19/04/2014 23:15:43 Free Membership Login

Interims, Notice of General Meeting and Update

Date : 08/22/2011 @ 2:30AM
Source : UK Regulatory (RNS & others)
Stock : Medicsight (MDST)
Quote : 0.45  0.0 (0.00%) @ 12:00AM
Medicsight share price Chart

Interims, Notice of General Meeting and Update

TIDMMDST

RNS Number : 7241M

Medicsight Plc

22 August 2011

 
 Press release   22 August 2011 
 

Medicsight PLC

("Medicsight" or "the Group")

Preliminary Findings of the Special Committee

Results of a Comprehensive Strategic Review

General Meeting on 14 September 2011 for Stockholder Vote to Cancel Trading on AIM

Interim Results for the Six Months Ended 30 June 2011

Medicsight PLC (AIM: MDST), an industry leader in the development of Computer-Aided Detection (CAD) and image analysis software, announces the preliminary findings of the Special Committee, results of a comprehensive strategic review including actions taken by the Board of Directors, and Interim Results.

Preliminary findings of the Special Committee

On 8 July, Medicsight announced that it had initiated an internal investigation through a Special Committee of the Board of Directors regarding the potential misappropriation and/or misdirection of Company funds. Based upon the substantially complete results of the investigation, the Company has concluded that no adjustments or restatement of prior issued financial statements is required. Although the investigation remains on-going, the Board is confident that the Company's financial statements will not require a material restatement as a result of any additional irregularities discovered in the future. Furthermore, the Company intends to seek all possible methods of recovery or restitution where appropriate and where the cost of doing so will not be greater than the expected outcome.

Following the results of the investigation, the Board has requested the recommencement of trading in the Company's ordinary shares to trading on AIM with immediate effect.

Comprehensive Strategic Review

Staff reductions and office relocation in London to conserve remaining cash in order to focus on existing products within approved markets

In order to maximize the opportunity for the Company's ColonCAD software to succeed, particularly in the U.S. market, the decision was made to streamline operations with regard to headcount and overhead. Medicsight utilised its lease termination option at its headquarters and will be moving shortly to more appropriate space. Robert Ladd, Interim Chief Executive, commented: "As difficult as this decision is, the only means of ensuring survival is to increase our runway until profitability; with a finite amount of cash, the only option is to reduce expenses. Many people worked very hard to create and support our CAD medical software. These cost cuts give hope for their vision to flourish. The Board will continue to examine all opportunities to maximise value from the Company's assets and generate value for shareholders."

Closing of Tokyo office

In late July 2011, Medicsight was informed by the Japanese Ministry of Health, Labour and Welfare "MHLW" that several statistical data errors were encountered in their review of the Company's application for approval of its MedicRead software for use in CT Colonography procedures. Following informal guidance from MHLW, the Company has decided to withdraw the current submission and is assessing the next course of action. In the meantime, the Board of Directors has decided to close the Tokyo office as part of the overall streamlining of operations and expense reductions.

Corporate organisational restructuring

In addition to Tokyo, the Board of Directors has decided to close several other Company subsidiaries in Australia, China and the UAE. The legal, regulatory and accounting costs of maintaining so many legal entities cannot be justified at this point. However, in order to better exploit the recent U.S. Food and Drug Administration approval of ColonCAD, the Company will reopen Medicsight, Inc. in New York.

Stockholder vote to delist from AIM

Medicsight's Board of Directors will call a General Meeting of stockholders on Wednesday 14th September 2011 to vote on whether to cancel its Ordinary Shares from trading on the AIM Exchange and to re-register as a private company.

Whilst the Directors were pleased to announce on 19 May 2011 that they had received clearance from the US Food and Drug Administration for its ColonCAD(TM) API, this also led the Board to conduct a full review of its operations and future strategy. The Board is very mindful that the Company has had minimal revenues since inception and is equally aware of the risks inherent in the commercialisation of emerging and new technologies in the US markets at the current time. Full commercialisation of the ColonCAD API without a committed, US based, commercialisation partner, would involve the Company in significant incremental costs in terms of a sales, marketing and training platform in the US.

