QUANTITATIVE ALPHA TRADING INC. REPORTS 3RD QUARTER 2011 FINANCIAL RESULTS
October 18, 2011 (Toronto) – Quantitative Alpha Trading Inc. (CNSX: QAT)(OTCQB:QATSF) (the “Company” or “QAT”), announced today the release of its financial statements for the period ending September 30, 2011, together with the management’s discussion & analysis in respect of the Company’s financial results and performance using the International Financial Reporting Standards (IFRS) applicable to all publicly accountable enterprises in Canada.
The Company reported a net loss of $1,273,478 ($0.00 per share) for the three months ended September 30, 2011 as compared to a net loss of $492,521 ($0.00 per share) for the three months ended September 30, 2010. The change was mainly due to a decrease in management consulting and administrative expense an increase in interest and other income, foreign exchange income offset by an increase in stock based compensation, software amortization, professional fees and salary and wages.
The Company reported a net loss of $3,908,303 ($0.02 per share) for the nine months ended September 30, 2011 as compared to a net loss of $2,660,481($0.02 per share) for the nine months ended September 30, 2010. The change was mainly due to a decrease in management consulting and administrative expense offset by an increase in stock based compensation, software amortization, professional fees and salary and wages.
“The Company is an extremely good position both financially and operationally” stated Jim McGovern, Chief Executive Officer of QAT. “With our New York operations now fully up and running under the leadership of Benjamin Chesir, and our Stealth Trading System (“Stealth”) now deployed in both Toronto and New York, the Company is in a position to start generating revenues this month. Various marketing initiatives will be undertaken, including a revamped website, to grow the assets that are traded using Stealth. We are in the final stages of submitting our application to move the Company from the CSNX to the TSX Ventures Exchange for listing our shares on that exchange. This will improve the visibility of the Company to the general public.”
The Company does not generate revenues from operations. The Company relies on equity financing for its working capital requirement to fund its operations, business and software development activities. At September 30, 2011, the Company had $1,531,141 in cash and cash equivalents (2010 – 63,561) and a working capital of $1,643,693 (2010 –$198,886). The Company is not subject to external working capital requirement and does not have significant capital commitments that it is obligated to make.
About QAT
For more than a decade, QAT’s Chief Technology Officer has been researching, developing and maintaining proprietary algorithmic securities trading systems that operate across numerous financial markets. Relying on behavioural science patterns, the Company’s proprietary systems use a linked series of computer programs to analyze securities market data in real-time and directly execute buy or sell orders over the electronic securities exchanges while monitoring the status of every trade within a given portfolio without human intervention. The Company trades on CNSX under the symbol QAT and in the United States on the OTCQB under the symbol QATSF.
For further information:
Contact: Jim McGovern, Chief Executive Officer, QAT - 1-416-323-0477, jim@qatinc.com
Forward-Looking Statements Advisory
Certain information included in this press release constitutes forward-looking statements and information and future-oriented financial information under applicable securities legislation and is provided for the purpose of expressing management’s current expectations and plans for the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions.
More particularly, this press release contains statements concerning QAT’s anticipated: business development strategy, customer orders, product deliveries, sales, revenue and revenue growth. The forward-looking statements are based on a number of key expectations and assumptions made by QAT, including expectations and assumptions concerning achievement of current timetables for development programs and sales, target market acceptance of QAT’s products, current and new product performance, availability and cost of labor and expertise. Although QAT believes that the expectations and assumptions used to develop the forward-looking statements are reasonable, undue reliance should not be placed on the forward-looking statements because QAT can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve numerous risks and uncertainties that contribute to the possibility that the projections and forecasts in the forward-looking statements will not occur and that actual performance or results could differ materially from those anticipated in the forward-looking statements. These risks and uncertainties include, but are not limited to, the risks associated with QAT’s stage of development, history of losses and lack of historical product revenues, uncertainty as to product development and sales milestones being met, product defect and performance risks, competition for capital and market share, uncertainty as to target markets, dependence upon third parties, uncertainty as to patent and proprietary rights, availability and retention of management and key personnel, exchange rate and currency fluctuations, uncertainties relating to potential delays or changes in plans with respect to product development or capital expenditures and the ability of QAT to access sufficient capital on acceptable terms. This is not an exhaustive list and additional information on these risks and other factors that could affect QAT’s operations and financial results are included in reports on file with the Canadian securities regulatory authorities and can be accessed through the SEDAR website at www.sedar.com.
The forward-looking statements contained in this press release are made as of the date hereof and QAT undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Additionally, QAT undertakes no obligation to comment on the expectations of, or statements made by, third parties about QAT.
