Exent Technologies Ltd. Announces Third Quarter 2007 Results



    TEL AVIV, ISRAEL, November 7 /CNW/ - Exent Technologies Ltd. ("Exent")
announced today its results for the nine months ended September 30, 2007.

    
    CONDENSED CONSOLIDATED BALANCE SHEETS
    U.S. dollars in thousands
    ----------------------------------------------------------------------

                                                        September December
                                                           30,       31,
                                                          2007      2006
                                                        --------- --------
                                                        Unaudited
                                                        ---------
       ASSETS

    CURRENT ASSETS:
     Cash and cash equivalents                             $5,889   $2,368
     Short-term deposits                                        -    5,300
     Restricted cash                                           32       32
     Trade receivables                                      1,044      458
     Other accounts receivable and prepaid expenses         1,159      496
                                                        --------- --------

    Total current assets                                    8,124    8,654
    --------------------------------------------------- --------- --------

    LONG-TERM INVESTMENTS AND RECEIVABLES:
     Long-term lease deposits                                  18       82
     Severance pay fund                                       803      659
                                                        --------- --------

    Total long-term investments                               821      741
    --------------------------------------------------- --------- --------

    PROPERTY AND EQUIPMENT, NET                               424      404
                                                        --------- --------

    Total assets                                           $9,369   $9,799
    --------------------------------------------------- --------- --------
    

    
    CONDENSED CONSOLIDATED BALANCE SHEETS
    U.S. dollars in thousands
    ----------------------------------------------------------------------

                                                       September December
                                                          30,       31,
                                                         2007      2006
                                                       --------- ---------
                                                       Unaudited
                                                       ---------
       LIABILITIES AND SHAREHOLDERS' EQUITY

    CURRENT LIABILITIES:
     Trade payables                                    $  1,922  $    890
     Deferred revenues                                    1,426     2,924
     Employees and payroll accruals                       1,000       871
     Accrued expenses and other accounts payable          1,975     2,063
                                                       --------- ---------

    Total current liabilities                             6,323     6,748
    -------------------------------------------------- --------- ---------

    LONG-TERM LIABILITIES:
     Accrued severance pay                                1,063       900
     Deferred revenues                                      378       424
                                                       --------- ---------

    Total long-term liabilities                           1,441     1,324
    -------------------------------------------------- --------- ---------

    SHAREHOLDERS' EQUITY:
      Ordinary shares of New Israeli Shekel ("NIS")
       0.01 par value: 100,000,000 shares authorized
       at September 30, 2007 and December 31, 2006;
       10,829,549 (unaudited) and 10,655,545 shares
       issued and outstanding at September 30, 2007
       and December 31, 2006, respectively                   36        36
     Preferred shares of NIS 0.01 par value:
      100,000,000 shares authorized at September 30,
      2007 and December 31, 2006;
      35,571,481(unaudited) and 35,571,481 shares
      issued and outstanding at September 30, 2007 and
      December 31, 2006, respectively                        80        80
     Additional paid-in capital                          37,556    37,378
     Accumulated deficit                                (36,067)  (35,767)
                                                       --------- ---------

    Total shareholders' equity                            1,605     1,727
    -------------------------------------------------- --------- ---------

    Total liabilities and shareholders' equity         $  9,369  $  9,799
    -------------------------------------------------- --------- ---------
    

    
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    U.S. dollars in thousands except per share data
    ----------------------------------------------------------------------

                                                                   Year
                                                   Nine months      ended
                                                       ended      December
                                                  September 30,      31,
                                                 ----------------
                                                  2007     2006     2006
                                                 ------- -------- --------
                                                    Unaudited
                                                 ----------------
    Revenues:
      Software                                   $2,654  $ 1,967  $ 2,770
      Services                                    6,757    3,865    5,045
                                                 ------- -------- --------

    Total revenues                                9,411    5,832    7,815
    -------------------------------------------- ------- -------- --------

    Cost of revenues:
      Software                                       14       15       20
      Services                                    3,133    1,712    2,404
                                                 ------- -------- --------

    Total cost of revenues                        3,147    1,727    2,424
    -------------------------------------------- ------- -------- --------

    Gross profit                                  6,264    4,105    5,391
                                                 ------- -------- --------

    Operating expenses:
     Research and development, net                2,187    2,290    3,139
     Selling and marketing                        3,067    1,758    2,448
     General and administrative                   1,310    1,139    2,419
                                                 ------- -------- --------

    Total operating expenses                      6,564    5,187    8,006
    -------------------------------------------- ------- -------- --------

    Operating loss                                 (300)  (1,082)  (2,615)
    Financial income, net                           155      233      359
                                                 ------- -------- --------

    Loss before income taxes                       (145)    (849)  (2,256)
                                                 ------- -------- --------

