13th Sep 2005 07:16
Emblaze Ltd13 September 2005 13 September 2005 Adamind Ltd (Adamind or "the Company") Interim Results for the six months ended 30 June 2005 Ra'anana, Israel, September 13, 2005: Emblaze Ltd ("Emblaze or "the Group")(LSE: BLZ) announces that its Group company, Adamind Ltd ("Adamind" or "theCompany") (LSE: ADA), the leading provider of media adaptation for multimediamessages (MMS) and content services markets, has today announced its maidenfinancial results for the six months ended 30 June 2005 since its flotation inFebruary 2005. Financial highlights • Revenues increased 121% to $3.2m (Combined Pro-forma* H1 2004: $1.4m) • Operating loss reduced by 62% to $0.83m (Combined Pro-forma H1 2004: $2.2m) • Net cash as of 30 June 2005 amounted to $28.9m • Net profit with interest income was $58K • Gross margin maintained at 91% • On track to deliver further growth for the full year 2005 and beyond * Adamind was formed in November 2004 from the merger of the transcodingbusiness units of Royal Philips Electronics and Emblaze Ltd; Philips MP4NET andEmblaze Transcoding. These are the combined financial information of twobusiness of H1 2004 as if the business combination had occurred on January 1,2003. Operational highlights • Firmly established commercial relationship with leading systems integrators such as IBM and OEM relationship with four of the top six multimedia messaging centre (MMSC) infrastructure vendors (Ericsson, LogicaCMG, Motorola and Openwave) • Two new infrastructure channel partners added: Critical Path and CBOSS • Total number of Adamind-enabled mobile networks up by 10 to more than 90 worldwide • Verizon Wireless launches MMS service; nearly 30% of their subscribers have registered for MMS services • Strategic partnership with Ericsson broadened to include video content adaptation and support for Digital Rights Management • Revenues already being generated from providing media adaptation for services beyond picture messaging, such as video, digital rights management, e-mail and MMS virus elimination • Announced today that the Company, with IBM as the system integrator, has sold directly to SMART Communications of Philippines. Shailendra Jain, chief executive of Adamind, said: "We have delivered a solidset of maiden half-year results following Adamind's flotation in February. Thegrowth reflects an increasing pace of network infrastructure investment bymobile network operators as multi-media messaging and other rich contentservices become increasingly popular with end-users worldwide. "The Company entered the second half with a solid order book amid signs ofrising MMS traffic volumes. With Adamind's long term prospects directly tied tothe volume of MMS and content traffic passing through many of the world'sleading mobile networks, our confidence in delivering further growth in revenuesfor the full year and in 2006 is reinforced." Enquiries: EmblazeDoron Cohen, Hagit Gal +972 9 7699831/339 Corfin CommunicationsHarry Chathli, Neil Thapar +44 20 7929 8989 Overview In announcing its maiden results since its flotation in February 2005, Adamindis pleased to report a strong operating performance in the first half of 2005,reflecting the Company's success in establishing its media adaptation softwareas a preferred choice of leading systems integrators such as IBM and four of theworld's top six MMSC infrastructure vendors: Ericsson, LogicaCMG, Motorola andOpenwave. In addition to strengthening the Company's ties with the top MMSC vendors andsystems integrators Adamind has also increased its direct selling efforts.Today's announcement with SMART Communications is a result of these efforts. Revenues increased by 121% to $3.2m compared with the corresponding combined proforma results of last year and were also higher than revenues of $3.06m for thewhole of 2004. Operating losses reduced to $0.83m (Combined Pro-forma H1 2004:$2.2m). Gross margin was maintained at 91%. The first half of 2005 has seen a strong uplift in demand for Adamind's mediaadaptation software as network operators launch MMS and other content services(such as picture messages, music and video downloads) as a means of boostingaverage revenues per user. At the same time advanced new multimedia handsets andother mobile devices are becoming available in greater numbers and at affordableprices. This provides a sound platform for growth in demand for Adamind'ssoftware, which