Itex Warns in SEC Filings that Bitcoin, Litecoin and Ripple may Cause it to Lose Revenue
Also Warns New Focus on Virtual Currencies by Regulators may have “spill over” into Itex’s Business
Can’t say I ever heard of this Company. Its a penny stock / OTC Bulletin Board Company and not a NASDAQ company
12/13/2013 10-Q for ITEX CORP
“For more than 30 years, ITEX Corporation (OTCQB: ITEX) has helped tens of thousands of businesses generate new sales, conserve precious cash flow and increase profits. With our leading payment technology platform for processing cashless business transactions and our exclusive distribution channel, member businesses utilize our digital currency ”ITEX dollars” to exchange goods and services, rather than use cash. ITEX Corporation is based in Bellevue, Washington.”
From the filing
The emergence of “virtual currencies” could result in competitive trading platforms which may reduce transaction volume and revenues
Virtual or digital currencies are receiving increasing interest from investors, businesses and governments. Examples include private virtual currency or payment systems such as BitCoin, Ripple, and Litecoin. As peer-to-peer currencies, they rely on a system of mutual trust and do not rely on a central bank, a third party or other intermediary to effect transactions or act as guarantor in the event the currency collapses. They do not have the status of legal tender. However, increased popularity or government acceptance of virtual currencies could encourage competitors to utilize virtual currencies or the exchange of online credits for goods and services. Our potential competitors could enjoy advantages, including greater financial resources and access to capital, a wider geographic presence, more accessible branch office locations, more aggressive marketing campaigns, better brand recognition, the ability to offer a wider array of services or more favorable pricing alternatives. If other virtual currencies gain widespread merchant acceptance, to the extent that we cannot compete effectively, it may adversely affect our business operations and financial performance.
The emergence of increased regulation related to virtual currencies could increase our costs by requiring us to update our products and services; or subject us to operational requirements that result in substantial compliance costs which would adversely affect our business
The increased attention to virtual currencies could result in changes in federal or state regulations or the adoption of new regulations that could affect us as well as many companies transacting in credits that might be called “virtual currency.” For example, the Bank Secrecy Act (“BSA”), as amended, established anti-money laundering related recordkeeping and reporting requirements for financial institutions and was designed to provide evidence useful in prosecuting money laundering and other financial crimes. The Financial Crimes Enforcement Network (“FinCEN”), a bureau of the U.S. Treasury, as the delegated administrator of the BSA issued interpretive guidance in March 2013 to clarify the applicability of regulations to persons creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies. Although we do not believe we are currently subject to the BSA requirements, that could change with new regulation. Registering with FinCEN and complying with FinCEN’s regulations would be burdensome, as would getting licensed as a money transmitter and complying with the money transmission regulatory regimes in each state (plus the District of Columbia). Changes to existing laws or regulations or adoption of new laws or regulations relating to the use of virtual currencies could require us to incur significant costs to update our products and services, significantly increase our compliance costs or may impose conditions that we are unable to meet. This could make our business cost-prohibitive in the affected state or states and could materially adversely affect our business.
SOURCE: http://www.faqs.org/sec-filings/131213/ITEX-CORP_10-Q/
Here is the Business Description from Yahoo! Finance
ITEX Corporation operates as a market place for cashless business transactions in North America. Its business services and payment systems enable member businesses to trade products and services without exchanging cash, and these products and services are instead exchanged for ITEX dollars, which can only be redeemed in the marketplace. The company also administers the marketplace; and acts as a third-party record-keeper for its members transactions. In addition, it assists members in marketing their products and services primarily through companys broker network, directories, newsletters, email, and other promotional means, as well as through its itex.com Website. The company offers its service through its independent licensed brokers and franchise network, as well as through corporate-owned offices. ITEX Corporation was founded in 1901 and is headquartered in Bellevue, Washington.
