2012-08-23 09:30:00 CEST
2012-08-23 09:30:06 CEST
REGULATED INFORMATION
GeoSentric Oyj - Interim report (Q1 and Q3)
INTERIM REPORT 1-6/2012
GEOSENTRIC OYJ Q2 2012 INTERIM REPORT 23.8.2012 at 10:30
INTERIM REPORT 1-6/2012
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. Future outlook
8. Assessment of significant operational risks
9. Review of R&D activities
10. Investments
11. Personnel and organization
12. Financing and structural arrangements
13. Board authorization
14. Company's shares and shareholders
15. About the Company
16. Financial Statements, Q2 2012 (not audited)
1. Summary of key figures and results
The key figures summarizing the Company's financial position and financial
results from continuing operations were as follows (teuros unless indicated
otherwise):
In period 4-6/2012 1-6/2012 4-6/2011 1-6/2011 2011
Net sales 0 0 16 45 49
Operating Result -172 -327 -1589 -3089 12739
Basic earnings per share (eur) -0,00 -0,00 -0.00 -0.00 0.01
At the end of the period
Total assets 789 1460 1171
Shareholders' equity 374 -19566 931
Total liabilities 415 21026 240
2. Operational overview
The Company has continued to act as a holding company and has not had direct
operational activities of its own since disposing of the TWIG business at the
end of 2010. In addition, all of its indirect operational activities, under its
former Dutch subsidiary, GeoSolutions Holdings N.V. (“GHNV”) and its respective
subsidiaries, were also disposed of in August 2011. As a result of this
transaction, the Company became a minority shareholder in its former subsidiary
GHNV with a current holding of approximately 24%.
GHNV carries on its indirect business as a developer and provider of solutions,
products and technologies for location based services and LBS-enabled social
networks through its 40% holding in the Joint Venture (“JV”) with a major
Chinese public media company, Sina Corp (“Sina”) focusing on the Chinese
market.
The Company did not have any net sales in the reporting period compared to 45
teuros in period 1-6/2011 from its then-current indirect GHNV´s operations.
The total operating expenses from continuing operations were significantly
lower in the reporting period compared to the prior period, decreasing to 327
teuros in 1-6/2012, from 3134 teuros in 1-6/2011. This was mainly driven by the
de-consolidation of the GHNV sub-group, as mentioned above, on August 4, 2011.
The Company´s result from the reporting period 1-6/2012 also includes its
proportional share of GHNV`s result, which was -266 teuros (0 teuros in
1-6/2011).
As a result of the above factors, the total result before taxes from continuing
operations was -594 teuros in 1-6/2012, compared to -4744 teuros in 1-6/2011, a
significant improvement resulting from downsizing the Company's operations to a
holding company level and related decrease of the operational costs. Earnings
per share from continuing operations in the reporting period were -0.00 euros
per share.
3. Material events in the period
The main events in the period 4-6/2012 were as follows:
The Company continued to act as a holding company to its approximately 24%
shareholding in GHNV.
As announced to the markets on April 3, 2012, the Company did not receive
approval from one of its largest shareholders, which was a crucial
pre-condition for the revised funding proposal announced to the markets on
March 30, 2012 and therefore the Company could not complete the signed proposal
for the funding. In the absence of securing any viable alternatives, the Board
of Directors decided to call an Extraordinary General Meeting to decide on the
placing of the company into liquidation and applied for immediate suspension of
trading with the Company's shares on NASDAQ OMX Helsinki. On the same day, the
Company's CFO that was acting on a contractual basis, left the Company.
The Company released an invitation to the Extraordinary General Meeting to be
held on May 3, 2012 to decide on any funding proposals that may be put on the
table or putting the Company into liquidation. Meanwhile, the Company continued
financing negotiations with the independent advisory business that had already
provided the Company with two rejected funding proposal, and, as announced on
April 23, 2012, the Company succeeded to receive a further revised funding
proposal of €350,000 (“Proposal”). This revised Proposal removed the
pre-conditions that had previously prevented the Company from completing the
proposal. Subsequently, the Company received the first tranche of funds (short
term loan of €75,000) from this funding source. The Company continued to
develop the formal funding documents for the loan with longer term, which are
based upon a secured pledge on the GHNV shares owned by the Company.
