SUMMARY HIGHLIGHTS
Listing prospectus issued in July
Company completes 9.575 million euro financing package
Decisions by the September Extraordinary General Meeting
Company makes significant progress with R&D and new product development
Industrial procedure in Salo completed
GeoSolutions GyPSii development is accelerating
Decisions by the November Extraordinary General Meeting
1. Highlights of the last quarter
Listing prospectus issued in July
On July 24, 2007, the Company published the prospectus approved by the Finnish
Financial Supervision (”FSA”), prepared for listing new shares at Helsinki
Exchanges for public trading issued in the share exchange of GeoSolutions
acquisition, in the eighth financing tranche and in the set-off issue. On the
same day, the Company made public with market bulletin prior undisclosed
information included in the prospectus. The Prospectus is available for
downloading at the Company website www.benefon.com.
Company completes 9.575 million euro financing package
Benefon Oyj informed on August 21, 2007, that the Company´s Board had accepted
the terms for the financing package of a total of approximately 9.575 million
euros negotiated with investors and consisting of new investment series shares
of the company and a convertible bond loan. The agreed financing was conditional
for restructuring the ownership of the Company by issuing new investment series
shares to GeoHolding B.V. without charge in order to correct the erraneous
valuation of the acquisition of GeoSolutions B.V. on April 27, 2007. At first
the Board decided to raise a maximum of EUR 4,950,000 by virtue of authorization
granted by the Annual General Meeting of April 16, 2007, by offering new
investment series shares and convertible bond loan to certain investors. In
order to execute the rest of the financing, the Board called an Extraordinary
General Meeting to convene on September 10, 2007 for resolving related matters.
The rest of the financing, totalling a maximum of EUR 4,050,000 was decided to
be raised subject to Extraordinary General Meeting granting new authorization
needed also for the said directed free share issue to GeoHolding B.V.
Accordingly, the Board decided to issue new investment series shares and
convertible bond loan for a total maximum of EUR 4,950,000 to investors accepted
by the Board. The maximum number of new investment series shares offered for
subscription was 22,000,000 and subscription price EUR 0.18 per share. In
addition, each subscribed share entitled investors to subscribe for four
convertible notes with a principal value of 0.01125 each. Therefore, the maximum
principal amount of the convertible loan is EUR 990,000 and the maximum number
of new investment series shares that can be subscribed for by virtue of the loan
was 88,000,000. Of the share subscription price, EUR 0.01 was booked to share
capital and the remainder in invested unrestricted equity fund. As a result of
the share issue company's share capital may increase by a maximum of EUR
220,000.00 and as a result of convertible bond loan by a maximum of EUR
880,000.00. The new investment series shares offered for subscription
represented at maximum 6.50 % and the convertible bond loan at maximum 26.01 %
of the Company's registered shares prior the Offering.
According to the conditions set by the investors for the financing, the Company
was obligated to issue new investment series shares and option rights to
GeoHolding B.V without charge in order to restructure the acquisition of
GeoSolutions B.V. executed on April 27th 2007 and to increase the fully diluted
ownership of GeoHolding B.V. up to 30 % as agreed with the investors. Therefore,
the Company agreed to issue a maximum of 221,007,003 new investment series
shares and maximum of 35,305,555 new option rights to GeoHolding without charge.
Of the issued shares 103,333,333 shares and all new option rights are directed
in order to correct the misevaluation of the purchase price defined by the
company. The corrected valuation is based on the valuations agreed with the
investors. With the same, the terms of option rights 2007-1, directed to the key
personnel of GeoSolutions B.V., was to be amended such that the share
subscription price is decreased to correspond to the agreed price of EUR 0,045
per share.
The Board accepted the above mentioned arrangements subject to confirmation and
authorization by the Extraordinary General Meeting called to convene on
September 10, at which point in time the arrangements were confirmed and
authorized at the EGM.
Decisions by September Extraordinary General Meeting
The Extraordinary General Meeting of Benefon Oyj convened on September 10, 2007,
decided to confirm the remaining part of the financing and the main terms and
conditions thereof in accordance with the proposal of the Board. The Board was
also authorised to decide on increasing the share capital and issuing new
shares, option rights and specific rights such that the maximum amount of share
capital increase is EUR 8,000,000 and number of issued new investment series
shares 800,000,000. The share capital can be increased by means of using the
premium fund or invested unrestricted equity fund for the increase. The
authorisation entitles the Board to deviate from the pre-emptive right of
shareholders and also accept set-off or other consideration in kind as a payment
for the shares, option rights or specific rights. The shares can also be issued
without payment provided that there is an especially weighty financial reason
for this as required by the Companies Act. The Board has the right to decide the
terms of any issue by virtue of the authorization for all other parts. The
authorisation is valid for two years from the date of the Extraordinary General
Meeting. The authorisation granted by the Annual General Meeting of April 16,
2007 remains to be valid.
