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BABYLON PUMP & POWER LIMITED — Proxy Solicitation & Information Statement 2011
Sep 20, 2011
64557_rns_2011-09-20_9671e7b9-bedc-445a-9f38-00bfd697adfa.pdf
Proxy Solicitation & Information Statement
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20 September 2011
Dear Shareholder
The Directors of IM Medical Limited (IMI or the Company) are pleased to enclose a Notice of Meeting in respect to a General Meeting of Shareholders to be held at The Quest Beaumont Kew on 21 October 2011 at 2.00pm.
The purpose of the General Meeting is to seek shareholder approval for a non-renounceable Entitlement Issue to raise up to $3.3 million before costs to recapitalise the Company and pay out all creditors.
The Directors consider the Entitlement Issue is the best means to recapitalise the Company and complete this important step in its restructure. The Company has not identified or received any other viable alternatives to raise the required funds.
Under the Entitlement Issue all shareholders will be entitled to participate in a non-renounceable issue of Shares at 0.5 cents per Share on the basis of six (6) new Shares for every (1) Share held together with one (1) free attaching option for every new Share issued exercisable at 1.0 cents each on or before 30 September 2016.
The Entitlement Issue will be made equitably to all shareholders and is the only legitimate method by which the company can recapitalise itself under the circumstances.
The ASX Listing Rules require shareholder approval where a non-renounceable issue is offered at a ratio greater than 1 for 1. The enclosed Notice of a General Meeting provides further details of the Entitlement Issue.
On completion of the Entitlement Issue the ASX has advised they will re-instate the Company’s securities to trading which your board believes will be of benefit to all shareholders
Please read the enclosed documentation carefully, and return your Proxy to Security Transfer Registrars Pty Ltd no later than 2.00pm (AEST) on Wednesday 19 October 2011. Further details are provided on the Proxy form.
The Directors stress the importance of approval of the Entitlement Issue to provide urgently needed equity funding for the Company. The Directors further stress that the Entitlement Issue proposed is the only viable funding arrangement available. All shareholders will have the opportunity to participate on equal terms in the future of the Company.
The Directors unanimously and strongly recommend you vote in favour of the resolution to approve the Entitlement Issue, thereby securing a future for the company.
Yours faithfully
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Nigel Blaze Chairman
IM MEDICAL LIMITED
A C N 0 0 9 4 3 6 9 0 8
NOTICE OF GENERAL MEETING
A General Meeting of the Company will be held at The Quest Beaumont Kew, 7 Studley Park Road, Kew on October 21, 2011 at 2.00 pm (AEST)
This Notice of General Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser prior to voting.
Should you wish to discuss any matter please do not hesitate to contact the Company Secretary by telephone on (03) 9613 4100.
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IM MEDICAL LIMITED
A C N 0 0 9 4 3 6 9 0 8
NOTICE OF GENERAL MEETING
Notice is hereby given that a general meeting of shareholders of IM Medical Limited ( Company ) will be held at The Quest Beaumont Kew, 7 Studley Park Road, Kew on Wednesday October 21, 2011 at 2.00 pm (AEST) ( General Meeting ).
The Explanatory Memorandum to this Notice provides additional information on matters to be considered at the Meeting. The Explanatory Memorandum and the Proxy Form form part of this Notice.
The Directors have determined pursuant to regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered as Shareholders on October 19, 2011 at 2.00pm (AEST).
Terms and abbreviations used in this Notice and the Explanatory Memorandum are defined in Section 5 of the Explanatory Memorandum.
A G E N D A
1. Resolution 1 – Approval of Entitlement Issue
To consider and, if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution:
"That, in accordance with the conditions attached to the waiver granted by ASX in respect of Listing Rule 7.11.3 and for all other purposes, Shareholders approve the Company undertaking a non-renounceable pro rata entitlement issue at a ratio of six (6) Shares at $0.005 per Share for every one (1) Share held on the Record Date which for every one (1) Share issued under the entitlement issue, the Shareholder will be granted one (1) Option exercisable at $0.01 on or before 30 September 2016 ( Entitlement Issue ) on the terms and conditions in the Explanatory Memorandum".
