Exhibit 1
I.I.S. Intelligent Information Systems Reports Third Quarter 2001 Financial
Results
The Company Also Announces Agreement to Exchange Convertible Warrants And
Debentures for Ordinary Shares and Cash
RAMAT GAN, Israel, Nov. 20 /PRNewswire/ -- I.I.S. Intelligent Information
Systems Ltd. (Nasdaq: IISL - news) today announced its financial results for the
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third quarter 2001. For the quarter, IIS recorded revenues of US$88,000 compared
with no revenues in the same period last year. The loss for the quarter was
US$532,000 or US$0.06 per share, compared with a loss of US$408,000 or US$0.05
per share in the comparable quarter last year.
This loss reflects the Company's continued focus on R&D for storage networking
applications, as well as the Company's continuous participation in the losses of
StoreAge, amounting to $206,000 this quarter.
IIS also announced that it has entered into agreements in principle with the
holders of its convertible secured debentures and warrants to exchange such
securities for the Company's Ordinary Shares and cash. These agreements were
entered into in order for the Company to remedy a deficiency in minimum
shareholders' equity and net tangible assets, and thus meet the continued
listing requirements of Nasdaq. In accordance with a securities purchase
agreement dated as of January 31, 2001, the Company had previously issued
convertible secured debentures in an aggregate principal amount of $3,000,000,
exercisable at $3.00 per share and also issued warrants to purchase up to
300,000 Ordinary Shares at $4.50 per share.
Under the agreements announced today, the debenture holders will convert
$2,426,576 principal amount of the debentures into an aggregate of not more than
1,797,464 of the Company's Ordinary Shares, will receive a cash payment of
$573,423.60 and will relinquish all of the warrants. The warrants and the
remaining debentures will be cancelled. This transaction represents an implied
exchange value of at least $1.35 per Ordinary Share based solely on the debt
amounts extinguished, without giving any effect to the cancelled warrants, and
represents a substantial premium over the current market price of the Company's
Ordinary Shares. Following the completion of the transaction, the Company will
have sufficient shareholders' equity and net tangible assets to meet the Nasdaq
requirements.
During the quarter, IIS continued to develop its IP storage technology and
testing tools for the enterprise market, with a focus on iSCSI environment.
This past October, the Company's iSWAT(TM) testing tool was demonstrated at the
second iSCSI Plugfest, held in the Interoperability Laboratory at University of
New Hampshire. The feedback for iSWAT's performance at this event was very
positive, validating iSWAT's interoperability with other iSCSI vendors iSWAT is
an interactive testing tool for IP storage networking, based on the industry
standard iSCSI protocol. It simulates a complete iSCSI storage
network and offers both interactive, manual and script-based testing, for
analyzing, script monitoring, traffic generation and protocol validation. iSWAT
incorporates all the professional features and functionality required for iSCSI
testing within a single, feature-rich test environment. It is positioned to be
marketed to storage networking developers, system architects, QA and QC testers
and for large system integrators, with the adoption of iSCSI technology.
During this past quarter, StoreAge Networking Technologies ("StoreAge"), a 39%
held subsidiary of IIS, strengthened its positioning as a leader of high volume
SAN installations with its out-of-band virtualization technology.
This month, StoreAge's SVM(TM) was chosen by the official broadcaster of the 9th
Chinese Sports Games, to provide storage virtualization solutions for TV
coverage of the Games. StoreAge's SVM was chosen for this project for its
technological advantage and because it possesses the high performance
requirements for the provider's Video Streaming system, over a very large
Storage Area Network (SAN). SVM was also the preferred solution for its
extremely low cost when compared with other systems on the market. SVM's
out-of-band architecture enables scalability and high performance that could
previously only be achieved by larger, much more costly systems.
About IIS
I.I.S. Intelligent Information Systems Ltd. (IIS) is focused on R&D investments
and operations within the technology sector of Storage Networking. The Company
develops and markets iSWAT (http://www.swattest.com), an innovative line of
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software applications for iSCSI testing and validation. The Company also owns a
39% interest in StoreAge Networking Technologies, Ltd.
