Published August 31 2017 – 21h00 CET
Leuven, Belgium – August 31, 2017 – Option N.V. (EURONEXT Brussels: OPTI; OTC: OPNVY), the company connecting Things to the Cloud, today announced its results for the first half fiscal year ended June 30 2017. The financial information reported in this release is presented in Euros and has been prepared in accordance with the recognition and measurement criteria of IFRS as adopted by the European Union. The accounting policies and methods of computation followed in the attached financial statements are the same as those followed in the most recent annual financial statements.
FINANCIAL HIGHLIGHTS OF THE FIRST HALF FISCAL YEAR 2017
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Update on Option’s restructuring plan
Earlier this year, Option announced a restructuring plan with a view to restore credibility and viability of the Company.
Seven steps were outlined and progress has been made on each step.
The first step was realized at the end of 2016, by the sale of Innolumis BV and the according cash generation necessary to overcome the first few months of 2017. In that respect the comparative figures for the first half-year of 2016 have been restated in order to present the net results of Innolumis BV as discontinued operations.
Second, we further secured EUR 2.6 million of new bridge loans from key investors to address the financial needs of the first half-year of 2017. As per August 2, an amount of EUR 0.5 million was still to be received.
Third, we converted a substantial amount of debt (EUR 23.8 million) into equity as elaborated in the notes to this report.
Fourth: we aligned operating expenses in better harmony with margin generations and are confident that we will have directed the company for positive EBITDA generation by the end of 2017.
Operating expenses have decreased by 31%, compared to the first half-year of 2016. These expenses comprised still an amount of EUR 0.8 million relating to non-recurring expenses. The sales and support operations of the North American subsidiary have been centralized in the Belgian Headquarters, leaving the Belgian parent company as the sole operational entity of the group.
During the second semester 2017, operating expenses will further decrease by 15% to 25%.
Fifth: We are in the process to refocus the company strategically together with the hiring of a new CEO, based on Option’s recognized core competencies related to IoT communication platforms.
Sixth: We have empowered senior management to lead daily operations under review of the Board of directors.
Mr. Jan Callewaert has ended his mandate as interim CEO of the Company effective 31 May 2017.
The daily management of the Company has been transferred to the executive committee, chaired by Mr Eric Van Zele (who joined the Company on 7 March 2017 as new president of the Board) and operating under the general supervision of the Board of directors.
Last and 7th point of the restructuring plan: now that we can demonstrate viability through operational profitability by the end of 2017, the Company will speed up its efforts to secure a credit line for funding of additional ‘working capital’ needs and cope with the remaining outstanding liabilities so that the company could enter 2018 leaner than years before and with a clean bill of health and financial stability.
The Board remains cautiously optimistic to continue the above plan and bring it to a positive conclusion and successful completion for the benefit of all stakeholders.
Corporate
Debt restructuring
In March and June of 2017, two rounds of debt restructuring resulted in the increase of share capital by contribution of in total EUR 9,957,077 details of which are below:
In March 2017, a total amount of EUR 12,153,600 of financial liabilities (bridge and bond loans) has been converted into equity instruments of the Company at EUR 0.147 per share, corresponding to the 30 days average closing share price prior to the day of the transaction. For each new share, EUR 0.05 was accounted as new capital and EUR 0.097 was recognized as share premium.
As a result of the capital increase 82,677,545 new shares were issued, bringing the total number of shares, subject to approval for listing on Euronext, from 98,442,546 to 181,120,091 shares after listing.
The share capital of the Company has accordingly been increased with EUR 4,133,877.25 bringing the share capital from EUR 4,922,127.30 before capital increase to EUR 9,056,004.55 after capital increase. A total of EUR 8,019,722.75 has been recognized as share premium.
Furthermore, the Company secured in March new financing for a total amount of EUR 2.6 million. These funds are structured as a new 2 year loan at 1% interest during the first year and 2% in the second year.