The Board is very aware that the ability to raise money in the equity markets at the current time is very limited, particularly for smaller companies. The Directors have accordingly concluded that conservation of existing cash resources must be the Board's first priority at the current time. The Board considers that the costs associated with the Company's quotation on AIM are large and, in the opinion of the Board, are not economically justified given the very low volumes of trading in the Company's Ordinary Shares. The Directors have decided to put a resolution to Shareholders for the termination of the AIM trading facility as part of the current austerity measures.

The Company has applied to the London Stock Exchange for the Cancellation and it is expected that, subject to the approval of Shareholders at the GM by Special Resolution, the Cancellation will become effective on 22 September 2011. If the resolution is passed and the Cancellation becomes effective there will no longer be any public market in the Company's Ordinary Shares. It is not the intention of the Company to support any off-market or matched bargain facilities in the Ordinary Shares although certain stockbrokers or market intermediaries may be able to offer such services to Shareholders.

Should the delisting be approved, it is the intention of the Board to keep shareholders updated via its website.

It is expected that a full copy of the circular will be sent to shareholders on 23 August 2012 and will be available on the Company's website at www.medicsight.com.

On 16 August 2011, Peter Venton resigned from the Board of MGT Investments Inc. ("MGT"), the Company's majority shareholder. This action has been taken to ensure that one Board member is independent of MGT. In light of the announcement of the proposals to cancel the AIM quotation it was considered impracticable to recruit any further independent directors for the Company at the current time, however, should shareholders resolve not to pass the resolutions to effect the cancellation of the AIM quotation the Board will take steps to supplement its current constitution with an additional independent non-executive director.

Interim results for the six months ended 30 June 2011

Highlights

 
            --   Received U.S. Food and Drug Administration ("FDA") 
                  510(k) clearance to market ColonCAD in the U.S. 
                  on 19 May 
            --   Received EU (CE) approval and launched ColonCAD 
                  4.1 on 25 March 
            --   Revenue decreased to GBP162,000 (2010: GBP215,000) 
            --   Operating costs increased to GBP2,703,000 (2010: 
                  GBP2,622,000) 
            --   Group cash balance at 30 June 2011 of GBP3,399,000 
                  (2010: GBP8,282,000) 
 

Medicsight has received its FDA clearance to market ColonCAD in the United States and is working with its partners to establish reference centres and to begin generating initial sales. In the six months ended 30 June 2011, ColonCAD sales decreased compared to the previous year and sales of the MedicCO(2) LON insufflator system decreased marginally.

Operating expenses were slightly higher than the previous year due to the costs of professional fees relating to the response to FDA, third party work on product development and severance costs relating to previous reductions in employment.

As at 30 June Medicsight's cash balance was GBP3,399,000. In order to preserve cash and maximise the potential U.S. market, we have begun implementing a company-wide expense reduction program as stated above. We expect to see a reduction in total expenses in the second half of this year.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2011

 
                                      6 months      6 months 
                                         ended         ended     Year ended 
                                       30 June       30 June    31 December 
                                          2011          2010           2010 
                                   (unaudited)   (unaudited)      (audited) 
                                        GBP000        GBP000         GBP000 
--------------------------------  ------------  ------------  ------------- 
 
 Revenue 
 Licence and support fees                  162           215            350 
 Cost of sales                            (62)          (75)           (75) 
 
 Gross profit                              100           140            275 
 
 
 Sales and marketing expense             (370)         (421)          (907) 
 Administrative expenses               (1,808)       (1,460)        (2,942) 
 Research and development                (455)         (597)          (985) 
 Share-based expense                      (70)         (144)          (219) 
 
 Operating loss                        (2,603)       (2,482)        (4,778) 
 
