2009-11-23 10:00:00 CET
2009-11-23 10:00:01 CET
REGULATED INFORMATION
GeoSentric Oyj - Interim report (Q1 and Q3)
INTERIM REPORT 1-9/2009
GEOSENTRIC OYJ Q3 2009 INTERIM REPORT 23.11.2009 at 11:00
INTERIM REPORT 1-9/2009
Contents
1. Summary of key figures and results
2. Operational overview
3. Material events in the period
4. Material events after the end of the period
5. Review of the financial position and the financial results
6. Sufficient liquidity
7. Outlook
8. Assessment of significant operational risks
9. Review of R&D activities
10. Investments
11. Personnel and organization
12. Environmental issues
13. Financing and structural arrangements
14. Board authorization
15. Company's shares and shareholders
16. About the Company
17. Financial Statements, Q3 2009 (not audited)
1. Summary of key figures and results
The key figures summarizing the Group's financial position and financial results
were as follows (teuros unless indicated otherwise):
--------------------------------------------------------------------------------
| In period | 7-9/2009 | 1-9/2009 | 7-9/2008 | 1-9/2008 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | 529 | 2016 | 1064 | 3210 | 4374 |
--------------------------------------------------------------------------------
| Operating Result | -4071 | -11841 | -2981 | -8664 | -11919 |
--------------------------------------------------------------------------------
| Basic earnings | -0.00 | -0.01 | -0.00 | -0.01 | -0.01 |
| per share (eur) | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| At the end of | | | | | |
| the period | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | 5674 | | 12709 | | 16805 |
--------------------------------------------------------------------------------
| Shareholders' | -1295 | | 8324 | | 10053 |
| equity | | | | | |
--------------------------------------------------------------------------------
| Total | 6969 | | 4385 | | 6752 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
2. Operational overview
GeoSentric is a developer and provider of solutions, products and technologies
for location based services and LBS-enabled social networks. It develops a
leading geo-integration platform for mobile devices, personal navigation
devices, web browsers, and other internet-connected devices, which provides
applications and bundled ODM/OEM solutions for consumer and B2B markets, built
on the convergence of location based services, social networking, search, mobile& Web 2.0 technologies. Its intellectual property is delivered as software and
services in products which include the GyPSii product platform (“GyPSii”)
together with ready-to-use integrated GPS/GSM devices for navigation and object
tracking and customisable software solutions for industry specific uses
(“TWIG”). In addition, GeoSentric offers Internet-based locating services with
which the user may locate other GeoSentric devices. The GyPSii platform and TWIG
product line complement each other and enable GeoSentric to utilize its overall
intellectual property rights to software and services in an efficient manner
with delivery of products and services to two different markets, GyPSii
offerings to the geo social networking/LBS sector and TWIG offerings to the
LBS/B2B sector.
The business model for the GyPSii platform services and applications is via
embedded licensing of IPR in terms of software technology and branded
trademarks, and downstream advertising revenue generation from the platform in
partnerships with mobile operators and carriers. Thus during the reporting
period Q3/2009 the Group continued its focus on securing contracts with the
major distribution partners to integrate product on to their new devices and
services. Major marketing and launch plans for 2009 by all the distribution
partners are expected to drive significant volumes of GyPSii users on a global
basis, which is also expected to have a positive impact on revenues from GyPSii
during the final quarter of 2009 and into 2010. The global financial crisis has
delayed the launches of certain new products by some of the company's
distribution partners. This has caused some lag to the company's business plans
but has not had any significant effect on the future outlook for GyPSii
business.
The total net sales of the Group in 1-9/2009 were 2016 teuros, down by 37.2%
compared to the total net sales in 1-9/2008 of 3210 teuros. Revenue in 1-9/2009,
as last year, was substantially all from the Twig products and IP with GyPSii
continuing to generate only minor revenues. The revenue reduction was caused by
a decline in sales of the older Discovery Pro product which was not offset by
the newly launched Protector product. The total cost of sales in 1-9/2009 were
-reduced from that of the prior period in 1-9/2008, going to 1722 teuros from
2342 teuros, a 26.5% reduction. The gross margin for the 9 month reporting
period was 294 teuros (14.6%), compared to a gross margin of 868 teuros (27.0%)
for 1-9/2008. This reduction in gross margin was caused mainly by a write down
in the carrying value of inventories in September 2009 of 386 teuros. This
resulted from the return to Finland of approximately 5000 Twig discovery units
as part of the out of court settlement that the Company has reached with a US
distributer (see section 3 Material events in the period) and also a
re-appraisal of the future outlook for Twig sales.
Total operating expenses were increased in the reporting period compared to the
prior year period, going to 12135 teuros in 1-9/2009, from 9567 teuros in
1-9/2008, a 26.8% increase. This was mainly driven by R & D personnel related to
the development of GyPSii products and services and to sales and marketing
expenditure and personnel in relation to the GyPSii products and services.
The total earnings before taxes were -12259 teuros in 1-9/2009, versus -8605
teuros in 1-9/2008, a 42.5% decrease. Earnings per share for the reporting
period were -0.01 Euros per share.
3. Material events in the period
During the period 7-9/2009, the Group has continued its efforts to broaden the
range of GyPSii supported devices, which is an essential element in Group's
business plan. As GyPSii's revenue model is based on income from embedded and
upstream licensing of IPR, subscription fees and advertising, broadening the
range of supported devices, entering into agreements with major distribution
partners and introduction of Open Experience™ (OEx) has created a solid basis
for achieving a critical mass of users for GyPSii and also for future revenue
generation. The following milestones were achieved during the reporting period:
In July the Company announced its partnership with China Unicom's Shanghai
Unicom for GyPSii to become the premier mobile social networking solution in
China for its new consumer 3G SNS service, UniSpace. This enables more than 5
million Shanghai Unicom customers to download GyPSii directly on to their mobile
devices from the UniSpace website, and activate it on devices on which it is
bundled. Access will expand to all 130M China Unicom Subscribers in late 2009
and 2010.
In August the Company added advertising network partner MadHouse, one of the
largest advertising networks in China, to supply advertising to the GyPSii
platform and users in China.
In September the Company announced that GyPSii functionality will be delivered
to Garmin customers on the pre-installed Garmin Ciao service on the latest
Garmin portable navigation device, the “nuvi 1690”.
