Interim / Quarterly Report • Aug 30, 2013
Interim / Quarterly Report
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| 1. HALF-YEAR 2013 ACTIVITY REPORT |
3 |
|---|---|
| 2. CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 |
6 |
| 3. STATUTORY AUDITORS' REVIEW REPORT |
24 |
| 4. ATTESTATION OF THE PERSON RESPONSIBLE FOR THE HALF-YEAR FINACIAL REPORT |
27 |
Sales Increased 23% During First Six Months of 2013
Mauna Kea Technologies posted sales up 23% year-on-year in the first half of 2013, at €4.320 million, with clinical and pre-clinical sales climbing 20% and 34% respectively versus the same period of 2012, to €3.438 million and €0.882 million.
Sales of consumables, the key indicator of the adoption of Cellvizio by physicians, rose by 31% to €1.110 million in the first half of 2013, compared with a 20% increase in Cellvizio sales in the same period of 2012, to €2.941 million. Sales of services also grew by 20%, to €0.268 million.
Mauna Kea Technologies sold 35 systems in the first six months of 2013 (versus 24 in the same period of 2012), representing a net increase of 32 in the number of systems installed, and 290 probes (versus 188 in the same period of 2012).
First-half sales in the APAC region (Asia-Pacific) shot up by 147% compared with in the same period of 2012, boosted by a sales agreement in China and the development partnership with Fujifilm. The Americas, where sales had slowed in the previous quarter, posted growth of 1%, while sales in the EMEA region (Europe, Middle East and Africa) remained broadly flat. The Americas, APAC and EMEA accounted for 49%, 30% and 21% of first-half 2013 sales respectively.
At June 30, 2013, the total installed base of Cellvizio systems numbered 315, with 211 located in hospitals and clinics and 104 in pre-clinical research centers.
Geographically, 112 Cellvizio systems have been installed in North America (104 in the United States), 150 in the EMEA region, 51 in the APAC region and two in Latin America.
Operating expenses were broadly unchanged in the first six months of the year at €11.191 million (€11.111 million in the same period of 2012). At June 30, 2013, the gross margin stood at 71%, versus 68% a year earlier.
Sales and marketing expenses, the company's main cost item, accounted for 52% of total operating expenses in the first half of 2013. Research and development expenses, meanwhile, increased by 43% over the period, as the company continued its innovation efforts.
Other revenue totaled €0.271 million over the period, compared with €0.719 million in the first half of 2012. The reason for the difference was a reduction in research tax credits following the receipt during the period of repayable advances for the Persée project of €0.685 million.
The Group made a net loss of €6.612 million in the first half of 2013, compared with a net loss of €6.940 million in the same period of 2012.
During the period, Mauna Kea Technologies reduced its use of cash to €6.1 million, from €7.9 million in the first six months of 2012, and had available cash of €31.5 million at June 30, 2013, from €37.6 million at December 31, 2012.
At June 30, 2013, Mauna Kea Technologies had 113 employees, compared with 107 a year earlier.
In January 2013, endomicroscopy procedures using Cellvizio in the upper gastrointestinal tract were added to the list of investigations that can be carried out at ambulatory surgery centers in the United States. These centers, which specialize in outpatient care and less-invasive investigations, are equipped with the latest medical technologies and offer patients a quick and efficient same-day service. A reimbursement rate of \$520 was applied by the U.S. health authorities (Medicare and Medicaid) to procedures with a category I CPT® code that were previously created for the use of Cellvizio in hospitals and clinics, and a reimbursement rate of \$927 has been effective since January 1, 2013.
There are more than 5,000 ambulatory surgery centers (ASCs) in the United States. On average, each ASC carries out close to 3,700 gastrointestinal endoscopies each year, a total of some 18 million procedures, representing 24% of all procedures carried out in these centers.
In April 2013, Mauna Kea Technologies received approval from the U.S. Food and Drug Administration (FDA) to sell the AQ-Flex™ 19 miniprobe. This miniprobe, which was previously awarded the CE mark in Europe (where it is already on sale), is used to carry out real-time optical biopsies during endoscopic ultrasound-guided fine needle aspiration procedures. This was the sixth regulatory clearance obtained in the United States for Cellvizio or one of its dedicated probes.
On June 13, 2013, Mauna Kea Technologies signed an exclusive five-year distribution partnership for Cellvizio in Japan with AMCO Inc. This agreement represented a key step forward in obtaining clearance to sell Cellvizio in the world's second-biggest market for endoscopy equipment after the United States.
Mauna Kea Technologies has entered into several distribution agreements centering on its LAB system (preclinical research), enabling it to implement its strategy of expanding its distribution network on a worldwide basis.
All of the commercial partnerships entered into by Mauna Kea Technologies are with top-level distributors in their respective territories, such as Quorum Technologies Inc., the North American leader in confocal microscopy and advanced live-cell imaging techniques. Quorum Technologies Inc. will distribute the full range of Cellvizio LAB systems and products - notably the Cellvizio Dual Band, which provides real-time structural and functional information in several colors, in vivo and in situ - to research laboratories in the United States and also in Canada, where it will be the sole distributor.
The use of Cellvizio's platform to carry out optical biopsies in pre-clinical research will enhance understanding of physiological and pathophysiological processes, leading to the future development of new treatments.
