Vancouver, British Columbia (FSCwire) - VendTek Systems Inc. (VSI - TSX Venture) (the "Company"), a developer and licensor of software for the global prepaid telecom and financial services markets, today reported its financial results for its first quarter of fiscal 2015 ended January 31, 2015 (“Q1 2015”).
Selected Financial Information
- Revenue for the quarter ended January 31, 2015 decreased $183,513 to $264,802, or 40.9% from $448,315 in the prior fiscal quarter of Q1 2014;
- Operating expenses were $614,237 compared to $830,014 in the prior fiscal quarter.
- Adjusted EBITDA[1] loss was $315,798 for Q1 2015 compared to a loss of $339,873 for the prior year;
- Net loss from continuing operations was $429,649 compared to $536,582 in the prior fiscal quarter;
- Cash used in operations was $260,846 for Q1 2015, compared to $927,130 cash used in operations in the prior fiscal year;
- Cash and cash equivalents was $196,505 at January 31, 2015 compared to $291,366 at October 31, 2014.
These consolidated financial statements have been prepared on the going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. For the quarter ended January 31, 2015 the Company has incurred a net loss from continuing operations of $429,649 and negative cash flows of $260,846 from operating activities. The Company also has a working capital deficiency of $3,247,990 and a shareholders’ deficiency of $3,789,433 as at Januay 31, 2015.
These conditions raise significant doubt about the ability of the Company to continue as a going concern without additional financing or renegotiate the terms of existing financing. In addition to the funds raised subsequent to quarter end, Management is pursuing several sources of additional financing (both debt and equity) and is of the opinion that sufficient working capital will be obtained from: external financing, renegotiation of existing financing; and improved operations to meet the Company’s liabilities and commitments as they become due, although there is significant risk that this may not happen on a timely basis or on terms acceptable to the Company.
These consolidated financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying consolidated financial statements.
Subsequent to quarter end, on February 5, 2015, the Company issued $350,000 of secured convertible debentures (“Convertible Debentures”) on a private placement basis that will mature on February 4, 2018. These bear interest at a rate of 1.0% per annum and have a conversion price of $0.05 per common share in the first year of the term and $0.10 in the remainder of the term. In addition, the Company issued 7,000,000 additional warrants exercisable at $0.05 per common share with the issuance of these Convertible Debentures.
VendTek’s MD&A and complete financial statements and notes are available at www.sedar.com and the Company’s website www.vendteksystems.com.
For more information or to receive the complete statements please contact Samantha White at 604-805-4653 or 1-800-806-4958 or investment@vendteksystems.com.
VendTek Systems Inc.
Unaudited Condensed Consolidated Statement of Financial Position
(All amounts expressed in Canadian dollars)
October 31, 2012 and 2011
| | | | January 31, | October 31, |
| | | | 2015 | 2014 |
| | | | | |
Assets |
| | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | | $ 196,505 | $ 291,366 |
Accounts receivable | | | 156,236 | 101,776 |
Prepaid expenses and deposits | | 47,949 | 81,943 |
| | | | 400,690 | 475,085 |
Non-current assets: | | | | |
Property, plant and equipment, net | | 73,765 | 87,053 |
Intangible assets | | | 55,634 | 60,198 |
| | | | | |
| | | | $ 530,089 | $ 622,336 |
| | | | | |
Liabilities and Shareholders' Deficiency |
| | | | | |
Current liabilities: | | | | |
Accounts payable and accrued liabilities | | $ 2,072,288 | $ 1,997,969 |
Current portion finance lease obligations | | 22,236 | 25,051 |
Current portion of convertible debentures | | 860,000 | 860,000 |
Short term loans | | | 694,156 | 597,206 |
| | | | 3,648,680 | 3,480,226 |
Non-current liabilities: | | | | |
Long term portion of convertible debentures | | 639,657 | 635,754 |
Long term portion of finance lease obligations | 31,185 | 34,314 |
| | | | | |
Shareholders’ deficiency: | | | | |
Share capital | | | 12,338,156 | 12,188,130 |
Contributed surplus | | | 4,105,818 | 4,090,033 |
Deficit | | | (20,277,629) | (19,847,980) |
Accumulated other comprehensive loss | | 44,222 | 41,859 |
| | | | (3,789,433) | (3,527,958) |
| | | | | |
| | | | $ 530,089 | $ 622,336 |
Approved on behalf of the Board:
Director Director
VendTek Systems Inc.
