VANCOUVER, CANADA--(Marketwire - May 7, 2012) - Versatile Systems Inc. (TSX VENTURE:VV) announces its results for the third quarter of the 2012 fiscal year.

Revenue for the three months ended March 31, 2012 was $12,482,474 generating a gross profit of $2,335,833 or 18.7% of sales compared to $11,044,100 generating a gross profit of $2,675,686 or 24.2% of sales for the same quarter last year. The cash flow generated from operations before other items amounted to $129,706 for the three months ended March 31, 2012 compared to cash used in operations before other items of $292,241 in the second quarter, an improvement of 421,947. The Net Earnings for the quarter amounted to $63,682 ($0.00 per share) compared to Net Earnings of $32,838 ($0.00 per share) for the same period last year.

"We are pleased with the significant improvement in several key financial metrics, such as revenue, cash flow and net earnings," said John Hardy, Chairman and CEO of Versatile. "We will continue to focus on operational efficiency, while cautiously investing in organic growth."

Highlights for the quarter included:

• Revenue for the three months ended March 31, 2012 was $12,482,474 compared to $11,044,100 for the same quarter last year, an increase of $1,438,374;
• Net Earnings for the quarter amounted to $63,682 compared to $32,838 for the same quarter last year;
• The cash flow generated from operations before other items amounted to $129,706 for the three months ended March 31, 2012 compared to cash used in operations before other items of $292,241 in the second quarter, an improvement of 421,947; and
• Deferred revenue at March 31, 2012 was $7,328,936 (of which $5,749,410 is expected to be recognized in the next four quarters) compared to $6,320,199 at June 30, 2011, an increase of $1,008,737.

The research and development expense for the quarter amounted to $199,568 compared to $278,226 for the same quarter last year. During the current quarter, the Company incurred $67,781 for research and development activities related to Mobiquity Route™, DEX and related mobile software products and $96,655 related to Smart Sign™, Mobiquity Transaction Engine 3.0™ and Mobiquity Kiosk™.

"The Company enjoyed a significant increase in cash flow from operations in the quarter," said Fraser Atkinson, CFO of Versatile. "We will need to focus on improving the gross profit percentage in order to maintain profitability."

Revenue for the nine months ended March 31, 2012 was $30,669,238 generating a gross profit of $6,078,044 or 19.8% of sales compared to $35,723,183 generating a gross profit of $7,747,650 or 21.7% of sales for the same period last year. The Net Loss for the period amounted to $541,060 ($0.00 per share) compared to Net Earnings of $122,489 ($0.00 per share) for the same period last year.

The Company adopted IFRS in the first quarter of the current fiscal year. The Company has applied the transitional exceptions and exemptions to full retroactive application of IFRS in its preparation of an opening IFRS consolidated statement of financial position at July 1, 2010. The most significant changes include the reclassification of deferred contract costs to intangible assets and the reclassification of current deferred income taxes to long term. Further details of the conversion to IFRS are provided in Management's Discussion and Analysis and in the Notes to the Company's unaudited Consolidated Financial Statements, as at and for the nine months ended March, 2012.

The following table provides a reconciliation of the Company's working capital under IFRS and under the previous Canadian generally accepted accounting principles:

		31-Mar-12		30-Jun-11		01-Jul-10
Current Assets - IFRS		15,546,111		12,501,790		16,478,255
Add back current portion of deferred contract costs		4,211,777		4,469,066		5,793,180
Add back current portion of deferred income taxes		536,401		546,252		721,975
Current Assets - Canadian GAAP		20,294,289		17,517,108		22,993,410
Current Liabilities - IFRS and Canadian GAAP	-	16,906,141	-	13,502,342	-	18,740,864
Working Capital - Canadian GAAP		3,388,148		4,014,766		4,252,546

On January 3, 2012 the Company delisted its shares from trading on the AIM market of the London Stock Exchange, which was approved by the shareholders at the annual general meeting held on November 17, 2011.

