Points International Reports Record Fourth Quarter and 2007 Financial Results



    
    Fourth Quarter and Fiscal Year 2007 Financial Highlights:

    -   Record Fourth Quarter Revenue of $14.2 Million, up 293% Year-Over-
        Year
    -   Record Full Year 2007 Revenue of $31.6 Million, up 170% Over 2006
        Revenue
    -   Fourth Quarter Transaction Volume Reached 3.1 Billion Points/Miles, a
        47% Annual Increase
    -   Positive EBITDA(1) of $384,136 - First Full Year of Positive EBITDA

    2008 Business Outlook:

    -   Expects to Post Record Revenue and EBITDA for the First Quarter of
        2008
    -   Reaffirms 2008 Revenue Guidance of $65 - $75 Million
    -   Expect Meaningful and Material Growth in Positive EBITDA Year-Over-
        Year
    -   2007 Successful Launch of GPX - The First Peer-to-Peer Mileage
        Trading Platform - Expected to Contribute to Growth in 2008
    

    TORONTO, March 20 /CNW/ - Points International Ltd., "Points" -
(OTCBB: PTSEF, TSX: PTS) - the world's leading loyalty reward solutions
provider and owner of the Points.com portal - today announced results for the
fourth quarter and full year ended December 31, 2007.
    "2007 was a pivotal year for Points as we nearly tripled revenues and
achieved our first full year of positive EBITDA," said CEO, Rob MacLean. "More
than 10 billion points and miles were transacted over our system during the
year and we began to unlock the value of our platform through a material shift
to principal-based partnerships with leading loyalty programs around the
world. We now have more than 50 partners participating in or deploying 150 of
our products and services, an increase of 31 instances over 2006 and a solid
indicator of market interest. At the end of 2007, 6 of our partners were
principal-based relationships including Delta Airlines, Alaska Airlines,
Icelandair, ATA Airlines, Choice Hotels and British Midland Airways. We also
launched a number of significant new products and services throughout the year
that further integrated Points within the revenue stream of our partners'
loyalty programs while expanding exciting programs that drove traffic to the
consumer side of our business at www.points.com."
    "Our record fourth quarter results demonstrate the material impact of the
first full-quarter effect of the shift in our business model to
principal-based partnerships. During the quarter we also successfully launched
the Global Points Exchange (GPX), the industry's first peer-to-peer mileage
trading platform, and just added Delta Airlines to the five launch partners
already on GPX demonstrating significant program interest in joining the
platform. Looking ahead we plan to continue to close principal-based deals
with new and existing partners, drive more traffic across our system and
expand the number of partners participating in and the functionality of GPX.
2008 is already off to a strong start with the recent additions of JetBlue and
Amtrak, two new principal-based partnerships. Given our momentum we expect to
post record revenue and EBITDA for the first quarter of 2008. We are
reaffirming our full year 2008 guidance that calls for Points to more than
double revenues to a record range of US$65 million to US$75 million and to
report significant EBITDA growth over 2007 levels," concluded Mr. MacLean.

    
    ---------------------
    (1) EBITDA (Earnings (loss) before interest, amortization and foreign
        exchange) is considered by management to be a useful supplemental
        measure of performance. However, EBITDA is not a recognized earnings
        measure under generally accepted accounting principles (GAAP).
    

    Fourth Quarter 2007 Results

    Total revenue was a record $14.2 million for the fourth quarter of 2007,
an increase of 293% over the $3.6 million reported in the fourth quarter of
2006, and up 89% from $7.5 million in the third quarter of 2007. Adjusted for
the weakening of the U.S. dollar versus the fourth quarter of 2006, revenues
would have been $16.4 million, an additional $2.1 million.
    For the fourth quarter of 2007, principal revenue totaled $11.3 million,
an increase of 916% over $1.1 million in the same period last year, and up
133% from $4.8 million in the third quarter of 2007. Commission revenue was
$2.7 million, an increase of 9% over $2.5 million reported in the same period
of last year and up 10% from $2.4 million in the third quarter of 2007.
Interest revenue was $256,000, an increase of 430% over $48,000 reported in
the same period of last year and up 2% from $251,000 in the third quarter of
2007.
    Points reported a net loss for the fourth quarter of 2007 of $935,195, or
$0.01 per share, compared to a net loss of $812,864, or $0.01 per share in the
previous year period, and versus a net loss of $1.0 million or $0.01 per
share, in the third quarter of 2007. Non-cash charges, including foreign
exchange loss, accrued interest, the amortization of property, plant and
equipment, intangible assets, stock option expense and deferred costs,
accounted for $1.3 million of the net loss in the fourth quarter of 2007.
    During the fourth quarter of 2007, Points reported positive EBITDA of
$204,411 compared to an positive EBITDA of $11,875 in the same period of 2006
and versus an EBITDA of $265,498 in the third quarter of 2007. Adjusted for
the weakening of the U.S. dollar versus 2006, EBITDA would have been $757,048,
an additional $552,637.