As a result of the prolonged and complicated funding negotiations and
negotiations with some of the major shareholders, the Company's Financial
Statements for 2011 were published on April 30, 2012 and the Board of Directors
decided to cancel the Extraordinary General Meeting already invited and call
the Annual General Meeting to be held on June 5, 2012 to decide on confirmation
of the Proposal, a reverse share split and the regular matters on the agenda of
an Annual General Meeting.
The Annual General Meeting held on June 5, 2012 confirmed the annual accounts
2011 and decided that the loss from the financial period will be booked on the
accrued profit/loss account and that no dividend is paid. The meeting further
approved the remuneration and incentives of the Board members and elected
Victor Franck, Jeffrey Crevoiserat and Mike Po to continue as the ordinary
Board members. The Board further elected Victor Franck to continue as the
Chairman of the Board.
The Annual General Meeting confirmed also the Proposal providing the Company
with a secured loan of €350,000. The loan is secured by a pledge on the GHNV
shares held by the Company. Additionally the independent advisory business
granting the loan is entitled to receive an arrangement fee of 1% of Company's
shares and warrants that entitle it to receive 10% of Company's outstanding
shares at the time of exercise of the warrants for one euro at any time during
twenty-four months period from the Annual General Meeting. The loan matures on
April 30, 2013 and accrues interest at the rate of 12% per annum, which is
payable in the Company shares at the valuation of the preceding financing round
of €0.004 per share. The Company has also the right to repay the loan at any
time subject to redemption premium that is 25% if the loan is repaid within
first three months from the Annual General Meeting, 50% if the repayment takes
place later than three months but earlier than six months from the meeting, 75%
of the repayment takes place later than six months but earlier than nine months
from the meeting and 100% if the repayment takes place later than nine months
from the meeting.
The Annual General Meeting further resolved on cancellation of all outstanding
option rights and reverse split in ratio of at maximum 10:1 to be executed by
the end of the year provided that the preconditions for the reverse split can
be met.
4. Material events after the end of the period
The Company continued finalizing the financing documents relating to
implementation of the Proposal, which process was completed in July, as
reported to the markets on July 6, 2012. As the Company has also reported, the
execution of the Proposal has been delayed from the original schedule and the
second tranche of €116,670 was received on August 17, 2012. The Company expects
to receive the remaining third tranche of approximately 117t€ by the end of the
year.
The Company reported also on August 15, 2012 that its ex-CFO Mr. Robin Halliday
has through his fully owned consulting company filed a claim against the
Company, amounting to approximately €40,000. The Company has rejected the claim
and started all necessary actions to respond.
To bring its operating cost level down even more and extend its current cash
runway, the Company has decided on part-time forced leaves for the time being
to reduce the working hours of its entire remaining personnel by 50% starting
from September.
5. Review of the financial position and the financial results
The Company has during the period retained solidity and liquidity.
The key figures summarizing the Company's financial position and financial
results from continuing operations were as follows (teuros unless indicated
otherwise):
In period 4-6/2012 1-6/2012 4-6/2011 1-6/2011 2011
Net sales 0 0 16 45 49
Operating Result -172 -327 -1589 -3089 12739
Basic earnings per share (eur) -0,00 -0,00 -0.00 -0.00 0.01
At the end of the period
Total assets 789 1460 1171
Shareholders' equity 374 -19566 931
Total liabilities 415 21026 240
Cash 33 897 131
6. Sufficient liquidity
The Company has, during the reporting period, retained sufficient liquidity.
As announced on April 23, 2012, the Company succeeded to secure a commitment
for an additional €350,000 secured funding from an independent advisory
business that secures the Company´s funding through 2012 and into 2013. The
Annual General Meeting on June 5, 2012 confirmed the terms of the funding as
explained in Section “Material events in the period” above. Subsequently the
Company has received the first tranche of the loan in June and second tranche
in August totalling to €233,316 and still expects to receive the third tranche
approximately 117t€ by the end of the year.