Mauna Kea Technologies has strengthened its presence in new high-potential markets by entering into commercial partnerships with CS Biotech in Taiwan, Crisel Instruments in Italy, Biotech Europe in Central and Eastern Europe and Merkel Technologies in Israel.
As a result, the Cellvizio LAB range will be offered to research centers in more than 25 countries, compared with fewer than ten previously.
On July 29, 2013, the dispute with AntiCancer Inc. was settled. The U.S. District Court for the Southern District of California handed down a judgment rejecting all claims made by AntiCancer Inc. against Mauna Kea Technologies for patent infringement.
The risks faced by the company are specified in chapter 4 "Risk Factors" of the company's source document.
Relationships with related parties are covered in Note 21 to the 2013 half-yearly financial statements.
A Public Limited Company (société anonyme) with a share capital of €550,523 Head office: 9 rue d'Enghien 75010 Paris, France Registered at the Paris Register of Commerce and Companies under 431 268 028
Consolidated financial statements prepared in accordance with IFRS, as of June 30, 2013
(Amounts in thousands of euros)
| Note | 6/30/2013 | 12/31/2012 | |
|---|---|---|---|
| ASSETS | |||
| Non-current Assets | |||
| Intangible assets | 3 | 3,367 | 3,163 |
| Property, plant, and equipment | 4 | 550 | 571 |
| Non-current financial assets | 69 | 73 | |
| Total of non-current assets | 3,987 | 3,807 | |
| Current assets | |||
| Inventories & Work in progress | 5 | 2,278 | 1,936 |
| Trade receivables | 6 | 3,161 | 3,324 |
| Other current assets | 6 | 2,409 | 2,143 |
| Current financial assets | 7 | 110 | 211 |
| Cash and cash equivalents | 8 | 31,527 | 37,638 |
| Total of current assets | 39,485 | 45,251 | |
| TOTAL OF ASSETS | 43,473 | 49,058 |
| Note | 6/30/2013 | 12/31/2012 | |
|---|---|---|---|
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Issued capital | 9 | 551 | 542 |
| Share premium | 9 | 57,363 | 56,805 |
| Reserves | (16,898) | (4,054) | |
| Foreign currency translation on reserve | (60) | (76) | |
| Profit / (loss) | (6,612) | (13,056) | |
| Total of equity | 34,343 | 40,162 | |
| Non-current Liabilities | |||
| Long-term loans and borrowings | 1 0 |
3,076 | 2,362 |
| Non-current provisions | 1 1 |
500 | 481 |
| Total of non-current liabilities | 3,576 | 2,843 | |
| Current liabilities | |||
| Short-term loans and borrowings | 1 0 |
656 | 756 |
| Trade payables | 1,992 | 2,178 | |
| Other current liabilities | 1 2 |
2,906 | 3,119 |
| Total of current liabilities | 5,554 | 6,053 | |
| TOTAL OF EQUITY AND LIABILITIES | 43,473 | 49,058 |
| As of 30 June | |||||
|---|---|---|---|---|---|
| Note | 2013 | 2012 | |||
| Operating Revenue | |||||
| Sales | 1 3 |
4,320 | 3,519 | ||
| Other income | 1 3 |
271 | 719 | ||
| Total of revenue | 4,591 | 4,238 | |||
| Operating Expenses | |||||
| Cost of sales | (1,236) | (1,122) | |||
| Gross margin | 71% | 68% | |||
| Research & Development | 1 5 |
(1,859) | (1,297) | ||
| Sales & Marketing | 1 5 |
(5,854) | (5,976) | ||
| Admnistrative expenses | 1 5 |
(1,955) | (1,916) | ||
| Share-based payments | 9 | (286) | (800) | ||
| Total of expenses | (11,191) | (11,111) | |||
| Operating profit | (6,600) | (6,873) | |||
| Financial revenue | 1 6 |
42 | 60 | ||
| Financial expenses | 1 6 |
(53) | (126) | ||
| Profit before tax | (6,612) | (6,939) | |||
| Income tax expense | 1 7 |
(1) | (1) | ||
| Profit / (loss) | (6,612) | (6,940) | |||
| Other comprehensive income | |||||
| Items that will not be reclassified to profit or loss | |||||
| Actuarial differences on defined benefit plans | |||||
| Total of items that will not be reclassified to profit or loss | 0 | 0 | |||
| Items that will be reclassified subsequently to profit or loss | |||||
| Exchange differences on translation of foreign operations | 16 | 61 | |||
| Items that will be reclassified subsequently to profit or loss | 16 | 61 | |||
| Total of other comprehensive income | 1 6 |
6 1 |
|||
| Comprehensive income | (6,597) | (6,879) | |||
| Weighted average number of shares outstanding (in thousands) | 13,678 | 13,419 | |||
| Basic earnings per share (EUR/share) | (0.48) | (0.52) | |||
| Weighted average number of potential shares (in thousands) | 1 9 |
15,300 | 15,205 | ||
(Amounts in thousands of euros)
| Foreign | ||||||||
|---|---|---|---|---|---|---|---|---|
| Issued capital |
Share premium |
Treasury shares |
Reserves | currency translation |
