RNS Number:7090L
IDMoS plc
14 January 2008
For Immediate Release 14 January 2008
IDMoS plc
Preliminary Results for the year ended 31 July 2007
Fundraising to raise approximately �1.54 million net of expenses through the
issue of 6,608,694 new ordinary shares at 25p
IDMoS plc (AIM: IDO) ('IDMoS' or the 'Group'), the specialist in disease
detection and monitoring technology, is pleased to announce its Preliminary
Results for the year ended 31 July 2007 and the conditional fundraising (the
"Fundraising") of approximately �1.54 million net of expenses.
Highlights
* Fundraising of approximately �1.54m net of expenses completed on 14
January 2008, subject to admission to trading on AIM and shareholder
approval;
* Successful UK launch of CarieScan and CarieScan Plus at October 2007
British Dental Trade Association meeting;
*�83,142 sales since October launch
o orders for 100 units received to date
o endorsement of CarieScan by Denplan; and
o ongoing expansion of direct marketing through local distributors
* Excellent progress made towards a definitive resolution of Dentsply's
involvement in the global commercialisation of IDMoS's dental products;
* Successful Irish launch of CarieScan in early November;
* Company substantially restructured and product review completed; and
* Board restructured and company refocused on immediate requirements of
dental product launch.
The Fundraising
In total, the Company proposes to issue 6,608,964 new Ordinary Shares. These
consist of the conditional placing of 5,354,514 Ordinary Shares of 5p each (the
"Placing"), a conditional subscription (including a subscription by certain of
the Directors) for 860,000 Ordinary Shares in aggregate, and the issue of
394,180 new Ordinary Shares to its advisers in lieu of fees ("Adviser Fee
Shares"). All 6,608,694 new Ordinary Shares will be issued at a price of 25p per
new Ordinary Share.
In total, the Company is issuing 6,608,694 new Ordinary Shares, representing
approximately 27.5 per cent of the current issued ordinary share capital of the
Company. The new Ordinary Shares to be issued pursuant to the Placing have been
placed by Nomura Code Securities Limited ("Nomura Code"), on behalf of the
Company, with institutional investors. The Placing will be fully underwritten by
Nomura Code subject to approval at the Extraordinary General Meeting.
The Fundraising is conditional, inter alia, on admission of the new Ordinary
Shares to trading on AIM and the approval by shareholders of certain resolutions
to be proposed at an Extraordinary General Meeting to be held by the Company on
8th February 2008. A circular will be sent to shareholders shortly, together
with the notice of EGM.
It is expected that, following the issue of the new Ordinary Shares, the
enlarged share capital of the Company will comprise 30,681,906 ordinary shares
of 5p each.
Directors' participation
Certain of the Directors have agreed to subscribe for an aggregate of 660,000
Subscription Shares under the Fundraising at the Issue Price, as set out in the
table below:
Name Aggregate price Number of Current shareholding Per cent shareholding
payable Subscription Shares following Admission
Roger �100,000 400,000 - 1.30%
McDowell*
Peter �25,000 100,000 92,397 0.63%
Murray
Malcolm �20,000 80,000 65,143 0.47%
Gillies
Graham �20,000 80,000 - 0.26%
Lay
Note: * The Subscription Shares being subscribed for by Roger McDowell are being
subscribed for by a pension fund.
John Pool, Chairman said:
"We believe that we have taken the necessary steps over the last few months to
restructure the business and enable it to achieve a number of significant
milestones. With the continued support of our shareholders to whom we extend our
thanks as well as contributions from the Group's directors, the business is now
sufficiently funded to move it forward into this positive commercialisation
phase. The Company looks forward to reporting on significant sales over the
coming year."
For further information please call:
IDMoS plc 01382 598 440
John Pool / Graham Lay
Buchanan Communications 0131 226 6150 / 020 7466 5000
Diane Stewart/Tim Anderson/
James Montgomerie
Chairman's Statement
I am delighted to announce IDMoS's preliminary results for the year ended 31
July 2007 and the conditional fundraising of approximately �1.54m net of
expenses.