About Versatile

Versatile provides business solutions that enable companies to improve sales, marketing and distribution of their products. Versatile also provides information technology services for the implementation, maintenance and security of mission-critical computer environments. Versatile has the ability to architect solutions involving both proprietary and third party components. For more information: www.versatile.com.

Forward-Looking Statements

This document may contain forward-looking statements relating to Versatile's operations or to the environment in which it operates, which are based on Versatile's operations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict or are beyond Versatile's control. A number of important factors including those set forth in other public filings could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. Consequently, readers should not place any undue reliance on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they are made. Versatile disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

All amounts are expressed in U.S. dollars unless otherwise stated. © 2012 Versatile Systems Inc. All rights reserved.

Versatile Systems Inc.
Consolidated Statements of Financial Position
(Unaudited - Prepared by Management)
Expressed in U.S. dollars		March 31, 2012			June 30, 2011				July 1, 2010
ASSETS
Current Assets
	Cash and cash equivalents	$	289,304		$	978,656		$	1,738,036
	Investment in Equus		2,202,098			2,311,109			2,203,043
	Accounts receivable		10,298,600			7,134,328			10,580,706
	Prepaid expenses		259,612			228,062			236,993
	Inventory		2,496,497			1,849,635			1,719,477
			15,546,111			12,501,790			16,478,255
Long-term accounts receivable			216,393			401,742			265,612
Capital Assets			264,307			270,437			519,391
Intangible assets			5,674,254			5,048,776			6,392,005
Deferred income tax assets			7,200,788			7,001,156			6,965,850
Goodwill			9,914,350			9,914,350			9,914,350
		$	38,816,203		$	35,138,251		$	40,535,463
LIABILITIES
Current Liabilities
	Line of credit	$	1,767,772		$	1,007,767		$	1,353,312
	Accounts payable and accrued liabilities		9,388,959			6,823,643			9,955,342
	Current portion of deferred revenue		5,749,410			5,670,932			7,432,210
			16,906,141			13,502,342			18,740,864
Deferred Revenue			1,579,526			649,267			710,269
			18,485,667			14,151,609			19,451,133
SHAREHOLDERS' EQUITY
	Share Capital		54,433,709			54,433,709			54,433,709
	Warrants		-			42,000			186,367
	Equity Reserve		4,629,219			4,578,470			4,231,539
	Deficit		(37,605,658	)		(37,064,598	)		(36,965,836	)
	Accumulated other comprehensive loss		(1,126,734	)		(1,002,939	)		(801,449	)
			20,330,536			20,986,642			21,084,330
		$	38,816,203		$	35,138,251		$	40,535,463

Versatile Systems Inc.
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited - Prepared by Management)
Expressed in U.S. dollars		Three months ended March 31						Nine months ended March 31
			2012			2011			2012			2011
SALES		$	12,482,474		$	11,044,100		$	30,669,238		$	35,723,183
COST OF SALES			10,146,641			8,368,414			24,591,194			27,975,533
			2,335,833			2,675,686			6,078,044			7,747,650
EXPENSES
	Selling and marketing		1,183,949			1,136,728			3,302,067			3,473,173
	General and administrative		812,153			829,900			2,601,131			2,772,247
	Research and development		199,568			278,226			719,525			749,403
	Non recurrring expenses		-			235,486			-			293,657
	Stock-based compensation		-			60,906			8,749			60,906
	Foreign exchange loss		8,311			21,703			37,092			(9,715	)
			2,203,981			2,562,949			6,668,564			7,339,671
OPERATING PROFIT (LOSS)			131,852			112,737			(590,520	)		407,979
	Amortization of capital assets		38,713			54,485			125,224			173,754
	Interest expense (income)		7,262			(1,826	)		20,079			13,810
	Loss on sale of capital assets and investments		-			625			1,534			3,200
EARNINGS (LOSS) BEFORE INCOME TAXES			85,877			59,453			(737,357	)		217,215
Current income tax expense (recovery)			(995	)		2,985			(3,335	)		995
Deferred income tax benefit (expense)			(21,200	)		(29,600	)		199,632			(95,721	)
NET EARNINGS (LOSS)		$	63,682		$	32,838		$	(541,060	)	$	122,489
EARNINGS (LOSS) PER SHARE (basic and diluted)			$0.00			$0.00			($0.00	)		$0.00
Net earnings (loss)		$	63,682		$	32,838		$	(541,060	)	$	122,489
Other comprehensive income (loss)
	Net change in fair value of available-for-sale investments		29,103			96,296			(123,795	)		(8,898	)
Total comprehensive income (loss)		$	92,785		$	129,134		$	(664,855	)	$	113,591