Profit / (loss) |
Total of equity |
||
| on reserve | ||||||||
| Equity as of | 12/31/2011 | 536 | 56,190 | (73) | 2,886 | (55) | (7,909) | 51,575 |
| Allocation of the profit / (loss) | (7,909) | 7,909 | (0) | |||||
| Capital transactions | 2 | 209 | 211 | |||||
| Share-based payment transactions | 880 | 880 | ||||||
| Treasury shares transactions | (122) | (7) | (129) | |||||
| Comprehensive income as of | 6/30/2012 | 61 | (6,940) | (6,879) | ||||
| Equity as of | 6/30/2012 | 538 | 56,399 | (195) | (4,150) | 6 | (6,940) | 45,657 |
| Foreign | ||||||||
|---|---|---|---|---|---|---|---|---|
| Issued capital |
Share premium |
Treasury shares |
Reserves | currency translation |
Profit / (loss) |
Total of equity |
||
| on reserve | ||||||||
| Equity as of | 12/31/2012 | 542 | 56,805 | (184) | (3,869) | (76) | (13,056) | 40,162 |
| Allocation of the profit / (loss) | (13,056) | 13,056 | ||||||
| Capital transactions | 8 | 558 | 566 | |||||
| Share-based payment transactions | 313 | 313 | ||||||
| Treasury shares transactions | (43) | (58) | (101) | |||||
| Comprehensive income as of | 6/30/2013 | 16 | (6,612) | (6,597) | ||||
| Equity as of | 6/30/2013 | 551 | 57,363 | (228) | (16,670) | (60) | (6,612) | 34,343 |
June 30, 2013
| As of 30 June | |||
|---|---|---|---|
| Note | 2013 | 2012 | |
| Cash flows from operating activities | |||
| Profit / (loss) | (6,612) | (6,940) | |
| Elimination of amortisations, depreciations and provisions | 341 | 284 | |
| Share-based payment transaction expense and revenue | 9 | 286 | 880 |
| Other items excluded from the auto-financing capacity | (37) | 19 | |
| Revenue and expenses related to the discounting of repayable advances | 13/1 | (37) | 2 3 |
| Interest expenses paid | 4 | ||
| Net gain or loss from cash equivalents | (8) | (16) | |
| Other non-cash items | 4 | 1 2 |
|
| Unrealised gains and losses related to changes in the fair value | (24) | ||
| Elimination of the income tax expense | 1 | 1 | |
| (6,021) | (5,781) | ||
| Auto-financing capacity | |||
| Income tax expense paid | (1) | (1) | |
| Change in WCR related to business activities | (880) | (1,552) | |
| Inventories & Work in progress | (321) | (485) | |
| Trade receivables | 173 | (124) | |
| Other current assets | (266) | (394) | |
| Trade payables | (187) | (759) | |
| Other current liabilities | (279) | 210 | |
| Net cash flows from operating activities (A) | (6,901) | (7,334) | |
| Cash flows from investing activities | |||
| Purchase of property, plant and equipment and intangible assets | 3/4 | (490) | (577) |
| Change in loans and advances granted | 105 | (0) | |
| Other cash flows from investing operations | (21) | ||
| (384) | (598) | ||
| Net cash flows from investing activities (B) | |||
| Cash flows from financing activities | |||
| Proceeds from exercise of share options | 9 | 566 | 211 |
| Repurchases and resales of treasury shares | (101) | (129) | |
| Net financial interests paid | 4 | 16 | |
| Gain from cash equivalents | 8 | 1 6 |
|
| Interest expenses paid | (4) | ||
| Other cash flows from financing operations | 1 0 |
705 | (100) |
| Net cash flows from financing activities (C) | 1,173 | (2) | |
| Net foreign exchange difference (D) | 2 | 11 | |
| Change in cash (A) + (B) + (C) + (D) | (6,110) | (7,923) | |
| Cash at the beginning of the period | 8 | 37,638 | 51,347 |
| Cash at the end of the period | 8 | 31,527 | 43,424 |
| Change in cash | (6,110) | (7,923) |
| Note 1: Accounting principles 12 | |
|---|---|
| Note 2: Company and scope 13 | |
| Note 3: Intangible assets 13 | |
| Note 4: Property, plant and equipment14 | |
| Note 5: Inventories and work in progress 14 | |
| Note 6: Trade receivables and other current assets 15 | |
| Note 7: Current Financial assets 15 | |
| Note 8: Cash and cash equivalents16 | |
| Note 9: Capital 16 | |
| Note 10: Loans and borrowings18 | |
| Note 11: Non-current provisions18 | |
| Note 12: Other current liabilities18 | |
| Note 12a: Financial instruments accounted on the balance sheet 19 | |
| Note 13: Sales and operating revenue 20 | |
| Note 14: Employee benefits expense 21 | |
| Note 15: External expenses21 | |
| Note 16: Financial revenue and expenses 22 | |
| Note 17: Income tax expense 22 | |
| Note 18: Commitments22 | |
| Note 19: Earnings per share 22 | |
| Note 20: Management of financial risk23 | |
| Note 21: Related party transactions 23 | |
| Note 22: Subsequent events23 |
The financial statements are presented in thousands of euros.
