eFuture Announces Third Quarter 2012 Unaudited Financial Results

eFuture Announces Third Quarter 2012 Unaudited Financial Results

BEIJING, Nov. 19, 2012 (GLOBE NEWSWIRE) -- eFuture Information Technology Inc.
(Nasdaq:EFUT) (the "Company" or "eFuture"), a leading provider of software and
services in China's rapidly growing retail and consumer goods industries,
today announced its unaudited financial results for the third quarter ended
September 30, 2012.

Third Quarter 2012 Financial Highlights

  *Total revenue decreased 10% year-over-year to RMB37.5 million (US$6.0
    million).
  *Gross profit increased 5% year-over-year to RMB16.1 million (US$2.6
    million).
  *Adjusted EBITDA was minus RMB1.0 million (US$0.2 million), compared to
    adjusted EBITDA of RMB1.1 million in the third quarter 2011.
  *Operating loss was RMB3.9 million (US$0.6 million), compared to an
    operating loss of RMB3.2 million in the third quarter 2011.
  *Net loss was RMB2.1 million (US$0.3 million), compared to a net loss of
    RMB2.5 million in the third quarter 2011.
  *Adjusted net income decreased 82% year-over-year to RMB0.3 million
    (US$47,415).
  *Basic and diluted loss per share was RMB0.52 (US$0.08), as compared to
    basic and diluted loss per share of RMB0.62 in the third quarter 2011.
  *Adjusted diluted earnings per share was RMB0.07 (US$0.01), as compared to
    adjusted diluted earnings per share of RMB0.39 in the third quarter 2011.

Mr. Adam Yan, Chairman and Chief Executive Officer of eFuture, commented on
the results. "eFuture achieved the mid-range of the guidance we set last
quarter and recorded a satisfactory gross margin. These performances for the
third quarter 2012 were fully in-line with our expectations as we continued to
execute on our strategic objectives to enhance profitability through product
upgrades and revenue mix changes in a challenging macroeconomic environment.

"Following the trends we have seen in previous quarters, we continue to
experience steady year over year order growth for our customized IT solutions
services from grocery and department store clients in big cities as well as in
tier two and three cities. However, we have also seen signs of a persistently
soft China consumer market, leading to stagnant growth in the retail and
consumer sector.

Mr. Yan concluded, "eFuture was named China's number one retail industry IT
service provider measured by market share in the International Data
Corporation's China Retail Industry IT Solution 2012-2016 Forecast and
Analysis Report. We believe our leading market position and the combination of
innovative products and customized services we now offer in the marketplace
will equip eFuture with a sustainable model to outgrow the market, as we
continue to gain market share and position ourselves for the eventual economic
recovery."

Mr. Sean Zheng, Chief Financial Officer, added, "We have secured two important
contracts for our customized IT solution services in the quarter and we expect
to recognize revenue from these projects early next year. As such, we are
expecting more evenly distributed revenue over the next four quarters of the
next fiscal year.

"Looking ahead to 2013, we are optimistic that we will see continued momentum,
along with a strengthened revenue stream throughout the year. Our new
operational initiatives and strategic objectives should enable us to build on
our relationships with existing customers and place us in a prime position to
realize solid growth for the future."

THIRD QUARTER 2012 FINANCIAL RESULTS

Revenue

Total revenue for the third quarter 2012 decreased 10% to RMB37.5 million
(US$6.0 million) from RMB41.9 million in the third quarter 2011.

Revenue Breakdown

                              
                      3Q11     3Q12
                      RMB '000 RMB '000 USD '000 Y-o-YChange
Software license sales 13,544   13,264   2,111    (2%)
Hardware sales         3,010    5,867    933      95%
Service fee income     25,304   18,353   2,920    (27%)
Total                  41,858   37,484   5,964    (10%)

Software license revenue for the third quarter 2012 decreased 2%
year-over-year to RMB13.3 million (US$2.1 million) from RMB13.5 million in the
third quarter 2011. The decrease was primarily attributable to the decline of
third-party software license revenue.

Hardware revenue in the third quarter 2012 increased 95% year-over-year to
RMB5.9 million (US$0.9 million) from RMB3.0 million in the third quarter 2011.
The increase was due to the completion of some large contracts from the
grocery and logistics industry in the third quarter 2012.

Service fee income for the third quarter 2012 decreased 27% year-over-year to
RMB18.4 million (US$2.9 million) from RMB25.3 million in the third quarter
2011, which was primarily attributable to decreased customization service fee
income in fast moving consumer goods ("FMCG") and grocery industries in the
third quarter 2012, as a result of the completion of two large contracts in
the same period last year.

