D-BOX Releases 2008 Third Quarter Results



    LONGUEUIL, QC, Feb. 28 /CNW/ - D-BOX Technologies Inc. (TSX-V: DBO.A),
("D-BOX" or the "Company"), a leading provider of motion technology for the
entertainment industry, today released its financial results for the third
quarter and nine-month period ended December 31, 2007.

    
    Q3 2008 Highlights

    -   Concluded milestone agreement with Walt Disney Studios Home
        Entertainment to include the D-BOX MOTION CODE(TM) on selected
        Blu-ray Disc releases
    -   Concluded agreement with Lionsgate, a leading independent film studio
        to include the D-BOX MOTION CODE(TM) on a selected movie release
    -   Twentieth Century Fox Home Entertainment released over 10 new
        blockbuster Blu-ray movies embedded with the D-BOX MOTION CODE(TM)
    -   Launched GP-200FS gaming chair for flight simulator market at the
        AVSIM FANCON Conference and Exhibition
    

    "During the third quarter, we focused our efforts on developing stronger
marketing tools, strengthening our commercialization strategy and expanding
our sales and engineering staff. These efforts, combined with the recently
announced partnership with Disney, have all contributed to increasing our
visibility. Our network of custom installers is expanding and we are confident
that our products are well on their way to being showcased in selected
high-end audio video specialty stores," said Claude Mc Master, President and
CEO of D-BOX Technologies. "Looking ahead, we will continue to expand our
library of motion coded titles, negotiate milestone agreements with additional
motion picture studios while developing our product line to reach a wider
audience."

    Financial results

    D-BOX posted $949,117 in operating revenues for the third quarter of
2008, compared to $875,484 for the same quarter of the previous year.
Operating revenues for the nine-month period ended December 31, 2007, totaled
$2,900,388 compared to $2,967,402 for the same nine-month period of the
previous year. Although sales of the D-BOX products continued to increase,
reporting 19% growth from the previous period, operating revenues were
essentially flat, reflecting a decrease in OEM sales to the arcade market and
negative impact of the exchange rate.
    Operating expenses for the third quarter ended December 31, 2007, totaled
$1,553,451 compared to operating expenses of $1,076,528 for the third quarter
in the previous year. For the first nine months of fiscal 2008, operating
expenses totaled $4,118,313 compared to $2,962,615 for the same period in the
previous year.
    Net loss for the third quarter of 2008 amounted to $1,251,133 or a
($0.0145) per share, compared to a net loss of $740,126 ($0.013) per share for
the third quarter of 2007. For the nine-month period ended December 31, 2007,
net loss amounted to $3,033,892 compared to $1,658,379 for the same period
last year. Increased operating expenses reflect the Company's anticipation of
future growth and include new hires for marketing and engineering activities.
The Company also improved its existing promotional tools, developed additional
marketing initiatives and prepared its successful participation at the 2008
Consumer Electronic Show in Las Vegas.
    As at December 31, 2007, cash and cash equivalents amounted to
$9,410,909, compared to $237,008 as at December 31, 2006. The increase in cash
and cash equivalents is the result of financing activities during the first
quarter that resulted in gross proceeds of $11,492,701. On November 9, the
Company announced that two major shareholders converted their D-BOX debentures
into an aggregate of 2,550,800 common shares and 1,950,800 warrants pursuant
to the conversion feature of the foregoing debentures. These operations helped
improve the Company's balance sheet: as at December 31, 2007, total assets
were at $13,346,942 compared to $5,528,912 as at March 31, 2007. Long term
debt stood at $19,650 as at December 31, 2007, compared to $742,314 as at
March 31, 2007.

    About D-BOX

    D-BOX Technologies designs and manufactures high-technology motion
systems destined mainly for the entertainment industry. Its unique and
patented technology, D-BOX MOTION CODE(TM), is specifically programmed for
each film, TV program or video game, resulting in motion that is perfectly
synchronized with on-screen action. By forming strong industry alliances,
D-BOX's award-winning motion technology is creating a global standard in the
entertainment world. For more information, please visit www.d-box.com.
    D-BOX(TM) is a registered trademark and D-BOX MOTION CODE(TM) is a
trademark of D-BOX Technologies Inc. Other names are for informational
purposes only and may be trademarks of their respective owners.