In September the Company added a completely new product to support the fast
growing Android (Google Phone OS) market, with several new design and technology
innovations, thus opening the subscriber base to many more devices.
In September the Company announced a relationship with WeFI, a high speed open
Wi-Fi network with 30M access points, to promote download of GyPSii via their
Wi-Fi portal access points to their users.
In September the Company announced a completely new Java based product aimed at
the mass market java based phones, adding support for over 100 additional phones
from Nokia, Sony Ericsson and other phone manufacturers.
The Court of First Instance in Rome has given a decision relating to the dispute
between the Company and a UK company Magi.Tel Limited regarding an alleged
patent infringement in Italy. The Company appealed the judgment on 21 April and
the hearing shall be held on March 27, 2012. Salo District Court has confirmed
the enforceability of the decision in October 2009. The Company has already made
reservation into the books.
The Company made a settlement in the previously reported dispute with its US
distributor for TWIG products whereby both parties have agreed to drop all
claims against each other in return for a payment from the US distributor to the
Company and the return of all Twig Discovery units to the Company.
4. Material events after the end of the period
The Company made significant announcements after the end of the period
concerning its GyPSii geo-social mobility platform and service:
In October the Company, along with China Unicom's launch activities, announced
the launch of the iPhone with GyPSii/Unispace branded mobile application
pre-loaded (bundled before point of purchase on the iPhone) into the Chinese
market. Unispace is the China Unicom 3G brand. GyPSii is the only social
networking application provided under the brand into China on iPhone.
The Extraordinary General Meeting (EGM) of the company convened on November 17,
2009. The EGM authorized the Board of Directors to decide upon raising new
financing up to EUR 25,000,000 through the Company's fully owned Dutch
subsidiary GeoSolutions Holdings N.V. (“Offering”). The purpose of the Offering
is to secure the working capital needs of the group and support the execution of
the business plan. The Offering shall be implemented by issuance of convertible
notes entitling to subscription of GeoSolutions Holdings N.V's shares to a
limited number of selected investors. The conversion rate will be based on
valuation exceeding GeoSentric's current stock price in the stock exchanges and
accordingly the maximum amount of new shares to be issued by virtue of possible
conversions would in all events be less than half of GeoSolutions Holdings N.V's
outstanding shares and share capital. The investors may also be offered an
option to convert their notes into GeoSentric's shares alternatively. In such
conversions the number of GeoSentric's shares received would be the same
proportional amount of fully diluted shares as the investor otherwise would have
received of the GeoSolutions Holdings N.V's shares.
The Extraordinary General Meeting's authorization is part of the previously
announced fund raising process enabling the Company to close the required
additional external financing in one or several tranches by end of March 2010.
The Board decided in its meeting on November 22, 2009 upon the Offering as
authorized by the EGM. The first investment commitment of EUR 7,500,000 has been
received from the lead investor participating in the Offering. The Board of
Directors has accepted the commitment in its meeting on November 22, 2009 by
virtue of the authorization granted by the Annual General Meeting on May 15,
2009 and the Extraordinary General Meeting on November 17, 2009. The loan
matures in five years starting from 31 March, 2010 or closing of the Offering,
whichever comes earlier. The commitment shall be withdrawn within November.
The Offering will continue until March 31st 2010 unless closed before. The final
terms of the financing will be confirmed upon closing and shall be applied to
the lead investor as well. The terms shall be published after their
confirmation. The Company is engaged in negotiations with multiple potential
investors and sees it likely that the Offering will be successful and that it's
able to retain sufficient liquidity in all circumstances.
As precondition for the investment the Company has agreed to pay an industry
standard placement fee, which shall be paid partially in cash and partially in
Company shares. The amount of the fee shall depend on final terms of the
Offering to be confirmed by March 31, 2010.
The Company's management monitors the progress of the business and financial
performance against the business plan and budget and reports to the Board on a
regular basis. Working capital management is one of management's key focus
areas.
5. Review of the financial position and the financial results
The Company has during the reporting period retained solidity and liquidity.
The key figures summarizing the Group's financial position and financial results
were as follows (teuros unless indicated otherwise):
--------------------------------------------------------------------------------
| In period | 7-9/2009 | 1-9/2009 | 7-9/2008 | 1-9/2008 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | 529 | 2016 | 1064 | 3210 | 4374 |
--------------------------------------------------------------------------------
| Operating Result | -4071 | -11841 | -2981 | -8664 | -11919 |
--------------------------------------------------------------------------------
| Basic earnings | -0.00 | -0.01 | -0.00 | -0.01 | -0.01 |
| per share (eur) | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| At the end of | | | | | |
| the period | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | 5674 | | 12709 | | 16805 |
--------------------------------------------------------------------------------
| Shareholders' | -1295 | | 8324 | | 10053 |
| equity | | | | | |
--------------------------------------------------------------------------------
| Total | 6969 | | 4385 | | 6752 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| Cash | 1798 | | 5230 | | 9754 |
--------------------------------------------------------------------------------
The Company has agreed with its main investor to delay the payment of accrued
interest on its loans, which had a positive impact of 930 k€ on the Company's
cash position at the end of the reporting period.
6. Sufficient liquidity
The Company has, during the reporting period, retained sufficient liquidity.
However, the Company's working capital is not sufficient for the next twelve
(12) months without raising additional external financing. To secure sufficient
liquidity in all circumstances, the Company has decided upon a new financing
round as is described in more detail in the section “Material events after the
end of the period”. With the new financing, as disclosed, the Company shall
retain sufficient liquidity through the next twelve (12) months period.
As previously announced, starting from interim report 1-6/2009 the Company does
not include future looking cash flow projection in its reports.
7. Future Outlook
The Group has signed agreements with global leaders in mobile technology and GPS
navigation: Samsung as the #2 provider of mobile handsets, LG as the #3
provider, which has now grown to over 10% of market share, and Garmin as the #1
provider of GPS products. Further, the agreement with MyNet and China Mobile is
indicative of the global market's selection and adoption of the GyPSii overall
platform. The Intel relationship as part of the reference platform for
Atom-based processor MID devices is also a strategic and significant milestone
for the Group. The Group also has deep device support for Nokia supported
platforms built on the Symbian operating systems, like the recently introduced,
5th Edition Touch based device, Nokia 5800 and future devices expected in 2009
and 2010, and added support for lower end Java based platforms for Symbian S40
and MIDP from other manufacturers like Samsung, Sony Ericsson and LG These
material agreements continue to establish GyPSii as a leading platform,
applications and services provider for the geo-social networking, mobility, and
internet advertising markets.
