<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] Quarterly report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
---------------------
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number 333-89561
E-XACT TRANSACTIONS, LTD
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 98-0212722
(State of Incorporation) (IRS Employer
Identification No.)
12687 W. CEDAR DR, SUITE 200 LAKEWOOD, COLORADO 80228
(Address of principal executive offices) (City, state, zip code)
Registrant's telephone number, including area code: (303) 716-7090
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Transitional Small Business Disclosure format (check one):
Yes No X
--- ---
The number of shares outstanding of the Registrant's $0.001 par value common
stock on November 10, 2000 was 8,502,000.
<PAGE> 2
E-XACT TRANSACTIONS, LTD
FORM 10-QSB
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
----
<S> <C> <C>
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II. OTHER INFORMATION 15
Signature 16
</TABLE>
2
<PAGE> 3
E-XACT TRANSACTIONS, LTD
BALANCE SHEETS
(Expressed in U.S. Dollars)
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- ------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents (Note 2) $ 21,162 $ 304,668
Accounts receivable, net (Note 3) 112,520 81,837
Prepaid expenses and deposits 13,921 4,334
----------- -----------
Total current assets 147,603 390,839
Non-current assets:
Deferred share issue costs -- 177,299
Capital assets (Note 4) 205,907 45,099
----------- -----------
Total assets $ 353,510 $ 613,237
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Current liabilities:
Accounts payable and accrued liabilities (Note 5) $ 388,217 $ 370,758
Income taxes payable 41,756 102,557
----------- -----------
Total current liabilities 429,973 473,315
----------- -----------
Stockholders' equity:
Common stock (Note 6) 8,502 5,897
Additional paid-in capital 3,237,921 940,863
Accumulated deficit (3,322,886) (806,838)
Total stockholders' equity (76,463) 139,922
----------- -----------
Total liabilities and stockholders' equity $ 353,510 $ 613,237
=========== ===========
</TABLE>
The accompanying notes are an integral part of
these financial statements.
3
<PAGE> 4
E-XACT TRANSACTIONS, LTD
STATEMENTS OF OPERATIONS
(Expressed in U.S. Dollars)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------- -------------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue $ 81,698 $ 11,557 $ 184,719 $ 54,612
Cost of sales 44,868 5,265 87,575 13,058
----------- ----------- ----------- -----------
GROSS MARGIN 36,830 6,292 97,144 41,554
----------- ----------- ----------- -----------
EXPENSES:
General and administrative 346,921 97,628 912,722 188,834
Operations 53,378 -- 201,321 --
Sales and marketing 200,693 7,161 634,272 8,943
Research and development 227,955 38,768 703,633 76,547
Stock compensation expense 320,000 -- 320,000 --
----------- ----------- ----------- -----------
Total expenses 1,148,947 143,557 2,771,948 274,324
----------- ----------- ----------- -----------
OPERATING LOSS $(1,112,117) $ (137,265) $(2,674,804) $ (232,770)
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest $ (18,634) $ -- $ (2,213) $ --
Foreign exchange gain 29,242 -- 102,245 --
----------- ----------- ----------- -----------
Total other income 10,608 -- 100,032 --
----------- ----------- ----------- -----------
NET LOSS BEFORE INCOME TAXES (1,101,509) (137,265) (2,574,772) (232,770)
INCOME BENEFIT (TAXES) -- -- 58,724 --
----------- ----------- ----------- -----------
NET LOSS $(1,101,509) $ (137,265) $(2,516,048) $ (232,770)
=========== =========== =========== ===========
Basic and diluted loss per share $ (0.13) $ (0.03) $ (0.32) $ (0.06)
=========== =========== =========== ===========
Weighted average number of
shares used to calculate loss
per share 8,472,989 4,200,000 7,756,048 4,200,000
</TABLE>
The accompanying notes are an integral part of
these financial statements.
