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Tropika Proves E-Commerce Strategy By Delivering Profitable Quarter
TORONTO, ONTARIO--Mr. John K. Ashbee, CEO of Tropika International
Limited, today announced Tropika's second quarter results, which
demonstrated a swift move to profitability, building on the
strength of the company's new e-commerce initiatives.
Revenues in the second quarter of fiscal 1999 reached $4,899,736,
a dramatic increase from the first quarter of fiscal 1999, when
revenues were $838,200. Profits totalled $11,657 in the second
quarter, versus a loss of $110,838 in the first quarter. In the
six months, revenues increased to $5,737,936, compared to $352,118
in the same period of 1997.
"We are very pleased with the success of our strategic shift to
e-commerce," said Ken Nason, Tropika's President. "This is only
our second quarter in Internet operations, and already we are
seeing a profit, unlike many other, much larger, internet players.
Tropika's strategic shift was introduced to shareholders at the
Annual General Meeting, held in November of 1998, and confirmed by
the company's new Board of Directors in December. The Board also
agreed in principle to several other online initiatives in the
future. As a result, Tropika now offers a core bundle of
e-commerce services to customers looking for strategic online
business solutions.
"Furthering the overall e-commerce strategy," added Ashbee,
"Tropika has just acquired a 51 percent interest in RC Securities
Inc. (RCS), an offshore brokerage based in Antigua, WI. Tropika's
Internet and e-commerce expertise will permit RCS to present a
fully interactive website that enables securities trading offshore
and brokerage services as well as the online incorporation of
international businesses.
RCS will be headed by Mr. David Putnam as Managing Director. Mr
Putnam's extensive experience includes such positions as Partner
with Gordon Capital and chief bond trader at CIBC in Toronto.
The transaction was valued as US$250,000, satisfied by the issue
of 3,000,000 common shares of Tropika plus a note in the amount of
US$50.000. Tropika anticipates that returns will exceed the cost
of purchase within a year.
Other Highlights of the Quarter:
-Three more casinos sites, in addition to the company's first two
have been turned over to the marketing department to commence
pre-launch activities. Two of these are now available for
previewing on the Tropika website (http://www.tropika.com);
-The next set of casinos, representing the sixth, seventh and
eighth have now been commissioned and construction is expected to
begin within the next 30 days.
-Additional licensed site sales are in negotiations;
-Tropika has adopted a new, aggressive reporting policy in an
effort to comply with the most stringent exchanges' disclosure
regulations. The first step in the fulfillment of this policy
requires insider-trading reports to be filed within five days of
trading, regardless of the trading date. As a result of this
policy, it has become clear the personal management holdings in
Tropika have increased over the last twelve months.
Tropika International Limited is an emerging e-commerce
organization. Tropika is well-positioned to be a leading provider
of electronic commercial and transactional services, with a
portfolio of products and technologies that enable it to provide
superior, one-stop, online solutions to companies wishing to do
business, securely, on the Internet.
For additional information about Tropika International Limited
please contact Mr. David Prue at 416-674-1365. To receive our
press releases directly to your e-mail, contact us at
info@tropika.com.
Note: Tropika and its management team acknowledge the need for
software initiatives to be Year 2000 compliant and have a policy
in that regard.
PR 01 January 6/99
/T/
TROPIKA INTERNATIONAL LIMITED
Consolidated Financial Statements
Income Statement
For the Three Month Period ended November 30, 1998
(000's of Canadian Dollars)
CURRENT LAST YEAR LAST
QUARTER QUARTER TO DATE YEAR
November August November November
30, 1998 31, 1998 30, 1998 30, 1997
Revenue $4,899,736 $838,200 $5,737,936 $352,118
Expenses
Payouts/Marketing/
Incentives $4,618,260 $684,949 $5,303,209 $0
Support and
Administrative $251,044 $257,349 $508,393 $153,281
CyberDealer $12,035 $0 $12,035 $0
Expenses $4,881,339 $942,298 $5,823,637 $153,281
Depreciation $6,740 $6,740 $13,480 $0
Net Earnings $11,657 -$110,838 -$99,181 $198,837
Share Capital
Beginning of Period $7,000,362 $6,776,499 N/A N/A
Share Capital
End of Period $7,288,062 $7,000,362 N/A N/A
Retained Earnings
(Deficit)
Beginning of Period -$6,599,757 -$6,488,737 N/A N/A
Retained Earnings
End of Period -$6,588,100 -$6,599,575 N/A N/A
Earnings Per Share $0.0002 -0.0030 -0.0028 $0.0100
TROPIKA INTERNATIONAL LIMITED
Consolidated Financial Statements
Balance Sheet
As At November 30, 1998
(000's of Canadian Dollars)
November 30, 1998
ASSETS
Cash $22,752
Reserves and Deposits $234,014
Advances Receivable $29,205
Accounts Receivable $393,982
Capital Assets $89,877
Goodwill/Trademarks/Licenses $574,000
Total Assets $1,343,830
LIABILITIES
Accounts Payable $318,380
Short Term Loan $336,188
Current Portion Long Term $24,000
Foreign Tax Payable -$12,352
GST Payable -$28,348
Bank Term Loan $6,000
SHAREHOLDERS EQUITY
Capital Stock $7,288,062
Retained Earnings -$6,588,100
Total Liabilities and Shareholder Equity $1,343,830
TROPIKA INTERNATIONAL LIMITED
Consolidated Financial Statements
Statement of Changes in Financial Position
For the Three Month Period ended November 30, 1998
(000's of Canadian Dollars)
November 30, 1998
Operating Activities
Net Income (Loss) for the Period $11,657
Non-Cash Items-Depreciation $6,740
Changes in Non-Cash Working
Capital
Accounts Receivable -$187,500
Advances Receivable $0
Notes Receivable $0
Accounts Payable $43,381
Cash Used in Operating Activities -$125,722
Investing Activities
Increase (Decrease) in Cash Deposits $78,178
Other Investing $0
Cash Used in Investing Activities $78,178
Financing Activities
Increase in Note Payable -$53,928
Increase (Decrease) in long-term Debt -$7,500
Increase in Capital Stock $287,700
Cash Provided by (used in)
Financing Activities $226,272
Increase (Decrease) in Cash $22,372
Opening Cash Balance $380
Closing Cash Balance $22,752
/T/
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
Tropika International Limited
Mr. David Prue
(416) 674-1365
e-mail: info@tropika.com
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