    
    Fourth Quarter 2007 Business Metrics

    -   Total points/miles transacted during the fourth quarter increased 47%
        versus last year to 3.1 billion, bringing the total cumulative
        points/miles transacted to 34.1 billion
    -   The total number of transactions increased 31% versus last year to
        approximately 330,000

    Private Branded Channels:
    -------------------------
    -   Total points/miles transacted on products distributed through
        Points' partner channels rose 50% to 2.6 billion bringing the
        cumulative total to 30 billion

    Points.com Channel:
    -------------------
    -   Over 532 million points were transacted on Points.com, a 32% increase
        versus 2006
    -   Cumulative registered users on Points.com increased 20% year-over-
        year to 1.8 million
    

    Full Year 2007 Results

    For the twelve months ended December 31, 2007, Points generated total
revenue of $31.6 million, a 170% increase versus the twelve months ended
December 31, 2006. Adjusted for the weakening of the U.S. dollar vs. 2006,
revenues would have been $34.6 million, an additional $3.0 million.
    Principal revenue totaled $20.1 million, an increase of 549% compared to
the twelve months ended December 31, 2006. Commission revenue totaled
$10.8 million, an increase of 29% compared to the twelve months ended
December 31, 2006. Interest revenue totaled $717,000, an increase of 222%
compared to the twelve months ended December 31, 2006.
    Net loss for the twelve months ended December 31, 2007 decreased to
$4.4 million, or $0.04 per share, versus a net loss of $8.2 million, or $0.08
per share in 2006.
    Points reported positive EBITDA of $384,136 for the twelve months ended
December 31, 2007 compared to an EBITDA loss of $3.7 million for the twelve
months ended December 31, 2006. Adjusted for the weakening of the U.S. dollar
vs. 2006, EBITDA would have been $1.5 million, an additional $1.1 million.
    As of December 31, 2007, Points' cash, short term investments and amounts
held by the Company's payment processors was $35 million, up from $28 million
at the end of third quarter of 2007.
    "Points' fourth quarter and fiscal year 2007 financial results would have
been even stronger if not for the ongoing weakening of the U.S. dollar against
the Canadian dollar. Currency effects continue to have a material negative
impact on our revenue and EBITDA results. After a thorough evaluation,
beginning in 2008 we will begin to report our financial results in U.S.
dollars. We believe that this better reflects our business operations, and the
2008 guidance noted in this press release is in U.S. dollars. Additionally,
the Company is currently evaluating a potential shift to a larger exchange,
most likely NASDAQ. We understand the importance of this move to larger
investors and equity analysts," said Anthony Lam, Chief Financial Officer.

    Restatement of Previously Issued Financial Statements

    "As we reported earlier this month, our long-standing auditors recently
merged with Deloitte & Touche LLP and we have been going through an intense
review associated with both this change as well as our first year of
Sarbanes-Oxley compliance. As part of a thorough review of the Company's prior
financial disclosures by management, and an ordinary course review by the US
Securities and Exchange Commission, we are restating our full year 2006
financial statements and revising our quarterly 2007 financial results to give
effect to these changes. In addition to the summary below, attached with this
press release is a detailed disclosure of the impact of the restatement on the
previously reported consolidated balance sheet, and income statement amounts
for the years ended December 31, 2006, and December 31, 2007, and these
restated numbers are used for comparative purposes in this release," concluded
Mr. Lam.