enables MMS and other content to be delivered to any mobiledevice through any network. Over the period the total number of operators usingAdamind's solutions increased to more than 90 thus maintaining the Company'sleadership in terms of deployments. Adamind also benefited from higher volumes of MMS traffic running throughnetworks as well as the launch of a wider range of content services by someoperators. Rising traffic volumes result in operators buying higher capacityusage for software while additional applications results in more licensing feesfor the Company. Significant MMS deployments since flotation In March 2005, it was announced that Adamind deployed its media adaptationplatform integrated into the Motorola MMSC at Verizon Wireless, one of the twolargest North American mobile phone companies with more than 40 millionsubscribers. Since the launch of the service nearly 30% of the subscribers haveregistered for MMS and is now making a growing contribution to Adamind'srevenues. Also in March 2005, Adamind's software was deployed at TELUS Mobility as part ofOpenwave's multimedia messaging services centre (MMSC) solution for its operatorcustomer base across North America. The media adaptation software is deployed atOpenwave's MMSC to provide an overall streamlined and scalable messagingplatform to operators across North America. At the time of the flotation it was a stated aim of the Company to penetrateinto more high growth regions. In February the Company announced a tie up withCBOSS, the largest MMSC infrastructure vendor in Russia and Eastern Europe,which will enable Azercell to offer seamless MMS and rich mobile contentservices to their customer base. Beyond picture messages The Company has also made considerable progress with its strategy of providingmedia adaptation for services beyond picture messaging. Over the period Adamindexpanded its offering to rich media content beyond person to person MMS to besent over any network and any device. Its products are now being deployed toenable audio/video content service to be transmitted to any handset over mobilenetworks. Also, Adamind now addresses the market of e-mail traffic andelimination of MMS viruses. Adamind has announced today deployment of its software at the heart of Nokia'sMMSC at Philippine's SMART Communications to deliver picture messaging, animatede-cards, polyphonic ringtones, cartoons and movies to its 20 millionsubscribers. This deal is expected to generate significant revenues in 2005 and2006. Adamind has broadened its alliance with Ericsson, the world's leading telecomsupplier, which has integrated Adamind's video content adaptation software anddigital rights management in addition to picture messaging as part of itsnetwork infrastructure solution. This has already started generating revenuesbut is expected to contribute more significantly in 2006 In the early part of the second half the Company announced the alliance withCritical Path, Inc. to address the market for email traffic. The alliance withCritical Path, Inc. a leading provider of messaging software and services, marksthe first significant step by Adamind to address the market for email traffic.By embedding Adamind's software, Critical Path's Memova Mobile bridges the gapbetween Internet email and MMS, enabling consumers to exchange multimedia-richemail messages and providing operators with a new way to drive MMS usage. Thismeans every user with an MMS-enabled device can send and receive email withpicture, audio and video attachments. Revenues from this alliance will commencein the latter part of 2005. Last week Adamind announced that it has deployed its virus detectioncapabilities and anti-abuse support to eliminate spread of the CommWarrior MMSvirus among Singapore's MobileOne's, MMS-active subscribers. Independent industry experts such as Strategy Analytics believe a full scalethreat from virus attack is some way away, however, it seems likely that viruseswill be created that are capable of infecting devices with most or all of themajor operating systems. The fact that viruses can propogate via MMS rather thanjust Bluetooth (which was the case in the earliest viruses) significantlyincreases the broader threat. The wireless industry, is expected to ensure thatvirus protection services are built into networks as opposed to devices andavoid the mistakes of the PC market. To this end Adamind is well placed