The recent announcement with China Unicom to use GyPSii as the mobile social
networking application of choice, branded as Unispace for iPhone and their other
mobile phones, extends GyPSii deeper into the DNA of our partners and their
potential subscriber bases. Contracts in place provide for revenue to be
derived from subscriptions along with advertising. The China Unicom launch and
its expected uptake in subscribers is planned to drive substantial revenue from
subscription revenue share with the company, along with the revenue share from
mobile advertising.
GyPSii is further establishing distribution with major global players in the
phone and MID (mobile internet devices) markets. The market is blurring between
smart phones, MID devices, even low end feature phones on Java, and new entrants
that are pushing the price down for entry point for what was seen as mid to high
level mobile devices, making them available for purchase by the mass market in
the US, Europe and Asia. This trend continues with the recent entries on Android
supported by multiple phone manufacturers and operators, with approximately 18
plus Android based devices to hit the market by Q1 2010. GyPSii is now
supporting Android as it emerges as a serious alternative for device
manufacturers to the development of home grown proprietary platforms, lightly
supported Linux variants and established competitive platforms like Windows
Mobile and Symbian.
The move onto platforms like Android is further evidence of the adoption and
convergence of smartphones and feature phones into platforms that are being
pushed aggressively by phone manufacturers and operators, and being adopted by
the developer community.
The GyPSii business is moving from intensive product development/market
penetration phase to monetization phase. As the revenues derive from embedded
licensing of IPR, subscriptions, and downstream advertising revenue generation,
the growth of both the number of GyPSii users and the devices supported by
GyPSii in the markets are crucial for the commercial success of the business.
Despite the global financial crisis the company has seen steady growth rate in
the number of GyPSii users and managed to close several important distribution
partnership deals with world's leading mobile manufacturers and operators. As
announced before, the company expected to see positive development in GyPSii
generated revenues starting from the second half of 2009. The global financing
crisis has slightly delayed the revenue expectations of GyPSii, however the
filling of the distribution channels with GyPSii-enabled devices is expected to
drive revenues future. Still, the revenues have started to generate during the
Q3 2009 and the company expects to see accelerated positive development in
GyPSii generated revenues starting from the last quarter of 2009 and into 2010.
TWIG product demand has declined substantially as the TWIG Discovery reaches the
end of its product life and the newer Twig Protector has so far not generated
significant revenue. The TWIG Discovery Pro GSM/GPRS/GPS handset is targeted at
the safety and security market and the TWIG Locator tracking unit for the asset
and vehicle tracking market. Customers continue to place orders for these unique
devices and the Company continues to provide reliable quality product shipments
and delivery. The recently announced new TWIG Protector product is a next
generation, ruggedized, location-centric personal protection device.
8. Assessment of significant operational risks
The global financial crisis and current global recession may have a negative
impact also on the business of the Group. The Group's business model is partner
driven and possible delays in partners' launching their new products to the
market may have an adverse effect on the development of the Group's business by
decelerating the distribution and user-adoption rate of the Group's services.
There is no certainty of the success regarding the implementation and
realisation of the business plan. According to the business strategy, the Group
is pursuing entrance also to new business segments with competitive situations
new to it, or which may be only in the early market phase. Unless the Group is
able to successfully respond to these development it may significantly impair
the Group´s operating results.
A key driver of the business model is sufficient and sufficiently rapid growth
of users of the services, and the speed of adoption of mobile, UGC and location
based advertising of which the Group has no certainty. Advertising budgets are
being reduced by many major brands and advertisers and this could have an
adverse affect on the adoption of mobile and location based advertising in 2009
and beyond.
In addition, the Company carries a limited risk connected with the TWIG product
inventory. Should the Company not be able to sufficiently protect its industrial
rights and other intangible assets, its competitive position may suffer. It is
also possible that other parties may bring action against the Company on grounds
of alleged infringement of industrial or intellectual property rights and,
should they be successful, the Company may be obligated to pay significant
compensation.
Since 1997, the Company has not paid dividends. In the future, the re-payments
of capital loans will restrict the possibility to distribute dividends. The
total amount of loans as at 30 September 2009 was 10113 teuros at nominal value.
Regarding future dividend payments, there is also uncertainty about the ability
of the Company to accrue distributable capital. According to the financial
statements of the Company, there was no distributable capital in the latest
balance sheet of the Company.
The Group´s business plan has been prepared by assuming that the Group´s result
and cashflow will improve significantly. Should the result and cashflow
essentially fail to meet the planned figures, the Group´s financing plan may
turn out to be insufficient causing a need to secure additional financing. The
Company has already decided upon a new financing round. Should the new financing
be delayed this might enforce the Company to introduce significant cost cutting
plans, which would also have a material effect on execution of the Company's
current business plan in the short term.
9. Review of R&D-activities
The volume of the Group´s R&D activities continued to be significant due to the
on-going R&D-programs by means of which the Group intends to significantly
expand its business over the next few years. No capitalizations were made.
The Group has R&D units in Salo (Finland), Amsterdam (the Netherlands), Windsor
(UK), Warwick, RI (USA) and Shanghai (China).
Additionally, GyPSii's GyPSiiPlex server facilities are maintained in the US,
China and the Netherlands at present, with continued upgrades and new locations
planned in the future.
10. Investments
Gross investments in period 1-9/2009 were 200 teuros. In the full year 2008
gross investments were 119 teuros. There were no new investments made into the
Company and no new sources of finance established in the period 1-9/2009.
11. Personnel and organization
The number of employed personnel at GeoSentric in period 1-9/2009 averaged 126,
of which 28, at most, were affected by alternate forced leaves. The alternate
forced leave program, agreed in autumn 2007 to apply for the time being,
continues also in 2009.
The services of Bill Conners, principal at Conquest One Group, were completed
and finalized during the Q3 2009.
