RNS Number:1810U
Zone-IP Limited
02 April 2007

                                                                    2 April 2007



                                  Zone-IP Ltd

                          ("Zone-IP" or the "Company")





            Preliminary results for the year ended 31 December 2006

Ra'anana, Israel , 2 April 2007 :  Zone-IP Ltd. (LSE: ZIP), formerly known as
Ki-Bi Mobile Technologies Ltd ("Ki-Bi"), announces its unaudited financial
results for the year ended 31 December 2006.

In April 2006 the Company discontinued its main business activities.
Subsequently, in July 2006, the Company acquired Emblaze V CON Ltd., a company
which offers video over-IP conferencing solutions and changed its name to
Zone-IP Ltd. and began trading under its new name on the AIM Market.

FINANCIAL HIGHLIGHTS:



  * Total revenues from operations were $6.6 million (2005: $4.5 million*)



  * Net loss was $5.9 million ** (2005: $913,000*)



  * Total assets as at 31 December 2006 were $12.1 million (2005: $7.2 million*)



  * Cash and marketable securities of $7.2 million at 31 December 2006



* Under IFRS, the acquisition of Emblaze V CON by Zone-IP has been accounted for
as a reverse acquisition, and accordingly, Emblaze V CON is treated as the
acquirer for financial reporting purposes. All 2005 comparable information
therefore relates to Emblaze V CON solely and does not include Zone-IP or any of
its then subsidiaries.



** The results for the year ended 31 December 2006 include the results of
Emblaze V CON for the full year of 2006 and Zone-IP and its subsidiaries with
effect from 13 July 2006, the date the reverse acquisition was completed.

Enquiries:

Zone-IP
Hadas Gazit                                                    +972 9 769 9633

Emblaze V CON
David Amir                                                     +972 9 762 7800

John East & Partners Limited
David Worlidge/Simon Clements                                  +44 20 7628 2200


CHAIRMAN'S STATEMENT

In the year ended 31 December 2006 the Company incurred a loss on continuing
operations of $5.9 million (2005: profit $0.1 million) on turnover of $6.6
million (2005: $4.5 million).  At that date, the Company had a cash portfolio of
$7 million.

The year ended 31 December 2006 was a disappointing year for the Company.  In
April 2006, the Company decided to discontinue the card operations (the
Company's principal business at that time) but continued to support its existing
customers. As a result of this decision, 17 employees including the chief
executive officer and chief financial officer ceased employment with the
Company.

On 13 July 2006, the Company acquired Emblaze V CON, a company providing video
over-IP conferencing solutions to corporate customers, Under IFRS, the
accounting treatment requires that the transaction is treated as an acquisition
by Emblaze V CON.  Accordingly, the financial statements for the year ended 31
December 2006 reflect the trading results of Emblaze V CON for the full year and
the results of Zone-IP and its subsidiaries for the "post-acquisition" period
from 13 July 2006.

Emblaze V CON develops and manufactures a variety of video conferencing
solutions that enable seamless communication and collaboration using all forms
of interactive media. The company's award-winning technology ensures the highest
audio and video performance for organizations worldwide. Emblaze V CON's meeting
and collaboration solutions include desktop and group videoconferencing
products, audio conferencing products, data conferencing products and management
systems. The company markets its products and services through a network of
reseller partners, OEMS and value-added resellers around the world. Emblaze V
CON has worldwide headquarters in Israel and regional offices in Munich, Rome,
London, New Jersey and Beijing.


In September 2006, the Company announced it had relieved Mr. Moshe Leder of his
duties as chief executive of Emblaze V CON and that Mr. Tal Barnoach, a
non-executive director of the Company, had agreed to take on temporary executive
responsibilities pending the appointment of a new chief executive.



Mr Barnoach conducted a strategic review of the Company's operations and core
technologies. Following the review, the Company appointed a new VP R&D and a new
VP Sales & Marketing and a new strategy plan was put forth. An overall change
took place to maintain focus on the Company's core business, strong execution,
better visibility in the market and strengthened stronghold in emerging markets



As a result, Emblaze V CON is planning a number of new product launches and
upgrades in our existing product line in the first half of the current financial
year. Emblaze V CON intends to extend its range of products and service offering
to customers and enhance the technology of existing products.



Emblaze V CON will endeavour to strengthen its leading position in Video-over-
IP, focus on solution-based selling and enhance its relationships and
partnerships with industry technology and service providers.



Current trading



Trading in the first quarter of the current financial year is in line with
management's expectations, which were approved by the Board of directors in
December 2006, following the strategic review.



Future prospects



The Directors expect that demand for communication tools using IP (Internet
Protocol) standards will increase as corporations worldwide move to replace and
converge their legacy analog systems into more advanced IP based products.



