Option needs another € 9 million to maintain liquidity
Belgian specialist in wireless connectivity and security Option announced today that instead of the € 5 million in additional financing announced earlier, it now wants to raise € 9 million to maintain its liquidity.
In a statement, the company says it successfully took steps to lower its cash burn. Still, at the end of 2012, the company had just € 3,2 million in cash left, or ten million less than it had at the end of the first six months of 2012.
The money will be raised through a convertible bond. The money will come from Option CEO and founder Jan Callewaert and a ‘number of parties’ who ‘intend’ to participate in the financing. Mondo NV, a company controlled by Option CEO Jan Callewaert, agreed to a mid term € 5 million loan to bridge potential cash requirements until the financing is complete.
In October, the company announced that it would need to raise 5 million. At that time, Jan Callewaert said the company was not yet in a critical condition, but that it needed to raise the money to keep it that way.
October also marked the end of a commercial deal between Option and former arch rival Huawei. In 2010, Option initiated a European procedure against Huawei for ‘unfair business practises’. Huawei and Option settled their differences – in exchange for € 68 million in cash for Option.
Option was once a global leader in the production of USB sticks for wireless connectivity, that it sold to mobile operators. Since 2011, the company is moving into software solutions.
Here’s the full statement:
Option (EURONEXT Brussels: OPTI; OTC: OPNVY), a global leader in wireless connectivity, security and experience, today announces that the Board of Directors has revised its plans with regards to the strengthening of the Company’s working capital. As previously announced in the financial notification issued on October 10, 2012, the Company is looking to raise cash in order to secure its going concern. In addition, the Company continued to be focused on the further reduction of its costs basis and on the diversification of the sales- and marketing efforts. The actions taken in the last quarter of 2012 have contributed to lower the cash burn resulting in a cash position of 3,2 million EUR by the end of December 2012.
Following discussions with interested parties the Board has decided to raise the amount of the investment to minimum 9 million EUR via the issue of a convertible bond. The combination of such investment with further cost reductions and the projected sales of the new products should allow the Company to return to profitability towards the end of 2013.
A number of parties, including Jan Callewaert, founder and CEO of the Company, have expressed their intention to participate in the transaction. It is the Boards’ expectation that the transaction will be concluded during the first quarter of 2013. More details about the transaction will be described in a report of the Board of Directors drafted in accordance with section 583 of the Code of Companies. This report will be made available at a later stage.
In addition, the Company came to an agreement with Mondo NV, controlled by Jan Callewaert, on a mid term loan facility up to a maximum amount of 5 million EUR, in order to bridge potential cash requirements until the completion of the transaction.
Option will provide more details on the financing efforts as soon as specific information is available.
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