tobenefit from such action. Financial Review Revenues increased by 121% to $3.2m (Pro-forma H1 2004: $1.4m). The Company hasbenefited from rising MMS traffic volumes, new capacity upgrades by operatorsand take up of additional content services by operators. The Company had a one-off currency gain of $0.6m after the Company converted itsapprox £14m net proceeds from the AIM placing into US dollars. This resulted inthe company having net cash from operating activities of $0.65m and posting asmall net profit of $0.06m. Sales and marketing expenditure amounted to $1.2m compared with $0.82m in H12004 combined pro forma numbers. Spending is expected to rise during the secondhalf as the Company's builds a global sales infrastructure and fosters directdeals with operators. Net cash as of 30 June amounted to $28.9m. Gross margins for the half amounted to 91% and are expected to be maintainedbetween the 89-91% range. Research and Development Research and development expenditure net amounted to $1.6m (Combined Pro-formaH1 2004: $1.9m), representing 49% on first half revenues for 2005. It is likelythat spending in this area will continue to be significant as the Companydevelops more products to take advantage of the considerable marketopportunities available. Outlook Adamind has established a solid foundation for the full year with good firsthalf results as multi-media messaging and other rich content services becomeincreasingly popular with end-users worldwide. The Company entered the second half with a solid order book and signs of risingMMS traffic volumes. With Adamind's long term prospects directly tied to thevolume of MMS and content traffic passing through many of the world's leadingmobile networks, our confidence in delivering further growth in revenues for thefull year and in 2006 is reinforced. CONSOLIDATED BALANCE SHEETSU.S. dollars in thousands, except share data ---------- ---------- 30 June 31 December 2005 2004 ---------- ---------- Unaudited ----------ASSETS CURRENT ASSETS:Cash and cash equivalents $ 8,802 $ 2,799Short-term available-for-sale marketable securitiesand accrued interest 15,079 -Trade receivables 819 233Other accounts receivable and prepaid expenses 220 41 ---------- ----------Total current assets 24,920 3,073 ---------- ----------LONG-TERM HELD-TO-MATURITY MARKETABLE SECURITIES 5,029 - ---------- ----------SEVERANCE PAY FUNDS 116 33 ---------- ----------EQUIPMENT, NET 408 413 ---------- ----------INTANGIBLE ASSETS, NET 3,229 3,681 ---------- ---------- $ 33,702 $ 7,200 ========== ==========LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES:Trade payables $ 187 $ 19Employees and payroll accruals 538 305Accrued expenses and other liabilities 1,269 616Deferred revenues 351 304 ---------- ----------Total current liabilities 2,345 1,244 ---------- ----------ACCRUED SEVERANCE PAY 122 33 ---------- ----------SHAREHOLDERS' EQUITY:Share capital -Series A Convertible Preferred shares of NIS 0.01par value: Authorized: 0 and 5,000,000 shares as of30 June 2005 and 31 December 2004, respectively;Issued and outstanding: 0 and 4,800,000 shares asof 30 June 2005 and 31 December 2004, respectively - 11 Ordinary shares of NIS 0.01 par value : Authorized:50,000,000 and 45,000,000 shares as of 30 June 2005and 31 December 2004, respectively; Issued andoutstanding: 35,363,636 and 19,200,000 shares as of30 June 2005 and 31 December 2004, respectively 80 43Additional paid-in capital 31,069 5,956Share based compensation 115 -Accumulated deficit (29) (87) ---------- ----------Total shareholders' equity 31,235 5,923 ---------- ---------- $ 33,702 $ 7,200 ========== ========== The accompanying notes are an integral part of the consolidated financialstatements. CONSOLIDATED STATEMENTS OF OPERATIONS AND PRO FORMA COMBINED CONSOLIDATEDFINANCIAL STATEMENTSU.S. dollars in thousands, except share and per share data Six months Six months Year ended ended ended 31 December 30 June 2005 30 June 2004 *) 2004 *) -------------- -------------- Combined Combined pro forma pro forma -------------- -------------- Unaudited ------------------------------------------------- Revenues $ 3,187 $ 1,441 $ 3,060Cost of revenues 287 133 252 ----------- ---------- -----------Gross profit 2,900 1,308 2,808 ----------- ---------- -----------Operating expenses: Research and development, net 1,563 1,883 3,545 Sales and marketing 1,192 821 1,595 General and administrative 527 341 