March 7, 2011 -- 3D, which owns the protected rights to a technology platform with a number of significant potential commercial applications, today announces its maiden interim results for the six month period ended 31 December 2010.
Highlights
- Successfully joined AIM in November 2010, raising £2.7m
- Distribution agreements in place in North America (USA and Canada) as well as the major European markets of Germany, Austria and Switzerland
- Further EU distribution agreements under discussion
- Initial sales into USA and Canada
- Second commercial application being planned
- £2m of cash at period end
- Industry recognition – Won Award in USA as “Best New Dental Diagnostic Product of 2011”
James Noble, Non-executive Chairman of 3D Diagnostic Imaging said: “3D made good progress in the six months to December 2010. Market acceptance of the CarieScan PRO has been encouraging and the Board expects significant increases in sales volumes to be made during 2011 and beyond.”
Contact Details:
3D Diagnostic Imaging Plc Graham Lay, CEO +44 (0) 1624 679 000 Oliver Cooke, CFO +44 (0) 1624 679 000
finnCap: NOMAD & Broker Geoff Nash, Henrik Persson (corporate finance) Stephen Norcross (corporate broking) +44 (0)20 7600 1658
Buchanan Communications Diane Stewart, Carrie Clement +44 (0) 131 226 6150
Chairman’s Half Year Statement
I am delighted to present shareholders with my first report since 3D successfully joined AIM in November 2010. The Company is now commercialising its first product, the CarieScan PRO and is starting to plan for the development of other applications of its core technology, known as ACIST and which is described below.
The six months under review involved a period of intense activity for 3D. In July, the Company announced the signature of an exclusive agreement with Patterson Dental Holdings Inc for the distribution of the CarieScan product range in the USA, followed by a similar agreement for Canada in August. As a result, 3D established support operations in the USA and achieved its first meaningful sales. In October, the Company announced that it had successfully raised £2.71 million by way of a placing and the shares were admitted to AIM in November.
Turnover in the period was £566,000 (six months to 31 December 2009 £nil) which was derived from sales made in the USA. The loss before tax amounted to £981,000, in line with directors’ expectations (2009: Loss £478,000). At 31 December 2010 the Company had net cash of £2 million (2009 cash of £566,000).
Since the period-end, the Company has continued to make progress, with the appointment of a commercial manager in Canada and the signing of a distribution agreement for the CarieScan PRO in Germany, the largest market in Europe.
Technology and applications
3D’s principal asset is its IP protected alternating current impedance spectroscopy technology (“ACIST”) platform which enables the accurate measurement of the integrity of a structure. This core technology may be used in a variety of applications, ranging from dental (the CarieScan PRO) to a number of other applications, including osteoporosis and certain cancers. As set out in the AIM admission document of October 2010, the Company intends to exploit the technology in these other areas, which will involve different development programmes according to the product. Each therapeutic area will be separately branded and will be progressed by a different subsidiary, with CarieScan Limited being the first such operation responsible for dental applications. It is intended to start pilot work in 2011 on the potential application in the detection and diagnosis of osteoporosis and a subsidiary, 3D Osteo Limited, has been set up for this purpose.
CarieScan Limited “CarieScan”
CarieScan is 3D’s main operating subsidiary, with responsibility for exploiting the dental applications of the ACIST technology. These comprise the CarieScan PRO and its single use disposable sensors. The CarieScan PRO is a simple to use, highly accurate, hand held device for the early detection and monitoring of dental caries. The presence of caries causes a detectable deterioration in the integrity of a tooth’s structure even before such decay becomes apparent by visual inspection. If detected sufficiently early the effects can be reversed through treatment and the integrity of the tooth restored.
In July 2010 the Company announced that it had signed a distribution agreement covering the whole of the USA with Patterson Dental, one of the largest distributors of dental equipment in North America, and in August a further distribution agreement was signed with Patterson Dental covering the Canadian market. During the period under review CarieScan shipped its first products to Patterson in the USA. The Company has also put in place the infrastructure required to support the efforts of Patterson’s own sales team and they in their turn have begun the process of selling both CarieScan PROs and sensors to dentists in practice.
After the period end, we succeeded in identifying a suitable representative to support the Patterson sales team in Canada and as a consequence have now begun the process of opening up that territory.
In February 2011 the Company announced the signature of a distribution agreement in Germany, Austria and Switzerland, which is highly significant as it marks its first entry into the continental European market. The German market is believed to be the largest in Europe and to be approximately 30% of the size of the USA market. Talks with potential distribution partners in the next two largest markets, those of France and Italy, are on-going.