The summarized consolidated financial statements of the first half-year 2013, approved by the Board of Directors meeting on August 30, 2013, have been prepared in compliance with international financial reporting standard IAS 34 "Interim Financial Reporting.
The Board of Directors assumed continuity of operation despite of the available cash totaling € 31.5 million as of June 30, 2013, which is sufficient to meet the Company's future requirements.
Since they are summary financial statements, the half-year consolidated financial statement do not include all the financial disclosures required in a full set of annual financial statements. They should therefore be read in conjunction with the Group's financial statements for the period ended December 31, 2012, subject to the specific characteristics for the preparation of interim financial statements, described below.
Aside from the specific characteristics for the preparation of interim financial statements set out in Note 1.3 Basis of preparation of half-year financial statements, the significant accounting policies used are the same as those used for the preparation of the consolidated financial statements for the fiscal year ended December 31, 2012, with the exception of the following new standards, revised standards and interpretations, adopted by the European Union and mandatory for fiscal years beginning on or after January 1, 2013:
The Company has not applied in advance the latest standards, amendments, revisions and interpretations of standards published whose application will only be mandatory for financial years opened after 1 January 2013. This pertains to the following standards and amendments: IFRS 10 "Consolidated Financial Statements", applicable for financial years opened from January 1, 2014,
The Company has also not applied in advance the standards, amendments, revisions and interpretations of standards published and not endorsed by the European Union :IFRS 9 "Financial Instruments",
Management foresees that the application of these standards will have no material impact on the consolidated financial statements.
The half-year's income tax expense is calculated for each country based on an estimated average effective rate calculated on an annual basis and applied to the country's half-yearly profit. Where applicable, this estimate takes into account the use of tax loss carryforwards and whether or not they are activated.
Failing indications of impairment as of 30 June 2013, and in accordance with the provisions of IAS 36, the Group did not conduct impairment tests on property, plant and equipment and intangible assets.
There was no material change to the actuarial assumptions used to calculate retirement benefits between December 31, 2011 and June 30, 2012, or between December 31, 2012 and June 30, 2013. Consequently, the actuarial assumptions used to calculate pension obligations as of June 30, 2012 and June 30, 2013 are the same as those used at December 31, 2011 and December 31, 2012, respectively.
Founded in May 2000, Mauna Kea Technologies SA (the Company) develops and markets medical devices, particularly optical instruments for medical imaging.
| As part of its development in the United States, the Company created Mauna Kea Technologies Inc. on January 3, 2005. |
||||||||
|---|---|---|---|---|---|---|---|---|
| 6/30/2013 12/31/2012 |
Consolidation method | |||||||
| Companies | % of interests |
% of control |
% of interests |
% of control |
||||
| Mauna Kea Technologies SA (1) | 100% | 100% | 100% | 100% | Full consolidation | |||
| Mauna Kea Technologies Inc | 100% | 100% | 100% | 100% | Full consolidation |
(1) Parent company
There were no changes in scope in first-half 2013.
The changes in intangible assets break down as follows:
| 12/31/2012 | Increase | Scrappring | Reclassification | 6/30/2013 | |
|---|---|---|---|---|---|
| Development costs | 2,313 | 2,313 | |||
| Patents, licenses and trademarks | 1,046 | 20 | 35 | 1,101 | |
| Software packages | 204 | 40 | (11) | 114 | 348 |
| Development costs in progress | 390 | 280 | 671 | ||
| Patents, licenses and trademarks in progress | 539 | 71 | (35) | 576 | |
| Other intangible assets in progress | 114 | (0) | (114) | (0) | |
| Total gross of intangible assets | 4,607 | 411 | (11) | 5,007 | |
| Amort. / dep. of development costs | (1,052) | (140) | (1,192) | ||
| Amort. / dep. of patents, licenses and trademarks | (292) | (37) | (328) | ||
| Amort. / dep. of software packages | (100) | (30) | 11 | (119) | |
| Total amort. / dep. of intangible assets | (1,444) | (207) | 1 1 |
(1,640) | |
| Total net of intangible assets | 3,163 | 204 | 3,367 |
Capitalized development expenditure for the period mainly concerns the Second Generation Cellvizio Dual BAND, Cellvizio Software 2.2 and Urology probe projects.
(CAPITALISED PORTION) (Amounts in thousands of euros)
| 6/30/2013 | 12/31/2012 | |
|---|---|---|
| External costs | 36 | 118 |
| Wages and salaries, social security costs | 312 | 416 |
| Research Tax Credit | (93) | (125) |
| Share-based payment transaction expense | 26 | 66 |
| Gross change in development costs | 280 | 475 |
| Amortisation of development costs | (140) | (293) |
| Net change in development costs | 140 | 182 |
The changes in property, plant and equipment break down as follows:
(Amounts in thousands of euros)
| Decrease / | Exchange | |||||
|---|---|---|---|---|---|---|
| 12/31/2012 | Increase | Scrappring | differences | Reclassification | 6/30/2013 | |
| Laboratory equipment | 1,032 | 33 | (52) | (0) | (23) | 989 |
| Fixture in buildings | 50 | 1 | 0 | 0 | 0 | 51 |
| Other property, plant and equipment * | 636 | 71 | (12) | 1 | 0 | 695 |
| Total gross of property, plant and equipment | 1,718 | 105 | (65) | 1 | (23) | 1,735 |
| Amort. / dep. of laboratory equipment | (754) | (60) | 52 | (0) | 16 | (747) |
| Amort. / dep. of fixture in buildings | (18) | (3) | 0 | 0 | 0 | (21) |
| Amort. / dep. of other property, plant and equipment * | (375) | (55) | 12 | (0) | 0 | (417) |
| Total amort. / dep. of property, plant and equipment | (1,147) | (118) | 6 5 |
(1) | 1 6 |
(1,185) |
| Total net of property, plant and equipment | 571 | (14) | 0 | 0 | (7) | 550 |
*Other property, plant and equipment include computer equipment for a gross total of k€ 465 and depreciation and amortization amounting to k€ 297 as of June 30, 2013.