In addition, the Extraordinary General Meeting resolved in accordance with
proposal of the Board, to amend the articles 4 and 5 of the Articles of
Association such that the maximum number of all shares and number of investment
series shares shall be 2,000,000,000.
In addition, the Extraordinary General Meeting resolved in accordance with
proposal of the Board, to amend option rights terms 2004A and 2005B(A-D) such
that the share subscription period is extended until June 15th, 2010 for all
such option rights. In addition the Extraordinary General Meeting resolved,
according to the proposal of the Board, to amend the terms of option rights
2007-1 such that the share subscription price for each option right is EUR
0.045. The terms of the above mentioned option rights shall remain for all other
parts unchanged.
Finally, the Extraordinary General Meeting resolved that the number of Board
members remains to be six and elected the following new persons to the Board:
David Francis, Gary Bellot and Michael Vucekovich. Dan Harple, Jeffrey
Crevoiserat and Juha Kiikeri shall continue as the members of the Board.
Company makes significant progress with R&D and new product development
Accordingly, the Company has made significant progress in its R&D efforts to
accelerate and support the GyPSii geo-location platform development with a focus
on mobile client developments where it sees mass market opportunities.
Therefore, the Company has ceased to continue the lower margin potential smart
phone hardware program informed about in February, instead focusing on the core
Intellectual Property and its subsequent potential for Internationally-based
licensing to OEM and ODM customers. The combination of a base Linux-based
mobile operating system from the Twig product family, coupled with the
location-based services features makes this software-only solution compelling
and a higher margin business opportunity.
2. Developments after the end of the reporting period
Industrial procedure in Salo completed
The industrial co-operation procedure of Benefon Oyj, informed on 23.8.2007 and
commenced on 30.8.2007, was completed by October 11, 2007. The solution,
touching all personnel in Finland, reached in the negotiations consists of so
called alternate forced leaves such that the alternate forced leaves agreed
already in the spring for production personnel and comprising one week per month
will be extended to comprise now two weeks per month. In addition, the alternate
forced leaves will now be applied also to office personnel for whom the leaves
will equally comprise two weeks per month as a rule, with some exceptions. The
extended alternate forced leave program will be applied for production personnel
as of 29.10.2007 and for office personnel as of 12.11.2007, and it will continue
for the time being.
GeoSolutions B.V.'s GyPSii development is accelerating
On November 9, 2007, the Company announced that its GyPSii webtop client is
available for users in ten different languages - US English, UK English, German,
Spanish, French, Italian, Korean, Russian, Simplified Chinese and Traditional
Chinese. The Gypsii webtop's extended language support comes as consumer demand
increases for the GyPSii application and service from users in different
countries around the world. Subscribers can now use the site for social
networking, sharing user-generated content, friend-finding and accessing
location based content, services and points of interest - all in their own
language.
GyPSii rolled out the Windows Mobile client in September in a public beta
program, for users to test the application in the real world. The current
public beta Microsoft-Certified Windows Mobile client is accessible in English
and Simplified Chinese, with the other languages rolling out over the coming
quarter.
The Symbian & Java/ J2ME Blackberry mobile clients are currently being user
tested in private beta.
A concurrent significant product announcement is made on 23 November, 2007
describing the release of the Nokia-supported and certified GyPSii mobile
application for Nokia handsets. GyPsii is current in testing with several
large telecomm OEM's and network operators on various mobile operating
platforms, in global geographies.
Decisions by November Extraordinary General Meeting
The Extraordinary General Meeting of Benefon Oyj convened on November 16, 2007,
decided to alter the Company´s Articles of Association in entirety. The main
contents of the decided amendments are as follows:
Article 1 of the Articles of Association:
The article was amended such that the Company's Finnish business name and
English parallel business name be changed to GeoSentric Oyj and GeoSentric Plc,
respectively.
Article 2 of the Articles of Association:
The article was amended such that “developing and providing location based
services” be added to the Company's field of purpose.
Article 3, 4, 5, 6, 7 and 17 of the Articles of Association:
The articles were amended such that all of the Company's ordinary shares and
investment series shares are combined to form a single series of shares. By
implementing the combination, the Company will have only one series of publicly
traded shares entitling their holders to equal rights. Hence the articles 5, 6,
7 and 17 will be annulled in their entirety. Combining these two share series
will be implemented by removing provisions related to differences between the
share series from the Articles of Association in such a way that each ordinary
share be converted into a share whose rights correspond to the current
investment series share. Respectfully to the combination of the share series the
articles regarding the minimum and maximum share capital (article 3) and the
amount of shares (article 4) will be annulled.