 
 Finance revenue                            20            23             41 
 
 Loss before taxation                  (2,583)       (2,459)        (4,737) 
 
 Income tax benefit / (expense)              -             -            217 
 
 Loss for the period and 
  Total comprehensive income 
  attributable to owners of 
  the parent                           (2,583)       (2,459)        (4,520) 
 
 
 Loss per share - basic and 
  diluted                                 (2p)          (2p)           (3p) 
 
 

FOR THE SIX MONTHS ENDED 30 JUNE 2011

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 
                                                                31 December 
                                  30 June 2011   30 June 2010          2010 
                                   (unaudited)    (unaudited)     (audited) 
                                        GBP000         GBP000        GBP000 
-------------------------------  -------------  -------------  ------------ 
 
 ASSETS 
 Current assets 
 Trade and other receivables               731            315           369 
 Cash and cash equivalents               3,399          8,282         5,336 
 Loan receivable - related 
  party                                      -              -           734 
 
                                         4,130          8,597         6,439 
 
 
 Non-current assets 
 Property, plant and equipment              65             70            81 
 
                                            65             70            81 
 
 
 Total assets                            4,195          8,667         6,520 
 
 
 LIABILITIES 
 Current liabilities 
 Trade and other payables                (583)          (556)         (395) 
 
 Total liabilities                       (583)          (556)         (395) 
 
 
 Net assets                              3,612          8,111         6,125 
 
 
 SHAREHOLDERS' EQUITY 
 Issued share capital                    7,776          7,776         7,776 
 Share premium                          57,306         57,306        57,306 
 Share-based expense reserve             3,347          3,202         3,277 
 Retained earnings                    (64,817)       (60,173)      (62,234) 
 
 Equity attributable to 
  owners of the parent                   3,612          8,111         6,125 
 
 
 
 

CONSOLIDATED STATEMENT OF CASH FLOW

FOR THE SIX MONTHS ENDED 30 JUNE 2011

 
                                    6 months        6 months     Year ended 
                                       ended           ended    31 December 
                                30 June 2011    30 June 2010           2010 
                                 (unaudited)     (unaudited)      (audited) 
                                      GBP000          GBP000         GBP000 
----------------------------  --------------  --------------  ------------- 
 
 Cash flows from operating 
  activities 
 Cash used in operations             (2,692)         (2,416)        (4,611) 
 
 Net cash from operating 
  activities                         (2,692)         (2,416)        (4,611) 
 
 
 Cash flows from investing 
  activities 
 Loan receivable - related 
  party                                  718               -          (734) 
 Purchase of equipment                     -            (30)           (57) 
 Interest received                         -              24             37 
 
 Net cash used in investing 
  activities                             718             (6)          (754) 
 
 
 Effects of exchange rate 
  changes                                 37             (4)            (7) 
 
 Net decrease in cash and 
 cash equivalents                    (1,937)         (2,426)        (5,372) 
 
 Cash and cash equivalents 
  at 1 January                         5,336          10,708         10,708 
 
 Cash and cash equivalents 
                              --------------  --------------  ------------- 
 at period end                         3,399           8,282          5,336 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2011

 
                                   Share-based     Currency 
                   Share    Share      payment  translation  Retained    Total 
                 Capital  Premium      reserve      reserve  earnings   Equity 
                  GBP000   GBP000       GBP000       GBP000    GBP000   GBP000 
--------------  --------  -------  -----------  -----------  --------  ------- 
 
At 1 January 
 2010              7,776   57,306        3,058            -  (57,714)   10,426 
Loss for the 
 period                -        -            -            -   (2,459)  (2,459) 
 
Total 
 comprehensive 
 income                -        -            -            -   (2,459)  (2,459) 
 
Transactions 
 with owners - 
 equity 
 settled 
 Share-based 
 expense               -        -          144            -         -      144 
 