730 Amortization of intangible assets 451 443 782 ----------- ---------- -----------Total operating expenses 3,733 3,488 6,652 ----------- ---------- -----------Operating loss (833) (2,180) (3,844)Financial income(expenses), net 891 (68) (80) ----------- ---------- -----------Net profit (loss) $ 58 $ (2,248) $ (3,924) =========== ========== ===========Basic net profit (loss)per Ordinary share $ 0.00 $ (0.12) $ (0.20) =========== ========== ===========Weighted average numberof Ordinary shares used incomputing basic net profit(loss) per Ordinary share 31,681,919 19,200,000 19,200,000 =========== =========== ===========Diluted net profit (loss) perOrdinary share $ 0.00 $ (0.12) $ (0.20) =========== =========== ===========Weighted average number ofOrdinary shares used in computingdiluted net profit (loss) perOrdinary share 33,906,437 19,200,000 19,200,000 =========== =========== ===========*) See also Note 3. The accompanying notes are an integral part of the consolidated financialstatements. STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITYU.S. dollars in thousands, except share data Series A convertible Preferred shares Ordinary shares ------------------------------------------------ Number Amount Number Amount ---------- -------- ---------- -------- Balance as of November 2004(date at commencement of operations) - $ - - $ - Issuance of shares *) 4,800,000 11 19,200,000 43Net loss - - - - ---------- -------- ----------- --------Balance as of31 December 2004 4,800,000 11 19,200,000 43 Issuance of Ordinaryshares upon InitialPublic Offering **) (4,800,000) (11) 16,163,636 37 Share based compensation - - - - Net profit - - - - ---------- -------- ----------- --------Balance as of30 June 2005 (unaudited) - $ - 35,363,636 $ 80 ========== ======== =========== ======== *) Net of issuance expenses of $ 100.**) Net of issuance expenses of $ 2,906. STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITYU.S. dollars in thousands, except share data Additional Total paid-in Accumulated Share based shareholders' capital deficit compensation equity ---------- ----------- ------------ -------------Balance as of30 November 2004 (datecommencement ofoperations) $ - $ - $ - $ - Issuance of shares *) 5,956 - - 6,010Net loss - (87) - (87) ---------- ----------- ------------ -------------Balance as of31 December 2004 5,956 (87) - 5,923 Issuance ofOrdinary shares uponInitial PublicOffering **) 25,113 - - 25,139 Share based compensation - - 115 115Net profit - 58 - 58 ---------- ----------- ------------ -------------Balance as of 30June 2005 (unaudited) $ 31,069 $ (29) $ 115 $ 31,235 ========== =========== ============ ============= *) Net of issuance expenses of $ 100.**) Net of issuance expenses of $ 2,906. The accompanying notes are an integral part of the consolidated financialstatements. CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands Six months ended 30 June 2005 ------------- Unaudited -------------Cash flows from operating activities:---------------------------------------Net profit $ 58Adjustments to reconcile net profit to net cash provided by operating activities: Depreciation and amortization 570 Increase in trade receivables, other accounts receivable and prepaid expenses (844) Increase in trade payables, employees and payroll accruals, accrued expenses and other liabilities and severance pay, net 708 Share based compensation 115 Increase in deferred revenues 47 -------------Net cash provided by operating activities 654 ------------- Cash flows from investing activities:--------------------------------------- Purchase of equipment (113)Investment in short-term available-for-sale marketable securities (15,000)Investment in long-term held-to-maturity marketable securities (5,029) -------------Net cash used in investing activities (20,142) ------------- Cash flows from financing activities:--------------------------------------- Proceeds from issuance of shares 28,045Issuance expenses (2,554) -------------Net cash provided by financing activities 25,491 -------------Increase in cash and cash equivalents 6,003Cash and cash equivalents at the beginning of the period 2,799 -------------Cash and cash equivalents at the end of the period $ 8,802 ============= Non-cash financing activities:-------------------------------- Conversion of Series A Convertible Preferred shares to Ordinary shares $ 11 =============Issuance expenses payable $ 352 ============= The accompanying notes are an integral part of the consolidated financialstatements. NOTES TO FINANCIAL STATEMENTSU.S. dollars in thousands, except share data NOTE 1:- GENERAL a. Background: On 17 September 2004, Emblaze Ltd. ("Emblaze"( a company organized under thelaws of the State of Israel, and traded on the London Stock Exchange, enteredinto an agreement ("the Agreement") with DommelRiver Israel Ltd., PhilipsDigital Networks B.V. ("PDN") and Koninklijke Philips Electronics N.V.