Ki-Bi Mobile Technologies Ltd. Interim Results for the Period to 30 June 2005.LONDON London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. -- Ki-Bi Mobile Technologies, (the "Company" or "Ki-Bi") a leading provider of pocket-sized pock·et-sized or pock·et·size adj. 1. Of a size suitable to be carried in a pocket: a pocket-sized radio. 2. digital cards for downloading downloading - download premium content to mobile handsets, announces its half year results to 30 June June: see month. 2005. Financial Highlights --Revenues increased 160% to $0.38m (H1 2004: $0.14m) --Operating loss was $1.43m (H1 2004: $0.59m), reflecting a significant investment in the Company's operations for future growth --Loss for period of $2.1m (H1 2004: $0.59m) --Net cash balances at 30 June 2005 amounted to $15.5m following admission to AIM in May 2005 --Fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. loss per share of $0.10 (H1 2004: loss of $0.20 per share) Operational Highlights --Research & Development spending increased by 126% to $0.77m --Sales & Marketing investment doubled to $0.31m (H1 2004: $0.15m) establishing a significant presence in key markets of Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and
the US--To date, Ki-Bi has signed deals with global leaders in the mobile market such as Ericsson Er·ics·son , John 1803-1889. American engineer and inventor who built the first ironclad warship, the Monitor (1862), which engaged the Confederate Merrimack in a famous naval battle of the Civil War (March 9, 1862). , Orange, O2, MTV MTV in full Music Television U.S. cable television network, established in 1980 to present videos of musicians and singers performing new rock music. MTV won a wide following among rock-music fans worldwide and greatly affected the popular-music business. , Ericsson, Siemens (Siemens AG, Munich, Germany, www.siemens.com) A leading European electrical and electronics firm founded in 1847. Siemens has more than 430,000 employees in nearly 200 countries, and more than 50,000 professionals are engaged in research and development. , Motorola (Motorola, Inc., Schaumburg, IL, www.motorola.com) A leading manufacturer of semiconductor devices, electronics, telecommunications and satellite systems. Founded in Chicago in 1928 by Paul V. , and other leading mobile content providers and aggregators. --The Company announces new partnerships and deals with additional global partners including Accenture (Accenture, Chicago, IL, www.accenture.com) The world's largest management and technology consulting firm, which was spun off of Arthur Andersen & Co. in 1989 as a separate entity known as Andersen Consulting. , Sun Microsystems Sun Microsystems, Inc. (NASDAQ: JAVA[3]) is an American vendor of computers, computer components, computer software, and information-technology services, founded on 24 February 1982. , Reuters Reuters British cooperative news agency. Founded in 1851 by Paul Julius Reuter, it was initially concerned with commercial news but began to serve a growing newspaper clientele after the London Morning Advertiser subscribed in 1858. and Giant Steps --Today, Ki-Bi announces a major breakthrough into Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. and New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. , six months ahead of schedule, through a distribution agreement with reseller An organization that sells hardware and software to the general public. Resellers purchase products from software publishers and hardware manufacturers. , RT Developments G.I.M. PTY Ltd PTY LTD Propriety Limited (company structure in Australia) Commenting on the results, Ehud Ehud (ē`həd). In the Bible, judge of Israel. He delivered Israel from Moab. Ehud freed Israelites from Moabites by murdering king. [O.T. Levy To assess; raise; execute; exact; tax; collect; gather; take up; seize. Thus, to levy a tax; to levy a Nuisance; to levy a fine; to levy war; to levy an execution, i.e., to levy or collect a sum of money on an execution. A seizure. , Chief Executive of Ki-Bi, said: "In the first half of 2005 we have expanded operations rapidly, thereby enabling the Company to establish an early mover mover /mov·er/ (moo´ver) that which produces motion. prime mover a muscle that acts directly to bring about a desired movement. advantage in the potentially huge market for mobile content distributed through physical formats. "Ki-Bi's market position and balance sheet have been considerably strengthened by its placing and admission to AIM, providing the Company with a solid platform for long term growth. We entered the second half, as planned, with a strong pipeline of sales leads A sales lead is the identity of a person or entity potentially interested in purchasing a product or service, and represents the first stage of a sales process. The lead may have a corporation or business associated with the person(s). with some of the largest players in the industry. Our products were well received by some of the leading brands in the telecom and media business which reassures us of our future prospects and ability to deliver