Voting Exclusion
The Company will disregard any votes cast on this Resolution by any Substantial Shareholders, Converting Loan Holders, any proposed promoter, underwriter or subunderwriter or their associates or a person (or any associate of such a person) who might obtain a benefit except a benefit solely in their capacity as holders of ordinary securities if the Resolution is passed.
However, the Company will not disregard a vote if:
-
(a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or
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(b) it is cast by the person chairing the General Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.
BY ORDER OF THE BOARD
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Richard Wadley Director and Company Secretary Dated: 20 September, 2011
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IM MEDICAL LIMITED
A C N 0 0 9 4 3 6 9 0 8
EXPLANATORY MEMORANDUM
1. Introduction
This Explanatory Memorandum has been prepared for the information of Shareholders in connection with the business to be conducted at the General Meeting to be held at The Quest Beaumont Kew, 7 Studley Park Road, Kew on Friday October 21, 2011 at 2.00 pm (AEST) ( General Meeting ).
This Explanatory Memorandum should be read in conjunction with and forms part of the accompanying Notice. The purpose of this Explanatory Memorandum is to provide information to Shareholders in deciding whether or not to pass the Resolutions set out in the Notice.
This Explanatory Memorandum includes the following information to assist Shareholders in deciding how to vote on the Resolutions:
Section 2: Action to be taken by Shareholders Section 3: Background Section 4: Resolution 1 – Approval of Entitlement Issue Section 5: Definitions
A Proxy Form is located at the end of the Explanatory Memorandum.
Terms and abbreviations used in this Explanatory Memorandum are defined in Section 5.
2.
Action to be taken by Shareholders
Shareholders should read this Explanatory Memorandum carefully before deciding how to vote on the Resolution.
A Proxy Form is attached to the Notice. This is to be used by Shareholders if they wish to appoint a representative (a "proxy") to vote in their place. All Shareholders are invited and encouraged to attend the Meeting or, if they are unable to attend in person, sign and return the Proxy Form to the Company in accordance with the instructions provided. Lodgement of a Proxy Form will not preclude a Shareholder from attending and voting at the General Meeting in person.
3. Background
3.1 Entitlement Issue
The Company is making a non-renounceable pro rata entitlement offer of Shares at an issue price of 0.5 cents each to all Shareholders registered at the Record Date on the basis of 6 Shares for every 1 Share held at 5pm (AEST) on the Record Date, together with one free attaching new Option for each Share subscribed for, to raise up to approximately $3,300,000.
There is a minimum subscription of 560,000,000 Shares to raise $2,800,000 before expenses of the Offer.
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The Entitlement Issue is a key step in recapitalising and restructuring the Company after a protracted period of disappointing financial performance. The Entitlement Issue will raise urgently needed funds to allow the Company to:
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(a) repay Converting Loans following the Company’s failure at the General Meeting held on 16 August 2011 to approve conversion of the Converting Loans into Shares and Options. A shareholder group associated with former management of the Company were successful in blocking approval for the conversion of Converting Loans at the General Meeting, without having a viable alternative proposal to finance the Company. The $750,000 in Converting Loans is now repayable together with approximately $192,000 in additional interest and redemption costs;
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(b) pay other creditors of approximately $1,039,683;
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(c) pay the costs of the Entitlement Issue of approximately $366,260; and
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(d) provide working capital for the Company of $968,021.
The financial impact of the Entitlement Issue is set out in more detail in Schedule 2.
3.2 Directors' Recommendation
The Directors stress the importance of approval of the Entitlement Issue to provide necessary equity funding for the Company. If the Entitlement Issue is not approved, the Company will not have the funds required to pay its creditors.