    Income taxes                                    (16)       -        -

    Net loss                                     $ (161) $  (849) $(2,256)
                                                 ------- -------- --------

    Net loss per share:

       Basic & Diluted:                          $(0.02) $ (0.08) $ (0.21)
                                                 ------- -------- --------
    

    
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    U.S. dollars in thousands
    ----------------------------------------------------------------------

                                                                   Year
                                                                   ended
                                               Nine months ended  December
                                                 September 30       31,
                                                                 ---------
                                                 2007     2006     2006
                                               -------- -------- ---------
                                                   Unaudited
    Cash flows from operating activities:
    Net loss                                   $  (161) $  (849)  $(2,256)
    Adjustments to reconcile net loss to net
     cash provided by (used in) operating
     activities:
     Depreciation                                  151      108       144
     Amortization of stock based compensation
      to employees and consultants                 161       85       112
     Increase in trade receivables                (586)    (111)     (309)
     Decrease in other accounts receivable and
      prepaid expenses                              88      346       369
     Increase in trade payables                  1,032      310       393
     Decrease in deferred revenues              (1,544)    (949)     (783)
     Increase (decrease) in employees and
      payroll accruals                             129       (2)      (26)
     Increase (decrease) in accrued expenses
      and other accounts payable                  (577)     118     1,954
     Increase in accrued severance pay, net         19       30        88
                                               -------- -------- ---------

    Net cash used in operating activities       (1,288)    (914)     (314)
                                               -------- -------- ---------

    Cash flows from investing activities:
    Purchase of property and equipment            (171)    (109)     (238)
    Proceeds from short-term investments         5,300       --        --
    Investment in short-term investments            --   (2,761)   (2,761)
    Proceeds from long-term lease deposits          64       --        --
    Investment in long-term lease deposits          --       (8)      (12)
                                               -------- -------- ---------

    Net cash provided by (used in) investing
     activities                                  5,193   (2,878)   (3,011)
                                               -------- -------- ---------

    Cash flows from financing activities:
    Proceeds from exercise of warrants to
     Preferred shares                               --      757       757
    Proceeds from issuance of Series D
     Preferred shares                               --    2,992     2,992
    Proceeds from exercise of options to
     employees                                      17       15        15
    Proceeds from payment of receivables on
     account of shares                              --       75        75
    Increase in capitalized issuance expenses     (401)      --        --
                                               -------- -------- ---------

    Net cash provided by financing activities     (384)   3,839     3,839
                                               -------- -------- ---------


    Increase (decrease) in cash and cash
     equivalents                                 3,521       47       514
                                               -------- -------- ---------

    Cash and cash equivalents at the beginning
     of the year                                 2,368    1,854     1,854
                                               -------- -------- ---------

    Cash and cash equivalents at the end of
     the year                                  $ 5,889  $ 1,901   $ 2,368
                                               -------- -------- ---------

    Non-cash activities:

    Capitalized issuance expenses              $   350       --        --
                                               -------- -------- ---------
    

    RECONCILIATION BETWEEN CANADIAN GAAP AND US GAAP

    The Company's consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States
of America ("US GAAP") which, in most respects, conform to accounting
principles generally accepted in Canada ("Canadian GAAP"). Significant
differences between US and Canadian GAAP are described in this note.

    The following summarizes the differences that would have resulted if
Canadian GAAP had been applied in the preparation of these consolidated
financial statements:

    Reconciliation of Consolidated Balance Sheet:

    
                                           September 30, 2007 (unaudited)
                                           -------------------------------
                                      Note  US GAAP  Adjustments Canadian
                                                                    GAAP
                                      ---- --------- ----------- ---------

    Total current liabilities              $  6,323        $ --  $  6,323

    SHAREHOLDERS' EQUITY:
    Share capital:
    Ordinary shares                              36          --        36
    Preferred shares                             80          --        80
    Receivables on account of shares             --          --        --
    Additional paid-in capital               37,556          59    37,615
    Accumulated deficit                     (36,067)        (59)  (36,126)
                                           ---------             ---------

    Total shareholders' equity             $  1,605              $  1,605

                                                  December 31, 2006
                                           -------------------------------
                                            US GAAP  Adjustments Canadian
                                                                    GAAP
                                           --------- ----------- ---------

    Total current liabilities              $  6,748       $ 139  $  6,887

    SHAREHOLDERS' EQUITY:
    Share capital:
    Ordinary shares                              36          --        36
    Preferred shares                             80          --        80
    Receivables on account of shares             --          --        --
    Additional paid-in capital               37,378          56    37,434
    Accumulated deficit                     (35,767)       (195)  (35,962)
                                           ---------             ---------

    Total shareholders' equity             $  1,727              $  1,588

                                                  December 31, 2005
                                           -------------------------------
                                            US GAAP  Adjustments Canadian
                                                                    GAAP
                                           --------- ----------- ---------