The Directors believe that the growing demand for visual communication solutions
will enable Emblaze V CON to achieve higher sales in 2007.





Dr Hans Wagner
Chairman
2 April 2007

CONSOLIDATED BALANCE SHEET
U.S. dollars in thousands
 
                                                                                  31 December                     
                                                                 -----------------------------------------------
                                                                 -----------------------------------------------
                                                                              2006                        2005    
                                                                 -------------------          ------------------
                                                                 -------------------          ------------------
     ASSETS                                                                                                       
                                                                                                                  
 CURRENT ASSETS:                                                                                                  
                                                                                                                  
   Cash and cash equivalents                                                 1,521                       1,889
   Restricted cash                                                             237                           -    
   Short-term available-for-sale marketable securities                       3,974                           -    
   Trade receivables (net of allowance of $ 179,000 and $                                                         
     Nil at 31 December 2006 and 2005, respectively)                         1,660                       2,102  
   Other accounts receivable and prepaid expenses                              387                         330    
   Inventories                                                               1,407                       1,267    
                                                                 -------------------          ------------------
                                                                 -------------------          ------------------
                                                                                                                  
 Total current assets                                                        9,186                       5,588    
                                                                 -------------------          ------------------
                                                                 -------------------          ------------------
                                                                                                                  
 NON-CURRENT ASSETS:                                                                                              
                                                                                                                  
   Long-term available-for-sale marketable securities                        1,505                           -    
   Property and equipment, net                                                 501                         491    
   Intangible assets, net                                                      894                       1,138    
                                                                 -------------------          ------------------
                                                                 -------------------          ------------------
                                                                                                                  
 Total non-current assets                                                    2,900                       1,629    
                                                                 -------------------          ------------------
                                                                 -------------------          ------------------
                                                                                                                  
                                                                                                                  
 Total assets                                                               12,086                       7,217
                                                                 ===================          ==================
      LIABILITIES AND EQUITY                                                                                      
                                                                                                                  
 CURRENT LIABILITIES:                                                                                             
                                                                                                                  
   Short-term bank credit                                                      423                           -
   Trade payables                                                            1,549                       1,264    
   Related party                                                               513                         331    
   Government grants                                                           577                         673    
   Employees and payroll accruals                                              628                       1,030    
   Deferred revenues                                                           471                         141    
   Accrued expenses and other liabilities                                      639                         400    
                                                                 -------------------          ------------------
                                                                 -------------------          ------------------
                                                                                                                  
 Total current liabilities                                                   4,800                       3,839    
                                                                 -------------------          ------------------
                                                                 -------------------          ------------------
                                                                                                                  
 NON-CURRENT LIABILITIES:                                                                                         
   Accrued severance pay                                                       149                           -    
   Government grants                                                           847                         688    
                                                                 -------------------          ------------------
                                                                 -------------------          ------------------
                                                                                                                  
 Total non-current liabilities                                                 996                         688    
                                                                 -------------------          ------------------
                                                                                                                  
 Total liabilities                                                           5,796                       4,527    
                                                                 -------------------          ------------------
                                                                 -------------------          ------------------
                                                                                                                  
 EQUITY:                                                                                                          
   Ordinary shares                                                             109                          66    
   Share premium                                                            12,989                       3,539    
   Net unrealized loss reserve                                                (10)                           -    
   Foreign currency translation reserve                                        (2)                         (2)    
   Accumulated deficit                                                     (6,796)                       (913)    
                                                                 -------------------          ------------------
                                                                 -------------------          ------------------
                                                                                                                  
 Total equity                                                                6,290                       2,690    
                                                                 -------------------          ------------------
                                                                 -------------------          ------------------
                                                                                                                  
                                                                                                                  
 Total liabilities and equity                                               12,086                       7,217
                                                                 ===================          ==================
CONSOLIDATED STATEMENT OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
 
 
                                                                                                        
                                                                                                    From
                                                           For the year             9 August, 2005 (date
                                                                  ended                 of inception) to
                                                            31 December                      31 December
                                                                   2006                             2005
                                                      -------------------        -------------------------
                                                      -------------------        -------------------------
                                                                                                        
 Continuing Operations:                                                                                 
                                                                                                        
                                                                                                          
 Revenues                                                         6,577                            4,532
 Cost of revenues                                               (3,344)                          (1,418)
                                                      -------------------        -------------------------
                                                      -------------------        -------------------------
                                                                                                        
 Gross profit                                                     3,233                            3,114
                                                      -------------------        -------------------------
                                                      -------------------        -------------------------
                                                                                                        