    
    Summary of Restatement Adjustments
    ----------------------------------
    (a) Restatement of Cash and Cash Equivalents, Security Deposits and Funds
        ---------------------------------------------------------------------
        Receivable From Payment Processors:
        -----------------------------------
        Funds receivable from payment processors are amounts collected on
        behalf of the Corporation by payment processors. The funds are held
        for up to three days before being released to the Corporation. As
        such, these amounts do not meet the definition of cash and cash
        equivalents as previously reported and have been moved from cash and
        cash equivalents to funds receivable from payment processors.
        Security deposits are amounts held on a rolling six month basis by
        the Corporation's payment processors that process deposit and credit
        card transactions. Historically, these amounts were recorded as a
        component of cash and cash equivalents, with disclosure in the notes
        to the financial statements.

    (b) Restatement of Public Company Costs:
        ------------------------------------
        In 2000, the Corporation became a public company through a reverse
        take over of its parent company. Costs of $150,000 incurred to effect
        the reverse take over were incorrectly capitalized and included
        within Goodwill. This Goodwill item was subsequently amortized in
        2000 and 2001, resulting in a carrying value of $50,000 at the end of
        2001. As a result of this restatement, the 2006 opening balance for
        Goodwill has been reduced by $50,000 and the 2006 opening Deficit
        increased by the same amount.

        The effect on 2006 opening balance is as follows:

        (Decrease) in goodwill                                     ($150,000)
        Decrease in accumulated amortization of goodwill            $100,000
        Increase in deficit                                        ($ 50,000)

    (c) Restatement of Transition Services Costs in Goodwill:
        -----------------------------------------------------
        Costs of $365,515 and $306,138 incurred in connection with the
        acquisition of the assets of MilePoint, Inc. in 2004 and 2005,
        respectively, were incorrectly added to Goodwill as they did not meet
        the definition of an acquisition cost as defined by CICA Handbook
        Section 1581 ("Business Combinations"). As these were integration and
        transition costs in nature, these costs should have been expensed as
        incurred. The financial statements of 2006 have been restated to
        correct these errors.

        The effect on 2006 opening balance is as follows:

        (Decrease) in goodwill                                     ($671,653)
        Increase in deficit                                        ($671,653)

    (d) Restatement of Upfront Contract Revenue Initiation Fees:
        --------------------------------------------------------
        The Corporation has determined that it has contracts with multiple
        deliverables. As such, the Corporation has applied guidance found in
        Abstract 142 of the Emerging Issues Committee ("EIC-142") of the
        Canadian Institute of Chartered Accountants (CICA) Handbook, "Revenue
        Arrangements with Multiple Deliverables" and determined that, for
        some contracts, there was only one unit of accounting. In
        particular, for contracts which contain ongoing service requirements,
        fees and direct costs for initial set-up have been deferred and
        recognized evenly over the term of the contract. Previously, the
        fees and direct costs had incorrectly been recognized as initial set-
        up occurred. The impact of this correction is included below by
        year. The cumulative net effects of these errors prior to 2006 are
        recognized in the restated consolidated financial statements of 2006.

        The effect is as follows:

                                                     2003-2005          2006
                                                     ---------          ----
        (Decrease) in revenue as previously
         recognized                               $   (460,305) $   (550,986)
        Decrease in costs as previously
         recognized                                    199,499       271,618
                                                  ------------- -------------
        Increase (decrease) in net income         $   (260,806) $   (279,368)

        (Increase) in deferred revenue            $   (460,305) $   (579,634)
        Increase in deferred costs                     199,499       300,266
                                                  ------------- -------------
        Increase in deficit                       $   (260,806) $   (279,368)
    


    Board Composition

    The Company also announced today a change in the composition of its Board
of Directors ("Board"). Points Investments, Inc. - a wholly-owned subsidiary
of IAC/InterActiveCorp - has elected to replace Jason L. Rapp, with Joey
Levin, Senior Vice President, Mergers and Acquisitions and Finance for
IAC/InterActiveCorp as a member of the Points International Board. As the
holder of the Series Two Preferred Share and the Series Four Preferred Share
in the capital of Points International Ltd., Points Investments, Inc. has the
exclusive right to elect up to three directors to the Board of the
corporation.
    "We want to thank Jason for his hard work and dedication," said Stephen
K. Bannon, Chairman of the Board, "And we are looking forward to a long and
productive relationship with Joey."

