HDX Announces Results for 3rd Quarter 2007



    TORONTO, Nov. 15 /CNW/ - Hosted Data Transaction Solutions Inc. ("HDX")
announced today its financial results for the third quarter ended September
30, 2007. HDX revenue was up due to acquisition of the QSR Division of Howell
Data Systems Inc. ("QSR"). Importantly, the Company's working capital position
was up significantly to over $3.0 million. The working capital position does
not include $1.88 million from the rights offering completed as a subsequent
event on October 12, 2007.
    HDX (formerly Dexit Inc.) is listed on the TSX under the symbol HDX.
    For the three month period ended September 30, 2007, revenue was
$613,709, compared to $134,348 for the comparable three month period in 2006. 
For the nine  month period ended September 30, 2007, revenue was $1,750,359,
compared to $1,004,066 for the comparable nine month period in 2006. On August
3, HDX completed the acquisition of QSR and consequently recognized less than
two months of revenue and earnings from QSR. HDX will recognize the QSR
revenue and expenses for the full three-month period commencing in the fourth
quarter of 2007.
    Operating expenses for the three month period ended September 30, 2007
decreased by 59 percent to $652,908 from $1,592,243 in the comparable three
month period in 2006. The decrease in operating expenses was due to the
continuing effect of extensive cost cutting measures made in previous
quarters.
    Net loss for the three month period ended September 30, 2007 was $475,284
or $0.02 per share, compared to a net loss of $1,197,189, or $0.12 per share
in the three month period ended September 30, 2006. Net loss for the nine
month period ended September 30, 2007 was $376,259 or $0.03 per share,
compared to a net loss of $5,685,800, or $0.56 per share in the nine month
period ended September 30, 2006. This significant turnaround is attributable
primarily to the continued cost rationalization and operational focus which
the Company has imposed over the last year and particularly over the last ten
months under the leadership of Paul Howell as President and Chief Executive
Officer, as well as the QSR acquisition which generated positive EBITDA for
the Company.
    The number of shares outstanding as at September 30, 2007 was 24,132,687.

    Business Highlights:

    The main highlight of the second quarter of 2007 is the completion of the
QSR acquisition, which is a profitable business and a key pillar to HDX growth
strategy. The Company intends to utilize this acquisition to be the platform
upon which it will grow HDX both organically and via additional acquisitions
that are accretive to the Company. The Company also raised $5.43 million by
way of a private placement during the quarter to fund the $4 million cash
component of the QSR purchase price and provide additional working capital to
the Company.
    In conjunction with the completion of the QSR acquisition, the Company
also changed its name to Hosted Data Transaction Solutions Inc. and started
trading under a new ticker symbol "HDX".
    Subsequent to the quarter, on October 12, the Company completed a rights
offering raising gross proceeds of $1.88 million, resulting in the issuance of
2,355,006 Common Shares and 1,177,499 warrants.
    Also subsequent to the quarter, on November 14, HDX announced it had
entered into a letter of intent to acquire Sabrepoint Inc. and Sabrepoint
Services Inc. ("Sabrepoint"), a point-of-sale technology company, for
$1,250,000 subject to closing adjustments. The purchase price will be
satisfied by the payment of $850,000 in cash and by the issuance of 400,000
HDX common shares. The transaction is expected to close on December 15, 2007
and is subject to completion of due diligence by HDX, customary closing
conditions, receipt of all necessary regulatory approvals and the negotiation
and execution of a definitive purchase and sale agreement. Sabrepoint,
established in 1992, is a profitable Mississauga based point-of-sale
technology company with annual revenue of approximately $2.5 Million.
Specializing in solutions for the quick service restaurant and fine dining
industry, Sabrepoint has fifteen employees and provides systems and services
to hundreds of customers including Tim Hortons, Copps Coliseum, Sodexho, and
Tony Romas.
    Additional information on HDX third quarter 2007 financial results will
be available in the financial reports filed by the Company with Sedar at
www.sedar.com and posted to the Investor Relations section of the Company's
website at www.dexit.com.

    About the Company

    Hosted Data Transaction Solutions Inc. is in the business of managing
merchant transactions with consumers and facilitating payment. HDX develops
and deploys touch screen POS system software and associated enterprise
management tools and has developed and deployed numerous POS applications. HDX
also provides system hardware integration services, merchant staff training,
system installation services, and post sale software and hardware support
services.
    Leading edge technology also includes customer self serve kiosks and
"line buster" mobile point of sale terminals. These products have been
designed to dramatically enhance customer throughput and drastically reduce
customer queues. These technologies are especially effective in high foot
traffic environments that have limited cash register counter space, limited
retail square footage, and the absence of a drive through.
    HDX pioneered an "instead of cash"(R) electronic based payment
facilitation service. The Dexit(R) Service can be private branded for a
specific merchant and enables customers to pay for items quickly and
conveniently with the tap of a RFID (radio frequency identification) tag
linked to a pre-paid account. This Dexit(R) Service payment solution is
especially well suited for corporate and institutional cafeteria environments
where hundreds of customers purchase and pay for meals in compressed periods
throughout the business day.