expected shareholders' value." Ki-Bi Technologies +44 207 929 8989 on the day ---------------------------------------------------------------------- Ehud Levy +972 3 6061101 thereafter ---------------------------------------------------------------------- Corfin Communications ---------------------------------------------------------------------- Harry Chathli, Neil Thapar + 44 207 929 8989 ---------------------------------------------------------------------- Overview Ki-Bi is pleased to announce its maiden MAIDEN. The name of an instrument formerly used in Scotland for beheading criminals. results since admission to London's Alternative Investment Market in May 2005. The figures cover two months' trading as a public company. Revenues increased by 160% to $0.38m in the first half compared with $0.14m for the corresponding period last year, reflecting an increase in demand for Ki-Bi cards from mobile phone companies, retailers and major brands. The loss before and after tax amounted to $2.1m, up from $0.59m. The increase was largely due to higher investment in research & development, the expansion of the international sales and marketing infrastructure in key markets of North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Europe and a foreign exchange cost. The market for Ki-Bi cards is still in its infancy infancy, stage of human development lasting from birth to approximately two years of age. The hallmarks of infancy are physical growth, motor development, vocal development, and cognitive and social development. but offers considerable growth potential as it represents a much-in-demand new physical distribution channel (as opposed op·pose v. op·posed, op·pos·ing, op·pos·es v.tr. 1. To be in contention or conflict with: oppose the enemy force. 2. to a virtual channel such as the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the ) for selling premium content to mobile device users and to support brands in their mobile marketing campaigns. Though embedded Inserted into. See embedded system. with advanced technology, the cards provide consumers with a highly user-friendly user-friendly - Programmer-hostile. Generally used by hackers in a critical tone, to describe systems that hold the user's hand so obsessively that they make it painful for the more experienced and knowledgeable to get any work done. means of selecting, purchasing and downloading any content such as music, games and ringtones at the touch of a button. With overall demand for mobile content expected to increase from approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $8bn to more than $30bn, there is a strong interest from a variety of businesses in tapping this market through the provision of such cards. In line with the strategy outlined at the time of the Company's flotation flotation or froth flotation Most widely used process for extracting many minerals from their ores. The method separates and concentrates ores by altering their surfaces so that they are either repelled or attracted by water. , Ki-Bi has made significant progress within a very short period of time in penetrating penetrating breaching the tissues of the body. its primary target markets among major media and content owners, retailers and mobile phone companies. In addition, many other consumer facing organisations in number of territories are also evaluating the potential for Ki-Bi cards to enhance their promotional activities and customer loyalty campaigns. Operational review The most significant milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. in the first half was the Company's success in raising a gross GBP GBP In currencies, this is the abbreviation for the British Pound. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 10m from a share placing and admission to AIM. The funds have significantly increased the Company's ability to establish itself as a leading provider of hi-tech hi-tech adj. Variant of high-tech. hi-tech Adjective using sophisticated, esp. electronic, technology Adj. 1. cards that facilitate the downloading of premium content to mobile devices. Since the flotation, the Company has deepened relationships with over 25 existing and potential new customers that have evaluated its products and solutions. Research and development spending was increased by 126% to $0.77m partly due to investment in new server capabilities and proprietary IVR (Interactive Voice Response) An automated telephone information system that speaks to the caller with a combination of fixed voice menus and data extracted from databases in real time. , development of improved chip programmers This is a list of programmers notable for their contributions to software, either as original author or architect, or for later additions. See also: Game programmer, List of computer scientists and software for the production line and completion of third generation decoders for CDMA (Code Division Multiple Access) A method for transmitting simultaneous signals over a shared portion of the spectrum. The foremost application of CDMA is the digital cellular phone technology