Article 10 and 11 of the Articles of Association:
The articles will be combined and amended such that the company shall be legally
represented by the Chairman of the Board of Directors or the Managing Director
individually, or jointly by the majority of the members of the Board of
Directors. In addition the Board of Directors would have authority to grant
authorisations to other persons to represent the Company jointly with another
authorised official of the Company or a holder of procuration.
In addition, the Extraordinary General Meeting decided to appoint
PriceWaterHouseCoopers as the deputy auditor of the company.
3. Outlook for the remainder of 2007
GyPSii will be making available to users a full selection of mobile clients on
multiple phone sets in Q4 and Q1, that will include Symbiam, Java, Blackberry
and Windows Mobile operating systems. The mobile clients will be made available
in multiples languages, US English, UK English, German, Spanish, French,
Italian, Korean, Russian, Simplified Chinese and Traditional Chinese, with more
languages to be added as dictated by the market growth. This will give GyPSii
the opportunity to provide users with a compelling mobile location based
application in a global market of over 3BN mobile phone subscribers.
In addition the GyPSii strategy of working with other providers and web social
networks, will include integrations to Facebook, MySpace and other leading Web
2.0 applications along with the new Open Social industry initiatives.
4. Financial Review
Financial Performance in the Period
The net sales of the company in Q3/2007 were 1170 teuros and in period
Q1+Q2+Q3/2007 3543 teuros. The comparable net sales in Q3/2006 were 644 teuros
and in period Q1+Q2+Q3/2006 3904 teuros.
The operating profit in Q3/2007 was -5359 teuros and in period Q1+Q2+Q3/2007
-15176 teuros. The comparable operating profit in Q3/2006 was -1704 teuros and
in period Q1+Q2+Q3/2006 -3830 teuros.
The total of the balance sheet at the end of Q3/2007 was 20844 teuros. The total
of the balance sheet at the end of the previous year 2006 was 17397 teuros and
at the end of the same period Q3/2006 in the previous year it was 15074 teuros.
The total shareholders´ equity at the end of Q3/2007 was 10042 teuros, or about
48% of the balance sheet, when at the end of the previous year 2006 it was 10421
teuros, or about 60%. At the end of the same period Q3/2006 in the previous year
it was 9606 teuros, or about 64%.
The book value of interest-carrying debt at the end of Q3/2007, including the
capital loans, was 2055 teuros. The total liabilities at the end of Q3/2007 were
10802 teuros, whereas they were 6976 teuros at the end of year 2006 and 5468
teuros at the end of the same quarter Q3/2006 in the previous year. Cash and
cash equivalents at the end of the period was 8682 teuros of which 373 teuros
were pledged.
The Company adopted the International Financial Reporting System (IFRS) during
financial year 2005 and the financial statements for the year 2005 and onwards,
including the interim reports, have been prepared according to IFRS.
Report on sufficient liquidity in period 10/2007-12/2008
The below cash flow statement assumes that sales targets set in financial
projections for financial years 2007 and 2008 are met. These projections are
highly dependent on timely deliveries and sales success of the Company's
products and services.
--------------------------------------------------------------------------------
| Cash Flow Statement 10/2007-12/2008 | million euros |
--------------------------------------------------------------------------------
| Cash flow from operations | -7.2 |
--------------------------------------------------------------------------------
| Share subscription payments | 0.0 |
--------------------------------------------------------------------------------
| Investments | -0.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in cash | -7.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash in the beginning of the period | 8.7 |
--------------------------------------------------------------------------------
| Cash at the end of the period | 1.2 |
--------------------------------------------------------------------------------
5. Company information
Founded in 1988 in Finland by early mobile phone pioneers, Benefon is a leader
in devicing means for exploitation of the service potential offered by GSM
networks, the Internet and the GPS system. Benefon is at forefront of research
and innovation in this domain.
Benefon currently provides solutions, products and technologies for location
based services and social networks. Its products include the GyPSii mobile
social networking and geo-location based services platform, together with
ready-to-use integrated GPS/GSM devices for navigation and object tracking and
customisable software solutions for industry specific uses. In addition, the
Company offers Internet-based locating service enabling the user to locate other
Benefon devices.
The number of personnel in quarter 3Q/2007 averaged 79, of whom 23 persons were
affected by alternate forced leaves.
Benefon share (BNFSV) is listed on the small cap -list of OMX Nordic Exchange in
Helsinki.