Securing sufficient liquidity beyond 2012 and early Q1 2013 most likely
requires further external funding as the Company is not likely to generate any
revenue of its own in the next twelve months and is not expecting to receive
any revenue from GHNV during this time period.
7. Future Outlook
Market Outlook
Due to forming the Joint Venture (“JV”) with a major Chinese media company,
Sina Corp (“Sina”) and refocus of the GHNV development, sales and marketing
activities into China, the future business outlook of the Company's associate
company, GHNV, is currently almost completely focused on the China market. In
partnership with Sina, China's third largest internet company, the immediate
focus is to leverage the now very large +300M Sina user base to spread the use
of the GyPSii platform and applications to as many mobile phone users as
possible over the next few years. The JV will combine the IP of GeoSolutions
B.V., a 100% owned subsidiary of GHNV, with Sina's large user base, marketing
and sales activities to develop the China market for the Tuding and Weilingdi
products and the GyPSii Location Based Services Platform. Seeding this market
should give rise to opportunities in 2013 and beyond for income to the JV based
on advertising, IP licensing and small to medium business subscriptions. The
China market for mobile technology is experiencing extremely rapid growth
compared to the rest of the world. This is expected to continue alongside
China's economic expansion well into the decade. This strong growth of mobile
technology is a natural pull for the Sina and GyPSii products.
Outside of China, GHNV is exploring opportunities to leverage its IP and
products in other developing countries with similar user demographics and
similarly strong smart phone growth as China. This involves creating other
potential partnerships with a business model similar to the JV with Sina.
Financial and Business Development Outlook
The Company's currently remaining business comprises solely its 24% minority
holding in GHNV. This in turn currently is focussed mainly on its 40% holding
in the JV. The current projections indicate that the JV will not be profitable
in its initial phase and it may be several years before there may be dividends
flowing from the JV to the Company via GHNV. Unless the Company decides to
start some new operational activities of its own, it is likely that the Company
will not generate any income of its own and will not recognise dividend income
from the JV until the JV turns profitable or becomes liquid through merger or
acquisition and starts to distribute profits. Therefore, despite minimized
operational costs, the Company is likely to make losses through this period.
The Company may also sell part or all of its holding in GHNV in the future,
which may generate an accounting and distributable profit.
8. Assessment of significant operational risks
As a result of the financial arrangements, the Company became a minority
shareholder in GHNV with its current approximate 24% holding on August 2011. As
a minority shareholder of GHNV, the Company does not have control over the
activities of GHNV and is dependent on the actions of the other shareholders of
GHNV. The Company's future value and cash flow is highly dependent on the
success of the JV with Sina in China. There is no certainty that these efforts
will succeed. As agreed in the Subscription and Shareholders' Agreement between
GHNV and its shareholders, GHNV has decided to issue an option pool to its
Board and management of up to 15% of its issued share capital. This may
decrease the Company´s current ownership of GHNV down to approximately 21%.
The global financial crisis and current global recession have had and may
continue to have a negative impact also on the GyPSii business although the
business is now almost exclusively focussed on China, which continues with
strong reported economic growth.
There is no certainty of the success regarding the implementation and
realisation of the GHNV business plan. According to the business strategy, GHNV
is pursuing entrance to new business segments with competitive situations new
to it, or which may be in the early market phase. Unless GHNV is able to
successfully respond to these developments it may significantly impair its
operating results.
A key driver of the GHNV business model is sufficient and rapid growth of users
of the services, and the speed of adoption of mobile, UGC and location based
advertising of which there is no certainty.
Since 1997, the Company has not paid dividends and, in the future, there may be
restrictions on the ability to distribute dividends. 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 Company´s business plan has been prepared by assuming that the Company can
derive long term value from its holding in GHNV but this potential value
creation is uncertain. The Company's financing plan assumes that the additional
€350,000 external financing confirmed by the Annual General Meeting on June 5,
2012 is sufficient to fund the Company through 2012 and into early Q1 2013. As
the financing is secured by a pledge on the shares of GHNV held by the Company
and the Company does not expect to have any net income from its business before
the maturity of the loan on April 30, 2012 it needs to raise additional
external financing to repay the loan. If the Company does not success to raise
such external funding, there is a risk that the creditor could by virtue of the
pledge demand realization of all or part of the GHNV shares owned by the
Company to received funds for repayment of the loan.