(http://www.store-age.com), a provider of SVM(TM) (Storage Virtualization
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Manager) and a leader in Storage Virtualization technology, which provides
storage networking solutions to the enterprise market with a focus on Storage
Area Network (SAN) architecture.
This release contains historical information and forward-looking statements.
Statements looking forward in time are included in this release pursuant to the
"safe harbor" provision of the Private Securities Litigation Reform Act of 1995.
They involve known and unknown risks and uncertainties that may cause the
Company's actual results in future periods to be materially different from any
future performance suggested herein. Further, the Company operates in an
industry sector where securities values may be volatile and may be influenced by
economic and other factors beyond the Company's control. In the context of the
forward-looking information provided in this release and in other releases and
reports by the Company, please refer to the discussions of risk factors detailed
in, as well as the other information contained in, the Company's filings with
the Securities and Exchange Commission during the past 12 months.
IIS Intelligent Information Systems Ltd
CONSOLIDATED BALANCE SHEETS
(In thousands)
Sept. 30, Dec. 31,
2001 2000 2000
Unaudited
ASSETS
CURRENT ASSETS:
Cash and Cash Equivalents $2,375 $5,801 $3,077
Restricted Cash -- -- 600
Trade Receivables 14 -- 43
Other Accounts Receivable 164 477 124
Total Current Assets 2,553 6,278 3,844
SEVERANCE PAY FUND 2 -- 32
INVESTMENT IN AFFILIATE 1,537 -- 2,127
PROPERTY, PLANT AND EQUIPMENT, NET 96 605 63
WORK FORCE, NET 211 -- 283
Total Assets $4,399 $6,883 $6,349
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short Term Bank Debt $ 10 $ 165 $ 10
Trade Payables 130 342 177
Other Accounts Payable 783 1,715 1,403
Total Current Liabilities 923 2,222 1,590
LONG TERM LIABILITIES:
Banks 4 76 11
Convertible Loan 2,855 -- 2,828
Accrued Severance Pay 14 40 38
Total Long Term Liabilities 2,873 116 2,877
MINORITY INTEREST -- 329 --
PREFERRED SHARES OF SUBSIDIARY -- 2,236 --
SHAREHOLDERS' EQUITY:
Share Capital 54 54 54
Additional Paid in Capital 37,624 36,895 37,435
Receivables on account of shares -- -- (16)
Deferred Compensation (117) -- (222)
Accumulated Deficit (36,958) (34,969) (35,369)
Total Shareholders' Equity 603 1,980 1,882
Total Liabilities and Shareholders' Equity $ 4,399 $ 6,883 $ 6,349
IIS Intelligent Information Systems Ltd
SUMMARY OF CONSOLIDATED STATEMENT OF OPERATION
(In thousands except per share amounts)
Three months ended Nine Months ended Year Ended
Sept. 30, Sept. 30, Dec. 31,
2001 2000 2001 2000 2000
Unaudited
Revenues
Sales $ 88 $ -- $ 247 $ -- $ 96
Maintenance Services -- -- -- -- --
88 -- 247 -- 96
Cost of revenues
Sales 3 -- 28 -- 27
Maintenance Services -- -- -- -- --
3 -- 28 -- 27
Gross profit 85 -- 219 -- 69
Operating expenses R&D, net 150 309 465 687 925
Selling & Marketing Expenses 5 202 12 420 639
General & Administrative Expenses 195 213 578 642 891
Amortization of other assets 24 -- 72 -- 8
Total operating expenses 374 724 1,127 1,749 2,463
Operating Loss (289) (724) (908) (1,749) (2,394)
Financial income (expenses), net (37) 99 (72) 231 277
Other Income (expenses) -- -- 1 20 (12)
Loss before taxes on income (326) (625) (979) (1,498) (2,129)
Taxes on income -- -- --
Loss After income taxes (326) (625) (979) (2,129)
Minority interest in loss -- 217 -- 509 740
Equity losses in subsidiary (206) (610) --
Net loss $ (532) $ (408) $(1,589) $ (989) $(1,389)
Loss per share $(0.06) $(0.05) $ (0.17) $(0.11) $ (0.16)
Weighted AVG.
No. of shares outstanding 9,535 8,903 9,185 8,892 8,901