Notwithstanding some claims by other parties to the contrary, the Company has not been presented with any other viable financing alternative.
In the event the Entitlement Issue is not approved, it is likely that the Company will face solvency issues that would require the Board to consider voluntary administration.
After considering all relevant factors, the Directors unanimously recommend all Shareholders vote in favour of Resolution 1.
3.3 Sale of Radiology Business
As set out in the prospectus for the Entitlement Issue announced by the Company to ASX on 14 September 2011, following completion of the Entitlement Issue, the Company proposes the sale of 100% of its interest in the Radiology Business to Capitol Health in consideration for:
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(a) 45,559,021 ordinary fully paid shares in the capital of Capitol Health;
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(b) up to an aggregate of $600,000 in deferred cash payments depending upon the post-sale financial performance of the Radiology Business; and
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(c) a management fee of $100,000 payable by the Company to Capitol Health on completion of the sale of the Radiology Business,
( Radiology Business Sale ).
The Board believes the Radiology Business Sale offers the best available outcome for Shareholders and is in the best interests of the Company. The Company intends that the benefit of the sale should go directly to Shareholders, and has proposed the inspecie distribution of shares in Capitol Health to IMI Shareholders. By doing this, Shareholders will be able to retain a direct interest in the radiology sector.
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The recent financial performance of the Radiology Business is set out in Schedule 2 below.
The Company will seek Shareholder approval for the sale of the Radiology Business and the in-specie distribution of Capitol Health shares at the Company’s Annual Meeting expected to be held in mid November 2011.
3.4 Future Direction of the Company
Following completion of the recapitalisation and restructure, the Company intends to investigate acquisition and investment opportunities to restore Shareholder value. The Directors expect to consider opportunities across a range of sectors which may take the Company away from its medical services focus.
Following completion of the Entitlement Issue, in the first instance the Directors will seek to employ a well-credentialed Chief Executive Officer ( CEO ) to lead the search for investment opportunities and to lead the rebuilding of the Company. Subject to confirmation regarding Shareholder approval for the sale of the Radiology Business in accordance with Listing Rule 11.2, the Directors will investigate the recruitment of a CEO with resource sector expertise, given that sector is a current focus for investor interest.
If the Company acquires a business or assets or otherwise changes its activities in a way which requires the Company to comply with Chapters 1 and 2 of the Listing Rules, the Company will undertake a consolidation of its capital to comply with Listing Rule 2.1 condition 2.
In the event Shareholders do not approve the Radiology Business Sale, the Company expects that the management arrangements with Capitol Health will terminate, and the Company’s focus will turn to recruitment of management with the skills and experience to lead the Radiology Business and to try to return it to profitability.
The Directors are confident that once recapitalised, the Company will be capable of attracting the calibre of CEO required to successfully rebuild the Company. At this stage no investment commitments have been made and no specific opportunities have been identified.
3.5 Proposed New Capital Structure
On the basis the Entitlement Issue is approved by Shareholders the capital structure of the Company would be as follows:
| Shares | Options | |
|---|---|---|
| Securities on issue as at date of Notice |
110,549,956 | 94,563,953(1) |
| Entitlement Issue (6 for 1) | 663,299,736(3) | 663,299,736(2,3) |
| Total | 773,849,692 | 757,863,689 |
(1) Unlisted Options with varying exercise prices and expiry dates. Refer to the Appendix 3B lodged by the Company with ASX on 22 December 2010 for the terms and conditions of these Options.
(2) Refer to Schedule 1 for the terms and conditions of the Options.
(3) Assuming no Options are exercised prior to the record date.