 Operating expenses:                                                                                    
   Research and development                                       3,018                              841
   Selling and marketing                                          3,816                            1,720
   General and administrative                                     1,714                              423
                                                      -------------------        -------------------------
                                                      -------------------        -------------------------
                                                                                                        
 Total operating expenses                                         8,548                            2,984
                                                      -------------------        -------------------------
                                                      -------------------        -------------------------
                                                                                                        
 Operating (loss)/income                                        (5,315)                              130
 Financial expenses, net                                           (37)                             (22)
                                                      -------------------        -------------------------
                                                      -------------------        -------------------------
                                                                                                        
 (Loss)/Profit for the period from continuing                                                             
   operations                                                   (5,352)                              108
                                                      -------------------        -------------------------
                                                      -------------------        -------------------------
                                                                                                        
 Discontinued Operations:                                                                               
                                                                                                        
 Loss for the period from discontinued operations                 (531)                          (1,021)
                                                      -------------------        -------------------------
                                                      -------------------        -------------------------
                                                                                                        
                                                                                                          
 Loss for the period                                            (5,883)                            (913)
                                                      ===================        =========================
                                                      ===================        =========================
                                                                                                        
 Loss per share:                                                                                       
                                                                                                        
 Basic and diluted loss per share from                                                                    
   continuing operations                                        $(0.13)                            $0.00
 Basic and diluted loss per share from                                                                    
   discontinued operations                                      $(0.02)                          $(0.03)
                                                      -------------------        -------------------------
                                                      -------------------        -------------------------
                                                                                                        
 Basic and diluted loss per share                               $(0.15)                          $(0.03)
                                                      ===================        =========================

 
 
 
 
 



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
U.S. dollars in thousands
 
 
 
                                                               Foreign                                                
                                                              currency                                                
                                                     Net   translation                            Total               
                      Share           Share   unrealized   adjustments      Accumulated      recognized          Total
                    capital         premium loss reserve       reserve          deficit         expense         equity
              ---------------------------------------------------------------------------------------------------------
                                                                                                                      
 Balance as                                                                                                            
   of 9                                                                                                                
   August                                                                                                              
   2005 (date                                                                                                          
   of                                                                                                   
   inception)                             -            -             -                -               -              -
                                                                                                                      
 Issuance of                                                                                                           
   shares by                                                                                                           
   EVC, net                                                                                                            
   of                                                                                                                  
   issuance                                                                                                            
   expenses              66           3,737            -             -                -               -          3,803
 Assumption                                                                                                            
   of net                                                                                                              
   liabilities                                                                                                         
   of Esys                                                                                                             
   Operation              -           (198)            -             -                -               -          (198)
 Loss for the                                                                                                          
   period                 -               -            -             -            (913)           (913)          (913)
 Foreign                                                                                                               
   currency                                                                                                            
   translation                                                                                                         
   adjustments            -               -            -           (2)                -             (2)            (2)
              ---------------------------------------------------------------------------------------------------------

                                                                                                                      
 Balance as                                                                                                            
   of 31                                                                                                               
   December                                                                                                            
   2005                  66           3,539            -           (2)            (913)           (915)          2,690
                                                                                                                      
 Assumption                                                                                                            
   of net                                                                                                              
   assets of                                                                                                           
   Zone IP               43           9,450            -             -                -               -          9,493
 Net loss on                                                                                                           
   available-for                                                                                                        
   -sale
   financial              
   assets                -               -         (10)             -                -            (10)           (10)   
 Loss for the                                                                                                          
   period                 -               -            -             -          (5,883)         (5,883)        (5,883)
              ---------------------------------------------------------------------------------------------------------
                                                                                                                      
 Balance as                                                                                                            
   of 31                                                                                                               
   December                                                                                             
   2006                 109          12,989         (10)           (2)          (6,796)         (5,893)          6,290
              =========================================================================================================
 
 
 
 
 
 
 



CONSOLIDATED STATEMENT OF CASH FLOWS
U.S. dollars in thousands
 
 
                                                                                                          From
                                                                                                9 August, 2005
                                                                                                      (date of
                                                                                Year ended       inception) to
                                                                               31 December         31 December
                                                                                      2006                2005
                                                                          ------------------  ------------------
                                                                          ------------------  ------------------
 Cash flows from operating activities:                                                                        
 Loss for the period                                                               (5,883)               (913)
 Adjustments  to reconcile  the loss for the period to net cash used in                                         
    operating activities:                                                                                       
 Loss from discontinued operations                                                     531               1,021
 Depreciation and amortization                                                         547                 219
 Decrease/(increase) in trade receivables                                              442             (2,102)
 Increase in other accounts receivable and prepaid expenses                           (57)               (330)
 (Increase)/Decrease in inventories                                                  (140)                 231
 Increase in trade payables                                                            285               1,264
 (Decrease)/Increase in employees and payroll accruals                               (214)                 468
 Increase in accrued expenses and other liabilities                                    569                 521
 Increase in short and long term government grants                                      63                   -
 Accrued severance pay, net                                                           (39)                   -
                                                                          ------------------  ------------------
                                                                          ------------------  ------------------        
                                                                                                     
