CHICAGO, July 17, 2000 (PRIMEZONE) - VirtualSellers.com, Inc. (OTCBB:VDOT), a provider of enterprise application development solutions, today announced its financial results for the first fiscal quarter ended May 31, 2000.
Revenues for the three months ended May 31, 2000 of $504,811 increased $428,213, or 559 percent, from revenues of $76,598 for the quarter ended May 31, 1999. For the same period last year the only source of operating revenue was the Call Center division. For quarter ended May 31, 2000, the acquisitions of CallDirect and VirtualSellers.com increased operating revenue sources to three distinct operations. While the company only reports revenues as work is completed, there is an additional $400,000 of work in progress that is not reflected as revenue for this quarter. This work in progress is scheduled for completion in the next fiscal quarter.
"We are very pleased with our $900,000 in revenue and work in progress for the quarter ended May 31, 2000. We are continually improving our growth rate, bringing on new management, adding larger clients and moving closer to completing multiple license agreements for TAME," said Dennis Sinclair Ph.D., president and CEO of VirtualSellers.com.
"Our new TAME technical staff has provided capabilities that aggressively positions VirtualSellers.com for the roll out of its proprietary software through advertising as the company markets to a larger audience. TAME has been recognized by tier one market providers (Red Hat and EMC) as being a legitimate solution for both Web technology development and turnkey e-commerce transaction processing. Building on the success of our most recent quarter, we are driving hard to reach positive cash flow."
Selling, general and administrative (SG&A) expenses increased to $1,645,829 from $381,273 in the same quarter in 1999, a 332 percent increase. The increase is primarily due to increased staffing requirements, sales and marketing expenses, non-cash compensation, and other administrative expenses.
For the quarter ended May 31, 2000, the company recognized a loss of $1,412,101 or $0.01 per share compared to a net income of $720,310 or $0.01 per share for the Quarter 1999. During the period the company had an extraordinary income item of $975,000 as a result of the sale of its former name. The loss is due to the factors discussed above.
As at May 31, 2000, the company has net working capital of $2,587,204 and capital assets of $2,038,797 for net equity of $4,626,001. The company does not have any long-term debt or other long-term obligations.
On May 19, 2000, the company acquired Sullivan Park, LLC, which is comprised of an Internet services business involved in the development of on-line stores in California. The company will issue common shares at a market value of $2,700,000 and assume up to $16,285 in current debt of the vendor for total proceeds of $2,716,875.
VirtualSellers.com provides turnkey e-commerce transaction processing and customer services to small and medium size businesses. With no monthly fees and small set-up charges, VirtualSellers.com can provide these businesses with immediately available, customized, secure and complete e-commerce services so that these businesses can retail their products over the Internet. VirtualSellers.com earns its revenues by charging the businesses a percentage of each transaction conducted over the Internet. VirtualSellers.com creates new revenue opportunities due to improved customer retention, improved customer service and the ability to deliver additional value-added services such as transaction processing, help desk, customer service, outbound sales and marketing, as well as customized product offerings.
VirtualSellers.com expects to strengthen relationships with customers, suppliers and business partners due to new direct, secure connections utilizing TAME technology across multiple computing platforms, applications and protocols and through the improved supply chain efficiencies, shortened cycle times, lower inventories, reduced error rates and increased return on investment from existing enterprise software systems.
Safe Harbor Statement
Included in this press release are "forward-looking statements," including "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Those forward-looking statements involve risks and uncertainties. The company's actual results could differ materially from those discussed in the forward-looking statements found in this document. Factors, risks and uncertainties that could cause or contribute to such differences include those specific risks and uncertainties discussed below and those discussed in the company's Form 20-F for the period ended Feb. 28, 1999. The cautionary statements made in this document should be read as being applicable to all related forward-looking statements wherever they appear in this document.
TAME is a trademark of VirtualSellers.com, Inc.
(financial tables to follow)
Consolidated Financial Statements of VirtualSellers.com Inc.
(Expressed in U.S. dollars)
Three months ended May 31, 2000 and 1999
(Unaudited)
VirtualSellers.com Inc.
Consolidated Balance Sheets
(Unaudited)
May 31, Feb 29,
2000 2000
Assets
Current assets:
Cash and cash equivalents $ 2,693,370 $ 447,844
Accounts receivable 478,210 72,029
Inventories 41,075 50,850
Prepaid expenses and advances 197,538 242,310
3,410,193 813,033
Equipment 2,038,797 1,926,857
$ 5,448,990 $ 2,739,890
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued
liabilities $ 822,989 $ 693,250
Shareholders' equity:
Common shares, no par value:
Authorized:
200,000,000 common shares
Issued and Outstanding:
126,881,128 shares at May 31,
2000 and 123,001,503 shares
at Feb. 29, 2000 106,483,500 102,492,038
Accumulated deficit (101,857,499) (100,445,398)
4,626,001 2,046,640
$ 5,448,990 $ 2,739,890
VirtualSellers.com Inc.
Consolidated Quarterly Statements of Operations and Deficit
(Expressed in U.S. Dollars)
(Unaudited)
Three months ended May 31,
2000 1999
Revenue $ 504,811 $ 76,598
Costs and expenses:
Direct cost 165,182 20,890
Selling, general and administrative
expenses 1,645,829 381,273
Depreciation 113,819 4,825
1,924,830 406,988
Loss before other income (expense) (1,420,019) (330,390)
Other income (expense):
Sale of trade name -- 975,000
Miscellaneous 7,918 75,700
7,918 1,050,700
Net income (loss) for the period $ (1,412,101) $ 720,310
Net income (loss) per common
share $ (0.01) $ 0.01
VirtualSellers.com Inc.
Consolidated Quarterly Statements of Cash Flows
(Unaudited)
Three months ended May 31,
2000 1999
Cash provided by (used in):
Operations:
Net income (loss) for the year $ (1,412,101) $ 720,310
Items not involving cash:
Non-cash compensation expense 200,000 --
Non-cash services and purchase 8,112 104,821
Depreciation and amortization 113,819 4,825
Change in non-cash operating working
capital:
Accounts receivable (406,181) (82,147)
Prepaid expenses and advances 44,772 2,838
Inventories 9,775 --
Accounts payable and accrued
liabilities 129,739 (130,276)
(1,312,065) (620,371)
Financing:
Issuance of common shares for cash 4,233,350 --
2000 convertible debentures issued -- 432,600
Shares issue costs (450,000) --
3,783,350 432,600
Investments:
Acquisition of Equipment (225,759) (19,600)
Cash acquired on acquisition -- --
Other -- (12,527)
(225,759) (32,127)
Increase (decrease) in cash and cash
equivalents 2,245,526 1,020,844
Cash and cash equivalents, beginning
of year 447,844 75,763
Cash and cash equivalents, end of
year $ 2,693,370 $ 1,096,607