FireOne feels the heat

[jetset]

FIRE ONE FEELS THE HEAT

e-Cash company reports serious losses

Sharecast reports that FireOne slumped to an all time low this week as the online payment processing firm reported a massive
pre-tax loss after recording a non-cash impairment charge of $78.4 million due to the new US Unlawful Internet Gambling Enforcement Act.

The group reported a loss before tax for the three months to 30 September of $71.78 million versus a profit of $5.60 million a year ago on revenue up 31 percent to $26.2 million due to revenue growth from its FirePay e-wallet offering.

This follows the enactment of the American anti-online gambling legislation on 13 October, after which the company ceased to process settlement transactions originating from US consumers that could be viewed as related to online gambling.

"This event will have a significant negative impact on the business and results of operations of the company as approximately 85 percent of our revenues originated from United States consumers" a group spokesman said.

FireOne also incurred exceptional provisions of $4 million during the quarter relating to the increased risk associated with customer losses resulting from the enactment of the Act, a foreign exchange loss of $0.1million and stock-based compensation of $0.4 million.

Restructuring costs are currently reckoned to be $1.5 million and will be recorded in the fourth quarter.