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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