Dexit Inc. (TSX: DXT), the creator and operator of the Dexit electronic payment facilitation service for small transactions, today announced its financial results for the three-month period ending March 31, 2006.
For the three-month period ended March 31, 2006, revenue was $859,941 compared to $787,702 for the comparable three-month period in 2005 and $842,680 in the last quarter of 2005. License fees earned from Bell Canada under the terms of the Company's Merchant Licence Agreement amounted to $0.75 million or 87 percent of revenue versus $0.5 million or 64 percent of revenue the comparable period in 2005. Sales of RFID tags, POS terminals and RFID readers were negligible in the quarter versus $0.25 million or 32 percent of revenue in the comparable quarter in 2005. Revenue from exclusivity fees, consumer refill fees, merchant transaction fees and other fees amounted to $105 thousand or 12 percent of revenue in first quarter 2006 versus $35 thousand or 4 percent of revenue in the first quarter 2005.
Operating expenses for the three-month period ended March 31, 2006 increased by 9 percent to $3,100,810 from $2,838,496 in the comparable three-month period in 2005. The increase in operating expenses was primarily due to one-time corporate costs and ongoing technology personnel costs for the continued development of new functionality, infrastructure upgrades, and maintenance. Net loss for the three-month period ended March 31, 2006 declined to $1,871,448, or $0.19 per share, compared with a net loss of $2,345,996 or $0.23 per share in the three-month period ended March 31, 2005. The reduced net loss is attributable primarily to the increase in revenues and a reduction of $448,681 in the expected future repayment obligations to be made under the terms of a financing agreement entered into in 2003 by the Company to fund the development of its technology.
As at March 31, 2006, Dexit had cash, cash equivalents and short term investments of $7.7 million compared with $8.9 million as at December 31, 2005. Dexit's cash position during the quarter was positively affected by a significant decrease in receivables. The number of shares outstanding as at March 31, 2006 was 10,105,702.
During the quarter, Dexit continued to work on strategic initiatives and with Bell Canada in pursuit of major merchants to roll out the Dexit Service on a national basis. Dexit also continued to explore potential markets outside of Canada. In addition, Janet C. Martin was made Dexit's new President and Chief Executive Officer, bringing her wealth of experience in retail banking and consumer packaged goods to this leadership position at Dexit.
Dexit continues to investigate opportunities to evolve its business model. This includes private-branded solutions whereby merchants would distribute RFID tags or cards to their customers which could only be used at specific branded locations and websites. The Company also continues to explore the prospect of introducing loyalty and customer value management solutions to further enhance the value proposition of the offering to consumers and merchants. It is also continuing to explore opportunities to leverage its existing infrastructure and intellectual property to provide a payment facilitation service to the regulated gaming industry.