TIDMDDD
RNS Number : 8964Y
DDD Group PLC
14 September 2015
Date: 14 September 2015
On behalf of: DDD plc (AIM: DDD; OTCQX: DDDGY; 'DDD' or the
'Group' or the 'Company')
DDD Group plc
Half yearly results for the six months ended 30 June 2015
Transition gaining momentum
DDD Group plc, the advanced imaging and 3D solutions company,
announces its half yearly results for the six months ended 30 June
2015.
Highlights:
-- Launched TriDef SmartCam webcam background removal PC
software for use with popular gamecasting and video conferencing
applications
-- Signed affiliate agreements with SplitmediaLabs for TriDef
SmartCam integration into XSplit Gamecaster and XSplit
Broadcaster
-- Signed license agreement for distribution of TriDef SmartCam
by SplitmediaLabs to OEM PC manufacturers
-- A number of additional commercial evaluations underway with
prospective partners in the gamecasting and video conferencing
markets
-- Promising progress on the patent licensing program
-- Revenue of $437,000 (H1 2014 restated: $1,179,000)
-- Cash and receivables at 30 June 2015 of $1,285,000 (H1 2014: $1,428,000)
-- Free cash flow* improved 43% to an outflow of $1,034,000 (H1:
2014: outflow $1,829,000) due to continued careful management of
operating expenses
*Free cash flow is cash flow required for operating and
capitalised investing activities (excluding financing
activities).
Subsequent to Period End
-- Filed patent infringement lawsuit in Los Angeles, USA against
LG Electronics on 23 July 2015 with Quinn, Emanual, Urquhart, &
Sullivan LLP as lead counsel
-- Extended Samsung 3D TV license agreement until December 2016
Chris Yewdall, Chief Executive said:
"The Company achieved a number of objectives in the first half
transitioning from its legacy 3D business into our new offering of
the 2D TriDef SmartCam solutions that target scalable opportunities
in the gamecasting and video conferencing markets. We have been
encouraged by the positive response from end users and prospective
partners to the new TriDef SmartCam products.
"Additionally, the Company has appointed Quinn Emanuel Urquhart
and Sullivan LLP, a leading US intellectual property law firm, to
pursue patent infringement litigation in the US against LG
Electronics related to LG's range of 3D televisions. Dominion
Harbor Group continues to make promising progress on the patent
licensing program with indications that additional licenses may be
secured in the current financial year without the need for
litigation.
"Revenues from the 3D TV market were lower due to the transition
of the use of Company's TriDef 3D conversion technology from HDTVs
to UHD/4K TVs which occurred at the end of the first quarter. The
Company expects the 3D TV revenues to recover in the near term in
line with the continued growth in sales of UHD TVs and has extended
its license agreement with Samsung until the end of 2016.
"During the transition from stereo 3D products to 2D solutions
the Company continues to carefully manage costs and expenses to
maximize the working capital as the Company returns to
break-even."
Enquiries
DDD Group
Chris Yewdall, President
& CEO
Victoria Stull, CFO +1 310 566 3340
Peel Hunt LLP (UK Nomad/Joint
Broker)
Richard Kauffer / Euan
Brown +44 (0)207 418 8900
Beaufort Securities (Joint
Broker)
Jon Levinson / Elliot
Hance +44 (0)207 382 8300
Blythweigh (UK IR)
Tim Blythe / Wendy Haowei
/ Andrea Benton +44 (0)207 138 3204
Berns & Berns (US PAL)
Michael Berns, esq. +1 212 332 3320
Forward-Looking Statements
This document includes forward-looking statements. Whilst these
forward-looking statements are made in good faith they are based
upon the information available to DDD at the date of this document
and upon current expectations, projections, market conditions and
assumptions about future events. These forward-looking statements
are subject to risks, uncertainties and assumptions about the Group
and should be treated with an appropriate degree of caution.
The past performance of the Company and its securities is not,
and should not be relied on as, a guide to the future performance
of the Company and its securities.
