22nd May 2009 07:00
22 May 2009
DDD GROUP PLC
AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2008
DDD Group plc ("DDD" or the "Company"), the 3D software and content company, announces its results for the twelve months ended 31 December 2008.
Highlights
Financial
Turnover increased 81% to £592,000 (2007: £327,000)
Loss before tax increased 20% to £1.441 million (2007: £1.203 million)
Operational
Retail launch of Hyundai IT 46" and 32" 3D LCD HDTVs with integrated TriDef® Core processor to support the Nippon BS Broadcasting Company's BS11 3D satellite TV network in Japan.
License agreement signed with Samsung Electronics allowing Samsung to bundle the TriDef 3D Experience software with Samsung's 3D accessory pack for Samsung DLP and plasma 3D HDTVs yielding £51,000 in licence income during the year.
Development agreement valued at £107,000 completed with Samsung Electronics to integrate DDD's TriDef 3D functions into a custom made chip for Samsung's next generation 3D HDTVs. Five-year licence agreement including £165,000 advance royalty signed with Samsung Electronics for the inclusion of DDD's automatic 2D to 3D conversion technologies in Samsung's next generation 3D HDTV chips.
Memorandum of Understanding signed with Taiwan-based Wistron Corporation to licence DDD's TriDef 3D Experience software products and TriDef Core chip technologies into a range of 3D consumer products being developed by Wistron Corp. Five-year licence agreement includes £909,000 initial licence fee payment.
Issue of £510,000 of convertible loan notes to directors and existing large shareholders including Arisawa Manufacturing Company Ltd, the Company's largest shareholder.
Post balance sheet events - highlights
Placing of 16,441,625 ordinary shares of 1p each at a price of 3.5p each per ordinary share raising approximately £545,000, after expenses, on 5 January 2009. Wistron Corporation subscribes to £442,821 of the placing and becomes the Company's second largest shareholder. Directors and existing large shareholders also subscribe to the placing.
Enquiries:
|
DDD Group |
|
|
Chris Yewdall, President & CEO |
+1 310 566-3340 |
|
e-mail: [email protected] |
|
|
Brewin Dolphin Sandy Fraser, Managing Director - Corporate Finance |
+44 (0) 131 529 0272 |
|
Paul Mason, Assistant Director - Corporate Finance |
+44 (0) 141 314 8208 |
CHAIRMAN'S STATEMENT
Dear Shareholder,
The rising tide of interest in 3-D during the year has continued to present increasingly lucrative development and licensing opportunities for consumer 3-D products and I am pleased to report that 2008 was a year of solid progress and improved performance by DDD. The Company's revenues are growing consistently while expenditures remain carefully controlled. During the year, DDD continued to acquire significant commercial licence agreements with partners who are leaders in their respective markets.
In early 2008, Samsung Electronics launched its 3D-ready Plasma TV to complement their 3D-ready DLP TV's that were launched in late 2007. Without exception, all of Samsung's 3-D HDTV's have been marketed with DDD's TriDef® 3-D Experience software under our licence agreement with Samsung and have been well received by consumers.
In Japan, Hyundai IT introduced a 3-D LCD HDTV supplied with DDD's TriDef Core hardware solution. The TriDef Core is manufactured under licence by Hyundai IT and enables viewing of 3-D content that is specially produced and broadcast by the Nippon BS Broadcasting Company in Japan. The automatic 3-D conversion of any 2-D content, using DDD's chip inside the TV itself, allows viewers to watch all their favourite shows in 3-D.
In a move that is expected to substantially increase the market penetration of 3-D TVs, DDD signed a licence agreement with Samsung for a chip-based version of our automatic 2-D to 3-D conversion to be incorporated directly in future 3-D HDTV sets to be manufactured by Samsung. This five-year licence agreement represents a major milestone for DDD. The Company expects that the returns to DDD from this agreement should be fully realised over the coming years as competitively priced 3-D enabled TVs become the latest 'must-have' consumer electronics item.
Towards the end of the year, DDD concluded an important licence agreement with Wistron Corporation in Taiwan for a broad range of 3-D consumer devices including notebook PCs, desktop PC monitors and LCD televisions. Wistron is an OEM with an annual turnover of £7 Billion, manufacturing products for brands including Acer, Dell, Hewlett Packard and Sony. Wistron has shown its corporate vision in actively promoting 3-D to its clients. During 2009, we expect that 3-D will be offered in notebook computers and PC monitors sold by Wistron's major customers, with these products incorporating DDD's TriDef 3-D Experience software solutions that have been selected by Wistron as being 'best of breed'.
