U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 14, 2008
Berkeley Technology Limited
(Exact Name of Registrant as Specified in its Articles)
----------------------
0-21874
(Commission File Number)
Jersey, Channel Islands Not applicable
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation)
One Castle Street
St. Helier, Jersey JE2 3RT
Channel Islands
Tel: 011 44 1534 607700
(Address and telephone of Principal Executive Offices)
4 Wests Centre
Bath Street
St. Helier
Jersey, JE2 4ST
Channel Islands
(Former Name or Address, if Changed Since Last Report)
The following information is furnished pursuant to this Item 7.01,"Regulation FD
Disclosure" and Item 2.02, "Results of Operations and Financial Condition."
FOR IMMEDIATE RELEASE November 14, 2008
Berkeley Technology Limited
Financial Results
For the Nine Months Ended
September 30, 2008
London, November 14, 2008 Berkeley Technology Limited (OTCBB: BKLYY.PK, London:
BEK.L) (the "Company") is an international venture capital and consulting firm
with a focus on Silicon Valley technology companies.
The Company today reported financial results for the nine months ended September
30, 2008. The Company's consolidated net loss for the nine months ended
September 30, 2008, was $(2.1) million, or $(0.04) per diluted share and $(0.41)
per diluted ADR, compared with consolidated net income of $0.2 million, or $0.00
per diluted share and $0.05 per diluted ADR, for the nine months ended September
30, 2007. The Company computes and reports consolidated net income (loss) and
diluted earnings (loss) per share and ADR in accordance with U.S. generally
accepted accounting principles ("U.S. GAAP").
Consulting fee income fell $0.6 million for the nine month period due to a fall
in the number of clients and the scope of one contract was reduced. Investment
income fell $0.4 million due to lower interest rates and insurance policy
maturities. There was a decline in realized investment gains of $1.2 million due
the receipt of a partial distribution of $1.2 million from the WorldCom, Inc.
securities litigation in 2007. A final distribution of $0.3 million was received
in 2008 but this gain was offset by a $0.3 million write-down on one of our
private equity investments during the third quarter of 2008. Our quarterly
review of investments identified an "other-than-temporary" impairment that was
taken in accordance with U.S. GAAP. Operating expenses increased by $0.2 million
primarily due to severance costs. These increased costs will continue through
June 30, 2009, but after taking into account other cost savings and favorable
currency movements, the net increase in quarterly costs are expected to be
approximately $67,000 until the end of the second quarter of 2009. In February
2008, the Company submitted a claim in the Enron securities class action
settlement, based on Enron bonds previously held by LPAL. Any receipts based on
the claim are not expected until 2009 at the earliest and the amount of the
recovery is unknown at this time. There has been no update in the status of our
claim. The claims administrator has still been accepting new claims until an
extended deadline of November 10, 2008. As of September 30, 2008, 86% of our
assets were invested in U.S. dollar bank deposits and money market mutual funds.
We are, however, operating in a much weaker economic environment.
Our intention is to continue managing the Company to create value for all of our
shareholders regardless of their different interests in the Company's shares. In
certain cases, we may benefit from investments made by our clients if their
investments are successful. Last year, we established several new equity
positions, through direct investment and through equity rights received as part
of our consulting activities. We use our consulting relationships in part to
generate fees that help cover operating expenses. The level of consulting fees
is expected to be volatile depending on the nature and extent of our work at any
point in time, but we are actively seeking new clients and business
opportunities.
Statements contained herein which are not historical facts are forward-looking
statements that involve a number of risks and uncertainties that could cause the
actual results of the future events described in such forward-looking statements
to differ materially from those anticipated in such forward-looking statements.
Factors that could cause or contribute to deviations from the forward-looking
statements include, but are not limited to, (i) variations in demand for the
Company's products and services, (ii) the success of the Company's new products
and services, (iii) significant changes in net cash flows in or out of the
Company's businesses, (iv) fluctuations in the performance of debt and equity
markets worldwide, (v) the enactment of adverse state, federal or foreign
regulation or changes in government policy or regulation (including accounting
standards) affecting the Company's operations, (vi) the effect of economic
conditions and interest rates in the U.S., the U.K. or internationally, (vii)
the ability of the Company's subsidiaries to compete in their respective
businesses, (viii) the ability of the Company to attract and retain key
personnel, and (ix) actions by governmental authorities that regulate the
Company's businesses, including insurance commissions. The Company undertakes no
obligation to update any forward-looking statements, whether as a result of new
information, future developments or otherwise.