4
<PAGE> 5
E-XACT TRANSACTIONS, LTD
Statement of Stockholders' Equity
(Expressed in U.S. Dollars)
(Unaudited)
<TABLE>
<CAPTION>
Additional Total
Common Stock Paid in Accumulated Stockholders'
Shares Amount Capital Deficit Equity
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Balance at December 31,1999 5,897,000 $ 5,897 $ 940,863 $ (806,838) $ 139,922
Issuance of stock pursuant to
exercise of warrants,
January 2000 225,000 225 74,334 74,559
Issuance of stock pursuant to
IPO, net of cash offering
costs of $491,393, stock
issued to the Underwriter of
$74,556, and warrants
issued for financing services
of $75,220 2,325,000 2,325 1,847,779 1,850,104
Exercise of stock options, 25,000 25 24,975 25,000
June 2000
Issuance of stock warrants 320,000 320,000
Exercise of warrants,
September 2000 30,000 30 29,970 30,000
Net loss for the nine months
ended September 30, 2000 (2,516,048) (2,516,048)
----------- ----------- ----------- ----------- -----------
Balance at September 30, 2000 8,502,000 $ 8,502 $ 3,237,921 $(3,322,886) $ (76,463)
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of
these financial statements.
5
<PAGE> 6
E-XACT TRANSACTIONS, LTD
STATEMENTS OF CASH FLOWS
(Expressed in U.S. Dollars)
(Unaudited)
<TABLE>
<CAPTION>
Nine
Months Ended
---------------------------------
September 30, September 30,
2000 1999
------------- -------------
<S> <C> <C>
NET CASH USED FOR OPERATING ACTIVITIES $(2,086,537) $ (261,132)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of capital assets (200,293) (31,667)
----------- -----------
NET CASH USED FOR INVESTING ACTIVITIES (200,293) (31,667)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from affiliates -- 98,102
Share issue costs -- (6,706)
Proceeds on issuance of capital stock, net of offering costs 1,827,779 --
Deferred share issue costs, net of related accounts payable 175,545 --
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 2,003,324 91,396
----------- -----------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (283,506) 201,403
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 304,668 2,940
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 21,162 $ 204,343
=========== ===========
Supplemental disclosure of non-cash investing and financing cash flow
disclosures:
Warrants issued for financing services $ 75,220 $ --
Shares issued for financing services 74,556 --
</TABLE>
The accompanying notes are an integral part of
these financial statements.
6
<PAGE> 7
E-XACT TRANSACTIONS, LTD
NOTES TO FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with U.S. generally accepted accounting principles ("US GAAP")
for interim financial information and the instructions to Form 10-QSB and
Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and disclosures required by US GAAP for annual financial
statements. In the opinion of E-XACT TRANSACTIONS, LTD (the "Company"), all
adjustments (consisting of normal recurring adjustments) considered
necessary for a fair presentation have been included. The balance sheet at
December 31, 1999 was derived from the audited financial statements
included in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1999 (the "1999 Form 10-KSB"), previously filed with the
Securities and Exchange Commission. For further information, refer to the
financial statements of, and the related notes, included in the Company's
1999 Form 10-KSB, previously filed with the Securities and Exchange
Commission.
The results of operations for the three and nine months ended September 30,
2000 presented are not necessarily indicative of the results of operations
that may be expected for the year ending December 31, 2000.
2. CASH AND CASH EQUIVALENTS
The Company considers all highly liquid financial instruments purchased
with a maturity of less than three months to be cash equivalents. The
Company has invested cash in excess of current working capital needs in a
money market mutual fund, which consists of obligations of U.S. government
agencies, having maturities of less than three months. These securities are
recorded at cost, which approximates fair market value.
3. ACCOUNTS RECEIVABLE
Accounts receivable are recorded net of approximately $6,500 allowance for
doubtful accounts at September 30, 2000 (December 31, 1999: approximately
$3,400). Subsequent to September 30, 2000 approximately $50,000 was
received from customers as payments on account.