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3.6 Indicative Timetable
The Entitlement Issue is proposed to be completed in accordance with the following indicative timetable:
| Notice of Meeting sent to Shareholders | Wed 21 Sep2011 |
|---|---|
| Ex-entitlement date | Thu 22 Sep2011 |
| Record Date | Wed 28 Sep2011 |
| Dispatch Prospectus to Shareholders | Thu 29 Sep2011 |
| General Meeting to approve Entitlement Issue | Fri 21 Oct 2011 |
| Entitlement Issue closes (5:00pm AEST) | Fri 28 Oct 2011 |
| ASX notified of shortfall | Wed 2 Nov 2011 |
| Settlement of shortfall | Mon 7 Nov 2011 |
| Allot and Dispatch Holding Statements | Mon 7 Nov 2011 |
| All shares expected to commence trading on a normal basis | Tue 8 Nov 2011 |
Note: The above timetable is indicative only and subject to change.
Note: The Company has obtained a waiver from the ASX in order to commence the Entitlement Issue timetable prior to the date on which Shareholders approve the Entitlement Issue.
3.7 Other Material Information
There is no other information material to the making of a decision by a Shareholder whether or not to approve Resolution 1 (being information that is known to any of the Directors and which has not been previously disclosed to Shareholders) other than as disclosed in this Explanatory Memorandum.
4. Resolution 1 – Approval of Entitlement Issue
4.1 General
Resolution 1 seeks Shareholder approval pursuant to Listing Rule 7.11.3 to enable the Company to offer Shares pro-rata on the basis of six (6) Shares for every one (1) Share held at the Record Date. In addition, for every one (1) Share issued under the Entitlement Issue, the Shareholder will be granted one (1) Option exercisable at 1.0 cent on or before 30 September 2016.
The Entitlement Issue is not underwritten and is subject to a minimum subscription of $2.8 million.
Listing Rule 7.11.3 provides an exemption for pro-rata offers that is expressed to be renounceable. The Company is suspended from trading on the ASX and is unable to make a renounceable offer.
Listing Rule 7.11.3 provides generally that a company may not, under a pro rata issue, offer securities to Shareholders at a ratio greater than one new security for each existing security held. Strict compliance with this rule would prevent the Company from undertaking a pro-rata offer of sufficient scale for the purposes of raising sufficient capital to recapitalise the Company.
The Company obtained from ASX a waiver of Listing Rule 7.11.3 to the extent required to enable the Company to make the offer under the Entitlement Issue nonrenounceable. A waiver was sought because the ratio on which Shares would be
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offered under the Entitlement Issue is six (6) Shares for every one (1) existing Share held.
While Shareholder approval is not normally required for a pro rata non-renounceable entitlements issue (as most are completed on a 1:1 basis), ASX granted the waiver of Listing Rule 7.11.3 on the condition that Shareholder approval is obtained. In addition, ASX requires that any Substantial Shareholders, Converting Loan Holders, any proposed promoter, underwriter or sub-underwriter or their associates or a person (or any associate of such a person) who might obtain a benefit except a benefit solely in their capacity as holders of ordinary securities if the Resolution is passed are excluded from voting.
Approval is sought from Shareholders for the issue of Shares on the following terms:
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(a) the maximum number of securities to be issued under Resolution 1 is 663,299,736 Shares and 663,299,736 Options (post the recent 1 for 50 share consolidation and subject to rounding);
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(b) the Securities will be allotted and issued in accordance with the Entitlement Issue timetable;
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(c) the Shares will be issued at a price of 0.5 cents per Share with the Options being free attaching;
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(d) The Shares will be offered to all registered Shareholders as at the Record Date;
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(e) The Shares to be issued pursuant to the Entitlement Issue are ordinary fully paid shares. The Options are free carried and will be issued for nil consideration exercisable at 1.0 cent each on or before 30 September 2016;
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(f) The intended use of the funds raised under Entitlement Issue is set out in Section 3.1; and
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(g) A voting exclusion statement has been included in this notice which precludes from voting any Substantial Shareholders, Converting Loan Holders, any proposed promoter, underwriter or sub-underwriter or their associates or a person (or any associate of such a person) who might obtain a benefit except a benefit solely in their capacity as holders of ordinary securities if the Resolution is passed.