About DDD
DDD transforms the visual experience. Its advanced imaging and
TriDef(R) solutions are licensed by leading brands for use in TVs,
tablets and PCs. Over 53.5 million 3D products have been shipped by
DDD's licensees worldwide. DDD's shares are quoted on the London
Stock Exchange's AIM Market (AIM: DDD) and the OTCQX (DDDGY). For
more information please visit www.ddd.com.
Overview
The Group continues to progress in its image analysis research
and development efforts and the related introduction of new
products focused on the larger 2D image market.
Business Review
Technology Licensing
During the period, the Group focused on the delivery of its new
2D product "TriDef SmartCam" which is designed to perform real time
background removal and substitution without the need for any
special 'green-screen' equipment. TriDef SmartCam enables users of
popular PC video conferencing products like Skype and popular
gamecasting products like XSplit Gamecaster to effectively overlay
their webcam image on alternative backgrounds such as gameplay
videos or still photos using their 2D webcam.
TriDef SmartCam was launched on DDD's TriDef.com website in late
May where it is available for purchase and also as a free 7 day
trial. The Group's GenMe Inc. subsidiary signed the first affiliate
agreement with SplitmediaLabs in May enabling the distribution of
TriDef SmartCam to end users of SplitmediaLabs' popular XSplit
Gamecaster and XSplit Broadcaster applications. Under the terms of
the affiliate agreement, end users of XSplit Gamecaster and XSplit
Broadcaster can try out the TriDef SmartCam app with a 7 day free
trial. Revenues of purchases of TriDef SmartCam licenses made by
XSplit end users are then shared with SplitmediaLabs on a calendar
quarterly basis. SplitmediaLabs launched the first version of
XSplit Gamecaster that supports TriDef SmartCam in August at the
Gamescom 2015 trade show in Cologne, Germany. A separate license
agreement with SplitmediaLabs enables TriDef SmartCam to be bundled
with the XSplit Gamecaster and XSplit Broadcaster products which
SplitmediaLabs will license to manufacturers of high performance
gaming PCs. Under the terms of this agreement, DDD will receive a
per unit royalty from SplitmediaLabs for each XSplit software
subscription that is activated by an end user.
The Group is also involved in a number of commercial discussions
and evaluations with other software vendors in the game casting and
video conferencing markets in the United States and Asia and
anticipates expanding the TriDef SmartCam affiliate licensing
program over the coming months as these discussions conclude.
The Group is also finalising the development of an Android
version of the SmartCam solution that can be used with mobile
phones and tablets. In addition to video conferencing applications,
the Group is planning to introduce an app in the second half that
leverages the SmartCam technologies to enable a new category of
'social photography' whereby users can include themselves in
photographs that they receive from friends and via social media
circles.
During the first half, a total of 2.5 million 3D consumer
products were shipped with the Group's TriDef 3D 2D to 3D
conversion technologies under license. This decline in shipments
was due to a softening demand in the LCD TV market that led TV
manufacturers to reduce production capacity by between 20% and 30%
in the first half coupled with the transition to the use of the
Group's 2D to 3D conversion technology exclusively in the new Ultra
High Definition (UHD) 4K premium TV category. Many manufacturers
phased out 3D capable HDTVs during the half in favour of 3D UHD
TVs. The UHD TV market grew 400% year on year to 4.7 million TVs in
the first quarter of 2015 according to market research firm
DisplaySearch and annual sales of UHD TVs are forecast to grow to
approximately 32 million TVs during 2015. According to
DisplaySearch, Samsung was the leading supplier of UHD TVs in the
first quarter of 2015 with over 30% market share by value.
Consequently, the Group expects royalties from 3D TV shipments to
recover during the remainder of the year and beyond as production
of UHD TVs and 3D UHD TVs continues to grow.
In July, the Group extended its license agreement with Samsung
for the use of the TriDef 2D to 3D conversion technology in
Samsung's 3D TVs until the end of 2016. As part of this renewal,
the agreement was restructured such that royalties become due when
the chip incorporating the Group's technology is used in the
manufacture of a 3D product. Previously the royalty was due when
the chip was manufactured. This royalty reporting transition
resulted in a credit to Samsung representing the difference between
the total chips manufactured and the total chips used in 3D
products during the first half. The Group expects that this credit
will be used in full by Samsung during the second half based on
current market projections.