12. Environmental issues
The Company pays for its products a statutory recycling fee and has organised
the recycling of disposed materials contractually through Jalopinta Ky.
Altogether, the Group´s operations cause no significant environmental impact.
13. Financing and structural arrangements
As previously disclosed, in August 2008, the Company raised a total amount of
EUR 10,000,000 (“Issue”) by issuing a loan note which includes a specific option
right. The subscription period for the Issue ended on May 15, 2009. The maximum
amount of new shares to be subscribed by virtue of the note is 94,339,622. In
addition the issued amount of 2,830,189 shares directed to an advisor of the
Board as part of his advisory fee were registered into the Finnish Trade
Register on February 5, 2009. Thus the registered share amount is 897,926,354.
The Board decided in its meeting on May 14, 2009 to adopt Option Plan 2009-I and
issue a total amount of 3,000,000 by virtue of the authorization granted by the
EGM on September 10, 2007. The options are directed to the Board's advisors
without charge as decided by the Board. The options may be subscribed into
corresponding amount of new shares during the share subscription period ending
on December 31, 2012 with a share subscription price of 0.045 euros per share.
Option rights have been subscribed when issued.
The Board decided in its meeting on May 15, 2009 to adopt Option Plan 2009-II
and issue a total amount of 24,500,000 option rights to the members of the Board
of Directors without charge. The options may be subscribed into corresponding
amount of new shares during the share subscription period ending on December 31,
2013 with a share subscription price of 0.045 euros per share. Option rights
have been subscribed when issued.
The Company announced on August 21, 2009 to adopt Option Plan 2009-III and issue
a total amount of 1,500,000 by virtue of the authorization granted by the AGM on
May 15, 2009. The options are directed to key employees of the Company as
decided by the Board. The options may be subscribed into corresponding amount of
new shares during the share subscription period ending on December 31, 2013 with
a share subscription price of 0.045 euros per share. Option rights have been
subscribed when issued.
During the reporting period the Company has completed a restructuring of its
group structure to achieve a more efficient operational model. In the
restructuring all GeoSentric subsidiaries have been centered under its Dutch
subsidiary, GeoSolutions Holdings, N.V. The restructuring does not have any
material effect on the group's assets and liabilities.
The Board decided in its meeting on November 13, 2009 to adopt Option Plan
2009-IV and issue a total amount of 3,500,000 option rights to the financial
advisor without charge. The options may be subscribed into corresponding amount
of new shares during the share subscription period ending on February 17, 2015
with a share subscription price of 0.0475 euros per share.
The Board has also decided upon allotment of option rights under the Option Plan
2008-V. According to the terms and conditions the maximum of 9,505,000 option
rights shall be allotted to the key resources of the GeoSentric group during the
option subscription period, which ends on December 31, 2009. Of the reserved
amount, a total of 9,479,500 options have now been allotted.
The Board of Directors has decided upon new financing amounting up to EUR
25,000,000 at maximum and accepted an investment commitment of EUR 7,500,000 by
the lead investor as described in more detail above in section 4 “Material
events after the end of the period”.
14. Board authorization
The Annual General Meeting convened on May 15, 2009 authorized the Board to
increase the share capital by maximum of 3,000,000 euros and share amount by
maximum of 300,000,000 new shares. The authorization is valid for two (2) years
from the date of the Annual General Meeting. At the same all the other
authorizations were terminated.
At the date of this report the remaining authorization is 2,705,000 euros and
270,500,000 shares.
15. Company's shares and shareholders
The shares of GeoSentric Oyj are listed on the NASDAQ OMX Helsinki (NASDAQ OMX:
GEO1V) and issued in the book entry system held by Euroclear Finland, address PL
1110, FIN-00101 Helsinki, Finland. The ISIN-code of the share is FI 0009004204.
The Company's shares have been on the surveillance list since February 11, 2003.
The Company and its subsidiaries do not have any Company´s shares owned by or
administered on behalf of the Company.
At the end of the reporting period company's registered share capital was
8,950,961.65 euros, consisting of 897,926,354 shares.
During Q2 2009 the company received a flagging notice from GeoHolding, B.V.
According to the notice, the threshold of GeoHolding B.V. could exceed 30%. The
flagging notice is available on company's website.
16. About the Company
GeoSentric is a developer of location-based technologies, delivering products
and services with a market-leading mobile digital lifestyle application and
geo-mobility social networking platform: connecting people, places and
communities across networks and devices. GyPSii provides a geo-location social
networking platform and services for mobile and web Internet-connected devices,
and provides applications and bundled ODM/OEM solutions for consumer and B2B
markets, built on the convergence of location based services, social networking,
search, mobile & Web 2.0 technologies. For more information, visit
www.geosentric.com or www.gypsii.com or www.gypsii.com.cn.
© 2009 GeoSentric Oyj. All rights reserved.
Based in Salo, Finland and Amsterdam, The Netherlands, GeoSentric operates
offices in North America, Europe and Asia Pacific.
GeoSentric (NASDAQ OMX Helsinki-GEO1V) is listed on the Nasdaq OMX Exchange in
Helsinki. The company has been on the surveillance list since February 2003.