During the year the Board spearheaded a complete review of the IDMoS business to
enable it to achieve a number of key milestones and with the net proceeds from
the latest fundraising round available, I believe that the business is now
robust and has a firm financial basis on which to progress to the full
commercialisation phase.
Having completed the restructuring and secured the latest funding round, my role
as Interim Executive Chairman is now complete and as a result, I am today
announcing that I am stepping down as Executive Chairman and from the Board
following the Extraordinary General Meeting on 8th February 2008.
Roger McDowell, currently one of our independent non-executive Directors, will
assume the role of Interim non-executive Chairman following the EGM. Roger has
brought a wealth of financial and commercial experience since he joined the
Board in June 2007. He worked for some 20 years with a pipeline manufacturing,
products and supplies company, of which he was subsequently managing director.
This company achieved a full listing on the London Stock Exchange, and in 1998
was sold to a French industrial company. Since then, he has held a number of
non-executive appointments in both private, full list and AIM quoted companies.
In July, I announced the appointment of Graham Lay to the role of Chief
Operating Officer. I am now delighted to announce that Graham will assume the
role of Chief Executive Officer with immediate effect. Graham has brought
extensive experience in the medical devices arena and in particular the
commercialisation of clinical products, obtained during his lengthy employment
at Johnson & Johnson. Graham was tasked with revitalising the drive towards
commercialisation and I am pleased to report that we are beginning to see the
benefits of his experience with the internal restructuring of the company and
the UK and Irish product launches.
During the year it became clear that we needed to make a number of other changes
to the management and the strategy of IDMoS in order to position it to be able
to deliver shareholder value and to enable it to make the transition from a
scientific and technical research company into a revenue generating
organisation. This review is substantially complete and we now believe that we
are in a much stronger position to produce significant and increasing revenues
over the coming year.
In the summer we significantly strengthened the Board by adding the core skills
that we felt were necessary to take the company's products successfully through
to commercialisation. In addition to the other appointments, Malcolm Gillies
joined the Board as a non-executive Director, bringing a wealth of legal,
financial and commercial experience to the Board.
We also identified the skill sets that were no longer appropriate to the
refocused business.
All transitions have staffing implications and after the year end we announced
that Mikael Bronnegard, who had previously headed the Group's medical
activities, had left the Company as we refocused our resources on our dental
activities. Both areas now directly report to Graham Lay. Stephen Westwood, who
steered the business through its early years, also left us during the year.
I am pleased to be able to report that since the financial year end we have
launched our products in the UK and Ireland in conjunction with our UK partners
Denplan, who have endorsed the product to its network of 6,500 dental practices,
representing over 70% of the UK dental plan market.
Sales began in October 2007. In October we showcased our CarieScan (previously
called the Caries Detection Device or CDD) and CarieScan Plus (previously called
the Caries Management Support System or CMSS) products at the UK's largest
dental gathering, the British Dental Trade Association conference at the NEC in
Birmingham. This was attended by some 12,000 dental professionals. There was
strong interest in our products at that exhibition and as well as following up
on a number of leads, we also received our first order for 100 units ahead of
the launch.
The sales launch is being monitored by our global partner, Dentsply Inc., as it
will produce valuable data for planning pricing, consumer usage and
manufacturing volume when our dental products are sold globally. The Board is
pleased to report the outcome of a positive meeting with our worldwide
distribution partner Dentsply. Excellent progress was made towards a definitive
resolution of Dentsply's involvement in the global commercialisation of IDMoS's
dental products. We anticipate that this process will be concluded by the end of
March 2008.
To conclude, we believe that we have taken the necessary steps over the last few
months to restructure the business and enable it to achieve a number of
significant milestones. With the continued support of our shareholders to whom
we extend our thanks, the business is now sufficiently funded to move it forward
into this positive commercialisation phase. The Company looks forward to
reporting on significant sales over the coming year.
