MONTREAL, Aug. 29, 2016 /CNW Telbec/ - EXO U Inc. ("EXO U"
or the "Corporation") (TSXV: EXO) today announced the financial
results for the three months ended June 30,
2016. All amounts are stated in Canadian dollars, unless
otherwise noted.
FINANCIAL HIGHLIGHTS
FOR THE THREE MONTHS ENDED JUNE 30, 2016
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|
|
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Three months
ended
June
30,2016
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Three months
ended
June
30,2015
|
|
|
|
Revenue
|
-
|
-
|
Adjusted Negative
EBITDA 1
|
$(1,381,682)
|
$(1,868,447)
|
Net loss
|
$(1,567,480)
|
$(2,101,648)
|
Basic and diluted net
loss per share
|
$(0.02)
|
$(0.05)
|
|
|
|
1.
|
Adjusted Negative
EBITDA is a non-GAAP financial performance measure. Please refer to
the annex of this press release for the Corporation's definition of
such measure and for a reconciliation of net loss, as determined in
accordance with IFRS, to Adjusted Negative EBITDA.
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First Quarter and Subsequent Event Highlights
- On August 26, 2016, the Company
announced the launch of Ormiboard, a first-of-its-kind digital
learning environment that redefines whole classroom teaching by
transforming any device with any operating system into an
easy-to-use whiteboarding and collaboration tool.
- In July 2016, the Company
underwent a number of changes to its leadership and organizational
structure. On July 12, the Company
appointed Jim Kirchner as its new
Chief Executive Officer, replacing Kevin
Pawsey who resigned as CEO but remains on the Board of
Directors. Mr. Kirchner was previously the Senior Vice President of
Business Development at the Company. Prior to joining EXO U in
October, 2015, Mr. Kirchner was Senior Vice President at Amplify,
Inc., a NewsCorp subsidiary, and prior to Amplify, he was a founder
and CEO of LearningStation.
- In July 2016, the Company
restructured and reduced its work force to significantly lower its
expenses. The workforce reduction cost savings and other expense
reductions will reduce the normalized spend in excess of 50%.
- On June 28, 2016, the Company
announced it had entered into an amendment to the previously
announced reseller agreement with a division of Panasonic
Corporation of America for the sale and distribution of 1,500
Ormiboard Pro licenses.
- On June 8, 2016, the Company
introduced the launch of Ormiboard Pro, a first-of-its-kind front
of class visual creation and collaboration tool, at Infocomm
2016.
- On June 2, 2016, the Company
announced that it had entered into an agreement with Tyton Partners
Capital Markets LLC for advisory services including, but not
limited to, assessing business development and partnership
opportunities, including channel joint venture partnerships and
identifying, evaluating and coordinating capital market
opportunities.
- On April 7, 2016, the Company
announced that Ormi, the Company's mobile device teaching platform
for schools, was named a finalist for the 2016 SIIA CODiE Awards in
the Best Post-Secondary Learning Content Solution category. The
CODiE Awards are the premier awards for the software and
information industries.
"With the recent launch of our flagship solution, Ormiboard, we
are seeing initial traction within the K-12 Education industry and
look forward to expanding our user base in the back to school
timeframe and through this year." commented newly appointed CEO
Jim Kirchner. "EXO U's next
generation digital learning environment is gaining attention
throughout the industry and we are well positioned to expand.
Not only have we have made significant additions to the platform
and are continually adding new content to make adoption and
integration of Ormiboard effective, we have received our first
orders for the product and have started generating revenue for the
Company."
Financial Results
There was no revenue for the three months ended June 30, 2016 and in the corresponding period of
the prior year. The absence of sales was attributable to the
building of new sales channels with partners coupled with the
timing of the launch of the newest versions of the Company's
product offerings, Ormi and Ormiboard. The Company continues to
conduct a number of demonstrations, trials and pilots on an ongoing
basis in order to develop revenue opportunities. Based on recent
contracts entered into by the Company, revenue is expected in the
second fiscal quarter (July-September
2016) of 2017.