In addition, the Company will need further external funding in the long term
and to enable possible further investments in GHNV. Should the new funding be
delayed or prove to be unavailable, this could cause an insolvency risk and/or
further dilution of the Company's holding in GHNV. The Company's going forward
budget and cash sufficiency estimates have been prepared assuming further
decreased cost levels. Should the actual cost levels be higher, the Company
would need to raise additional external capital and the availability of this
additional capital is uncertain.
As reported to the market on 15 August 2012, SoftTech Support Services Ltd, a
company domiciled in the United Kingdom and owned by the Company's ex-CFO Robin
Halliday, has filed a claim against GeoSentric Oyj. The amount of the claim is
approximately EUR 40,000. The Company has rejected the claim and will take all
necessary actions to respond. Should the Company have to pay the full or a
substantial amount of the claim, the Company would need to raise additional
external capital and the availability of this capital is uncertain.
There are significant financial risks related to the Company's business,
competition and industry and it is possible that investors may lose all or a
part of their invested capital.
Schroders & Co Limited and investor groups led by Horizon Group, have influence
on GeoSentric. As a result of the directed share offering closed in November
2011, Jeffrey Crevoiserat, a Board member of the Company, has a substantial
holding in the Company. The Company trusts that the regulation and information
obligation binding public companies, supported by the compliance with the
corporate governance recommendations, together with the continuous external
auditing activity maintained by a skilled and reputable auditing firm suffice
to pre-empt a misuse of control power.
9. Review of R&D-activities
The Company did not have any R&D-activities in the reporting period.
10. Investments
The Company did not make any investments in the reporting period (43 teuros in
period 1-6/2011).
11. Personnel and organization
The number of employed personnel in the Company in period 1-6/2012 averaged 3
in addition to the managing director (73 in period 1-6/2011).
12. Financing and structural arrangements
The financing arrangements and latest developments have been described above in
sections “Material events in the period” and ”Material events after the end of
the period”.
13. Board authorization
The Annual General Meeting convened on June 29, 2011 as extended to July 1,
2011 authorized the Board to increase the share capital by maximum of 5,000,000
euros and share amount by maximum of 5,000,000,000 new shares, option rights or
special rights. The authorization is valid for two (2) years from the date of
the Annual General Meeting. At the same time all the other authorizations were
terminated.
At the end of the reporting period the remaining amount of Board's
authorization, as granted by the extended meeting on July 1, 2011, was
5,000,000 euros and 2,434,410,000 shares corresponding to 69.75 % of the
currently registered share amount and 68.0 % shares after all shares and
instruments entitled to shares, effecting a corresponding immediate dilution to
existing shareholdings (including current authorization).
14. 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. Since April 3, 2012 the trading with Company´s shares has
been suspended on the request of the Company.
The Company does not have any Company´s shares owned by or administered on
behalf of the Company.
At the end of the reporting period the Company's registered share capital was
8,955,761.65 Euros, consisting of 3,490,246,354 shares of which 924,656,354 are
currently listed on NASDAQ OMX Helsinki stock exchange.
15. About the Company
GeoSentric is an investor in a business GeoSolutions Holdings N.V., a former
subsidiary of GeoSentric, and a Dutch company which together with its
subsidiaries and affiliates 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, 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.
© 2011 GeoSentric Oyj. All rights reserved.
The Company is based in Salo, Finland.
