Wizcom Technologies Releases Nine Months 2011 Results - Additional Funding Required to Complete Turnaround

Rosh Ha'ayin, November 30th, 2011 - Wizcom Technologies Ltd. (Prime Standard: WZM, IL 0010830706), a leading global provider of handheld scanning and translation tools, today announces its results for the first nine months of 2011. Figures are according to US-GAAP and in US$ thousands.

Financial Highlights

• Revenues for the first nine months of 2011 rose by 42.2% compared to the same period last year, from US$2,898 to US$4,122.

• The gross profit margin for the first nine months of 2011 came in at 32%, compared to 29.1% for the same period last year.

• An operating loss of US$1,925 was posted for the first nine months of 2011, as compared to a US$1,232 operating loss for the first nine months of 2010.

• Total operating expenses for the first nine months of 2011 were US$3,235, a rise of 56% compared to the US$2,074 in the same period of 2010.  The increase in operating expenses was in part due to a $513 impairment charge Wizcom recorded in relation to a revaluation of its subsidiary Galil Microwaves.

• Wizcom recorded a financial gain in relation to a positive change of $507 in the fair value of derivatives.  This positive effect was in part offset by $223 in financial expenses.

• Net loss decreased marginally compared to the same period last year from US$1,710 to US$1,632.

• Basic and diluted net loss per common share was US$0.11, compared to US$0.14 for the same period last year.

• As of September 30th, 2011, the Company had cash and cash equivalents of US$666, compared to US$639 for December 31st, 2010.  Compared to 30th September 2010, cash was up from US$190

• For the first nine months of 2011, the company recorded a negative cash flow from operations of $1,332.  As a result, Wizcom will have to raise additional funds, as presently the Company does not have sufficient cash to satisfy its operational requirements for the coming 12 months, raising substantial doubt about the Company's ability to continue as a going concern unless additional capital is raised.  The company is putting together a funding package, consisting of a bridge loan and a convertible debenture, to ensure sufficient funds are available to complete the turnaround program and develop its markets. 

Operations

Mr. Shimon Amouyal, CEO for Wizcom, stated, "In the past two years we have made sweeping changes and rebuilt the company completely.  We have new management, a new Board and a new sales organization with recent appointments in important regions such as the US, the UK and Russia.  Our commercial model has changed in that we are more focused on key regions and specific target markets.  We also increased our single tier sales capabilities, rather than indirect sales, as was the case before.  This gives us much more control and enables us to take direct action.  These appointments have already had a positive impact, partially offsetting the negative effect of the issue with our Asian distributor.  In addition, we have made key appointments in R&D, which has enabled us to develop a clear and visionary technology roadmap for the year ahead."

"We have now gotten to a situation where three quarters of our turnaround program has been implemented.  To complete the final part and to see us through to when we believe we will become cash flow positive, we are looking to raise approximately $2 million.  We have designed a funding package to help raise this money, consisting of a bridge loan of up to $800k, to be raised within the next few weeks, and a convertible debenture.  We will be calling an Extraordinary Shareholder Meeting to obtain approval for the convertible in the coming weeks.  I am confident we will be able to complete this coming round and I am pleased to share that some of our Board members have already committed funds, conditional upon full subscription.  We will make more announcements on the funding as and when new material information becomes available."

"What we are really excited about, and what forms the basis of our belief in Wizcom's future as a financially strong company, is that we are in the process of developing an entirely new generation of products, slated for launch around the middle of 2012.  We are looking to bring out three new product lines that share a common platform, using generic components as much as possible, rather than expensive bespoke ones.  This should make a very positive contribution to our gross margin.  The new products will be differentiated towards each of our three target groups; special needs (e.g. dyslexia), consumers and business professionals, and have additional functionality that the current generation does not have.  Additionally, we are looking to launch a cheaper, entry level model.  Finally, both design and ergonomics will play an important part in the appeal of our new product lines."

"We believe that these exciting new products, assuming a timely launch and completion of the commercial part of our turnaround program, will herald the start of a new era for Wizcom and we expect significantly accelerated sales, as well as a marked improvement of our bottom line."