GEOSENTRIC OYJ
For more information, please contact: investors@gypsii.com
Distribution:
NASDAQ OMX Helsinki
Principal news media
17. GEOSENTRIC OYJ INTERIM REPORT 3Q/2009 (Unaudited)
GROUP STATEMENT OF COMPREHENSIVE INCOME
--------------------------------------------------------------------------------
| 1000 EUR | Note | 3Q/2009 | 1-3Q/200 | 3Q/2008 | 1-3Q/200 | 2008 |
| | | | 9 | | 8 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | | 529 | 2016 | 1064 | 3210 | 4374 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cost of goods | 4 | 733 | 1722 | 742 | 2342 | 3006 |
| sold | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross margin | | -204 | 294 | 322 | 868 | 1368 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other | | 0 | 0 | 1 | 35 | 35 |
| operating | | | | | | |
| income | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| General & | 4 | 762 | 2321 | 840 | 2746 | 3874 |
| Administrativ | | | | | | |
| e expenses | | | | | | |
--------------------------------------------------------------------------------
| Research & | 4 | 1983 | 6266 | 1630 | 4495 | 6088 |
| Development | | | | | | |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| Sales & | 4 | 1122 | 3548 | 834 | 2326 | 3360 |
| Marketing | | | | | | |
| expenses | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating | | -4071 | -11841 | -2981 | -8664 | -11919 |
| result | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial | | 2 | 74 | 86 | 140 | 330 |
| income | | | | | | |
--------------------------------------------------------------------------------
| Financial | | -156 | -492 | -14 | -81 | -276 |
| expenses | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Result before | | -4225 | -12259 | -2909 | -8605 | -11865 |
| taxes | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income taxes | | 45 | 299 | 127 | 382 | 492 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Result for | | -4180 | -11960 | -2782 | -8223 | -11373 |
| the period | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Translation | | -15 | 3 | 0 | 0 | 124 |
| difference | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Comprehensive | | -4195 | -11957 | -2782 | -8223 | -11249 |
| income | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per | | | | | | |
| share, eur | | | | | | |
--------------------------------------------------------------------------------
| Basic | | -0,00 | -0,01 | -0,00 | -0,01 | -0,01 |
| earnings per | | | | | | |
| share, eur | | | | | | |
--------------------------------------------------------------------------------
Diluted earnings per share have not been computed because dilution effect would
improve the key figure.
GROUP STATEMENT OF FINANCIAL POSITION
--------------------------------------------------------------------------------
| 1000 EUR | Note | 30.9.2009 | 30.9.2008 | 31.12.2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ASSETS | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current assets | | | | |
--------------------------------------------------------------------------------
| Property, plant and | | 278 | 215 | 194 |
| equipment | | | | |
--------------------------------------------------------------------------------
| Goodwill | | 216 | 216 | 216 |
--------------------------------------------------------------------------------
| Other intangible assets | | 1012 | 3023 | 2520 |
--------------------------------------------------------------------------------
| Other financial assets | | 66 | 64 | 64 |
--------------------------------------------------------------------------------
| Deferred tax assets | | 0 | 0 | 0 |
--------------------------------------------------------------------------------
| | | 1572 | 3518 | 2994 |
--------------------------------------------------------------------------------
| Current assets | | | | |
--------------------------------------------------------------------------------
| Inventories | | 1448 | 1556 | 1405 |
--------------------------------------------------------------------------------
| Trade receivables and | | 856 | 1628 | 1816 |
| other receivables | | | | |
--------------------------------------------------------------------------------
| Prepaid expenses | | 0 | 777 | 836 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | | 1798 | 5230 | 9754 |
--------------------------------------------------------------------------------
| | | 4102 | 9191 | 13811 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | | 5674 | 12709 | 16805 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders´ equity | | | | |
--------------------------------------------------------------------------------
| Share capital | 5 | 8951 | 8951 | 8951 |
--------------------------------------------------------------------------------
| Share premium account | 5 | 13631 | 13631 | 13631 |
--------------------------------------------------------------------------------
| Translation difference | | 127 | 0 | 124 |
--------------------------------------------------------------------------------
| Invested distributable | 5 | 27971 | 23642 | 28039 |
| equity account | | | | |
--------------------------------------------------------------------------------
| Retained earnings | | -51975 | -37900 | -40692 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total shareholders´ equity | | -1295 | 8324 | 10053 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | | 256 | 766 | 638 |
--------------------------------------------------------------------------------
| Interest-bearing debt | 7 | 3013 | 1086 | 3394 |
--------------------------------------------------------------------------------
| | | 3269 | 1852 | 4032 |
--------------------------------------------------------------------------------
| Current liabilities | | | | |
--------------------------------------------------------------------------------
| Trade payables and other | | 2576 | 2316 | 1977 |
| payables | | | | |
--------------------------------------------------------------------------------
| Provisions | | 62 | 104 | 62 |
--------------------------------------------------------------------------------
| Interest bearing debt | 7 | 1062 | 113 | 681 |
--------------------------------------------------------------------------------
| | | 3700 | 2533 | 2720 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total liabilities | | 6969 | 4385 | 6752 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total shareholders´ equity | | 5674 | 12709 | 16805 |
| and liabilities | | | | |
--------------------------------------------------------------------------------
GROUP CASH FLOW STATEMENT
--------------------------------------------------------------------------------
| 1000 EUR | 1-3Q/2009 | 1-3Q/2008 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from operations | | | |
--------------------------------------------------------------------------------
| Result for the period | -11960 | -8223 | -11373 |
--------------------------------------------------------------------------------
| Adjustments | 1775 | 2494 | 3384 |
--------------------------------------------------------------------------------
| Changes in working capital: | | | |
--------------------------------------------------------------------------------
| Change of trade and other | 1796 | 609 | 362 |
| receivables | | | |
--------------------------------------------------------------------------------
| Change of inventories | -43 | 1262 | 1416 |
--------------------------------------------------------------------------------
| Change of trade and other | 599 | -115 | -454 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Paid interests | 0 | 0 | -2 |
--------------------------------------------------------------------------------
| Received interest payments | 145 | 74 | 118 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from operations, net | -7688 | -3899 | -6549 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investments, net | -200 | -105 | -119 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing | | | |
--------------------------------------------------------------------------------
| Proceeds from issue of share | 0 | 1 | 1 |
| capital | | | |
--------------------------------------------------------------------------------
| Transaction expenses of share | -68 | -87 | -99 |
| issues | | | |
--------------------------------------------------------------------------------