Please address any inquiries to:
Ian Whitehead Jersey (0)1534 607700
Chief Financial Officer
Berkeley Technology Limited
Form 10-Q for the quarter ended September 30, 2008
A copy of the above document will be submitted to the U.K. Listing Authority and
will be shortly available for inspection at the U.K. Listing Authority's
Document Viewing Facility, which is situated at:
Financial Services Authority
25 The North Colonnade
Canary Wharf
London
E14 5HS
Tel: 020 7676 1000
Berkeley Technology Limited
Condensed Consolidated Balance Sheets
Under U.S. GAAP (unaudited)
In thousands, except share amounts
September 30, December 31,
2008 2007
------------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 13,064(1) $ 14,568
Accounts receivable, less allowances of $34 as of September 30,
2008 and December 31, 2007 233 423
Interest receivable 3 14
Prepaid expenses and deposits 84 164
------------- ------------
Total current assets 13,384 15,169
Private equity investments (at lower of cost or estimated fair value) 1,734(1) 1,984
Property and equipment, net of accumulated depreciation of $176 and $175 as
of September 30, 2008 and December 31, 2007, respectively 11 14
------------- ------------
Total assets $ 15,129 $ 17,167
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 554 $ 547
Policyholder liabilities (due in less than one year) 130 46
------------- ------------
Total current liabilities 684 593
Policyholder liabilities (due in more than one year) - 95
------------- ------------
Total liabilities 684 688
------------- ------------
Commitments and contingencies
Shareholders' equity:
Ordinary shares, $0.05 par value per share: 86,400,000 shares authorized;
64,439,073 shares issued and outstanding as of September 30, 2008
and December 31, 2007 3,222 3,222
Additional paid-in capital 67,840 67,789
Retained earnings 6,380 8,465
Employee benefit trusts, at cost (13,522,381 shares as of
September 30, 2008 and December 31, 2007) (62,598) (62,598)
Accumulated other comprehensive loss (399) (399)
------------- ------------
Total shareholders' equity 14,445 16,479
------------- ------------
Total liabilities and shareholders' equity $ 15,129 $ 17,167
============= ============
<FN>
(1) The Company's insurance subsidiary, London Pacific Assurance Limited ("LPAL"), holds $10,555 of the
Group's $13,064 in cash and cash equivalents and $1,594 of the Group's $1,734 in private equity investments
which are only available to fund the operations or commitments LPAL, and not to the parent company or any of
the other subsidiaries.
</FN>
Berkeley Technology Limited
Condensed Consolidated Statements of Operations
Under U.S. GAAP (unaudited)
In thousands, except per share and ADS amounts
Nine Months Ended
September 30,
--------------------------------
2008 2007
------------- ------------
Revenues:
Consulting fee income $ 414 $ 1,017
Investment income 271 632
Net realized investment gains 20 1,198
------------- ------------
705 2,847
Expenses:
Operating expenses 2,784 2,557
Amounts credited on insurance policyholder accounts 4 42
------------- ------------
2,788 2,599
------------- ------------
Income (loss) before income tax expense (2,083) 248
Income tax expense 2 2
------------- ------------
Net income (loss) $ (2,085) $ 246
============= ============
Basic and diluted earnings (loss) per share $ (0.04) $ 0.00
============= ============
Basic and diluted earnings (loss) per ADS $ (0.41) $ 0.05
============= ============
Berkeley Technology Limited
Condensed Consolidated Statements of Cash Flows
Under U.S. GAAP (unaudited)
In thousands
Nine Months Ended
September 30,
--------------------------------
2008 2007
------------- ------------
Net cash used in operating activities $ (1,754) $ (779)
Cash flows from investing activities:
Purchases of available-for-sale equity securities - (1,000)
Proceeds from maturity of held-to-maturity fixed maturity securities - 3,000
Proceeds from maturity of available-for-sale fixed maturity securities - 9,000
Proceeds from WorldCom, Inc. securities litigation settlement 270 1,198
Capital expenditures (2) -
------------- ------------
Net cash provided by investing activities 268 12,198
------------- ------------
Cash flows from financing activities:
Insurance policyholder benefits paid - (3,510)
------------- ------------
Net cash used in financing activities - (3,510)
------------- ------------
Effect of exchange rate changes on cash (18) 14
------------- ------------
Net increase (decrease) in cash and cash equivalents (1,504) 7,923
Cash and cash equivalents at beginning of period 14,568 6,707
------------- ------------
Cash and cash equivalents at end of period $ 13,064 $ 14,630
============= ============