Metalink Announces Second Quarter 2009 Results and Amendment of Short Term Secured Loan

• Press Release
• Source: Metalink Ltd
• On 8:40 am EDT, Tuesday September 8, 2009

YAKUM, Israel, September 8 /PRNewswire-FirstCall/ -- Metalink Ltd. (NASDAQ: MTLK - News), a global provider and developer of high-performance broadband communication silicon solutions, today announced its unaudited financial results for the second quarter of 2009 and an amendment of its short term secured loan agreement with an institutional investor.

FINANCIAL HIGHLIGHTS FOR THE SECOND QUARTER OF 2009: Revenues for the second quarter of 2009 were $1.9 million, the majority of which consisted of legacy DSL sales, compared to $2.7 million for the second quarter of 2008. Net loss for the second quarter of 2009 was $(4.4) million, or $(0.18) per share, compared to $(6.6) million, or $(0.28) per share, for the second quarter of 2008. Net loss for the second quarters of 2009 and 2008 includes stock-based compensation expenses of $0.2 million and $0.5 million, respectively.

FOR THE FIRST 6 MONTHS OF 2009: Revenues were $3.7 million, the majority of which consisted of legacy DSL sales, compared to $3.3 million for the first half of 2008. Net loss for the first six months of 2009 was $(7.9) million, or $(0.33) per share, compared to $(16.4) million, or $(0.70) per share, for the first six months of 2008.

FINANCIAL EXPENSES: Financial Expenses, net, in the second quarter of 2009 were $1.6 million, compared to $1 million in the first quarter of 2009. The increase in financial expenses primarily reflects a non-cash expense attributable to the increase in the fair value of the warrants granted under the loan agreement to the institutional investor, carried in fair value.

CASH STATUS: Metalink's cash, cash equivalents, and short-term investments as of June 30, 2009 were $6.6 million.

SHORT TERM LOAN: As previously announced, Metalink has drawn down a total of $5.75 million under its short-term secured loan agreement with an institutional investor. The Company announced today that it has entered into an amendment to the loan agreement, whereby the maturity date was extended from September 9, 2009 to March 9, 2010. As part of the amendment, Metalink will immediately repay the lender $2 million out of the outstanding $5.75 million. Metalink also agreed that the repayment amount will be between 105% and 115% of the $3.75 million balance of the loan amount, depending on the timing of the repayment (interest at the annual rate of 10% will continue to accrue on the original amount outstanding). Pursuant to the amendment, the exercise price of 1,165,000 warrants that were previously issued to the lender was adjusted from $0.50 to $0.03 per share.

Additional details regarding the amendment to the loan agreement, including a copy of the amendment, are included in the Company's Report on Form 6-K that is being filed today with the Securities and Exchange Commission (SEC).

COMMENTS OF MANAGEMENT: Metalink's CEO, Tzvika Shukhman, said, "We are pleased to have secured an extension of the loan maturity for six months. We believe that this will allow us sufficient time to pursue our strategic alternatives, including a financing or a sale of the company or its business."

Mr. Shukhman continued, "We are in the process of sampling our Generation 3 WLAN products which will allow us to further improve both our performance edge and the cost structure of our products. We are pleased to update that WLAN products by our world-class customers have started to ship in volume. We believe that a successful outcome of the strategic process would be a key factor in our ability to increase our WLAN revenues and will have a material effect on our business outlook."

There can be no assurance that the exploration of strategic alternatives will result in any transaction or as to the timing, terms or deal structure if a transaction occurs.

ABOUT METALINK

Metalink Ltd. (NASDAQ: MTLK - News) is a provider of high performance wireless and wireline broadband communication silicon solutions. Metalink's WLAN and DSL technologies are designed to enable true broadband connectivity in every home, and its products change the broadband experience by facilitating the convergence of telecommunication, networking and entertainment.

Metalink's WLANPLUS(TM) is a high-throughput, 802.11n-draft-compliant wireless LAN technology optimized for the networked home entertainment environment. Featuring advanced MIMO technology and full support of QoS, and operating in both 2.4GHz and 5GHz bands, WLANPLUS enables multi-room networking of multiple high-definition video streams.

Further information is available at http://www.MTLK.com

SAFE HARBOR STATEMENT

This press release contains "forward looking statements" within the meaning of the United States securities laws. Words such as "aim," "expect," "estimate," "project," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believe," "predicts," "potential," "continue," and similar expressions are intended to identify such forward-looking statements. For example, when we discuss the exploration of strategic alternatives and its possible effect on our WLAN revenues, we are using a forward looking statement. Because such statements deal with future events, they are subject to various risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to: in light of our cash status, our inability to raise additional funds or enter into other strategic transactions on a timely basis may lead us to insolvency; our inability to regain compliance with NASDAQ'S requirements for continued listing; any unforeseen developmental or technological difficulties with regard to our products; changes in the competitive landscape, including new competitors or the impact of competitive pricing and products; and the impact on revenues of economic and political uncertainties and weaknesses in various regions of the world, including the commencement or escalation of hostilities or acts of terrorism. Additional factors that could cause actual results to differ materially from these forward-looking statements are set forth from time to time in Metalink's filings with the SEC, including Metalink's Annual Report in Form F-20. Readers are cautioned not to place undue reliance on forward-looking statements. Except as required by applicable law, the Company undertakes no obligation to republish or revise forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrences of unanticipated events. The Company cannot guarantee future results, events, and levels of activity, performance, or achievements.

