SOURCE: Trycera Financial, Inc.

November 15, 2006 22:20 ET

Trycera Financial Announces Third Quarter 2006 Financial Results

Financial Services Company Specializing in the Delivery of Prepaid Card Programs and Products Continues Sequential Growth in All Areas

NEWPORT BEACH, CA -- (MARKET WIRE) -- November 15, 2006 -- Trycera Financial, Inc. (OTCBB: TRYF), a financial services company specializing in the delivery of prepaid card programs and products, today announced financial results for the quarter ended September 30, 2006.

"We are pleased with the ongoing growth and accelerating performance of the Company, as we continue to expand current card programs, features and services and develop new ones," said Matt Kerper, President and CEO of Trycera Financial. "Our success to date has enabled us to focus on continued organic growth, coupled with new product and program innovation for our entire cardholder base. These developments, in turn, have allowed the Company to systematically enhance cardholder value and deliver improved financial results quarter over quarter and year over year."

Q3 Financial Summary

Trycera Financial reported revenues of $350K for the quarter ended September 30, 2006, an increase of 73% compared to 3 QTR 2005, and an increase of 136% compared to 2 QTR 2006. The Company reports its revenues, consistent with GAAP, on a net basis and does not state any financials using gross card load dollars.

Trycera Financial reports operating income, net income and earnings per share (EPS) on a GAAP basis. The GAAP measures are described below in the accompanying financial highlights and are also provided in full via the financial tables provided at the end of this release.

--  GAAP operating loss for 3 QTR 2006 decreased 67% to $129K, or 37% of
    revenues. This compares to a GAAP operating loss of $396K, or 195% of
    revenues, in 2 QTR 2006.
    
--  GAAP net loss for 3 QTR 2006 decreased 72% to $129K, as compared to
    $460K in 2 QTR 2006.
    
--  GAAP EPS for 3 QTR 2006 was ($0.02) on 7.38M weighted average shares
    outstanding, compared to a GAAP EPS of ($0.06) for 2 QTR 2006, on 6.37M
    weighted average shares outstanding. This equates to an EPS loss reduction
    of 67% sequentially.
    
Q3 Financial Highlights

Revenues - Trycera Financial reported revenues of $350K for 3 QTR 2006, an increase of 73% compared to 3 QTR 2005, and an increase of 136% compared to 2 QTR 2006.

Cost of Sales - Cost of sales, which is comprised primarily of processing and portfolio transactional expenses, decreased to $189K, or 54% of revenues, in 3 QTR 2006, compared to $294K, or 197% of revenues, in 2 QTR 2006. The large shift in cost of sales was driven by non-recurring program processing costs associated with new program rollouts.

Operating Expenses - Operating expenses, other than cost of revenues, were $290K in 3 QTR 2006 and included $144K in payroll-related expenses, $18K in stock-based compensation, $56K in G&A expenses and $66K in professional fees, including $15K related to certain strategic consulting deals. The $290K in 3 QTR 2006 represents an improvement of 7% or $23K over comparable operating expenses of $313K in 2 QTR 2006, which included $140K in payroll-related expenses, $3K in stock-based compensation, $70K in G&A expenses and $91K in professional fees.

Stock-Based Compensation - In 3 QTR 2006, the total charge related to stock-based compensation was $18K, as compared to $3K in 2 QTR 2006.

Q3 Portfolio Highlights

Gross Dollar Volume (GDV) - For the first 9 months of 2006, GDV increased 1201% to $6.0M from $463K for the comparable 9 month period of 2005. The Company views this metric as a key indicator of cardholder adoption and recurring use.

Gross Transactional Volume (GTV) - For the first 9 months of 2006, GTV increased 1831% to $5.0M from $260K for the comparable 9 month period of 2005. The Company views this metric as a key indicator of recurring cardholder use and convenient functionality such as bill payment.

Gross Dollars per Load (GDL) - For the first 9 months of 2006, GDL increased 198% to $93 from $31 for the comparable 9 month period of 2005. The Company views this metric as a key indicator cardholder adoption and a more sophisticated cardholder expanding use of the card as a valuable financial tool.

Average Ticket Value (ATV) - For the first 9 months of 2006, ATV increased 30% to $46 from $35 for the comparable 9 month period of 2005. The Company views this metric as a key indicator of a strategic advantage as the installed card base gains comfort with the features and functionality of the card product.