In addition to the five-year licence agreement, Wistron also made an equity investment in DDD worth approximately £440,000. It has been my great pleasure to welcome Wistron as DDD's second-largest shareholder. Wistron's strategic interest in DDD provides our Company with access to significant manufacturing capabilities for a variety of important 3-D consumer platforms, including notebook PCs, PC monitors, LCD televisions and smartphones.
DDD continues to sign long-term licence agreements with world leading companies for its 3-D enabling TriDef software and hardware. The increasing commercial value of these deals attest to DDD's competitive advantage in the field of 3-D.
The many achievements have been made possible by the complete dedication of DDD's staff under the tireless leadership of CEO Chris Yewdall. I wish to thank the entire team and my fellow directors for their commitment and hard work. It is a rare privilege to work with such an outstanding group of people.
Despite the global economic turmoil, DDD continues to make solid progress towards break-even and profitability through consistent growth in our revenues. The Company remains determined to ensure that our shareholders will be rewarded for their support.
Yours faithfully,
Paul Kristensen
Chairman
22 May 2009
CHIEF EXECUTIVES REPORT
It is my pleasure to present this review of the operations of the Company for the financial year to December 2008. The growth in licence and royalty income from the new consumer products that began in the second half of 2007 continued, allowing the Company to record another increase in revenues of approximately 81% while maintaining gross margins similar to the previous year. Revenue from the Company's activities in the TV market comprised nearly two-thirds of the full year revenue.
A very important milestone in the development of the 3D market was achieved during 2008 when the Nippon BS Broadcasting Company began transmitting original 3D programming on the BS11 satellite network in Japan. Similar to the manner in which the early television broadcasts were introduced in the late 1930's, BS11's 3D programming is currently broadcast for a few hours each day. Since March 2008, customers in Japan have been able to purchase compatible Hyundai IT 3D LCD televisions from the Bic Camera electronics retailer, marking the first time that a full colour, high definition 'end to end' 3D TV solution has been available to mass market consumers.
DDD made a significant contribution to this milestone in the development of the TriDef Core circuit board that is part of the 46" and 32" Hyundai IT 3D LCD televisions. The TriDef® Core provides key 3D features including decoding the original 3D broadcast signal as well as the ability to automatically convert any incoming 2D content to 3D from Blu-ray®, DVD, broadcast TV and games consoles. In addition to retail sale in Japan, a number of Hollywood studios, film production companies, broadcasters, cable operators and telecommunications companies have purchased the Hyundai IT 3D LCD TVs.
The availability of the first generation of high quality, viewer-friendly 3D TVs with DDD's embedded TriDef 3D capabilities has helped accelerate the interest from major companies worldwide in delivering 3D to the home. The Hyundai IT 3D TVs are being used in a wide range of applications including post-production of the latest 3D Hollywood movies, consumer market research on 3D TV and demonstrations of 3D broadcast TV including those recently publicised by SKY TV in the United Kingdom. This would not have been possible without the close alliance with DDD's strategic partner, Arisawa Manufacturing Company, whose 3D optical materials are an intrinsic part of the Hyundai IT TVs.
In February 2008, the Company announced the next stage of its 3D TV development roadmap in the form of a development agreement with Samsung to incorporate DDD's automatic 2D to 3D conversion algorithms into Samsung's own 3D chip for their next generation 3D plasma and LCD HDTVs. This development project was completed on schedule in June of 2008 resulting in an advance royalty payment from Samsung of approximately £165,000 in addition to the £107,000 development fee. The advance royalty payment will be recognised as revenue once Samsung commences mass manufacture of their 3D chip and as such, is not included in the 2008 turnover. Samsung demonstrated the results of this project at the Consumer Electronics Show in Las Vegas in January 2009 when they exhibited a 58" 3D plasma TV connected to an X-Box 360 game console. The normal 2D X-Box driving game was being converted to 3D inside the plasma TV using Samsung's Real3D Engine that incorporates DDD's automatic 3D conversion technologies.
