MEDIVISION 
By MediVision Medical Imaging Ltd. ?+(972) 4-989-4884 ?+(972) 4-989-4883
? 26 Sweden St. Haifa, Israel 34980
REGULATED INFORMATION? noam@medivision.co.il
MediVision Board of Directors' Report for the Period ended June 30th, 2013
MediVision Medical Imaging Ltd. (EuroNext: MEDV) released today (September 24th, 2013) information concerning its operations and financial results for the period ended June 30th, 2013.
.
ended June 30
Year endedDecember 31
Revenues
Cost of revenues 272,2 5,4 1,191 921 1,831
Gross profit (loss) 569
)465(
422
)1,(
)642(
Research and development 451 225 299 992 593
Selling and marketing 644 222 5,2 941 758
General and administrative expenses 270 98 969 9, 447
Other expenses 168 - 168 - - Listing expenses 331 - 331 - - Financial income - 91 - 17 55
Financial expenses 163 99 924 59 282
) 576,1(
(914)
) 57511(
(405) (2,677)
Taxes expenses - - - - -
Loss for the period) 576,1(
(914)
) 57511(
(405) (2,677)
Total comprehensive loss) 576,1(
(914)
) 57511(
(405)
) 776,,(
Loss per share
Basic loss for the period attributable to
ordinary equity holders of the parent
) .0.,(
) .0.,(
) .0.1(
) .0.0(
) .05,(
*) Following the retroactive application of reverse acquisition, see Note 1.2.
CONSOLIDATED BALANCE SHEET as of June 30th, 2013: (Thousands U.S. Dollars, except per-share data) Assets Current assets30 June 31 December
2013 2012*) 2012*)
Unaudited Audited
US Dollars in thousands
Cash and cash equivalents 434 34 44
Trade receivables 355 100 186
Inventories 436 478 360
Other accounts receivable 215 22 168
1,440 634 758
Security deposits 19 9 19
Property, plant and equipment, net 47 26 50
66 35 69
Short-term credit from banks and others - 481 701
Trade payables 1,478 329 1,074
Other accounts payables 1,757 1,396 1,433
Loans from shareholders - 96 456
Convertible loans - 123 139
3,235 2,425 3,803
Employee benefit liabilities, net 62 42 60
Loans from shareholders 578 - 458
Convertible loans - 556 -
Loans from others 705 - -
1,345 598 518
Total liabilities 4,580 3,023 4,321 Equity
Share capital 1,032 393 567
Share premium 6,013 4,028 4,423
Capital reserve 63 - -
Capital reserve from transaction with controlling shareholder - 51 63
Capital reserve from share-based payment 46 - 42
Non-controlling interests 36 - -
Retained deficit (10,264)
)6,62 6 (
(8,589)
Total deficit (3,074) (2,354) (3,494)
*) Following the retroactive application of reverse acquisition, see Note 1.2.
The interim condensed consolidated financial statements of the company for the six month ended in 30 June 2013 were authorized for issue in accordance with a resolution of the Board of Directors on 24 September 2013.
1.1 Medivision Medical Imaging Limited is limited company incorporated and domiciled in Israel whose shares are publicly traded in Belgium. The Company was founded and commenced operations on July 1993. Medivision owns
100% of MTL Print Ltd.
1.2 The comparative figures in these consolidated financial statements have been restated in order to reflect the Group's financial position and operating results in conformity with the reverse acquisition accounting method. The calculation of loss per share and of the weighted average number of shares was performed in accordance with the provisions of IFRS 3 (Revised), "Business Combinations" ("IFRS 3R") regarding reverse acquisitions. See more details in Note 2.1.
The interim consolidated financial statements prepared after the completion of the transaction on June 18, 2013 were issued in the Company's name but accounted for as a continuation of the consolidated financial statements of MTL Print Ltd (MTL), the accounting acquirer in the transaction, and the comparative information presented in these consolidated financial statements relates to MTL, excluding comparative data on earnings per share, share capital and share premium, which are presented in conformity with the provisions of IFRS 3R.
1.3 MTL was founded and commenced operations on August 9, 2008. MTL develops, manufactures and markets wide-format digital printing machines.