("Philips") (all of the aforementioned Philips companies - "Philips Parties")to transfer their respective media adaptation business to a new Israeli-basedcompany, Adamind Ltd. ("Adamind Ltd."). Emblaze agreed to contribute the Emblazemedia adaptation business ("Emblaze Media Adaptation Business") and operationsin consideration for the issuance of Ordinary shares of Adamind Ltd., and thePhilips Parties agreed to contribute the MP4Net media adaptation business("Philips MP4Net media adaptation business") to Adamind Ltd. in considerationfor the issuance of Ordinary shares of Adamind Ltd., all as set forth in theAgreement. In addition, Emblaze agreed to make an equity investment of $ 2,000in Adamind Ltd. in consideration of the issuance of Series A ConvertiblePreferred shares of Adamind Ltd., as set forth in the Agreement (see c. and d.below). Adamind Ltd. has a wholly-owned subsidiary in the U.S. ("Adamind Inc."), whichis primarily engaged in marketing, sales, professional services and certaingeneral and administrative functions associated with Adamind Ltd.'s activities. b. Adamind develops and licenses proprietary media adaptation technology.Adamind's software products enable multimedia data applications and services tobe accessible across disparate types of networks (mobile and fixed-wire) andconsumer devices. The Company's core technologies aims to solve the problem ofapplication-to-person and person-to-person media transactions (e.g., sending ofimages, video and ringtones) between non-compatible devices, enabling networkoperators to launch interoperable rich-media services including MMS, contentdownload, mobile browsing and more, reaching a wealth of diversified mobile andother devices. Adamind's solutions are primarily targeted at cellular network operators,multimedia messaging center vendors, and system integrators providing mobileinfrastructure solutions worldwide. c. Pursuant to the Agreement, on 7 November 2004, Emblaze transferred to AdamindLtd. assets, including intellectual property, and liabilities related to themedia adaptation business with a net carrying value in the accounts of Emblazeof $ 610 in consideration of the issuance of 12,000,000 Ordinary shares. Inaddition, Emblaze transferred to Adamind Ltd. $ 2,000 in cash as an equityinvestment in consideration of 4,800,000 Series A Convertible Preferred shares.The identification of the assets and liabilities transferred ("the transferrednet assets") was agreed upon between Emblaze and Philips Parties pursuant to theAgreement and related documents entered into by and between Adamind Ltd.,Emblaze and Philips Parties. d. Business combination: Pursuant to the Agreement, on 7 November 2004, the Philips Parties agreed tocontribute the Philips MP4Net media adaptation business to Adamind Ltd. inconsideration for the issuance of Ordinary shares of Adamind Ltd. and otherconsideration paid by Emblaze. The transaction has been accounted for under the purchase method of accounting,under which Adamind Ltd. is considered as the acquirer of the Philips MP4Netmedia adaptation business from Philips. Accordingly, the results of operationsof Philips MP4Net media adaptation business were included in the consolidatedstatements of operations of Adamind Ltd., commencing 7 November 2004. The estimated fair value of the identifiable assets acquired and liabilitiesassumed as of 7 November 2004 are as follows: Current assets $ 262Equipment 217Acquired technology 2,266Customer agreements 248 -------- 2,993 --------Accrued expenses and other liabilities (91)Deferred revenues (76) -------- (167) --------Fair value of net assets 2,826Goodwill arising on acquisition 674 -------- $ 3,500 ======== NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES a. The significant accounting policies and methods of computation applied in thepreparation of the interim financial statements are the same as those applied inthe annual financial