    Investor Conference Call

    Points' quarterly conference call with Stephen K. Bannon, Chairman, Rob
MacLean, Points CEO, Christopher Barnard, Points President and Anthony Lam,
Points CFO, will be held today at 8:00 a.m. Eastern Time. To participate in
the conference call, investors from the U.S. and Canada should dial (800)
218-0204 ten minutes prior to the scheduled start time. International callers
should dial (303) 262-2131. Points will also offer a live and archived webcast
of the conference call, accessible from the "Investor Relations" section of
the company's Web site at
https://www.points.com/static/corporate/investor_overview.html.

    About Points International Ltd.

    Points International Ltd. is owner and operator of Points.com, the
world's leading reward-program management portal. At Points.com consumers can
Swap, Earn, Buy, Gift, Share and Redeem miles and points from more than 25 of
the world's leading reward programs. Participating programs include American
Airlines AAdvantage(R) program, American Express(R) Membership Rewards(R),
Aeroplan(R), AsiaMiles(TM), British Airways Executive Club, Northwest
WorldPerks(R), Wyndham Hotel Group's TripRewards(R), Delta SkyMiles(R), and
InterContinental Hotels Group's Priority Club(R) Rewards. Redemption partners
include Amazon.com(R) and Starbucks.
    Consumer Website: www.points.com
    Investor Relations: www.pointsinternational.com

    Caution Regarding Forward-Looking Statements

    This press release contains or incorporates forward-looking statements
within the meaning of the United States Private Securities Litigation Reform
Act of 1995, as amended, and forward-looking information within the meaning of
Canadian securities legislation (collectively "forward-looking statements").
All statements, other than statements of historical fact are forward-looking
statements. These forward-looking statements include statements relating to
our guidance for 2008 with respect to revenue and EBITDA, statements relating
to our objectives, strategic plans and business development goals, and may
also include other statements that are predictive in nature or that depend
upon or refer to future events or conditions. Such forward-looking statements
can generally be identified by words such as "will", "may", "expects,"
"anticipates," "intends," "plans," "believes," "estimates" or similar
expressions. In addition, any statements that refer to expectations,
projections or other characterizations of future events or circumstances are
forward-looking statements. These statements are not historical facts but
instead represent only Points' expectations, estimates and projections
regarding future events.
    Although Points believes the expectations reflected in such
forward-looking statements are reasonable, the forward-looking statements are
not guarantees of future performance and are subject to important risks and
uncertainties that are difficult to predict. Certain material assumptions or
estimates are applied in making forward-looking statements, and may not prove
to be correct. Known and unknown factors could cause actual results to differ
materially from those expressed or implied in such statements. Important
factors that could cause actual results to differ materially are referred to
in the body of this news release and also include the risks and uncertainties
discussed herein, the matters set forth under "Risks and Uncertainties" or
"Risk Factors" contained in Points' Annual Information Form and Management's
Discussion and Analysis filed with applicable securities regulators and the
factors detailed in Points' other filings with applicable securities
regulators, including the factors detailed in Points' annual and interim
financial statements and the notes thereto. These documents are available at
www.sedar.com and www.sec.gov. Forward-looking statements are provided in this
press release for the purpose of allowing readers to get a better
understanding of Points' business environment. However, readers are cautioned
that forward-looking statements are not guarantees of future performance and
that it may not be appropriate to use such forward-looking statements for any
other purpose.
    The forward-looking statements contained in this press release are made
as at the date of this release and, accordingly, are subject to change after
such date. Except as required by law, Points does not undertake any obligation
to update or revise any forward-looking statements made or incorporated in
this press release, whether as a result of new information, future events or
otherwise. All dollar amounts are in Canadian dollars unless otherwise
specified.