Cost of Revenue

Cost of revenue for the third quarter 2012 decreased 19% to RMB21.4 million
(US$3.4 million) from RMB26.5 million in the third quarter 2011.

Cost of Revenue Breakdown

                                           
                                   3Q11     3Q12
                                   RMB '000 RMB '000 USD '000 Y-o-YChange
Cost of software license sales      3,783    3,876    617      2%
Cost of hardware sales              2,133    4,816    766      126%
Cost of service fee                 17,963   11,310   1,799    (37%)
Amortization of acquired technology 1,736    686      109      (61%)
Amortization of software costs      928      683      109      (26%)
Total                               26,543   21,371   3,400    (19%)

Gross Profit and Gross Margin

Gross profit increased 5% year-over-year to RMB16.1 million (US$2.6 million)
from RMB15.3 million in the third quarter 2011, and consolidated gross margin
for the third quarter 2012 was 43%, compared with 37% in the third quarter
2011. The improvement in gross margin was mainly due to an increased margin on
service fee income. The Company continued to improve the sales portfolio to
focus on more profitable projects, which reflects a higher proportion of
high-margin maintenance and consulting service fee income in the third quarter
2012.

Operating Expenses

Research and development ("R&D") expenses for the third quarter 2012 increased
76% year-over-year to RMB0.6 million (US$97,215), or 2% of total revenue,
compared with RMB0.3 million, or 1% of total revenue in the third quarter
2011. The increase was primarily attributable to an increase of share-based
compensation expenses, as a new grant under the share incentive plan started
its vesting period in the second quarter 2012.

General and administrative expenses ("G&A") for the third quarter 2012
decreased 26% year-over-year to RMB8.0 million (US$1.3 million), representing
21% of total revenue, compared with RMB10.7 million, or 26% of total revenue
in the third quarter 2011. The decrease was primarily attributable to better
debt reserve in the third quarter 2012 compared with the same period in 2011.
In addition, the interim bonus and share-based compensation for senior
management also decreased in the third quarter 2012.

Selling and distribution ("S&D") expenses for the third quarter 2012 increased
55% year-over-year to RMB11.5 million (US$1.8 million), representing 31% of
total revenue, compared with RMB7.4 million, or 18% of total revenue in the
third quarter 2011. The increase was primarily attributable to the rise of
sales commissions for the newly-signed contracts during the third quarter
2012. In the third quarter 2012, the amount of new contracts increased nearly
40% compared with the third quarter 2011. In addition, more expenditure on the
business development was incurred for seed businesses in the third quarter
2012.

Operating Loss

Operating loss in the third quarter 2012 was RMB3.9 million (US$0.6 million),
compared with an operating loss of RMB3.2 million in the third quarter 2011.

Net Loss/Adjusted Net Income and Loss Per Share/Adjusted Earnings Per Share

As a result of the aforementioned loss, third quarter 2012 net loss was RMB2.1
million (US$0.3 million), compared with a net loss of RMB2.5 million in the
third quarter 2011. Adjusted net income for the third quarter 2012 was RMB0.3
million (US$47,415), compared with an adjusted net income of RMB1.6 million in
the third quarter 2011.

Basic and diluted loss per share in the third quarter 2012 was RMB0.52
(US$0.08), compared to basic and diluted loss per share of RMB0.62 in the
third quarter 2011. Adjusted diluted earnings per share was RMB0.07 (US$0.01),
compared to an adjusted diluted earnings per share of RMB0.39 in the third
quarter 2011.

EBITDA

Adjusted EBITDA for the third quarter 2012 was minus RMB1.0 million (US$0.2
million), compared to adjusted EBITDA of RMB1.1 million in the third quarter
2011.

Balance Sheet and Cash Flow

As of September 30, 2012, cash and cash equivalents amounted to RMB39.1
million (US$6.2 million), a decrease of RMB18.1 million from RMB57.2 million
as of December 31, 2011. The decrease was primarily attributable to the
expenditures on customization projects and capitalized R&D projects.

Total accounts receivable as of September 30, 2012 increased 14% to RMB22.6
million (US$3.6 million) from RMB19.9 million as of December 31, 2011. The
increase was primarily attributable to the increase of revenue recognition
from some large contracts in 2012; meanwhile the cash collection was partially
impacted by the recent uncertain economic environment.