At 30 June 
 2010              7,776   57,306        3,202            -  (60,173)    8,111 
Loss for the 
period                 -        -            -            - 
Net exchange 
adjustments            -        -            -            -         -        - 
 
Total 
 comprehensive 
 income                -        -            -            -   (2,061)  (2,061) 
 
Transactions 
 with owners - 
 equity 
 settled 
 Share-based 
 expense               -        -           75            -         -       75 
 
At 31 December 
 2010              7,776   57,306        3,277            -  (62,234)    6,125 
Loss for the 
period                 -        -            -            - 
Net exchange 
adjustments            -        -            -            -         -        - 
 
Total 
 comprehensive 
 income                -        -            -            -   (2,583)  (2,583) 
 
Transactions 
 with owners - 
 equity 
 settled 
 Share-based 
 expense               -        -           70            -         -       70 
 
 
At 30 June 
 2011              7,776   57,306        3,347            -  (64,817)    3,612 
 
 
 

NOTES TO INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2011

1. Basis of preparation of interim financial information

These interim consolidated financial statements are for the six months ended 30 June 2011. The interim financial report, which is unaudited, has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards and IFRIC interpretations adopted for use in the European Union (IFRS). The accounting policies and methods of computation used are consistent with those used in the Group annual report for the year ended 31 December 2010 and are expected to be used in the Group Annual Report for the year ended 31 December 2011.

In the period, MedicCO(2) LON Limited, a subsidiary of the group, made the first sales of its CO(2) insufflation device. The revenue from the device is recognised as goods and orders are satisfied, and goods are delivered.

The financial information for the year ended 31 December 2010 does not constitute statutory information. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on these accounts was not qualified and did not contain statements under section 498(2) and (3) of the Companies Act 2006.

The interim consolidated financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the group operates. All values are rounded to the nearest thousand pounds (GBP000) except when otherwise stated.

Going concern

The Group is loss making and has yet to make meaningful revenues. Despite U.S. FDA clearance in May 2011, the group may need to raise additional capital to fully exploit this approval. In addition, any potential resubmission to MHLW may also require additional capital. In light of this, the directors have reviewed cash flow forecasts and the Group's capital and liquidity requirements for the balance of 2011 and for 2012. The directors have considered various scenarios and have concluded that aggressive cost controls are necessary. These actions as outlined above should allow that with the remaining cash available and the ability to further manage expenditure rates, the accounts should be prepared on a going concern basis.

2. Segment Reporting

The Group operates in two business areas. Our primary business is the development and commercialisation of medical imaging software. To complement this business the Group has launched the MedicCO(2) LON Insufflator, a hardware product that is used to introduce carbon dioxide gas to distend the colon when patients are undergoing a CT colonography examination. This results in improved image quality and supports diagnostic interpretation.

Operating results are reported to the Group's chief operating decision maker on a geographical basis. As a new business our MedicCO(2) LON business operates through a new subsidiary in the UAE. The following reports financial information on a geographical basis and reconciles it to the Group's results.

 
                                                          All other 
                        UK & Europe     Japan       UAE    segments     Total 
                             GBP000    GBP000    GBP000      GBP000    GBP000 
---------------------  ------------  --------  --------  ----------  -------- 
 
 6 months ended 
  30 June 2011 
 Revenue                         37         -         -         125       162 
 Depreciation                    10         8         -           -        18 
 Operating loss             (2,199)     (337)      (57)        (10)   (2,603) 
 Interest receivable              7         6         7           -        20 
 Non-current assets              24        41         -           -        65 
 Segment assets               3,773       219       193          10     4,195 
 Segment liabilities          (426)      (27)     (125)         (5)     (583) 
 Tax Income                       -         -         -           -         - 
 Share-based payment             66         4         -           -        70 
 Capital Additions                -         -         -           -         - 
 
                                                          All other 
                        UK & Europe     Japan       UAE    segments     Total 
                             GBP000    GBP000    GBP000      GBP000    GBP000 
---------------------  ------------  --------  --------  ----------  -------- 
 