    
                          POINTS INTERNATIONAL LTD.
                    UNAUDITED CONSOLIDATED BALANCE SHEETS
                       (Expressed in Canadian dollars)

                                                                    Restated
                                                   December 31,  December 31,
    AS AT                                                 2007          2006
    -------------------------------------------------------------------------

                                   ASSETS
                                   ------
    CURRENT
      Cash and cash equivalents                   $ 21,148,331  $ 19,758,490
      Funds receivable from payment processors       5,034,223     3,710,341
      Short-term investments                         7,272,200             -
      Security deposits                              1,533,073     1,220,209
      Accounts receivable                            3,293,291     2,375,966
      Current portion of future income tax asset       590,000             -
      Current portion of deferred costs                274,327       283,649
      Prepaids and sundry assets                     1,735,538     2,059,212
                                                  ------------- -------------
                                                    40,880,983    29,407,867
                                                  ------------- -------------
    PROPERTY AND EQUIPMENT                           1,981,463     2,934,239
    INTANGIBLE ASSETS                                1,384,080     1,986,433
    GOODWILL                                         4,129,069     4,129,069
    DEFERRED COSTS                                     474,973     1,383,446
    FUTURE INCOME TAX ASSET                                  -       590,000
                                                  ------------- -------------
                                                     7,969,585    11,023,187
                                                  ------------- -------------
                                                  $ 48,850,568  $ 40,431,054
                                                  ------------- -------------
                                                  ------------- -------------

                                 LIABILITIES
                                 -----------
    CURRENT
      Accounts payable and accrued liabilities    $  3,425,150  $  3,342,869
      Current portion of deferred revenue            1,600,194       776,251
      Payable to loyalty program partners           30,195,664    21,000,403
      Current portion of loan payable                    5,820        33,515
                                                  ------------- -------------
                                                    35,226,828    25,153,038

    DEFERRED REVENUE                                   380,047       422,476
    LOAN PAYABLE                                             -         5,289
    CONVERTIBLE PREFERRED SHARES                    20,306,850    19,506,279
                                                  ------------- -------------
                                                    55,913,725    45,087,082
                                                  ------------- -------------

                           SHAREHOLDERS' DEFICIENCY
                           ------------------------
    CAPITAL STOCK                                   45,994,159    43,051,048
    WARRANTS                                            30,668       186,688
    CONTRIBUTED SURPLUS                              7,945,633     8,703,518
    DEFICIT                                        (61,033,617)  (56,597,282)
                                                  ------------- -------------
                                                    (7,063,157)   (4,656,028)
                                                  ------------- -------------
                                                  $ 48,850,568  $ 40,431,054
                                                  ------------- -------------
                                                  ------------- -------------



                          POINTS INTERNATIONAL LTD.
    UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS, COMPREHENSIVE LOSS AND
                                   DEFICIT
                       (Expressed in Canadian dollars)

    FOR THE THREE MONTHS ENDED DECEMBER 31                2007          2006
                                                                    Restated
    -------------------------------------------------------------------------

    REVENUE
      Principal                                   $ 11,288,359  $  1,110,988
      Commission                                     2,690,395     2,459,788
      Interest                                         255,759        48,273
                                                  ------------- -------------
                                                    14,234,513     3,619,049
                                                  ------------- -------------

    GENERAL AND ADMINISTRATION EXPENSES
      Direct cost of principal revenue               9,327,963             -
      Employment costs                               3,022,793     1,775,916
      Sales commissions and related expenses           379,022       289,440
      Marketing and communications                     343,970       722,077
      Technology services                              184,400       209,012
      Amortization of property and equipment           472,696       428,223
      Amortization of intangible assets                154,384       210,257
      Amortization of deferred costs                   118,199       132,926
      Foreign exchange loss                             92,828      (217,379)
      Other                                            771,954       610,729
                                                  ------------- -------------
                                                    14,868,209     4,161,201
                                                  ------------- -------------

    OPERATING LOSS - before undernoted                (633,696)     (542,152)
                                                  ------------- -------------

    OTHER EXPENSES
      Interest on preferred shares                     292,182       277,456
      Interest and other charges                         9,317        (6,744)
                                                  ------------- -------------
                                                       301,499       270,712
                                                  ------------- -------------

    NET LOSS AND COMPREHENSIVE LOSS               $   (935,195) $   (812,864)
                                                  ------------- -------------
    LOSS PER SHARE                                      ($0.01)       ($0.01)
                                                  ------------- -------------
                                                  ------------- -------------