The Company has also begun the process of obtaining the necessary regulatory clearances to enable it to sell its products in Asia, and in particular in China, South Korea and in Japan.
In January 2011, the CarieScan PRO won a prestigious industry award in the USA for the “Best New Diagnostic Product of the Year”. In February 2011, CarieScan won another industry award, this time in the UK, where it was voted “Best New Life Science Company in Scotland”.
3D Osteo Limited
As set out in the Admission Document, the Company intends to set up separate subsidiaries to exploit the exciting commercial potential for the ACIST technology outside the dental field. Diagnosing and monitoring osteoporosis is considered to be the most attractive market for the technology and 3D has therefore set up a new subsidiary to exploit this opportunity. The existing group infrastructure will be used to support this new subsidiary.
The Directors believe that the diagnostic sector of the osteoporosis industry is many times larger than the dentistry market. The Company already has specific registered IP and a functioning bench top prototype product. This prototype will need to be developed into a final product capable of being manufactured in volume and clinical trials will be needed to support the performance of the product in the market and to meet market specific regulatory requirements. These trials are expected to be modest in scope, as the product will be non-invasive in its operation and will take only a few seconds to obtain a reading. The Directors believe that the growth opportunities for the Company in this field are substantial.
Outlook
The period under review marked the first meaningful commercial sales for CarieScan PRO and 2011 has started with the addition of a significant new distribution agreement in Europe, however we approach the second half with caution as it is still too early to predict with accuracy the sales trends for the Company. Market acceptance of the product has been encouraging and the Board expects significant increases in sales volumes to be made during 2011 and beyond.
James Noble Non-executive Chairman
Notes to the Interim Financial Information (unaudited)
General Information
The condensed financial information for the six months to 31 December 2010 and 31 December 2009 does not constitute statutory accounts for the purposes of Section 434 of the Companies Act 2006 and has not been audited. No statutory accounts for the period have been delivered to the Registrar of Companies. This half-yearly financial report constitutes a dissemination announcement in accordance with Section 6.3 of the Disclosure and Transparency Rules.
The condensed financial information in respect of the year ended 30 June 2010 has been produced using extracts from the statutory accounts for this period. Consequently, this does not constitute the statutory information (as defined in section 434 of the Companies Act 2006) for the year ended 30 June 2010, which was audited. The statutory accounts for this period have been filed with the Registrar of Companies. The auditors’ report was unqualified and did not contain a statement under Sections 498 (2) or 498 (3) of the Companies Act 2006.
The Interim Report was approved by the Directors on 7th March 2011 and is available on the Company’s website at www.3ddiagnosticimaging.com.
Accounting Policies
Basis of preparation
The interim financial information has been prepared on the historical cost basis.
The Group’s business activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman’s Statement. This statement also includes a summary of the Group’s financial position and its cash flows.
Overall, the Directors believe the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook. The Group’s forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within the level of its current facilities.
After making reasonable enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly condensed financial information.
Basis of accounting
The Group’s consolidated financial statements for the year ended 30 June 2010 were prepared in accordance with International Financial Reporting Standards (IFRSs). The half-yearly report for the period ended 31 December 2010 has been prepared in accordance with International Accounting Standards (“IAS”) 34 “Interim Financial Reporting”.
Tax
The Group has recognised a taxation credit in relation to R&D taxation credits relating to the year ended 30 June 2010 of £25,124 which was received in September 2010.
No deferred tax asset has been recognised in respect of tax losses due to the uncertainty of future profit streams in the UK.
Notes to the Interim Financial Information (unaudited) continued
Loss Per Share and Dividends
No dividends have been paid during the 6 month period ended 31 December 2010 or 31 December 2009.
Basic earnings per share are calculated by dividing the earnings attributable to equity holders of the parent by the weighted average shares in issue during the period. Diluted earnings per share are presented when a company could be called upon to issue shares that would decrease net profit or increase loss per share In the current period, the weighted average number of shares has increased due to the placing of shares on the AIM exchange in November 2010. The weighted average number of shares, and therefore the loss per share, for the previous periods have been restated to reflect the impact of the placing.
Share Based Payments
The Group issues share-based benefits to employees. These share-based payments have been measured at their fair value at the date of grant and the fair value of expected shares is being expensed to the Income Statement on a straight-line basis over the vesting period. Fair value has been measured using the Black Scholes model and adjusted to reflect the most likely share vesting and exercise pattern.
Subsequent events
There were no significant events after the balance sheet date.