CNSX has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this news release.
Quantitative Alpha Trading Inc.
(Formerly known as RTN Stealth Software Inc.)
CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2011
(Unaudited)
UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS
In accordance with National Instrument 51-102 released by the Canadian Securities Administrators, the Company discloses that its auditors have not reviewed the unaudited consolidated condensed interim financial statements for the three and nine month period ended September 30, 2011.
| Quantitative Alpha Trading Inc. |
| (Formerly known as RTN Stealth Software Inc.) |
| Consolidated Condensed Interim Financial Statements |
| Statement of Loss and Comprehensive Loss |
| For the three and nine months ended September 30, 2011 and 2010 |
| (Unaudited, expressed in Canadian dollars) |
| | | Three months ended September 30 | | Nine months ended September 30 | |
| | | 2011 | | 2010 | | 2011 | | 2010 | |
| Expenses | | | | | | | | | | | | | |
| Advertising and promotion | | $ | — | | $ | 750 | | $ | — | | $ | 51,673 | |
| Amortization - Equipment | | | 4,895 | | | 1,923 | | | 8,603 | | | 6,144 | |
| Amortization - Intangible | | | 207,744 | | | 207,744 | | | 623,232 | | | 311,616 | |
| Finance costs | | | 1,402 | | | 19,417 | | | 24,831 | | | 20,479 | |
| Foreign exchange (gain) | | | (40,382 | ) | | (24,072 | ) | | (1,834 | ) | | (24,072 | ) |
| Management, consulting and administrative | | | 36,308 | | | 176,814 | | | 132,263 | | | 349,268 | |
| Office | | | 1,258 | | | 10,101 | | | 15,809 | | | 27,154 | |
| Professional fees | | | 139,908 | | | 30,298 | | | 294,160 | | | 60,977 | |
| Rent | | | 16,189 | | | 37,498 | | | 48,963 | | | 57,498 | |
| Salary and wages | | | 129,350 | | | — | | | 304,130 | | | — | |
| Share based compensation | | | 731,848 | | | — | | | 2,390,983 | | | 1,744,745 | |
| Travel | | | 7,599 | | | 12,585 | | | 20,359 | | | 20,546 | |
| Trust and filing fees | | | 31,296 | | | 20,449 | | | 52,900 | | | 35,471 | |
| Loss before the following: | | | (1,267,415 | ) | | (493,507 | ) | | (3,914,399 | ) | | (2,661,499 | ) |
| Interest and other income (loss) | | | (6,063 | ) | | 986 | | | 6,096 | | | 1,019 | |
| Loss in write off of oil and gas property | | | — | | | — | | | — | | | (1 | ) |
| | | | | | | | | | | | | | |
| Net loss and comprehensive loss | | $ | (1,273,478 | ) | $ | (492,521 | ) | $ | (3,908,303 | ) | $ | (2,660,481 | ) |
| | | | | | | | | | | | | | |
| Loss per share, basic | | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.02 | ) | $ | (0.02 | ) |
| Loss per share, fully diluted | | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.02 | ) | $ | (0.02 | ) |
| | | | | | | | | | | | | | |
| Weighted average number of common shares outstanding, basic | | | 260,580,304 | | | 124,416,860 | | | 206,544,689 | | | 111,962,648 | |
| Weighted average number of common shares outstanding, fully diluted | | | 268,206,477 | | | 124,416,860 | | | 213,705,043 | | | 111,962,648 | |
| Quantitative Alpha Trading Inc. |
| (Formerly known as RTN Stealth Software Inc.) |
| Consolidated Condensed Interim Financial Statements |
| Statement of Financial Position |
As at, (Unaudited - expressed in Canadian Dollars) | | September 30,2011 | | December 31,2010 | | January 1 2010 | |
| | | | | | (Note 11) | | (Note 11) | |
| Assets | | | | | | | | | | |
| | | | | | | | | | | |
| Current assets | | | | | | | | | | |
| Cash and cash equivalents | | $ | 1,513,141 | | $ | 174,530 | | $ | 379,284 | |
| Marketable securities | | | — | | | — | | | 1,448,800 | |
| Other receivables | | | 67,367 | | | 28,664 | | | 242,744 | |
| Prepaid expenses (Note 2) | | | 276,042 | | | 216,135 | | | 10,000 | |
| | | | 1,856,550 | | | 419,329 | | | 2,080,828 | |