    Total current liabilities              $  4,121       $ 126  $  4,247

    SHAREHOLDERS' EQUITY:
    Share capital:
    Ordinary shares                              36          --        36
    Preferred shares                             53          --        53
    Receivables on account of shares            (75)         --       (75)
    Additional paid-in capital               33,529          47    33,576
    Accumulated deficit                     (33,511)       (173)  (33,684)
                                           ---------             ---------

    Total shareholders' equity             $     32              $    (94)
    

    Reconciliation of consolidated Net Loss:

    
                                                    Nine months ended
                                                       September 30,
                                                        (unaudited)
                                                 -------------------------
                                                     2007         2006
                                                 ------------ ------------

    Net Loss under US GAAP                       $      (161) $      (849)
    Stock-based compensation                              (3)         (27)
    Tax impact (FIN 48)                                   --           --
                                                 ------------ ------------

    Net Loss under Canadian GAAP                 $      (164) $      (876)
                                                 ------------ ------------

    Net Loss per share under Canadian GAAP
    Basic and diluted                            $     (0.02) $     (0.08)

    Weighted average number of shares             10,730,805   10,516,455
                                                 ------------ ------------

                                           Year ended December 31,
                                    --------------------------------------
                                        2006         2005         2004
                                    ------------ ------------ ------------

    Net Loss under US GAAP          $    (2,256) $    (1,331) $    (2,369)
    Stock-based compensation                 (9)         (39)          (8)
    Tax impact (FIN 48)                     (13)        (110)         (16)
                                    ------------ ------------ ------------

    Net Loss under Canadian GAAP    $    (2,278) $    (1,480) $    (2,393)
                                    ------------ ------------ ------------

    Net Loss per share under
     Canadian GAAP
    Basic and diluted               $     (0.22) $     (0.14) $     (0.23)
                                    ------------ ------------ ------------

    Weighted average number of
     shares                          10,551,541   10,502,900   10,502,900
                                    ------------ ------------ ------------
    

    (a) Stock-based compensation:

    Under US GAAP, effective January 1, 2006, the Company adopted the fair
value recognition provisions of FASB Statement No. 123(R) "Share-Based
Payment" which requires companies to measure the cost of employee service
received in exchange for an award of equity instruments (typically stock
options) based on the grant-date fair value of the award.

    Prior to January 1, 2006, the Company has elected to follow Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB 25") and Interpretation No. 44, "Accounting for Certain Transactions
Involving Stock Compensation" ("FIN 44") in accounting for its employee stock
option plans, using the intrinsic value method.

    Under Canadian GAAP, in September 2003, a new Standard was issued
requiring the use of the fair value method of accounting for stock-based
compensation for grants made after January 1, 2003. The adoption of the new
Canadian Standard result in a reconciling difference between US GAAP and
Canadian GAAP in the amount of $0 in 2003, $8 in 2004, $39 in 2005, $9 in 2006
and $(3) nine month ended 2007.

    (b) FIN 48:

    Under US GAAP, effective January 1, 2007, the Company adopted the
provisions of FIN 48 which provides specific guidance on the recognition and
measurement of uncertain tax positions. FIN 48 is not mandatory under Canadian
GAAP but was adopted by the Company for Canadian GAAP on January 1, 2007 and
has been reflected as a change in accounting policy and accordingly applied on
a retrospective basis. The adoption of FIN 48 results in a reconciling
difference between US GAAP and the Canadian GAAP in the amount of $16 in 2004,
$110 in 2005 and $13 in 2006.

    (c) Financial instruments:

    Effective January 1, 2007, the Company adopted CICA Section 1530,
"Comprehensive Income", Section 3855, "Financial Instruments -- Recognition
and Measurement", Section 3861, "Financial Instruments -- Disclosure and
Presentation" and Section 3865, "Hedges". These new standards increased
harmonization between US and Canadian GAAP.

    The Company had no impact as a result of the adoption.

    About Exent Technologies

    Exent is a global leader in developing and marketing software products
and services that enable the broadband-based delivery of video games known as
Games-on-Demand. Games-on-Demand services are designed to monetize the
extensive catalogue of video games that are no longer likely to generate
significant revenue through retail sales channels. This is achieved by a
broadband-based distribution of video games to end-users through paid
subscriptions and through free, ad-supported offerings. Exent markets and
sells its unique video game digital distribution platform and video game
advertising technologies directly and through channel partners to broadband
service providers and media companies that offer Games-on-Demand services to
their end-users.

    8134542.1

    34691-2001




For further information:

For further information: Exent Media Contacts The Bohle Company Derek
Asato, 310-785-0515 ext. 201 derek@bohle.com

Organization Profile

EXENT TECHNOLOGIES LTD.

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