EFT Canada Inc.
TSX VENTURE : EFT

EFT Canada Inc.

October 24, 2014 11:21 ET

EFT Canada Reports Annual Financial Results

TORONTO, ONTARIO--(Marketwired - Oct. 24, 2014) - EFT Canada Inc. ("EFT Canada" or the "Company") (TSX VENTURE:EFT), today announced that it has recognized an impairment charge in respect of its card gateway technology which is reflected in its audited financial results for the year ended June 30, 2014.

For the year ended June 30, 2014, the Company reported a net loss of ($2,081,766) or ($0.152) on revenues of $2,279,088 (2013 Revenue - $2,417,487) compared to net income of $239,457 or $0.018 per share for the period ending June 30, 2013.

The loss includes fourth quarter impairment charges of $1,054,742 for software and $174,514 for hardware, both related to the card gateway. The carrying value of the software has been written down to nil and $40,000 of remaining hardware.

The impairment charge, which is a non-cash using adjustment, resulted from of a review of the carrying value of technology related to the card processing gateway. The charge was taken because the financial benefit associated with the software had come to be substantially less than what had originally been anticipated and the service did not warrant projected expenditures. The Company has therefore ceased gateway operations and many of its expenditures, which averaged $30,000 per month.

The gateway closure has not affected operations, and EFT Canada has successfully transferred all existing gateway clients to its partner's software (gateway), without loss of revenue. Moving forward, the Company will continue to market card processing services while earning the same share of processing revenue.

Discontinuing the card gateway will result in a significant reduction of the Company's cash requirements and improvement in its operating cost structure.

The reported loss includes a bad debt expense of $591,459, of which $540,000 is related to a previously reported client receivable as to which collectability is in doubt. The Company is dependent upon the collection of this receivable or raising additional funds in order to maintain sufficient working capital.

EFT Canada had a gross profit margin of $1,561,577 for the year ending June 30, 2014, or 68.5% compared with $1,601,732 or 66% for the year ending June 30, 2013.

The audited financial statements have been filed on Sedar and can be viewed at www.sedar.com

EFT CANADA INC.

EFT Canada, founded in 2003, is a financial processing company that offers a complete solution to the collection and payment processing needs of small and medium sized business merchants, banks, credit unions, and other financial firms in Canada and the United States. The Company develops, maintains and delivers innovative electronic transaction processing technologies, such as customized electronic payment and collection processing solutions and gift and loyalty card services, by drawing on its operational and applications expertise. For more information, please visit www.eftcanada.com.

This press release contains forward-looking statements which reflect the Company's current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual results could differ significantly from those projected herein. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • EFT Canada Inc.
    Jonathan Pasternak
    President
    (416) 781-0666
    jpasternak(at)eftcanada.com
    www.eftcanada.com