Inventory and work in process as of September 30, 2012 increased 26% to
RMB35.1 million (US$5.6 million) from RMB28.0 million as of December 31, 2011.
The increase was primarily attributable to an increase in the number of
on-going projects which had not reached the point of revenue recognition, and
also related to the amount of hardware to be delivered to customers.

For the quarter ended September 30, 2012, net cash provided by operating
activities was RMB12.4 million (US$2.0 million). Net cash used in investing
activities was RMB5.5 million (US$0.9 million).

Share Repurchase Program

On December 22, 2011, the Company announced a share repurchase program to
repurchase up to US$2 million worth of its ordinary shares over the next 12
months.During the third quarter of 2012, eFuture repurchased approximately 16
thousand shares with an average price of US$3.75 per share.

FOURTH QUARTER 2012 GUIDANCE

eFuture expects total revenue for the fourth quarter 2012 to be in the range
of RMB65 million (US$10.3 million) to RMB70 million (US$11.1 million).
Adjusted EBITDA for the fourth quarter 2012 is expected to be in the range of
RMB3 million (US$0.5 million) to RMB4.5 million (US$0.7 million). The
year-over-year decrease in guidance for the fourth quarter is mainly due to
the exceptionally strong results from Hardware revenue in the fourth quarter
2011.

CONFERENCE CALL INFORMATION

eFuture's management will host a conference call on Tuesday,November 20, 2012
at 5:00 am (US Pacific) / 8:00 am (US Eastern) / 9:00 pm (Beijing) to discuss
the Company's 2012 third quarter and recent business activities. The
conference call may be accessed by dialing:

To access the conference call, please dial:
Toll Free:         
U.S.                1-866-519-4004
Hong Kong           800-930-346
Toll:               
International       65-6723-9381
China               400-620-8038 / 800-819-0121
Hong Kong           852-2475-0994
U.S.               1-718-354-1231
Passcode:           eFuture
                   
                   
Please dial in 10 minutes before the call is scheduled to begin.
                   
A replay of the conference call may be accessed by phone at the following
numbers:
                   
Toll Free:         
U.S.                1-866-214-5335
China North         1080-0714-0386
China South         1080-0140-0386
Hong Kong          800-901-596
International Toll: 61-2-8235-5000
Replay Passcode:    57311154
Available Time:     11:00 a.m. November 20, 2012 EST – 07:59 a.m. November 28,
                    2012 EST

The Company will also broadcast a live audio webcast of the conference call.
The webcast will be available at http://ir.e-future.com.cn.

CURRENCY CONVENIENCE TRANSLATION

For the convenience of readers, certain RMB amounts have been translated into
US dollars at the rate of RMB6.2848 to US$1.00, the noon buying rate for US
dollars in effect on September 30, 2012 for cable transfers of RMB per U.S.
dollar as certified for customs purposes by the Federal Reserve Bank of New
York.

USE OF NON-GAAP FINANCIAL MEASURES

To supplement eFuture's unaudited consolidated financial results presented in
accordance with U.S. GAAP, eFuture uses the following non-GAAP measures
defined as non-GAAP financial measures by the U.S. Securities and Exchange
Commission: (i) adjusted EBITDA excluding amortization of acquired software
technology, amortization of intangibles, impairment of intangible assets,
share-based compensation expenses and depreciation; (ii) adjusted net income
excluding amortization of acquired software technology, amortization of
intangibles, impairment of intangible assets, share-based compensation
expenses and accretion on convertible notes; and (iii) adjusted basic and
diluted earnings per share excluding amortization of acquired software
technology, amortization of intangibles, share-based compensation expenses and
accretion on convertible notes.

The presentation of these non-GAAP financial measures is not intended to be
considered in isolation or as a substitute for the financial information
prepared and presented in accordance with U.S. GAAP.

eFuture believes that these non-GAAP financial measures provide meaningful
supplemental information regarding its performance and liquidity by excluding
expenses that may not be indicative of its operating performance from a cash
perspective or be indicative of its operating performance. eFuture believes
that both management and investors benefit from referring to these non-GAAP
financial measures in assessing the Company's performance and when planning
and forecasting future periods. These non-GAAP financial measures also
facilitate management's internal comparisons to eFuture's historical
performance and liquidity. eFuture computes its non-GAAP financial measures
using the same consistent method from quarter to quarter. The Company believes
these non-GAAP financial measures are useful to investors in allowing for
greater transparency with respect to supplemental information used by
management in its financial and operational decision-making. The accompanying
paragraphs have more details on the reconciliations between GAAP financial
measures that are most directly comparable to non-GAAP financial measures.

