This report contains advance information regarding financial year 2007. The financial results are not based on annual accounts approved by the Board of Directors but the Company does not expect material changes in the information. The Company will release the annual accounts on March 27th 2008. SUMMARY HIGHLIGHTS Company financing arrangements completed Company name change finalised GyPSii development is accelerating Full International Multi-lingual releases GyPSii Symbian application accredited by Nokia Launch of GyPSii on Blackberry Devices GyPSii announces launch of China Mobile Social Network with Dopod Club GyPSii announces India distribution agreement with Broadway GyPSii announces partnership with NAVTEQ GyPSii announces partnership in China with China Unicom and Shanghai Rannuo GyPSii announces launch on Apple iPhone devices Listing prospectus supplement publicised in January A convertible loan converted into shares Overview GeoSentric's performance in the fourth quarter was solid with strong adoption of TWIG mobile phone products and development of GyPSii services continuing across multiple market sectors and geographies, including enterprise and consumer market segments in Asia, Europe and the America's. GeoSentric and its partners continue to execute our business plans effectively. The Company is pleased to see continuing growth amongst business and consumer users, with the GyPSii platform being deployed for a widening range of markets, and is also pleased with the solid TWIG sales results achieved in Asian and European markets throughout the quarter. The GyPSii platform and mobile lifestyle application has proved to be desirable with global partners and the Company is pleased to see its business momentum continuing in the New Year. The gradual takeoff in net subscriber accounts expected in the New Year has occurred ahead of forecasts and the focused execution with partners has continued to produce strong feedback and results within the consumer segment. 1. Highlights of the last quarter 10-12/2007 Company financing arrangements completed On November 14, 2007, the Company informed that it had decided to raise the remaining part of the 9.575 million euros financing package announced on September 10, 2007 by offering new investment series shares of the Company and a convertible loan as agreed with the committed investors and to accept the related subscriptions. Horizon Group subscribed for 9,929,555 shares and a convertible loan of 446,830.00 euros and Schroders Private Bank 10,626,000 shares and a convertible loan of 478,170.00 euros. As a result of the share subscriptions, the Company´s share capital was increased by 205,555.55 euros and the invested distributable equity account by 3,494,444.35 euros. The convertible loans entitle their holders to subscribe for a total maximum of 82,222,221 new investment series shares of the Company until 31.12.2012. As a result of such subscriptions, the Company´s share capital may increase further by 822,222.21 euros. By accepting the financing of 9,575,000 euros, according to its terms, the Company had committed to issue new investment series shares, special rights and options rights in free issues directed to GeoHolding B.V. to increase its fully diluted holding share. Therefore, the maximum amount of issued new investment series shares is 264,785,555 comprising 1) 127,308,932 new investment series shares, 2) 102,171,068 special rights according to the Companies´ Act chapter 10 section and 3) 35,305,555 option rights. The Company´s share capital was simultaneously increased by 0.01 euros for each issued share by transferring a corresponding amount from share premium account into share capital. As a result, the Company´s share capital was increased by 1,273,089.32 euros and the share premium account was decreased correspondingly. Each special right entitles its bearer to subscribe for one new investment series share of the Company such that a subscription price of one euro entitles to subscribe for 100,000 new investment series shares in the share subscription period of 19.10.2007-2.1.2013. Each option right entitles its holder to subscribe for one new investment series share at a subscription price of 0.045 euros per share in the subscription period that began on 19.10.2007 and will end on 2.1.2013. As a result of the special rights and the options rights, the Company´s share capital may increase by a total maximum of 1,374,766.23 euros. In addition, by virtue of authorization granted to it by the Extraordinary General Meeting on September 10, 2007, the Board of the Company decided to arrange a set-off issue of a total maximum of 265,000.00 euros directed to certain creditors as follows. The set-off issue consisted of a maximum of 1,177,777 new investment series shares and of a convertible loan of 53,000.00 euros, entitling its bearer to subscribe for a total maximum of 4,711,111 new investment series shares. 1,100,000 shares and convertible loan of 49,500 euros entitling to subscribe for a maximum of 4,400,000 shares were offered for subscription to Jean-Francois Cristau and 77,777 shares and a convertible loan of 3,500 euros entitling to subscribe for a maximum of 311,111 shares were offered for subscription to Ashland Capital Management. The subscription price of the shares was 0.18 euros per share, of which 0.01 euros was booked in share capital and the rest in the distributable equity account. The total subscription price of shares therefore was 211,999.86 euros. As a result of the share subscriptions, the Company´s share capital was increased by 11,777.77 euros and the distributable equity account by 200,222.09 euros. The capital of the convertible loan is 53,000.00 euros and each 0.01125 euros entitles its bearer to subscribe for one new investment series share such that the entire capital entitles subscription of a maximum of 4,711,111 shares. In conversion of the convertible loan, the Company´s share capital may increase by a maximum of 47,111.11 euros and the distributable equity account by a maximum of 5,888.89 euros. Company name change finalised The Extraordinary General