2013-05-31 15:00:00 CEST
2013-05-31 15:00:04 CEST
REGULATED INFORMATION
GeoSentric Oyj - Interim report (Q1 and Q3)
INTERIM REPORT 1-3/2013
GEOSENTRIC OYJ Q1 2013 INTERIM REPORT 31.5.2013 at 16:00
INTERIM REPORT 1-3/2013
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, Q1 2013 (not audited)
1. SUMMARY OF KEY FIGURES AND RESULTS
The key figures summarizing the Company's financial position and financial
results were as follows (teuros unless indicated otherwise):
In period 1-3/2013 1-3/2012 2012
Net sales 0 0 0
Operating Result -93 -155 -589
Basic earnings per share (eur) -0.00 -0.00 -0.00
At the end of the period
Total assets 724 971 947
Shareholders' equity -1018 663 -606
Total liabilities 1742 308 1553
2.OPERATIONAL REVIEW
The Company has continued to act as a holding company. The Company is currently
a minority shareholder in its former subsidiary GeoSolutions Holdings N.V.
(“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 business model is via licensing of intellectual property in terms
of software technology and branded trademarks, and revenue generation from
services, which generate advertising and subscription revenue.
The Company did not have any net sales in the reporting period or in period
1-3/2012.
The Company's other operating income was in 1-3/2013 3 teuros compared 0 teuros
in 1-3/2012.
Because of the saving measures the total operating expenses were significantly
lower in the reporting period compared to the comparison period, decreasing to
96 teuros in 1-3/2013, from 155 teuros in 1-3/2012.
The Company´s financial expenses were 177 teuros in 1-3/2013 (0 teuros in
1-3/2012).
The Company´s result from 1-3/2013 also includes its proportional share of
GHNV`s result, which was -150 teuros (-133 teuros in 1-3/2012).
As a result of the above factors, the total result before taxes was -420 teuros
in 1-3/2013, compared to -288 teuros in 1-3/2012. Earnings per share for the
reporting period were -0.00 euros per share.
3. MATERIAL EVENTS IN THE PERIOD
The main events in the period 1-3/2013 were as follows:
The Company continued to act as a holding company to its approximately 24%
shareholding in GHNV.
During early 2013 the Company negotiated upon acquiring a new business based on
signed term sheet regarding the acquisition of Sinophi Healthcare Limited, a
company operating in the field of private specialty healthcare, especially in
China. The planned transaction involved acquisition of the entire share
capital, shares and votes of Sinophi Healthcare Limited in exchange for newly
issued shares of the Company representing 90 % of the Company's shares and
votes after the acquisition.
Despite the substantial efforts the negotiations with Sinophi Healthcare
Limited terminated on March 2013. As a result of the termination Company
commenced negotiations with another acquisition target based on a similar deal
structure that was negotiated with Sinophi. The Company also requested
additional short term funding from its key investors and received signed
confirmation for this short-term funding. This short-term funding enables the
Company to complete the acquisition or, in the event of non-completion, orderly
wind-down of its business. The Company has received in March 2013 a commitment
from an independent advisory group to make a loan and fund the Company with up
to €250,000, which arrangement the Board of Directors has accepted. This
commitment is from the same independent advisory group that has previously made
secured loans to the Company. This investor and the Company are also working
with other parties and negotiating a business plan under which the Company
would acquire minority holding in another business. If this acquisition would
be successful, the investor would defer repayment on the prior secured loans,
which would keep the Company solvent and operating. The Company has already
received the first tranche of financing in the amount of €25,000 for the
Company's imminent working capital needs. The remaining financing will be
funded periodically for the Company's working capital needs through the
remainder of 2013. This financing is secured by the shares of GHNV owned by the
Company. 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 after Annual General Meeting 2013 approval.
The Managing Director and a Member of the Board of Directors Michael Po
resigned from Company.
4. MATERIAL EVENTS AFTER THE END OF THE PERIOD
After the reporting period the Company continued to pursue possible options
open to it in order continue the operations and continued to negotiate with
another acquisition target under which the Company would acquire minority
holding in another business. Meanwhile the creditors of the valid loans,
matured on April 30,2013, are exercising forbearance, and have not made legal
demand due to the Company's failure to make repayment by the maturity date.
The Company received a flagging notice regarding acquisition and/or disposal of
the Company's shares between ANSA McAL Limited, Schroder & Co (Parent company
being Schroders Plc) and Schroder Investment Management Limited.