R&D expense amounted to $484,771 for the three-month period ended
June 30, 2016, compared to the
$1,039,220 incurred in the
three-month period ended June 30,
2015. This reduction of R&D expenses was largely a
result of lower compensation costs due to decreased
staff.
Selling, general and administrative ("SG&A") expenses for
the three-month period ended June 30,
2016 was $938,549, an increase
of $59,220, from expenses incurred
during the same period in the prior year. The increased expenses
for the three months ended June 30,
2016 as compared to the same period in the prior year was
mainly due to an increase in professional fees associated with
outside services for contract and business development support.
During the three-month period ended June
30, 2016, the Company incurred an expense of $138,030 for stock-based compensation costs,
while for the three-month period ended June
30, 2015, the Company recognized a stock-based compensation
expense of $169,775.
Adjusted Negative EBITDA was $1,381,682 for the quarter, compared to negative
$1,868,447 for the same period in the
prior year. (Please refer to the annex of this press release for
the company's definition of Adjusted Negative EBITDA and for a
reconciliation of net loss and comprehensive loss, as determined in
accordance with IFRS, to Adjusted Negative EBITDA and for further
details with respect to the company's non-GAAP financial
performance measures.)
As at June 30, 2016, the Company
had a cash position of $1,112,410.
This represents a decrease of $1,389,453 from the Company's cash position from
March 31, 2016.
Going concern considerations
The unaudited interim condensed consolidated financial
statements of the Company for the three-month period ended
June 30, 2016 have been prepared on a
going concern basis, which implies the Company will continue to
realize its assets and discharge its liabilities and commitments in
the normal course of business. The continuation of the Company as a
going concern is dependent upon, among other things, the Company's
ability to generate future profitable operations by securing
contracts and growing its revenue base, and its ability to obtain
additional financing in the form of equity and/or debt financing,
joint venture agreements, or in another form in order to meet its
obligations arising from normal business operations.
As at June 30, 2016, the Company
had not yet achieved profitable operations or positive cash flows
from operating activities and has accumulated losses of
$29,349,669 since inception,
including a net loss of $1,567,480
for the three-month period ended as at the same date. The Company
used $1,389,453 of cash from its
operating activities for the period ended June 30, 2016. The Company expects to continue to
incur further operating losses and negative cash flows from
operating activities in the development of its business, and these
material uncertainties cast significant doubt on the Company's
ability to continue as a going concern. Furthermore, as at
June 30, 2016, the Company's
committed cash obligations and expected level of expenses for the
next twelve months exceeds its actual cash resources. Whether
and when the Company can attain profitability and positive cash
flows from operating activities is uncertain, in particular as a
result of current market conditions and the length of time required
to generate positive cash flows from new customers or partner
agreements.
Management is not certain that the Company will be able to
obtain additional funds through financing or partnership
agreements. Without additional financing or other revenues, the
Company will be forced to cease operations.
Accordingly, the unaudited interim condensed consolidated
financial statements do not include any adjustments to the
recoverability and classification of recorded asset amounts and
classification of liabilities that might be necessary should the
Company be unable to continue as a going concern. Such adjustments
could be material.
The unaudited interim condensed consolidated financial
statements and related notes, and Management's Discussion and
Analysis for the three months ended June 30,
2016 are available under the Corporation's profile on SEDAR
at www.sedar.com.
About EXO U
At EXO U, we believe that people learn best with instructional
technologies that support and do not interrupt the momentum of
teaching, learning, and collaboration—whether they are learning in
person, remotely, or across an evolving device landscape. That is
why our web-based whiteboarding and classroom management solutions
for educational institutions and corporations work on any device
with any operating system, anytime and anywhere, solving important
mobility issues such as security, privacy, real-time collaboration,
and management of application and content. EXO U's shares trade on
the TSX Venture Exchange under the ticker symbol EXO.V. EXO U's
Ormi was recently a finalist for the 2016 SIIA CODiE Award. For
more information, visit http://www.exou.com and follow us on
Twitter @exo_u. For more information about Ormiboard, visit
https://ormiboard.com and follow us on Twitter @ormiboard.