    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 Dexit's 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 Annual Information Form filed on April 2, 2007 with the
regulatory authorities. Dexit 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.

    (R) Registered trade-mark of Dexit Inc.


    

    DEXIT INC.
    Balance Sheets
    -------------------------------------------------------------------------
                                                   September 30, December 31,
                                                       2007         2006
                                                  ------------- -------------
                                                    (unaudited)   (audited)
    ASSETS

    CURRENT
      Cash and cash equivalents                   $  2,369,396  $  3,041,017
      Restricted cash                                  238,254       253,049
      Accounts receivable                            1,424,986       101,975
      Miscellaneous receivables                         34,002        53,740
      Inventory                                        125,405        57,099
      Prepaid expenses and other assets                117,575       137,417
    -------------------------------------------------------------------------
                                                     4,309,618     3,644,297

    EQUIPMENT                                           53,189             -
    INTANGIBLE ASSETS                                3,938,250             -
    GOODWILL                                         4,338,478       159,579
    -------------------------------------------------------------------------


                                                  $ 12,639,535  $  3,803,876
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    CURRENT
      Accounts payable and accrued charges        $    523,515  $  1,441,081
      Customer liabilities                             202,672       227,503
      Current portion of obligation under
       capital leases                                    1,434         5,593
      Current portion of technology support repayment
       obligation                                            -         7,699
      Lease inducement                                 118,460       234,171
      Current portion of vehicle loans                   5,413             -
      Deferred revenue                                 421,387           409
    -------------------------------------------------------------------------
                                                     1,272,881     1,916,456

    VEHICLE LOANS                                       22,789             -

    -------------------------------------------------------------------------
                                                     1,295,670     1,916,456
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY

    SHARE CAPITAL                                   41,566,814    32,840,413

    CONTRIBUTED SURPLUS                              3,404,303     3,251,993

    WARRANTS                                         1,192,396       238,403

    DEFICIT                                        (34,819,648)  (34,443,389)
    -------------------------------------------------------------------------
                                                    11,343,865     1,887,420
    -------------------------------------------------------------------------
                                                  $ 12,639,535  $  3,803,876
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------




    DEXIT INC.
    Statements of Operations and Deficit
    (unaudited)

                           Three months ended           Nine months ended
                              September 30,               September 30,
                      --------------------------- ---------------------------
                           2007          2006          2007          2006
                      ------------- ------------- ------------- -------------

    REVENUE           $    613,709  $    134,348  $  1,750,359  $  1,004,066

    COST OF SALES          360,900       198,030       379,306       225,388
    -------------------------------------------------------------------------
    GROSS MARGIN           252,809       (63,682)    1,371,053       778,678
    -------------------------------------------------------------------------

    OPERATING EXPENSES
      Technology           127,138       447,812       421,592     1,582,696
      Operations and
       support             107,920       401,848       452,895     1,980,033
      Sales and marketing   44,182       142,601        28,666       957,560
      General and
       administrative      371,336       551,680       480,168     2,579,519
      Stock-based
       compensation          2,333        48,302       276,999       420,748
    -------------------------------------------------------------------------
                           652,908     1,592,243     1,660,319     7,520,556
    -------------------------------------------------------------------------

    INCOME (LOSS)
     BEFORE THE
     UNDERNOTED           (400,099)   (1,655,925)     (289,266)   (6,741,878)
    -------------------------------------------------------------------------

    OTHER EXPENSES
     (INCOME)
      Interest and
       exchange loss         2,232      (493,012)        2,975      (485,019)
      Interest and
       other income        (20,863)      (62,028)      (94,316)     (181,931)
      Adjustment to
       fair value
       of the
       technology
       support
       repayment
       obligation                -             -        (7,617)     (678,332)
      Amortization          93,816        96,304       185,951       289,204
    -------------------------------------------------------------------------
                            75,185      (458,736)       86,993    (1,056,078)
    -------------------------------------------------------------------------

    NET INCOME (LOSS)     (475,284)   (1,197,189)     (376,259)   (5,685,800)

