Dexit Announces Year-End 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 fourth quarter and $500,000 is recorded as deferred revenue as at December 31, 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 operation of the Dexit service that began in September 2003, resulted in a net loss for the three-month period ended December 31, 2004 of $2.5 million or $0.25 per share, compared with a net loss of $2.5 million or $0.42 per share in the same period in 2003. Per-share calculations are based on weighted average shares outstanding of 10,052,000 in the fourth quarter of 2004 and 5,875,000 a year earlier. The net loss for the 2004 twelve-month period was $11.2 million or $1.40 per share, compared with $7.1 million or $1.94 per share in 2003 (based on 7,998,000 weighted average shares outstanding for the 2004 period and 3,650,000 for the prior-year period). Dexits initial public offering in June 2004 raised $22.7 million, net of financing-related costs. On December 31, 2004, Dexit had cash, cash equivalents and short-term investments of $17.7 million, compared with $4.4 million at the end of 2003. The number of shares outstanding as at December 31, 2004 was 10,052,167. 2004 Highlights - Signing of consumer issuer and merchant acquirer deals with Bell Canada - Completion of our IPO raising $25 million in gross proceeds - The transition of merchant sales, installation and service to Bell Canada - Introduction of bilingual capability to the Dexit platform - Over 350 merchants accepting Dexit - Over 47,000 consumers registered for the Dexit service Upcoming initiatives - Automated credit card refill to give tag holders another refill option - The introduction of a loyalty offering to the Dexit technology platform - Dexit online, which will enable consumers and merchants to conduct low-value-payments online - High profile marketing blitz throughout the Greater Toronto Area - Expanding the Dexit service to the 514 area code and to international markets.