For the quarter, the company incurred an operating loss of $1.9 million, compared to an operating loss of $141,000 in the comparable year ago quarter. The increase in the operating loss in the quarter compared to a year ago primarily reflects higher cost of goods sold attributable to temporarily higher debit interchange rates and the costs associated with the audit committee's investigation and the severance arrangements with the company's former chief executive officer. The increased operating loss also reflects decreases in revenue from fewer activation fees earned in the current quarter and the Visa support funding in the prior year's same fiscal quarter. Net loss applicable to common shareholders for the quarter was $1.8 million, or ($0.06) per diluted share, compared to a net loss of $133,000, or ($0.01) per diluted share a year ago. Results for the second quarter of fiscal 2012 include a $152,000 gain on change in fair value of warrant liability, whereas there was no like gain in the year ago quarter.
The adjusted EBITDA loss for the quarter was $938,000 compared to positive adjusted EBITDA of $450,000 in the second quarter of last year.
Herbert concluded, "Over the past several months we have taken a hard look at our organization in order to implement strategies that will accelerate our path towards profitability as soon as practicable. One of the first indicators of progress that management expects to achieve on our path towards profitability would be sustainable positive adjusted EBITDA. The actions we have taken are focused on three primary strategies: to increase revenues, improve margins and reduce costs. In the quarter we signed a new processing agreement with Elavon, which we believe provides a solid foundation to support both improvements in functionality as well as continued increases in customers, connections and resulting transactions processed. Our ability to achieve growth despite the numerous distractions in the quarter is a testament to both a vibrant market and our ability to deliver outstanding value to our customers. Over the long term we believe our commitment to industry leadership will create value for our shareholders."