GuestLogix Inc.
TSX VENTURE : GXI

GuestLogix Inc.

August 15, 2007 08:30 ET

GuestLogix Inc. Announces Results for 2nd Quarter 2007

TORONTO, ONTARIO--(Marketwire - Aug. 15, 2007) - GuestLogix Inc. (TSX VENTURE:GXI), a leading provider of transaction-based on-board retail solutions for the passenger travel industry, is pleased to announce record results for the three-month period ending May 31, 2007.

For the three-month period ended May 31, 2007, revenues increased by 1,088% to $1,725,122, compared to $145,175 for the comparable three-month period in 2006, and $671,452 for the three-month period ended February 28, 2007. For the six-month period ended May 31, 2007, revenue was $2,396,574, compared to $274,430 for the comparable six-month period in 2006. During the quarter, GuestLogix continued to deploy its innovative on-board retail technology platform to new customers within the airline industry and also increase penetration within existing customers.

Operating expenses for the three-month period ended May 31, 2007 increased to $758,362 from $471,382 in the comparable three-month period in 2006. The increase in operating expenses was due to an increase in staff to deliver on key customer implementations, increased sales and marketing, and the building of the infrastructure to support GuestLogix' growing customer base.

Net loss for the three-month period ended May 31, 2007, including non-cash accretion charges of $636,675, was $677,423 or $0.10 per share, compared to a net loss of $405,625, or $0.06 per share in the three-month period ended May 31, 2006. Net loss for the six-month period ended May 31, 2007, including non-cash accretion charges of $1,186,701, was $1,491,091 or $0.21 per share, compared to a net loss of $691,713, or $0.10 per share in the six-month period ended May 31, 2006.

As at May 31, 2007, GuestLogix' cash and cash equivalents were $1,130,574, up from $207,072 as at November 30, 2006. The number of shares outstanding as at May 31, 2007 was 7,022,526.

The acquisition of the shares of GuestLogix Inc. and the amalgamation with Growthgen Equity II Inc., by which GuestLogix became a public company, was completed on August 1, 2007 and therefore these numbers do not reflect the effects of that transaction or the completion of the related financing.

Business Highlights:

The company expanded its customer base with three new airlines in Europe and one new airline in North America. The Company also significantly enhanced its customer delivery infrastructure in support of a world-class production and support environment, enabling the Company to bring on additional customers in a seamless manner. The Company also strengthened an already experienced executive team by adding an experienced Chief Financial Officer with payments and public market experience, and a seasoned airline executive to support the company's business development initiatives.

Additional information on GuestLogix' second quarter 2007 financial results will be available in the financial reports filed by the Company with Sedar at www.sedar.com. To find out more about GuestLogix Inc. (TSX VENTURE:GXI) visit our website at www.guestlogix.com.

About GuestLogix Inc.

GuestLogix develops, integrates and provides advanced On-Board Retail technology solutions for the passenger travel industry and their suppliers, and has been doing so for more than five years. GuestLogix' mission is to provide best-of-breed solutions that deliver high-end functionality, and unmatched flexibility, to create new revenue streams for GuestLogix' customers and also help them improve the level of service that they can promise and deliver to their customers. The GuestLogix solution for On-Board Retail, called Mobile Virtual Store™, provides industry-leading functionality for pre-departure, on-board, and post-arrival processing, as well as on-board retail performance analysis, on-board retail merchandising and credit card processing. GuestLogix is headquartered in Toronto, Canada with offices in the USA, Europe and the company utilizes strategic distribution partners to service all other geographic regions. Further information is available at www.guestlogix.com.

Forward-Looking Statements

This discussion includes certain forward-looking statements that are based upon current expectations, which involve risks and uncertainties associated with our business and the environment in which the business operates. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking, including those identified by the expressions "anticipate", "believe", "plan", "estimate", "expect", "intend", and similar expressions to the extent they relate to the Company or its management. The forward-looking statements are not historical facts, but reflect GuestLogix' current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the matters discussed under "Risks and Uncertainties" in the Filing Statement filed on July 24, 2007 with the regulatory authorities. GuestLogix assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements.