PC and mobile shipments continued to be negligible (less than
1%).
Patent Licensing
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Following the appointment of Dominion Harbor to assist in the
licensing of the Group's extensive patent library a number of
discussions have been conducted with prospective licensees in the
consumer and professional services markets. The licensing
discussions with LG Electronics related to the 3D conversion
technology in LG's range of 3D TVs was not conclusive and the Group
appointed the law firm of Quinn Emanuel Urquhart and Sullivan LLP
(Quinn Emanuel) to represent them in a patent litigation with LG
Electronics that was filed in Los Angeles California in July. Quinn
Emanuel has an outstanding track record in patent related
litigation and mediation, having tried 1,516 cases and won 1,371,
or over 90%. When representing plaintiffs, Quinn Emanuel's lawyers
have won over $15 billion in judgments and settlements. Quinn
Emanuel has successfully represented many leading technology
companies including Google, Motorola, Samsung and Sony in a variety
of patent related matters.
The complaint alleges that as a result of discussions with LG
dating back to 2008 and LG's subsequent licensing of the Group's
technologies for their 3D PCs and 3D mobile phones, that LG's
unlicensed use of the Group's patent claims in their range of 3D
televisions was done in the full knowledge of the existence of the
Group's patents and continues to be willful. The complaint seeks
injunctive relief and unspecified monetary damages and contends
that since LG's infringement is willful, the Group is entitled to
seek treble damages and an award of its attorneys' fees, costs, and
expenses.
As Dominion Harbor makes further progress on the licensing
discussions with other parties, the Group will provide additional
updates as and when appropriate however the Group is not of the
view that litigation will be required with all prospective
licensees.
Outlook
With the first of the new 2D products now available in the
target markets of gamecasting and video conferencing, the Group is
encouraged by the response of prospective partners and end users
alike. The Group plans to build upon the core 2D image analysis
technologies, refining the performance of the existing products and
releasing new products that deliver innovative user experiences in
sizeable growth markets.
As part of the shift in product strategy, the Group is also
placing more emphasis on direct to consumer sales through affiliate
agreements with market leaders such as the one concluded with
SplitmediaLabs. In this approach, the Group can secure
significantly higher per unit license fees from end users than
would be possible if licensing to OEMs who have fragile profit
margins as a result of perpetual price competition. At the same
time, the Group can share these end user license fees with the
third party affiliate, creating an incremental revenue opportunity
for the affiliate from their installed base which benefits both the
affiliate and the Group.
The Group plans to continue to place business development
emphasis on securing additional affiliate agreements in the
gamecasting and video conferencing markets with customers in both
the United States and Asia.
As the UHD TV market continues to grow, the Group expects that
the shipments of 3D TVs with the Groups 2D to 3D conversion
technologies will recover and will continue to contribute to the
Group's revenues for the foreseeable future.
For the remainder of 2015, the Group will focus on
commercialising the new 2D products with distribution partners in
the PC video conference and gamecasting markets and delivering the
Android versions of these new products to enable the Group to
address new mobile opportunities in the digital photography and
social media markets. The Group will continue to assist Dominion
Harbor in concluding licensing discussions with prospective
licensees and will work closely with Quinn Emanuel on the patent
litigation with LG Electronics.
Financial Review
An analysis of the financial results and business progress for
the period follows. A thorough analysis of the business model and
key markets is provided in the 2014 Annual Report and Accounts
available on the Group's website.
Revenue for the period ended 30 June 2015, primarily from 3D
technology licensing in the TV market, declined 63% against the
same period in the prior year to $437,000 (June 2014 restated:
$1,179,000) due to the decline in 3D technology shipments discussed
previously.