John Pool
Chairman
IDMOS plc
Operating and Financial Review
Chief Operating Officer's Report
The Year
2007 has been a year of challenge for IDMoS plc, with the recognition on the
part of the board that it was necessary for the business to move to a more
proactive and directed approach, with the emphasis on revenue generation. I was
appointed Chief Operating Officer in July, replacing outgoing Chief Executive,
Stephen Westwood. In conjunction with the Board, I have been carrying out a
strategic review of the business, its direction and its internal processes.
Whilst this review is not yet complete, we have already made a number of
changes. These have enabled the business to generate revenues in the seven
months since my appointment, and have redefined the business model to a fully
aligned, commercial approach.
It was also essential to reduce our 'run rate' or monthly spend. This has been
achieved by aggressive reductions in all areas where cost could either be
removed or postponed. At the same time it was necessary to tighten the focus of
the business on moving to revenue generation. This has required changes in all
areas of the business including bringing in-house essential core competencies
previously supported by external consultancies and ensuring that there are tight
controls over capital expenditure.
The Technology
IDMoS is founded on a horizontal platform technology, Alternating Current
Impedance Spectroscopy Technique (ACIST). This technology is well protected by
IP licensed or owned by IDMoS. There are a substantial number of vertical
applications stemming from ACIST. The first, resulting in the dental products is
well described. The company had already determined that subsequent opportunity
exists in both the Osteoporosis and Skin Cancer measurement areas. To this end,
early evaluation of the applications has been undertaken along with early
clinical 'proof of principle' work which will enable the business to make an
effective assessment of development opportunities available when revenues/funds
permit.
Moving to Revenues
To meet with both the needs of the dentist and the market (including
distributors) the requirements for the product features were revisited,
resulting in a validated product offering both simplicity in use and validated
outputs. It is this revised product which now bears the CarieScan trademark. All
other activity was placed on hold while the company focused on bringing the
revised dental products to completion. Following validation, these products were
CE marked in compliance with the Medical Device Directive, supported by the
company's compliance with ISO13485:2003. Development activity on the production
of the interproximal sensor was re-evaluated. A revised product development
program is now in place targeting a move into clinical trials in mid 2008.
The performance of CarieScan exceeds all competitive products, with both
specificity (number of times we identify sound teeth) and sensitivity (number of
times we identify caries) in excess of 92%. As well as providing clear
indication of both sound teeth and the presence of caries, CarieScan provides
the user with a qualitative (numeric) value which enables the progression of
carious lesions to be monitored and preventive rather than restorative
treatments undertaken. Less drilling for the dentist, fewer fillings for the
patient. Even when fillings are indicated these can be precisely placed and are
smaller than when using conventional visualisation methods.
Dentsply
The Board is pleased to announce the outcome of a meeting between Dentsply and
IDMoS in December 2007 about progression to a definitive resolution of
Dentsply's involvement in the global commercialisation of IDMoS's dental
products. Agreement on the joint activities necessary to reach such a resolution
was made and both parties will be pursuing these activities with a target
completion of activities at the end of the first quarter 2008.
IDMoS and Dentsply formed a partnership in 2005 with expectation of moving to
sales and revenue for both parties in 2006. The terms of the agreement between
IDMoS and Dentsply confines IDMoS in terms of independent sales. The revised
product was offered to Dentsply who, constrained by processes external to IDMoS
were unable to pursue immediately. On this basis the two parties agreed that
IDMoS would have the right to distribute product into the UK and Ireland
independently of the main agreement which to date remains unchanged. IDMoS will
share the resultant market data with Dentsply to enable forecasting and
benchmarking on pricing, volume/uptake and opportunity validation when the
product goes onto the global market. We intend to actively pursue moving forward
to global sales whether within, or outside of the Dentsply agreement.
Denplan
With the freedom to market independently into the UK we have been fortunate to
be strongly supported by Denplan UK. Denplan are the largest provider of private
health care in the UK with over 70% of the UK Dental Plan practice market (6500
practices). Both companies see strong synergy in working together. This was
reinforced by Dr Roger Matthews, Chief Dental Officer, Denplan, who stated: "We
are extremely impressed with the instruments and the research findings to date
and welcome the chance to promote it to our members as a truly innovative aid to
early diagnosis and an integral part of preventive practice." This endorsement
aids IDMoS access to these practices and potentially 24,000 dentists.