FORWARD-LOOKING STATEMENTS

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: With the exception of historical information, the statements set forth above include forward-looking statements that involve risk and uncertainties. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. The Company wishes to caution readers that a number of important factors could cause actual results to differ materially from those provided in the forward-looking statements. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, the risk factors noted in the Company's filings with the United States Securities and Exchange Commission (SEC) such as the changes in federal, state or municipal laws governing the distribution and performance of financial services; a general economic downturn; the Company's startup phase of operations; the Company's continuing ability to fund its operations; the Company's reliance on third-party processors and product suppliers; the Company's inability to locate suitable acquisition targets; and those risks and uncertainties included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," in our report on Form 10-QSB for the quarter ended September 30, 2006, which is on file with the SEC and is available on both our investor relations web site at www.trycera.com/investorrelationship.aspx and on the SEC's web site at www.sec.gov. All information provided in this release and in the related attachments is as of November 14, 2006, and Trycera Financial undertakes no duty to update this information.

ABOUT TRYCERA FINANCIAL, INC.

Trycera Financial, Inc., is a financial services company specializing in the delivery of prepaid card programs, prepaid card program management and private label catalog shopping cards. As a registered MSP for MasterCard and an ISO for Visa, the Company partners with companies focused on developing, implementing and marketing customized prepaid card solutions. As an innovative program manager, the Company has delivered a diverse suite of customized solutions including the Platinum Tel Everyone Prepaid Visa card, US Capital Debit MasterCard card and the Model Prepaid MasterCard card. In addition to the customized solutions, the Company has also developed three branded products including the Trycera Financial Prepaid MasterCard card, the Finium Prepaid MasterCard card and the Mi Dinero y Mis Sueños Prepaid MasterCard card, which are marketed directly by the Company through direct and reseller channels. All MasterCard cards are issued by MetaBank pursuant to license by MasterCard International, and all Visa cards are issued by MetaBank pursuant to a license from Visa USA, Inc. Separately, the Company operates a catalog shopping card network under the name Tru Platinum. The Tru Platinum catalog shopping card offers thousands of products to create a unique catalog shopping experience with a user friendly web interface for fast product ordering and delivery to the consumer's door. To complement its core prepaid card business, the Company has developed ancillary card services to improve the overall cardholder experience and functionality. These card services are highlighted by Full Credit, a service that allows enrolled cardholders the ability to have non-traditional payment information such as rent, utilities and wireless phone service payments reported to local credit reporting agencies. The Full Credit program is ideal for cardholders seeking report items and build upon a credit profile with credit reporting agencies nationwide. To further enhance the consumer experience, the Company also operates a 24/7 call center called isleCORE Systems, Inc. isleCORE is located in Honolulu, Hawaii, and services a wide range of business and industry, including financial services, wireless telecommunications and the State of Hawaii. For more information, please visit the Company's web site at www.trycera.com.

                          Trycera Financial, Inc.
                        Consolidated Balance Sheets


                                                  September      December
                                                   30, 2006      31, 2005
                                                 -----------   -----------
                           Assets
                                                 (Unaudited)
Current Assets
   Cash                                          $   116,542   $   211,523
   Accounts Receivable, net of allowance of $0
    and $1,999                                        70,655        99,811
   Prepaid Expenses and other current assets          35,668        42,786
   Client ACH Reserves                                 5,000         5,000
                                                 -----------   -----------
         Total Current Assets                        227,865       359,120

Property & Equipment, net                              6,911        12,764

Other Assets
   Deposits                                            9,207         9,207
   Definite Life Intangible Assets, net               65,854        75,644
                                                 -----------   -----------
         Total Other Assets                           75,061        84,851
                                                 -----------   -----------

         Total Assets                            $   309,837   $   456,735
                                                 ===========   ===========

            Liabilities & Stockholders' Equity

Current Liabilities
   Accounts Payable                              $    44,008   $    52,469
   Portfolio Reserves                                 31,494             -
   Accrued Expenses                                   56,029        46,827
   Line of Credit                                          -        14,485
   Deferred Revenue, net                                   -        22,191
                                                 -----------   -----------

   Total Current Liabilities                         131,531       135,972
                                                 -----------   -----------

Commitments                                                -             -
Stockholders' Equity

   Preferred Stock, 20,000,000 Shares
   Authorized, $.001 Par Value; None Issued and
    Outstanding                                            -             -
   Common Stock, 100,000,000 Shares Authorized
    at $.001 Par Value; 7,417,302 and 6,876,802
    Shares                                                 -             -
    Issued and Outstanding, Respectively               7,417         6,876
   Additional Paid-In Capital                      3,440,497     2,761,230
   Accumulated Deficit                            (3,269,608)   (2,447,343)
                                                 -----------   -----------
        Total Stockholders' Equity                   178,306       320,763

        Total Liabilities & Stockholders'
         Equity                                  $   309,837   $   456,735
                                                 ===========   ===========


The accompanying notes are an integral part of these financial statements.