Resolution 1 is an ordinary resolution.
5. Definitions
In this Explanatory Memorandum and the Notice of General Meeting and Proxy Form:
ASIC means Australian Securities and Investments Commission.
ASX means ASX Limited (ABN 98 008 624 691) and, where the context permits, the Australian Securities Exchange operated by ASX Limited.
Capitol Health means Capitol Health Limited ACN 117 391 812.
Company or IMI means IM Medical Limited ACN 009 436 908.
Converting Loan Holder means a person who has provided a Converting Loan to the Company.
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Converting Loans means the loans of an aggregate amount $750,000 convertible into the 150,000,000 Shares and 150,000,000 Options exercisable at 0.5 cents each on or before 31 March 2012 (which if exercised entitle the holder to be granted one additional Option exercisable at 1.5 cents each on or before 30 June 2015).
Corporations Act means the Corporations Act 2001 (Cth).
Director(s) mean the directors of the Company.
Entitlement Issue has the meaning in Resolution 1.
EST means eastern standard time.
General Meeting means the general meeting of the Shareholders to be held at The Quest Beaumont Kew, 7 Studley Park Road, Kew at 2.00pm on Friday 21 October 2011.
Listing Rules means the official listing rules of ASX.
Notice means the Notice of General Meeting which this Explanatory Memorandum accompanies.
Option means an option to acquire a Share.
Patersons means Patersons Securities Limited.
Proxy Form means the proxy form attached to the Notice.
Radiology Business means the Company's radiology services business.
Record Date means the date specified in the indicative timetable.
Share means a fully paid ordinary share in the capital of the Company.
Shareholder means a holder of a Share.
Substantial Shareholder has the meaning given to Substantial Holder in Chapter 19 of the Listing Rules.
In this Explanatory Memorandum and the Notice of words importing the singular include the plural and vice versa.
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Schedule 1 – Option Terms and Conditions
1. Entitlement
Each Option entitles the holder to subscribe for one Share upon exercise of the Option.
2. Exercise Price and Expiry Date
The Options have an exercise price of $0.01 (Exercise Price) and an expiry date of 30 September 2016 (Expiry Date).
3. Exercise Period
The Options are exercisable at any time on or prior to the Expiry Date.
4. Notice of Exercise
The Options may be exercised by notice in writing to the Company (Notice of Exercise) and payment of the Exercise Price for each Option being exercised. Any Notice of Exercise of an Option received by the Company will be deemed to be a notice of the exercise of that Option as at the date of receipt.
5. Shares issued on exercise
Shares issued on exercise of the Options rank equally with the then shares of the Company.
6. Quotation of Shares on exercise
Application will be made by the Company to ASX for quotation of the Shares issued upon the exercise of the Options.
7. Timing of issue of Shares
After an Option is validly exercised, the Company must, within, 15 Business Days of the notice of exercise and receipt of cleared funds equal to the sum payable on the exercise of the Option:
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(a) issue and allot the Share; and
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(b) do all such acts, matters and things to obtain the grant of official quotation of the Share on ASX no later than 5 Business Days after issuing the Shares.
8. Participation in new issues
There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least ten business days after the issue is announced. This will give the holders of Options the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.
9. Adjustment for bonus issues of Shares
If the Company makes a bonus issue of Shares or other securities to existing Shareholders (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment):
- (a) the number of Shares which must be issued on the exercise of an Option will be increased by the number of Shares which the Optionholder would have received if the Optionholder had exercised the Option before the record date for the bonus issue; and
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(b) no change will be made to the Exercise Price.
10. Adjustment for entitlement issue
If the Company makes an issue of Shares pro rata to existing Shareholders (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment) the Exercise Price of an Option will be reduced according to the following formula:
New exercise price = O - E[P-(S+D)]
N+1
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O = the old Exercise Price of the Option.
