• home
• about us
  • overview
  • management team
  • board of directors
  • advisory consultant panel
• scorpion works
  • overview
  • VCM technology
  • intellectual property
• products
  • personal protection
    • trauma plate
    • inconjunction plate
    • stand alone plate
    • helmets & shields
  • vehicles
  • rotary & fixed wing
  • energy & infrastructure assets
• investor relations
  • Overview
  • AIM rules
  • financial information
    • latest results
    • annual reports
    • financial calendar
  • company information
    • general information
    • admission document
    • board
    • governance
    • advisers
  • shareholder information
    • share price & RNS
    • shareholder information
  • corporate news
  • investor email news alert
• news / events
  • news
  • events & tradeshows
• contact us
  • contact us
  • career opportunities

Corporate News

Results for year ended 31 December, 2010

Armor Designs, Inc., ("ADI", "Armor" or the "Company"), a knowledge-based designer, developer and manufacturer of next generation composite protective products, is pleased to report its audited results for the year ended 31 December 2010 which are also available for download from the Company's website:www.armordesigns.com

Highlights

Business Developments

• Development of ballistic protection capability against incendiary ammunition.
• Recertified as ISO 9001:2008 due to our continuing commitment to quality product.
• Award of first development contract by the U.S. Department of Defense.

Financial Developments

• Operating loss of US$12.5m (US$5.7m after non-cash items) in 2010;
• Equity fundraising of US$2.7m raised in 2010;
• Reduced cash operating expenses by over 70% from prior year levels, from US$9.2m in 2009 to US$2.6m in 2010;
• Established accounts export sales financing facility with a credit capacity of US$0.7m; and
• The Company continues its efforts to correct and strengthen the balance sheet conditions previously announced and described more fully in footnotes 2 and 16 to the financial statements.

Further Funding required

During 2010, the Company completed secondary placement of 148,333 shares and 30,000 share subscriptions for US$2.675 million.  These funds were used for general working capital.  In addition, the Company secured additional lending capacity of US$237,500 through a shareholder's agreement to provide collateral.  The shareholder was compensated with 8,333 shares.

In the fourth quarter of 2010, the Company obtained agreement on a US$700,000 working capital line of credit from GBC International bank.  The funds from this line can only be used to finance qualified orders for export from the United States.  Full documentation and completion of loan was achieved in 2011.  Utilization of this line is expected to occur in the third quarter of 2011.

US GAAP requires the Company to validate that it has sufficient working capital either on hand, irrevocably pledged or reasonably secured through ongoing operational activity. If there is any shortfall or material uncertainty that the Company may not have or generate the working capital it requires for a minimum period of twelve months subsequent to the date of the accounts, then the Company is required to disclose this in the notes to the financial statements.  The recently completed round of equity fund raising is insufficient to meet the Company's capital requirements over the required period, and so the Company has included a formal disclosure (Note 2) regarding its going concern situation.  The note refers to certain events and circumstances which give rise to funding uncertainties.  However, the Directors believe that Armor has adequate resources and financing options available to support the going concern basis. It should however be noted that the Company's auditors issued an explanatory paragraph expressing doubt about the Company's ability to continue as a going concern.

Note to Going Concern

The accompanying consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business as they become due.

For the year ended 31 December, 2010, the Company incurred net losses from operations of approximately US$12.5 million and has accumulated approximately US$52.9 million (unaudited) in net losses from 30 September 2004 to 31 December 2010.  Additionally, during the period from 30 September 2004 to 31 December 2010, the Company had negative cash flows from operating activities of approximately US$30.4 million (unaudited).  The Company's current liabilities exceed its current assets by approximately US$6.8 million as of 31 December 2010.  Historically, the Company has relied, in part, upon debt financing, loans from related entities and raising new capital to fund its operations.  In the past, the Company has been successful in obtaining the capital necessary to meet its obligations; however, there are no assurances that the Company will be able to continue to raise the sufficient funds needed for working capital until such time as the operations can provide positive cash flow.

The Company's ability to continue as a going concern is predicated upon its ability to improve operating results and to continue to fund its cash needs.  Management is pursuing ways to improve operating results in order to generate additional cash flow from operations.  The Company will consider undertaking further equity fundraisings to provide for working capital.  The Company may also consider other forms of non-equity fundraisings for the same purpose which may include debt financing collateralized by the Company's assets.  Management has the ability to curtail spending and negotiate payments to third parties, in the event that future funding takes longer than anticipated.  There can be no assurance that the Company will be able to raise capital needed to fund its operations or implement management's plans.

The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result if the Company is unable to operate as a going concern.

Post Balance Sheet Events

• As announced on 11 March 2011, closing of an equity fundraising of US$450,000 (before expenses) for short term working capital requirements; and
• As announced 15 March 2011 extension to ADI of a US$700,000 USD credit facility in the form of a "transaction specific" revolving line of credit, to be used for the fulfillment of international purchase orders and for international accounts receivables.

Commenting on the results, James A. St. Ville, M.D., Chairman and Chief Executive Officer of Armor Designs, Inc., said:  "2010 was another challenging year.  Our limited capital position, hindered by the worldwide recession, restrictions in traditional banking products, and difficulty in obtaining purchase order financing, inhibited our growth potential significantly and, as a result, Armor Designs made only limited strategic advancements throughout the year.  The Company continued to lower the cost base and have brought our cash expenses down by over 70% from the 2009 level.  Armor Designs also expanded its product capability and was very pleased to be awarded a contract to develop a new, lower weight protection device for the U.S. government.  Our sales and marketing effort has been constrained by needing to prioritize working capital proceeds to finance purchase orders instead of on sales and marketing programs, consequently, sales and marketing may be negatively impacted in the future.  However, as announced on 15 March 2011, now that the Company has obtained some limited new financing, and is working on other sources, that will allow us to commercially exploit our technology, we are excited about the opportunities before us."

The Company confirms that copies of the annual report and accounts for the period ended 31 December 2010 have been sent to shareholders and are available on the Company's website at www.armordesigns.com.

The Chairman and Chief Executive's Statement and the financial report, which are contained below and form part of this announcement, include further important information and disclosures; the announcement should be read in its entirety.

For further information please contact: