Syscan Releases 2008 Audited Results, Shareholder Approval of Both the 40 to 1 Share Consolidation and Private Placement, and a Negative Court Judgement in Quebec: Financial News

Syscan Releases 2008 Audited Results, Shareholder Approval of Both the 40 to 1 Share Consolidation and Private Placement, and a Negative Court Judgement in Quebec
Thursday October 30, 2008 11:59 am ET

MONTREAL, QUEBEC--(MARKET WIRE)--Oct 30, 2008 -- Syscan International (CDNX:SYA.V - News) today released its results for the year ended June 30, 2008. Sales for the year were $3,811,448 on a consolidated basis, as compared to $1,811,228 in the previous year, an overall increase of 110%. The Company continued its growth in RFID product offerings and revenues. RFID solutions represented nearly 90% of total sales over the year. Operating expenses for the year were higher at $2,234,869 compared to $1,466,910 in fiscal 2007. The Company recorded a net loss of $1,203,154 during the year compared to a loss of $1,088,534 in fiscal 2007. The Company's cash position decreased to $210,782 from $512,308.

Please see the Consolidated Statement of Income attached at the end of this announcement.

Mr. Joseph Tassone, President and CEO of Syscan said, "Although the Company showed a good increase in revenue it still concluded the year with a sizable net loss. During the 2nd half of the year the Company has been cutting costs and conserving cash through the stretching out of accounts payable. It ended the year with $1,401,430 in payables." Efforts to raise additional capital before fiscal year end were unsuccessful.

Subsequent to fiscal 2008's year end on August 19, 2008, the Company entered into and announced an agreement for a bridge loan to be used for working capital and for a subsequent private placement by the same investor. The bridge loan is for a term of four months in the amount of $150,000 and was subsequently increased to $200,000 and is to be repaid from the proceeds of the private placement. The loan is interest bearing at a rate of 18% and is secured by all the assets of the company.

The private placement is in the amount of $750,000 and is subject to a number of closing conditions including regulatory and shareholder approval.

Terms of the private placement require shareholder approval of a 40 to 1 reverse share split, a post consolidation share price as determined by the volume-weighted average trading price of the shares during the ten days following the reverse share split, less the allowable TSX discount, and other customary conditions for transactions of this nature.

The investor has the option to not proceed with the private placement if the ten day post consolidation, volume-weighted average share price of the company is above $0.40 per share or if the aggregate indebtedness of the company as of the closing exceeds $350,000. The company is responsible for all costs attributed to the private placement.

The company plans to use the proceeds to pay down its obligations and for working capital to support its on-going marketing and sales plans.

On October 27, 2008 a Special Meeting of the Shareholders was convened to obtain shareholder approval for a 40 to 1 reverse share split and the $750,000 Private Placement. Both items were approved by shareholders at the meeting. Shareholders will be receiving additional information to affect the share consolidation and conversion of their share certificates.

On October 20, 2008 the Superior Court of Quebec rendered a judgment in the amount of nearly $100,000 including costs, against the company for an ongoing lawsuit. The company is evaluating its options on this judgment including any grounds for appeal. This amount was recorded in the books of account as at June 30, 2008.

To view the Company's audited financial statements and management's discussion and analysis for the fiscal year ended June 30, 2008, visit www.sedar.com.

About Syscan International Inc.

Syscan is a world class supply chain solution provider that delivers integrated real-time tracking and tracing systems that improve business efficiency through Radio Frequency Identification (RFID). Its standardized supply chain solutions include traceability, temperature monitoring and quality control methodologies for the food, pharmaceutical and healthcare sectors. Shares of Syscan trade on the TSX Venture Exchange under the symbol SYA. There are currently approximately 49.2 million shares outstanding.

 

SYSCAN INTERNATIONAL INC.                   SYSCAN INTERNATIONAL INC.

CONSOLIDATED STATEMENT OF                                   RESULTATS
INCOME                                                     CONSOLIDES
FOR THE YEAR ENDED                                EXERCICE TERMINE LE
JUNE 30, 2008                                            30 JUIN 2008
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                            2008          2007
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SALES                 $3,811,448    $1,811,228     CHIFFRE D'AFFAIRES

COST OF SALES          2,480,641     1,042,674        COUT DES VENTES
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GROSS MARGIN           1,330,807       768,554            MARGE BRUTE
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OPERATING EXPENSES                               FRAIS D'EXPLOITATION

 Selling and                                           Frais de vente
  administrative       1,748,551     1,430,302    et d'administration
 Gain on disposal                                    Gain sur cession
  of investment                -       (37,924)          de placement
 Amortization of                                      Amortissement -
  intangible assets      381,635        45,353     actifs incorporels
 Loss on exchange         29,645         7,545        Perte de change
 Gain on settlement                                Gain sur reglement
  of debt                      -        (7,023)             de dettes
                                                      Amortissement -
 Amortization of                                      immobilisations
 fixed assets             45,499        18,643            corporelles
                                                     Frais financiers
 Financial (note 13)      29,539        10,014              (note 13)
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                       2,234,869     1,466,910
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OPERATING LOSS          (904,062)     (698,356)  PERTE D'EXPLOITATION

                                                         RECHERCHE ET
RESEARCH AND                                            DEVELOPPEMENT
 DEVELOPMENT (note 3)    282,672       388,009               (note 3)
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                                                          PERTE AVANT
LOSS BEFORE                                            IMPOTS SUR LES
 INCOME TAXES         (1,186,734)   (1,086,365)             BENEFICES
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INCOME TAXES                                           IMPOTS SUR LES
 (note 19)                                        BENEFICES (note 19)
   Current                 7,000         2,169              Exigibles
   Future                  9,420             -                 Futurs
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                          16,420         2,169
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NET LOSS             $(1,203,154)  $(1,088,534)           PERTE NETTE
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                                                          PERTE NETTE
NET LOSS PER SHARE        $(0.03)       $(0.03)            PAR ACTION

WEIGHTED AVERAGE                                 NOMBRE MOYEN PONDERE
 NUMBER OF COMMON                                D'ACTIONS ORDINAIRES
 SHARES OUTSTANDING   47,657,837    40,340,447         EN CIRCULATION
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The TSX Venture Exchange has not reviewed this release and it does not accept responsibility for its adequacy or accuracy.