GEOSENTRIC OYJ STOCK EXCHANGE RELEASE 06 NOVEMBER 2012 at 15:30
FUNDING UPDATE, GSOY TO OPEN FUNDING ROUND OF UP TO €1,55M TO FINANCE OPERATIONS THROUGH 2013, REPAYMENT OF LOAN AND ADDITIONAL INVESTMENT IN GHNV
As previously reported on June 5, 2012, the Annual General Meeting of the Company confirmed a €350,000 secured funding (“Loan”) proposal from an independent advisory business. This funding, as presented at the meeting, was expected to finance the operations of the Company into Q1 2013 and was secured by a pledge on the shares of GeoSolutions Holding N.V. (“GHNV”) held by the Company. The Company now reports that when the full amount of the Loan has been received, it will finance the operations of the Company into Q1/2013 as originally expected. The Loan falls due on the maturity date of 30 April 2013 and requires a maximum repayment in the amount of €700,000 on that date.
As the Company’s approximately 24% investment in GHNV, in which the Company holds its investment in the “GyPSii” brand of applications, has not yet started to generate revenues back to the Company, the Company must finance the repayment of the Loan by additional external funding. The Company also reports that it has recently received a cash call from GHNV for additional funding needed to finance GHNV’s operations for 2013. The Company’s pro-rata share of the GHNV cash call is €540,348, which is needed to protect the Company’s holding in GHNV from further dilution. A commitment for this funding from the Company to GHNV is due no later than 30 November 2012, with funds due no later than 1 January 2013.
In addition to the €700,000 repayment of the Loan, and the requested €540,348 GHNV cash call, the Company will require cash for its own operations in 2013. The estimated operational budget for 2013 is €350,000. Given the cash that is expected to be in the bank at the end of December, the total amount needed to fund all the cash needs of the Company through 2013 is €1,550,000.
The Company plans to reach out to its current largest shareholders and investors and other potential investors in the near future to discuss potential funding mechanisms. In the meantime, the Board continues to retain and pursue, where appropriate, all realistic strategic options open to it in order to raise the necessary funding, including another directed share offering, a secured loan, an asset sale and other possible sources of external finance.
As previously announced, the reverse split of the Company shares approved by the Annual General Meeting on June 5, 2012, and the listing of the 2,565,590,000 new shares issued in the GSOY Offering in October and November 2011 will be delayed until the now announced new funding is completed.
If the Company does not succeed in raising the required additional funding, it may lose all or part of its holding in GHNV either as a result of realization of the pledge on the Loan or further dilution from the other shareholders’ investment in GHNV based on the cash call.
GEOSENTRIC OYJ
Board of Directors
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