VANCOUVER, CANADA — (Marketwire) — 11/28/12 — Versatile Systems Inc. (TSX VENTURE: VV) announces its results for the fourth quarter and the 2012 fiscal year.
Revenue for the three months ended June 30, 2012 was $8,832,150 generating a gross profit of $1,942,201 or 22.0% of sales compared to $10,180,289 generating a gross profit of $2,381,728 or 23.4% of sales for the same quarter last year. The Loss from Operations for the quarter amounted to $390,775 compared to $302,775 for the same quarter last year. As a result of the performance of the U.S. Eastern operations, management determined that the goodwill related to the original acquisition of Perfect Order was impaired. Further a provision should also be recorded against the Deferred income tax assets for the U.S. operations. Consequently, Versatile Systems Inc. (“Versatile” or “the Company”) recorded non-cash expenses of $7,195,380 for the Goodwill impairment and a write-down of Deferred income taxes in the amount of $6,319,821. The Company also recorded $105,875 for the equity loss relating to the Investment in Equus. As a result the Net Loss for the quarter amounted to $14,075,239 ($0.09 per share) compared to the Net Loss of $438,131 ($0.00 per share) for the same period last year.
Highlights for the quarter included:
The research and development expense for the quarter amounted to $208,356 compared to $210,996 for the same quarter last year. During the current quarter, the Company incurred $111,102 for research and development activities related to an iPad application for Mobiquity Sell, Mobiquity Route and $54,546 primarily related to Smart Sign.
Revenue for the year ended June 30, 2012 was $39,501,388 generating a gross profit of $8,020,245 or 20.3% of sales compared to $45,903,472 generating a gross profit of $10,129,378 or 22.1% of sales for the same period last year. The Loss from Operations for the year amounted to $1,092,841 compared to $68,550 for the previous year. As a result of the performance of the U.S. Eastern operations, management determined that the goodwill related to the original acquisition of Perfect Order was impaired. Further a provision should also be recorded against the Deferred income tax assets for the U.S. operations. Consequently, the Company recorded non-cash items of $7,195,380 for the Goodwill impairment and a write-down of Deferred income tax assets in the amount of $6,120,189. The Company also recorded $220,412 for the equity loss relating to the Investment in Equus. As a result the Net Loss for the period amounted to $14,717,158 ($0.09 per share) compared to Net Loss of $255,770 ($0.00 per share) for the same period last year.
The Company adopted IFRS in the first quarter of the current fiscal year. The Company has applied the transitional exceptions and exemptions to full retroactive application of IFRS in its preparation of an opening IFRS consolidated statement of financial position at July 1, 2010. Further details of the conversion to IFRS are provided in Management-s Discussion and Analysis and in the Notes to the Company-s audited Consolidated Financial Statements for the year ended June 30, 2012.
The Company has a 9.2% interest in Equus Total Return, Inc. (Equus), which is a public company trading on the NYSE under the symbol EQS. The Company is deemed to exert significant influence by virtue of having four Board members in common as well as a senior executive in common. Significant influence was reached when the four directors were elected to the Equus Board in May 2010 and the senior executive was appointed in June 2010.
Equus applies generally accepted accounting principles in the United States (“US GAAP”) and is not required to consolidate portfolio company investments, including those in which Equus has a controlling interest. However, under IFRS Equus is required to consolidate investments in which it has a controlling interest and equity account for those investments Equus significantly influenced. The Company prepared consolidated financial statements for Equus as at June 30, 2012 in accordance with IFRS. The Company is unable to obtain information for dates prior to June 30, 2012 that would allow the preparation of financial information for Equus that fully reflect the impact of these differences between US GAAP and IFRS. As a result, Versatile Systems Inc. was unable to determine whether any adjustments were necessary to the carrying value of its investment in Equus as at June 30, 2011 and July 1, 2010 or the equity method income (loss) for the years ended June 30, 2012 and 2011.
As a result of the foregoing the Company-s auditors could not issue an unqualified Auditors Report to accompany the Company-s June 30, 2012 consolidated financial statements. As applicable legislation does not permit such a qualification, the Company had to seek exemptive relief under National Instrument 52-107 from the British Columbia Securities Commission and the Ontario Securities Commission (collectively “the Regulators”). The Regulators granted this relief with a Decision dated November 20, 2012, which permits the Company-s auditors to issue their Auditors Report with a qualified opinion. The Decision also permits the Company-s auditors to qualify their Auditors Report to accompany the Company-s June 30, 2013 consolidated financial statements is so far as those statements relate to comparative information for the year ended June 30, 2012.
About Versatile
Versatile provides business solutions that enable companies to improve sales, marketing and distribution of their products. Versatile also provides information technology services for the implementation, maintenance and security of mission-critical computer environments. Versatile has the ability to architect solutions involving both proprietary and third party components. For more information: .
Forward-Looking Statements
This document may contain forward-looking statements relating to Versatile-s operations or to the environment in which it operates, which are based on Versatile-s operations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict or are beyond Versatile-s control. A number of important factors including those set forth in other public filings could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. Consequently, readers should not place any undue reliance on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they are made. Versatile disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. All amounts are expressed in U.S. dollars unless otherwise stated. (c) 2012 Versatile Systems Inc. All rights reserved.
Contacts:
Versatile Systems Inc.
John Hardy
Chairman and CEO
1-800-262-1633
International: 001-206-979-6760
Versatile Systems Inc.
Fraser Atkinson
CFO
1-800-262-1633
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