The Company postponed the Annual General Meeting to be held in the last week of
June 2013.
5. REVIEW OF THE FINANCIAL POSITION AND THE FINANCIAL RESULTS
The key figures summarizing the Company's financial position and financial
results were as follows (teuros unless indicated otherwise):
In period 1-3/2013 1-3/2012 2012
Net sales 0 0 0
Operating Result -93 -155 -589
Basic earnings per share (eur) -0.00 -0.00 -0.00
At the end of the period
Total assets 724 971 947
Shareholders' equity -1018 663 -606
Total liabilities 1742 308 1553
Cash 23 74 96
6. SUFFICIENT LIQUIDITY
The Company has, during the reporting period, retained sufficient liquidity.
The Company received a commitment for additional short-term funding from its
key investors enabling the Company to complete the acquisition of a minority
holding in another business, or in the event of non-completion, orderly
wind-down of its business. Thus the financing provides the funding of the
Company through 2013.
The Company is pursuing possible options open to it in order continue the
operations. Company is working with other parties and negotiating a possible
business plan under which the Company would acquire minority holding in another
business. If the financing arrangement and the related business plan are not
approved by the annual general meeting on 2013, the Company does not have the
ability to repay the prior secured loans, and the Company's GHNV shares which
are pledged against these loans would be put up for auction to satisfy the
amounts owed by the Company on these loans. If the GHNV shares were able to be
sold for more than the total amount owed on the secured loans, then the Company
would be entitled to retain any such excess amount. Currently the creditors of
the loans are exercising forbearance, and have not made legal demand due to the
Company's failure to make repayment by the maturity date on April 30, 2013.
The Company does not have sufficient funds to finance its operations beyond
2013 unless it succeeds to raise additional financing.
7. OUTLOOK
Market Outlook
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 focused mainly on its 40% holding in
the Joint Venture with Sina (“JV”). The current projections indicate that the
JV will become profitable over the next few years, however, it may be several
years before dividends may flow 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
recognize 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 minority shareholder of GHNV the Company does not have the 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 to enjoy
strong 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 also to new business segments with competitive situations
new to it, or which may be only in the early market phase. Unless GHNV is able
to successfully respond to these developments it may significantly impair its
operating results affecting consequently to operating results of the Company.
A key driver of the GHNV 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 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. 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, 2013 it needs to
raise additional external financing to repay the loan despite the additional
loan of €250,000 described above in “Material events in the period”. 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 to secure
sufficient liquidity in the long term and also to enable further investments in
GHNV. Should the new financing be delayed or prove to be unavailable, this
could cause an insolvency risk and/or further dilution of Company's holding in
GHNV. The Company's go-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.
Trading with the Company's shares on NASDAQ OMX Helsinki stock exchanges has
been suspended since April 3, 2012 on Company's request. Also a substantial
portion of the Company's shares have not been applied for public trading due to
the lack of financial resources to complete the process before sufficient
long-term funding has been secured. The Company may not guarantee that the
trading with its shares will continue and that the currently unlisted but
issued shares will be listed before the long-term funding has been secured. If
the unclear situation continues, there is also the risk that the Company's
shares will get de-listed.
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 have any investments in the reporting period.
11. PERSONNEL AND ORGANIZATION
The number of employed personnel in the Company in the reporting period and in
the comparison period averaged 3, at most in addition to the Managing Director.
All personnel have been subject to forced leaves from September 2012.
12. FINANCING AND STRUCTURAL ARRANGEMENTS
The Company has received in March 2013 a commitment from an independent
advisory group to make a loan and fund the Company with up to €250,000, which
arrangement the Board of Directors has accepted. This commitment is from the
same independent advisory group that has previously made secured loans to the
Company. This investor and the Company are also working with other parties and
negotiating a business plan under which the Company would acquire minority
holding in another business.
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 1,922,802,890 shares corresponding to 53.39 % of the issued
share amount and 47.24 % 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. As of April 3, 2012 the trading with Company's shares has
been suspended on the request of the Company. Of the total share amount
924,656,354 have are subject to public trading. Remaining share amount shall be
applied for public trading.
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 and share amount 3,601,668,118, consisting of 3,490,246,354
registered shares and 111,421,764 un-registered shares (registration pending).
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.