High margin OEM royalty revenues decreased to $378,000 (June
2014: $1,095,000), primarily resulting from the decrease in
shipments of 3D TV products by existing licensees as the 3D feature
transitions into the smaller but more profitable UHD/4K television
segment. During the first half of 2015, only two PC licensees (H1
2014: 5) were shipping 3D PC products with the majority of
remaining 3D PC products having become end of line in prior
periods. Additionally, the decline in availability of 3D PCs
effected the direct-to-consumer PC software sales which fell 41% to
$41,000 (June 2014: $69,000). Other licensing royalty revenues were
$18,000 (June 2014: $15,000).
Gross profit margin remained 99.8% (June 2014: 99.8%) therefore
the revenue decline described above directly impacted the gross
profit. Gross profit for the period was $435,000 (June 2014
restated: $1,176,000).
Depreciation and amortisation expenses totaled $704,000 (June
2014 restated: $776,000). The decrease is primarily due to the
effect of certain disposals made at the end of 2014.
The non-cash share-based incentive expense was $21,000 (June
2014: $92,000). In early June 2015, an employee-wide grant over
3,650,000 ordinary 1p shares at the market price of 1.75p per share
was announced.
Administrative expenses fell 7% to $1,446,000 (June 2014
restated: $1,566,000) and down just under 9% sequentially compared
to H2 2014 ($1,587,000). The savings is a result in weakness in the
Australian Dollar against the US Dollar, savings from the move to
the new Australian office in the second half of 2014 and continued
expenditure controls.
Other income rose to $399,000 (June 2014: $34,000). In 2015, the
amount primarily represents the R&D tax incentive for FY2014
which is anticipated to be received by September. Adjusted loss
before interest, taxes, depreciation, amortisation and share based
payments increased to $612,000 (2014 restated: $356,000).
Reported pre-tax loss was $1,433,000 (June 2014 restated:
$1,222,000).
The majority of taxation is due to foreign withholding taxes
that are deducted at source from royalty revenues by certain
non-treaty territories such as Korea and Taiwan. These foreign
withholding taxes may be available as tax credits in the US for
future periods against foreign-sourced profits which are uncertain
and are therefore included in the taxation line item. Taxation for
the period was $109,000 (June 2014: $257,000) reflecting the mix in
revenues from tax treaty jurisdictions during the period plus the
effect of deferred tax liability adjustments as a result of the
R&D capitalisation.
The Group completed a fund raising of $1,202,000 ($1,119,000 net
of costs) in March 2015 which was partly via convertible loan notes
and partly via an equity offering.
The Group's total loss per share after taxation was $0.010 per
share (June 2014: $0.011 per share).
Cash used by operations (before tax payments and interest
received) was $214,000 (June 2014: used $528,000). Net cash used by
operating activities was $374,000 (June 2014: used $736,000).
Capitalised expenditure was $660,000 (June 2014: $1,093,000),
therefore free cash flow improved to an outflow for the period of
$1,034,000 (June 2014: outflow $1,829,000).
$1,119,000 net of costs was raised from a combination of equity
issuance and additional convertible loan note issuance activity
(June 2014: nil), resulting in cash of $783,000 at the end of June
2015 (June 2014: $867,000).