In June, a second round of conversion of financial liabilities (bonds and debts) has been executed. A total of EUR 11,646,400.00 of liabilities was converted into equity instruments of the Company at an average share price of EUR 0.10 per share, resulting in an increase of EUR 5,823,200 in share capital from EUR 9,056,004.55 before transaction to EUR 14,879,204.55 after transaction with the issue of 116,464,000 new shares. As such, the total number of shares amounted to 297,584,091 shares without nominal value.
As a result of the debt restructuring during the first half-year of 2017, 199,141,545 new shares have been issued.
At 30 June 2017, the Company had the following significant shareholders in accordance with the received transparency declarations:
- Total share capital EUR 14,879,204.55
- Total number of voting securities 297,584,091
- Shareholders (>3%)
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Jan Callewaert |
23.94% |
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Danlaw Inc. |
17.02% |
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Eric Van Zele |
11.40% |
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Alychlo[1] |
8.00% |
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Vermec/Michel Verhaeren |
3.22% |
The updated shareholders information can always be consulted on our website.
The Company is currently working towards the contribution of the remaining balance of EUR 5.4 million of nominal outstanding liabilities into the equity of the Company.
Change of Management
In accordance with Article 21 of the statutory bylaws of the Company, the Board of directors has approved the delegation of powers to the following people, who are authorized to be a member of the Option Executive Management Team, within the context of Option’s Corporate Governance Charter:
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Areas of responsibility |
Authorized representative |
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Finance, bank authorities, insurance |
CFO (Edwin Bex) |
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Legal, Compliance, investor relations, HR, Board Secretary, intellectual property |
General Counsel (Steve Theunissen)
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Operations, procurement, facilities, IT, safety |
Director of Operations (Rudy Snoeks) |
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Sales, services, customer relations, marketing |
Sales Director (Patrick Willekens) |
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Engineering, product research and development |
Director of Engineering (Ben Cober) |
The authorized representatives meet on regular occasions to organise the daily management of the Company, under temporary supervision of Mr Eric Van Zele.
Mr Eric Van Zele has been authorized by the Board on a temporary basis to chair the Executive Management Meeting and report to the Board of its activities, until a new CEO has been found.
Changes in the Board of Directors
The Shareholders’ Meeting of 30 June 2017 has decided upon several changes in the Board as follows:
The Meeting has decided to approve the termination of the mandates of directors (1) Sabine Everaet as from 12 July 2016, (2) QUNOVA BVBA, represented by Mr. Jan Vorstermans as from 7 March 2017 and (3) FVDH Beheer BVBA, represented by Mr. Francis Vanderhoydonck as from 27 May 2017.
The Meeting has accepted and approved the cooptation as new directors (1) Vermec NV, represented by Mr. Peter Cauwels as from 1 July 2016, (2) Mr. Eric Van Zele as from 7 March 2017 and (3) Crescemus BVBA, represented by Mr. Pieter Bourgeois as from 7 March 2017.
The Meeting has decided to renew the mandate of Mr. Jan Callewaert as director of the Company for a period of 4 years ending at the general shareholders’ meeting of 2021.
Going concern
To date the Company has limited financial means of about EUR 670,000 (consolidated), out of which EUR 540,000 are contributions still due under the 2017 bridge loan, which have been confirmed to be paid within the next weeks.
Sales are in line with projections made under current restructuring plan, but need to increase in the second half in order to operationally break even.
The Company is still working to secure a credit line for about EUR 2 million, of funding of additional ‘working capital’ needs and cope with the remaining outstanding liabilities.
To facilitate this process, the Company is planning to convert the remaining financial debt into the capital (which amounts currently to about EUR 5 million nominal value and EUR 3.7 million interests).
Given the current sales outlook and the ongoing efforts under current restructuring plan, the Board decided to prepare the interim accounts under the going concern principle.
[1] Alychlo NV, Mylecke Management, Art & Invest NV & Marc Coucke.
For the entire press release, including tables, click on the link below.
Option reports First Half Year 2017 results
For the entire interim report, click on the link below