4. CAPITAL ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
---------------------------------------- ------------
Accumulated Net Book Net Book
Cost Depreciation Value Value
-------- ------------ -------- ------------
<S> <C> <C> <C> <C>
Leasehold improvements $ 5,012 $ 360 $ 4,652 $ --
Computer software 71,025 51,951 19,074 12,892
Computer equipment 218,350 36,169 182,181 32,207
-------- -------- -------- --------
$294,387 $ 88,480 $205,907 $ 45,099
======== ======== ======== ========
</TABLE>
7
<PAGE> 8
E-XACT TRANSACTIONS, LTD
NOTES TO FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
(Unaudited)
5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
The principal components of accounts payable and accrued liabilities were
as follows:
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- ------------
<S> <C> <C>
Trade payables $237,354 $205,096
Accrued liabilities 150,863 33,783
Financing costs payable -- 131,879
-------- --------
$388,217 $370,758
======== ========
</TABLE>
6. COMMON STOCK
On March 22, 2000, the Company successfully completed its initial public
offering in Canada of 2,250,000 shares of the Company's common stock at an
offering price of $1.00 per share on the Canadian Venture Exchange.
In connection with the Company's Initial Public Offering (the "IPO"), the
Company granted to Canaccord Capital Corporation and Haywood Securities
Inc. (the "Agents"), an aggregate of 225,000 share purchase warrants (the
"Agents' Warrants") entitling the Agents up to 225,000 shares of the
Company's common stock at any time up to the close of business on the first
anniversary of the Company's listing on the Canadian Venture Exchange at a
price of $1.00 per share. 30,000 of these Agents' Warrants were exercised
in September 2000, leaving an aggregate of 195,000 Agents' warrants
outstanding.
The Company incurred costs of approximately $450,000 in connection with the
initial public offering. The Company received net proceeds from the initial
public offering of $1,827,779.
7. FUNCTIONAL CURRENCY CHANGE
Effective April 2000, the Company changed its functional currency from
Canadian dollars to United States dollars. This change was made because the
majority of the Company's cash flows are denominated in U.S. dollars. Under
US GAAP, this change requires remeasurement of the financial statements.
The Company has remeasured their annual and first quarter financial
statements accordingly. The gain occurring as a result of this change is
included in other income.
8
<PAGE> 9
E-XACT TRANSACTIONS, LTD
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD-LOOKING STATEMENTS
The following Management Discussion and Analysis of Financial Condition and
Results of Operations should be read in conjunction with the accompanying
condensed financial statements and notes included in this report.
Statements made in this Form 10-QSB that are not historical or current
facts are "forward-looking statements" made pursuant to the safe harbor
provisions of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. These statements often can be
identified by the use of terms such as "may," "will," "expect," "believes,"
"anticipate," "estimate," or "continue," or the negative thereof. The
Company intends that such forward-looking statements be subject to the safe
harbors for such statements. The Company wishes to caution readers not to
place undue reliance on any such forward-looking statements, which speak
only as of the date made. Any forward-looking statements represent
management's best judgment as to risks, uncertainties and important factors
beyond the control of the Company that could cause actual results and
events to differ materially from historical results of operations and
events from those presently anticipated or projected. These factors include
adverse economic conditions, entry of new and stronger competitors,
inadequate capital, unexpected costs, failure to gain product approval in
the United States or foreign countries and failure to capitalize upon
access to new markets. Additional risks and uncertainties that may affect
forward-looking statements about the Company's business and prospects
include the possibility that a competitor will develop a more comprehensive
solution, delays in market awareness of its products, possible delays in
execution of sales and marketing strategy, which could have an immediate
and material adverse effect. The Company disclaims any obligation
subsequently to revise any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events.
OVERVIEW
The Company was incorporated under the laws of the Province of British
Columbia on August 13, 1998. On July 29, 1999 the Company filed a
certificate of domestication and certificate of incorporation with the
Secretary of State of the State of Delaware, thereby "domesticating" or
transitioning from a Canadian company to one organized under the laws of
the State of Delaware.