The business model for the CarieScan is strong, offering good margin
opportunities throughout the supply pipeline, with elements for distributors,
dentists and patients. For IDMoS, the CarieScan enables strong margins, with
ongoing revenues from sensor sales, true also for the distributors. For the
dentist not only is there a reimbursable element, it allows accurate assessment
and monitoring of disease status - enabling the monitoring of treatment
effectiveness. For the patient it offers the possibility of repair and
prevention rather than restoration (filling).
A branding exercise has been undertaken for the IDMoS dental product range with
the Caries Detection Device (CDD) now renamed the CarieScan TM and the Caries
Management Support System (CMSS) the CarieScan Plus. The products were launched
at the British Dental Trade Association showcase meeting at the NEC Birmingham
during October 18 - 20. Both UK and Irish distributors are in the process of
being appointed. The products were launched in Ireland at the Interplex (Irish
Dental Association) meeting in November. First orders for the product were
received ahead of the UK launch, which saw additional orders and substantial
distributor interest.
As part of the UK launch we introduced a product specific web site
www.CarieScan.com which is designed not only to provide product information, but
includes all of the clinical references relative to the product, video
presentation of the product and an interactive overview of the use and feature
set of the product along with product manual downloads, FAQ's and support
information. Based on hit rates this has been well received by the market and
demonstrates an extension of our marketing reach.
The Organisation
To meet the challenges of moving to revenues, it has been necessary for the
organisation to adapt. Changes have been made across the business with a number
of internal promotions and appointments, and necessarily some losses.
One core competence brought in house has been that of Quality, with the internal
appointment of a Quality Manager and the recruitment of a documentation
controller. This approach was validated when we passed our last audit to
ISO13485:2003 with only two minor non compliances.
We have added to the Sales and Marketing resource, to cover not only direct
sales but also to support our distributor base.
To support our move into the market, product has been sourced from our two
primary suppliers SKF and Medifiq. Both these suppliers are qualified to
ISO13485:2003 and have been audited by IDMoS for compliance to our internal
requirements.
Competition
There are two directly competing technologies on the caries detection market
today, both optically based. One uses laser technology to measure the
fluorescence in the pits and fissures of the occlusal surface While this
technique has been shown to be 90% accurate at detecting caries where operative
care would be advised, the system suffers 'false positive' issues which may be
caused by stains or other contamination on the tooth which limit its clinical
utility.
The second uses a white light LED to assess the optical properties of the tooth,
indicating the presence of caries, as the tooth demineralises. Although claiming
92.3% accuracy in detecting caries requiring restoration, the system suffers the
same issues of false positives, with a specificity of only 69%, potentially
leading to greater than 30% false positives.
Key in the detection of caries is the ability to detect disease that requires
operative treatment. Furthermore, to minimise the risk of unnecessary drilling
and filling, the ability to detect healthy enamel is required. While the ability
to measure caries in progress allows the dental team to take preventive action
and monitor therapy.
Financial Performance
Results
We are reporting a loss before tax of �3.5m for the year ended 31 July 2007.
This is net of interest earnings of �33k.
Cash and Funding
During the year we completed two fundraisings of �1.9m in December 2006 and
�2.0m fundraising in July 2007 to fund product launch. The cash position at the
end of the year was �1.3m. Our current cash burn has been reduced below �150k
per month.
Fundraising
IDMoS today announces the conditional raising of approximately �1.54 million net
of expenses. In total, the Company proposes to issue 6,608,694 new Ordinary Shares.
These consist of the conditional placing of 5,354,514 Ordinary Shares of 5p each
at 25 pence per share (the "Placing"), a conditional subscription (including a
subscription by certain of the Directors) for 860,000 Ordinary Shares in aggregate
and the issue of 394,180 shares to its advisers in lieu of fees. All 6,608,694
shares will be at a price of 25p per new Ordinary Share and represent approximately
27.5 per cent of the current issued ordinary share capital of the Company.