The licence agreement with Samsung that incorporates DDD's TriDef 3D Experience game and video software with Samsung's 3D glasses accessory packs has been the primary driver behind the success of the TriDef 3D Experience software product.
While income from the TV market represented the largest portion of DDD's 2008 revenue, the Company remains equally focused on opportunities in the PC market, largely driven by the innovative TriDef 3D Experience software that delivers a wide range of 3D capabilities to the desktop including automatic 3D conversion of 2D games, playback of original 3D video and automatic 2D to 3D conversion of 2D video. Income from the sale of software and 3D monitors in the PC market grew by 120% over the previous year with OEM licensing contributing significantly to this growth. Income from the PC market represented 25% of the total turnover.
In December, DDD concluded the largest single commercial licence agreement in the Company's history with Wistron Corporation. Based in Taiwan, Wistron Corporation is an original design manufacturer (ODM) that manufactures approximately £7 billion annually in notebook and netbook PCs, PC monitors, LCD televisions and smart phones. Wistron's is the world's second largest manufacturer of notebook/netbook PCs with approximately 20% market share.
Wistron selected DDD to provide software and hardware content solutions for a broad range of 3D consumer products and, as announced in early January 2009, the Company expects to recognise approximately $1,200,000 in licensing revenues during 2009. Along with the five-year licence agreement, Wistron chose to make a strategic equity investment in DDD Group, acquiring approximately 14% of the ordinary share capital in an investment transaction that was announced in early January 2009.
In combination with DDD's two strategic investors, DDD now has access to the leading supplier of 3D polarising materials and one of the leading contract manufacturers of consumer electronic products for major brands allowing the Company to provide comprehensive 3D content, display and contract manufacturing capabilities to the growing number of organisations who are showing ever-increasing interest in 3D.
During 2009, the Company anticipates continued growth in a number of product categories in the 3D consumer market.
DDD has begun to focus on the supply of originally made 3D content that supplements the automatic 3D conversion capabilities of DDD's licensed hardware and software products. Despite the success of Hollywood's latest 3D movies, none are yet available on Blu-ray disc in high quality, full colour 3D. DDD is therefore developing a content publishing infrastructure that is directly linked to the DDD hardware and software products supplied by DDD's growing base of licensees. It is expected that this will allow creators of original 3D content to unlock the potential of the growing installed base of 3D capable devices, while providing DDD with a new income stream from 3D content publishing.
Despite the global economic instability, DDD has continued to increase turnover at high double-digit rates, and this trend has continued in 2009. Our demonstrated progress has allowed us continued access to investment capital through both convertible debt and equity issues in very challenging financial markets, with major shareholders continuing to show strong support.
DDD's team of dedicated staff has continued to deliver market-leading solutions and grow the Company's stable of high profile licensees, allowing the Company to remain competitive in this evolving and growing market. I would like to again express particular thanks to Julien Flack, DDD's Chief Technology Officer, who continues to guide the development team to the successful delivery of many of these latest products. As the group of licensees continues to grow, DDD's goal will be to enable new revenue streams that allow the Company to enhance the profitability derived from each new 3D consumer device.
Finally, I would like to once again thank the shareholders for their continued support during the year, and look forward to a very promising future for the 3D market and for DDD.
Chris Yewdall
President and Chief Executive Officer
22 May 2009
|
CONSOLIDATED INCOME STATEMENT |
||||
|
12 months to 31 Dec |
12 months to 31 Dec |
|||
|
2008 |
2007 |
|||
|
£'000 |
£'000 |
|||
|
Revenue |
592 |
327 |
||
|
Cost of sales |
(208) |
(93) |
||
|
Gross profit |
384 |
234 |
||
|
Administration expenses |
(1,958) |
(1,606) |
||
|
Other income |
197 |
158 |
||
|
Share based payment |
(23) |
(26) |
||
|
Operating loss |
(1,400) |
(1,240) |
||
|
Finance income |
12 |
37 |
||
|
Finance expense |
(53) |
- |
||
|
Loss before tax |
(1,441) |
(1,203) |
||
|
Taxation |
60 |
(17) |
||
|
Loss for the year |
(1,381) |
(1,220) |
||
|
Loss per share |
||||
|
Basic and diluted (pence per share) |
(1.86) |
(1.64) |
||
All transactions arose from continuing operations.