    DEFICIT - Beginning of period
      As previously reported                      $(58,974,401) $(54,718,272)
      Effect of restatement of prior years          (1,124,021)   (1,066,146)
                                                  ------------- -------------
      As restated                                  (60,098,422)  (55,784,418)

      NET LOSS                                        (935,195)     (812,864)
                                                  ------------- -------------

    DEFICIT - End of year                         $(61,033,617) $(56,597,282)
                                                  ------------- -------------
                                                  ------------- -------------



                          POINTS INTERNATIONAL LTD.
    UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS, COMPREHENSIVE LOSS AND
                                   DEFICIT
                       (Expressed in Canadian dollars)

                                                                    Restated
    FOR THE YEARS ENDED DECEMBER 31                       2007          2006
    -------------------------------------------------------------------------

    REVENUE
      Principal                                   $ 20,109,876  $  3,099,182
      Commission                                    10,780,678     8,373,966
      Interest                                         717,146       222,555
                                                  ------------- -------------
                                                    31,607,700    11,695,703
                                                  ------------- -------------

    GENERAL AND ADMINISTRATION EXPENSES
      Direct cost of principal revenue              14,585,813             -
      Employment costs                               9,291,645     8,157,264
      Sales commissions and related expenses         1,618,877       818,187
      Marketing and communications                   1,650,075     2,607,609
      Technology services                              918,140     1,055,967
      Amortization of property and equipment         1,817,783     1,702,535
      Amortization of intangible assets                760,495       890,346
      Amortization of deferred costs                   472,794       531,699
      Foreign exchange loss                            547,186         9,319
      Other                                          3,159,014     2,739,527
                                                  ------------- -------------
                                                    34,821,822    18,512,453
                                                  ------------- -------------

    OPERATING LOSS - before undernoted              (3,214,122)   (6,816,750)
                                                  ------------- -------------

    OTHER EXPENSES
      Interest on preferred shares                   1,168,728     1,109,823
      Interest and other charges                        53,485        64,737
      Interest on convertible debentures                     -       194,753
                                                  ------------- -------------
                                                     1,222,213     1,369,313
                                                  ------------- -------------

    NET LOSS AND COMPREHENSIVE LOSS               $ (4,436,335) $ (8,186,063)
                                                  ------------- -------------
    LOSS PER SHARE                                      ($0.04)       ($0.08)
                                                  ------------- -------------
                                                  ------------- -------------

    DEFICIT - Beginning of year
      As previously reported                      $(55,335,455) $(47,428,760)
      Effect of restatement of prior years          (1,261,827)     (982,459)
                                                  ------------- -------------
      As restated                                  (56,597,282)  (48,411,219)

      NET LOSS                                      (4,436,335)   (8,186,063)
                                                  ------------- -------------

    DEFICIT - End of year                         $(61,033,617) $(56,597,282)
                                                  ------------- -------------
                                                  ------------- -------------



                          POINTS INTERNATIONAL LTD.
                 UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF
                   OPERATIONS,COMPREHENSIVELOSS AND DEFICIT
                       (Expressed in Canadian dollars)
                                 AS RESTATED

    FOR THE THREE         MARCH 31,      JUNE 30, SEPTEMBER 30,  DECEMBER 31,
     MONTHS ENDED             2007          2007          2007          2007
    -------------------------------------------------------------------------
    REVENUE
      Principal       $  1,996,576  $  1,982,533  $  4,842,408  $ 11,288,359
      Commission         3,188,136     2,463,600     2,438,547     2,690,395
      Interest              42,975       167,875       250,537       255,759
                      ------------- ------------- ------------- -------------
                         5,227,687     4,614,008     7,531,492    14,234,513

    GENERAL AND
     ADMINISTRATION
     EXPENSES
      Direct cost of
       principal
       revenue             977,033       991,414     3,289,403     9,327,963
      Employment costs   2,152,604     2,042,073     2,074,175     3,022,793
      Sales commissions
       and related
       expenses            466,442       373,578       399,835       379,022
      Marketing and
       communications      348,673       410,614       546,818       343,970
      Technology
       services            279,550       217,153       237,037       184,400
      Amortization of
       property and
       equipment           460,451       442,011       442,625       472,696
      Amortization of
       intangible assets   202,037       202,037       202,037       154,384
      Amortization of
       deferred costs      118,199       118,198       118,198       118,199
      Foreign exchange
       loss                  7,593       202,553       244,212        92,828
      Other                709,905       958,429       718,726       771,954
                      ------------- ------------- ------------- -------------
                         5,722,487     5,958,060     8,273,066    14,868,209