Cautionary Note Regarding to Forward Looking Information
Certain statements included herein, including those that express
management's expectations or estimates of EXO U's future
performance or future events, constitute "forward-looking
information" within the meaning of applicable securities laws. Such
forward-looking information and statements are often, but not
always, identified by the use of words such as "plans", "expects",
"estimates", "intends", "anticipates", or "believes", or variations
of such words and phrases (or the negative form thereof) or
statements that certain actions, events or results "may", "could",
"would", "might", or "will" be taken, occur or be achieved.
Forward-looking information is necessarily based upon a number of
estimates and assumptions that, while considered reasonable by
management at this time, are inherently subject to significant
business, economic, regulator and competitive uncertainties and
contingencies that could cause actual results, performance or
achievements of the Corporation to be materially different from any
future results, performance or achievements expressed or implied by
the forward-looking information. For additional information with
respect to certain of these and other assumptions and risk factors,
please refer to EXO U's management's discussion and analysis for
the year ended March 31, 2016,
available under the Corporation's profile on SEDAR
at www.sedar.com. Forward-looking information contained herein
is presented as of the date of this news release and the
Corporation disclaims any obligation to update any forward-looking
statements, whether as a result of new information, future events
or results, except as may be required by applicable securities
laws. There can be no assurance that forward-looking information
will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.
Accordingly, readers are cautioned not to place undue reliance on
these forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
ANNEX
Management uses net loss and comprehensive loss as presented in
the audited condensed consolidated statement of loss and
comprehensive loss as well as loss before financing expenses
(income), income taxes, depreciation of property and equipment and
amortization of intangible assets ("Negative EBITDA") and Adjusted
Negative EBITDA as measures to assess the performance of the
Corporation.
Negative EBITDA represents an indication of the Corporation's
capacity to generate income, excluding the impact of management's
financing activities, cost of depreciation of property and
equipment, amortization of intangible assets as well as income
taxes.
"Adjusted Negative EBITDA" is a further refinement of Negative
EBITDA to exclude stock-based compensation expenses and foreign
exchange gains (losses). Adjusted Negative EBITDA represents an
indication of the Corporation's capacity to generate income from
operations before taking into account certain non-cash
transactions. Adjusted Negative EBITDA is a measure used by the
Corporation to make strategic decisions, forecast future results
and evaluate its performance.
Negative EBITDA and Adjusted Negative EBITDA do not have any
standardized meaning prescribed by Canadian Generally Accepted
Accounting Principles ("GAAP") and International Financial
Reporting Standards ("IFRS") and may not be comparable to similar
measures presented by other entities. Neither Negative EBITDA nor
Adjusted Negative EBITDA represent the actual cash used by
operating activities, nor are they recognized measures of financial
performance under IFRS. EXO U's definition of Negative EBITDA and
Adjusted Negative EBITDA may differ from that used by other
companies. Investors are cautioned that Negative EBITDA and
Adjusted Negative EBITDA should not be considered as an alternative
to net loss and comprehensive loss determined in accordance with
IFRS or indicators of the Corporation's performance. These measures
are identified and defined under "Other Financial Measures"
in the Corporation's management's discussion and analysis for the
three months ended June 30, 2016.
The following is a reconciliation of Negative EBITDA and
Adjusted Negative EBITDA to net loss for the three-month periods
ended June 30, 2016 and 2015:
(In Canadian
dollars)
|
Three months
ended
June 30, 2016
|
Three months
ended
June 30, 2015
|
|
|
|
Net Loss
|
(1,567,480)
|
(2,101,648)
|
|
|
|
Financials expenses
(income), net
|
7,713
|
(5,885)
|
Depreciation of
property & equipment
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8,372
|
13,037
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Amortization of
intangible assets
|
33,266
|
37,065
|
Impairment
charge
|
|
|
Negative
EBITDA
|
(1,518,129)
|
(2,057,431)
|
|
|
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Stock-based
compensation
|
138,030
|
169,775
|
Net loss (gain) on
foreign exchange
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(1,583)
|
19,209
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Adjusted Negative
EBITDA
|
(1,381,682)
|
(1,868,447)
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SOURCE EXO U Inc