from QUALCOMM that operates in the 800 MHz band and 1.9 GHz PCS band. support. Higher R&D costs were also incurred in response to rising number of customer requests for cards for market evaluation. As planned at the time of the flotation, the Company has made significant progress in building an international sales and marketing infrastructure for long term growth. The number of sales and marketing personnel worldwide increased to 14. In the US the Company has recruited a core sales and marketing team with staff of four. Our European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. operations, based in the UK, added four new staff to take total numbers in that region to six. Early results from the enlarged sales and marketing function are encouraging. The Company is in talks with leading network operators and brands, media, content providers and leading retailers in US and Europe. To date, Ki-Bi has relationships with global leaders in the mobile market such as Ericsson, Orange, O2, MTV, Ericsson, Siemens, Sun Microsystems, Motorola, and leading mobile content providers and aggregators and others. The US market is showing a high level of interest in Ki-Bi solutions as major content providers in the gaming sector, music and the film industry establish wireless content divisions to address the rapid growth in demand for mobile content. While this bodes well for the future, many of these businesses are still in the process of formulating strategies to monetise the value of their content, stretching our sales cycle. Nevertheless, the Company expects a much stronger second half of 2005 compared with the first half with many potential customers looking to use Ki-Bi cards in their Christmas Christmas [Christ's Mass], in the Christian calendar, feast of the nativity of Jesus, celebrated in Roman Catholic and Protestant Churches on Dec. 25. In liturgical importance it ranks after Easter, Pentecost, and Epiphany (Jan. 6). campaigns. Today, we also announce a major breakthrough into Australia and New Zealand, six months ahead of schedule, with distribution agreement with the reseller RT Developments G.I.M. PTY Ltd. We expect the agreement to result in Ki-Bi cards being distributed to channels including network operators, media groups and retail markets within Australiasia, thereby providing the Company with access to an additional regional market of up to 20 million end-users. Outlook Ki-Bi's market position and balance sheet have been considerably strengthened by its placing and admission to AIM, providing the Company with a solid platform for long term growth. We entered the second half, as planned, with a strong pipeline of sales leads with some of the largest players in the industry. Our products have been well received by some of the leading brands in the telecom and media business which reassures us of our future prospects and ability to deliver expected shareholders' value.
KI-BI MOBILE TECHNOLOGIES LTD.
BALANCE SHEETS
----------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)
30 June 31 December
2005 2004
----------- -----------
(Unaudited)
-----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 15,540 $ 132
Trade receivables 116 -
Other accounts receivable and prepaid
expenses 188 54
Inventories 266 265
-------- -------
Total current assets 16,110 451
----- -------- -------
SEVERANCE PAY FUNDS 59 42
-------- -------
PROPERTY AND EQUIPMENT, NET 198 183
-------- -------
Total assets $ 16,367 $ 676
----- ======== =======
LIABILITIES
CURRENT LIABILITIES:
Short-term bank credit $ - $ 3
Trade payables 134 244
Other accounts payable and accrued expenses 276 336
-------- -------
Total current liabilities 410 583
----- -------- -------
ACCRUED SEVERANCE PAY 89 70
-------- -------
Total liabilities 499 653
----- -------- -------
EQUITY:
Share capital:
Series A Convertible Preferred shares of
NIS 0.01 par value: Authorized: 0 and
2,611,176 shares as of 30 June 2005 and 31
December 2004, respectively; Issued and
outstanding: 0 and 2,611,176 shares as of
30 June 2005 and 31 December 2004,
respectively. - 4
Series A-1 Preferred shares of NIS 0.01 par
value: Authorized: 0 and 792,075 shares as
of 30 June 2005 and 31 December 2004,
respectively; Issued and outstanding: 0
and 520,576 shares as of 30 June 2005 and
31 December 2004, respectively. - 1
Series B Convertible Preferred shares of
NIS 0.01 par value: Authorized: 0 and
1,510,390 shares as of 30 June 2005 and 31
December 2004, respectively; Issued and
outstanding: 0 and 606,414 shares as of 30
June 2005 and 31 December 2004,
respectively. - 1
Ordinary shares of NIS 0.01 par value:
Authorized: 30,000,000 and 10,086,358
shares as of 30 June 2005 and 31 December
2004, respectively; Issued and
outstanding: 20,395,101 and 3,025,281
shares as of 30 June 2005 and 31 December
2004, respectively 43 4
Additional paid-in capital 20,279 2,395
Accumulated deficit (4,454) (2,382)
-------- -------
Total equity 15,868 23
----- -------- -------
Total liabilities and equity $ 16,367 $ 676
----- ======== =======
The accompanying notes are an integral part of the financial
statements.