|
CONSOLIDATED BALANCE SHEET |
||||
|
31 Dec |
31 Dec |
|||
|
2008 |
2007 |
|||
|
£'000 |
£'000 |
|||
|
Assets |
||||
|
Non-current assets |
||||
|
Property, plant and equipment |
34 |
43 |
||
|
Intangible assets |
242 |
441 |
||
|
Financial assets |
1 |
1 |
||
|
Total non-current assets |
277 |
485 |
||
|
Current assets |
||||
|
Trade and other receivables |
1,014 |
111 |
||
|
Inventory |
40 |
13 |
||
|
Cash and cash equivalents |
95 |
286 |
||
|
Total current assets |
1,149 |
410 |
||
|
Total assets |
1,426 |
895 |
||
|
Equity and liabilities |
||||
|
Capital and reserves |
||||
|
Issued capital |
7,442 |
7,442 |
||
|
Share premium |
4,612 |
4,612 |
||
|
Merger reserve |
13,279 |
13,279 |
||
|
Share based payment reserve |
238 |
215 |
||
|
Translation reserve |
(164) |
(55) |
||
|
Retained earnings |
(26,315) |
(24,934) |
||
|
Total equity |
(908) |
559 |
||
|
Non-current liabilities |
||||
|
Financial liability - loan note |
532 |
- |
||
|
Deferred tax liabilities |
63 |
123 |
||
|
Total non-current liabilities |
595 |
123 |
||
|
Current liabilities |
||||
|
Trade and other payables |
1,739 |
213 |
||
|
Total current liabilities |
1,739 |
213 |
||
|
Total liabilities |
2,334 |
336 |
||
|
Total equity and liabilities |
1,426 |
895 |
|
CONSOLIDATED CASHFLOW STATEMENT |
||||
|
12 months to 31 Dec |
12 months to 31 Dec |
|||
|
2008 |
2007 |
|||
|
£'000 |
£'000 |
|||
|
Cash flows from operating activities |
||||
|
Loss for the year |
(1,381) |
(1,220) |
||
|
Finance costs in the income statement |
41 |
(37) |
||
|
Tax in the income statement |
(60) |
17 |
||
|
Depreciation of non-current assets |
25 |
32 |
||
|
Amortisation |
526 |
254 |
||
|
Share based payments |
23 |
26 |
||
|
Increase in inventory |
(27) |
(2) |
||
|
(Increase)/decrease in trade and other receivables |
(903) |
4 |
||
|
Increase in trade and other payables |
1,546 |
50 |
||
|
Net cash used in operations |
(213) |
(876) |
||
|
Interest received |
12 |
37 |
||
|
Income tax paid |
- |
(8) |
||
|
Net cash generated by/(used in) operating activities |
(201) |
(847) |
||
|
Cash flows from investing activities |
||||
|
Interest paid |
(53) |
- |
||
|
Payments for property, plant and equipment |
(12) |
(20) |
||
|
Payments for intangible assets |
(326) |
(342) |
||
|
Net cash used in investing activities |
(391) |
(362) |
||
|
Cash flows from financing activities |
||||
|
Proceeds from issue of convertible loan notes |
510 |
- |
||
|
Issue costs |
- |
- |
||
|
Net cash generated by financing activities |
- |
- |
||
|
Net (decrease) / increase in cash and cash equivalents |
(82) |
(1,209) |
||
|
Exchange gains / (losses) |
(109) |
28 |
||
|
Total (decrease) / increase in cash and cash equivalents |
(191) |
(1,181) |
||
|
Cash and cash equivalents at the start of the period |
286 |
1,467 |
||
|
Cash and cash equivalents at the end of the year |
95 |
286 |
NOTES TO THE ACCOUNTS
1. Loss before tax
|
2008 |
2007 |
|
|
Loss before tax has been arrived at after charging (crediting): |
£'000 |
£'000 |
|
Foreign exchange gains / (losses) |
- |
1 |
|
Depreciation and amortisation: |
||
|
Depreciation of property, plant and equipment |
25 |
31 |
|
Amortisation of intangible assets |
526 |
255 |
|
Employee benefits expense: |
||
|
Employee costs |
855 |
985 |
|
Land and buildings held under operating leases |
||
|
Other operating leases |
160 |
127 |
|
Audit and non-audit services: |
||
|
Fees payable to the Company's auditor for the audit of the Group accounts |
47 |
55 |
|
Fees payable to the Company's auditor and its associates for other services: |
||
|
The audit of the Company's subsidiaries pursuant to legislation |
3 |
4 |
|
Tax services |
9 |
12 |
|
Other services pursuant to legislation |
1 |
2 |
During the year the Group's Australian subsidiary received a refund of research and development expenditures from the Australian Government amounting to £171,300 (2007: £151,000). The research and development refund comprises the majority of the income reported as Other Income on the Group's Consolidated Income Statement.