statements of the Company as of 31 December 2004. Inaddition, in 2005 the Company adopted International Financial ReportingStandards ("IFRS") No. 2 (see c below) and implemented International AccountingStandard ("IAS") No. 32, "Financial Instruments: Disclosure and Presentation",and IAS 39, "Financial Instruments: Recognition and Measurement" (see b below),with respect to accounting for marketable securities. These financial statements have been prepared in a condensed format as of 30June, 2005, and for the six months then ended ("interim financial statements").These financial statements should be read in conjunction with the Company'saudited annual financial statements and accompanying notes as of 31 December2004. b. Marketable securities: The Company accounts for investments in debt securities in accordance with IAS32 and IAS 39. Management determines the appropriate classification of itsinvestments in marketable debt securities at the time of purchase andre-evaluates such determinations at balance sheet date. Debt securities that aredesignated as available-for-sale are stated at fair value, with unrealized gainsand losses charge directly in shareholders' equity. Realized gains and losses onsales of investments, as determined on a specific identification basis, will beincluded in the statement of operations. As of 30 June 2005, no impairment hasbeen identified. c. Adoption of new standards: Commencing 1 January 2005, the Company has adopted IFRS 2, "Share BasedPayment". IFRS 2 requires an expense to be recognized where the Company buysgoods or services in exchange for shares or rights over shares ("equity-settledtransactions"), or in exchange for other assets equivalent in value to a givennumber of shares or rights over shares ("cash-settled transactions"). The mainimpact of IFRS 2 on the Company is the expense of employees' and directors'share options and other share-based incentives by using an option-pricing-model. The Company has applied IFRS 2 only to equity-settled awards granted after 7November 2002 that had not vested on or before 31 December 2004. The effect of the adoption of IFRS 2 on the six months ended 30 June 2005 is anincrease in the employee benefits expenses in the amount of $115 with acorresponding increase in additional paid-in capital. In December 2003, the International Accounting Standards Board ("IASB") releasedrevised IAS 32 and IAS 39. These standards replace IAS 32 (revised 2000), andsupersedes IAS 39 (revised 2000), and should be applied for annual periodsbeginning on or after 1 January 2005. The amendments do not have a materialimpact on the consolidated financial statements. In December 2003, as a part of the IASB's project to improve InternationalAccounting Standards, the IASB released revisions to the following standardsthat supersede the previously released versions of those standards: IAS 1,"Presentation of Financial Statements", IAS 2, "Inventories"; IAS 8, "AccountingPolicies, Changes in Accounting Estimates and Errors"; IAS 10, "Events afterBalance Sheet Date"; IAS 16, "Property, Plant and Equipment"; IAS 17, "Leases";IAS 21, "The Effects of Changes in Foreign Exchange Rates"; IAS 24, "RelatedParty Disclosures"; IAS 27, "Consolidated and Separate Financial Statements";IAS 28, "Investments in Associates"; IAS 31, "Interests in Joint Ventures"; IAS33, "Earnings Per Share"; and IAS 40, "Investment Property". The revisedstandards should be applied for annual periods beginning on or after 1 January2005. The amendments do not have a material impact on the consolidated financialstatements. NOTE 3:- UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL STATEMENTS The following unaudited pro forma combined financial statements has beenprepared to give effect to the acquisition of Philips MP4Net media adaptationbusiness by Adamind Ltd. ("the Transaction") under the purchase method ofaccounting as if it had occurred on 1 January 2003 after giving effect to theadjustments described in the accompanying notes. This financial statements isnot intended to be a profit forecast and the profits of Adamind Ltd. will notnecessarily be in line with such data. The unaudited pro forma combined financial statements reflects the bestestimates of Adamind Ltd.'s management; however, the actual results ofoperations may differ significantly from the pro forma amounts reflected hereinbecause of various factors, including, without