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 1Q/2013 (Unaudited)
GROUP STATEMENT OF COMPREHENSIVE INCOME
1000 EUR Note 1Q/2013 1Q/2012 2012
Other operating income 3 0 4
General & Administrative expenses 4 96 155 593
Operating result -93 -155 -589
Financial expenses 5 -177 0 -487
Share of Associate Company result 6 -150 -133 -526
------------------------
------------------------
Result before taxes -420 -288 -1602
Result for the period -420 -288 -1602
Comprehensive income -420 -288 -1602
Earnings per share, eur:
Basic earnings per share -0,00 -0,00 -0,00
Diluted earnings per share -0,00 -0,00 -0,00
GROUP STATEMENT OF FINANCIAL POSITION
1000 EUR Note 31.3.2013 31.3.2012 31.12.2012
ASSETS
Non-current assets
Property, plant and equipment 3 1 3
Investment in Associate Company 6 670 855 820
---------------------------------
---------------------------------
673 856 823
Current assets
Trade receivables and other receivables 28 41 28
Cash and cash equivalents 23 74 96
---------------------------------
---------------------------------
51 115 124
Total assets 724 971 947
EQUITY AND LIABILITIES
Shareholders´equity
Share capital 7 8956 8956 8956
Share premium account 7 13631 13631 13631
Invested distributable equity account 7 29056 29056 29056
Retained earnings -52661 -50980 -52249
---------------------------------
---------------------------------
Total shareholders´ equity -1018 663 -606
Current liabilities
Trade payables and other payables 469 195 436
Interest bearing debt 9 1273 113 1117
---------------------------------
---------------------------------
Total liabilities 1742 308 1553
Total shareholders´ equity and 724 971 947
liabilities
GROUP CASH FLOW STATEMENT
1000 EUR 1Q/2013 1Q/2012 2012
Cash flow from operations
Result for the period -420 -288 -1602
Adjustments 314 154 888
Changes in working capital:
Change of trade and other receivables 0 9 22
Change of trade and other liabilities 33 68 309
Paid interests 0 0 0
Received interest payments 0 0 0
Cash flow from operations, net -73 -57 -383
Cash flow from investments, net 0 0 -360
Cash flow from financing
Proceeds from long term borrowings, liability 0 0 708
Net cash flow from financing 0 0 708
Change in cash -73 -57 -35
Cash at beginning of period 96 131 131
Cash at end of period 23 74 96
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS´ EQUITY
Share Share premium Inv distributed Accrued Total
capital account (1000 equity account result (1000
(1000 eur) eur) (1000 eur) (1000 eur) eur)
Shareholders´ 8956 13631 29056 -50712 931
equity
31.12.2011
Result for 0 0 0 -288 -288
the period
------------------------------------------------------------------
------------------------------------------------------------------
Comprehensive 0 0 0 -288 -288
income
Equity 0 0 0 20 20
portions of
liabilities
------------------------------------------------------------------
------------------------------------------------------------------
Shareholders´ 8956 13631 29056 -50980 663
equity
31.3.2012
Shareholders´ 8956 13631 29056 -52249 -606
equity
31.12.2012
Result for 0 0 0 -420 -420
the period
------------------------------------------------------------------
------------------------------------------------------------------
Comprehensive 0 0 0 -420 -420
income
Booked 0 0 0 8 8
expense of
stock
options
------------------------------------------------------------------
------------------------------------------------------------------
Shareholders´ 8956 13631 29056 -52661 -1018
equity
31.3.2013
KEY FIGURES
1Q/2013 1Q/2012 2012
Net sales, 1000 EUR 0 0 0
Operating result, 1000 EUR -96 -155 -589
Result before taxes, 1000 EUR -420 -288 -1602
Gross investments, 1000 EUR 0 0 360
Average personnel 3 3 3
Earnings per share, EUR -0,00 -0,00 -0,01
Equity per share, EUR -0,00 0,00 -0,01
Weighted average number of shares in period, 1000 pcs 3490246 3490246 3490246
Number of shares at the end of the period, 1000 pcs 3490246 3490246 3490246
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 2012.
Accounting principles:
The used preparation principles have been presented in the Financial Statements
from year 2012. IASB has published new standards and interpretations and
changes in existing standards, application of which is mandatory on 1.1.2013 or
thereafter, and which the group has not adopted earlier voluntarily. The group
will adopt these standards (and their amendments) and interpretations from
1.1.2013 onwards, but they have not had effect on the interim report.
3. SEGMENT INFORMATION
The group has only one distinct segment, location based services.