 Net cash flows provided by (used in) continuing operating activities              (3,896)                 379
 Net cash flows used in discontinued operating activities (3)                        (531)               (780)
                                                                          ------------------  ------------------
                                                                          ------------------  ------------------
                                                                                                              
 Net cash used in operating activities                                             (4,427)               (401)
                                                                          ------------------  ------------------
                                                                          ------------------  ------------------
                                                                                                              
 Cash flows from investing activities:                                                                        
 Purchase of property and equipment                                                  (313)               (110)
 Acquisition of assets from VCON                                                         -             (1,631)
 Restricted cash                                                                     (237)                   -
 Investment in marketable securities                                              (12,139)                   -
 Proceeds from sale of marketable securities                                         6,650                   -
                                                                          ------------------  ------------------
                                                                          ------------------  ------------------        
                                                                                                     
 Net cash used in investing activities                                             (6,039)             (1,741)
                                                                          ------------------  ------------------
                                                                          ------------------  ------------------
                                                                                                              
 Cash flows from financing activities:                                                                        
 Increase in short-term bank credit                                                    423                   -
 Issuance of shares, net                                                                 -               3,803
 Issuance of shares in connection with reverse acquisition                           9,493                   -
 Increase in related party                                                             182                 230
                                                                          ------------------  ------------------
                                                                          ------------------  ------------------        
                                                                                                     
 Net cash provided by financing activities                                          10,098               4,033
                                                                          ------------------  ------------------
                                                                          ------------------  ------------------
                                                                                                              
 (Decrease)/Increase in cash and cash equivalents                                    (368)               1,891
 Effect of exchange rate changes on cash and cash equivalents                            -                 (2)
 Cash and cash equivalents at beginning of year                                      1,889                   -
                                                                          ------------------  ------------------
                                                                          ------------------  ------------------
                                                                                                              
                                                                                               
 Cash and cash equivalents at end of year                                            1,521               1,889
                                                                          ==================  ==================
 






Notes to the financial statements



1.  The financial information for the year ended 31 December 2005 is
extracted from Emblaze VCON's financial statements to that date which received
an unqualified auditor's report. The financial information for the year ended 31
December 2006 is extracted from the Group's unaudited financial statements to
that date.



2.  Loss per share

The figures for loss per share are calculated on a loss of $5,883,000 (2005 -
$913,000). The basic earnings per share calculation is based on a weighted
average number of ordinary shares of NIS 0.01 each of 40,083,881 (2005:
30,762,152).



3.  Dividends

    No dividends have been declared for the year ended 31 December 2006.



4.  Copies of the Report and Accounts will be sent to shareholders
shortly and will be available from the offices of the Company's nominated
adviser, John East & Partners Limited, Crystal Gate, 28-30 Worship Street,
London EC2A 2AH.



About Emblaze V CON

Emblaze V CON is a leader in the development and deployment of Video over-IP
Conferencing Solutions, enabling enterprises of all sizes to optimize their
productivity and efficiency through enhanced interaction and communication. The
Company designs, develops, manufactures and markets high-performance,
feature-rich desktop and group videoconferencing systems designed for a variety
of networks, including those based on the Internet Protocol (otherwise known as
"IP") as well as infrastructure servers to manage the video network and
services.

Emblaze V CON offers video conferencing and video communication solutions, which
are designed to meet and adapt to the needs of thousands of customers. The
intuitive, easy-to-use desktop communication tools maximize functionality,
flexibility and control, while maintaining an uncompromising commitment to
flawless audio and video experiences.  The software solutions represent the
single greatest deployment flexibility in today's market.  Unlike hardware
proprietary products, which are dedicated and costly to implement, Emblaze V
CON's software solutions run on standard hardware platforms and can be simply
integrated into customer's existing network infrastructure.

Emblaze V CON has customers in North America, Europe, Asia and Africa drawn from
a broad range of sectors, including financial institutions, SMEs, large
corporates, universities and colleges, healthcare organizations and governmental
agencies. Emblaze V CON also sells to the ISP and telecommunications market,
offering video-telephony services for the IPTV sector.



Emblaze V CON has wholly-owned subsidiaries operating in the United States,
France and Germany in order to market and sell its products.  It also has an
office in China.




                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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