    OPERATING LOSS -
     before undernoted    (494,800)   (1,344,052)     (741,574)     (633,696)
                      ------------- ------------- ------------- -------------

    OTHER EXPENSES
      Interest on
       preferred shares    292,182       292,182       292,182       292,182
      Interest and other
       charges              38,004        30,646       (24,482)        9,317
                      ------------- ------------- ------------- -------------
                           330,186       322,828       267,700       301,499
                      ------------- ------------- ------------- -------------

    NET LOSS AND
     COMPREHENSIVE
     LOSS             $   (824,896) $ (1,666,880) $ (1,009,274) $   (935,195)
                      ------------- ------------- ------------- -------------

    LOSS PER SHARE          ($0.01)       ($0.01)       ($0.01)       ($0.01)
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------

    DEFICIT - Beginning
     of period
      As previously
       reported       $(55,335,455) $(56,146,503) $(57,794,510) $(58,974,401)
      Effect of
       restatement of
       prior periods    (1,261,827)   (1,275,765)   (1,294,638)   (1,124,021)
                      ------------- ------------- ------------- -------------
      As restated      (56,597,282)  (57,422,268)  (59,089,148)  (60,098,422)
      NET LOSS            (824,986)   (1,666,880)   (1,009,274)     (935,195)
                      ------------- ------------- ------------- -------------
    DEFICIT - Beginning
     of period        $(57,422,268) $(59,089,148) $(60,098,422) $(61,033,617)



    RESTATEMENT OF 2006 FINANCIAL STATEMENTS

    The Corporation is restating its previously reported consolidated
financial statements for the fiscal year ended December 31, 2006. The
following table summarizes the impact of the restatement adjustment on the
previously reported consolidated balance sheet and income statement for the
year ended December 31, 2006.

                                    Affecting
                                     periods
                          2006        prior       2006              2006
                       As Reported   to 2006   Restatement  Ref  As Restated
                      -------------------------------------------------------

    Balance Sheet Items
    -------------------
    Cash and cash
     equivalents      $ 24,689,040  $       -  $(4,930,550)  a  $ 19,758,490
    Security deposits            -          -    1,220,209   a     1,220,209
    Funds receivable
     from payment
     processor                   -          -    3,710,341   a     3,710,341
    Current portion of
     deferred costs              -    107,053      176,596   d       283,649
                                    -----------------------
    Current assets      29,124,218    107,053      176,596        29,407,867
                                    -----------------------

    Goodwill
    --------
      Public company
       costs                          (50,000)               b
      Transition
       services costs                (671,653)           -   c
    Goodwill             4,850,722   (721,653)           -         4,129,069
    Defered costs        1,167,330     92,446      123,670   d     1,383,446
    Total assets        40,652,942   (522,154)     300,266        40,431,054

    Current portion of
     deferred revenue      158,788    222,048      395,415   d       776,251
    Deferred revenue             -    238,257      184,219   d       422,476
                                    -----------------------
    Total liabilities   44,047,143    460,305      579,634        45,087,082
                                    -----------------------

                                    -----------------------     -------------
    Deficit            (55,335,455)  (982,459)    (279,368)       (1,261,827)
                                    -----------------------     -------------

    Deficit - restated                                           (56,597,282)

    Liabilities and
     Shareholders'
     Deficiency       $ 40,652,942  $(522,154) $   300,266      $ 40,431,054
                      -------------------------------------------------------


                                     2006         2006               2006
                                  As Reported  Restatement  Ref  As Restated
                                 --------------------------------------------
    Income Statement Items
    ----------------------
    Total revenue                $ 12,246,689  $  (550,986)  d  $ 11,695,703

    Sales commission and related
     expenses                         897,401      (79,214)  d       818,187
    Employment costs                8,378,316     (221,052)  d     8,157,264
    Foreign exchange loss (gain)      (19,329)      28,648   d         9,319
                                 --------------------------------------------
    Net loss                     $ (7,906,695) $  (279,368)     $ (8,186,063)
                                 --------------------------------------------
    Loss per share                     ($0.07)      ($0.01)           ($0.08)
                                 --------------------------------------------