In the period, demonstration equipment for a net amount of k€ 7 was reclassified in inventory prior to its sale.
The inventories and work in progress line-item break down as follows:
| (Amounts in thousands of euros) | ||
|---|---|---|
| 6/30/2013 | 12/31/2012 | |
|---|---|---|
| Inventories of raw materials | 840 | 936 |
| Inventories & work in progress of finished goods | 1,502 | 1,074 |
| Total gross of inventories & work in progress | 2,342 | 2,010 |
| Dep. of inventories of raw materials | (61) | (75) |
| Dep. of inventories & work in progress of finished goods | (3) | |
| Total dep. of inventories & work in progress | (64) | (75) |
| Total net of inventories & work in progress | 2,278 | 1,936 |
| (Amounts in thousands of euros) | ||
|---|---|---|
| 6/30/2013 | 12/31/2012 | |
| Trade receivables | 3,248 | 3,324 |
| Dep. of trade receivables | (87) | 0 |
| Total net of trade receivables | 3,161 | 3,324 |
The trade receivables not past due and not depreciated amounts to k€ 851 as of June 30, 2013.
The other current assets break down as follows:
| OTHER CURRENT ASSETS | ||
|---|---|---|
| (Amounts in thousands of euros) | ||
| 6/30/2013 | 12/31/2012 | |
| Personnel and related accounts | 78 | 43 |
| Research Tax Credit | 1,361 | 1,100 |
| Other tax receivables | 210 | 367 |
| Other receivables | 546 | 557 |
| Prepaid expenses | 214 | 76 |
| Total gross of other current assets | 2,409 | 2,143 |
| Dep. of other current asets | ||
| Total net of other current assets | 2,409 | 2,143 |
The other tax receivables relate primarily to k€ 88 in VAT deductible, k€ 95 in VAT refunds claimed and k€ 24 in competitiveness and employment tax credits.
The other receivables include public subsidies due to be received in the amount of k€ 198 and supplier downpayments totaling k€ 266.
The changes in research tax credits are presented in the table below:
| CHANGES IN THE RESEARCH TAX CREDIT RECEIVABLE (Amounts in thousands of euros) |
|||||
|---|---|---|---|---|---|
| Operating | Payment | Capitalised | |||
| 12/31/2012 | revenue | received | portion | 6/30/2013 | |
| Research Tax Credit | 1,100 | 168 | 93 | 1,361 |
The estimated research tax credit was down to k€ 261 as of June 30, 2013 from k€ 474 in the same period last year. The reduction was due to payment during the half-year of a repayable advance for the Persée project (k€ 685) which minus the research tax credit amount of the period for k€ 205.
The securities account opened under the Company's liquidity contract is domiciled with Gilbert Dupont. The total for execution of the contract amounts to k€ 350.
The amount not invested in treasury shares as of June 30, 2013 is k€ 110.
The cash and cash equivalents line breaks down as follows:
| (Amounts in thousands of euros) | ||
|---|---|---|
| 6/30/2013 | 12/31/2012 | |
| Short-term bank deposits | 528 | 721 |
| Money market funds | 31,000 | 36,917 |
| Total of cash and cash equivalents | 31,527 | 37,638 |
| of which, unrealised gains are | 16 | 16 |
The Company's share capital totals five hundred and fifty thousand five hundred and twenty-three euros and twenty-eight cents (€ 550,523.28), divided into 13,763,082 shares, with a par value of € 0.04 each, all fully subscribed and paid up.
This figure does not include share purchase warrants (BSA), stock warrants for business creator shares (BSPCE) and stock options granted to certain investors and natural persons,who may or may not be employees of the Company.