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
GEOSENTRIC OYJ INTERIM REPORT 2Q/2012 (unaudited)
GROUP STATEMENT OF COMPREHENSIVE INCOME
1000 EUR Note 2Q/201 1-2Q/201 2Q/201 1-2Q/201 2011
2 2 1 1
Continuing operations
Net sales 0 0 16 45 49
Cost of goods sold 0 0 0 0 0
------------------------------------------
------------------------------------------
Gross margin 0 0 16 45 49
Other operating income 4 0 0 0 0 16690
General & Administrative 5 172 327 743 1313 1969
expenses
Research & Development 5 0 0 506 1079 1224
expenses
Sales & Marketing expenses 5 0 0 356 742 807
------------------------------------------
------------------------------------------
Operating result -172 -327 -1589 -3089 12739
Financial income 6 0 0 0 1 4265
Financial expenses -1 -1 -850 -1656 -2066
Share of Associate Company 7 -133 -266 0 0 -231
result
------------------------------------------
------------------------------------------
Result before taxes -306 -594 -2439 -4744 14707
Income taxes 0 0 13 129 129
------------------------------------------
------------------------------------------
Result for the period -306 -594 -2426 -4615 14836
Translation difference 0 0 7 3 -34
------------------------------------------
------------------------------------------
Comprehensive income -306 -594 -2419 -4612 14802
Earnings per share, eur:
Basic earnings per share, -0,00 -0,00 -0,00 -0,00 0,01
Diluted earnings per share, -0,00 -0,00 -0,00 -0,00 0,01
GROUP STATEMENT OF FINANCIAL POSITION
1000 EUR Note 30.6.2012 30.6.2011 31.12.2011
ASSETS
Non-current assets
Property, plant and equipment 1 67 2
Goodwill 0 216 0
Other intangible assets 0 1 0
Investment in Associate Company 7 722 0 988
Other financial assets 0 5 0
Deferred tax assets 0 0 0
---------------------------------
--------------------------------- 723 289 990
Current assets
Inventories 0 0 0
Trade receivables and other receivables 33 274 50
Prepaid expenses 0 0 0
Cash and cash equivalents 33 897 131
---------------------------------
---------------------------------
66 1171 181
Total assets 789 1460 1171
EQUITY AND LIABILITIES
Shareholders´equity
Share capital 8 8956 8956 8956
Share premium account 8 13631 13631 13631
Translation difference 0 125 0
Invested distributable equity account 8 29056 30912 29056
Retained earnings -51269 -73190 -50712
---------------------------------
---------------------------------
Total shareholders´ equity 374 -19566 931
Non-current liabilities
Deferred tax liabilities 0 0 0
Interest-bearing debt 10 0 16628 0
---------------------------------
---------------------------------
0 16628 0
Current liabilities
Trade payables and other payables 227 4285 127
Provisions 0 0 0
Interest bearing debt 10 188 113 113
---------------------------------
---------------------------------
415 4398 240
Total liabilities 415 21026 240
Total shareholders´ equity and 789 1460 1171
liabilities
GROUP CASH FLOW STATEMENT
1000 EUR 1-2Q/2012 1-2Q/2011 2011
Cash flow from operations
Result for the period -594 -4615 14836
Adjustments 304 527 -16282
Changes in working capital:
Change of trade and other receivables 17 -50 174
Change of inventories 0 0 0
Change of trade and other liabilities 100 1066 -3092
Paid interests 0 0 0
Received interest payments 0 1 501
Cash flow from operations, net -173 -3071 -3863
Cash flow from investments, net 0 -43 -1043
Cash flow from financing
Proceeds from issue of share capital 0 0 1026
Transaction expenses of share issues 0 0 0
Transaction expenses of loans 0 -31 -31
Proceeds from long term borrowings, equity 0 0 0
Proceeds from long term borrowings, liability 75 3150 3150
Net cash flow from financing 75 3119 4145
Change in cash -98 5 -761
Cash at beginning of period 131 892 892
Cash at end of period 33 897 131
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS´ EQUITY
Share Translatio Share Inv. Accrued Total
capital n premium distributed result (1000
(1000 difference account equity (1000 eur)
eur) (1000 eur) (1000 account eur)
eur) (1000 eur)
Shareholders´ 8956 122 13631 30912 -68645 -15024
equity
31.12.2010
Items booked 0 3 0 0 -28 -25
directly info
shareholders´
equity
Result for the 0 0 0 0 -4615 -4615
period
----------------------------------------------------------------
----------------------------------------------------------------
Comprehensive 0 3 0 0 -4643 -4640
income
Booked expense 0 0 0 0 98 98
of stock
options to key
personnel and
partners
Equity portions 0 0 0 0 0 0
of liabilities
