Any statements contained herein that are not statements of historical
facts may be deemed to be forward-looking, including those identified
by the expressions “anticipate”, “believe”, “plan”, “estimate”,
“expect”, “intend”, and similar expressions to the extent they relate
to the Company or its management. The forward-looking
statements are not historical facts, but reflect HDX current
expectations regarding future results or events. These
forward-looking statements are subject to a number of risks and
uncertainties that could cause actual results or events to differ
materially from current expectations, including the matters discussed
under “Risks and Uncertainties” in the Annual Information Form filed on
April 2, 2007 with the regulatory authorities. HDX assumes no
obligation to update the forward-looking statements, or to update the
reasons why actual results could differ from those reflected in the
forward-looking statements.
COMPANY OVERVIEW
Hosted Data Transaction Solutions Inc. is in the business of managing
merchant transactions with consumers and facilitating payment. HDX
develops and deploys touch screen POS system software and associated
enterprise management tools and has developed and deployed numerous POS
applications. HDX also provides system hardware integration services,
merchant staff training, system installation services, and post sale
software and hardware support services.
Leading edge technology also includes customer self serve kiosks and
“line buster” mobile point of sale terminals. These products have been
designed to dramatically enhance customer throughput and drastically
reduce customer queues. These technologies are especially effective in
high foot traffic environments that have limited cash register counter
space, limited retail square footage, and the absence of a drive
through.
HDX pioneered an "instead of cash"® electronic based payment
facilitation service. The Dexit® Service can be private branded for a
specific merchant and enables customers to pay for items quickly and
conveniently with the tap of a RFID (radio frequency identification)
tag linked to a pre-paid account. This Dexit® Service payment solution
is especially well suited for corporate and institutional cafeteria
environments where hundreds of customers purchase and pay for meals in
compressed periods throughout the business day.
To find out more about Hosted Data Transaction Solutions Inc., visit
our website at www.hdx-solutions.com.
GROWTH
STRATEGY AND FUTURE OUTLOOK
Management has historically focused its financial resources on key
opportunities, with a focus on private branded prepaid solutions, as
well as other payments-related real time hosted data solutions for
merchants, such as loyalty and remote monitoring
applications. HDX will continue to pursue opportunities
directly, as well as through partner arrangements. HDX is also pursuing
selective acquisitions to further its growth, which the Company expects
will be primarily focused on POS services companies which can be
acquired at attractive multiples.
On August 3, 2007, the Company completed that acquisition of the assets
of the quick service restaurant division (“QSR”) of Howell Data Systems
Inc. (“HDS”). QSR is in the business of managing merchant
transactions with consumers and facilitating payment. QSR develops and
deploys touch screen point-of-sale ("POS") system software and
associated enterprise management tools and, like HDX, QSR has developed
and deployed numerous POS applications. In keeping with the
common turnkey service and one stop shop philosophies of both HDX and
QSR, QSR also provides system hardware integration services, merchant
staff training, system installation services, and post sale software
and hardware support services. QSR has established a customer base of
thousands of system installations throughout North America and include
such names as Tim Hortons, Wendys, Country Style, Harveys,
Wienerschnitzel, and Tastee Freeze.
The Company’s business and the QSR business are substantially the same
and therefore the Company expects to realize significant synergies with
QSR. The combined entity provides a one stop shop for merchants for
touch screen POS systems, software, associated enterprise management
tools and integrated real-time hosted data applications, including
prepaid and loyalty applications. In addition, the combined
entity provides system hardware integration services, merchant staff
training, system installation services, and post sale software and
hardware support services, with a focus on customer service.
The combined company is focused on enhancing relationships with the
established QSR customer base of thousands of merchant locations
throughout North America, driving incremental revenue from these
existing customers and from new customers which will be secured
organically and through the planned acquisition of other merchant
point-of-sales companies. In conjunction with the completion
of the QSR acquisition, the Company also changed its name to Hosted
Data Transaction Solutions Inc.
On November 14, 2007, HDX entered into a letter of intent to acquire
Sabrepoint Inc. and Sabrepoint Services Inc. (“Sabrepoint”), a
point-of-sale technology company, for $1,250,000 subject to closing
adjustments. The purchase price will be satisfied by the payment of
$850,000 in cash and by the issuance of 400,000 HDX common shares. The
transaction is expected to close on December 15, 2007 and is subject to
completion of due diligence by HDX, customary closing conditions,
receipt of all necessary regulatory approvals and the negotiation and
execution of a definitive purchase and sale agreement.
The Company is also in late stage negotiations to acquire another POS
technology and services company which would be a slightly larger
acquisition than the Sabrepoint acquisition.
There are no assurances that HDX, the Dexit Service or any of the other
products or services offered by the Company will gain market
acceptance, or that HDX will achieve or maintain profitability, as the
Company has historically not earned operating profits and may incur
further operating losses.
SHARE CAPITAL
As at September 30, 2007, HDX had issued and outstanding 24,132,687
voting common shares.
In addition to common shares, the following is a summary of stock
options and warrants outstanding as at September 30, 2007:
Exercise
price
per common share
Expiry
Number
issued and outstanding
Warrants
$0.75 to $2.50
Nov 30, 2007 to
August 3, 2009
4,096,911
Stock options
$0.53 to $6.00
April 15, 2009 to
April 11, 2016
1,382,227
5,479,138
GOVERNANCE
& BOARD MEMBERS
The HDX Board of Directors has implemented a high standard of corporate
governance. All members of the Board's Audit Committee, Human Resources
and Compensation Committee, Corporate Governance and Nominating
Committee are independent of management.
John
McBride
Chairman of the Board
Paul
Howell
Director
Edward
Nordholm
Director
Loudon
Owen
Director
Thomas
Pladsen
Director
CODE OF BUSINESS
CONDUCT
The HDX Board of Directors has adopted a Code of Business Conduct,
which summarizes the standards of business conduct that are to guide
the actions of all directors, officers and employees of the company.
The goal of the Code is to promote, above all, honest and ethical
conduct and fair dealing in all business relationships, with respect to
all of HDX stakeholders - including its shareholders, customers,
suppliers, other business partners, regulators, and employees.
MANAGEMENT TEAM
Paul
Howell Chief
Executive Officer
Mr. Howell, a veteran in the retail systems industry, is the founder,
chairman, and majority shareholder of Howell Data Systems Inc. (“HDS”),
a leading supplier of point of sale solutions in North America and a
supplier of business software solutions, hardware systems, and support
services, to thousands of merchants in the grocery, restaurant,
theatre, and general retail industries. Due to consistent success in
deploying solutions to new merchant locations, HDS received the IBM
North America Market Growth Achievement Award for 2005.
Sol
Korngold Chief
Operating Officer
Mr. Korngold came to Hosted Data Transaction Solutions (HDX) in 2001
from CIBC, where he was the Director of Programme Management for CIBC’s
Internet Channel. Prior to working at CIBC, Mr. Korngold held senior
positions at Cebra Inc., then a wholly-owned e-commerce subsidiary of
the Bank of Montreal. At Cebra, Mr. Korngold contributed to the
development and launch of, among other initiatives, MERX, Canada’s
national tendering service and ePOST, an electronic bill presentment
and payment service that was developed and launched in partnership with
Canada Post Corporation. Mr. Korngold is a founding member of Dexit Inc.
Kevin
Mills Chief
Financial Officer
Mr. Mills came to Hosted Data Transactions Solutions Inc. during fiscal
2008 from PricewaterhouseCoopers LLP where Mr. Mills served as an audit
manager. Throughout his career at PricewaterhouseCoopers LLP,
Mr. Mills was assigned to projects in Washington, DC, Toronto, San
Diego and most recently London, Ontario offices.
Mr. Mills holds a BCOM degree from Queen’s University in Kingston,
Ontario and is a Chartered Accountant, registered in the Province of
Ontario.
FINANCIAL
REPORTS & REGULATORY FILINGS
The Company trades under the ticker symbol HDX on the Toronto Stock
Exchange and has a fiscal year end of December 31.
HDX financial information and regulatory filings are available at www.sedar.com.
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INVESTOR CONTACTS
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