2. Finance charges
|
2008 |
2007 |
|
|
£'000 |
£'000 |
|
|
Interest income |
(12) |
(37) |
|
Unwinding discount for convertible loan note |
25 |
- |
|
Interest charges |
28 |
- |
|
Total finance charges |
53 |
- |
|
Net finance charges |
41 |
(37) |
3. Income tax expense
|
2008 |
2007 |
|
|
£'000 |
£'000 |
|
|
Current Tax: |
||
|
Corporation tax on loss for the year |
- |
8 |
|
Overseas tax |
28 |
- |
|
Adjustment in respect of previous periods |
- |
- |
|
Total current tax |
28 |
8 |
|
Deferred Tax: |
||
|
Origination and reversal of timing differences |
||
|
-current period |
(60) |
26 |
|
-attributable to the reduction in the rate of domestic income tax |
- |
(9) |
|
Total income tax on loss for the year |
(32) |
17 |
The tax assessed for the period differs from the standard rate of corporation tax as applied in the respective trading domains where the Group operates. The tax charge on ordinary activities is explained below:
|
2008 |
2007 |
|
|
£'000 |
£'000 |
|
|
Loss for the period before tax |
(1,441) |
(1,203) |
|
Loss for period multiplied by the respective standard rate of corporation tax applicable in each domain - 28% (2007 - 28%). |
(403) |
(337) |
|
Effects of: |
||
|
Higher foreign tax rates |
- |
(1) |
|
Expenses not deductible for tax purposes |
45 |
42 |
|
Tax losses carried forward |
310 |
317 |
|
Other timing differences |
(12) |
(30) |
|
Foreign withholding tax |
28 |
(8) |
|
Total income tax on loss for the year |
(32) |
(17) |
There are substantial unrelieved tax losses of £21,863,000 (2007: £20,749,000) across the Group companies as set out below:
|
USA |
UK |
Canada |
Australia |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
At 31 December 2008 |
|||||
|
Unrelieved tax loss |
7,982 |
1,793 |
1,514 |
10,574 |
21,863 |
|
Local rate of tax |
34% |
28% |
30% |
30% |
|
|
Unprovided potential deferred tax asset |
2,714 |
502 |
454 |
3,172 |
6,842 |
|
At 31 December 2007 |
|||||
|
Unrelieved tax loss |
7,783 |
1,492 |
1,510 |
9,964 |
20,749 |
|
Local rate of tax |
34% |
28% |
30% |
30% |
n/a |
|
Unprovided potential deferred tax asset |
2,646 |
418 |
453 |
2,989 |
6,506 |
At 31 December 2008, the availability to offset unrelieved tax losses against future taxable trading profits may be subject to restrictions in the respective tax jurisdictions. The potential deferred tax asset of £6,842,000 (2007: £6,506,000) has not been recognised due to the uncertainty of the timing and recoverability of the asset. The asset will be recovered in line with future profits.
4. Loss per share
|
2008 |
2007 |
|
|
£'000 |
£'000 |
|
|
Loss for the year attributable to equity shareholders |
(1,381) |
(1,220) |
|
Loss per share |
||
|
Basic & diluted (pence per share) |
(1.86) |
(1.64) |
|
Shares |
Shares |
|
|
Issued ordinary shares at start of the period |
74,416,547 |
74,416,547 |
|
Ordinary shares issued in the period |
- |
- |
|
Issued ordinary shares at end of the period |
74,416,547 |
74,416,547 |
|
Weighted average number of shares in issue for the period. |
74,416,547 |
74,416,547 |
The diluted loss per share does not differ from the basic loss per share as the exercise of share options would have the effect of reducing the loss per share and is therefore not dilutive under the terms of IAS 33.