4. COSTS BY CATEGORY
1000 EUR 1Q/2013 1Q/2012 2012
Total expense of indirect employees 26 51 329
Depreciations 0 0 1
Other operating expenses 70 104 263
-----------------------
-----------------------
Expenses by cost category, total 96 155 593
5. FINANCIAL EXPENSES
1000 EUR 1Q/2013 1Q/2012 2012
Interest expense from liabilities valued at amortized 21 0 17
cost
Other financing expenses 156 0 470
-----------------------
-----------------------
Total 177 0 487
6. INVESTMENT IN ASSOCIATE COMPANY
1000 EUR 1Q/2013 1Q/2012 2012
Value of investment at a beginning of period 820 988 988
Additions 0 0 358
Subtractions 0 0 0
Share of result in period -150 -133 -526
------------------------
------------------------
Value of investment at end of period 670 855 820
Domicile of GeoSolutions Holdings N.V. is Holland.
GeoSentric´s interest at the end of period 24 % 24 % 24 %
Assets at end of period 3569 4399 2717
Liabilities at end of period 85 170 127
Net sales 2 7 21
Result -625 -554 -2186
7. SHAREHOLDERS´ EQUITY
Number of Share Share premium Invested Total
shares capital account (1000 distributed equity (1000
(1000) (1000 eur) eur) account (1000 eur) eur)
31.12.2012 3490246 8956 13631 29056 51643
31.03.2013 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.
8. OPTION RIGHTS
Option program 2007-1: Share subscription period have ended with 25,625 option
rights, shares have not been subscribed.
Option program 2007-6: Share subscription period have ended with all 35,305,555
option rights, shares have not been 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 1Q/2013 1Q/2012 2012
Key persons 8 21 66
9. FINANCIAL LIABILITIES
1000 EUR Nominal loan value 1Q/2013 1Q/2013 1Q/2012 2012
Current:
Cbl 2004A 113 113 113 113
Loan 2012 708 1160 0 1004
-----------------------
-----------------------
Current total 1273 113 1117
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.
Secured Loan 2012
The Company has received loan for the amount of 350 teuros from an independent
advisory business. The shares of GeoSolutions Holdings N.V. owned by the
Company secure the financing. The loan matures on April 30, 2013 and accrues
interest 12% per annum, which is payable in the Company shares. The Company has
also the right to repay the loan at any time subject to redemption premium that
is now 100%. 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. Value of special subscription rights and
one-off investment fee is about 174 teuros, which have been booked as cost.
Additional Secured Loan 2012
The Company has received in December loan fo the amount of 358 teuros from
independent investment company, which participated in GeoSolutions Holdings
N.V.:s equity funding ground to its full prorata share of approximately 24%.
Received shares of GeoSolutions Holdings N.V. owned by the Company secure the
financing. The loan matures on April 30, 2013 and accrues interest 12% per
annum, which is payable in the Company shares. The Company has also the right
to repay the loan at any time subject to redemption premium that is 28.83% now
and will rice to 38.44%.
10. COLLATERAL COMMITMENTS AND CONTINGENCIES
1000 EUR 1Q/2013 1Q/2012 2012
Contingent liability 0 0 0
Collateral for own liabilities:
Pledged non-current financial assets 670 0 820
Quarrels and trials:
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 The Company does not have any other pending or threatening
legal proceedings, which the Company would consider to have material impact on
the Company´s financial position or profitability.
11. RELATED PARTY TRANSACTIONS
The parent and subsidiary company relations in the group are as follows: Parent
company is GeoSentric Oyj, no subsidiaries. Associate is GeoSolutions Holdings
N.V. with minority holding of 24.34%.
The Managing Director and a Member of the Board of Directors Michael Po has
resigned from Company. Mr. Po has agreed to assist the Company for the
transition period until the end of April 2013.
Related party transactions have been presented in the Financial Statements from
year 2012. No essential changes have taken place in the reporting period.
12. EVENTS AFTER THE END OF THE PERIOD
After the reporting period the Company continued to pursue possible options
open to it in order continue the operations and continued to negotiate with
another acquisition target under which the Company would acquire minority
holding in another business. Company's loans have been matured on April 30,
2013. However, the creditors of the loans are exercising forbearance, and have
not made legal demand due to the Company's failure to make repayment by the
maturity date on April 30, 2013.
The Company received a flagging notice regarding acquisition and/or disposal of
the Company's shares between ANSA McAL Limited, Schroder & Co (Parent company
being Schroders Plc) and Schroder Investment Management Limited.
The Company postponed the Annual General Meeting to be held in the last week of
June 2013.
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