    Forward-Looking Statements

    Certain statements included herein, including those that express
management's expectations or estimates of our future performance, constitute
"forward-looking statements" within the meaning of applicable securities laws.
Forward-looking statements are necessarily based upon a number of estimates
and assumptions that, while considered reasonable by management at this time,
are inherently subject to significant business, economic and competitive
uncertainties and contingencies. We caution that such forward-looking
statements involve known and unknown risks, uncertainties and other risks that
may cause our actual financial results, performance, or achievements to be
materially different from our estimated future results, performance or
achievements expressed or implied by those forward-looking statements.
Numerous factors could cause actual results to differ materially from those in
the forward-looking statements, including without limitation, our ability to
achieve increased market acceptance for our product offerings and penetrate
new markets; the existence of undetected errors or similar problems in our
products; our ability to manage our growth; our ability to compete
successfully; potential liabilities; maintaining our intellectual property
rights and litigation involving intellectual property rights; our dependence
on the expertise of our key personnel; and our access to sufficient capital to
fund our future requirements. This list is not exhaustive of the factors that
may affect any of our forward-looking statements. Investors are cautioned not
to put undue reliance on forward-looking statements. All subsequent written
and oral forward-looking statements attributable to D-BOX or persons acting on
our behalf are expressly qualified in their entirety by this notice. We
disclaim any intent or obligation to update publicly these forward-looking
statements, whether as a result of new information, future events or
otherwise. Risks and uncertainties about our business are more fully discussed
in our Annual Report.

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.

    
    D-BOX Technologies Inc.
    UNAUDITED CONSOLIDATED INTERIM BALANCE SHEETS

    As at                                             31-Dec-07    31-Mar-07
                                                   --------------------------
                                                              $            $
    ASSETS
    Current assets
    Cash and cash equivalents                         9,410,909      931,163
    Short-term investments                                    -    1,799,873
    Accounts receivable                               1,381,892      917,559
    Inventories                                       1,629,216    1,226,925
    Prepaid expenses                                     89,092       34,028
    -------------------------------------------------------------------------
                                                     12,511,109    4,909,548
    -------------------------------------------------------------------------
    Property, plant and equipment                       590,363      429,320
    Intangible assets                                   245,470      190,044
    -------------------------------------------------------------------------
                                                     13,346,942    5,528,912
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
    Accounts payable and accrued liabilities          1,155,215    1,168,123
    Current portion of long-term term debt               25,135       15,182
    -------------------------------------------------------------------------
                                                      1,180,350    1,183,305
    Long-term debt                                       19,650      742,317
    -------------------------------------------------------------------------
                                                      1,200,000    1,925,622
    -------------------------------------------------------------------------

    Shareholders' equity
    Share capital                                    23,527,697   12,324,101
    Warrants                                            648,985      517,620
    Contributed surplus                                 623,577      291,716
    Equity component of convertible debentures                -       89,278
    Deficit                                         (12,653,317)  (9,619,425)
    -------------------------------------------------------------------------
                                                     12,146,942    3,603,290
    -------------------------------------------------------------------------
                                                     13,346,942    5,528,912
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    D-BOX Technologies Inc.
    UNAUDITED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS, COMPREHENSIVE
    LOSS AND DEFICIT

                           --------------------------------------------------
                                  THIRD QUARTER             NINE MONTHS
                           --------------------------------------------------
    Third quarter and
     nine-month period
     ended December 31,
     2007                        2007         2006         2007         2006
                           --------------------------------------------------
                                    $            $            $            $
    Revenues                  949,117      875,484    2,900,388    2,967,402
    Cost of goods sold        646,799      539,082    1,815,967    1,663,166
    -------------------------------------------------------------------------
    Gross profit              302,318      336,402    1,084,421    1,304,236
    -------------------------------------------------------------------------

