NEW YORK, July 23, 2004 (PRIMEZONE) -- Atlantic Synergy, Inc. (OTCBB:ASGY) ("Company") announced today that the Company has filed a Form 8-K, which contains financial statements that reflect Atlantic Synergy's recent acquisition of Acies, Inc., formerly GM Merchant Solutions, Inc.
On July 2, 2004, the Company acquired approximately 99.2%, and subsequently thereto acquired the remaining 0.8%, of the issued and outstanding common stock of Acies in exchange for 26,150,000 newly issued shares of the Company's common stock pursuant to an Exchange Agreement whereby Acies became a wholly-owned subsidiary of the Company (the "Exchange"). As of the filing of this press release there are 30,763,750 shares of the Company's common stock outstanding. Atlantic Synergy is a holding company for Acies and implemented business combination accounting treatment to record this transaction. The business operations and financial information discussed herein are for Acies.
Unaudited Results of Operations for Acies
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2004 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2003
Net revenues increased $571,723 (or 419%) to $708,227 for the three months ended June 30, 2004, as compared to net revenues of $136,504 for the three months ended June 30, 2003. The increase in net revenues was due to an increase in product revenue, service revenue from existing customers and Acies' accelerating acquisition of new merchant accounts.
Cost of revenues increased $510,031 (or 564%) to $600,384 for the three months ended June 30, 2004, as compared to cost of revenues of $90,353 for the three months ended June 30, 2003. The increase in cost of revenues was attributed to an increase in product costs that resulted from an increase in product sales, and an increase in merchant processing costs that resulted in an increase in existing and new merchant processing revenue.
Gross margin increased $61,692 (or 134%) to $107,843 for the three months ended June 30, 2004, as compared to gross margin of $46,151 for the three months ended June 30, 2003. The increase in gross margin is directly attributable to the increase in net revenues that was offset by the increase in costs of revenue.
General, administrative and selling ("G&A") expense increased $263,185 (or 680%) to $301,889 for the three months ended June 30, 2004, as compared to G&A expense of $38,704 for the three months ended June 30, 2003. The increase in G&A expense was primarily attributable to $200,000 of financial advisory services incurred in connection with the Exchange.
We incurred a cost of $23,000 to settle a lawsuit for the three months ended June 30, 2004. We did not incur such an expense during the three months ended June 30, 2003.
We had a net loss of $217,024 for the three months ended June 30, 2004, as compared to net income of $7,447 for the three months ended June 30, 2003. The increase in net loss is directly attributable to G&A expense.
Audited Results of Operations for Acies
RESULTS OF OPERATIONS FOR THE FISCAL YEAR ENDED MARCH 31, 2004 COMPARED TO THE FISCAL YEAR ENDED MARCH 31, 2003
Net revenues increased $1,251,134 (6,608%) to $1,270,067 for the fiscal year ended March 31, 2004, as compared to net revenues of $18,933 for the fiscal year ended March 31, 2003. The increase in net revenues was due to an increase in product revenue, service revenue from existing customers and the Acies' accelerating acquisition of new merchant accounts.
Cost of revenues increased $937,404 (or 2,504%) to $974,837 for the fiscal year ended March 31, 2004, as compared to cost of revenues of $37,433 for the fiscal year ended March 31, 2003. The increase in cost of revenues was attributed to an increase in product costs that resulted from an increase in product sales, and an increase in merchant processing costs that resulted in an increase in existing and new merchant processing revenue.
Gross margin increased $313,730 (or 1,696%) to $295,230 for the fiscal year ended March 31, 2004, as compared to a negative gross margin of $18,500 for the fiscal year ended March 31, 2003. The increase in gross margin is directly attributable to the increase in net revenues that was offset by the increase in costs of revenue.
G&A expense increased $249,317 (or 502%) to $298,980 for the fiscal year ended March 31, 2004, as compared to G&A expense of $49,663 for the fiscal year ended March 31, 2003. The increase in G&A expense was primarily attributable to costs associated with accelerating sales growth.
We had a net loss of $3,750 for the fiscal year ended March 31, 2004, as compared to a net loss of $68,163 for the fiscal year ended March 31, 2003. The decrease in net loss was directly attributable to accelerating gross margins achieved through pricing power and operating efficiencies.
Oleg Firer, Acies' President and Chief Executive Officer said, "Acies' reported results demonstrate its commitment to continue leveraging its operating efficiencies to increase operating margins; accelerating revenue and earnings growth. Acies' next generation payment processing solutions coupled with pricing power to deliver these solutions to customers is a competitive advantage that, to date, has enabled Acies to organically grow its customer base and take market share away from Acies' competitors."
According to the Nilson Report (the "Report"), purchase transaction on credit cards totaled $17.54 billion in 2002, up 4.5% over 2001. These transactions are projected to reach 22.26 billion by 2007. According to the 2003/2004 Study of Consumer Payment Preferences conducted by the American Bankers Association and Dove Consulting, a Boston-based strategy consulting firm (the "Study"), consumers report that electronic payment methods account for 54% of their purchases in stores, surpassing cash and check usage. The Study found that cash and checks account for 47% of consumers' in-store purchases, which confirms a continuing migration from paper to electronic payments.
"Research data overwhelmingly suggests that the world is rapidly moving to a cashless, electronic payment dependent Global economic environment," said Michael Beygelman, Chairman of Acies. Mr. Beygelman continued, "This Global shift towards electronic payment squarely positions Acies to become a fast growth company as the total number and the total dollar amount of electronic transactions is increasing annually."
The Company's Form 8-K can be viewed at http://www.sec.gov/edgar.shtml
About Acies, Inc.
Acies, Inc. ("Acies") is headquartered on Wall Street in the heart of New York City's Financial District, and is a registered Member Service Provider of JP Morgan Chase Bank. Acies' considers itself to be a next generation payment processor and one of the fastest growing innovative providers of payment processing solutions for retail, restaurants, direct marketing, Quick Service Restaurants (QSR), hospitality, supermarket, petroleum, financial services and healthcare industries. Acies provides its merchants and Independent Sales Organizations ("ISO") with fast and reliable merchant processing, complex point of sale systems and superior customer support. In addition, Acies' Powerhouse Alliance -- the extranet of Acies' strategic and exclusive distribution partners -- combines a wide array of payment processing solutions including: point-of-sale terminal products; Radio Frequency (RF) contact-less payment solutions; signature capture; processing for credit, debit, stored-vale, gift cards, and gas cards; Electronic Benefits Transfer (EBT) transactions; Dynamic Currency Conversion (DCC); Business to Business (B2B), recurring payments, Electronic Check Acceptance (ECA) service, and one-stop e-commerce solutions. Acies' point-of-sale and back-office products and services are specifically designed to help clients expand revenue while reducing costs. The products and services provide advanced, industry-specific solutions distinguished by speed, security, ease of use and proven reliability. At the core, Acies' products and services are designed to enable small, medium and large-scale enterprises to expand their revenue stream opportunities while reducing operating costs. For more information visit http://www.aciesinc.com/.
Forward-looking Statements
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This press release contains or may contain forward-looking statements such as statements regarding the Company's growth and profitability, growth strategy, liquidity and access to public markets, operating expense reduction, and trends in the industry in which the Company operates. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in the Company's filings with the Securities and Exchange Commission. The Company assumes no obligation to update these forward-looking statements to reflect actual results, changes in risks, uncertainties or assumptions underlying or affecting such statements, or for prospective events that may have a retroactive effect.