 6 months ended 
  30 June 2010 
 Revenue                         74         -       141           -       215 
 Depreciation                     8         8         -           1        17 
 Operating loss             (1,773)     (433)     (266)        (10)   (2,482) 
 Interest receivable             23         -         -           -        23 
 Non-current assets               8        60         -           2        70 
 Segment assets               8,337       282        43           5     8,667 
 Segment liabilities          (427)      (38)      (89)           -     (556) 
 Tax Income                     110         -         -           -       110 
 Share-based payment            135         9         -           -       144 
 Capital Additions                4        20         -           -        24 
---------------------  ------------  --------  --------  ----------  -------- 
 
 
                                                          All other 
                        UK & Europe     Japan       UAE    segments     Total 
                             GBP000    GBP000    GBP000      GBP000    GBP000 
---------------------  ------------  --------  --------  ----------  -------- 
 
 12 months ended 
  31 December 2010 
 Revenue                        210         -       140           -       350 
 Depreciation                    17        20         -           -        37 
 Operating loss             (3,442)     (829)     (485)        (22)   (4,778) 
 Interest receivable 
  / (paid)                       34      (17)        24           -        41 
 Non-current assets              33        48         -           -        81 
 Segment assets               5,514       247       751           8     6,520 
 Segment liabilities          (346)      (36)       (5)         (8)     (395) 
 Tax Income                     217         -         -           -       217 
 Share-based payment          (209)      (10)         -           -     (219) 
 Capital Additions               37        20         -           -        57 
---------------------  ------------  --------  --------  ----------  -------- 
 

3. Earnings per share

 
                           6 months ended   6 months ended          Year ended 
                             30 June 2011     30 June 2010    31 December 2010 
                              (unaudited)      (unaudited)           (audited) 
------------------------  ---------------  ---------------  ------------------ 
 
 
 
 Loss for the period 
  (GBP000)                        (2,583)          (2,459)             (4,520) 
 Weighted average number 
 of ordinary shares 
  (000)                           155,525          155,525             155,525 
 Loss per ordinary 
  share 
 - basic and diluted                 (2p)             (2p)                (3p) 
 
 

The loss per share is based on the weighted average number of ordinary shares in issue during the year. The Group has recorded a loss in all periods. No adjustment has been made to the basic loss per share, as the exercise of the share options would have the effect of reducing the loss per ordinary share and is anti-dilutive.

4. Share options

The Group has granted share options to eligible employees since 2003.

A summary of the movement on the Group's share option plans is:

 
                          30 June 2011                 31 December 2010 
 
                    Number of  Weighted-average   Number of  Weighted-average 
                       shares    exercise price      shares    exercise price 
----------------  -----------  ----------------  ----------  ---------------- 
 
 
Start of period    13,703,334           GBP0.13   9,128,359           GBP0.20 
Granted                     -           GBP0.00   5,475,000           GBP0.05 
Forfeited         (3,429,167)           GBP0.06   (900,025)           GBP0.39 
Exercised                   -                 -           -                 - 
 
At period 
 end               10,274,167              0.15  13,703,334           GBP0.13 
 
 
Exercisable 
 at period 
 end                5,646,851              0.21   4,928,052           GBP0.24 
 
 
 

The following data summarises the status of the share options outstanding at 30 June 2011:

 
                              Remaining contractual 
 Share Option 
      Plan           Number            life (years) 
--------------  -----------  ---------------------- 
 
 
 A                        -                     nil 
 B                  150,000                     3.2 
 C                   85,000                     4.6 
 D                        -                     nil 
 E                  790,000                     5.6 
 F                   50,000                     5.9 
 G                  150,000                     6.5 
 H                        -                     nil 
 I                  100,000                     7.5 
 J                5,689,167                     7.9 
 K                        -                     7.9 
 L                  100,000                     8.5 
 M                3,160,000                     9.5 
 
 
                 10,274,167 
 
 
 

Options are fair valued using the Black-Scholes option pricing model. No performance conditions were included in the fair value calculations. There were no new options issued in the period.