Consolidated statement of comprehensive
income
Restated
6 months 6 months 12 months
to to to
30 June 30 June 31 Dec
2015 2014 2014
$'000 $'000 $'000
(unaudited) (unaudited) (audited)
------------ ------------ -------------
Notes
Revenue 3 438 1,179 2,533
Cost of sales (2) (3) (5)
------------ ------------ -------------
Gross profit 436 1,176 2,528
Depreciation/amortisation
expense (704) (776) (1,282)
Share based payment expense (21) (92) (148)
Administration expense (1,447) (1,566) (3,153)
------------ ------------ -------------
Total administrative expenses (2,172) (2,434) (4,583)
Other income 399 34 340
------------ ------------ -------------
Operating loss (1,337) (1,224) (1,715)
Analysed as:
Loss before interest, taxes,
depreciation, amortisation
and share based payments
(Adjusted EBITDA) (612) (356) (285)
Depreciation/amortisation
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expense (704) (776) (1,282)
Share based payments (21) (92) (148)
------------ ------------ -------------
(1,337) (1,224) (1,715)
--------------------------------------- ------ ------------ ------------ -------------
Finance (expense)/income (96) 2 (105)
------------ ------------ -------------
Loss before tax (1,433) (1,222) (1,820)
Taxation (109) (257) (389)
------------ ------------ -------------
Loss for the period from
continuing operations (1,542) (1,479) (2,209)
Loss from discontinued operation:
Yabazam 3D streaming movie
service - (146) (700)
------------ ------------ -------------
Loss for the period (1,542) (1,625) (2,909)
Exchange differences on translation
of foreign operations which
will be subsequently reclassified
to profit and loss (13) 26 (42)
------------ ------------ -------------
Other comprehensive income
(loss) for the period, net
of tax (13) 26 (42)
------------ ------------ -------------
Total comprehensive loss
for the period (1,555) (1,599) (2,951)
============ ============ =============
Loss per share
Continuing Operations -
Basic & Diluted (per share) $0.010 $0.010 $0.015
============ ============ =============
Total Operations - Basic
& Diluted (per share) 4 $0.010 $0.011 $0.020
============ ============ =============
Consolidated statement of financial
position
Restated
30 June 30 June 31 Dec
2015 2014 2014
$'000 $'000 $'000
(unaudited) (unaudited) (audited)
------------ ------------ -----------
Notes
Assets
Non-current assets:
Intangible assets 5 3,002 3,428 3,041
Property, plant and equipment 25 58 32
Restricted cash 68 - 72
Deferred tax asset 1,096 1,096 1,096
------------ ------------ -----------
Total non-current assets 4,191 4,582 4,241
Current assets:
Inventory - 6 -
Trade and other receivables 503 561 571
Cash and bank balances 783 867 697
------------ ------------ -----------
Total current assets 1,285 1,434 1,268
------------ ------------ -----------
Total assets 5,477 6,016 5,509
============ ============ ===========
Equity and liabilities
Capital and reserves:
Issued capital 13,138 13,867 12,636
Share premium 17,939 19,169 17,467
Merger reserve 20,871 22,638 20,627
Share based payment reserve 1,892 2,018 1,849
Translation reserve (565) (4,954) 124
Retained earnings (51,147) (48,344) (49,605)
------------ ------------ -----------
Total equity 2,128 4,394 3,098
Financial liabilities
Non-current liabilities:
Financial liabilities 6 1,529 - 912
Deferred tax liabilities 573 666 582
------------ ------------ -----------
Total non-current liabilities 2,102 666 1,494
Current liabilities:
Trade and other payables 1,247 956 917
------------ ------------ -----------
Total current liabilities 1,246 956 917
------------ ------------ -----------
Total liabilities 3,348 1,622 2,411
------------ ------------ -----------
Total equity and liabilities 5,477 6,016 5,509
============ ============ ===========
Consolidated statement of
cash flows
6 months 6 months 12 months
to to to
30 June 30 June 31 Dec
2015 2014 2014
$'000 $'000 $'000
(unaudited) (unaudited) (audited)
------------ ------------ ----------
Cash flows from operating
activities
Loss for the period (1,555) (1,625) (2,909)
Finance expense/(income) 109 (2) 105
Taxation 66 257 389
Debt issuance costs in the
consolidated stmt of comprehensive
income -- -- 70
Depreciation 13 34 58
Amortisation 691 742 1,363
Loss on disposal of assets -- -- 399
Share based payments 21 92 148
Decrease in inventory -- -- 6
(Increase)/decrease in trade
and other receivables 68 (55) (65)
Increase/(decrease) in trade
and other payables 330 29 (10)
------------ ------------ ----------
Net cash (used in)/generated
from operations (214) (528) (446)
Interest (paid)/received (41) 2 (19)