                          Trycera Financial, Inc.
                  Consolidated Statements of Operations
                                (Unaudited)

                                For the Three           For the Nine
                                Months Ended            Months Ended
                            September   September   September   September
                             30, 2006    30, 2005    30, 2006    30, 2005
                            ----------  ----------  ----------  ----------

Revenues
  Consulting                $  102,168  $        -  $  111,268  $        -
  Stored Value                 171,150     123,639     542,440     174,679
  Call Center                   73,921      69,699     209,485      80,116
  Catalog Shopping               2,927       8,980       6,169     100,316
                            ----------  ----------  ----------  ----------
                               350,166     202,318     869,362     355,111

Cost of Sales                  189,113     175,260     694,303     283,042
                            ----------  ----------  ----------  ----------
   Gross Profit                161,053      27,058     175,059      72,069

Expenses
  Depreciation and
   Amortization                  5,483      30,290      16,840      81,675
  Salaries and Wages           143,768     176,033     465,052     424,967
  Stock-Based Compensation      18,317           -     126,490           -
  Professional Fees             65,670      68,427     203,852     197,271
  General & Administrative      56,624      93,871     185,429     289,326
                            ----------  ----------  ----------  ----------

     Total Expenses            289,862     368,621     997,663     993,239

     Income (Loss) from
      Operations              (128,809)   (341,563)   (822,604)   (921,170)
                            ----------  ----------  ----------  ----------

Other Income (Expenses)
  Interest, net                     10        (393)        339        (965)
  Financing Costs                    -     (54,088)          -     (54,088)
  Impairment of Intangible
   Assets                            -           -           -           -
                            ----------  ----------  ----------  ----------

     Total Other Income
      (Expenses)                    10     (54,481)        339     (55,053)
                            ----------  ----------  ----------  ----------

     Income (Loss) Before
      Taxes                   (128,799)   (396,044)   (822,265)   (976,223)
     Income Taxes                    -           -           -           -
                            ----------  ----------  ----------  ----------
     Net Income (Loss)      $ (128,799) $ (396,044) $ (822,265) $ (976,223)
                            ==========  ==========  ==========  ==========

  Basic earnings per share:
     Loss per share         $    (0.02) $    (0.06) $    (0.11) $    (0.15)
                            ==========  ==========  ==========  ==========
     Weighted average
      shares                 7,378,053   6,374,976   7,225,003   6,314,835
                            ==========  ==========  ==========  ==========


The accompanying notes are an integral part of these financial statements.



                          Trycera Financial, Inc.
                  Consolidated Statements of Cash Flows
                                (Unaudited)

                                                  For the Nine Months Ended
                                                    September   September
                                                     30, 2006    30, 2005
                                                    ----------  ----------

Cash Flows from Operating Activities
     Net Income (Loss)                              $ (822,265) $ (976,223)
     Adjustments to Reconcile Net Loss to Net Cash
     Provided by Operations;
       Depreciation and amortization                    16,840      81,675
       Stock issued for services                        55,317           -
       Stock-based compensation expense                126,490      45,133
       Stock warrants issued                                        54,088
       (Increase) decrease in accounts receivable       29,156     (51,219)
       (Increase) decrease in prepaid and other
        current assets                                   7,118      (1,878)
       (Increase) decrease in deposits                       -      (5,000)
       Increase (decrease) in portfolio reserves             -      17,500
       Increase (decrease) in accounts payable          (8,460)      8,868
       Increase (decrease) in portfolio reserves        31,494           -
       Increase (decrease) in accrued expenses           9,202      26,551
       Increase (decrease) in unearned revenue         (22,191)    (48,886)
                                                    ----------  ----------
Net Cash Provided (Used) by Operating Activities      (577,299)   (849,391)
                                                    ----------  ----------

Cash Flows from Investing Activities
     Acquisition of property & equipment                (1,197)    (15,039)
     Acquisition of intangible assets and other              -     (27,404)
     Proceeds received from I/C Receivable                   -           -
                                                    ----------  ----------
Net Cash Provided (Used) by Investing Activities        (1,197)    (42,443)
                                                    ----------  ----------

Cash Flows from Financing Activities
     Proceeds from issuance of common stock            498,000     250,000
     Proceeds from convertible debenture                     -           -
     Payments made on line of credit                   (14,485)     (2,799)
                                                    ----------  ----------
Net Cash Provided (Used) by Financing Activities       483,515     247,201
                                                    ----------  ----------

Net Increase (Decrease) in Cash and Cash
 Equivalents                                           (94,981)   (644,633)

Cash and Cash Equivalents at Beginning of Period       211,523     974,658
                                                    ----------  ----------

Cash and Cash Equivalents at End of Period          $  116,542  $  330,025
                                                    ==========  ==========

Cash Paid for:
     Interest                                       $      992  $        -
     Income Taxes                                   $        -  $        -

Non-cash financing activities:
     Common stock issued for services                   55,317           -


The accompanying notes are an integral part of these financial statements.

Contact Information

  • INVESTOR / PRESS / MEDIA CONTACT:

    Bryan Kenyon
    CFO
    (949) 273-4304
    Email Contact