| Proceeds from long term | 0 | 1714 | 6038 |
| borrowings, equity | | | |
--------------------------------------------------------------------------------
| Proceeds from long term | 0 | 1086 | 3962 |
| borrowings, liability | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash flow from financing | -68 | 2714 | 9902 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in cash | -7956 | -1290 | 3234 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash in the beginning of the | 9754 | 6520 | 6520 |
| period | | | |
--------------------------------------------------------------------------------
| Cash at the end of the period | 1798 | 5230 | 9754 |
--------------------------------------------------------------------------------
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS´ EQUITY
--------------------------------------------------------------------------------
| | Share | Translat | Share | Invested | Accrued | Total |
| | capital | ion | premium | distrib. | result | (1000eur |
| | (1000eur | differen | account | equity | (1000eur | ) |
| | ) | ce | (1000eur | account | ) | |
| | | (1000eur | ) | (1000eur | | |
| | | ) | | ) | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholde | 5246 | 0 | 14652 | 23695 | -30856 | 12737 |
| rs´ equity | | | | | | |
| 31.12.2007 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Items | 0 | 0 | 0 | 0 | 0 | 0 |
| booked | | | | | | |
| directly | | | | | | |
| into | | | | | | |
| shareholde | | | | | | |
| rs´ equity | | | | | | |
--------------------------------------------------------------------------------
| Result for | 0 | 0 | 0 | 0 | -8223 | -8223 |
| the period | | | | | | |
--------------------------------------------------------------------------------
| Comprehens | 0 | 0 | 0 | 0 | -8223 | -8223 |
| ive income | | | | | | |
--------------------------------------------------------------------------------
| Share | 6 | 0 | 0 | 99 | 0 | 105 |
| issues, | | | | | | |
| cash | | | | | | |
--------------------------------------------------------------------------------
| Share | 1022 | 0 | -1021 | 0 | 0 | 1 |
| issues, | | | | | | |
| special | | | | | | |
| rights | | | | | | |
--------------------------------------------------------------------------------
| Conversion | 2677 | 0 | 0 | -1721 | 0 | 956 |
| of | | | | | | |
| convertibl | | | | | | |
| e bonds | | | | | | |
| into | | | | | | |
| shares | | | | | | |
--------------------------------------------------------------------------------
| Share | 0 | 0 | 0 | -87 | 0 | -87 |
| issue | | | | | | |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| Booked | 0 | 0 | 0 | 0 | 1179 | 1179 |
| expense of | | | | | | |
| stock | | | | | | |
| options to | | | | | | |
| key | | | | | | |
| personnel | | | | | | |
| and | | | | | | |
| partners | | | | | | |
--------------------------------------------------------------------------------
| Equity | 0 | 0 | 0 | 1656 | 0 | 1656 |
| portions | | | | | | |
| of | | | | | | |
| liabilitie | | | | | | |
| s | | | | | | |
--------------------------------------------------------------------------------
| Shareholde | 8951 | 0 | 13631 | 23642 | -37900 | 8324 |
| rs´ equity | | | | | | |
| 30.09.2008 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholde | 8951 | 124 | 13631 | 28039 | -40692 | 10053 |
| rs´ equity | | | | | | |
| 31.12.2008 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Items | 0 | 3 | 0 | 0 | 0 | 3 |
| booked | | | | | | |
| directly | | | | | | |
| into | | | | | | |
| shareholde | | | | | | |
| rs´ equity | | | | | | |
--------------------------------------------------------------------------------
| Result for | 0 | 0 | 0 | 0 | -11960 | -11960 |
| the period | | | | | | |
--------------------------------------------------------------------------------
| Comprehens | 0 | 3 | 0 | 0 | -11960 | -11957 |
| ive income | | | | | | |
--------------------------------------------------------------------------------
| Share | 0 | 0 | 0 | -68 | 0 | -68 |
| issue | | | | | | |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| Booked | 0 | 0 | 0 | 0 | 677 | 677 |
| expense of | | | | | | |
| stock | | | | | | |
| options to | | | | | | |
| key | | | | | | |
| personnel | | | | | | |
| and | | | | | | |
| partners | | | | | | |
--------------------------------------------------------------------------------
| Shareholde | 8951 | 127 | 13631 | 27971 | -51975 | -1295 |
| rs´ equity | | | | | | |
| 30.09.2009 | | | | | | |
--------------------------------------------------------------------------------
KEY FIGURES
--------------------------------------------------------------------------------
| | 3Q/2009 | 1-3Q/2009 | 3Q/2008 | 1-3Q/2008 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales, 1000 | 529 | 2016 | 1064 | 3210 | 4374 |
| EUR | | | | | |
--------------------------------------------------------------------------------
| Operating result, | -4071 | -11841 | -2981 | -8664 | -11919 |
| 1000 EUR | | | | | |
--------------------------------------------------------------------------------
| Result before | -4225 | -12259 | -2909 | -8605 | -11865 |
| taxes, 1000 EUR | | | | | |
--------------------------------------------------------------------------------
| Gross | 9 | 200 | 25 | 105 | 119 |
| investments, 1000 | | | | | |
| EUR | | | | | |
--------------------------------------------------------------------------------
| Average personnel | 126 | 118 | 97 | 92 | 94 |
--------------------------------------------------------------------------------
| Earnings per | -0,00 | -0,01 | -0,00 | -0,01 | -0,01 |
| share, EUR | | | | | |
--------------------------------------------------------------------------------
| Equity per share, | -0,00 | -0,00 | 0,01 | 0,01 | 0,01 |
| EUR | | | | | |
--------------------------------------------------------------------------------
| Weighted average | 897926 | 897559 | 856707 | 740363 | 779047 |
| number of shares | | | | | |
| in period, 1000 | | | | | |
| pcs | | | | | |
--------------------------------------------------------------------------------
| Number of shares | 897926 | 897926 | 895096 | 895096 | 895096 |
| at the end of the | | | | | |
| period, 1000 pcs | | | | | |
--------------------------------------------------------------------------------
NOTES TO THE GROUP INTERIM REPORT
1. BASE INFORMATION OF THE COMPANY
GeoSentric is a developer and provider of solutions, products and technologies
for location based services and LBS-enabled social networks. It develops a
leading geo-integration platform for mobile devices, personal navigation
devices, web browsers, and other internet-connected devices, which provides
applications and bundled ODM/OEM solutions for consumer and B2B markets, built
on the convergence of location based services, social networking, search, mobile& Web 2.0 technologies. Its intellectual property is delivered as software and
services in products which include the GyPSii product platform (“GyPSii”)
together with ready-to-use integrated GPS/GSM devices for navigation and object
tracking and customisable software solutions for industry specific uses
(“TWIG”). The company has deep expertise and technology IP in User Generated
Content Management, Location Based Services, Open Social Networking,
Ad-Targeting and Integration, for Social Media markets and users on mobile
phones, the web, personal navigation and internet connected devices. Based in
Salo, Finland, and Amsterdam, The Netherlands, GeoSentric operates offices in
North America, Europe and Asia Pacific. GeoSentric is listed in NASDAQ OMX
Helsinki Ltd (NASDAQ OMX: GEO1V). The parent company of the group is GeoSentric
Oyj (former Benefon Oyj). The registered domicile is Salo, Finland, with street
address Meriniitynkatu 11, 24100 Salo, Finland, and mail address PL 84,
FIN-24101 Salo, Finland. A copy of the group financial statements is available
at the internet address www.geosentric.com or at the company head office at
address Meriniitynkatu 11, FIN-24100 Salo, Finland
2. ACCOUNTING PRINCIPLES FOR THE FINANCIAL STATEMENTS
Foundation:
The group interim report has been prepared in accordance with the International
Financial Reporting Standards ("IFRS") and has been prepared according to the
accounting standard IAS 34, Interim Reports. An interim report shall be read
together with the financial statements for year 2008.
