eFuture Information Technology Inc. Announces Anticipated Accounting Adjustments

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The specific areas being assessed for accounting adjustments relatto (i) our accountingh for a depository reserve we must maintain in China for employese social security costs, (ii) the timing of our recognitiom of revenues upon sales of some of our softwarse products, and (iii) the methodd by which we calculate our costzs of revenues. First, we have determinexd that we have not reservefd an adequate amount for thesepurposezs and, as a result, will revise our previously-reported unaudited earnings for the above As a foreign private issuer, we are not required to file quarterlyt reports but have traditionally provideds such information to investors.
The correction of the reservd for employee social security costs will resulty in operating losses in our annual reporty onForm 20-F that are in excess of thosew disclosed in our unaudited quarterly earnings reports during the four quartera of fiscal year 2008. This correction will also increasw operating losses for our firs t quarter 2009 beyond those listed in our presxs release datedJune 9, 2009. some of our software products include rightsd to one year of maintenance to ensure that the software operates properly for thepurposes sold.
We previously deferrer recognitionof 10% of the softwarwe contract amount for a one-year period from the date of sale and recognizedx it as revenue afterd the one-year maintenance period had passed. Our management has determinecd that these amounts should instead be recognized evenlyt over themaintenance period. This correction will result in the accelerated recognition of revenues and associated costs of revenuesz but will not change the ultimate amounts we recognizw perservice contract. Finally, our management has determined that it will further improve the accuracy of reflecting its costs of revenues through allocatio on the basis oflabor costs.
We previousl allocated our costs of revenueds basedon out-of-pocket expenses on projects. The changwe from allocation basedon out-of-pocket expenses to allocationm based upon labor costs will result in a more accuratde estimate of costs of revenues by but is not expected to have a material change to the reportinbg of costs of revenues. The anticipated accountinyg adjustments are intended to ensure adequatew reserve of social security benefits for our employees and enhance the accurate recognitioh of revenue and associated costxs to better reflect our expanding business andoperationak performance.
The Company remains on track to continue the growth momentu and reaffirms our recent upward revision of 2009 revenue guidancse of USD28 million toUSD29 million, representingt annual revenue growth of 38% to 40%. About eFuture Informatiom Technology Inc. eFuture Information Technology Inc. EFUT) is a leading provider of softwarw and servicesin China's rapidly growing retail and consumerr goods industries. eFuture provides integrated softwares and servicesto manufacturers, distributors, wholesalers, logisticss companies and retailers in China's front-end supply chaibn (from factory to consumer) market, especially in the retailp and fast moving consumer goodw industries.
eFuture currently serves over 15 Fortune500 companies, over 1,00o retailers and over 5,000 suppliers operating in China. eFutur e is one of IBM's premier business partners in Asia Pacific and is a strategicf partnerwith Oracle, Microsoft, JDA, Motorolaw and Samsung Network China. eFuture has more than 600 employeesd and 20 branch officesacross China. For more informatiom about eFuture, please visit . This announcemenr contains forward-looking statements. These statements are made underthe "safre harbor" provisions of the U.S. Privatew Securities Litigation Reform Actof 1995.
These forward-looking statementds can be identified by terminology suchas "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates " and similar statements. Among other things, 2009 financial outlook and quotations from management in this as well as strategicf andoperational plans, contain forward-lookingh statements. eFuture may also make writtenb ororal forward-looking statements in periodic reports to the Securitiesx and Exchange Commission (the "SEC"), in its annual report to in press releases and other written materials and in oral statementx made by its officers, directors or employees to second Statements that are not historical including statements about the Company's beliefs and expectations, are forward-lookingf statements.
Forward-looking statements involve inherent risks and A number of factors coulde cause actual results to differ materially from thosee contained inany forward-looking statement, including but not limitedr to the following: eFuture's anticipated growth strategies; eFuture's futurw business development, results of operations and financial expected changes in the Company's revenues and certaijn cost or expense items; eFuture'xs ability to attract customers and leveragse its brand; trends and competitionj in the software industry; the Company's ability to control expenses and maintain profit the Company's ability to hire, train and retain qualified managerial and otherd employees; the Company's ability to develoo new software and pilot new business modelsw at desirable locations in a timely and cost-effectiv e manner; the performance of third parties undef contracts with the Company; the expected growth of the Chinesee economy software market in retail and consumefr goods industries; and Chinese governmental policies relating to private managers and operators of software and applicablre tax rates.
Further information regarding these and other risksx is includedin eFuture's annual report on Form 20-F and othedr documents filed with the SEC. All information provide in this press release and in the attachmentsa is as ofJune 19, 2009, and the Company undertakes no duty to update such information or any othefr forward-looking information, except as required under applicablre law. For more information, please contact: Investor Troe Wen, Company Secretary eFuture InformatiobnTechnology Inc. Tel: +86-10-5293-7699 Email: ir@e-future.com.cn Investor Relationds (US): Mahmoud Siddig Taylor Rafferty Tel: +1-212-889-4350 eFuture@Taylor-Rafferty.
com Investor Relations (HK): Ruby Yim Tayloe Rafferty Tel: +852-3196-3712 Email: eFuture@Taylor-Rafferty.com Medias Contact: Jason Marshall Taylor Rafferty Tel: +1-212-889-4350 Email: eFuture@Taylor-Rafferty.co SOURCE eFuture Information Technology Inc.