The Company provides real-time financial transaction processing services
using web-centric technology. Its electronic commerce (e-commerce) software
services allow PC based cash registers, PCs, point-of-sale terminals,
computer systems and proprietary product platforms to accept credit card
payments and submit those payments to various payment processing companies
for pre-authorization, authorization and settlement/deposit. The Company is
approved to act as a third party payment processor to conduct transaction
processing with major banks in North America. The Company is also launching
an on-line application, with real-time credit decisioning, for automatic
processing of merchant account applications for retailers.
The Company's success will depend largely upon its ability to compete
successfully, develop new products and services and market them
successfully in a market that is becoming increasingly competitive.
9
<PAGE> 10
E-XACT TRANSACTIONS, LTD
BUSINESS SUMMARY
The Company achieved several accomplishments in the third quarter of 2000,
including:
o Comparing the Company's third quarter of 1999 with the third
quarter of 2000, the Company grew its client base from a total
of 12 clients in the third quarter of 1999 to 325 clients in
the third quarter of 2000, while also increasing the number of
transactions processed from approximately 120,000 in the third
quarter of 1999 to approximately 600,000 in the third quarter
of 2000.
o Executed a service agreement with Dell Computer Corporation to
provide real time processing of credit card transactions for
customer purchases made through Dell's Canadian call centers
and web storefront. The contract calls for the Company's
software to be integrated into Dell's order fulfillment and
shipping systems to completely automate a process that
involves multiple steps when done manually. The integration
was completed to specification just subsequent to quarter end.
o Simultaneous with execution of the service agreement, agreed
to execute a warrant agreement with Dell Ventures, L.P., the
wholly-owned venture fund of Dell Computer Corporation, to
allow the purchase of up to 5% of the outstanding common stock
of the Company given certain stock price performance during
the two year term of the above mentioned service agreement.
o Completed development of a beta version of a new service,
named Speedy Merchant, to provide on-line application and
real-time decisioning as well as account provisioning and
document fulfillment for merchant accounts. A merchant account
is required for a retailer to accept e-commerce payments from
customers.
o Executed an agreement with Transfirst, LLC (formerly ACS
Merchant Services), the 25th largest credit card acquirer in
North America, to provide Speedy Merchant services. The
service is scheduled to enter production status within
Transfirst, LLC in November 2000.
With completion of the Company's Version 5.0 transaction processing
service, certain non-recurring contracting expenses were terminated. Also,
the Company reduced staffing by approximately 20% and took other
cost-reduction actions in order to achieve certain operating efficiencies.
Both of these events, which occurred in the third quarter, have resulted in
a significant reduction in ongoing operating costs going into the fourth
quarter.
RESULTS OF OPERATIONS
INTERIM FINANCIAL RESULTS
(All amounts are expressed in U.S. dollars)
The Company earns its revenues by charging its customers setup fees,
monthly account maintenance fees and transaction fees for usage of its
services. Transaction fees are based on the number of transactions
processed in a month.
10
<PAGE> 11
E-XACT TRANSACTIONS, LTD
Results of Operations, continued
Interim Financial Results, continued
Revenues. During the three and nine month periods ended September 30, 2000,
revenues were $81,698 and $184,719, respectively, compared to $11,557 and
$54,612, respectively, in the corresponding periods in 1999. The revenues
were derived primarily from transaction processing fees and monthly service
fees.
Approximately 325 clients were using the Company's services at September
30, 2000 compared to 12 clients at September 30, 1999.
Revenue from two clients accounted for approximately 45% of total revenue
for the three months ended September 30, 2000 compared to 82% for the three
months ended September 30, 1999. For the nine months ended September 30,
2000 revenue from two clients accounted for approximately 70% of total
revenue compared to 85% for the corresponding period in 1999. As the
Company continues to grow, management expects that the relative
significance of revenue from these two clients should diminish.
Expenses. Total expenses during the three months ended September 30, 2000
were $1,148,947 compared to $143,557 for the three months ended September
30, 1999. For the nine months ended September 30, 2000 total expenses were
$2,771,948 compared to $274,324 for the nine months ended September 30,
1999. The increased expenditures were attributed to accelerated development
of the Company's transaction processing services and capabilities to serve
the North American market, as well as increased sales and marketing efforts
for these services.