1. On January 17, 2013 the Company following the execution of a Term Sheet, the Company has entered into a definitive Share Purchase Agreement (the "Agreement"), for merging the Company's business with the business of MTL Print Ltd ("MTL"), an Israeli private company, by way of acquisition of MTL's entire share capital, in consideration for the issuance to the MTL shareholders and option-holders of Company shares and/or options representing approximately 65% of the Company's post-closing issued share capital on fully diluted basis. MTL is engaged in various activities in the field of R&D and manufacturing of capital equipment in the field of digital wide format printers (the "Transaction").
The Agreement was subject to customary closing conditions as detailed therein, including fulfillment of all the terms and conditions set forth in the Agreement and performing and delivering certain ancillary agreements in connection thereto.
Under the terms of the Agreement and following the consummation of the Transaction, the Company shall, inter alia: (i) adopt amendments to its Articles of Association, including subject certain issues to the approval of representatives of both parties, (ii) appoint MTL representatives to its Board of Directors, of which 5 shall be designated by MTL's shareholders and 3 by the Company's current principals, (iii) nominate a Chairman and Vice Chairmen to the Company, (iv) appoint MTL officers as senior officers of the Company and Company officers as senior officers in MTL, (V) enter into indemnification agreements and D&O liability insurance coverage with all appointed Board members, (vi) adopt new signatory rights in the Company and in MTL, (vii) enter into employment agreements with senior officers, (viii) adopt a new Employee Share Option Plan, (ix) grant Company
Options to broker/finder; and (x) approve a new budget, which includes financing of the Company's new business. Furthermore, the Transaction included customary lock-up provisions and rights of first refusal, rights of
Co-sale and bring-along rights among the groups. Certain of foregoing were limited in time and/or to rates of holding.
The execution of transaction was approved by a Special General Meeting of the Company's Shareholders held on, April 25, 2013.
The Special General Meeting also approved the proposed amendments to the Company's Articles of Association, Indemnification by the Company of all of its Board members and its senior office holders, AND
THE remuneration terms to Company's Officers and Directors following the consummation of the Transaction.
The consummation of the Transaction was subject to completion of the closing under the Agreement.
On June 18, 2013 following the fulfillment of all closing conditions, the Company and MTL have consummated the closing of the transaction.
According to the agreements described above, The Company issued shares for the purpose of purchasing the entire shares of MTL Ltd. ("MTL"). From a legal standpoint, the Company is viewed as the buyer, yet since the controlling shareholders in MTL became the controlling shareholders in the Company following the completion and execution of said agreements and are now able to determine the Company's operating and financial policies, and given that on the date of allocation of said shares to MTL's shareholders, the Company will be left with nothing but cash and cash equivalents and other financial net assets, the transaction does not constitute the purchase of a "business" as defined in IFRS 3 but rather is accounted for in the consolidated financial statements as reverse acquisition and therefore, from an accounting perspective, the Company's net assets are viewed as net assets acquired by MTL whereas the Company's net assets are sold and measured according to their carrying amount on the date of the transaction.
Therefore, the transactions described above were presented in the consolidated financial statements as issuance of shares in return for net financial assets and for listing MTL's business for trade on the stock exchange. The expenses relating to the transactions totaled approximately $ 331 thousand.
The consolidated financial statements prepared after the completion of the above transaction were issued in the Company's name but accounted for as a continuation of the consolidated financial statements of MTL and the comparative information presented in these consolidated financial statements relates to MTL, excluding comparative data on earnings/loss per share, share capital and share premium, which are presented in conformity with the provisions of IFRS 3R
2. In connection with the negotiations and the execution of the transaction for merging the business of the Company and MTL, the parties have concluded to raise funds to finance the merger and the ongoing operations of the planned activity of the Company and MTL. On June 2, 22947 the Company's Audit Committee and Board of Directors as well as the Board of Directors of MTL, approved entering into a convertible loan agreement with Sigma Opportunity Fund II, LLC ("Sigma"), a New York private equity fund.