eFuture's management also believes that EBITDA, defined as earnings before
interest, income tax expense, depreciation and amortization is a useful
financial metric to assess its operating and financial performance before the
impact of investing and financing transactions and income taxes. In addition,
eFuture's management believes that EBITDA is widely used by other companies in
the software industry and may be used by investors as a measure of its
financial performance. Given the significant investments that eFuture has made
in property, equipment, depreciation and amortization expense comprises a
meaningful portion of the Company's cost structure. eFuture's management
believes that EBITDA will provide investors with a useful tool for
comparability between periods because it eliminates depreciation and
amortization expense attributable to capital expenditures. The presentation of
EBITDA should not be construed as an indication that the Company's future
results will be unaffected by other charges and gains eFuture considers to be
outside the ordinary course of its business.

The use of EBITDA and adjusted EBITDA has certain limitations. Depreciation
and amortization expense for various long-term assets, income tax expense,
interest expense and interest income have been and will be incurred and are
not reflected in the presentation of EBITDA. Further, share-based compensation
expenses have been and will be incurred and are not reflected in the
presentation of adjusted EBITDA. Each of these items should also be considered
in the overall evaluation of eFuture's financial results. The term EBITDA or
adjusted EBITDA is not defined under U.S. GAAP, and EBITDA or adjusted EBITDA
is not a measure of net income, operating income, operating performance or
liquidity presented in accordance with U.S. GAAP. When assessing eFuture's
operating and financial performance, you should not consider this data in
isolation or as a substitute for its net income, operating income or any other
operating performance measure that is calculated in accordance with U.S. GAAP.
In addition, the Company's EBITDA and adjusted EBITDA may not be comparable to
EBITDA or similarly titled measures utilized by other companies since such
other companies may not calculate EBITDA in the same manner as eFuture does.

STATEMENT REGARDING UNAUDITED FINANCIAL INFORMATION

The unaudited financial information set forth above is subject to adjustments
that may be identified when audit work is performed on the Company's year-end
financial statements, which could result in significant differences from this
unaudited financial information.

ABOUT EFUTURE INFORMATION TECHNOLOGY INC.

eFuture Information Technology Inc. (Nasdaq:EFUT) is a leading provider of
software and services in China's rapidly growing retail and consumer goods
industries.eFuture provides integrated software and services to
manufacturers, distributors, wholesalers, logistics companies and retailers in
China's front-end supply chain (from factory to consumer) market, especially
in the retail and fast moving consumer goods industries. For more information
about eFuture, please visit http://www.e-future.com.cn.

SAFE HARBOR

This announcement contains forward-looking statements. These statements are
made under the "safe harbor" provisions of the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can be
identified by terminology such as "will," "expects," "anticipates," "future,"
"intends," "plans," "believes," "estimates" and similar statements. Among
other things, 2012 financial outlook and quotations from management in this
announcement, as well as strategic and operational plans, contain
forward-looking statements. eFuture may also make written or oral
forward-looking statements in periodic reports to the Securities and Exchange
Commission (the "SEC"), in its annual report to shareholders, in press
releases and other written materials and in oral statements made by its
officers, directors or employees to second parties. Statements that are not
historical facts, including statements about the Company's beliefs and
expectations, are forward-looking statements. Forward-looking statements
involve inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any
forward-looking statement, including but not limited to the following:
eFuture's anticipated growth strategies; eFuture's future business
development, results of operations and financial condition; expected changes
in the Company's revenue and certain cost or expense items; eFuture's ability
to attract clients and leverage its brand; trends and competition in the
software industry; the Company's ability to control expenses and maintain
profit margins; the Company's ability to hire, train and retain qualified
managerial and other employees; the Company's ability to develop new software
and pilot new business models at desirable locations in a timely and
cost-effective manner; the performance of third parties under contracts with
the Company; the expected growth of the Chinese economy software market in
retail and consumer goods industries; and Chinese governmental policies
relating to private managers and operators of software and applicable tax
rates.

Further information regarding these and other risks will be included in
eFuture's annual report on Form 20-F and other documents filed with the SEC.
All information provided in this press release and in the attachments is as of
November 19, 2012, and the Company undertakes no duty to update such
information or any other forward-looking information, except as required under
applicable law.