Accounting principles:
The utilised principles of preparation are identical with those utilised by the
Group in financial statements for year 2008.
IASB has published new standards and interpretations and changes in existing
standards, application of which is mandatory on 1.1.2009 or thereafter, and
which the group has not adopted earlier voluntarily. The group has adopted the
following standards (and their amendments) and interpretations from 1.1.2009
onwards:
IAS 23, cost of liabilities. The renewed standard prescribes that in the
purchase cost of a commodity fulfilling the conditions are included the
immediate cost of related liabilities. No effect on the Group.
IFRIC 13, Customer Loyalty Programmes. Group operations do not include pertinent
transactions.
IAS 1, Presentation of the financial statements. The change affects the
terminology and the presentation format of some accounts.
IFRS 2, Share-based payments. The change affects the definition of the fair
value of equity-based instruments.
IAS 1, Presentation of the financial statements and IAS 32, Financing
instruments: presentation format. The changes may cause the re-classification as
equity of certain equity-based financing instruments.
Changes for "Improvements to IFRS". Small changes relate to 34 different
standards but they have no significant effects on the financial statements.
Changes to standards IFRS 1, First application of the IFRS-standards and IAS 27,
Group financial statements and separate financial statements. They concern only
firms applying the IFRS for the first time.
IFRIC 15, Agreements for the Construction of Real Estate. No effect on the
Group.
IFRIC 16, Hedges of a Net Investment in a Foreign Operation. No effect on the
Group.
IFRS 8, Business segments. No essential effect on the information because there
is only one business segment.
3. SEGMENT INFORMATION
The primary reported segments of the group comprise business segments. At the
moment, there is only one distinct segment, location based services and devices
utilising them. Its share of net sales has been 100% in the period and in the
reference period.
4. COSTS BY CATEGORY
--------------------------------------------------------------------------------
| 1000 EUR | 3Q/2009 | 1-3Q/200 | 3Q/2008 | 1-3Q/2008 | 2008 |
| | | 9 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Increase/decrease | | | | | |
| in inventories | | | | | |
--------------------------------------------------------------------------------
| of finished | -625 | -261 | 358 | 1094 | 1290 |
| products | | | | | |
--------------------------------------------------------------------------------
| Impairment loss in | 386 | 386 | 0 | 0 | 0 |
| inventories | | | | | |
--------------------------------------------------------------------------------
| Use of raw | 848 | 1204 | 146 | 547 | 808 |
| materials and | | | | | |
| consumables | | | | | |
--------------------------------------------------------------------------------
| Total expense of | 124 | 393 | 238 | 701 | 908 |
| direct employees | | | | | |
--------------------------------------------------------------------------------
| Cost of goods sold | 733 | 1722 | 742 | 2342 | 3006 |
| total | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total expense of | 2238 | 6610 | 1841 | 5063 | 7263 |
| indirect employees | | | | | |
--------------------------------------------------------------------------------
| Depreciations | 544 | 1622 | 531 | 1595 | 2133 |
--------------------------------------------------------------------------------
| Other operating | 1085 | 3903 | 932 | 2909 | 3926 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Expenses by cost | 3867 | 12135 | 3304 | 9567 | 13322 |
| category, total | | | | | |
--------------------------------------------------------------------------------
5. SHAREHOLDERS´ EQUITY
--------------------------------------------------------------------------------
| | Number of | Share | Share | Invested | Total |
| | shares | capital | premium | distribut | (1000eur) |
| | (1000) | (1000eur) | account | . equity | |
| | | | (1000eur) | account | |
| | | | | (1000eur) | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 31.12.2008 | 895096 | 8951 | 13631 | 28039 | 50621 |
--------------------------------------------------------------------------------
| Share issue free | 2830 | | | | 0 |
| 5.2.2009 | | | | | |
--------------------------------------------------------------------------------
| Costs of share | | | | -68 | -68 |
| issues | | | | | |
--------------------------------------------------------------------------------
| 30.09.2009 | 897926 | 8951 | 13631 | 27971 | 50553 |
--------------------------------------------------------------------------------
According to the Company´s articles of association registered there is no
maximum for the shares and there is only one category of shares at the Company.
Also the clause about maximum amount of share capital has been removed. The
shares carry no nominal value. All outstanding shares are fully paid.
6. OPTION RIGHTS
Option program 2008-5:
According to the terms and conditions the maximum of 9,505,000 option rights
shall be allotted to the key recourses of the GeoSentric group during the option
subscription period, which ends on December 31, 2009. Of the received amount, a
total of 9,277,500 options have been allotted before end of reporting period.
Option program 2009-I:
The Board decided in its meeting on May 14, 2009 to adopt Option Plan 2009-I and
issue a total amount of 3,000,000 option rights by virtue of the authorization
granted by the EGM on September 10, 2007. The options are directed to the
Board´s advisors without charge as decided by the Board. The options may be
subscribed into corresponding amount of new shares during the share subscription
period ending on December 31, 2012 with a share subscription price of 0.045
euros per share. Option rights have been subscribed when issued.
Option program 2009-II:
The Board decided in its meeting on May 15, 2009 to adopt Option Plan 2009-II
and issue a total amount of 24,500,000 option rights to the members of the Board
of Directors without charge by virtue of the authorization granted by the AGM on
May 15, 2009. The options may be subscribed into corresponding amount of new
shares during the share subscription period ending on December 31, 2013 with a
share subscription price of 0.045 euros per share. Option rights have been
subscribed when issued.