Benefon Oyj
For more information, please contact: communications@gypsii.com (Americas) or
geosentric@companycare.com (EMEA)
Distribution:
OMX Nordic Exchange Helsinki
Principal news media
BENEFON OYJ INTERIM REPORT 3Q/2007 (not audited)
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| GROUP INCOME STATEMENT | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1000 EUR | | | | 3Q/200 | 1-3Q/2 | 3Q/200 | 1-3Q/2 | 2006 |
| | | | | 7 | 007 | 6 | 006 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | | | | 1170 | 3543 | 644 | 3904 | 6959 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other operating income | | 6 | 32 | 1 | 15 | 25 |
--------------------------------------------------------------------------------
| Increase (+)/decrease (-) in | | | | | |
| inventories | | | | | |
--------------------------------------------------------------------------------
| of finished | | | -423 | -305 | 689 | 686 | 2625 |
| products | | | | | | | |
--------------------------------------------------------------------------------
| Production for own use | | 0 | 0 | 0 | 0 | 0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Use of raw materials and | -1152 | -3869 | -1015 | -3157 | -7190 |
| consumables | | | | | |
--------------------------------------------------------------------------------
| Total expense of | | -1513 | -4862 | -1232 | -3431 | -4915 |
| employees | | | | | | |
--------------------------------------------------------------------------------
| Depreciations | | | -1279 | -3238 | -15 | -59 | -563 |
--------------------------------------------------------------------------------
| Impairment loss | | | -440 | -440 | 0 | 0 | -872 |
--------------------------------------------------------------------------------
| Other operating | | -1728 | -6037 | -1795 | -5451 | -11775 |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| Capitalised R&D | | 0 | 0 | 1019 | 3663 | 4163 |
| expenses | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating result | | | -5359 | -15176 | -1704 | -3830 | -11543 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial income | | | 8 | 26 | 55 | 104 | 145 |
--------------------------------------------------------------------------------
| Financial expenses | | | -15 | -334 | -21 | -127 | -162 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Result before | | | -5366 | -15484 | -1670 | -3853 | -11560 |
| taxes | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income taxes | | | 128 | 255 | 0 | 0 | 0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Result for the | | | -5238 | -15229 | -1670 | -3853 | -11560 |
| period | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, | | | | | | |
| eur | | | | | | |
--------------------------------------------------------------------------------
| Basic earnings per | | -0,02 | -0,05 | -0,01 | -0,02 | -0,05 |
| share, eur | | | | | | |
--------------------------------------------------------------------------------
Diluted earnings per share not been computed because dilution effect would
improve the key figure.
The interim financial statements have not been audited.
--------------------------------------------------------------------------------
| GROUP BALANCE SHEET | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1000 EUR | | | | Note | | 30.9.2 | 30.9.2 | 31.12. |
| | | | | | | 007 | 006 | 2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ASSETS | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current assets | | | | | | | |
--------------------------------------------------------------------------------
| Property, plant and | | | | 216 | 236 | 244 |
| equipment | | | | | | |
--------------------------------------------------------------------------------
| Development costs | | | | | 250 | 3663 | 2841 |
--------------------------------------------------------------------------------
| Goodwill | | | | | | 216 | 0 | 0 |
--------------------------------------------------------------------------------
| Other intangible | | | | 5035 | 24 | 32 |
| assets | | | | | | |
--------------------------------------------------------------------------------
| Other financial | | | | | 62 | 61 | 61 |
| assets | | | | | | | |
--------------------------------------------------------------------------------
| Deferred tax | | | | | 0 | 0 | 0 |
| assets | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | 5779 | 3984 | 3178 |
--------------------------------------------------------------------------------
| Current assets | | | | | | | |
--------------------------------------------------------------------------------
| Inventories | | | | | | 3338 | 3177 | 6194 |
--------------------------------------------------------------------------------
| Trade receivables and other | | | 2425 | 3079 | 4585 |
| receivables | | | | | |
--------------------------------------------------------------------------------
| Prepaid expenses | | | | | 620 | 1809 | 898 |
--------------------------------------------------------------------------------
| Cash and cash | | | | 8682 | 3025 | 2542 |
| equivalents | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | 15065 | 11090 | 14219 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | | | | | 20844 | 15074 | 17397 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders´equit | | | | | | | |
| y | | | | | | | |
--------------------------------------------------------------------------------
| Share capital | | | 5 | | 3533 | 2206 | 2634 |
--------------------------------------------------------------------------------
| Share issue | | | | | 3960 | 0 | 400 |
--------------------------------------------------------------------------------
| Share premium account | | 5 | | 15925 | 15936 | 15936 |
--------------------------------------------------------------------------------
| Invested distributable equity | 5 | | 14200 | 0 | 4866 |
| account | | | | | |