                         – FINANCIAL TABLES TO FOLLOW



                                                                         
EFUTURE INFORMATION TECHNOLOGY INC. AND SUBSIDIARIES   Exchange               6.2848
                                                       rate
CONDENSED CONSOLIDATED INCOME STATEMENTS                                     
                                                                         
                Nine months ended                     Three months ended
                Chinese Yuan (Renminbi)   U.S.        Chinese Yuan (Renminbi) U.S.
                                           Dollars                             Dollars
                September    September    September   September   September   September
                 30,          30,          30,         30,         30,         30,
                2011         2012         2012        2011        2012        2012
                (Unaudited)  (Unaudited)  (Unaudited) (Unaudited) (Unaudited) (Unaudited)
                                                                         
Revenues                                                                  
Software revenue 25,305,494   37,224,364   5,922,919   13,543,576  13,264,366  2,110,547
Hardware revenue 13,296,651   11,304,164   1,798,652   3,010,218   5,867,089   933,536
Service fee      49,112,642   51,529,510   8,199,069   25,304,521  18,353,121  2,920,239
revenue
Total Revenues   87,714,787   100,058,038  15,920,640  41,858,315  37,484,576  5,964,322
                                                                         
Cost of revenues                                                          
Cost of software 6,784,449    13,188,019   2,098,399   3,782,726   3,876,244   616,765
revenue
Cost of hardware 11,183,763   9,662,676    1,537,468   2,132,978   4,815,972   766,289
revenue
Cost of service  32,837,763   32,242,590   5,130,249   17,963,219  11,309,683  1,799,529
fee revenue
Amortization of
acquired         6,096,678    4,042,853    643,275     1,736,300   685,832     109,126
technology
Amortization of  2,578,528    1,921,139    305,680     927,949     683,348     108,730
software costs
Total Cost of    59,481,181   61,057,277   9,715,071   26,543,172  21,371,079  3,400,439
Revenues
                                                                         
Gross Profit     28,233,606   39,000,761   6,205,569   15,315,143  16,113,497  2,563,883
                                                                         
Operating                                                                 
Expenses
Research and
development      3,502,758    2,432,592    387,060     348,126     610,975     97,215
expenses
General and
administrative   28,958,159   23,236,929   3,697,322   10,736,293  7,971,294   1,268,345
expenses
Selling and
distribution     16,964,897   27,903,231   4,439,796   7,419,445   11,478,353  1,826,367
expenses
Total Operating  49,425,814   53,572,752   8,524,178   18,503,864  20,060,622  3,191,927
Expenses
                                                                         
Loss from        (21,192,208) (14,571,991) (2,318,609) (3,188,721) (3,947,125) (628,044)
operations
                                                                         
Other income                                                              
(expenses)
Interest income  153,705      354,349      56,382      25,259      60,581      9,639
Interest         (486,540)    --           --          (159,648)   --          --
expenses
Interest
expenses -
amortization of  (345,826)    --           --          (263,418)   --          --
discount on
convertible
notes payable
Interest
expenses -
amortization of  (271,665)    --           --          (79,651)    --          --
deferred loan
costs
Gains on
derivative       348,876      3,168        504         9,355       --          --
liabilities
Other expenses   554,698      802,455      127,682     554,698     803,559     127,858
Foreign currency 32,499       15,906       2,531       (21,464)    8,227       1,309
exchange loss
Loss from
continuing
operations       (21,206,461) (13,396,113) (2,131,510) (3,123,590) (3,074,758) (489,238)
before income
tax
Less: Income tax (4,169,382)  (5,852,627)  (931,235)   (581,414)   (937,151)   (149,114)
benefit
Loss from
continuing       (17,037,079) (7,543,486)  (1,200,275) (2,542,176) (2,137,607) (340,124)
operations
Less: Net loss
attributable to
the              (511,423)    --           --          --          --          --
non-controlling
interest
Net loss from
continuing
operations
attributable to  (16,525,656) (7,543,486)  (1,200,275) (2,542,176) (2,137,607) (340,124)
eFuture
Information
Technology Inc.
Discontinued                                                              
operations
Gain from
discontinued
operations
(including gain  5,609,352    --           --          --          --          --
on disposal of
¥6,701,170 and
nil,
respectively)
Less: Income tax --           --           --          --          --          --
expenses
Gain from
discontinued     5,609,352    --           --          --          --          --
operations
Net loss         (10,916,304) (7,543,486)  (1,200,275) (2,542,176) (2,137,607) (340,124)
Loss per share                                                            
Basic            (2.64)       (1.84)       (0.29)      (0.62)      (0.52)      (0.08)
- Continuing     (4.00)       (1.84)       (0.29)      (0.62)      (0.52)      (0.08)
operations
- Discontinued   1.36         --           --          --          --          --
operations
Diluted          (2.64)       (1.84)       (0.29)      (0.62)      (0.52)      (0.08)
- Continuing     (4.00)       (1.84)       (0.29)      (0.62)      (0.52)      (0.08)
operations
- Discontinued   1.36         --           --          --          --          --
operations
Basic
Weighted-average 4,130,221    4,109,188    4,109,188   4,130,221   4,082,729   4,082,729
Shares
Outstanding
Fully-Diluted
Weighted-average 4,132,035    4,109,188    4,109,188   4,130,221   4,153,046   4,153,046
Shares
Outstanding
                                                                         

EFUTURE INFORMATION TECHNOLOGY INC. AND            Exchange rate 6.2848
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS                           
                                                              
                                    Chinese Yuan (Renminbi)     U.S. Dollars
                                    December 31,  September 30, September 30,
                                    2011          2012          2012
                                    (Audited)     (Unaudited)   (Unaudited)
ASSETS                                                         
Current assets                                                 
Cash and cash equivalents            57,157,078    39,065,725    6,215,906
Trade receivables, net of allowance
for doubtful accounts of ¥3,559,207  19,904,642    22,599,281    3,595,863
and ¥3,996,384($635,881),
respectively
Refundable value added tax           6,950,923     1,902,669     302,741
Advances to employees                1,749,427     1,681,963     267,624
Advances to suppliers                331,040       4,688         746
Other receivables due from           1,067,000     555,000       88,308
previously consolidated entities
Other receivables                    2,021,053     6,523,509     1,037,983
Prepaid expenses                     1,465,219     1,811,684     288,264
Inventory and work in process, net
of inventory provision of ¥4,507,846 28,001,490    35,146,226    5,592,258
and ¥3,140,328($499,670),
respectively
Total current assets                 118,647,872   109,290,745   17,389,693
Non-current assets                                             
Long-term investments, net of
impairment of ¥240,000 and           --            --            --
¥240,000($38,187), respectively
Property and equipment, net of
accumulated depreciation of          3,930,974     4,693,350     746,778
¥5,748,528 and
¥7,240,973($1,152,141), respectively
Intangible assets, net of
accumulated amortization of
¥65,846,644 and                      17,190,976    21,978,170    3,497,036
¥71,381,635($11,357,821),
respectively
Goodwill                             80,625,667    80,625,667    12,828,677
Deferred tax assets                  --            4,890,972     778,222
Total non-current assets             101,747,617   112,188,159   17,850,713
Total assets                         220,395,489   221,478,904   35,240,406
                                                              
LIABILITIES AND EQUITY                                         
Current liabilities                                            
Trade payables                       12,500,602    13,430,724    2,137,017
Other payables                       12,525,300    10,847,875    1,726,049
Accrued expenses                     14,464,113    8,601,310     1,368,589
Taxes payable                        4,205,734     1,159,692     184,523
Advances from customers              49,653,714    64,457,695    10,415,241
Deferred tax liabilities, current    623,600       75,075        11,945
portion
Total current liabilities            93,973,063    99,572,371    15,843,364
Long-term liabilities                                          
Derivative liabilities               3,168         --            --
Deferred tax liabilities             413,130       --            --
Total long-term liabilities          416,298       --            --
                                                              
Equity                                                         
Ordinary shares, $0.0756 U.S.
dollars par value; 6,613,756 shares
authorized; 3,937,221 shares and     2,353,068     2,327,207     370,291
3,883,076 shares issued and
outstanding, respectively
Additional paid-in capital           225,411,222   228,880,974   36,418,179
Statutory reserves                   3,305,527     3,305,527     525,956
Accumulated deficits                 (105,063,689) (112,607,175) (17,917,384)
Total equity                         126,006,128   121,906,533   19,397,042
Total liabilities and equity         220,395,489   221,478,904   35,240,406

                                                                                
EFUTURE INFORMATION                                           Exchange
TECHNOLOGYINC. AND                                        rate        6.2848      
SUBSIDIARIES
CONDENSED
CONSOLIDATEDSTATEMENTS                                                          
OF CASH FLOWS
                                                                                