In the period ending 30 June 2011 the Group recorded a share option charge of GBP70,000 (30 June 2010: GBP144,000).

5. Related Parties

The Group has related party relationships with its subsidiaries, its parent company (MGT Capital Investments, Inc.), directors, employees and subsidiary companies of its parent Group.

Other subsidiary companies of the parent also operate from 66 Hammersmith Road, London and some establishment, finance, IT and administration costs are charged to, and from, these companies. In the six months to 30 June 2011 MGT Capital Investments (UK) Ltd. charged the Group GBP159,000 (30 June 2010: GBP345,000), and the Group charged MGT Capital Investments (UK) Ltd GBP30,000 (30 June 2010: GBP14,000). At 30 June 2011, the Group owed MGT Capital Investments (UK) Ltd the balance of GBP20,745 (30 June 2010: GBP2,678).

6. Reconciliation of net cash flows from operating activities

 
                                                                    Year ended 
                                6 months ended   6 months ended    31 December 
                                  30 June 2011     30 June 2010           2010 
                                   (unaudited)      (unaudited)      (audited) 
                                        GBP000           GBP000         GBP000 
-----------------------------  ---------------  ---------------  ------------- 
 
 
 Loss for the period                   (2,583)          (2,459)        (4,778) 
 Adjustments for:                                             - 
 Depreciation                               16               17             37 
 Loss on disposal of 
  equipment                                  -                -              4 
 Loss on sale of investments                 -                -              - 
 Forgiveness/impairment 
  of trading balances 
  of related entities                        -                -              - 
 Interest income                          (13)             (23)              - 
 Interest expense                            -                -              - 
 Foreign currency exchange 
  cost                                       -                -              - 
 Share options                              66              144            219 
 Changes in working capital                  -                - 
 Trade and other receivables             (365)               39           (15) 
 Trade and other payables                  187            (134)          (277) 
 Cash flows from operating 
  activities                           (2,692)          (2,416)        (4,810) 
 Interest paid                               -                -           (18) 
 Tax received                                -                -            217 
 
 Net Cash flows from 
  operating activities                 (2,692)          (2,416)        (4,611) 
 
 

- Ends -

For further information:

 
 Medicsight plc 
 Robert Ladd, Interim CEO                 Tel: +44 (0)207 605 7950 
 U.S. Contact Details                     Tel: +1 (212) 652 3214 
 Troy Robinson, Chief Financial Officer 
                                          www.medicsight.com 
                                           follow us on twitter 
                                           @Medicsight 
 
 
 Daniel Stewart & Co 
 Noelle Greenaway / Oliver Rigby   Tel: +44 (0) 207 776 6550 
                                   www.danielstewart.co.uk 
 

Media enquiries:

 
 Abchurch 
                                    www.abchurch-group.com 
 Julian Bosdet                      Tel: +44 (0) 207 398 7700 
 julian.bosdet@abchurch-group.com 
 Adam Michael                       Tel: +44 (0) 207 398 7708 
 adam.michael@abchurch-group.com 
 Simone Elviss                      Tel: +44 (0) 207 398 7728 
 simone.elviss@abchurch-group.com 
 Quincy Allan                       Tel: +44 (0) 207 398 7710 
 quincy.allan@abchurch-group.com 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR PLMITMBTBBAB

Medicsight (LSE:MDST)
Historical Stock Chart

1 Year : From Apr 2013 to Apr 2014

Click Here for more Medicsight Charts.

Medicsight (LSE:MDST)
Intraday Stock Chart

Today : Saturday 19 April 2014

Click Here for more Medicsight Charts.


NYSE and AMEX quotes are delayed by at least 20 minutes.
All other quotes are delayed by at least 15 minutes unless otherwise stated.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

1 site:2 us 140419 23:15