    Expenses and other items
    Selling and marketing     911,439      561,549    2,217,360    1,327,115
    Administrative            446,281      291,327    1,376,203      949,198
    Research and development  208,369      148,913      573,175      440,089
    Financial, net            (12,638)      74,739      (48,425)     246,213
    -------------------------------------------------------------------------
                            1,553,451    1,076,528    4,118,313    2,962,615
    -------------------------------------------------------------------------
    Net loss and
     comprehensive loss    (1,251,133)    (740,126)  (3,033,892)  (1,658,379)

    Deficit, beginning of
     period               (11,402,184)  (8,459,143)  (9,619,425)  (7,540,890)
    -------------------------------------------------------------------------
    Deficit, end of
     period               (12,653,317)  (9,199,269) (12,653,317)  (9,199,269)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Loss per share -
     basic and diluted        (0.0145)     (0.0130)     (0.0383)     (0.0299)
    -------------------------------------------------------------------------

    Weighted average
     number of common
     shares outstanding    87,742,147   57,889,485   79,185,576   55,442,548
    -------------------------------------------------------------------------



    D-BOX Technologies Inc.
    UNAUDITED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

                           --------------------------------------------------
                                  THIRD QUARTER             NINE MONTHS
                           --------------------------------------------------
    Third quarter and nine-
     month period ended
     December 31, 2007           2007         2006         2007         2006
                           --------------------------------------------------
                                    $            $            $            $

    OPERATING ACTIVITIES
    Net loss               (1,251,133)    (740,126)  (3,033,892)  (1,658,379)
    Items not affecting
     cash:
      Amortization of
       property, plant
       and equipment           44,369       30,028      110,655       64,757
      Amortization of
       intangible assets       11,037        6,723       27,514       18,220
      Stock-based
       compensation            24,698        9,264       73,687       58,554
      Accrued interest
       and other non-cash
       interest expense
       on convertible
       debentures               1,958       13,128       19,085       66,699
    -------------------------------------------------------------------------
                           (1,169,071)    (680,983)  (2,802,951)  (1,450,149)
    Net change in non-cash
     working capital items:
      Accounts receivable    (229,780)    (123,002)    (464,333)     (97,052)
      Inventories             (95,891)    (185,615)    (402,291)    (146,881)
      Prepaid expenses          6,681        1,327      (55,064)      (8,069)
      Accounts payable and
       accrued liabilities    (23,647)    (433,795)     (12,908)    (251,833)
    -------------------------------------------------------------------------
    Cash flows relating to
     operating activities  (1,511,708)  (1,422,068)  (3,737,547)  (1,953,984)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Additions to property,
     plant and equipment     (181,735)     (94,701)    (271,698)    (261,822)
    Additions to intangible
     assets                   (47,804)     (43,117)     (82,939)     (74,304)
    Decrease (increase) in
     short-term investments         -   (1,050,000)   1,799,873     (570,319)
    -------------------------------------------------------------------------
    Cash flows relating to
     investing activities    (229,539)  (1,187,818)   1,445,236     (906,445)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Increase in bank
     borrowings                     -       15,000            -       15,000
    Repayment of long-term
     debt                      (6,032)      (3,862)     (17,968)     (48,593)
    Increase in long-term
     debt                           -            -            -       17,400
    Issuance of equity
     securities               174,583    2,452,788   11,697,584    2,452,788
    Equity security issue
     costs                          -      (38,349)    (907,559)     (38,349)
    -------------------------------------------------------------------------
    Cash flows relating to
     financing activities     168,551    2,425,577   10,772,057    2,398,246
    -------------------------------------------------------------------------

    Net change in cash and
     cash equivalents      (1,572,696)    (184,309)   8,479,746     (462,183)
    Cash and cash
     equivalents,
     beginning of period   10,983,605      421,317      931,163      699,191
    -------------------------------------------------------------------------
    Cash and cash
     equivalents, end of
     period                 9,410,909      237,008    9,410,909      237,008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplementary
     information
    Interest paid              18,991      145,842      118,311      160,302
    -------------------------------------------------------------------------
    

    %SEDAR: 00012304EF




For further information:

For further information: Normand Chartrand, Chief Financial Officer,
D-BOX Technologies Inc., (450) 442-3003, ext. 258, nchartrand@d-box.com;
Danielle Ste-Marie, The Equicom Group Inc., (514) 844-6064,
dste-marie@equicomgroup.com

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