Income tax paid (119) (210) (453)
------------ ------------ ----------
Net cash (used in)/generated
from operating activities (374) (736) (918)
Cash flows from investing
activities
Restricted cash deposit -- -- (72)
Payments for property plant
and equipment (8) (1) (4)
Payments for intangible assets (652) (1,092) (1,818)
------------ ------------ ----------
Net cash used in investing
activities (660) (1,093) (1,894)
Cash flows from financing
activities
Proceeds from issue of loan
notes 534 -- 906
Proceeds from issue of equity 668 -- --
shares
Issuance costs (83) -- (70)
------------ ------------ ----------
Net cash generated by financing
activities 1,119 -- 836
------------ ------------ ----------
Net change in cash and cash
equivalents 85 (1,829) (1,976)
Effect of exchange rate fluctuation 1 35 12
------------ ------------ ----------
Total change in cash and cash
equivalents 86 (1,794) (1,964)
Cash and cash equivalents
at the start of the period 697 2,661 2,661
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------------ ------------ ----------
Cash and cash equivalents
at the end of the period 783 867 697
============ ============ ==========
Consolidated statement of changes in equity
Share
based
Share Share Merger payment Translation Retained Total
capital premium reserve reserve reserve earnings equity
$'000 $'000 $'000 $'000 $'000 $'000 $'000
---------- ---------- ---------- --------- -------------- ----------- ---------
At 1 January 2014 13,414 18,543 21,898 1,861 (3,072) (46,743) 5,901
Transactions with
owners
Share issue - - - - - - -
Share based payment
reserve transfer - - - (24) - 24 -
Equity settled
share options
Foreign exchange
differences - - - 92 - - 92
453 626 740 89 (1,908) - -
---------- ---------- ---------- --------- -------------- ----------- ---------
Total transactions
with owners 453 626 740 157 (1,908) 24 92
Comprehensive income
Loss for the period - - - - - (1,625) (1,625)
Other comprehensive
loss - - - - 26 - 26
---------- ---------- ---------- --------- -------------- ----------- ---------
Total comprehensive
loss - - - - 26 (1,625) (1,599)
---------- ---------- ---------- --------- -------------- ----------- ---------
At 30 June 2014 13,867 19,169 22,638 2,018 (4,954) (48,344) 4,394
Transactions with
owners
Share issue - - - - - - -
Share based payment
reserve transfer - - - (23) - 23 -
Equity settled
share options - - - 56 - - 56
Foreign exchange
differences (1,231) (1,702) (2,011) (202) 5,146 - -
---------- ---------- ---------- --------- -------------- ----------- ---------
Total transactions
with owners (1,231) (1,702) (2,011) (169) 5,146 23 56
Comprehensive income
Loss for the period - - - - - (1,284) (1,284)
Other comprehensive
loss - - - - (68) - (68)
---------- ---------- ---------- --------- -------------- ----------- ---------
Total comprehensive
loss - - - - (68) (1,284) (1,352)
---------- ---------- ---------- --------- -------------- ----------- ---------
At 31 December
2014 12,636 17,467 20,627 1,849 124 (49,605) 3,098
Transactions with
owners
Share issue 334 251 - - - - 585
Share based payment - - - - - - -
reserve transfer
Equity settled - - - - - - -
share options
Foreign exchange
differences 168 221 244 43 (676) - -
---------- ---------- ---------- --------- -------------- ----------- ---------
Total transactions
with owners 502 472 244 43 (676) - 585
Comprehensive income
Loss for the period - - - - - (1,542) (1,542)
Other comprehensive
income - - - - (13) - (13)
---------- ---------- ---------- --------- -------------- ----------- ---------
Total comprehensive
income (loss) (13) (1,542) (1,555)
---------- ---------- ---------- --------- -------------- ----------- ---------
At 30 June 2015 13,138 17,939 20,871 1,892 (565) (51,147) 2,128
========== ========== ========== ========= ============== =========== =========
Notes to the Unaudited Consolidated Half-Yearly Financial
Statements of DDD Group plc
for the six months ended 30 June 2015
1. The Company
DDD Group Plc ("the Company") is the parent entity of the
consolidated group which is a leading developer and licensor of
intellectual property in the advanced imaging market for consumer
entertainment products. It provides patented software solutions for
consumer 3D devices which automatically convert content from 2D to
3D that had been shipped in just over 53.5 million consumer devices
as of the end of the period. Additionally, the Group is broadening
its development and licensing activities to address larger markets
by delivering innovative new solutions for conventional 2D
applications including video conferencing and gamecasting.