KI-BI MOBILE TECHNOLOGIES LTD.
STATEMENTS OF OPERATIONS
----------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)
Six months ended Year ended
30 June 31 December
------------------------ ------------
2005 2004 2004
------------ ----------- ------------
(Unaudited) (Unaudited)
Revenues $ 357 $ 137 $ 787
Cost of revenues 296 90 741
------------ ----------- ------------
Gross profit 61 47 46
------------ ----------- ------------
Operating expenses:
Research and development 773 342 668
Sales and marketing 310 151 461
General and administrative 404 144 436
------------ ----------- ------------
Total operating expenses 1,487 637 1,565
----- ------------ ----------- ------------
Operating loss (1,426) (590) (1,519)
Financial income (expenses), net (646) (4) 15
------------ ----------- ------------
Loss $ (2,072) $ (594) $ (1,504)
============ =========== ============
Basic and diluted loss per share
(in U.S. dollars) $ (0.18) $ (0.20) $ (0.50)
============ =========== ============
Weighted average number of
shares used in computing basic
and diluted loss per share 11,710,188 3,025,281 3,025,281
============ =========== ============
The accompanying notes are an integral part of the financial
statements.
KI-BI MOBILE TECHNOLOGIES LTD.
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
----------------------------------------------------------------------
U.S. dollars in thousands
Additional
Share paid-in Accumulated
capital capital deficit Total
------- ---------- ----------- --------
Balance as of 1 January 2004 $ 8 $ 1,505 $ (878) $ 635
Issuance of Preferred B
shares, net of issuance
expenses 1 540 - 541
Issuance of Preferred A-1
shares 1 350 - 351
Loss - - (1,504) (1,504)
------- ---------- ----------- --------
Balance as of 31 December 2004 10 2,395 (2,382) 23
Issuance of Preferred A-1
shares *) - 97 - 97
Exercise of warrants to
Preferred B shares 1 811 - 812
Issuance of Preferred C
shares, net of issuance
expenses 1 491 - 492
Stock based compensation
related to options issued
to employees - 7 - 7
Conversion of all Preferred
shares into Ordinary shares - - - -
Bonus shares effected as
share split 8 (8) - -
Issuance of Ordinary shares,
net of issuance expenses 23 16,486 - 16,509
Loss - - (2,072) (2,072)
------- ---------- ----------- --------
Balance as of 30 June 2005
(Unaudited) $43 $20,279 $(4,454) $15,868
======= ========== =========== ========
*) Represents an amount lower than $ 1.
The accompanying notes are an integral part of the financial
statements.
KI-BI MOBILE TECHNOLOGIES LTD.
STATEMENTS OF CASH FLOWS
----------------------------------------------------------------------
U.S. dollars in thousands
Six months ended Year ended
30 June 31 December
-----------------------
2005 2004 2004
----------- ----------- -----------
(Unaudited) (Unaudited)
Cash flows from operating
activities:
-----------------------------------
Loss $ (2,072) $ (594) $ (1,504)
Adjustments to reconcile loss to
net cash used in operating
activities:
Share based compensation
expenses 7 - -
Depreciation 22 14 32
Increase in trade receivables (116) (49) -
Decrease (increase) in other
accounts receivable and
prepaid expenses (134) 133 110
Decrease (increase) in
inventories (1) 27 (209)
Increase (decrease) in trade
payables and other accounts
payable and accrued expenses (183) (114) 389
Increase in accrued severance
pay, net 2 - 28
----------- ----------- -----------
Net cash used in operating
activities (2,475) (583) (1,154)
----------- ----------- -----------
Cash flows from investing
activities:
-----------------------------------
Purchase of property and
equipment, net (37) (23) (99)
----------- ----------- -----------
Net cash used in investing
activities (37) (23) (99)
----------- ----------- -----------
Cash flows from financing
activities:
-----------------------------------
Short-term bank credit, net (3) (22) (19)
Proceeds from issuance of
shares, net of expenses 17,923 186 892
----------- ----------- -----------
Net cash provided by financing
activities 17,920 164 873
----------- ----------- -----------
Increase (decrease) in cash and
cash equivalents 15,408 (442) (380)
Cash and cash equivalents at the
beginning of the period 132 512 512
----------- ----------- -----------
Cash and cash equivalents at the
end of the period $ 15,540 $ 70 $ 132
=========== =========== ===========
The accompanying notes are an integral part of the financial
statements.