| | | | | | | | | | | |
| Equipment (Note 5) | | | 57,395 | | | 7,884 | | | 3,940 | |
| Intangible (Note 6) | | | 7,167,159 | | | 7,790,391 | | | — | |
| Prepaid Expenses - long term (Note 2) | | | 130,208 | | | 286,458 | | | — | |
| Mineral property | | | — | | | — | | | 67,185 | |
| Oil and gas property | | | — | | | — | | | 1 | |
| | | $ | 9,211,312 | | $ | 8,504,062 | | $ | 2,151,954 | |
| | | | | | | | | | | |
| Liabilities and Shareholders’ Equity | | | | | | | | | | |
| | | | | | | | | | | |
| Current liabilities | | | | | | | | | | |
| Trade and other payables | | $ | 212,857 | | $ | 115,046 | | $ | 75,072 | |
| Deposit on private placement | | | — | | | 250,000 | | | — | |
| Notes payable - current portion (Note 7) | | | — | | | 358,445 | | | — | |
| | | | 212,857 | | | 723,491 | | | 75,072 | |
| | | | | | | | | | | |
| Note payable -long term | | | — | | | 2,095,476 | | | — | |
| | | | 212,857 | | | 2,818,967 | | | 75,072 | |
| Shareholders’ equity | | | | | | | | | | |
| Share capital and warrants (Note 8) | | | 13,922,243 | | | 8,939,599 | | | 3,919,865 | |
| Contributed surplus | | | 4,645,457 | | | 2,406,438 | | | 670,374 | |
| Accumulated other comprehensive income | | | | | | — | | | 504,770 | |
| Deficit | | | (9,569,245 | ) | | (5,660,942 | ) | | (3,018,127 | ) |
| | | | 8,998,455 | | | 5,685,095 | | | 2,076,882 | |
| | | $ | 9,211,312 | | $ | 8,504,062 | | $ | 2,151,954 | |
Approved by the Audit Committee on behalf of Board of Directors on October 17, 2011
| Quantitative Alpha Trading Inc. |
| (Formerly known as RTN Stealth Software Inc.) |
| Consolidated Condensed Interim Financial Statements |
| Statement of Changes in Equity |
| For the three and nine months ended September 30, 2011 and 2010 |
| (Unaudited, expressed in Canadian dollars) |
| | | Share Capital and Warrants | | Contributed Surplus | | Accumulated other comprehensive Income | | Deficit | | Total Equity | |
| | | | $ | | | $ | | | $ | | | | | | $ | |
| | | | | | | | | | | | | | | | | |
| As at January 1, 2011 | | | 8,939,599 | | | 2,406,438 | | | — | | | (5,660,942 | ) | | 5,685,095 | |
| Net loss and comprehensive loss | | | — | | | — | | | — | | | (3,908,303 | ) | | (3,908,303 | ) |
| Issuance - private placement (Note 8a) | | | 500,000 | | | — | | | — | | | — | | | 500,000 | |
Issuance - conversion of notes payable (Note 7) | | | 2,486,930 | | | — | | | — | | | — | | | 2,486,930 | |
| Issuance - warrant exercise (Note 8a) | | | 2,000,000 | | | — | | | — | | | — | | | 2,000,000 | |
| Share based compensation (Note 8b) | | | — | | | 1,091,189 | | | — | | | — | | | 1,091,189 | |
| Share based compensation (Note 8b) | | | — | | | 463,779 | | | — | | | — | | | 463,779 | |
| Share based compensation (Note 8b) | | | — | | | 679,765 | | | — | | | — | | | 679,765 | |
| Cancellation of preferred shares (Note 8a) | | | (4,286 | ) | | 4,286 | | | — | | | — | | | — | |
| As at September 30, 2011 | | | 13,922,243 | | | 4,645,457 | | | — | | | (9,569,245 | ) | | 8,998,455 | |
| | | | | | | | | | | | | | | | | |
| As at January 1, 2010 | | | 3,919,865 | | | 670,374 | | | 504,770 | | | (3,018,127 | ) | | 2,076,882 | |
| Net loss and comprehensive loss | | | — | | | — | | | — | | | (2,660,481 | ) | | (2,660,481 | ) |
| Issuance - Arrangement Agreement | | | — | | | — | | | — | | | — | | | — | |
| Redemption of Class A preferred shares | | | (1,515,986 | ) | | — | | | (504,770 | ) | | 504,770 | | | (1,515,986 | ) |
| Share based compensation | | | — | | | 1,736,064 | | | — | | | — | | | 1,736,064 | |
| Issuance-acquisition of software license | | | 150,000 | | | — | | | — | | | — | | | 150,000 | |
| Issuance - acquisition of RTN Stealth Software | | | 5,000,000 | | | — | | | — | | | — | | | 5,000,000 | |
| Issuance - finders fees for ENAJ acquisition | | | 31,250 | | | — | | | — | | | — | | | 31,250 | |