                       Nine months ended                     Three months ended
                       Chinese Yuan (Renminbi)   U.S.        Chinese Yuan (Renminbi) U.S.
                                                  Dollars                             Dollars
                       September    September    September   September   September   September
                        30,          30,          30,         30,         30,         30,
                       2011         2012         2012        2011        2012        2012
                       (Unaudited)  (Unaudited)  (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cash flows from                                                                  
operating activities:
                                                                                
Net loss                (10,916,304) (7,543,486)  (1,200,275) (2,542,176) (2,137,607) (340,124)
Adjustments to
reconcile net loss to                                                            
net cash flows used in
operating activities:
Depreciation of         1,410,508    1,492,445    237,469     406,585     501,814     79,846
property and equipment
Amortization of         8,723,303    5,963,992    948,955     2,664,248   1,369,180   217,856
intangible assets
Amortization of
discount on convertible 345,826      --           --          263,418     --          --
notes payable
Amortization of         271,665      --           --          79,651      --          --
deferred loan costs
Gains on extinguishment (382,889)    --           --          (382,889)   --          --
of debt
Gains on derivative     (348,876)    (3,168)      (504)       (9,335)     --          --
liabilities
Investment income       (6,701,170)  --           --          --          --          --
Loss on disposal of     72,844       --           --          52,400      --          --
property and equipment
Allowance for doubtful  2,638,516    2,300,859    366,099     1,550,631   663,829     105,625
accounts
Provision (Reversal)
for loss in inventory   1,041,943    1,410,854    224,487     (85,909)    --          --
and work in process
Compensation expenses   4,008,380    4,798,568    763,520     1,235,739   1,066,424   169,683
Deferred income taxes   (4,169,381)  (5,852,628)  (931,235)   (581,414)   (937,152)   (149,114)
Foreign exchange gain   (235,644)    (15,405)     (2,451)     (9,640)     (8,083)     (1,286)
Non-controlling         (511,423)    --           --          --          --          --
interest
Changes in assets and                                                            
liabilities:
Trade receivables       (6,008,807)  (4,995,498)  (794,854)   (3,646,831) (943,505)   (150,125)
Refundable value added  (1,421,511)  5,048,254    803,248     (1,360,298) 596,027     94,836
tax
Advances to employees   64,431       67,464       10,734      47,275      4,313       686
Advances to suppliers   2,009,294    57,340       9,124       4,826,730   --          --
Other receivables       823,165      (3,990,456)  (634,938)   1,566,827   667,012     106,131
Prepaid expenses        (685,046)    (346,465)    (55,127)    266,120     981,058     156,100
Inventory and work in   (33,476,906) (8,555,589)  (1,361,314) (9,677,303) (3,228,678) (513,728)
process
Trade payables          9,085,873    930,122      147,995     3,243,626   1,565,713   249,127
Other payables          (2,268,859)  (1,677,425)  (266,902)   (772,495)   (733,900)   (116,774)
Accrued expenses        (5,401,833)  (5,862,803)  (932,854)   416,885     745,474     118,615
Taxes payable           (7,334,790)  (3,046,042)  (484,668)   (848,576)   (281,831)   (44,843)
Advances from customers 26,500,299   15,803,981   2,514,634   3,358,299   12,510,960  1,990,670
Net cash provided by
(used in) operating     (22,867,392) (4,015,086)  (638,857)   61,548      12,401,048  1,973,181
activities
                                                                                
Cash flows from                                                                  
investing activities:
Purchases of property   (1,314,446)  (1,985,809)  (315,970)   (1,059,594) (361,195)   (57,471)
and equipment
Payments for intangible (4,561,032)  (10,751,186) (1,710,665) (2,141,717) (3,805,291) (605,475)
assets
Cash paid for share     --           (1,354,677)  (215,548)   --          (1,354,677) (215,548)
repurchase
Cash received from
disposal of property    3,000        --           --          3,000       --          --
and equipment
Disposal of investments 5,895,999    --           --          --          --          --
Net cash provided by
(used in) investing     23,521       (14,091,672) (2,242,183) (3,198,311) (5,521,163) (878,494)
activities
                                                                                
Cash flows from                                                                  
financing activities:
Net cash provided by    --           --           --          --          --          --
financing activities
                                                                                
Effect of exchange rate
changes on cash and     105,449      15,045       2,452       (98,985)    8,083       1,286
cash equivalents
                                                                                
Net increase (decrease)
in cash and cash        (22,738,422) (18,091,353) (2,878,588) (3,235,721) 6,887,968   1,095,973
equivalents
                                                                                
