24 April 2002
Appendix 4C
PocketMail Obtains Funding, Reduces liabilities and Positions Itself for Strong Subscriber Growth
• Placements made in calendar year 2002 to date have raised $1.7 million (in addition to $6.25 million raised to 31 December 2001) which has been used to fund working capital and retire debt.
• Current creditors and accrued liabilities reduce by more than $0.70 million.
• Operating activities, excluding funds applied to reduce pre-existing creditors and accrued liabilities, produced a surplus of $0.03 million during the quarter.
• Solid subscriber growth expected.
Sydney, Wednesday 24 April 2002 - PocketMail Group Limited (ASX: PKT), leading worldwide provider of affordable mobile e-mail services, released its Statement of Cash Flows for the quarter ended 31 March 2002.
Financial Results
Receipts from customers for the quarter were $3.4 million, representing a small decrease (7%) from the previous December quarter, and an increase of 476% over same quarter last year.
Receipts from subscription service revenue was $3.1 million, representing 90% of total cash received, product sales accounted for the balance, $0.3 million.
The company had a net cash deficiency from operations in the quarter of $668K. However, expenditure exceeded the company’s normal operational requirements by more than $700K, as funds were applied to reduce the company’s current creditors and accrued liabilities. If these additional payments had not been made the company would have had a net surplus from operations of $32K, a result that reflects its sustainable break even cost structure.
During the quarter the Company raised $1.55 million from the placement of Under-subscription to the 18 October 2001 Prospectus. A further $0.15 million was also raised from additional placements. Subsequent to the Prospectus, the company has raised $7.95 million in equity. These funds have been used to reduce debt and fund working capital.
The company intends to make an additional equity placement of $0.60 million in the next week and expects to secure additional loan funds of at least $0.75 million from existing shareholders, also next week. These additional equity and debt funds will enable the Company to further reduce current creditors and ensure that it has adequate working capital to grow the business.
Subscribers
Insufficient working capital has limited the company’s ability to manufacture and acquire sufficient PocketMail devices to meet demand. This has restricted new customer activations which were exceeded by subscriber churn. As a consequence, the company’s subscriber base has fallen from more than 50,000 in October to 43,162. The raising of additional equity and loan funds as noted above should now rectify this issue and should mean the company has sufficient working capital to fund subscriber growth.
Comments
PKT Chief Executive, David Marchant, commented:
“We have raised almost $8 million in equity since October. Further equity and loan funds exceeding $1.3 million will be received within the next two weeks”
“This funding should enable us to move forward with our business plan and recommence growing our customer base. Given our existing, break even cost structure, this subscriber growth should flow through to the bottom line”
RELEASE ENDS
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FOR IMMEDIATE RELEASE
Media Contacts:
David Marchant (CEO)
(408) 689-1241
San Jose, California
david.marchant@corp.
pocketmail.com
Richard Shaw (CF)
+61 2 9955-0500
Sydney, Australia
richard.shaw@pkt.com.au
PR Contact:
Nanci Williams
Orloff/Williams
(408) 293-1791
About PocketMail:
Interactive Demo
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