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E = the number of underlying Shares into which one Option is exercisable.
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P = average market price per Share weighted by reference to volume of the underlying Shares during the 5 trading days ending on the day before the ex rights date or ex entitlements date.
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S = the subscription price of a Share under the pro rata issue.
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D = the dividend due but not yet paid on the existing underlying Shares (except those to be issued under the pro rata issue).
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N = the number of Shares with rights or entitlements that must be held to receive a right to one Share.
11. Adjustments for reorganisation
If there is any reconstruction of the issued share capital of the Company, the rights of the Optionholders may be varied to comply with the Listing Rules which apply to the reconstruction at the time of the reconstruction.
12. Quotation of Options
The Options will be listed Options.
13. Options transferable
The Options are freely transferable.
14. Lodgement Instructions
Cheques shall be in Australian currency made payable to the Company and crossed "Not Negotiable". The application for shares on exercise of the Options with the appropriate remittance should be lodged at the Company's Registry.
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Schedule 2 – Financial Information
1. Pro forma statement of financial position
| Current Assets Cash and cash equivalents Assets classified as held for sale Investments Prepayments Trade and other receivables Total current assets Non Current Assets Plant and equipment Receivables Total non current assets Total assets Current liabilities Trade and other payables Other financial liabilities Provisions Liabilities classified as held for sale Convertible note Total current liabilities Non current liabilities Other financial liabilities Total non current liabilities Total liabilities Net assets Equity Issued capital Reserve Accumulated losses Total equity Net tangible assets per security* |
30 June 2011 (Pro- forma) $ 30 June 2011 $ 2,390,303 382,598 - 2,093,482 1,594,600 - 50,621 41,553 50,621 41,553 4,077,077 2,568,254 168,630 217,454 168,630 - 386,084 168,630 4,463,161 2,736,884 1,081,236 951,236 2,457 2,457 5,753 5,753 - 281,428 - 915,617 |
|---|---|
| 1,089,446 2,156,491 |
|
| - - - - 1,089,446 2,156,491 3,373,715 580,393 23,798,047 20,847,808 - - (20,424,332) (20,267,415) 3,373,715 580,393 $0.004 $0.005 |
- Adjusted for the 1 for 50 share consolidation completed on 25 August 2011.
Basis of Preparation
The above pro forma statement of financial position has been prepared in accordance with the draft ASIC Guide to Disclosing Pro Forma Financial Information (issued July 2005).
The statement of financial position as at 30 June 2011 is in the process of being audited by the Company’s auditors, and has been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and settlement of liabilities in the normal course of business.
The statements of financial position as at 30 June 2011 have been prepared to provide Shareholders with information on the assets and liabilities of the Company and pro-forma assets and liabilities of the Company. The historical and pro-forma financial information is presented in an abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial statements.
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The pro forma statement of financial position is based on the unaudited statement of financial position as at 30 June 2011 and has then been adjusted to reflect the following material transactions, assuming shareholder approval is obtained for the Entitlement Issue and the sale of the Radiology Business to Capitol Health:
Pro-forma Adjustments
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Receipt of proceeds of the Entitlement Issue net of capital raising costs of $2,950,238 (gross proceeds of the Entitlement Issue are $3,316,498 and capital raising costs associated with both the Converting Loans and the Entitlement Issue are $366,260). This is on the assumption maximum entitlements are taken up under the Entitlement Issue.
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Repayment of the $750,000 Converting Loans including a redemption payment of $150,000 and accrued interest at 10% p.a. from 15 April 2011 to 8 November 2011 (estimated completion date of Entitlement Issue) of $42,534.
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Accrued other related costs of $130,000. Included in this figure is a $100,000 management fee payable by the company to Capitol Health on completion of the Radiology Business Sale.