General and Administrative (G&A). During the three months ended September
30, 2000, G&A expenses were $346,921 compared to $97,628 for the comparable
period in 1999. G&A expenses for the nine months ended September 30, 2000
were $912,722 compared to $188,834 for the nine months ended September 30,
1999. For the three months ended September 20, 2000, professional fees
increased by approximately $80,000; general and administrative salaries and
employee benefits increased by approximately $80,000; rent and telephone
expenses increased by approximately $50,000; and office expenses increased
by approximately $40,000. For the nine months ended September 30, 2000,
professional fees increased by approximately $260,000; general and
administrative salaries and employee benefits increased by approximately
$180,000; rent and telephone expenses increased by approximately $160,000;
and office expenses increased by approximately $100,000. The increased
level of expenditures is primarily attributed to hiring professional
managers and commencing activities in the US as well as fulfilling
regulatory responsibilities as a publicly held company.
Operations. Operations expenditures increased from $0 for the three months
ended September 30, 1999 to $53,378 for the three months ended September
30, 2000. For the nine months ended September 30, 2000 operations
expenditures were $201,321 compared to $0 for the corresponding period in
1999. The increase was primarily due to the start-up of customer service
and network operations to support the
11
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E-XACT TRANSACTIONS, LTD
Results of Operations, continued
Interim Financial Results, continued
needs of clients.
Sales and Marketing. Sales and Marketing expenditures increased from $7,161
for the three months ended September 30, 1999 to $200,693 for the
corresponding period in 2000. For the nine months ended September 30, 2000
sales and marketing expenditures were $634,272 compared to $8,943 in the
nine months ended September 30, 1999. During the three months ended
September 30, 2000, salaries and employee benefits increased by
approximately $120,000; travel expenses increased by approximately $450,000
; and advertising and promotions increased by approximately $20,000. During
the nine months ended September 30, 2000, salaries and employee benefits
increased by approximately $260,000; travel expenses increased by
approximately $175,000 ; and advertising and promotions increased by
approximately $180,000. These additional costs were incurred in order to
achieve basic market visibility for the Company's service and to hire sales
professionals in the North American marketplace.
Research and development. Research and development expenses consist
primarily of compensation expenses and consulting fees to support the
development of the Company's software, services and technologies. Research
and development expenditures were $227,955 for the three months ended
September 30, 2000 compared to $38,768 for the comparable period in 1999.
For the nine months ended September 30, 2000 research and development
expenses were $703,633 compared to $76,547 for the nine months ended
September 30, 1999. This increase is attributed to accelerating the
completion of the Company's V5.0 transaction processing software for
general marketplace use, and for commencement of certain strategic
initiatives including the start of technical development with Microsoft as
part of the e-commerce alliance executed in March 2000.
Stock compensation expense. Stock compensation expense relates to a charge
for the issuance of the warrant to Dell Ventures, L.P. The expense was
calculated in accordance with SFAS 123 and represents a one-time non-cash
charge to earnings.
Net loss. The Company incurred a net loss of $1,101,509 and $2,516,048 for
the three and nine months ended September 30, 2000, respectively, compared
to a net loss of $137,265 and $232,770 in the three and nine months ended
September 30, 1999, respectively. The increased loss is primarily a result
of increased expenses.
In November 2000, management implemented a fifty percent reduction in
staffing and relocation of primary operations to Vancouver, BC Canada. This
change will result in a further reduction in monthly operating expenses
starting in December 2000. However, the Company anticipates continued
operating losses for the remainder of 2000 while its services gain market
acceptance.
LIQUIDITY & CAPITAL RESOURCES
(All amounts are expressed in U.S. dollars)
Cash flow. The Company's net cash flows used for operating activities
during the nine months ended
12
<PAGE> 13
E-XACT TRANSACTIONS, LTD
Liquidity & Capital Resources, continued
September 30, 2000 was $2,086,537 compared to $261,132 for the nine months
ended September 30, 1999. This is a result of using working capital to fund
increases in accounts receivable and operating losses.