The new Ordinary Shares to be issued pursuant to the Placing have been placed by
Nomura Code Securities Limited ("Nomura Code"), on behalf of the Company, with
institutional investors. The Placing will be fully underwritten by Nomura Code
subject to approval at the Extraordinary General Meeting.
The net proceeds of the Fundraising (�1.54m) will be used to meet the Company's
requirements for working capital and to meet certain costs in relation to expanding
its sales channels, building inventory and further development following the successful
launch of the Company's initial dental products, the CDD ("Caries Detection Device")
and the CMSS ("Caries Management Support System") in the UK and Ireland.
The Fundraising is conditional, inter alia, on admission of the new Ordinary
Shares to trading on AIM and the approval by shareholders of certain resolutions
to be proposed at an Extraordinary General Meeting to be held by the Company on
8th February 2008. A circular will be sent to shareholders shortly together with
the notice of EGM.
Application will be made for the new Ordinary Shares to be admitted to trading
on AIM and it is expected that trading in the new Ordinary Shares, which will
rank from Admission pari passu in all respects with the existing ordinary shares
in the Company, will commence on AIM by 11th February 2008.
It is expected that, following Admission, the enlarged share capital of the Company
will comprise 30,681,906 ordinary shares of 5p each.
Outlook and Opportunities
Current Trading and Prospects
Since the launch of the CarieScan in October 2007, we have made a good start in
selling products. Total sales invoiced so far are �83,142 representing end user
(52) and distributor (100) sales in total. We currently see a high level on
interest both within the UK and globally from distributors (17) and dentists
(200+), and Denplan have shown their enthusiasm for the CarieScan product. The
new funds raised in the Fundraising provide adequate capital to capitalise on
the interest we have seen so far. We look forward to concluding our relationship
with Dentsply in the near future and in delivering significant sales growth over
the next year.
Interproximal Sensors
Completion of the interproximal sensor development is a high priority for the
business enabling completion of the first generation of dental products. The
interproximal concepts have been evaluated and we are moving into the main
development phase at this time, which will be followed by performance
evaluations and validation activity. Availability of the product is forecast for
Q3 2008.
Osteoporosis & Skin Cancer
ACIST technology opens the door to qualitative measurements in these application
areas. At this time the business is firmly focused on revenue generation and the
completion of the first generation of dental products. Early assessment of both
the markets and technology indicates high values for products in both these
application areas.
With appropriate resourcing it is the intention of the company to complete the
market assessment and follow development pathways for these and subsequently
additional ACIST based applications.
Graham Lay
Chief Operating Officer
IDMoS plc
Consolidated profit and loss account
for the year ended 31st July 2007
2007 2006
Note � �
Group turnover - -
Cost of sales - -
Gross profit - -
Other operating income and charges (3,534,855) (2,887,712)
Operating loss (3,534,855) (2,887,712)
Interest receivable 32,652 117,621
Interest payable - (983)
Loss on ordinary activities before (3,502,203) (2,771,074)
taxation
Tax on loss on ordinary activities - -
Loss for the financial year (3,502,203) (2,771,074)
Basic and diluted loss per share (19.41p) (17.27p)
All of the activities of the Group are classed as continuing.
The Group has no recognised gains and losses other than the results for the year
as set out above.
The accompanying accounting policies and notes form an integral part of these
financial statements.
