MediVision Presents Management’s Report for the period ended March 31, 2008
MediVision consolidated revenues for the three months period ended March 31, 2008 aggregated to $3,601,000 compared to revenues of $4,589,000 for the comparable period of 2007, reflecting a decrease of 22%.
Highlights of the three months period ended March 31, 2008
Purchase of Acermed assets by OIS - In January 2008, OIS purchased substantially all of the assets of Acermed, Inc., a leading software developer for Electronic Medical Records (EMR) and Practice Management(EPM) software. The acquisition was done through OIS's newly established subsidiary, Abraxas Medical Solutions, Inc., and was approved by the California Central Bankruptcy Court.
Merger with OIS - During the first quarter, MediVision signed a Merger agreement with OIS, under which the Company will become a subsidiary of OIS in a stock transaction. According to the Merger agreement and subject to the conditions of the agreements, MV ACQUISITIONS Ltd ("MVA"), an Israeli company under incorporation and a wholly-owned subsidiary of OIS, and the Company intend to effect the merger of MVA with and into MediVision (the "Merger"), following which, MVA will cease to exist, MediVision's outstanding shares will be converted into shares of OIS common stock, and the Company will become a wholly-owned subsidiary of OIS.
At the effective time of the merger each MediVision ordinary share will be converted into 1.66 shares of OIS common stock ("OIS Shares"). OIS Shares will be listed for trade on the NASDAQ OTC Bulletin Board.
This ratio reflects the approximately 9.4 million OIS Shares held by MediVision for 9.4 million OIS Shares and an additional aggregate amount of approximately 1.9 million shares of OIS common stock (taking into account MediVision's current outstanding share capital), reflecting the following assets and liabilities:
- MediVision's product pipeline;
- MediVision's research and development capabilities;
- MediVision's sales and distribution capabilities;
- MediVision's German-based subsidiary; and
- MediVision's debt to banks of approximately $2.85 million
In addition, outstanding options and warrants to purchase MediVision shares shall also be converted into options or warrants in the same exchanged ratio, as the case may be, to purchase shares of OIS Common Stock. The Merger agreement also includes additional provisions regarding certain rights of major shareholders of MediVision, voting arrangements, registration rights and provisions applicable to share transfers.
The Merger which was unanimously approved by both companies' Boards of Directors, OIS' special independent committee and MediVision's audit committee, is expected to close by the end of the third quarter of 2008 and will be subject to approval by OIS and MediVision's shareholders in special shareholders meetings, as well as securing all other approvals and consents which are legally required.
Management's Discussion and Analysis of the Financial Condition and Results of Operations of the Company
Sales - The consolidated Sales for the period ended March 31, 2008 aggregated to $3,601,000 compared to sales of $4,589,000 for the comparable period of 2007, reflecting a decrease of 22%. The decrease in revenues between the quarters is due to a decrease of product sales in the three months ended March 31, 2008 of approximately $1,054,000, offset by an increase in service revenue of approximately $66,000.
Gross Profit - Gross profit for the period ended March 31, 2008 were $1,826,000 or 51% of sales revenues, as compared with $2,690,000 which were 59% of sales revenues for the comparable period of 2007. Gross margins decreased due to the decrease in sales with fixed overhead costs.
Research and Development Expenses - Net R&D expenses for the period ended March 31, 2008 amounted to
$579,000 or 16% of Sales revenues. During the comparable reported period, the Company recognized development costs in the amount of $285,000 as an intangible asset in accordance with the criteria for recognition as set forth in IAS 38 "Intangible Assets". The total R&D spending during the period was $579,000 or 16% of Sales revenues compared to $719,000 or 16% of Sales revenues in the comparable period of 2007.
Selling and Marketing Expenses - Total Selling and Marketing expenses for the three months period ended March 31, 2008 amounted $1,197,000 which are 33% of total Sales revenues, as compared with $1,058,000 which were 23% of total Sales revenues for the comparable period in 2007.
General and Administrative Expenses - General and Administrative expenses include mainly salaries, professional services, rental, maintenance and various provisions. Total General and Administrative expenses for the three months period ended March 31, 2008 were $747,000 which are 21% of the total Sales, as compared to $687,000, which were 15% of total Sales in the comparable period of 2007.
Minority Interest - Minority interest for the three months period ended March 31, 2008 are attributed mainly to the part of OIS minority shareholders in the loss of OIS. In addition part of the minority interest is attributed to the minority shareholders of CCS Pawlowski GmbH, the company's German subsidiary.
Long-term debt - Long-term debt during the period ended March 31, 2008 decreased due to repayments of loans and higher allocation to current maturities.
Total equity - During the period ended March 31, 2008, total equity was decreased by $850,000 or 9% reaching
MediVision Medical Imaging Ltd. / Headquarters and Manufacturing Facility
MediVision specializes in digital imaging devices for medical ophthalmic applications with an emphasis on diagnostics related to the eye retina. MediVision's products are designed to provide digital upgrades for a range of ophthalmic imaging systems, thus significantly enhancing imaging capability and providing its users with advanced diagnostic tools. The company has significant market share and is a market leader in the ophthalmic digital imaging field. As of the balance sheet date, the Company owns 56% interest in Ophthalmic Imaging Systems Inc. based in Sacramento, California, USA and 63% interest in CCS Pawlowski GmbH based in Jena, Germany.