Cash used for investing activities totaled $200,293 during the nine months
ended September 30, 2000 compared to $31,667 for the nine months ended
September 30, 1999. The increase is primarily attributed to the purchase of
capital equipment for new personnel and to expand processing capabilities.
Cash provided by financing activities was $2,003,324 for the nine months
ended September 30, 2000 compared to $91,396 for the nine months ended
September 30, 1999. The Company received net proceeds of approximately
$1,827,779 on the issuance of capital stock during the first quarter of
2000. The Company received $25,000 on the exercise of options during the
second quarter of 2000 and $30,000 on the exercise of common stock warrants
during the third quarter of 2000.
The Company's negative cash flow from operations resulted primarily from
the operating loss of the Company that was due to incurring expenditures
necessary to position E-xact to deliver reliable real time transaction
processing services through its Version 5.0 software, and to grow its
transaction processing business. Management believes this negative cash
flow will continue through the end of 2000, although at lower levels, as
sales of services increase and expenses decrease.
Capital resources. The Company's working capital increased during the three
and six months ended September 30, 2000 compared to the same periods in
1999 primarily due to the Company's initial public offering. The Company
had anticipated closing a private placement financing prior to the end of
the third quarter 2000. Due to market conditions, this financing will not
be completed as planned. Instead, the Company secured a short term secured
note in October 2000 from some principal investors that will provide
operating funds through early November. The Company is attempting to
complete additional financings to provide funds for operating activities in
2001.
Management believes that the Company will continue to incur losses through
the remainder of 2000. In the event that cash flow from operations,
together with the proceeds of any future financings, are insufficient to
meet these expenses, the Company will be required to re-evaluate its
planned expenditures and allocate its total resources in such manner as the
board of directors and management deems to be in the best interest of the
Company and its stockholders.
NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 133 "Accounting for
Derivative Instruments and Hedging Activities" (SFAS No. 133). The
standard, which is effective for fiscal years beginning after June 15,
2000, sets forth guidelines and requirements for measuring derivative
instruments at fair value as assets and liabilities to be reported in the
financial statements and that the changes in the fair value of the
instruments shall be recognized in the results of operations. The Company
has not completed the process of evaluating the impact that will result
from adopting this pronouncement.
13
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E-XACT TRANSACTIONS, LTD
New Accounting Pronouncements, continued
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
(SAB No. 101). SAB No. 101, which is effective in the fourth quarter of
2000, provides guidance on the recognition, presentation, and disclosure of
revenue in financial statements of all public companies. Management expects
the adoption of SAB 101 will have no effect on the Company's results of
operations or financial position.
14
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E-XACT TRANSACTIONS, LTD
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable
ITEM 2. CHANGES IN SECURITIES
During September 2000 Bolder Investment Partners exercised warrants to
purchase 30,000 shares of the Company's common stock @ $1.00 per share.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5. OTHER INFORMATION
Not applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K.
During the quarter covered by this report, the Company filed the
following reports on Form 8-K.
On August 9, 2000, the Company filed a Form 8-K under Item 5
announcing the Company's software was selected by Dell Canada for
order processing and the Company granted Dell Ventures a warrant to
purchase common shares of the Company's common stock.
On September 20, 2000, the Company filed a Form 8-K under Item 5
announcing an agreement with Transfirst, LLC (formerly ACS Merchant
Services) for on-line merchant account application processing.
15
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E-XACT TRANSACTIONS, LTD
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1933 the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
E-XACT TRANSACTIONS, LTD
(Registrant)
Dated: November 13, 2000 By: /s/ Ted Henderson
---------------------------------
Ted Henderson
President and CEO
By: /s/ Edmund Shung
----------------------------------
Edmund Shung
CFO
16
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EXHIBIT INDEX
Exhibit No. Description
----------- -----------
27 Financial Data Schedule