--------------------------------------------------------------------------------
| Retained earnings | | | | | -27576 | -8536 | -13415 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total shareholders´ | | | | 10042 | 9606 | 10421 |
| equity | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current | | | | | | | |
| liabilities | | | | | | | |
--------------------------------------------------------------------------------
| Deferred tax | | | | | 1275 | 0 | 0 |
| liabilities | | | | | | | |
--------------------------------------------------------------------------------
| Interest bearing | | | 7,8 | | 930 | 946 | 2319 |
| debt | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | 2205 | 946 | 2319 |
--------------------------------------------------------------------------------
| Current | | | | | | | |
| liabilities | | | | | | | |
--------------------------------------------------------------------------------
| Trade payables and other | | | 7315 | 4452 | 4500 |
| payables | | | | | |
--------------------------------------------------------------------------------
| Provisions | | | | | | 157 | 47 | 157 |
--------------------------------------------------------------------------------
| Interest bearing | | | 7,8 | | 1125 | 23 | 0 |
| debt | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | 8597 | 4522 | 4657 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total liabilities | | | | | 10802 | 5468 | 6976 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total shareholders´equity and | | | 20844 | 15074 | 17397 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| GROUP CASH FLOW STATEMENT | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1000 EUR | | | | | | 1-3Q/2 | 1-3Q/2 | 2006 |
| | | | | | | 007 | 006 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from | | | | | | |
| operations | | | | | | |
--------------------------------------------------------------------------------
| Result of the | | | | | -15229 | -3853 | -11560 |
| period | | | | | | | |
--------------------------------------------------------------------------------
| Adjustments | | | | | 3955 | 191 | 4391 |
--------------------------------------------------------------------------------
| Changes in working | | | | | | |
| capital | | | | | | |
--------------------------------------------------------------------------------
| Change of trade and other | | | 2438 | -2753 | -3343 |
| receivables | | | | | |
--------------------------------------------------------------------------------
| Change of | | | | | 2856 | -1895 | -4912 |
| inventories | | | | | | | |
--------------------------------------------------------------------------------
| Change of trade and other | | | -626 | 957 | 2540 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| Paid interests | | | | | -2 | -38 | -62 |
--------------------------------------------------------------------------------
| Received interest | | | | 21 | 97 | 140 |
| payments | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from | | | | -6587 | -7294 | -12806 |
| operations, net | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from | | | | -130 | -3823 | -4393 |
| investments, net | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from | | | | | | |
| financing | | | | | | |
--------------------------------------------------------------------------------
| Proceeds from issue of share | | | 6953 | 11676 | 16476 |
| capital | | | | | |
--------------------------------------------------------------------------------
| Transaction expenses of share | | | -269 | -296 | -1022 |
| issues | | | | | |
--------------------------------------------------------------------------------
| Proceeds from long-term | | | 0 | 0 | 1225 |
| borrowings, equity | | | | | |
--------------------------------------------------------------------------------
| Proceeds from long-term borrowings, | | 6173 | 1425 | 1725 |
| liabilities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from | | | | 12857 | 12805 | 18404 |
| financing, net | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in cash | | | | | 6140 | 1688 | 1205 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash in the beginning of the | | | 2542 | 1337 | 1337 |
| period | | | | | |
--------------------------------------------------------------------------------
| Cash at the end of the | | | | 8682 | 3025 | 2542 |
| period | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| GROUP STATEMENT OF CHANGES IN SHAREHOLDERS´EQUITY | | | |
--------------------------------------------------------------------------------
| | | | | | Share | Inv. | | |
| | | | | | | distri | | |
| | | | | | | b. | | |
--------------------------------------------------------------------------------
| | | | Share | Share | premiu | equity | Accrue | |
| | | | | | m | | d | |
--------------------------------------------------------------------------------
| | | | capita | issue | accoun | accoun | result | Total |
| | | | l | | t | t | | |
--------------------------------------------------------------------------------
| | | | (1000e | (1000e | (1000e | (1000e | (1000e | (1000e |
| | | | ur) | ur) | ur) | ur) | ur) | ur) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Chareholders´equity | 1313 | 0 | 1211 | 0 | -4855 | -2331 |
| 31.12.2005 | | | | | | |
--------------------------------------------------------------------------------
| Share issue, cash | | 556 | 0 | 11120 | 0 | 0 | 11676 |
--------------------------------------------------------------------------------
| Share issue, offset | | | | | | |
| with capital | | | | | | |
--------------------------------------------------------------------------------
| Loans and trade | 227 | 0 | 4407 | 0 | 0 | 4634 |
| receivables | | | | | | |
--------------------------------------------------------------------------------
| Conversion of | | | | | | |
| convertible bonds | | | | | | |
--------------------------------------------------------------------------------