Unaudited Condensed Consolidated Interim Statements of Operations and Comprehensive Loss
(All amounts expressed in Canadian dollars)
| | | |
| | Restated |
| | Three months ended | Three months ended |
| | January 31, | January 31, |
| | 2015 | 2014 |
Continuing operations: | | | |
| | | |
Revenue | | | |
Products and service revenue | $ 264,802 | $ 448,315 |
Cost of product and service revenue | - | - |
| | | |
Gross profit | | 264,802 | 448,315 |
| | | |
Operating expenses: | | | |
General and administrative | 484,795 | 617,447 |
Research and development | 129,442 | 212,567 |
Total operating expenses | | 614,237 | 830,014 |
| | | |
Loss before finance costs, loss on disposal of assets and foreign exchange loss (gain) | (349,435) | (381,699) |
| | | |
Finance costs | | 43,680 | 117,788 |
Foreign exchange loss | | 36,534 | 37,095 |
| | | |
Net loss from continuing operations | (429,649) | (536,582) |
| | | |
Discontinued operations: | | | |
| | | |
Net income from discontinued operations | | - | 4,637,602 |
Net income (loss) | | (429,649) | 4,101,020 |
| | | |
Other comprehensive income (loss): | | |
Foreign currency translation difference | 2,363 | 14,940 |
| | | |
Comprehensive income (loss) | $ (427,286) | $ 4,115,960 |
| | | |
| | | |
Earnings per share | | | |
Basic and diluted earnings (loss) per share | (0.01) | 0.07 |
| | | |
Earnings per share – continuing operations | | | |
Basic and diluted loss per share | (0.01) | (0.01) |
| | | |
| | | |
Weighted average shares outstanding: | | |
Basic and diluted | | 60,842,553 | 58,357,652 |
VendTek Systems Inc.
Unaudited Condensed Consolidated Statements of Changes in Equity
(All amounts expressed in Canadian dollars)
Three months ended January 31, 2014 and 2013
| | | | | | |
| | | Accumulated other | Total Shareholders’ |
| Share capital | Contributed | comprehensive | | equity |
| Number | Value | surplus | loss | Deficit | (deficiency) |
| | | | | | |
Balance, November 1, 2013 | 58,357,652 | $ 12,188,130 | $ 3,916,136 | $ (257,601) | $ (20,579,957) | $ (4,733,292) |
| | | | | | |
Stock based compensation | ‑ | ‑ | 8,183 | ‑ | ‑ | 8,183 |
| | | | | | |
Currency translation adjustment | - | - | - | 14,940 | - | 14,940 |
| | | | | | |
Net income for period | - | - | - | - | 4,101,020 | 4,101,020 |
| | | | | | |
| | | | | | |
Balance January 31, 2014 | 58,357,652 | $ 12,188,130 | $ 3,924,319 | $ (242,661) | $ (16,478,937) | $ (609,149) |
| | | | | | |
Balance, November 1, 2014 | 58,357,652 | 12,188,130 | 4,090,033 | 41,859 | (19,847,980) | (3,527,958) |
| | | | | | |
Issue of shares | 14,288,179 | 150,026 | - | - | - | 150,026 |
| | | | | | |
Stock based compensation | ‑ | ‑ | 15,785 | ‑ | ‑ | 15,785 |
| | | | | | |
Currency translation adjustment | ‑ | ‑ | ‑ | 2,363 | ‑ | 2,363 |
| | | | | | |
Net income (loss) for period | ‑ | ‑ | ‑ | ‑ | (429,649) | (429,649) |
| | | | | | |
| | | | | | |
Balance January 31, 2015 | 72,645,831 | $ 12,338,156 | $ 4,105,818 | $ 44,222 | $ (20,277,629) | $ (3,789,433) |
VendTek Systems Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(All amounts expressed in Canadian dollars)
Three months ended January 31, 2015 and 2014
| 2015 | 2014 |
| | |
Cash provided by (used in): | | |
| | |
Operating activities: | | |
Net income (loss) for the period: | $ (429,649) | $ 4,101,020 |
Items not involving cash: | | |
Amortization | 17,852 | 108,642 |
Accretion on convertible debentures | 3,903 | 67,793 |
Foreign exchange loss (gain) | 36,534 | 37,095 |
Gain on disposal of discontinued operations | - | (4,792,384) |
Loss on disposal of assets | 8,199 | |
Stock-based compensation expense | 15,785 | 8,183 |
Change in non-cash operating working capital | 54,952 | (534,435) |
Interest expense on long-term debt | 39,777 | 68,757 |
| (260,846) | (927,130) |
| | |
Financing activities: | | |
Issue of shares | 150,026 | - |
Short term loans | 50,000 | - |
Interest paid on long-term debt | (40,876) | (116,546) |
Repayment of capital lease obligations | (5,944) | (64,890) |
| 153,206 | (181,436) |
| | |
Investing activities: | | |
Purchases of equipment | - | (7,298) |
Increase in restricted cash | - | (2,790) |
Net proceeds received from disposition | | |
of discontinued operations | - | 110,260 |
| - | 100,172 |
| | |
Foreign exchange effect on cash and cash equivalents | 12,779 | 12,725 |
| | |
Decrease in cash and cash equivalents | (94,861) | (995,669) |
| | |
Cash and cash equivalents, beginning of period | 291,366 | 2,653,198 |
| | |
Cash and cash equivalents, end of period | $ 196,505 | $ 1,657,259 |
[1]Management defines Adjusted EBITDA as net income adjusted for financing, taxes, depreciation, amortization expenses, impairment of non-financial assets, foreign exchange differences and stock based compensation expense. Please see the Management Discussion and Analysis for more details.
To view this press release as a PDF file, click onto the following link:
public://news_release_pdf/vendtek03302015.pdfSource: VendTek Systems Inc (TSX Venture:VSI) www.vendteksystems.com
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