| Issuance - management agreement with Chief Operating officer | | | 625,000 | | | — | | | — | | | — | | | 625,000 | |
| Issuance - acquisition of ENAJ software | | | 625,000 | | | — | | | — | | | — | | | 625,000 | |
| As at September 30, 2010 | | | 8,835,129 | | | 2,406,438 | | | — | | | (5,173,838 | ) | | 6,067,729 | |
| Quantitative Alpha Trading Inc. |
| (Formerly known as RTN Stealth Software Inc.) |
| Consolidated Condensed Interim Financial Statements |
| Cash Flow Statement |
| For the three and nine months ended September 30, 2011 |
| (Unaudited, expressed in Canadian dollars) |
| | | Three months ended September 30 | | Nine months ended September 30 | |
| | | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
| Cash provided by (used in) | | | | | | | | | | | | | |
| Operating activities | | | | | | | | | | | | | |
| Loss for the period | | $ | (1,273,478 | ) | $ | (492,521 | ) | $ | (3,908,303 | ) | $ | (2,660,481 | ) |
| Items not involving cash: | | | | | | | | | | | | | |
| Share based compensation | | | 731,848 | | | 52,083 | | | 2,390,983 | | | 1,796,828 | |
| Amortization | | | 212,638 | | | 209,667 | | | 631,835 | | | 317,760 | |
| Accrued interest income | | | — | | | (101 | ) | | — | | | (134 | ) |
| Accrued interest on notes payable | | | | | | 17,733 | | | 21,631 | | | 17,733 | |
| Foreign exchange on notes payable | | | — | | | (24,072 | ) | | 11,378 | | | (24,072 | ) |
| | | | (328,992 | ) | | (237,211 | ) | | (852,476 | ) | | (552,366 | ) |
| Net changes in non-cash working capital | | | | | | | | | | | | | |
| Other receivables | | | (15,017 | ) | | (2,685 | ) | | (38,703 | ) | | (13,510 | ) |
| Prepaid expenses | | | (52,126 | ) | | — | | | (59,907 | ) | | 10,000 | |
| Deposit on private placement | | | — | | | 38,850 | | | — | | | 38,850 | |
| Trade and other payables | | | 34,507 | | | 81,791 | | | 97,811 | | | 17,474 | |
| | | | (361,628 | ) | | (119,255 | ) | | (853,275 | ) | | (499,552 | ) |
| Investing activities | | | | | | | | | | | | | |
| Purchase of equipment | | | (46,996 | ) | | (2,219 | ) | | (58,114 | ) | | (14,171 | ) |
| Redemption of Short term investments | | | — | | | 10,000 | | | — | | | 10,000 | |
| Acquisition of Short term investments | | | — | | | — | | | — | | | (50,000 | ) |
| | | | (46,996 | ) | | 7,781 | | | (58,114 | ) | | (54,171 | ) |
| Financing activities | | | | | | | | | | | | | |
| Common shares issued | | | — | | | — | | | 2,500,000 | | | — | |
| Share subscription receivable | | | — | | | — | | | — | | | 238,000 | |
| Deposit on private placement | | | — | | | — | | | (250,000 | ) | | — | |
| | | | — | | | — | | | 2,250,000 | | | 238,000 | |
| | | | | | | | | | | | | | |
| Increase in cash and cash equivalents | | | (408,624 | ) | | (111,474 | ) | | 1,338,611 | | | (315,723 | ) |
| Cash and cash equivalents, beginning of period | | | 1,921,765 | | | 175,035 | | | 174,530 | | | 379,284 | |
| | | | | | | | | | | | | | |
| Cash and cash equivalents, end of period | | $ | 1,513,141 | | $ | 63,561 | | $ | 1,513,141 | | $ | 63,561 | |
| | | | | | | | | | | | | | |
| Supplementary information: | | | | | | | | | | | | | |
| Cash received from interest | | $ | — | | $ | — | | $ | — | | $ | 12 | |
| Non-cash transactions: | | | | | | | | | | | | | |
| Conversion of notes payable | | $ | — | | $ | — | | $ | 2,486,930 | | $ | — | |
| Shares distributed as part of corporate restructuring | | $ | — | | $ | — | | $ | — | | $ | 1,515,986 | |
| Acquisition of Software License | | $ | — | | $ | — | | $ | — | | $ | 150,000 | |
| Common shares issued for management agreement (Note 2) | | $ | — | | $ | — | | $ | — | | $ | 625,000 | |
| Common shares issued for the acquisition of software (Note 2) | | $ | — | | $ | — | | $ | — | | $ | 5,806,250 | |