    The summarized 2006 restatement adjustments set out above are a result of
the specific restatement adjustments as follows:

    (a) Restatement of Cash and Cash, Security Deposits and Funds Receivable
        --------------------------------------------------------------------
        From Payment Processors:
        ------------------------
        Funds receivable from payment processors are amounts collected on
        behalf of the Corporation by payment processors. The funds are held
        for up to three days before being released to the Corporation. As
        such, these amounts do not meet the definition of cash and cash
        equivalents as previously reported and have been moved from cash and
        cash equivalents to funds receivable from payment processors.
        Security deposits are amounts held on a rolling six month basis by
        the Corporation's payment processors that process deposit and credit
        card transactions. Historically, these amounts were recorded as a
        component of cash and cash equivalents, with disclosure in the notes
        to the financial statements.

    (b) Restatement of Public Company Costs:
        ------------------------------------
        In 2000, the Corporation became a public company through a reverse
        take over of its parent company. Costs of $150,000 incurred to effect
        the reverse take over were incorrectly capitalized and included
        within Goodwill. This Goodwill item was subsequently amortized in
        2000 and 2001, resulting in a carrying value of $50,000 at the end of
        2001. As a result of this restatement, the 2006 opening balance for
        Goodwill has been reduced by $50,000 and the 2006 opening Deficit
        increased by the same amount.

        The effect on 2006 opening balance is as follows:

        (Decrease) in goodwill                                     ($150,000)
        Decrease in accumulated amortization of goodwill            $100,000
        Increase in deficit                                        ($ 50,000)


    (c) Restatement of Transition Services Costs in Goodwill:
        -----------------------------------------------------
        Costs of $365,515 and $306,138 incurred in connection with the
        acquisition of the assets of MilePoint, Inc. in 2004 and 2005,
        respectively, were incorrectly added to goodwill as they did not meet
        the definition of an acquisition cost as defined by CICA Handbook
        Section 1581 ("Business Combinations"). As these were integration and
        transition costs in nature, these costs should have been expensed as
        incurred. The financial statements of 2006 have been restated to
        correct these errors.

        The effect on 2006 opening balance is as follows:

        (Decrease) in goodwill                                     ($671,653)
        Increase in deficit                                        ($671,653)

    (d) Restatement of Upfront Contract Revenue Initiation Fees:
        --------------------------------------------------------
        The Corporation has determined that it has contracts with multiple
        deliverables. As such, the Corporation has applied guidance found in
        Abstract 142 of the Emerging Issues Committee ("EIC-142") of the
        Canadian Institute of Chartered Accountants (CICA) Handbook, "Revenue
        Arrangements with Multiple Deliverables" and determined that, for
        some contracts, there was only one unit of accounting. In particular,
        for contracts which contain ongoing service requirements, fees and
        direct costs for initial set-up have been deferred and recognized
        evenly over the term of the contract. Previously, the fees and direct
        costs had incorrectly been recognized as initial set-up occurred. The
        impact of this correction is included below by year. The cumulative
        net effects of these errors prior to 2006 are recognized in the
        restated consolidated financial statements of 2006.

        The effect is as follows:

                                                     2003-2005          2006
                                                     ---------          ----
        (Decrease) in revenue as previously
         recognized                               $   (460,305) $   (550,986)
        Decrease in costs as previously recognized     199,499       271,618
                                                  ------------- -------------
        Increase (decrease) in net income         $   (260,806) $   (279,368)

        (Increase) in deferred revenue            $   (460,305) $   (579,634)
        Increase in deferred costs                     199,499       300,266
                                                  ------------- -------------
        Increase in deficit                       $   (260,806) $   (279,368)
    





For further information:

For further information: Anthony Lam, Chief Financial Officer, Points
International Ltd., (416) 596-6382, anthony.lam@points.com; Alex Wellins or
Brinlea Johnson, The Blueshirt Group, (415) 217-7722, alex@blueshirtgroup.com,
brinlea@blueshirtgroup.com

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POINTS INTERNATIONAL LTD.

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