The table below presents the history of the Company's capital since December 31, 2012:
| Number of | |||||
|---|---|---|---|---|---|
| Date | Type of transaction | Issued capital (en K€) |
Share premium (en K€) |
shares comprising the issued capital |
|
| Total | 542 | 56,805 | 13,562 | ||
| 2/4/2013 | Exercise of BSPCE | 5 | 256 | 114 | |
| 2/5/2013 | Exercise of stock-options | 1 | 50 | 13 | |
| 3/1/2013 | Exercise of BSPCE | 1 | 111 | 34 | |
| 3/5/2013 | Exercise of stock-options | 1 | 57 | 14 | |
| 6/30/2013 | Exercise of BSPCE | 1 | 85 | 27 | |
| Total | 551 | 57,363 | 13,763 |
The Company issued share purchase warrants (BSA) representating compensation, stock warrants for employees (BSPCEs and others), as well as stock options whose change since December 31, 2012 is as follows:
| Date of | Exercise | Outstanding as of |
Outstanding as of |
Potential | |||||
|---|---|---|---|---|---|---|---|---|---|
| Type | granting | price | Price | 12.31.2012 | Granted | Exercised | Cancelled | 6.30.2013 | options |
| Options granted before the 1st january 2013 | 5,245,260 | 0 | 805,344 | 384,756 | 4,055,160 | 1,470,915 | |||
| BSPCE 2013 | 5/7/2013 | 10.28 | 10.83 | 63,000 | 63,000 | 63,000 | |||
| 5,245,260 | 63,000 | 805,344 | 384,756 | 4,118,160 | 1,533,915 |
The number of cancelled warrants includes 216,504 warrants included in the calculation of the total share-based payment expense.
Following the 1-for-4 reverse stock split on May 25, 2011, four BSAs, BSPCEs or SOs are now required for one share in the case of warrants granted prior to this date. The parity is 1-for-1 for warrants and options granted after the date of the reverse split.
Options are settled in shares.
Share-based payments (capitalised portion) 26 80 Share-based payments (expense of the period) 286 800
| As of 30 June | ||||
|---|---|---|---|---|
| 2012 | ||||
| 880 | ||||
Changes in the share-based payment expense are primarily due to the cancellation of 105,000 warrants for stockoption plans and BSPCEs at December 5, 2011.
The Company's combined general meeting held on June 19 2013 authorized the Board of Directors, for a time period of eighteen months from the date of the meeting, to implement, in one or more stages, a program for the repurchase of the shares of the Company'stock pursuant to, the provisions of Article L. 225-209 of the French Commercial Code, and in accordance with the General Regulations of the Autorité des Marchés Financiers (AMF)under the conditions set out below:
Maximum number of shares that may be purchased: 10% of the total number of shares on the share repurchase date. When the shares are acquired with the intent of encouraging the regular trading and liquidity of the stock, the number of shares included in the calculation of the 10% ceiling above is equal to the number of shares purchased minus the number of shares resold during the time period of the authorization.
Maximum purchase price: €30 per share, excluding fees and commission, up to an overall limit of €5,000,000.
It is specified that the total number of shares acquired by the Company to hold and for their subsequent exchange or use as consideration in any merger, de-merger or capital contribution may not exceed 5% of the Company's share capital.
As of June 30, 2013, the Company held 23,337 Mauna Kea Technologies shares, acquired at an average price of € 9.75 per share and valued at € 215,867, resulting in an unrealized capital loss of € 11,669 accounted in the consolidated reserves.
The changes in loans and borrowings break down as follows:
| CHANGES IN LOANS AND BORROWINGS | |
|---|---|
| (Amounts in thousands of euros) |
| 12/31/2012 | Receipt | Repayment | Reclassification | Others | 6/30/2013 | |
|---|---|---|---|---|---|---|
| Repayable advances | 3,088 | 825 | (120) | (52) | (13) | 3,727 |
| Discounted portion of repayable advances | 24 | (24) | (0) | |||
| Others | 5 | 5 | ||||
| Total of loans and borrowings | 3,117 | 825 | (120) | (52) | (37) | 3,732 |
Following the updating of the repayments projections of COFACE advances, the sum of k€ 95 was reclassified from short-term loans and borrowings to long-term debts.
The subsidy portion of repayable advances not yet posted to income as of June 30, 2013 was recognized in deferred income.
The Company received:
(Amounts in thousands of euros)
| Unused | ||||||
|---|---|---|---|---|---|---|
| 12/31/2012 | Allowance | reversals | Used reversals | Others | 6/30/2013 | |
| Pension plan provision | 174 | 20 | (9) | 185 | ||
| Provisions for personnel disputes | 244 | 2 | 246 | |||
| Provision for software update | 23 | 23 | ||||
| Others provisions for expenses | 40 | 5 | 46 | |||
| Total of non-current provisions | 481 | 2 5 |
(9) | 2 | 500 | |
Other current liabilities break down as follows:
(Amounts in thousands of euros)
| 6/30/2013 | 12/31/2012 | |
|---|---|---|
| Taxes payable | 116 | 213 |
| Staff and social security payable | 2,004 | 2,145 |
| Other payable | 102 | 133 |
| Deferred revenue | 684 | 628 |
| Total of other current liabilities | 2,906 | 3,119 |
The tax liabilities mainly concern taxes on payroll, sales and value added tax.
Staff and social security payables relate primarily to provisions for paid leave, bonuses and commission, and to amounts due to social security bodies.
Deferred income essentially comprises maintenance contracts on systems sold (maintenance periods of one to three years), as well as a one-year warranty on Cellvizio.
