31 December 2006.
These interim financial statements are unaudited and do not constitute statutory
accounts of the Group as defined in section 240 of the Companies Act 1985.
The financial information for the year ended 31 December 2006 has been extracted
from the Group's published financial statements for that year, which contain an
unqualified audit report and which have been filed with the Registrar of
Companies.
2. Segmental geographical reporting
The primary segment is geographical
6 months ended UK Other Total
30 June 2007 #000 #000 #000
________ ______ ________
Revenue - - -
Loss (2,936) (591) (3,527)
Segment assets 28,850 85 28,935
Capital expenditure 22 - 22
________ ______ ________
6 months ended UK Other Total
30 June 2006 #000 #000 #000
________ ______ ________
Revenue - - -
Loss (2,491) (141) (2,632)
Segment assets 1,216 221 1,437
Capital expenditure 24 - 24
________ ______ ________
12 months ended UK Other Total
31 December 2006 #000 #000 #000
________ ______ ________
Revenue - - -
Loss (4,373) (563) (4,936)
Segment assets 7,014 64 7,078
Capital expenditure 98 29 127
________ ______ ________
NOTES TO INTERIM FINANCIAL STATEMENTS
3. Loss per ordinary share
6 months ended 6 months ended Year ended
30 June 2007 30 June2006 31 December 2006
(unaudited) (unaudited) (audited)
______________ ______________ ______________
Loss for the period (#000) 3,527 2,632 4,936
Weighted average number
of ordinary shares (000) 128,041 86,434 86,872
Loss per ordinary share
- basic and diluted (3p) (3p) (6p)
______________ ______________ ______________
The loss per share is based on the weighted average number of ordinary shares in
issue during the year. The Company has recorded a loss in all periods. No
adjustment has been made to the basic loss per share, as the exercise of the
share options would have the effect of reducing the loss per ordinary share and
is anti- dilutive.
4. Debt
6 months ended 6 months ended Year ended
30 June 2007 30 June 2006 31 December 2006
(unaudited) (unaudited) (audited)
#000 #000 #000
______________ ______________ ______________
Debt - 17,444 5,599
______________ ______________ ______________
During the period ended 30 June 2007, the Company repaid in full the loan with
MGT Capital Investments Inc (the parent company).
On 30 June 2007, the credit facility with Asia IT Capital Investments limited (a
related party) was terminated by mutual agreement.
NOTES TO INTERIM FINANCIAL STATEMENTS
5. Share issue and Initial Public Offering
On 21 June 2007 Medicsight PLC issued 29,090,909 5p Ordinary Shares at a price
of #1.10, and listed the company on the AIM Market of the London Stock Exchange.
We incurred IPO-related fees of #1,550,000, including #149,000 with Asia IT
Capital Investments Ltd (a related party).
6. Share options
The Company has granted share options to eligible employees since 2003. In the
period ending 30 June 2007, the Company granted the following options:
Plan E - On 22 February 2007 the Company approved share option plan "E" and
granted options over 5,900,000 shares. The options had an exercise price of
#0.50 and vest equally over 3 years after the employees have been employed for
12, 24 and 36 months. The options expire if unexercised on 31 December, 2016.
Plan F - On 16 May 2007 the Company approved share option plan "F" and granted
options over 350,000 shares. The options had an exercise price of #0.75 and
vest equally over 3 years after the employees have been employed for 12, 24 and
36 months. The options expire if unexercised on 31 March 2017.
On 22 February 2007 the Company re-priced 50% of the existing employee share
options under Plan A to D to #0.50. No other terms of the options plans were
changed.
A summary of the movement on the share option plans is:
30 June 2007 31 December 2006
Number of Weighted Average Number of Weighted Average
Shares Exercise Price Shares Exercise Price
__________ __________ __________ __________
Start of period 3,684,000 #1.04 3,695,000 #1.00
Granted 6,250,000 #0.75 1,625,000 #1.08
Forfeited (689,000) #0.75 (1,636,00) #1.00
Exercised - - - -
__________ __________ __________ __________
At period end 9,245,000 #0.73 3,684,000 #1.04
__________ __________ __________ __________
NOTES TO INTERIM FINANCIAL STATEMENTS
The following data is a summary of the status of the share options outstanding
at 30 June 2007:
Remaining
contractual
life
Share Option Plan Number (years)
_____________________ _______________ _______________
A 488,000 5.6
B 897,000 6.8
C 235,000 7.9
D 1,375,000 9.0
E 5,900,000 9.6
F 350,000 9.9
_____________________ _______________ _______________
Options are fair valued using the Black-Scholes option pricing model. No
performance conditions were included in the fair value calculations. The
following weighted average assumptions were used to estimate the fair value of
stock options granted in the period:
Dividend yield Nil
Expected volatility 60% to 65%
Risk free rates 4.65% to 5.25%
Expected volatility is based on historical volatility over the last three years
of MGT Capital Investments, Inc (the parent company). The expected life is the
average expected period to exercise (usually the vesting period). The risk free
rate of return is the yield on zero-coupon UK government bonds of a term
consistent with the assumed option life.
In the period ending 30 June 2007 the Company recorded a share option charge of
#478,000 (December 2006: #291,000).
NOTES TO INTERIM FINANCIAL STATEMENTS
7. Related Parties
The Company has related party relationships with its subsidiaries, its parent
company (MGT Capital Investments, Inc), directors, employees and subsidiary
companies of its parent company.
During the year the Company funded the trading activities of its subsidiary
operations for NIL mark up to cost.
Parent company loan
The Company had a loan arrangement with its parent company. This loan was repaid
in full in June 2007.
Asia IT Capital Investments Ltd
A brother of Tim Paterson-Brown (a director of the Company) is a director of
Asia IT Capital Investments Ltd.
The Company had a #10M credit facility with Asia IT Capital Investments Ltd. On
30 June 2007, the credit facility with Asia IT Capital Investments (a related
party) was terminated by mutual agreement.
We incurred #149,000 of IPO-related fees from Asia IT Capital Investments Ltd
which were paid in the period ended 30 June 2007.
Other entities
Medicexchange PLC (incorporated in July 2006 in England and Wales) is a
subsidiary of the Company's parent company (MGT Capital Investments, Inc).
Medicexchange PLC and the Company both operate from 66 Hammersmith Road, London,
with Medicexchange PLC being the tenant on the lease with the landlord.
In the period ended June 30, 2007: (a) Medicexchange PLC charged the Company for
rent and related costs; and (b) the Company charged Medicexchange PLC for
services and a share of finance, admin and IT resource costs. There is a
netting arrangement in place between the companies. Net charges in the period
were #319,000 and the balance outstanding as at 30 June was #219,000.
NOTES TO INTERIM FINANCIAL STATEMENTS
8. Reconciliation of net cash flows from operating activities
6 months ended 6 months ended Year ended
30 June 2007 30 June 2006 31 December 2006
(unaudited) (unaudited) (audited)
#000 #000 #000
__________ __________ __________
Loss for the period (3,527) (2,632) (4,936)
Adjustments for:
Depreciation 46 66 135
Loss on disposal of equipment 3 - 8
Amortisation of intangibles - 348 522
Interest income (110) (54) (63)
Interest expense 192 637 1,453
Foreign currency finance cost (121) (1,106) (2,432)
Share options 478 146 291
Changes in working capital
Trade and other receivables (120) 38 46
Trade and other payables 14 99 457
__________ __________ __________
Cash used in operations (3,145) (2,458) (4,519)
__________ __________ __________
This information is provided by RNS
The company news service from the London Stock Exchange
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