SYSCAN INTERNATIONAL INC.
TSX VENTURE : SYA

SYSCAN INTERNATIONAL INC.

October 28, 2005 09:00 ET

Syscan Annual Results Above Expectations

MONTREAL, QUEBEC--(CCNMatthews - Oct. 28, 2005) - Syscan International Inc. (TSX VENTURE:SYA) today announced its results for the year ended June 30, 2005. Sales for the twelve-month period were $3.274.142 compared to $2.026.163 in the previous year, an increase of 61.5%.

Gross margins rose to 27.5% as compared to 12.6% in the previous year as demand grew for the company's products. Operating expenses were $1.853.686 compared to $1.470.123 in fiscal 2004, an increase of 26%. The increase was largely driven by increases in Administrative expenses to $1.048.146 from $930.267 and Selling expenses to $666.627 from $488.262 in 2004. Administrative expenses rose due to increases in infrastructure items such as rent, insurance and utilities. In addition, the company began charging the full cost of option grants to its administrative expenses ($106.643). Selling expenses rose as the company added personnel and commission payouts increased with the growth in sales. Research and Development expenses grew to $254.997 from $221.833, an increase of 15%. The company added development personnel as it increased its product lines amid growing expectations for fiscal 2006. The company reduced its operating loss to $951.691 from $1.214.213 in the previous year, primarily as a result of the increase in sales. At the end of the year, working capital stood at $1.241.298 and there was no bank debt. Subsequent to the end of the year, the company raised gross proceeds of $610.000, pursuant to the issuance of 1, 525, 000 units of the company.

Mr. Axel Striefler, President and CEO of Syscan said, "We are pleased with our 2005 fiscal performance and believe that much of the ground work accomplished this year will bring us significant RFID sales in 2006. We are in the very early stages of the RFID market as a whole and are confident that our market leading tracking and tracing applications will provide attractive ROI's to our customers for many years to come."

In other corporate developments, the company announced that on the 27th day of October, the Board granted a total of 600.000 options to Directors, Officers, employees and consultants. The options are all exercisable @ $.30 per share and are valid for a period of 5 years. Of the total; 200.000 were granted to Directors; 175.000 to officers and the balance to employees and consultants.

About Syscan

Syscan is a unique supply chain solution provider that delivers integrated real-time tracking and tracing systems that improve business efficiency through Radio Frequency Identification (RFID). Its standardized supply chain solutions include traceability, temperature monitoring and quality control methodologies for the food, pharmaceutical and health care sectors.



SYSCAN INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF INCOME AND DEFICIT
FOR THE YEAR ENDED JUNE 30, 2005

CONSOLIDATED STATEMENT OF LOSS
For the year ended June 30, 2005

2005 2004
$ $
SALES 3,274,142 2,026,163

COST OF SALES 2,372,147 1,770,253
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GROSS PROFIT 901,995 255,910
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EXPENSES
Administrative 1,048,146 930,267
Selling 666,627 488,262
Amortization of fixed assets 47,258 53,033
Loss on exchange 47,212 22,778
Amortization on intangible assets 26,781 17,883
Loss on disposal of fixed and intangible
assets 9,968 -
Financial 7,694 (42,100)
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1,853,686 1,470,123
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OPERATING LOSS (951,691) (1,214,213)

RESEARCH AND DEVELOPMENT COSTS (254,997) (221,833)
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LOSS BEFORE DISCONTINUED OPERATIONS (1,206,688) (1,436,046)

DISCONTINUED OPERATIONS - (3,081)
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NET LOSS (1,206,688) (1,439,127)
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Net loss per share $(0.04) $(0.05)

Weighted average number of common
shares outstanding 31,952,481 29,425,980


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