(Amounts in thousands of euros)
| Fair value | ||||
|---|---|---|---|---|
| As of 30 June 2013 | Value on the | through profit | Loans and | Debt at |
| balance sheet | or loss | receivables | amortised cost | |
| Assets | ||||
| Non-current financial assets | 69 | 69 | ||
| Trade receivables | 3,161 | 3,161 | ||
| Other current assets | 2,409 | 2,409 | ||
| Current financial assets | 110 | 110 | ||
| Cash equivalents (1) | 31,000 | 31,000 | ||
| Cash | 528 | 528 | ||
| Total of assets | 37,277 | 31,000 | 6,277 | |
| Liabilities | ||||
| Long-term loans and borrowings | 3,076 | 3,076 | ||
| Short-term loans and borrowings | 656 | 656 | ||
| Trade payables | 1,992 | 1,992 | ||
| Other current liabilities | 2,906 | 2,906 | ||
| Total of liabilities | 8,630 | 8,630 |
| Fair value | ||||
|---|---|---|---|---|
| As of 31 December 2012 | Value on the | through profit | Loans and | Debt at |
| balance sheet | or loss | receivables | amortised cost | |
| Assets | ||||
| Non-current financial assets | 73 | 73 | ||
| Trade receivables | 3,324 | 3,324 | ||
| Other current assets | 2,143 | 2,143 | ||
| Current financial assets (1) | 211 | 211 | ||
| Cash equivalents (1) | 36,917 | 36,917 | ||
| Cash | 721 | 721 | ||
| Total of assets | 43,388 | 36,917 | 6,472 | |
| Liabilities | ||||
| Long-term loans and borrowings | 2,362 | 2,362 | ||
| Short-term loans and borrowings | 756 | 756 | ||
| Trade payables | 2,178 | 2,178 | ||
| Other current liabilities | 3,119 | 3,119 | ||
| Total of liabilities | 8,415 | 8,415 |
(1) Fair value measurement of these financial assets at fair value through profit or loss refers to an active market (IFRS 7 Level 1 inputs).
Sales and operating revenue consist of the following:
(Amounts in thousands of euros)
| As of 30 June | |||
|---|---|---|---|
| 2013 | 2012 | ||
| Sales | 4,320 | 3,519 | |
| Subsidies | 13 | 285 | |
| Research Tax Credit and other tax credits | 192 | 391 | |
| Discounted portion of repayable advances | 56 | 28 | |
| Other income | 10 | 15 | |
| Total of revenue | 4,591 | 4,238 |
The Group's sales comprise sales of Cellvizio® products and accessories (probes, software and others), and services provided
The competitiveness and employment tax credit is accounted under Research tax credit and other tax credits.
| SALES BY TYPE | ||
|---|---|---|
| (Amounts in thousands of euros) | ||
| As of 30 June | ||
| 2013 | 2012 | |
| Total sales of "equipements" | 2,941 | 2,447 |
| Total sales of "consumables" (probes) | 1,111 | 849 |
| Total sales of "services" | 268 | 223 |
| Total sales by type | 4,320 | 3,519 |
The sales by geographical area as of June 30, 2013 and 2012 are as follows:
| (Amounts in thousands of euros) | ||
|---|---|---|
| As of 30 June | ||
| 2013 | 2012 | |
| EMEA (Europe, Middle East, Africa) | 891 | 891 |
| including France | 400 | 371 |
| America | 2,124 | 2,099 |
| including United States of America | 1,814 | 2,011 |
| Asia | 1,305 | 529 |
| including China | 691 | |
| Total sales by geographical area | 4,320 | 3,519 |
For the purposes of geographical analysis, sales are allocated by management according to the place of delivery, or, in the case of services, according to the location of the customer's registered office.
As of 30 June 2013, one distributor accounted for 16% of consolidated sales. As of 30 June 2012, no single Group customer accounted for more than 10% of consolidated sales.
The Group employed 113 people as of June 30, 2013, compared with 107 as of June 30, 2012.
The employee benefits expense breaks down as follows:
(Amounts in thousands of euros)
| As of 30 June | ||
|---|---|---|
| 2013 | 2012 | |
| Wages and salaries, social security costs | 5,711 | 5,666 |
| Pension costs | 11 | 29 |
| Share-based payment transaction expenses | 286 | 800 |
| Total of employee benefits expense | 6,009 | 6,495 |
(Amounts in thousands of euros)
| As of 30 June | ||
|---|---|---|
| 2013 | 2012 | |
| Purchases consumed | 14 | 87 |
| Employee benefits expenses | 1,155 | 862 |
| External expenses | 479 | 165 |
| Net change in amortisation and depreciation | 211 | 184 |
| Total of Research & Development | 1,859 | 1,297 |
(Amounts in thousands of euros)
| As of 30 June | ||
|---|---|---|
| 2013 | 2012 | |
| Purchases consumed | 33 | 127 |
| Employee benefits expenses | 3,222 | 3,805 |
| External expenses | 2,470 | 2,017 |
| Net change in amortisation and depreciation | 130 | 27 |
| Total of Sales & Marketing | 5,854 | 5,976 |
| As of 30 June | ||
|---|---|---|
| 2013 | 2012 | |
| Purchases consumed | 29 | 22 |
| Employee benefits expenses | 1,123 | 862 |
| External expenses | 694 | 886 |
| Taxes | 46 | 115 |
| Net change in amortisation and depreciation | 62 | 30 |
| Total of Administrative expenses | 1,955 | 1,916 |
The table below shows the breakdown in financial revenue and expenses:
(Amounts in thousands of euros)
| As of 30 June | ||
|---|---|---|
| 2013 | 2012 | |
| Gains on current financial assets | 0 | 24 |
| Foreign exchange gains | 33 | 19 |
| Gains on cash equivalents | 8 | 16 |
| Other financial incomes | 0 | 1 |
| Total of financial revenue | 4 2 |
6 0 |
| Foreign exchange losses | (30) | (75) |
| Losses on cash equivalents | (4) | 0 |
| Discounting expenses | (18) | (52) |
| Total of financial expenses | (53) | (126) |
| Total of financial revenue and expenses | (11) | (67) |
As was the case at year-end 2012, the Group does not capitalize its tax losses. The income tax expense relates to the minimum tax due from the United States subsidiary recognized in the financial statements in accordance with the accounting principles described in Note 1.3.1 above.