| into shares | | 110 | 0 | 425 | 0 | 0 | 535 |
--------------------------------------------------------------------------------
| Share issue | | 0 | 0 | -1227 | 0 | 0 | -1227 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Booked expense of | | | | | | |
| stock options | | | | | | |
--------------------------------------------------------------------------------
| to key personnel and | 0 | 0 | 0 | 0 | 172 | 172 |
| partners | | | | | | |
--------------------------------------------------------------------------------
| Result of the | | 0 | 0 | 0 | 0 | -3853 | -3853 |
| period | | | | | | | |
--------------------------------------------------------------------------------
| Shareholders´ equity | 2206 | 0 | 15936 | 0 | -8536 | 9606 |
| 30.09.2006 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders´ equity | 2634 | 400 | 15936 | 4866 | -13415 | 10421 |
| 31.12.2006 | | | | | | |
--------------------------------------------------------------------------------
| Share issue, cash | | 189 | 3560 | 0 | 3153 | 0 | 6902 |
--------------------------------------------------------------------------------
| Share issue, dept | 80 | 0 | 0 | 1054 | 0 | 1134 |
| set-off | | | | | | |
--------------------------------------------------------------------------------
| Share issue, share | 11 | 0 | -11 | 0 | 0 | 0 |
| premium acc. | | | | | | |
--------------------------------------------------------------------------------
| Share exchange, | 300 | 0 | 0 | 3900 | 0 | 4200 |
| GeoSolutions | | | | | | |
--------------------------------------------------------------------------------
| Conversion of | | | | | | 0 |
| convertible bonds | | | | | | |
--------------------------------------------------------------------------------
| into shares | | 319 | 0 | 0 | 2020 | 0 | 2339 |
--------------------------------------------------------------------------------
| Share issue | | 0 | 0 | 0 | -793 | 0 | -793 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Booked expense of | | | | | | |
| stock options | | | | | | |
--------------------------------------------------------------------------------
| to key personnel and | 0 | 0 | 0 | 0 | 1068 | 1068 |
| partners | | | | | | |
--------------------------------------------------------------------------------
| Result of the | | 0 | 0 | 0 | 0 | -15229 | -15229 |
| period | | | | | | | |
--------------------------------------------------------------------------------
| Shareholders´ equity | 3533 | 3960 | 15925 | 14200 | -27576 | 10042 |
| 30.09.2007 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| KEY FIGURES | | | | | | | |
--------------------------------------------------------------------------------
| | | | | 3Q/200 | 1-3Q/2 | 3Q/200 | 1-3Q/2 | 2006 |
| | | | | 7 | 007 | 6 | 006 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales, 1000 | | | 1170 | 3543 | 644 | 3904 | 6959 |
| EUR | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating result, 1000 | | -5359 | -15176 | -1704 | -3830 | -11543 |
| EUR | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Result before taxes, | | -5366 | -15484 | -1670 | -3853 | -11560 |
| 1000 EUR | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross investments, | | 13 | 6279 | 1007 | 3823 | 4393 |
| 1000 EUR | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average personnel | | | 79 | 82 | 84 | 81 | 82 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, | | -0,02 | -0,05 | -0,01 | -0,02 | -0,05 |
| EUR | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity per share, | | | 0,03 | 0,03 | 0,03 | 0,03 | 0,04 |
| EUR | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Weighted average number of | | | | | |
| shares | | | | | |
--------------------------------------------------------------------------------
| in period, 1000 | | | 303402 | 339527 | 220576 | 206104 | 213490 |
| pcs | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Number of shares | | | | | | | |
--------------------------------------------------------------------------------
| at the end of the | | 353321 | 353321 | 220576 | 220576 | 263416 |
| period, 1000 pcs | | | | | | |
--------------------------------------------------------------------------------
NOTES TO THE GROUP INTERIM REPORT
1. BASIC INFORMATION ABOUT THE COMPANY
Benefon Oyj ("Group") is a provider of navigation devices intended for personal
and professional use, and that of services enabling navigation, tracking and
locating by means of personal mobile devices. The Group sells products in 30
countries. The parent company of the Group is Benefon Oyj. Its registered
domicile is Salo, Finland, with street address Meriniitynkatu 11, 24100 Salo,
Finland, and mail address PL 84, FIN-24101 Salo, Finland. Copy of the Group
financial statements FY2006 is available at the internet address www.benefon.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 it 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 2006.
Principles of preparation:
The utilised principles of preparation are identical with those utilised by the
Group in financial statements for FY 2006.
IASB has published new standards and interpretations and changes in existing
standards, application of which is mandatory on 1.1.2007, and which the group
has not adopted earlier voluntarily. The group has adopted the following
standards (and their amendments) and interpretations from 1.1.2007
onwards:
IAS 1, Presentation of financial statements, amendments in sections
124A-C.
IFRS 7, Financing instruments: Notes.
IFRS 8, Business segments. The Company provides an assessment about segment
reporting in context of the business acquisition.
IFRIC 11, Group and Treasury Share transactions.
IFRIC 12, Service Concession Arrangements. Its new interpretation is not
applicable to Group´s industry.
New standards, interpretations or amendments have not had significance or
essential effect to information in the interim report.
