NEW YORK, Feb. 15, 2005 (PRIMEZONE) -- Acies Corporation (OTCBB:ACIE), an emerging leader in payment processing and electronic banking services to small and medium size merchants across the United States, today filed its Form 10-QSB quarterly report disclosing its third quarter financial results for the quarter ended December 31, 2004.
Quarter ending December 31, 2004 highlights include, but are not limited to:
-- Revenues of $1,160,607 for the quarter ending December 31, 2004;
307.01% year-over-year growth; 133.29% growth from the Second
Fiscal Quarter of 2004
-- Revenues of $2,739,579 for the Nine Months Ended December 31,
2004; 359.61% increase over last year
For the three months ended December 31, 2004, net revenues totaled $1,160,607, up 307% compared with $378,035 in the same period last year. Net loss for the quarter was $415,341, compared with a profit of $37,320, in the same quarter of 2003. Weighted average shares outstanding for the 2004 and 2003 periods were 37,433,686 and 25,321,906, respectively.
The increase in net revenues in the quarter 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 $651,912, or 339%, to $924,290 for the three months ended December 31, 2004, compared with cost of revenues of $272,378 for the three months ended December 31, 2003. The increase in cost of revenues reflected an increase in product costs that resulted from an increase in product sales, and an increase in merchant processing costs that resulted from an increase in existing and new merchant processing revenue.
Gross margin in the quarter increased $130,660, or 224%, to $236,317, for the three months ended December 31, 2004, as compared with gross margin of $105,657 for the same period in 2003. The increase in gross margin was directly attributable to an increase in net revenues, offset by the increase in costs of revenue.
General, administrative and selling expense increased $507,793, or 842%, to $576,220 for the three months ended December 31, 2004. This compared with G&A expense of $68,427 for the three months ended December 31, 2003. The increase in G&A expense was primarily attributable to issuance of common stock valued at $225,000 for services in connection with going public, along with an increases in office lease expense, an increase in full-time employees and payroll expense, as well as increases in legal fees, insurance and public company compliance and administrative fees incurred in being publicly traded.
For the nine months ended December 31, 2004, net revenues were $2,739,579, or 360%, compared with $761,818 for the prior 2003 nine months. Net loss for the period totaled $2,705,171, or $0.09 per share, compared with $52,202, or $0.00 per share in the same period of 2003. Weighted average shares outstanding for the nine month periods for 2004 and 2003 were 31,890,301 and 25,321,906, respectively.
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 $1,682,078, or 403%, to $2,237,797 for the nine months ended December 31, 2004, compared with cost of revenues of $555,719 in the same nine month period of 2003. As in the third quarter, the nine month increase 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 from an increase in existing and new merchant processing revenue.
Gross margin increased $295,683, or 243%, to $501,782 for the nine months ended December 31, 2004, compared with gross margin of $206,099 for the similar nine month period of 2003. The increase in gross margin was directly attributable to the increase in net revenues, offset by the increase in costs of revenue.
General, administrative and selling expense ("G&A") increased $2,951,670, or 2,017%, to $3,105,567 for the nine months ended December 31, 2004, as compared with G&A expense of $153,897 for the nine months ended December 31, 2003. The increase in G&A expense primarily was due to issuance of common stock valued at $1,835,437 for services in connection with the company becoming a publicly traded entity, as well as increases in office lease expense, higher employee headcount and payroll expense, financial advisory services and legal fees, and renovation and equipment for the company's headquarters office -- all part of the expenses of becoming publicly traded.
"The investments we have made in the company are all very necessary to fully participate in what we consider to be an upside for Acies," said President & CEO Oleg Firer.
"We have added a variety of new and aggressive programs to stimulate sales, and the announcement last week of the first institutional investment in the company of $1,067,500 reflects that commitment, as does the fact that we may ultimately be able to receive an additional $2,135,000 in proceeds, if the common stock purchase warrants issued pursuant to the financing are exercised, bringing the total financing commitment up to $3,202,500.
"We are very excited by this funding," the CEO continued, noting that "we anticipate that these funds will assist us to grow both organically and through selected acquisitions that we anticipate will be accretive to our top and bottom lines."
About Acies Corporation
Acies, Inc. ("Acies"), a wholly owned subsidiary of Acies Corporation (OTCBB:ACIE), is a financial services company that specializes in payment processing services and online banking services to small, medium, and large-size merchants across the United States. Acies' payment processing services enable merchants to process Credit, Debit, Electronic Benefit Transfer (EBT), Check Conversion, and Gift & Loyalty transactions. Acies also offers traditional and next-generation point-of-sale (POS) terminals, which enable merchants to utilize Acies' payment processing services. Acies' banking services offer customers traditional banking services, ability for customers to apply for an on-line bank account and pay bills electronically.
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.