The Company had the following commitments as of June 30, 2013:
- Commitments under operating leases amounted to k€ 195 for terms of less than one year and to k€ 347 for terms of more than one year. The increase in these commitments from the December 31, 2012 figure is due to the new lease signed by Mauna Kea Technologies Inc. for the period 02/01/2013 to 02/28/2015 in relation to 1325 Satellite Boulevard, Unit 108, Suwanee, GA, 30024, USA.
Commitments to suppliers totaled k€ 893 for terms of less than one year and k€ 496 for terms of one to five years. The increase in these commitments is due to signature of procurement contracts with suppliers of raw materials used in the manufacture of Cellvizio products and probes.
The Company is committed to contributing to the initiatives of the Fondation San T Dige for a total of k€ 25, in tranches of k€ 5 per year from 2013 to 2017. A provision of k€ 2,5 was recognized as of June 30, 2013. This foundation is dedicated to research and development in the field of hepato-gastroenterology.
There were no material changes to the Company's other commitments in the half-year period.
Instruments giving deferred right to the capital (BSAs, BSPCEs and stock options) are considered antidilutive, since they lead to an increase in earnings per share. Accordingly, the diluted earnings per share are identical to the basic earnings per share.
There was no material change to the management of financial risk over the past half-year.
The related party transactions shown below were recognized as expenses during the periods presented:
| RELATED PARTY TRANSACTIONS | |||
|---|---|---|---|
| (Amounts in thousands of euros) | |||
| As of 30 June | |||
| 2013 | 2012 | ||
| Wages and salaries | 204 | 183 | |
| Directors' fees | 31 | 4 | |
| Share-based payments | 3 | 18 |
The dispute with Anticancer Inc. was settled on July 29, 2013. The Federal Court of the Southern District of California issued a ruling rejecting all infringement of patent claimed by AntiCancer Inc. against Mauna Kea Technologies.
COFIDEC ERNST & YOUNG et Autres
This is a free translation into English of the statutory auditors' review report on the half-yearly consolidated financial statements issued in French and it is provided solely for the convenience of English-speaking users. This report also includes information relating to the specific verification of information given in the Group's interim management report. This report should be read in conjunction with and construed in accordance with French law and professional standards applicable in France.
Mauna Kea Technologies Period from January 1 to June 30, 2013
Statutory Auditors' Review Report on the first half-yearly financial information
155, boulevard Haussmann 75008 Paris S.A.R.L. au capital de € 32.800
Commissaire aux Comptes Membre de la compagnie régionale de Paris
1/2, place des Saisons 92400 Courbevoie – Paris-La Défense 1 S.A.S. à capital variable
Commissaire aux Comptes Membre de la compagnie régionale de Versailles
Mauna Kea Technologies Period from January 1 to June 30, 2013
Statutory auditors' review report on the first half-yearly financial information
To the Shareholders,
In compliance with the assignment entrusted to us by your annual general meetings and in accordance with the requirements of article L. 451-1-2 III of the French monetary and financial code (Code monétaire et financier), we hereby report to you on:
These condensed half-yearly consolidated financial statements are the responsibility of the board of directors. Our role is to express a conclusion on these financial statements based on our review.
We conducted our review in accordance with professional standards applicable in France. A review of halfyearly financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with professional standards applicable in France and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the condensed half-yearly consolidated financial statements are not prepared in all material respects in accordance with IAS 34 – standard of the IFRSs, as adopted by the European Union applicable to interim financial information.
We have also verified the information presented in the interim management report in respect of the condensed half-yearly consolidated financial statements subject to our review.
We have no matters to report as to its fair presentation and its consistency with the condensed half-yearly consolidated financial statements.
Paris and Paris-La Défense, August 30, 2013
The Statutory Auditors
French original signed by
COFIDEC ERNST & YOUNG et Autres
Thibault Faure Denis Thibon
(Article 222-3-4 of the General Regulations of the AMF [Autorité des Marchés Financiers/French Financial Markets Authority])
I attest that, to my knowledge, the condensed financial statements for the last half-yearly period were prepared in accordance with the applicable accounting standards (IFRS standards as adopted by the European Union for consolidated financial statements) and give a fair representation of the company's assets, financial position and results, and that the half-yearly activity report presents an accurate picture of the significant events occurring during the first six months of the fiscal year, their impact on the financial statements and the principal transactions between related parties, along with a description of the principal risks and the principal uncertainties for the remaining six months of the year.
Alexandre Loiseau
Chief Executive Officer
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