3. SEGMENT INFORMATION
The primary reported segments of the group comprise business segments. Number of
distinct segments at the moment is one: mobile telematics equipment. Its share
of net sales, result and assets was almost 100% in the reporting period and in
the prior period.
4. ACQUISITIONS
Benefon Oyj has on 2.5.2007 acquired the entire share stock of the Dutch firm
GeoSolutions BV. The acquisition was realised as a share exchange in which the
Company issued 21,000,000 new shares and, after the terms of the share exchange
agreement had been met, further 9,000,000 new shares. In the acquisition cost
calculation, it has been assumed that also the latter part will be
realised.
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| | | | | | | 1000 | | |
| | | | | | | EUR | | |
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--------------------------------------------------------------------------------
| Acquisition cost to | | | | | | |
| Benefon: | | | | | | |
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| Share issued as | | | | 4200 | | |
| payment | | | | | | |
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| Transaction | | | | | 486 | | |
| costs | | | | | | | |
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| Total | | | | | | 4686 | | |
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--------------------------------------------------------------------------------
| Assets and liabilities at fair value | | | | |
| according to IFRS: | | | | |
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| IPR | | | | | | 6000 | | |
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| Goodw | | | | | | 216 | | |
| ill | | | | | | | | |
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| Deferred tax | | | | | -1530 | | |
| liability | | | | | | | |
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| Acquired net assets at | | | | 4686 | | |
| fair value | | | | | | |
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| Net assets of the acquired company at | | | | |
| fair value: | | | | |
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| IPR | | | | | | 6000 | | |
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| 5. SHAREHOLDERS´ | | | | | | |
| EQUITY | | | | | | |
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| | | | | | | Share | Inv. | |
| | | | | | | | distri | |
| | | | | | | | b. | |
--------------------------------------------------------------------------------
| | | | | Number | Share | premiu | equity | |
| | | | | of | | m | | |
--------------------------------------------------------------------------------
| | | | | shares | capita | accoun | accoun | Total |
| | | | | | l | t | t | |
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| | | | | (1000) | (1000e | (1000e | (1000e | (1000e |
| | | | | | ur) | ur) | ur) | ur) |
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--------------------------------------------------------------------------------
| 31.12.2006 | | | 263416 | 2634 | 15936 | 4867 | 23437 |
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| Share issue | | | 1667 | 16 | | 334 | 350 |
| 1.2.2007 | | | | | | | |
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| Share conversion of CBL2007A | 556 | 6 | | 44 | 50 |
| 22.3.2007 | | | | | |
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| Share issue | | | 4703 | 47 | | 940 | 987 |
| 22.3.2007 | | | | | | | |
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| Share conversion of CBL2007B | 21071 | 211 | | 1604 | 1815 |
| 10.4.2007 | | | | | |
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| Share issue | | | 2045 | 21 | | 409 | 430 |
| 10.4.2007 | | | | | | | |
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| Share exchange 25.5.2007, | 21000 | 210 | | 3900 | 4110 |
| GeoSolutions | | | | | |
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| Share issue | | | 2400 | 24 | | 336 | 360 |
| 28.5.2007 | | | | | | | |
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| Share issue 28.5.2007, share | 1111 | 11 | -11 | | 0 |
| premium acc. | | | | | |
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| Share conversion of CBL2007D | 2630 | 26 | | 105 | 131 |
| 28.5.2007 | | | | | |
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| Share conversion of CBL2007E | 1600 | 16 | | 24 | 40 |
| 13.6.2007 | | | | | |
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| Share issue | | | 8100 | 81 | | 1134 | 1215 |
| 13.6.2007 | | | | | | | |
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| Share issue | | | 7975 | 80 | | 1054 | 1134 |
| 24.7.2007 | | | | | | | |
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| Share conversion of CBL2007C | 6047 | 60 | | 242 | 302 |
| 5.9.2007 | | | | | |
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| Share exchange 5.9.2007, | 9000 | 90 | | 0 | 90 |
| GeoSolutions | | | | | |
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| Costs of | | | | | | -793 | -793 |
| share issues | | | | | | | |
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| 30.09.2007 | | | 353321 | 3533 | 15925 | 14200 | 33658 |
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Maximum number of shares in the Company, as stipulated in the articles of
association, is 1000 million. The share carries no nominal value but the book
parity value at the moment is 0.01 euros per share. Maximum share capital is 50
million euros. All outstanding shares are fully paid.
6. OPTION RIGHTS
In the financial year, 9,778,500 new option rights according to IFRS 2 have been
issued to key personnel of GeoSolutions and 1,500,000 option rights to other key
persons of Benefon. Share subscription price with these options was 0,14
euros.
The EGM of Benefon Oyj resolved on 10.9.2007 to amend option rights terms, such
that share subscription price to key personnel of GeoSolutions is 0,045 euros
and such that share subscription period of certain other option rights is
extended until 15.6.2010.