Change in cash and cash
equivalents included in 516,322      --           --          --          --          --
the current assets of
discontinued operations
Cash and cash
equivalents at          73,250,856   57,157,078   9,094,494   54,264,477  32,177,757  5,119,933
beginning of period
Cash and cash
equivalents at end of   51,028,756   39,065,725   6,215,906   51,028,756  39,065,725  6,215,906
period
                                                                                
Supplemental cash flow                                                           
information
Interest paid           323,175      --           --          --          --          --
                                                                                

                                                                        
EFUTURE INFORMATION TECHNOLOGY INC. AND              Exchange               6.2848
SUBSIDIARIES                                          rate
NON-GAAP
MEASURES OF                                                              
PERFORMANCE
                                                                        
                                                                        
               Nine months ended                     Three months ended
               Chinese Yuan (Renminbi)   U.S.        Chinese Yuan (Renminbi) U.S.
                                          Dollars                             Dollars
               September    September    September   September   September   September
                30,          30,          30,         30,         30,         30,
               2011         2012         2012        2011        2012        2012
               (Unaudited)  (Unaudited)  (Unaudited) (Unaudited) (Unaudited) (Unaudited)
                                                                        
NON-GAAP
OPERATING
INCOME                                                                   
(LOSS)AND
ADJUSTED EBITDA
                                                                        
Operating loss  (21,192,208) (14,571,991) (2,318,609) (3,188,721) (3,947,125) (628,044)
(GAAP Basis)
                                                                        
Adjustments for
non-GAAP                                                                 
measures of
performance:
Add back
amortization of
acquired        6,096,678    4,042,853    643,275     1,736,300   685,832     109,126
software
technology
Add back
amortization of 2,578,528    1,921,139    305,680     927,949     683,348     108,730
intangibles
Add back
share-based     4,008,449    4,798,568    763,520     1,235,739   1,066,424   169,683
compensation
expenses
Adjusted
non-GAAP        (8,508,553)  (3,809,431)  (606,134)   711,267     (1,511,521) (240,505)
operating
income/(loss)
Add back        1,362,168    1,492,445    237,469     406,585     501,814     79,846
depreciation
                                                                        
Adjusted EBITDA
(Earnings
before
interest,       (7,146,385)  (2,316,986)  (368,665)   1,117,852   (1,009,707) (160,659)
taxes,
depreciation
and
amortization)
                                                                        
NON-GAAP
OPERATING
INCOME
(LOSS)AND                                                               
ADJUSTED
EBITDA, as a
percentage of
revenue
                                                                        
Operating loss  -24%         -15%         -15%        -8%         -11%        -11%
(GAAP BASIS)
                                                                        
Adjustments for
non-GAAP                                                                 
measures of
performance:
Amortization of
acquired        7%           4%           4%          4%          2%          2%
software
technology
Amortization of 3%           2%           2%          2%          2%          2%
intangibles
Share-based
compensation    5%           5%           5%          3%          3%          3%
expenses
Adjusted
non-GAAP        -10%         -4%          -4%         2%          -4%         -4%
operating loss
Depreciation    2%           1%           1%          1%          1%          1%
                                                                        
Adjusted EBITDA
(Earnings
before
interest,       -8%          -2%          -2%         3%          -3%         -3%
taxes,
depreciation
and
amortization)
                                                                        
NON-GAAP
EARNINGS PER                                                             
SHARE
                                                                        
Net loss from
continuing      (16,525,656) (7,543,486)  (1,200,275) (2,542,176) (2,137,607) (340,124)
operations
Amortization of
acquired        6,096,678    4,042,853    643,275     1,736,300   685,832     109,126
software
technology
Amortization of 2,578,528    1,921,139    305,680     927,949     683,348     108,730
intangibles
Share-based
compensation    4,008,449    4,798,568    763,520     1,235,739   1,066,424   169,683
expenses
Accretion on
convertible     345,826      --           --          263,418     --          --
notes
Adjusted Net    (3,496,175)  3,219,074    512,200     1,621,230   297,997     47,415
Income/(Loss)
                                                                        
Adjusted
non-GAAP
diluted         (0.85)       0.78         0.12        0.39        0.07        0.01
earnings/(loss)
per share
Shares used to
compute
non-GAAP        4,130,221    4,109,188    4,109,188   4,130,221   4,153,046   4,153,046
diluted
earnings per
share
                                                                        

CONTACT: Investor Contact:
         Troe Wen, Company Secretary
         eFuture Information Technology Inc.
         +86 10 5293 7699
         ir@e-future.com.cn