The main terms of the Agreement and the transaction contemplated thereby include the following:
a. Sigma will extend the Company and MTL, a senior secured convertible loan of an aggregate sum of US$1.5 (the "Loan"(7 bearing accrued interest at the rate of 96% per annum7 repayable within 29 months or earlier upon certain events of capital and/or debt raising by the Company and/or certain events entitling Sigma to accelerate repayment.
b. The proceeds of the Loan are designated to finance the on-going operations of the Company and MTL, as well as to repay existing loans granted by certain Israeli banks.
c. Under the terms of the Transaction, Sigma will also provide the Company and MTL with advisory services, in
consideration for (i) a fixed immaterial sum; and (ii) issuance of Ordinary shares of the Company, representing
5.4% of the Company's issued and outstanding share capital on a fully diluted basis, subject to certain anti-
dilution provisions )the "Advisory Shares"(.
d. The Loan (and interest) is convertible into Ordinary Shares of the Company, representing 14.29% of the
Company's issued and outstanding share capital on a fully diluted basis (including the Advisory Shares).
e. The Agreement further includes terms customary to such convertible loan transactions, including but not limited to representations and warranties, indemnification, limitations on certain future actions and transactions, reporting requirements, liens on Company assets and guarantees (to secure the Loan) and payment of fees and expenses to Sigma. The agreement was subject to the fulfillment of its closing conditions.
f. Upon execution of the Agreement, the Company received an advance payment on account of the Loan (the
"Advance Payment"( in a total amount of $ 705 thousand.
g. After the balance sheet date 6 in July, 2013 , following the fulfillment of all closing conditions, the Company
And MTL have consummated the closing of the agreement with Sigma.
h.Among the guarantees to be provided under the Transaction, Messrs. Moshe Nur, Noam Allon, Gil Allon and Ariel Shenhar, controlling shareholders of the Company who also serve as its directors and officers, each undertook to deliver Sigma personal promissory notes in an aggregate sum of US$800,000.
3. Significant events after the reporting period
1. On September 17, 22947 the Company's Audit Committee and Board of Directors as well as the Board of Directors of MTL7 approved entering into a Convertible Loan and Credit Line Agreement with Sigma )the "Agreement"7 and the "Transaction"7 respectively(. The main terms of the Agreement and the Transaction contemplated thereby include the following:
a. Sigma will extend The Company and MTL, a senior secured convertible loan of an aggregate sum of US$500,000, and a credit line of an additional US$1,000,000 (the "Credit Line"), bearing accrued interest at the rate of 6% per annum. The Loan and Credit Line (if used) are repayable upon Sigma's demand (the "Demand") within 21 or 36 months ( "First Maturity Date" and "Second Maturity Date" respectively)
whereas when a Demand is made on the First Maturity Date The Company and MTL has the right to (i) Pay Sigma an amount equal to the outstanding principal and accrued but unpaid interest multiplied by 1.25, and receive back to the Company (or transfer to its order) the Advisory Shares(see above note 5.2), or (ii) pay
50% of the outstanding principal and accrued but unpaid interest on the First Maturity Date, with the remaining unpaid amounts multiplied by 1.5, whereupon Sigma shall keep the Advisory Shares. If the Demand is made on the Second Maturity Date, The Company and MTL shall pay Sigma an amount equal to the outstanding principal and accrued but unpaid interest multiplied by 2 and Sigma shall keep the Advisory Shares. Prepayment is also possible upon certain events of capital and/or debt raising by The Company and MTL and/or certain events entitling Sigma to accelerate repayment.
b. Upon the occurrence a of liquidation, dissolution, or winding up of The Company and MTL, Sigma will have the right to (i) convert the outstanding principal and accrued but unpaid interest or (ii) demand that The Company and MTL will pay an amount equal to the outstanding principal and accrued but unpaid interest multiplied by 2.
c. The Credit Line shall be available to The Company and MTL in one or more payments, of a minimum principal
amount of $2427222 )each a "Drawdown"(7 from time to time7 over a period of 92 months. Drawdowns are conditioned upon certain terms, including The Company and MTL securing new purchase orders, and complying with the requirements of the Agreement.
d. The proceeds of the Loan and Credit Line are designated to finance the on-going operations of The Company
and MTL.