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| 1000 | | | | | | 1-3Q/2 | 1-3Q/2 | 2006 |
| EUR | | | | | | 007 | 006 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Option expence booked in the period according to | | | |
| IFRS 2. | | | |
--------------------------------------------------------------------------------
| Received service is compensated as options. In cost booking the counter |
| item is shareholders´equity. |
--------------------------------------------------------------------------------
| Options issued in 2005 | | | | 70 | 171 | 58 |
--------------------------------------------------------------------------------
| Options issued in 2006 | | | | 122 | 0 | 2942 |
--------------------------------------------------------------------------------
| Options issued in 2007 | | | | 876 | 0 | 0 |
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| Total | | | | | | 1068 | 171 | 3000 |
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| 7. DEBTS WITH NOMINAL INTEREST | | | | | |
--------------------------------------------------------------------------------
| | | | | Nomina | | | | |
| | | | | l | | | | |
--------------------------------------------------------------------------------
| 1000 | | | | loan | | 3Q/200 | 3Q/200 | 2006 |
| EUR | | | | value | | 7 | 6 | |
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| | | | | 3Q/200 | | | | |
| | | | | 7 | | | | |
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| Non-current | | | | | | | |
| loans: | | | | | | | |
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| CBL 2004A | | | 955 | | 930 | 946 | 898 |
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--------------------------------------------------------------------------------
| Current | | | | | | | |
| loans: | | | | | | | |
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| CBL 2004A | | | | | 0 | 23 | 0 |
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| CBL 2007C | | | 135 | | 135 | 0 | 0 |
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| CBL 2007F | | | 990 | | 990 | 0 | 0 |
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| | | | | | | 1125 | 23 | 0 |
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--------------------------------------------------------------------------------
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| 8. DEBTS WITH NO NOMINAL VALUE | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1000 | | | | | | 3Q/200 | 3Q/200 | 2006 |
| EUR | | | | | | 7 | 6 | |
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--------------------------------------------------------------------------------
| Non-current | | | | | | | |
| loans: | | | | | | | |
--------------------------------------------------------------------------------
| Interest-free loan 1450 teur, | | | 0 | 0 | 703 |
| year 2006 | | | | | |
--------------------------------------------------------------------------------
| Interest-free loan 1500 teur, | | | 0 | 0 | 718 |
| year 2006 | | | | | |
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| Total | | | | | | 0 | 0 | 1421 |
--------------------------------------------------------------------------------
Interest-free loans from year 2006 with nominal value of 1450 teur and 1500
teur. In March 2007, these loans were converted into convertible loan 2007B.
Convertible loan 2007B was converted into shares in April 2007.
--------------------------------------------------------------------------------
| 9. COLLATERAL COMMITMENTS AND CONTINGENCIES | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1000 EUR | | | | | | 3Q/200 | 3Q/200 | 2006 |
| | | | | | | 7 | 6 | |
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| Contingent liabilities relating to | | | | | | |
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| chattel mortgage | | | | | 1723 | 1678 | 1689 |
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| Collateral for own liabilities: | | | | | | |
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| Chattel mortgage as collateral for | | 12068 | 12068 | 12068 |
| contingent liabilities | | | | |
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| Pledged non-current financial assets | | | 42 | 41 | 41 |
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| Pledged current financial assets | | | | 373 | 358 | 373 |
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10. RELATED PARTY TRANSACTIONS
Relations between mother company and subsidiaries are as follows: Benefon Oyj is
the mother company in the group, in which there are the following 100 %
subsidiary companies: Benefon UK Ltd., Benefon Solutions B.V., GeoSolutions B.V.
and Benefon China.
Inner circle transactions have been presented in the financial statements for
year 2006. No essential changes have taken place in the reporting
period.
Interest free loans with a nominal capital of 2950 teuros, raised from Luben
Limited in year 2006, were converted in March 2007 into convertible loan 2007B,
which was converted into shares in April 2007. In addition, of related party
firms, Ashland Partners, Horizon Trustees and Cercle Investment have
participated in share issues, and Campbell Investment and Octagon Solutions in
set-off issues, of year 2007.
11. EVENTS AFTER THE END OF THE PERIOD
Market bulletin on 11.10.2007
The industrial co-operation procedure of Benefon Oyj touching all personnel in
Finland was completed. The alternate forced leaves agreed already in the spring
for production personnel and comprising one week per month will be extended to
comprise now two weeks per month. In addition, the alternative forced leaves
will now be applied also to office personnel for whom the leaves will equally
comprise two weeks per month as a rule, with some exceptions.
Extraordinary general meeting on 16.11.2007
The meeting decided to alter the Articles of Association in entirety and to
change the name of the Company into GeoSentric Oyj.