Metalink survives with one employee

Metalink says it is seeking strategic alternatives and new investment, including via a merger or becoming a private company.

Metalink Ltd. (Nasdaq: MTLK) has had just one employee since June 2010 - apparently founder and CEO Zvi Shukhman - according to the filing of Form 20-F (audited full-year financial report) with the US Securities and Exchange Commission (SEC) on Friday.

Financially troubled Metalink sold its core business, the development of WAN processors, 18 months ago, keeping its legacy DSL processor business. The sale of the WAN processor business to Germany's Lantiq Beteiligungs GmbH & Co. KG and Lantiq Israel Ltd. was made in stages, and should have totaled $16.9 million in cash. In practice, according to the SEC filing, Metalink failed to meet the milestones in the agreement, and will not receive the final $9.2 million, after receving $7.7 million.

Metalink's revenue totaled $813,000 in 2010, 75% from $3.3 million in 2009, although it posted its first profit in years ($6.8 million, compared with a net loss of $13.4 million in 2009), thanks to the gains from the sale of its business. The company predicts $1-2 million in DSL processor sales in the short term, but says that sales will wane over time.

Metalink says it is seeking strategic alternatives and new investment, including via a merger or becoming a private company.

Shukhman owns 21.9% of Metalink and chairman Uzi Rosenberg owns 17.8%. Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) owns 9.7%. The company has no ongoing development operations and just one employee.

Metalink had 70 employees in 2009, and it paid $360,000 to eight executives, seven of whom are currently working at the company. The directors receive no salary, except for the external directors.

Metalink delisted from the TASE in March 2010, and was delisted from Nasdaq in April 2011, because it failed to meet the threshold conditions, and was relegated to the Pink Sheets.

Metalink's share price fell 1.2% on Friday to $0.66, giving a market cap of $1.2 million - 99.8% less than its peak value in 2000.

Published by Globes [online], Israel business news - www.globes-online.com - on July 17, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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