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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Raf Weverbergh

Editor of whiteboard. Raf Weverbergh was a magazine journalist whose work appeared in magazines like Rolling Stone, Playboy, Mail on Sunday, Publico and South China Morning Post. He is the co-founder of FINN, a corporate communications agency where he advises startups and multinationals on their PR and Mustr, the easiest media database for PR professionals. You can contact him on Twitter, Linkedin or Skype (rafweverbergh).