----------------------------------------------------------------
----------------------------------------------------------------
Shareholders´ 8956 125 13631 30912 -73190 -19566
equity
30.6.2011
Shareholders´ 8956 0 13631 29056 -50712 931
equity
31.12.2011
Items booked 0 0 0 0 0 0
directly into
shareholders´
equity
Result for the 0 0 0 0 -594 -594
period
----------------------------------------------------------------
----------------------------------------------------------------
Comprehensive 0 0 0 0 -594 -594
income
Booked expense 0 0 0 0 37 37
of stock
options to key
personnel and
partners
Equity portions 0 0 0 0 0 0
of liabilities
----------------------------------------------------------------
----------------------------------------------------------------
Shareholders´ 8956 0 13631 29056 -51269 374
equity
30.6.2012
KEY FIGURES
2Q/2012 1-2Q/20 2Q/201 1-2Q/20 2011
12 1 11
Net sales, 1000 EUR 0 0 16 45 49
Operating result, 1000 EUR -172 -327 -1589 -3089 12739
Result before taxes, 1000 EUR -306 -594 -2439 -4744 14707
Gross investments, 1000 EUR 0 0 20 43 1043
Average personnel 3 3 73 73 44
Earnings per share, EUR -0,00 -0,00 -0,00 -0,00 0,01
Equity per share, EUR 0,00 0,00 -0,02 -0,02 0,00
Weighted average number of shares in 3490246 3490246 924656 924559 1031507
period, 1000 pcs
Number of shares at the end of the 3490246 3490246 924656 924656 3490246
period, 1000 pcs
1. BASE INFORMATION OF THE COMPANY
Prior to August 4, 2011, GeoSentric wholly owned its subsidiary, GeoSolutions
Holdings NV ("GHNV"). On August 4, 2011, its holding in GHNV became a minority
holding and GeoSentric´s sole business then became holding its minority
investment in GHNV. GHNV 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"). It 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. GeoSentric
is based in Salo, Finland. GeoSentric is listed in NASDAQ OMX Helsinki Ltd
(NASDAQ OMX: GEO1V). Trading has been suspended as of April 3, 2012. The parent
company of the group is GeoSentric 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
Accounting principles:
The group interim report has been prepared in accordance with International
Financial Reporting Standards ("IFRS") and has been prepared to the accounting
standard IAS 34, Interim Reports. An interim report shall be read together with
the financial statements for year 2011.
Accounting principles:
The utilised principles of preparation are identical with those utilised by the
Group in financial statements for year 2011. IASB has published new standards
and interpretations and changes in existing standards, application of which is
mandatory on 1.1.2012 or thereafter, and which the group has not adopted
earlier voluntarily. The group will adopt the following standards (and their
amendments) and interpretations from 1.1.2012 onwards:
Change to IFRS 7, Financial instruments: Disclosures (in force 1.7.2011 or in
beginning account period after it). Change bring more transparence regarding
transaction presentation of disposal of financial instruments. Change is not
yet accepted to apply in EU.
Change to IAS 12, Income taxes (in force 1.1.2012 or in beginning account
period after it). Change concern valuation method effects of selected assets to
deferred taxes. Change is not yet accepted to apply in EU. No effect on the
group.
Change to IAS 1, Presentation of financial statements (in force 1.7.2012 or in
beginning account period after it). Central change is demand for grouping of
other comprehensive income items according if they will possible carry later to
earnings acting with filling certain condition. Change is not yet accepted to
apply in EU.
3. SEGMENT INFORMATION
The group has only one distinct segment, location based services. Its share of
net sales has been 100% in the period and in the reference period.
4. OTHER OPERATING INCOME
As a result of the de-consolidation of GHNV, the Company realized in year 2011
a one time, non cash gain of 16690 teuros.
5. COSTS BY CATEGORY
1000 EUR 2Q/2012 1-2Q/2012 2Q/2011 1-2Q/2011 2011
Total expense of indirect 121 172 982 1984 2370
employees
Depreciations 0 0 23 58 66
Other operating expenses 51 155 600 1092 1564
---------------------------------------------
---------------------------------------------
Expenses by cost category, total 172 327 1605 3134 4000
6. FINANCIAL INCOME
As a result of the repayment of CBL2008B, the Company realized in year 2011 a
one time, non cash gain of 4264 teuros.
