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 April 30, 2015 (“Q2 2015”).

 

Selected Financial Information

 

• Revenue for the quarter ended April 30, 2015 decreased $287,727 to $264,934, or 52.1% from $552,661 in the prior fiscal quarter of Q2 2014; 

 

• Operating expenses were $773,807 compared to $1,017,270 in the prior fiscal quarter.

 

• Adjusted EBITDA [1] loss was $486,314 for Q2 2015 compared to a loss of $341,689 for the prior year;

 

• Net loss from continuing operations was $527,737 compared to $530,898 in the prior fiscal quarter;

 

• Cash used in operations was $563,244 for Q2 2015, compared to $1,995,823 cash used in operations in the prior fiscal year;

 

• Cash and cash equivalents was $117,923 at April 30, 2015 compared to $291,366 at October 31, 2014.

 

“Since the beginning of the current quarter, our Company has refocused its business to solely operate as a software provider, having eFresh^TM as its core product.  While this decision was inevitable due to the company’s inability to raise sufficient funds in order to support the growth in its distribution network, it was also supported by our strong belief that our eFreshTM technology can, with the adequate sales team and structure, generate significant value to our shareholders” says Felipe Ayres, VendTek’s Chief Executive Officer.

 

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 April 30, 2015 the Company has incurred a net loss from continuing operations of $527,737 and negative cash flows of $563,244 from operating activities.  The Company also has a working capital deficiency of $3,389,252 and a shareholders’ deficiency of $4,157,730 as at April 30, 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 June 5, 2015, the Company closed its previously announced non-brokered private placement of 9,478,568 units of the Company (each a "Unit") at a price of $0.07 per Unit for gross proceeds of $663,499.76 (the "Offering”).

 

Each Unit was comprised of one common share in the capital of the Company (each a "Common Share") and one warrant (each a "Warrant"). Each Warrant is exercisable to purchase one Common Share at a price of $0.25 (subject to adjustment) for a period of three years from the date of issuance.
 

The net proceeds from the Offering will be used for general corporate purposes, including working capital.

 

The Offering may be considered a related party transaction pursuant to applicable securities laws due to the fact that certain insiders of the Company will be participating in the Offering. 
 

 

 

 

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

		April 30,	October 31,
		2015	2014
Assets
Current assets:
Cash and cash equivalents		$ 117,923	$ 291,366
Accounts receivable		73,640	101,776
Prepaid expenses and deposits		83,662	81,943
		275,225	475,085
Non-current assets:		71,624	87,053
Property, plant and equipment, net		51,124	60,198
Intangible assets
		$ 397,973	$ 622,336
Liabilities and Shareholders' Deficiency
Current liabilities:
Accounts payable and accrued liabilities		$ 1,996,797	$ 1,997,969
Current portion finance lease obligations		17,393	25,051
Current portion of convertible debentures		860,000	860,000
Short term loans		790,287	597,206
		3,664,477	3,480,226
Non-current liabilities:
Long term portion of capital lease obligations		29,720	34,314
Long term portion of convertible debentures		861,506	635,754
Shareholders’ deficiency:
Share capital		12,338,156	12,188,130
Contributed surplus		4,265,799	4,090,033
Deficit		(20,805,366)	(19,847,980)
Accumulated other comprehensive income		43,681	41,859
		(4,157,730)	(3,527,958)
		$ 397,973	$ 622,336

 

 

Approved on behalf of the Board:

 

                                                                                                                        

 

 

VendTek Systems Inc.