Versatile Systems Inc.

Consolidated Statements of Changes in Shareholders' Equity

(Unaudited - Prepared by Management)

Expressed in U.S. dollars

	Share Capital			Warrants			Equity Reserve			Deficit			Accumulated other comprehensive loss			Total
Balance, July 1, 2010	$	54,433,709		$	186,367		$	4,231,539		$	(36,965,836	)	$	(801,449	)	$	21,084,330
Net earnings											122,489						122,489
Net change in fair value of available-for-sale investments														(8,898	)		(8,898	)
Expiration of warrants					(63,307	)		63,307									-
Share-based compensation expense								60,906									60,906
Balance, March 31, 2011		54,433,709			123,060			4,355,752			(36,843,347	)		(810,347	)		21,258,827
Balance, June 30, 2011		54,433,709			42,000			4,578,470			(37,064,598	)		(1,002,939	)		20,986,642
Net loss											(541,060	)					(541,060	)
Net change in fair value of available-for-sale investments														(123,795	)		(123,795	)
Expiration of warrants					(42,000	)		42,000									-
Share-based compensation expense		-			-			8,749			-			-			8,749
Balance, March 31, 2012	$	54,433,709		$	-		$	4,629,219		$	(37,605,658	)	$	(1,126,734	)	$	20,330,536

Versatile Systems Inc.
Consolidated Statements of Cash Flows
(Unaudited - Prepared by Management)
Expressed in U.S. dollars				Three months ended March 31						Nine months ended March 31
				2012			2011			2012			2011
OPERATING ACTIVITIES
	Net earnings (loss)		$	63,682		$	32,838		$	(541,060	)	$	122,489
	Items not affecting cash
		Amortization of capital assets		52,725			61,228			147,725			199,077
		Stock-based compensation		-			60,906			8,749			60,906
		Loss on sale of capital assets and investments		-			625			1,534			3,200
		Unrealized foreign exchange gain		(7,901	)		21,624			(17,943	)		1,233
		Deferred income taxes		21,200			29,600			(199,632	)		95,721
Cash flow used in operations before other items				129,706			206,821			(600,627	)		482,626
	Net change in non-cash working capital			314,083			(1,854,160	)		(80,343	)		(2,245,893	)
				443,789			(1,647,339	)		(680,970	)		(1,763,267	)
INVESTING ACTIVITIES
	Short term Investments			-			-			(14,776	)		(309,556	)
	Proceeds from disposition of capital assets			14,597			4,087			35,027			107,355
	Intangible assets - contract cost additions			(3,078,726	)		(1,217,221	)		(5,712,159	)		(4,131,789	)
	Amortization of intangible assets			1,948,725			2,397,419			5,086,681			5,436,073
	Purchase of capital assets			(53,856	)		(30,220	)		(163,160	)		(108,844	)
				(1,169,260	)		1,154,065			(768,387	)		993,239
FINANCING ACTIVITIES
	Proceeds from (Repayment of) line of credit			882,647			322,972			760,005			(214,485	)
				882,647			322,972			760,005			(214,485	)
Increase (Decrease) in cash and cash equivalents				157,176			(170,302	)		(689,352	)		(984,513	)
Cash and cash equivalents, beginning of period				132,128			923,825			978,656			1,738,036
Cash and cash equivalents, end of period			$	289,304		$	753,523		$	289,304		$	753,523