Meeting of Benefon Oyj of November 16, 2007, resolved in accordance with proposal of the Board to alter the Articles of Association in its entirety and at the same change the Company's business name to GeoSentric Oyj. The official registration of the altered Articles of Association with the name change was received on December 10, 2007, from which date the official name of the Company has been GeoSentric Oyj. 2. Operating review GeoSolutions/GyPSii overview GyPSii development accelerates The Company accelerated its engineering efforts and geo-social engineering platform focus in the quarter. Deliverables were accomplished in interoperable mobile device support and extended development of the GyPSii platform. Data center architecture and development was ramped to include the full-live public beta of the GyPSii social networking site. Further plans and specifications were made for additional data center support in the Company's Shanghai location and in India. Full International Multi-lingual releases 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. 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. 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 Symbian & J2ME Blackberry mobile clients are currently being user tested in private beta, with impending announcements. GyPSii is current in testing with several large telecomm OEM's and network operators on various mobile operating platforms, in global geographies. GyPSii Symbian application accredited by Nokia On November 23, 2007, the Company announced that its GeoSolutions Business Unit had confirmed that the Symbian version of its flagship GyPSii application had been accredited by Nokia for its N95 and 6110 Navigator mobile phones. GyPSii combines - in a web-based application - a social networking platform, location-based news and services such as search and friend-finder, and user generated content-creation and sharing. Designed specifically for use on a mobile phone, the GyPSii platform is already compatible with Windows Mobile devices and by adding Symbian and Nokia support, GyPSii is now available on the vast majority of mobile phones and almost any Internet connected device. GyPSii for Nokia and Windows Mobile is available for download at the Company's website (www.gypsii.com). TWIG overview In 2007, focus points of the Company´s TWIG business unit operations and product development were continuing market launches of TWIG Discovery Pro and TWIG Locator products and further upgrading of their functionalities, on one hand, and introduction of TWIG Web Finder on the other hand. TWIG Discovery Pro GSM/GPRS/GPS handset is targeted for safety and security market and TWIG Locator tracking unit for asset and vehicle tracking market. Both products were successfully launched in various European countries during 2007. The TWIG Web Finder is a service for tracking vehicles and other mobile assets as well as for securing persons. The location of mobile objects can be seen on detailed street maps on three continents. The service enables users of TWIG products also to receive locations on normal mobile phones as address information. Further features include alarm reception, history functions, sending of SMS and GPRS messages and workstation operation from multiple sites. The TWIG tracking solutions are made with easy use and competitive prices in mind. No extra installation is required. Further credits and service extensions can be conveniently purchased at the TWIG eShop (www.twigworld.com). Shanghai Operations overview The Shanghai subsidiary has a primary focus for market development in Asia. Further, product quality assurance, testing, and multi-lingual review is assisted by the Shanghai team, led by Jeff Lin, Managing Director, China Operations. 3. Outlook for 2008 The outlook for 2008 appears to be strong for the GyPSii platform, both in its ability to drive subscribers and in the ability to generate partnerships. More detail is covered in the next section, Developments after the end of the reporting period. The GyPSii Business team has a focus in 2008 of generating significant volumes of users on a global basis. Revenue generation is planned to come via embedded licensing of IPR in terms of software technology and branded trademarks, and downstream advertising revenue generation from the platform in partnerships with mobile operators and carriers. TWIG product demand at this point, appears to be steady state focused on TWIG Discovery Pro GSM/GPRS/GPS handset which is targeted for safety and security market and the TWIG Locator tracking unit for asset and vehicle tracking market. The market continues to develop in both of the focused sectors, and, activity after the reporting period has generated business potentials that may have a material positive impact on 2008 results. 4. Developments after the end of the reporting period Launch of GyPSii on Blackberry Devices A bulletin was released 06 February 2008 announcing the availability of the GyPSii mobile application on the Blackberry smartphone product family from Research in Motion (RIM). GyPSii announces launch of China Mobile Social Network with Dopod Club A bulletin was released on 07 February 2008 announcing the partnership with China's leading online community, Dopod Club, (www.club.dopod.com). GyPSii announces India distribution deal with Broadway A bulletin was released 11 February 2008 announcing a signed agreement with India's Broadway Pvt Ltd., to offer the full suite of GyPSii services and applications into the Indian market. With over 233 million mobile subscribers and growing at over 8 million per month, India is the world's second largest and fastest growing mobile market. GyPSii announces partnership with NAVTEQ A Bulletin was released on 12 February, 2008, announcing the signing of an agreement between the world's leading mapping data provider, NAVTEQ, and GeoSentric. GyPSii announces partnership in China with China Unicom and Shanghai Rannuo A Bulletin was released 20 February, 2008, announcing the signing of an agreement between GyPSii, China Unicom and Shanghai Rannuo, for the largest mobile social