The Company is a public limited liability company incorporated
and domiciled in England and Wales. The address of its registered
office is 42-50 Hersham Road, Walton-on-Thames, Surrey KT12 1RZ,
United Kingdom.
The Company has its quote on AIM, a market operated by the
London Stock Exchange. It is also listed on the OTCQX Market in the
US.
2. Basis of preparation
This interim report on the unaudited consolidated financial
statements is for the six month period ended 30 June 2015. As
permitted, this interim report has been prepared in accordance with
the AIM Rules for Companies and does not seek to comply with IAS 34
"Interim Financial Reporting" or constitute statutory accounts as
defined in Section 435 of the Companies Act 2006. It does not
include all the information required for full annual financial
statements and should be read in conjunction with the audited
consolidated financial statements of the Group for the year ended
31 December 2014. The Group's statutory financial statements for
the year ended 31 December 2014, prepared under IFRS as adopted by
the EU, have been filed with the Registrar of Companies. Those
accounts have received an unqualified audit report which contained
an emphasis of matter regarding going concern to which the auditors
drew attention under the Act.
Restatement - The 2014 interim results have been restated for
the effect of the discontinued operation and the 2013 formulaic
error in amortisation discussed in detail in Note 1 of the audited
consolidated financial statements of the Group for the year ended
31 December 2014.
Impact of restatement on profit and loss statement (effected
line items only):
Effect
of Effect
Dec'14 of H1'14 Restated
Disc 2013 to be
H1'14 Original Ops Error Comparative
----------------------------- --------------- -------- ------- ---------------
Revenue 1,185 (6) - 1,179
COGS (6) 3 - (3)
Gross Profit 1,179 (3) - 1,176
Admin Expenses (1,673) 107 - (1,566)
Depreciation/Amortisation (818) 42 - (776)
Loss before tax (1,368) 257 - (1,111)
Loss after tax - Continuing
Operations (1,625) 146 - (1,479)
Discontinued Operation - (146) - (146)
----------------------------- --------------- -------- ------- ---------------
Loss after Tax (1,625) - - (1,625)
----------------------------- --------------- -------- ------- ---------------
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Impact of restatement on statement of financial position
(effected line items only):
Effect
of
H1'14 Disc 2013
Original Ops Error H1'14 Restated
---------------------------- ---------- ----- ------- ---------------
Intangible assets 3,765 - (337) 3,428
Long-term assets 4,919 - (337) 4,582
Total assets 6,353 - (337) 6,016
Retained earnings (48,007) - (337) (48,344)
Total equity 4,731 - (337) 4,394
Total equity & liabilities 6,353 - (337) 6,016
Accounting Policies - These unaudited consolidated half-year
financial statements have been prepared in accordance with
accounting policies consistent with those set out in the Group's
financial statements for the year ended 31 December 2014, which
were prepared in accordance with IFRS as adopted by the EU. No new
and/or revised IFRS and IFRIC publications that came into force in
the period had any impact on the accounting policies, financial
position or performance of the Group.
The Group's consolidated financial statements are presented in
US dollars.
3. Selected segmental reporting data
The Group's operating segments are based upon the Group's
revenue streams. At present, given the size of the Group, costs of
goods sold and operating expenses cannot be allocated on a
reasonable basis to the segments below and, as a result, the
segmental analysis is limited to the Group gross profit as
presented to the Board of Directors.
Please note that the following data is not an IFRS8 compliant
disclosure but selected financial information.
Restated
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2015 2014 2014
$'000 $'000 $'000
(unaudited) (unaudited) (audited)
REVENUES:
Technology licensing
segment:
Royalties from OEM
unit shipments 379 1,095 2,367
License fees -- -- 20
Other licensing royalties 18 15 29
Consumer software
product sales 41 69 117
----------- ----------- -----------
Revenue from group
technologies 438 1,179 2,533
Other areas:
Consulting - - -
----------- ----------- -----------
Total revenue 438 1,179 2,533
Cost of sales (2) (3) (5)
----------- ----------- -----------
Gross profit 436 1,176 2,528
=========== =========== ===========
Margin 99.5% 99.8% 99.8%
The revenues generated from licensees of the Group's
intellectual property are categorised based on contractual
agreement terms.
