Dexit Announces Third-Quarter 2004 Results

In April 2004, the company signed an exclusive merchant license agreement with Bell Canada and received a payment of $2 million in license fees, of which $500,000 was recognized as revenue in the third quarter and $1.0 million is recorded as deferred revenue as at September 30, 2004. The remainder of the revenue came from merchant transaction fees, consumer refill fees, RFID tag sales, and miscellaneous fees. Sales, marketing, operations, technology, customer support, and administration expenses, mainly related to the launch of the Dexit service that began in September 2003, resulted in a net loss for the 2004 third quarter of $2.9 million or $0.29 per share, compared with a net loss of $3.5 million or $0.77 per share a year earlier. Per-share calculations are based on weighted average shares outstanding of 10,052,000 in the third quarter of 2004 and 4,489,000 a year earlier. The net loss for the 2004 nine-month period was $8.7 million or $1.09 per share, compared with $4.6 million or $1.27 per share in 2003 (based on 7,986,000 weighted average shares outstanding for the 2004 period and 3,637,000 for the prior-year period). Dexits initial public offering in June 2004 raised $22.6 million, net of financing-related costs. On September 30, 2004, Dexit had cash, cash equivalents and short-term investments of $21.3 million compared with $4.4 million at the end of 2003. The number of shares outstanding as at September 30, 2004 was 10,052,167.