limitation, access to additionalinformation, changes in value and changes in operating results between the dateof preparation of the unaudited pro forma financial statements and the futureoperation of Adamind Ltd. The following unaudited pro forma combined statements of operations for the sixmonths ended 30 June 2004 and for the year ended 31 December 2004 give effect tothe Transaction as if it had occurred on 1 January 2003 and combine thehistorical statements of operations of Emblaze Media Adaptation ("EMA") andPhilips MP4Net media adaptation business for these periods. Unaudited pro forma combined financial statements is presented for illustrativepurposes only and is not necessarily indicative of the results of operationsthat would have actually been reported had the Transaction occurred at thebeginning of the period presented, nor is it necessarily indicative of futureresults of operations. The unaudited pro forma combined financial statements arebased upon the respective separate financial statements of EMA and PhilipsMP4Net media adaptation business. The pro forma adjustments are based onavailable financial statements and certain estimates and assumptions thatAdamind Ltd.'s management believes are reasonable and that are set forth in thenotes to the unaudited pro forma combined financial statements. Six months ended 30 June 2004 ---------------------------------------------- Philips MP4Net media Combined adaptation Adjust- Refer- pro EMA business ment ences forma -------- ---------- --------- -------- -------- Unaudited Unaudited ---------------------------------------------------Revenues $ 968 $ 473 $ - $ 1,441Cost of revenues 75 58 - 133 -------- ---------- --------- ---------Gross profit 893 415 - 1,308 -------- ---------- --------- ---------Operating expenses:Research and development,net 642 1,256 (15) A 1,883Sales and marketing 344 477 - 821General and administrative 233 108 - 341Amortization of intangibleassets 185 - 258 B 443 -------- ---------- --------- ---------Total operating expenses 1,404 1,841 243 3,488 -------- ---------- --------- ---------Operating loss (511) (1,426) (243) (2,180)Financial expenses, net - (68) - (68) -------- ---------- --------- ---------Net loss $ (511) $ (1,494) $ (243) $ (2,248) ======== ========== ========= =========Basic and diluted netloss per Ordinary share $ (0.12) =========Weighted average numberof Ordinary shares used incomputing basic anddiluted net loss per share 19,200,000 ========== From 7*) November 2004 (date of commence- ment of operation) Ten months through 31 Year ended ended 31 December 31 December October 2004 2004 2004 ------------ ---------- ----------- Philips MP4Net media Combined adaptation Adamind Adjust- Refer- pro EMA business Ltd. ment ences forma ------- -------- ----------- -------- ----- --------- Historical Historical (Audited) (Audited) ---------------- ----------Revenues $ 1,307 $ 775 $ 978 $ 3,060Cost of revenues 101 91 60 252 -------- ------ ----------- ---------Gross profit 1,206 684 918 2,808 -------- ------ ----------- ---------Operating expenses:Research and development,net 1,069 2,222 391 (137) A 3,545Sales and marketing 574 722 299 1,595General and administrative 355 200 175 730Amortization of intangibleassets 264 - 150 368 C 782 -------- ------ ----------- ------ ---------Total operating expenses 2,262 3,144 1,015 231 6,652 -------- ------ ----------- ------ ---------Operating loss (1,056) (2,460) (97) (231) (3,844)Financial income(expenses), net - (90) 10 (80) -------- ------ ----------- ------ ---------Net loss $(1,056)$(2,550) $ (87) $(231) $ (3,924) ======== ====== =========== ====== ========= Basic and diluted netloss per Ordinary share $ (0.20) ========= Weighted average numberof Ordinary shares used incomputing basic anddiluted net loss perOrdinary share 19,200,000 ========== *) Date of commencement of operations; the results of operation from 1 November2004 through 6 November 2004 were considered immaterial. Reference: A Elimination of research and development costs related to duplicated activities. B Amortization of intangible assets acquired from Philips MP4Net media adaptation business for the six months ended 30 June 2004. C Amortization of intangible assets acquired from Philips MP4Net media adaptation business for the year ended 31 December 2004. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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