Option program 2009-III:
The Board decided in its meeting on August 13, 2009 to adopt Option Plan
2009-III and issue a total amount of 1,500,000 option rights to the secretary of
the Board of Directors without charge under the same terms and conditions as
Option Plan 2009-II directed to the Board members. The options may be subscribed
into corresponding amount of new shares during the share subscription period
ending on December 31, 2013 with a share subscription price of 0.045 euros per
share. Option rights have been subscribed when issued.
Special right:
The Board decided to issue 2.830.189 shares without price to Raymond Kalley as
part of the agreed advisor fee. The shares have been registered in trade
register on 5.2.2009.
Cost of options booked in the period according to IFRS 2. Consideration is given
as options. The counter-item of costs bookings is income statement is
shareholders´ equity.
--------------------------------------------------------------------------------
| 1000 EUR | 1-3Q/2009 | 1-3Q/2008 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Key persons | 209 | 250 | 385 |
--------------------------------------------------------------------------------
| Board | 441 | 807 | 989 |
--------------------------------------------------------------------------------
| Other interest groups | 27 | 122 | 163 |
--------------------------------------------------------------------------------
| Total | 677 | 1179 | 1537 |
--------------------------------------------------------------------------------
7. FINANCIAL LIABILITIES
--------------------------------------------------------------------------------
| 1000 EUR | Nominal loan | 3Q/2009 | 3Q/2008 | 2008 |
| | value | | | |
| | 3Q/2009 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current: | | | | |
--------------------------------------------------------------------------------
| Loan 2008 | 10000 | 3013 | 1086 | 3394 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current: | | | | |
--------------------------------------------------------------------------------
| Cbl 2004A | 113 | 113 | 113 | 113 |
--------------------------------------------------------------------------------
| Loan 2008 | | 949 | 0 | 568 |
--------------------------------------------------------------------------------
| Current total | | 1062 | 113 | 681 |
--------------------------------------------------------------------------------
Convertible bond loan 2004A:
This loan with a nominal principal of 1130 teuros was raised on year 2004 and
was converted during the conversion period before 31.12.2008 in all 1017 teuros.
The remaining amount of loan is 113 teuros. The interest is 4%. No interest was
paid. The loan capital, interest and other benefit may be paid in case of
dismantling or bankruptcy of the company only with priority after the other
creditors. The principal may be returned otherwise only providing that a full
coverage for the bound equity and other non-distributable items in the confirmed
financial statements for the latest expired financial year is retained. Interest
or other benefits may be paid only in case the paid amount may be used for
profit distribution in the confirmed balance sheet for latest expired financial
period.
Financing round 2008:
The subscription period of the loan note for raising a maximum amount of 16,000
teuros ended on May 15, 2009 and the total amount of subscription was 10,000
teuros. The maximum amount of new shares to be subscribed by virtue of the
subscribed note is 94,339,622 representing approximately 10.51 % of the
registered share amount and 8.11 % of all outstanding securities. As a result of
the note company's share capital may increase by a maximum of 943 teuros. The
annual interest of the loan is 12.5 %, paid twice a year, however no interest
was paid by the end of the reporting period. The loan will end on August 25,
2013.
8. COLLATERAL COMMITMENTS AND CONTINGENCIES
--------------------------------------------------------------------------------
| 1000 EUR | 3Q/2009 | 3Q/2008 | 2008 |
--------------------------------------------------------------------------------
| Contingent liability: | 0 | 0 | 0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Collateral for own liabilities: | | | |
--------------------------------------------------------------------------------
| Chattel mortgage as collateral for | 0 | 12068 | 0 |
| own liability | | | |
--------------------------------------------------------------------------------
| Pledged non-current financial | 46 | 44 | 44 |
| assets | | | |
--------------------------------------------------------------------------------
| Pledged current financial assets | 57 | 357 | 57 |
--------------------------------------------------------------------------------
9. RELATED PARTY TRANSACTIONS
The parent and subsidiary company relations in the group were as follows: Parent
company GeoSentric Oyj. Subsidiaries with parent company ownership and voting
rights of 100 % are GyPSii (Shanghai) Co. Ltd. and GeoSolutions Holdings N.V.
and the following through GeoSolutions Holdings N.V. (100 %): GeoSolutions B.V.,
GeoSentric (UK) Ltd. and GyPSii Inc.
Inner circle transactions have been presented in the financial statements for
year 2008. No essential changes have taken place in the reporting period.
The Annual General Meeting on May 15, 2009 elected the following persons to the
Board: Daniel Harple, Michael Vucekovich, Gary Bellot, Andy van Dam, Hans van
der Velde, Winston Guillory and Raymond Kalley. The Board meeting elected Daniel
Harple as Chairman.
The Board received a directed option program 2009-II with total cost effect of
555 teuros of which a cost of 145 teuros was booked in period 2Q/2009 and 220
teuros in period 3Q/2009.
10. EVENTS AFTER THE END OF THE PERIOD
1) The Board decided in its meeting on November 13, 2009 to adopt Option Plan
2009-IV and issue a total amount of 3,500,000 option rights to the financial
adviser and placement agent without charge. The options may be subscribed into
corresponding amount of new shares during the share subscription period ending
on February 17, 2015 with a share subscription price of 0.0475 euros per share.
2) The Extraordinary General Meeting (EGM) of the company convened on November
17, 2009 to authorize the board to decide upon new financing.
3) The Board of Directors has decided upon new financing amounting up to EUR
25,000,000 at maximum through the Company's fully owned Dutch subsidiary
GeoSolutions Holdings N.V. (“Offering”). With respect to the Offering the Board
accepted an investment commitment of EUR 7,500,000 by the lead investor as
described in more details in section 4 “Material events after the end of the
period” of the explanatory section.
More about events after the end of the period in the explanatory section above.
11. DISCLAIMER
Possible forward-looking statements in this Q3/2009 release are based on the
current expectations, known factors, decisions and plans of the management of
GeoSentric. Although the management believes that the disclosed expectations are
reasonable, there is no assurance that these expectations would prove to be
correct. Therefore, the results could differ materially from those implied in
the management's statements, due to for example changes in the economic, market
and competitive environments, delays in partners' launching their new products
and regulatory changes.
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