4. (Loss)/earnings per share
6 months 6 months 12 months
to to to 31 December
30 June 30 June
2015 2014 2014
$'000 $'000 $'000
(unaudited) (unaudited) (audited)
----------- ----------- ---------------
Continuing Operations (loss)
for the year attributable to
equity shareholders (1,542) (1,479) (2,209)
Continuing Operations (loss)
per share: $(0.010) $(0.010) $(0.015)
Basic & Diluted (per share)
Total (loss) for the period
attributable to equity shareholders (1,542) (1,625) (2,909)
Total (loss) per share:
Basic & Diluted (per ordinary
share) $(0.010) $(0.011) $(0.020)
Shares Shares Shares
(unaudited) (unaudited) (audited)
----------- ----------- ---------------
Ordinary shares
Issued ordinary shares par
1p at start of the period 143,663,572 143,664,572 143,664,572
Ordinary shares issued in the 22,500,000 -- --
period(1)
----------- ----------- ---------------
Issued ordinary shares at end
of the period 166,163,572 143,664,572 143,663,572
=========== =========== ===============
Weighted average number of
shares in issue for the period 154,851,417 143,663,572 143,663,572
=========== =========== ===============
Deferred shares
Issued deferred shares par
9p at start of the period 74,416,547 74,416,547 74,416,547
Deferred shares issued in the - - -
period
----------- ----------- ---------------
Issued deferred shares at end
of the period 74,416,547 74,416,547 74,416,547
=========== =========== ===============
Total issued share capital 240,580,119 218,080,119 218,080,119
=========== =========== ===============
(1) On 1 April 2015, 22,500,000 ordinary 1p shares were admitted
to trading following shareholder approval of the March 2015 equity
fund raising. The shares were issued at 2 pence per share (a
premium of 6.7% to the mid-market closing rate on the previous
day).
For profit periods, the diluted profit per share includes the
effect of outstanding, fully vested, in-the-money share options at
the end of the period. For loss periods, 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.
For all periods, the deferred shares are not deemed to be
dilutive given the characteristics of these shares which are
described in full in the 2014 Annual Report and Accounts of the
Company.
5. Intangible assets
Capitalised
development Other
costs Patents intangibles Total
$'000 $'000 $'000 $'000
------------ --------- ------------- -------
Cost
At 1 January 2014 7,698 332 569 8,599
Additions 959 78 54 1,091
Foreign exchange 2 - - 2
------------ --------- ------------- -------
At 30 June 2014 8,659 410 623 9,692
Additions 718 9 - 727
Disposals (836) (55) (539) (1,430)
Foreign exchange (151) - (3) (154)
------------ --------- ------------- -------
At 31 December 2014 8,390 364 81 8,835
Additions 619 33 - 652
Foreign exchange (12) (3) - (15)
------------ --------- ------------- -------
At 30 June 2015 8,997 394 81 9,472
------------ --------- ------------- -------
Amortisation
At 1 January 2014
- as restated 5,017 308 183 5,508
Charge for the period 725 4 55 784
Foreign exchange (27) - (1) (28)
------------ --------- ------------- -------
At 30 June 2014 -
restated 5,715 312 237 6,264
Charge for the period 515 10 55 580
Disposals (735) (55) (243) (1,033)
Foreign exchange (16) - (1) (17)
------------ --------- ------------- -------
At 31 December 2014 5,479 267 48 5,794
Charge for the period 670 11 9 690
Foreign exchange (15) 0 1 (13)
------------ --------- ------------- -------
At 30 June 2015 6,134 278 58 6,471
------------ --------- ------------- -------
Net book value
At 30 June 2014 -
restated 2,944 98 386 3,428
At 31 December 2014 2,911 97 33 3,041
At 30 June 2015 2,863 116 23 3,002
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