                                  METALINK LTD.

                           CONSOLIDATED BALANCE SHEETS


                                                 June 30,     December 31,
                                               ___________    ____________
                                                 2 0 0 9        2 0 0 8
                                               ___________    ____________
                                               (Unaudited)
                                               ___________
                                               (in thousands except share
                                                          data)
                                               ___________________________
    ASSETS
    Current assets
    Cash and cash equivalents                        $ 6,594        $ 5,166
    Short-term investments                                 -            677
    Trade accounts receivable                            858          2,515
    Other receivables                                  1,300          1,529
    Prepaid expenses                                     270            209
    Deferred charges                                     132            242
    Inventories                                        1,724          2,508
                                                  __________     __________
    Total current assets                              10,878         12,846
                                                  ----------     ----------
    Severance pay fund                                 1,259          1,195
                                                  ----------     ----------

    Property and equipment, net                        2,739          3,338
                                                  ----------     ----------
                                                  __________     __________

    Total assets                                    $ 14,876       $ 17,379
                                                  ==========     ==========

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
    Trade accounts payable                             $ 609          $ 739
    Other payables and accrued expenses                4,260          3,257
    Short-term loan                                    5,268          2,101
    Warrants to issue shares                             948            196
                                                  __________     __________
    Total current liabilities                         11,085          6,293
                                                  ----------     ----------

    Accrued severance pay                              1,931          2,098
                                                  ----------     ----------

    Shareholders' equity
    Ordinary shares of NIS 0.1 par value
    (Authorized - 50,000,000 shares, issued
    and outstanding 25,402,232 and 24,752,232
    shares as of June 30, 2009 and December
    31, 2008, respectively)                              728            711
    Additional paid-in capital                       157,099        156,500
    Accumulated other comprehensive loss                   -           (124)
    Accumulated deficit                             (146,082)      (138,214)
                                                  __________     __________
                                                      11,745         18,873
                                                  ----------     ----------

    Treasury stock, at cost; 898,500 as of
    June 30, 2009 and December 31, 2008               (9,885)        (9,885)
                                                  __________     __________

    Total shareholders' equity                         1,860          8,988
                                                  ----------     ----------
                                                  __________     __________

    Total liabilities and shareholders'
    equity                                          $ 14,876       $ 17,379
                                                  ==========     ==========



                                  METALINK LTD.

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                               Three months ended        Six months ended
                                    June 30,                 June 30,
                              _____________________    ____________________
                               2 0 0 9      2 0 0 8     2 0 0 9     2 0 0 8
                              ________     ________    ________    ________
                                   (Unaudited)              (Unaudited)
                              _____________________    ____________________
                             (In thousands, except share and per share data)

     Revenues                  $ 1,883      $ 2,673     $ 3,716     $ 3,333
     Cost of revenues:
     Costs and expenses            937          900       1,765       1,404
     Royalties to the
     Government of Israel           59           82         115         105
                              ________     ________    ________    ________

     Total cost of revenues        996          982       1,880       1,509
                              --------     --------    --------    --------
                              ________     ________    ________    ________

     Gross profit                  887        1,691       1,836       1,824
                              --------     --------    --------    --------
     Operating expenses:
     Gross research and
     development                 2,843        6,563       5,785      15,055
     Less - Royalty bearing
     and other grants              519          138         871         936
                              ________     ________    ________    ________

     Research and
     development, net            2,324        6,425       4,914      14,119
                              --------     --------    --------    --------

     Selling and marketing         441        1,353         798       3,110
     General and
     administrative                967          735       1,479       1,443
                              ________     ________    ________    ________

     Total operating
     expenses                    3,732        8,513       7,191      18,672
                              --------     --------    --------    --------
                              ________     ________    ________    ________

     Operating loss             (2,845)      (6,822)     (5,355)    (16,848)

     Financial income
     (expenses), net            (1,555)         177      (2,513)        418
                              ________     ________    ________    ________

     Net loss                 $ (4,400)    $ (6,645)   $ (7,868)  $ (16,430)
                              ========     =========   ========    ========


     Loss per ordinary
     share:
     Basic                     $ (0.18)     $ (0.28)    $ (0.33)    $ (0.70)
                              ========     =========   ========    ========


     Diluted                   $ (0.18)     $ (0.28)    $ (0.33)    $ (0.70)
                              ========     =========   ========    ========

     Shares used in
     computing loss per
     ordinary share:
     Basic                  24,185,954   23,490,643  24,019,843  23,498,760
                            ==========    ==========  ==========  ==========

     Diluted                24,185,954   23,490,643  24,019,843  23,498,760
                            ==========    ==========  ==========  ==========


    Contact:
    Yuval Ruhama
    CFO
    Metalink Ltd.
    Tel:+972-9-9605555
    Fax:+972-9-9605544
    Yuvalr@MTLK.com

Buzz up!