A holding company specializing in the acquisition & growth of software companies
Specializing in the acquisition of software companies in e-business, mobile business and business to business (b2b) commerce
Message: Open EC Technologies, Inc. Reports Third Quarter, Fiscal 2009 Results
| May 26, 2009 |
| Open EC Technologies, Inc. Reports Third Quarter, Fiscal 2009 Results |
| NORTH VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 26, 2009) - Open EC Technologies, Inc. (the "Company") (TSX VENTURE:OCE) announced today sales revenue for the third fiscal quarter $285,368 with EBITDA excluding the loss on the disposal of the China operations of $153,583. Highlights of the performance during the three months ended March 31, 2009 are as follows: The revenues for the quarter were $285,368 with an EBITDA of $153,583 excluding the loss on the disposal of the China operations as compared with revenues of $124,982 and an EBITDA of ($147,011) during the same period in the last fiscal year. Effective January 1, 2009, the Company's subsidiary, Shenzhen Headware Software Systems Ltd. had sold its China operations, including a 60% ownership interest in Shenzhen Jinhuaye Software Ltd. to Mr. Zhongdong Zhou ("Mr. Zhou"). Mr. Zhou paid cash of $850,000 Canadian dollars to the Company, and arranged for the return of 11,400,000 of the Company's common shares (the "Shares") that were issued to Happy Clear Investments Ltd. ("Happy Clear") and Right Strong Investments Ltd ("Right Strong") pursuant to the Share Purchase Agreement dated June 22, 2007 between Right Strong, Happy Clear, First Fortune Capital Limited ("First Fortune), Mr. Zhou, Fine High Group Ltd and the Company (the "Agreement"). Subsequent to the quarter, the cash payment has been received and the shares have been cancelled and returned to the Company's treasure thereby reducing the issued and outstanding shares from 56,461,235 to 45,061,235, an approximate 20% reduction. Mr. Zhou and Happy Clear are non-arms length to the Company. Upon the return and cancellation of the Shares, Mr. Zhou will not hold or control any shares of the Company. The sale of the Company's China operations to Mr. Zhou was initiated by a sudden downturn in business contract development with a major customer, Huawei in China. The accounting loss for the sale of the China operation was $1,987,505. This is mainly due to the change in share price of the 11,400,000,000 shares issued for the purchase and was later returned. According to the Canadian GAAP, market price was required to be used for valuation upon purchase or disposal. When the shares were originally issued, the value was $0.15 per share while they are now valued at $0.03 per share. This resulted in a non-cash accounting loss of $0.12 per share or $1,368,000. If this amount is deducted from the above loss, the resulting loss on disposal of the China operations would have been $619,506. From cash perspective, the company made a cash payment of $500,000 plus 12,000,000 shares for the purchase of the China operations in July 2007. The cash received from the sale of the China operations was $850,000 and virtually almost all 12,000,000 were returned to the Company's treasury. After deducting the cash expenses of $172,568 incurred for the transactions, the Company actually had a gain of $177,432 by selling the China operations from cash perspective. The comparative financial statements for the three months and nine months ended March 31, 2009, along with other information, may be obtained through the Company's website at www.openec.com or on SEDAR at www.sedar.com About Open EC Technologies Inc. Open EC Technologies, Inc. ("OCE") www.openec.com is a TSX Venture Exchange listed holding company specializing in the acquisition of software companies in e-business and business to business (b2b) commerce. Our subsidiary, SoftCare EC Solutions Inc., www.softcare.com provide software solutions to customers throughout North America. We deliver innovative software solutions to mid-market through Fortune 100 companies. ON BEHALF OF THE BOARD Martyn A. Armstrong, President & CEO Further information about the Company can be found on SEDAR (www.sedar.com) or by contacting either, Mr. Martyn A. Armstrong, President & CEO of the Company or Mr. Michael (Gong) Chen, CFO and a Director of the Company. Trading in the securities of Open EC should be considered speculative. The Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this news release. |
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