7. INVESTMENT IN ASSOCIATE COMPANY
1000 EUR 1-2Q/2012 1-2Q/2011 2011
Value of investment at beginning of period 988 0 463
Additions 0 0 1000
Subtractions 0 0 -244
Share of result in period -266 0 -231
---------------------------
---------------------------
Value of investment at end of period 722 0 988
Domicile of GeoSolutions Holdings N.V. is Holland.
GeoSentric´s interest was 24,34% at the end of June
2012.
Assets at end of period 3782 0 4947
Liabilities at end of period 109 0 163
Net sales 13 0 17
Result -1107 0 -868
8. SHAREHOLDERS´ EQUITY
Number of Share Share premium Invested Total
shares capital account (1000 distributed equity (1000
(1000) (1000 eur) eur) account (1000 eur) eur)
31.12.2011 3490246 8956 13631 29056 51643
30.6.2012 3490246 8956 13631 29056 51643
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.
9. OPTION RIGHTS
Option program 2008-1: Share subscription period has expired, shares has not
subscribed. 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 1-2Q/2012 1-2Q/2011 2011
Key persons 38 98 127
10. FINANCIAL LIABILITIES
1000 EUR Nominal loan value 2Q/2012 2Q/2012 2Q/2011 2011
Non-current:
Loan 2008 0 0 2000 0
Loan 2009 0 0 5075 0
Loan 2010 0 0 6325 0
Loan 2011 0 0 3228 0
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Non-current total 0 16628 0
Current:
Cbl 2004A 113 113 113 113
Loan 2012 75 75 0 0
-----------------------
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Current total 188 113 113
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 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.
Loan 2012:
The Company has received a financing offer for the amount of 350 teuros from an
independent advisory business, which proposal the Board of Directors and Annual
General Meeting have accepted. The Company has already received current
financing 233 teuros satisfying its imminent working capital needs. The final
documents have been executed after the end of the period.
11. COLLATERAL COMMITMENTS AND CONTINGENCIES
1000 EUR 2Q/2012 2Q/2011 2011
Contingent liability 0 0 0
Collateral for own liabilities:
Pledged non-current financial assets 0 5 0
12. RELATED PARTY TRANSACTIONS
The parent and subsidiary company relations in the group were to beginning of
August 2011 as follows: Parent company GeoSentric Oyj. Subsidiaries with parent
company ownership and voting rights of 100 % were GeoSolutions Holdings N.V.,
and its through (100%) subsidiaries GeoSolutions B.V., GyPSii (Shanghai) Co
Ltd. and GyPSii Inc.. GeoSentric (UK) Ltd was sold in June 2011. On August 4,
2011 the GeoSentric Oyj´s interest in GHNV was reduced to a minority holding of
approximately 15%, and it was 24,34% at the end of June 2012.
Related party transactions have been presented in the Financial Statements
2011. The Annual General Meeting the following persons to continue on the
Board: Victor Franck, Jeffrey Crevoiserat and Michael Po. The Board elected
Victor Franck to continue as the Chairman of the Board.
13. EVENTS AFTER THE END OF THE PERIOD
The Annual General Meeting decided to confirm the €350k funding proposal from
the independent advisory business as proposed. The Company has received the
first tranche in the amount of approximately €117k according to the proposal.
The second tranche of approximately €117k has been received and the final
documents have been executed after the reporting period in August 2012. The
Company will receive the remaining third tranche of approximately €117k during
2012, which will secure Company´s working capital needs through 2012 and into
early Q1 2013. The shares of GeoSolutions Holdings N.V. owned by the Company
secure the financing. The investor is in addition entitled to receive special
subscription rights entitling to Company´s shares to the amount agreed in the
financing terms and a one-off investment fee payable in Company´s shares to be
issued to the investor without charge.
Company's ex-CFO has filed a claim against the Company through his fully owned
company SoftTech Support Services Ltd. amounting to €40k. The Company has
rejected the claim.
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