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Completion of the Radiology Business Sale to Capitol Health, resulting in 45,559,021 shares in Capitol Health held as an investment asset pending an in specie distribution to Shareholders of the Company. Reclassification of assets held for sale $2,093,482 and liabilities held for sale $281,428 as investment of $1,594,600 (45,559,021 Capitol Health ordinary shares at 3.5 cents per share), and extinguishment of liabilities held for sale of $281,428. Receivables of $217,454 represent potential bonus payments in relation to the Radiology Business Sale amounting to up to $600,000 adjusted by the probability of receiving the bonuses and by a discount factor representing the time value over the period until the payments may be due. The value of investments and assets classified as held for sale is based on a share price for Capitol Health of 3.5 cents per share. Any change in the Capitol Health share price will affect the value of these assets.
2. Financial Performance of Radiology Business
The Radiology Business was acquired by the Company from companies associated with the director, Dr Mark Scott, following approval by Company shareholders in July 2010 and completion of the acquisition in August 2010. The Radiology Businesses are held by the Company’s wholly owned subsidiary, eHealth Imaging Pty Ltd.
Since being acquired by the Company, the trading performance of the Radiology Business has not met expectations and was a significant contributor to the net loss of $4.07 million recorded by the Company in the year to 30 June 2011.
Due to the underperformance of the eHealth Imaging Pty Ltd subsidiary, on 25 March 2011 the Directors of IM medical Limited entered into an agreement with Capitol Health Ltd to acquire the radiology division of the Company, subject to shareholder approval. Pending completion of the sale of the radiology business, the Company entered into a Management Agreement with Capitol Health whereby Capitol Health pays the costs and takes the operating risks relating to the Radiology Business, and receives the operating revenues.
The table below shows the financial performance of the Company’s Radiology Business for the period from 1 January 2011 to 31 August 2011.
The Radiology Business was managed by IM Medical Limited during the period 1 January 2011 to 31 March 2011. The Radiology Business has been managed by Capitol Health under the terms of the Management Agreement since 1 April 2011. The Radiology business was loss making when the Management Agreement with Capitol Health was entered into and continues to be loss making.
The financial results set out below have been audited as part of the IM Medical Limited consolidated 30 June 2011 audit for the period 1 January 2011 to 30 June 2011. The financial results for the period from 1 July 2011 to 31 August 2011 are based on management accounts and have not been audited.
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Radiology Business Divisional Income Statement
| . Revenue Radiology Interest income Total revenue Direct Costs Direct personnel costs Other direct costs Total direct costs Gross profit/(loss) Indirect Costs Corporate administration Office occupancy Depreciation & Amortisation Consultancy expenses Equipment costs Interest expense Total indirect costs Net profit/(loss) Net profit/(loss) per Month |
1 Jan 2011 to 31 March 20111 1 April 2011 to 31 August 20112 Total $ $ $ $1,514,758 $2,751,985 $4,266,743 $558 $0 $558 |
|---|---|
| $1,515,316 $2,751,985 $4,267,301 |
|
| $898,572 $2,240,922 $3,139,494 $55,530 $93,536 $149,066 |
|
| $954,102 $2,334,458 $3,288,560 |
|
| $561,214 $417,527 $978,741 $392,000 $492,725 $884,725 $103,125 $183,990 $287,115 $108,150 $4,274 $112,424 $6,173 $79,836 $86,009 $304,151 $195,336 $499,487 $2,800 $0 $2,800 |
|
| $916,399 $956,161 $1,872,560 |
|
| ($355,185) ($538,634) ($893,819) ($118,395) ($107,727) ($111,727) |
Notes
1 Managed by IM Medical Limited during the period. Audited as part of the IM Medical Limited consolidated 30 June 2011 audit.
2 Managed by Capitol Health under a management agreement. The period from 1 April 2011 to 30 June 2011 has been audited as part of the IM Medical Limited consolidated 30 June 2011 audit. The period from 1 July 2011 to 31 August 2011 has not been audited.
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