e. Under the terms of the Transaction, Sigma will also provide The Company and MTL with advisory services, in consideration for (i) a fixed immaterial sum; and (ii) issuance of Ordinary shares of the Company, representing 4%of the Company's issued and outstanding share capital on a fully diluted basis7 subject to certain anti-dilution provisions )the "Advisory Shares"(. Commencing as of January 97 22957 The Company and MTL shall pay an availability fee equal to an annual rate of 2.5% of any amount of the outstanding annual unused portion of the Credit Line, calculated as an average of the monthly amounts unused.
f. The Loan (and interest) and the Facility Notes (if used), are convertible into Ordinary Shares of the Company at Sigma's option7 representing 95.26% of the Company's issued and outstanding share capital on a fully diluted basis (including the Advisory Shares). However, conversion of the Loan and Facility Notes, in addition to conversion of the Previous Loan7 shall entitle Sigma to a percentage in the Company's issued and outstanding share capital, on a fully diluted basis, of 25% only (rather than all 28.56% to which it would have otherwise been entitled under both the Previous Loan and the current Agreement.
g. The Agreement further includes terms customary to such convertible loan transactions, including but not
limited to representations and warranties, indemnification, limitations on certain future actions and transactions, reporting requirements, liens on THE COMPANY AND MTL 's assets and guarantees (to secure the Loan and Credit Line) and payment of fees and expenses to Sigma. Sigma is also entitled to nominate a member of the Company's Board of Directors until its holding or debt fall below a certain threshold. In addition, the Agreement contains The Company and MTL right to demand prepayment, whereupon, Sigma has the right to (i) convert the outstanding principal and accrued but unpaid interest or (ii) to approve such prepayment for such outstanding principal and accrued but unpaid interest multiplied by 1.5 or by 2 if made respectively, prior to the First Maturity Date, or at any time on or after to the First Maturity Date.
h. Upon execution of the Agreement, The Company and MTL received the Loan payment of $US 500,000.
Availability of the Credit Line and the completion of the Transaction are subject to consummation of a closing, expected to take place within the following weeks.
i. Among the guarantees to be provided under the Transaction, Messrs. Moshe Nur, Noam Allon, Gil Allon and Ariel Shenhar (the "Guarantors"), controlling shareholders of the Company who also serve as its directors and officers, each undertook to deliver Sigma personal promissory notes in an aggregate sum of up to US$,427222 )the "Personal Guarantees"(. The Personal Guarantees shall be allocated among the Guarantors pro-rata to their shareholdings in the Company and are intended to secure repayment of the Loan and any used Credit Line and the performance of The Company and MTL's undertakings pursuant to the Agreement.
j. The Guarantors shall not receive any consideration or other personal benefit whatsoever in connection with the Personal Guarantees, other than the benefit derived by The Company and MTL and its shareholders generally from the availability of the Loan and Credit Line for funding The Company and MTL's activities.
This information as well as other financial information can also be consulted on the Company's website (www.
medivision.co.il) under - Investor Relations tab.
This Report contains certain forward-looking statements and information relating to the Company that are based on the beliefs of t he Management of the Company as well as assumptions made by and information currently available to the Management of the Company. Such statements reflect the current views of th e Company with respect to future events, the outcome of which is subject to certain risks including but not limited to as listed below and other factors, which may be outside of the Company's control. Sho uld one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results of outcomes may vary materially from those described herein as projected, anticipated, believed, estimated, expected or intended. Such abovementioned risks include but are not limited to:
1. Uncertain market acceptance of Company products - The Company's future growth and profitability will depend, in large part, on the acceptance by the market of the Company's existing and proposed products. This acceptance will be substantially dependent on educating the market as to full capabilities, disti nctive characteristics, perceived benefits and efficacy of the Company's existing and proposed products. In addition, the future success of the Company's products will depend on their acce ptance by customers and on such customers' willingness and ability to purchase such products. There can be no assurance that the Company's products will receive the necessary market acceptance. Failure of the C ompany's existing and/or proposed products to gain market acceptance could have a material adverse effect on the Company's business, financial condition and results of operations.
2. New products - The Company, through its Research and Development teams, engages in the development of new technologies and products and in t he upgrading and improvement of existing ones. There is no certainty that development of these technologies and/or products will be completed, successfully, or at all, or if completed succe ssfully, that a market for them will exist.
|
distributed by
|