    DEFICIT, BEGINNING
     OF PERIOD         (34,344,364)  (31,064,202)  (34,443,389)  (26,575,591)
    -------------------------------------------------------------------------
    DEFICIT, END
     OF PERIOD        $(34,819,648) $(32,261,391) $(34,819,648) $(32,261,391)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LOSS PER SHARE    $      (0.02) $      (0.12) $      (0.03) $      (0.56)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    WEIGHTED AVERAGE
     NUMBER OF
     COMMON SHARES
     (in 000's)             19,766        10,141        14,700        10,124
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    DEXIT INC.
    Statements of Cash Flows
    (unaudited)
    -------------------------------------------------------------------------

                           Three months ended          Nine months ended
                              September 30,               September 30,
                      --------------------------- ---------------------------
                           2007          2006          2007          2006
                      ------------- ------------- ------------- -------------

    NET INFLOW
     (OUTFLOW) OF
     CASH RELATED
     TO THE FOLLOWING
     ACTIVITIES

    OPERATING
    Net income
     (loss)           $   (475,284) $ (1,197,189) $   (376,259) $ (5,685,800)
    Items not
     affecting cash
      Amortization          93,816        96,304       185,951       289,204
      Stock-based
       compensation
       expense               2,333        49,012       276,999       424,535
      (Gain) loss on
       disposal of
       equipment               411          (238)          475          (238)
      Accretion of
       interest on
       the technology
       support
       repayment
       obligation                -           273             -        33,722
      Accretion of
       interest on
       the note payable          -        18,588             -        58,601
      Adjustment to
       fair value of
       the technology
       support
       repayment
       obligation                -             -        (7,617)     (678,332)
      Adjustment to
       fair value of
       the note payable          -      (512,074)            -      (578,251)
    -------------------------------------------------------------------------
                          (378,724)   (1,545,324)       79,549    (6,137,269)
    Changes in non-
     cash operating
     items                (229,846)       12,782    (2,228,488)    1,147,181
    -------------------------------------------------------------------------
                          (608,570)   (1,532,542)   (2,148,939)   (4,990,088)
    -------------------------------------------------------------------------

    FINANCING
      Proceeds from
       issuance of
       common shares     4,525,460         6,280     4,708,987        42,724
      Proceeds from
       issuance of
       warrants            955,150             -       955,150             -
      Issuance costs
       of common
       shares and
       warrants           (413,427)            -      (413,427)            -
      Issuance of
       shares for
       services            304,998             -             -             -
      Repayment of
       obligation
       under capital
       lease                (1,340)       (1,332)       (4,049)       (3,938)
      Repayment of
       technology
       support
       repayment
       obligation                -          (409)         (180)     (168,595)
      Repayment of
       note payable              -       (17,900)            -       (53,700)
    -------------------------------------------------------------------------
                         5,370,841       (13,361)    5,551,479      (183,509)
    -------------------------------------------------------------------------

    INVESTING
      Maturity of
       (investment in)
       short term
       investments               -       985,435             -     7,961,335
      Acquisition
       of QSR assets    (4,089,344)            -    (4,089,344)
      Disposal
       (acquisition)
       of equipment          4,207         6,154        15,183        (1,694)
    -------------------------------------------------------------------------
                        (4,085,137)      991,589    (4,074,161)    7,959,641
    -------------------------------------------------------------------------

    NET CASH
     INFLOW (OUTFLOW)      677,134      (554,314)     (671,621)    2,786,043

    CASH AND CASH
     EQUIVALENTS,
     BEGINNING OF
     PERIOD              1,692,262     4,291,092     3,041,017       950,735
    -------------------------------------------------------------------------
    CASH AND CASH
     EQUIVALENTS,
     END OF PERIOD    $  2,369,396  $  3,736,778  $  2,369,396  $  3,736,778
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    FOR THE PURPOSE
     OF THIS STATEMENT,
     CASH AND CASH
     EQUIVALENTS
     COMPRISE THE
     FOLLOWING
      Cash            $    291,279  $    342,640  $    291,279  $    342,640
      Cash
       equivalents
       (investments
       less than
       3 months)         2,078,117     3,394,138     2,078,117     3,394,138
    -------------------------------------------------------------------------
                      $  2,369,396  $  3,736,778  $  2,369,396  $  3,736,778
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    SUPPLEMENTAL CASH
     FLOW INFORMATION
      Interest paid   $        102  $        112  $        248  $        498
      Interest
       received       $     19,883  $     52,535  $     65,860  $    271,530

    





For further information:

For further information: Paul Howell, President/CEO, Hosted Data
Transaction Solutions Inc. (HDX), (416) 703-6462, extension 263

Organization Profile

HOSTED DATA TRANSACTION SOLUTIONS INC.

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