5. Intangible assets
|
Capitalised development costs |
Patents |
Total |
|
|
£'000 |
£'000 |
£'000 |
|
|
Cost |
|||
|
At January 1 2007 |
454 |
192 |
646 |
|
Additions |
342 |
- |
342 |
|
At 31 December 2007 |
796 |
192 |
988 |
|
Additions |
327 |
- |
327 |
|
At 31 December 2008 |
1,123 |
192 |
1,315 |
|
Amortisation |
|||
|
At January 1 2007 |
101 |
192 |
293 |
|
Charge for the year |
254 |
- |
254 |
|
At 31 December 2007 |
355 |
192 |
547 |
|
Charge for the year |
526 |
- |
526 |
|
At 31 December 2008 |
881 |
192 |
1,073 |
|
Net book value |
|||
|
At January 1 2007 |
353 |
- |
353 |
|
At 31 December 2007 |
441 |
- |
441 |
|
At 31 December 2008 |
242 |
- |
242 |
6. Property, plant and equipment
|
Leasehold improvements |
Furniture fittings and equipment |
Total |
|
|
£'000 |
£'000 |
£'000 |
|
|
Cost or valuation |
|||
|
At 1 January 2007 |
12 |
243 |
255 |
|
Additions |
20 |
20 |
|
|
Exchange rate differences |
1 |
(2) |
(1) |
|
At 31 December 2007 |
13 |
261 |
274 |
|
Additions |
8 |
8 |
|
|
Exchange rate differences |
1 |
38 |
39 |
|
At 31 December 2008 |
14 |
307 |
321 |
|
Depreciation |
|||
|
At 1 January 2007 |
7 |
194 |
201 |
|
Provided in the year |
1 |
31 |
32 |
|
Exchange rate differences |
1 |
(3) |
(2) |
|
At 31 December 2007 |
9 |
222 |
231 |
|
Provided in the year |
1 |
24 |
25 |
|
Exchange rate differences |
1 |
30 |
31 |
|
At 31 December 2008 |
11 |
276 |
287 |
|
Net book value |
|||
|
At 1 January 2007 |
5 |
49 |
54 |
|
At 31 December 2007 |
4 |
39 |
43 |
|
At 31 December 2008 |
3 |
31 |
34 |
7. Trade and other receivables
|
2008 |
2007 |
|
|
£'000 |
£'000 |
|
|
Trade receivables |
989 |
79 |
|
Prepayments |
13 |
21 |
|
Other receivables |
12 |
11 |
|
1,014 |
111 |
The following financial assets are aged as follows:
|
2008 |
2007 |
|
|
£'000 |
£'000 |
|
|
Trade receivables |
||
|
Not more than 3 months |
985 |
76 |
|
More than 3 months but not more than 6 months |
4 |
2 |
|
More than 6 months but not more than 1 year |
- |
1 |
|
More than one year |
- |
- |
|
989 |
79 |
|
£987,000 of the trade receivables were invoiced in US dollars while the balance of £2,000 was invoiced in Australian dollars. £44,000 (4.5%) of the receivables was owed to the US operation with the balance of £945,000 (95.5%) owed to the Australian operation.
The trade receivables include £913,000 in licence fees from Wistron Corporation that fell due on December 30th, 2008.
No receivables are currently judged to be impaired and therefore there are no allowance account balances.
8. Inventory
|
2008 |
2007 |
|
|
£'000 |
£'000 |
|
|
Finished goods |
40 |
13 |
The cost of inventory recognised as an expense and included in 'cost of sales' amounted to £145,000 (2007 £64,000).
There has been no impairment charge recognised in relation to inventory.
9. Cash and cash equivalents
|
2008 |
2007 |
|
|
£'000 |
£'000 |
|
|
Cash at bank and in hand |
95 |
286 |
10. Trade and other payables
|
2008 |
2007 |
|
|
£'000 |
£'000 |
|
|
Non-current liabilities |
||
|
Deferred tax liabilities |
63 |
123 |
|
Current liabilities |
||
|
Trade payables |
304 |
44 |
|
Accrued expenses and deferred income |
1,435 |
169 |
|
1,739 |
213 |
The accrued expenses include £1,166,000 in prepaid licence fees and advance royalty payments from licensees for software and hardware products in the TV, PC and Mobile Phone markets.