Unaudited Consolidated Interim Statements of Operations and Comprehensive Loss

(All amounts expressed in Canadian dollars)

Three and six months ended April 30, 2015 and 2014

			Restated							Restated
	Three months ended April 30,						Six months ended April 30,
	2015				2014		2015		2014
Continuing operations:
Revenue:
Products and service revenue	$ 264,934				$ 552,661		$ 529,736		$ 1,000,976
Cost of product and service revenue	-				-		-		-
							529,736		1,000,976
Gross profit	264,934				552,661
Operating expenses:
General and administrative	587,398				823,519		1,072,193		1,440,966
Research and development	186,409				193,751		315,851		406,318
Total operating expenses	773,807				1,017,270		1,388,044		1,847,284
Loss before finance cost  and
foreign exchange loss (gain)	(508,873)				(464,609)		(858,308)		(846,308)
Finance cost (note 6)	65,889				45,768		109,569		163,556
Foreign exchange loss (gain)	(47,025)				20,521		(10,491)		57,616
Net loss from continuing operations	(527,737)				(530,898)		(957,386)		(1,067,480)
Discontinued operations:
Net income (loss) from discontinued
operations (note  7)	-				(695,891)		-		3,941,711
Net income (loss)	(527,737)				(1,226,788)		(957,386)		2,874,232
Other comprehensive income (loss):
Foreign currency translation difference	(541)				(1,700)		1,822		13,240
Comprehensive income (loss)	$ (528,278)				$ (1,228,488)		$ (955,564)		$ 2,887,472
Earnings per share
Basic and diluted earnings per share	$ (0.07)				$ (0.21)		$ (0.14)		$ 0.49
Earnings per share – continuing operations
Basic and diluted earnings per share	$ (0.07)				$ (0.21)		$ (0.14)		$ 0.49
Weighted average shares outstanding:
Basic and diluted	7,264,583				5,835,765		6,664,638		5,835,765

 

 

 

 

 

 

 

VendTek Systems Inc.       

Unaudited Condensed Consolidated Statements of Cash Flows

(All amounts expressed in Canadian dollars)

Three and six months ended April 30, 2015 and 2014

 

	Three months ended April 30,				Six months ended April 30,
	2015		2014		2015		2014
Cash provided by (used in):
Operations:
Net income(loss) for the period	$ (527,737)		$ (1,226,788)		$ (957,386)		$ 2,874,232
Items not involving cash:
Accretion on convertible
debentures	15,909		17,507		19,812		85,300
Amortization	6,638		97,921		24,490		206,566
Loss (gain)  on disposal of assets	-		-		-		8,199
Foreign exchange loss (gain)	(47,025)		20,521		(10,491)		57,616
Gain on disposal of
discontinued operations (note 7)	-		-		-		(4,792,384)
Stock-based compensation
expense	15,921		8,273		31,706		16,456
Changes in non-cash operating
working capital items (note 9)	(64,198)		(958,244)		(9,246)		(1,492,679)
Interest expense on long-term debt	37,248		44,987		77,025		113,744
	(563,244)		(1,995,823)		(824,090)		(2,922,950)
Financing activities:
Interest paid on long-term debt	(1,570)		(25,061)		(42,446)		(141,607)
Increase in bank indebtedness	-		187,356		-		187,356
Issue of convertible debentures	350,000		-		350,000		-
Issue of shares	-		-		150,026		-
Short term loans	117,764		-		167,764		-
Repayment of convertible debentures	-		(1,628,000)		-		(1,628,000)
Repayment of capital lease obligations	(6,308)		(70,230)		(12,252)		(135,120)
	459,886		(1,535,935)		613,092		(1,717,371)
Investments activities:
Decrease (increase) in restricted cash	-		(12,123)		-		(14,913)
Purchase of equipment	-		(10,339)		-		(17,637)
Net proceeds received from disposition
of discontinued operations (note 7)	-		3,874,204		-		3,984,402
	-		3,851,742		-		3,951,852
Effect of foreign exchange on cash
and cash equivalents	24,776		(38,007)		37,555		(25,223)
Increase (decrease) in cash
and cash equivalents	(78,582)		281,977		(173,443)		(713,692)
Cash and cash equivalents,
beginning of period	196,505		1,657,529		291,366		2,653,198
Cash and cash equivalents,
end of period	$ 117,923		$ 1,939,506		$ 117,923		$ 1,939,506

 

 

To view this press release as a PDF file, click onto the following link:
public://news_release_pdf/vendtek06292015.pdf

Source: VendTek Systems Inc (TSX Venture:VSI) www.vendteksystems.com

 

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