Mobile Tornado Regulatory News (MBT)

27 Jun 2006 07:00

Mobile Tornado Group PLC27 June 2006 Mobile Tornado Group Plc ("Company" or "Mobile Tornado") On 26 April 2006, the Company announced the placing of 14,551,333 new ordinaryshares at a price of 16p per ordinary share ("Placing") to accelerate its globalmarketing and develop extensions of its fixed-mobile convergence products. Mr Pinievsky, a director of the Company, subscribed for 12,251,333 new ordinaryshares in the Placing ("Placing Shares"). On receipt of his duly signedsubscription letter and confirmation from Mr Pinievsky that the Company'sIsraeli subsidiary was in funds, the Board issued and allotted the PlacingShares. However, as at the date of this announcement, the Company has not yetreceived payment for the Placing Shares. Whilst Mr Pinievsky has assured theBoard that he continues to make every effort to secure the funds to pay for theshares, the Board has now come to the view, following its own investigationsand detailed discussions with Mr Pinievsky, that there can be no assurance thatthe financing that Mr Pinievsky confirmed was in place will be forthcoming, inwhich circumstances Mr Pinievsky may be unable to pay for his Placing Shares. Mr Pinievsky has today resigned from the board of Mobile Tornado, although hewill remain with the Group as an employee. The Board is taking legal advice todetermine what immediate action should be taken in relation to the PlacingShares and to consider the enforcement of payment obligations against MrPinievsky. The financial position of the Company and its subsidiaries ("Group") has beenprotected against the shortfall of the placing proceeds by management actionsacross the Group to reduce development costs, delay the expansion programme,manage creditors and agree additional shareholder loans. The Board is currently working with Mr Pinievsky to resolve this matter withoutrecourse to litigation and, in particular, is addressing the possibility of MrPinievsky realising other assets (including potentially his pre-existing holdingof shares in the Company) to fund his default. Mr Pinievsky has agreed todeposit the share certificates he holds in respect of all shares issued to himin connection with such discussion. A further announcement will be made in due course. Trading Update The Company continues to see increasing global interest for its mobile Push to 'X' products, including its recently demonstrated Push to Video solution. TheCompany's key patent continues to be progressed in major territories. MobileTornado, in collaboration with global hosting partners, is planning to launch amanaged service for its products to address the smaller mobile operators andenterprise customers on a pay per month model. The first service is expected tolaunch in Germany in July 2006. Trading revenues from Mobile TornadoInternational Limited are anticipated to be €290,000 for the 12 months to 30June 2006. The Directors are encouraged by the revenues expected from thecontracts already in place and the growing order book for the coming financialyear. Contacts: Mobile Tornado GroupJohn Swingewood, Executive Chairman 020 8104 1992 Buchanan CommunicationsJames Strong 020 7466 5000 Corporate Synergy PlcRhod Cruwys / John Prior 020 7448 4400 This information is provided by RNS The company news service from the London Stock Exchange