Consolidated balance sheet
as at 31st July 2007
2007 2006
Note � �
Fixed assets 116,949 153,397
Tangible assets
Current assets
Stocks 227,752 58,100
Debtors 100,580 142,476
Cash at bank and in hand 1,338,808 1,434,265
1,667,140 1,634,841
Creditors: amounts falling due within one 559,532 808,794
year
Net current assets 1,107,608 826,047
Total assets less current liabilities 1,224,557 979,444
Capital and reserves
Called up share capital 1,203,661 812,391
Share premium account 9,325,129 5,969,083
Other reserves (34,977) (34,977)
Profit and loss account (9,269,256) (5,767,053)
Shareholders' funds 1,224,557 979,444
Consolidated cash flow statement
for the year ended 31st July 2007
2007 2006
Note � �
Net cash outflow from operating (3,851,914) (2,972,285)
activities
Returns on investments and servicing of
finance
Interest received 32,652 117,621
Interest paid - (983)
Net cash inflow from returns on 32,652 116,638
investments and servicing of finance
Capital expenditure
Purchase of tangible fixed assets (23,511) (151,318)
Net cash outflow from capital (23,511) (151,318)
expenditure
Management of Liquid Resources 1,062,629 (1,062,629)
Financing
Issue of shares 3,900,000 2,333,776
Expenses paid in connection with share (152,684) (61,340)
issues
Net cash inflow from financing 3,747,316 2,272,436
Increase/(Decrease) in cash 967,172 (1,797,158)
Notes to the Financial Statements
for the year ended 31st July 2007
1. Basic and diluted loss per share
The calculation of the basic and diluted loss per share is based on the loss
attributable to ordinary shareholders divided by the weighted average number of
shares in issue during the year.
FRS 22 requires presentation of diluted EPS to reflect all outstanding share
options where their future exercise would decrease net profit or increase net
loss per share. For a loss making Company with outstanding share options, net
loss per share would only be increased by the exercise of options and as such
the effect is anti-dilutive.
Reconciliations of the loss and weighted average number of shares used in the
calculations are set out below.
2007 2006
� �
Loss attributable to shareholders (3,502,203) (2,771,074)
Weighted average number of shares 18,043,683 16,045,475
Basic and diluted loss per share (19.41p) (17.27p)
2. Net cash outflow from operating activities
2007 2006
� �
Operating loss (3,534,855) (2,887,712)
Depreciation 59,959 37,690
Decrease/(Increase) in debtors 41,896 (45,381)
(Increase) in stock (169,652) (58,100)
(Decrease) in creditors (249,262) (18,782)
Net cash outflow from operating (3,851,914) (2,972,285)
activities
3. Reconciliation of net cash flow to movement in net funds
2007 2006
� �
Increase / (Decrease) in cash in the year 967,172 (1,797,158)
(Decrease)/Increase in liquid resources (1,062,629) 1,062,629
Net funds at 1 August 1,434,265 2,168,794
Net funds at 31 July 1,338,808 1,434,265
4. Reconciliation of movements in shareholders' funds
2007 2006
� �
Loss for the financial year (3,502,203) (2,771,074)
Issue of shares (net of issue expenses) 3,747,316 2,272,436
Net increase /(decrease) in 245,113 (498,638)
shareholders' funds
Shareholders' funds at 1 August 979,444 1,478,082
Shareholders' funds at 31 July 1,224,557 979,444
Attributable to:
Equity shareholders 1,224,557 979,444
5. Basis of Preparation -
The financial information set out above does not constitute the Company's
statutory financial statements for the year ended 31st July 2007 or the year
ended 31 July 2006 but is derived from those financial statements. Those
financial statements have been reported on by the Company's auditors. The report
of the auditors was unqualified. However, the auditors have highlighted an
emphasis of matter with regard to the going concern.
The Basis of Preparation paragraph in the audited financial statements reads as
follows:
The financial statements have been prepared in accordance with applicable United
Kingdom accounting standards and under the historical cost convention.
The group accounts have been prepared on the going concern basis. Following the
year end the group has started to generate revenue, however, there is
significant uncertainty over the level of forecast sales for the next twelve
months. In order to mitigate the risk posed by this uncertainty, the group has
initiated a process to obtain additional funding through the issue of share
capital. At the time of signing the financial statements the directors had
received commitments to raise approximately �1.54m net of expenses, which is
being fully underwritten by Nomura Code, subject to approval at the
Extraordinary General Meeting. If the projected level of sales materialise then
the group is unlikely to require further funding.
However, if sales are delayed or do not materialise at the level projected, the
directors would have to seek further funding.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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