GUESTLOGIX INC.
Balance Sheets
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May 31, November 30,
2007 2006
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(unaudited)

Assets

Current assets:
Cash $ 1,130,574 $ 207,072
Accounts receivable 648,481 195,627
Inventory 576,866 -
Prepaid expenses 361,592 7,735
Investment tax credits receivable 285,000 160,000
Current portion of net finance receivable 1,232,732 1,272,222
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4,235,245 1,842,656

Restricted cash 1,111,221 1,253,861
Net finance receivables 1,136,332 1,699,610
Other long-term assets 2,375,109 2,849,866
Property and equipment 31,514 -
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8,889,421 7,645,993
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Liabilities and Shareholders'
Equity (Deficiency)

Current Liabilities:
Accounts payable and accrued liabilities 1,702,530 629,362
Current portion of obligations
under capital lease 608,408 725,450
Current portion of notes payable 465,340 755,093
Current portion of loans from
shareholders 911,612 460,490
Convertible debentures 923,805 648,893
Deferred revenue 785,469 922,187
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5,397,164 4,141,475

Loans from shareholder 61,383 61,383
Deferred revenue 1,790,733 2,102,613
Obligations under capital lease 916,379 1,103,105
Notes payable - -

Shareholders' equity (deficiency):
Share capital 860,753 860,753
Shares to be issued 1,930,752 470,746
Contributed surplus 590,399 588,902
Conversion rights 772,701 772,701
Warrants 746,778 738,659
Deficit (4,177,621) (3,194,344)
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723,762 237,417

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8,889,421 7,645,993
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GUESTLOGIX INC.
Statements of Operations and Deficit

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Three months ended May 31, Six months ended May 31,
2007 2006 2007 2006
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(unaudited) (unaudited) (unaudited) (unaudited)

Revenue $ 1,725,122 $ 145,175 $ 2,396,574 $ 274,430

Cost of sales 942,105 19,715 1,248,995 19,715
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Gross margin 783,017 125,460 1,147,579 254,715

Operating expenses
(income):
Research and
development 179,669 185,482 334,629 310,479
Sales and marketing 186,908 135,745 325,950 272,247
General and
administrative 388,283 148,474 577,253 300,180
Depreciation 3,502 1,681 3,502 3,250
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758,362 471,382 1,241,334 886,156
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Income (loss) before
the undernoted 24,655 (345,922) (93,755) (631,441)

Other income
(expenses):
Other income - 970 15,544 970
Foreign exchange
gain (loss) 64,255 8 12,209 3,580
Interest income 16,540 172 30,541 1,420
Interest expense (146,198) (37,204) (268,929) (37,204)
Interest accretion
expense (636,675) (23,649) (1,186,701) (29,038)
Debt extinguishment
expense - - - -
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(702,078) (59,703) (1,397,336) (60,272)
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Loss for the period
and comprehensive
income (677,423) (405,625) (1,491,091) (691,713)

Deficit, beginning
of period: (3,500,198) (1,190,652) (2,686,530) (904,564)
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Deficit, end of
period (4,177,621) (1,596,277) (4,177,621) (1,596,277)
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Loss per share (0.10) (0.06) (0.21) (0.10)

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Weighted average
number of common
shares 7,022,526 7,022,526 7,022,526 6,951,634

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GUESTLOGIX INC.
Statements of Cash Flows
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Three months ended May 31, Six months ended May 31,
2007 2006 2007 2006
(unaudited) (unaudited) (unaudited) (unaudited)
Cash provided by
(used in):
Operations:
Loss for the period (677,423) (405,625) (1,491,091) (691,713)
Items not involving
cash:
Depreciation 3,502 1,681 3,502 3,250
Interest accretion
on notes payable 636,675 23,649 1,186,701 29,038
Stock-based
compensation expense 748 748 9,615 748
Change in non-cash
operating working
capital (407,510) (1,210,826) (472,672) (1,172,689)
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(444,008) (1,590,373) (763,945) (1,831,366)

Financing:
Issuance of notes
payable - 392,000 - 392,000
Issuance of
convertible
debentures - 200,000 - 200,000
Issuance of common
shares - - - 479,018
Shares to be issued 1,350,006 - 1,460,006 -
Issuance of loans to
shareholders - 665,000 - 665,000
Repayment under
capital leases (169,955) - (372,972) -
Repayment of notes
payable (106,990) (56,000) (259,146) (56,000)
Repayment of loans
from shareholder - - - (10,600)
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1,073,061 1,201,000 827,888 1,669,418

Investments:
Investment in
collateral security - - 44,424 -
Purchase of
equipment for
sales-type leases - (71,000) (152,020) (71,000)
Payments received on
sales-type leases 367,229 - 739,974 -
Additions to
property and
equipment - - (35,016) -
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367,229 (71,000) 597,362 (71,000)

Effect of foreign
exchange 118,446 - 10,108 262,197 16,234
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Increase (decrease)
in cash 1,114,728 (470,481) 923,502 (216,714)

Cash, beginning of
period 15,846 471,201 207,072 217,434

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Cash, end of period 1,130,574 720 1,130,574 720
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Supplemental cash
flow information:
Interest paid 52,787 - 103,643 -
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The TSX Venture Exchange has neither approved nor disapproved the content of this news release. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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