11. Deferred tax
|
2008 |
2007 |
|
|
£'000 |
£'000 |
|
|
1 January |
123 |
106 |
|
Timing differences |
(60) |
26 |
|
Change in income tax rate on deferred tax |
- |
(9) |
|
31 December |
63 |
123 |
12. Convertible loan note
|
2008 |
2007 |
|
|
£'000 |
£'000 |
|
|
Financial liability element of loan note |
532 |
- |
On April 23rd, 2008, the Company issued Convertible Loan Notes ("Notes") totalling £510,000 to certain Directors of the Group and to Arisawa, pursuant to the existing authorities granted to the board of Directors. The Notes have an annual interest rate of 8%. The Notes can be converted by the holders into ordinary shares of 10 pence each in the capital of the Company ("Shares") at a conversion price of 10 pence nominal amount of Notes per Share. The Company has the option to redeem the Notes at any time at a 5% premium to their nominal value plus accrued interest. Any Notes outstanding on 17 April 2010 will at the option of the Company be repaid in cash or settled by the issue of Shares at the conversion price; in both cases accrued interest will be payable in cash.
The loan notes have conversion rights to equity and mature in 2 years. As such they are treated as compound instruments. The valuation of the liability is achieved by discounting the maturity value of the note at the rate available to the Group on a simple loan. The residual value is the equity element of the instrument. The present value of the convertible bond's equity element is considered an immaterial amount at the time of the establishment of the loan and therefore the financial liability element is £532,000. The change in the valuation is charged to the Income Statement as finance charges. Included in the valuation of the financial liability is an element of derivative value for the ability to settle the liability early as described by the Loan Note schedule.
13. Issued share capital
|
Shares |
Nominal |
Premium |
Total |
|
|
Value (10p) |
net of costs |
|||
|
£'000 |
£'000 |
£'000 |
||
|
In issue 1 January & 31 December 2007 and 31 December 2008 |
74,416,547 |
7,442 |
4,612 |
12,054 |
The Company executed a share placing during December 2008. The placing funds were received in two tranches; the first being in December 2008 amounting to £60,000 and the remaining funds in January 2009. The shares were admitted to AIM in January 2009 and hence will be accounted for in that period. No options have been exercised.
Events after the balance sheet date
On January 5th, 2009, the Company announced that it had raised £575,457 before expenses through a placing of 16,441,625 ordinary shares of 1 pence each in the capital of the Company ("Placing Shares") at a placing price of 3.5 pence per share.
The Placing Shares were placed with Mr. Christopher Yewdall and Dr Sanji Arisawa (existing Directors of DDD), Mr. Michael Stubbs (an existing shareholder) and Wistron Corporation (listed on the Taiwan Stock Exchange under symbol 3231) which has made this strategic investment at the same time as entering into a memorandum of understanding in relation to licence agreements with DDD. Under the terms of the agreement with Wistron Corporation, Wistron Corporation is restricted from selling its shares for the earlier of (i) a period of 2 years from the date of issue or (ii) such time as the exclusive rights to be separately licenced by DDD to Wistron Corporation to use DDD's software revert to non-exclusive rights.
Following the issue of the Placing Shares, the Company's issued share capital increased from 74,416,547 shares to 90,858,172 shares when the Placing Shares were admitted to AIM on January 7th, 2009.
Since two of the Directors of the Company (Mr. Christopher Yewdall and Dr. Sanji Arisawa) and a substantial shareholder in the Company (Mr. Michael Stubbs) subscribed for Placing Shares, the Transaction is a related party transaction for the purpose of AIM Rule 13. In this regard, having consulted with the Company's nominated adviser, Brewin Dolphin, the Directors of the Company, other than Dr. Sanji Arisawa and Mr. Christopher Yewdall, consider that the terms of the Transaction are fair and reasonable insofar as the shareholders of DDD are concerned.
NOTE TO THE ANNOUNCEMENT
The Group's consolidated financial statements on which this financial information is based, have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use by listed companies in the European Union and also in accordance with those parts of the Companies Act 1985 applicable to companies reporting under IFRS. The financial information set out in this announcement does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985.
This announcement includes extracts from the audited statutory accounts for the year to 31 December 2008 upon which the auditors' opinion is modified on the basis of an emphasis of matter opinion and going concern. The comparative figures relating to the year to 31 December 2007 are taken from the audited statutory accounts for that year.
END
Related Shares:
DDD.L