networking global launch on-record, the 2008 Beijing Olympics. GyPSii announces launch on Apple iPhone devices A bulleting was released 05 March 2008, announcing the availability of the GyPSii applications on the innovative industry-leading Apple iPhone product line. Listing prospectus supplement publicized The Company announced on January 23, 2008, that it is publicising the listing prospectus supplement, needed for listing for public trading of the shares that were issued in the financing arrangements of autumn 2007 as detailed above. With the same, the Company released some information in the said supplement not made public before, and informed that the said shares will be applied for public trading on approximate January 25, 2008. A convertible loan converted into shares On January 29, 2008, the Company informed that by virtue of convertible loan 2007G-J a total of 93,653,333 new shares of the Company have been subscribed for, and that the shares will be registered on approximate January 31, 2008, and applied for public trading at Helsinki Exchanges as soon as practically possible. After the registration, the total number of GeoSentric shares is 618,236,440. 5. Financial Review Financial Performance in the Period All year 2007 numbers presented in this section are preliminary and they are not based on annual accounts approved by the Board of Directors. The net sales of the company in period 10-12/2007 were 892 teuros and in period 1-12/2007 4435 teuros. The comparable net sales in period 10-12/2006 were 3055 teuros and in period 1-12/2006 6959 teuros. The operating profit in period 10-12/2007 was -3550 teuros and in period 1-12/2007 -18726 teuros. The comparable operating profit in period 10-12/2006 was -7713 teuros and in period 1-12/2006 -11543 teuros. The total of the balance sheet at the end of year 2007 was 17360 teuros. The total of the balance sheet at the end of the previous year 2006 was 17397 teuros. The total shareholders´ equity at the end of year 2007 was 12737 teuros, or about 73.3 % of the balance sheet, when at the end of the previous year 2006 it was 10421 teuros, or about 59.9% of the balance sheet. The book value of interest-carrying debt at the end of year 2007, including the capital loans, was 940 teuros. The total liabilities at the end of year 2007 were 4623 teuros, whereas they were 6976 teuros at the end of previous year 2006. Cash and cash equivalents at the end of year 2007 was 6520 teuros of which 373 teuros were pledged. Report on sufficient liquidity in period 01/2008-03/2009 The below cash flow statement assumes that sales targets set in financial projections for financial years 2008 and 2009 are met. These projections are highly dependent on timely deliveries and sales success of the Company's products and services. -------------------------------------------------------------------------------- | Cash Flow Statement 01/2008-03/2009 | million euros | -------------------------------------------------------------------------------- | Cash flow from operations | -4.6 | -------------------------------------------------------------------------------- | Share subscription payments | 0.0 | -------------------------------------------------------------------------------- | Investments | -0.5 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in cash | -5.1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash in the beginning of the period | 6.5 | -------------------------------------------------------------------------------- | Cash at the end of the period | 1.4 | -------------------------------------------------------------------------------- 5. Company information Founded in 1988 in Finland by early mobile phone pioneers, GeoSentric is a leader in devising means for exploitation of the service potential offered by GSM networks, the Internet and the GPS system. GeoSentric is at forefront of research and innovation in this domain. GeoSentric 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. GyPSii is a market-leading mobile lifestyle application, connecting people, places and communities across networks and devices. GyPSii provides a geo-location social networking platform and services for mobile, web & set-top box devices, and is headquartered in Amsterdam, The Netherlands. (www.gypsii.com). These products, together with ready-to-use integrated GPS/GSM devices for navigation and object tracking and customisable software solutions for industry specific uses, provide a full solution for customers. In addition, the Company offers Internet-based locating service enabling the user to locate other GeoSentric devices. The number of personnel in period 10-12/2007 averaged 87, of whom 42 persons were affected by alternate forced leaves. GeoSentric share (GEO1V) is listed on the small cap -list of OMX Nordic Exchange in Helsinki. GeoSentric Oyj -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | | | GEOSENTRIC OYJ | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | | | PREMILINARY REPORT 2007 | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | | | Not | | | | | | | | | | audit | | | | | | | | | | ed | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | GROUP INCOME | | | | | | | | STATEMENT | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 1000 | | | | | 4Q/200 | 2007 | 4Q/200 | 2006 | | EUR | | | | | 7 | | 6 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net | | | | | 892 | 4435 | 3055 | 6959 | | sales | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other | | | | 29 | 61 | 10 | 25 | | operating | | | | | | | | | income | | | | | | | | -------------------------------------------------------------------------------- | Increase (+)/decrease (-) in | | | | | | | inventories | | | | | | -------------------------------------------------------------------------------- | of finished | | | | -386 | -691 | 1939 | 2625 | | products | | | | | | | | -------------------------------------------------------------------------------- | Production | | | | 0 | 0 | 0 | 0 | | for own use | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Use of raw materials and | | -377 | -4246 | -4033 | -7190 | | consumables | | | | | | -------------------------------------------------------------------------------- | Total expense of | | | -1567 | -6429 | -1484 | -4915 | | employees | | | | | | | -------------------------------------------------------------------------------- | Depreciations | | | | -775 | -4013 | -504 | -563 | -------------------------------------------------------------------------------- | Impairment | | | | 0 | -440 | -872 | -872 | | loss | | | | | | | | -------------------------------------------------------------------------------- | Other operating | | | -1366 | -7403 | -6324 | -11775 | | expenses | | | | | | | -------------------------------------------------------------------------------- | Capitalised R&D | | | 0 | 0 | 500 | 4163 | | expenses | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating | | | | -3550 | -18726 | -7713 | -11543 | | result | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial | | | | 43 | 69 | 41 | 145 | | income | | | | | | | | -------------------------------------------------------------------------------- | Financial | | | | -19 | -353 | -35 | -162 | | expenses | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Result before | | | | -3526 | -19010 | -7707 | -11560 | | taxes | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Income taxes | | | | 127 | 382 | 0 | 0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Result for | | | | -3399 | -18628 | -7707 | -11560 | | the period | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | GROUP BALANCE SHEET | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 1000 | | | | | | 31.12.2 | | 31.12.2 | | EUR | | | | | | 007 | | 006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ASSET | | | | | | | | | | S | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current | | | | | | | | | assets | | | | | | | | -------------------------------------------------------------------------------- | Property, plant and | | | | 199 | | 244 | | equipment | | | | | | | -------------------------------------------------------------------------------- | Development | | | | | 0 | | 2841 | | costs | | | | | | | | -------------------------------------------------------------------------------- | Goodw | | | | | | 216 | | 0 | | ill | | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | 4531 | | 32 | | intangible | | | | | | | | | assets | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | 62 | | 61 | | financial | | | | | | | | | assets | | | | | | | | -------------------------------------------------------------------------------- | Deferred tax | | | | | 0 | | 0 | | assets | | | | | | | | -------------------------------------------------------------------------------- | | | | | | | 5008 | | 3178 | -------------------------------------------------------------------------------- | Current | | | | | | | | | assets | | | | | | | | -------------------------------------------------------------------------------- | Inven | | | | | | 2818 | | 6194 | | torie | | | | | | | | | | s | | | | | | | | | -------------------------------------------------------------------------------- | Trade receivables and other | | | 2049 | | 4585 | | receivables | | | | | | -------------------------------------------------------------------------------- | Prepaid | | | | | 965 | | 898 | | expenses | | | | | | | | -------------------------------------------------------------------------------- | Cash and cash | | | | 6520 | | 2542 | | equivalents | | | | | | | -------------------------------------------------------------------------------- | | | | | | | 12352 | | 14219 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total assets | | | | | 17360 | | 17397 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EQUITY AND | | | | | | | | LIABILITIES | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders´ | | | | | | | | | equity | | | | | | | | -------------------------------------------------------------------------------- | Share capital | | | | | 5246 | | 2634 | -------------------------------------------------------------------------------- | Share issue | | | | | 0 | | 400 | -------------------------------------------------------------------------------- | Share premium account | | | | 14652 | | 15936 | -------------------------------------------------------------------------------- | Invested distributable equity | | | 23695 | | 4866 | | account | | | | | | -------------------------------------------------------------------------------- | Retained | | | | | -30856 | | -13415 | | earnings | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total shareholders´ | | | | 12737 | | 10421 | | equity | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current | | | | | | | | | liabilities | | | | | | | | -------------------------------------------------------------------------------- | Deferred tax | | | | | 1148 | | 0 | | liabilities | | | | | | | | -------------------------------------------------------------------------------- | Interest | | | | | 0 | | 2319 | | bearing debt | | | | | | | | -------------------------------------------------------------------------------- | | | | | | | 1148 | | 2319 | -------------------------------------------------------------------------------- | Current | | | | | | | | | liabilities | | | | | | | | -------------------------------------------------------------------------------- | Trade payables and other | | | 2431 | | 4500 | | payables | | | | | | -------------------------------------------------------------------------------- | Provi | | | | | | 104 | | 157 | | sions | | | | | | | | | -------------------------------------------------------------------------------- | Interest | | | | | 940 | | 0 | | bearing debt | | | | | | | | -------------------------------------------------------------------------------- | | | | | | | 3475 | | 4657 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total | | | | | 4623 | | 6976 | | liabilities | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total shareholders´equity and | | | 17360 | | 17397 | | liabilities | | | | | | 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