KI-BI MOBILE TECHNOLOGIES LTD.
NOTES TO FINANCIAL STATEMENTS
----------------------------------------------------------------------
U.S. dollars in thousands
NOTE 1:- GENERAL
These financial statements have been prepared in a
condensed format as of 30 June 2005, and for the six
months then ended. These financial statements should be
read in conjunction with the Company's audited annual
financial statements and accompanying notes as of 31
December 2004 and for the year then ended. Operating
results for the six-month period ended 30 June 2005 are
not necessarily indicative of the results that may be
expected for the year ended 31 December 2005.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
a. The interim financial statements were prepared in
accordance with International Financial Reporting
Standards ("IFRS") in relation to condensed interim
financial reports. The significant accounting policies
and methods of computation applied in the preparation of
the interim financial statements are the same as those
applied in the annual financial statements of the
Company as of 31 December 2004, except for the adoption
of IFRS 2 (see b below).
b. Adoption of new accounting standard:
On 1 January 2005, the Company has adopted IFRS 2,
"Share-based Payment". IFRS 2 requires an expense to
be recognized where the Company buys goods or services
in exchange for shares or rights over shares
("equity-settled transactions"), or in exchange for
other assets equivalent in value to a given number of
shares of rights over shares ("cash-settled
transactions"). The main impact of IFRS 2 on the
Company is expensing of employees' and directors'
share options and other share-based incentives by
using an option-pricing-model.
The cost of equity-settle transactions is measured by
reference to the fair value of the date which they were
granted. The cost of such transactions is recognized
together with a corresponding increase in equity, over
the vesting period.
Pursuant to the transitional provisions of IFRS 2, the
Company has applied IFRS 2 only to equity-settled
awards granted after 7 November 2002 and that had not
vested by 31 December 2004.
The effect of the initial adoption of IFRS 2 on the
six months ended 30 June 2005 is an increase in the
employee benefits expenses in the amount of $7 for the
six months ended 30 June 2005, with a corresponding
increase in additional paid-in capital.
The effect of the adoption of IFRS 2 for all periods
prior to January 1, 2005 (retrospective application)
is immaterial.
NOTE 3:- SHARE CAPITAL
a. Bonus shares:
In April 2005, the Board of Directors resolved to
issue to the shareholders of the Company one bonus
share for each two issued and outstanding shares and
to adjust the number of shares and exercise price
underlying each outstanding share option accordingly.
All share capital data included in these financial
statements for all periods presented have been
retroactively adjusted to reflect the bonus share.
b. Warrants:
On 31 March 2005, 561,375 warrants of Series B
Convertible Preferred shares were exercised for a
consideration of $511. On 7 April 2005, 21,972
warrants of Series B Convertible Preferred shares were
exercised for a consideration of $20. On 19 April
2005, 49,437 warrants of Series B Convertible
Preferred shares were exercised for a consideration of
$45. On 27 April 2005, 259,545 warrants of Series B
Convertible Preferred shares were exercised for a
consideration of $236.
c. Issuance of shares:
On 11 May 2005, the Company's shares were admitted to
trading in AIM, a market operates by the London Stock
exchange. Concurrently, the Company completed an
initial public offering ("IPO") of its Ordinary
shares. The Company issued 10,204,076 shares at a
price of 98 U.K. pence per share, before underwriting
discount and other issuance expenses. The net proceeds
from the IPO amounted to $16,509.
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