EXO U announces its fiscal 2014 third quarter and year to date financial results

MONTREAL, Feb. 28, 2014 /CNW Telbec/ - EXO U Inc. ("EXO U" or the "Corporation") a software provider that develops cross platform operating system, OS agnostic software which, when layered atop any OS, enables development of highly customizable touch-based user-interfaces and applications, today announced its financial results for the three and nine months ended December 31, 2013. All amounts are stated in Canadian dollars, unless otherwise noted.

FINANCIAL HIGHLIGHTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2013 AND 2012.

  Q3 Fiscal 2014   Q3 Fiscal 2013   YTD Fiscal 2014   YTD Fiscal 2013
Revenue $ -   $ 108,241   $ 73,307   $ 195,371
Adjusted negative EBITDA 1 $ (979,724)   $ (452,680)   $ (2,586,233)   $ (1,283,925)
Net loss $ (1,333,138)   $ (675,001)   $ (6,030,163)   $ (1,865,930)
Basic loss per share $ (0.040)   $ (0.032)   $ (0.201)   $ (0.088)

1. Adjusted EBITDA as defined by the Corporation means earnings before interest and financial costs(net of interest income), income tax, depreciation and amortization, stock-based compensation, restructuring and other non-recurring costs. Adjusted EBITDA is a non-IFRS measure. Please refer to the annex for reconciliation of net loss to adjusted negative EBITDA.


Q3 2013 and Subsequent

-On February 12, 2014, the corporation announced that it had entered into an agreement with Mackie Research Capital Corporation pursuant to which a syndicate of underwriters will purchase, on a bought-deal private placement basis, a financing with gross proceeds exceeding $5 million.

-On February 10, 2014, the Corporation announced that it had signed a partnership agreement for the education sector in Quebec with CGI. The agreement proclaims that the two companies will be working together to promote the implementation of educational software solutions.

-on December 12, 2013, the Corporation entered into a 3 year lease for its new office in Palo Alto, California. This establishes a base for the Company in Silicon Valley, an area rich in technical resources and business activity.

"We continue to make good progress in the evolution of our Company and product offering" said Shan Ahdoot, President and Chief Executive Officer of EXO U. "External validation of our product offering is evidenced by the relationship we have established with CGI, which is the fifth largest independent information technology and business process services firm in the world. We are also very pleased with the private bought -deal financing that has been announced. These funds will allow us to accelerate our business and provide the necessary capital to achieve our growth objectives. Finally, the establishment of our new office in Palo Alto will let us tap into the resources in that area, and establish a base for our growing business activity in the United States"

Financial Results

EXO U had no revenue in the third quarter fiscal 2014 versus the $108,241 reported in the same period last year. Last year the company recorded revenue for a digital classroom in Panama.

Year to date revenue is $73,307, is down from the $195,371 recorded in the nine months ended December 31, 2012.

Research and Development expense in the Quarter of $306,929 were higher than the $47,548 recorded in the third quarter last year primarily due to the change of expensing R&D as incurred, versus capitalizing it, as well as the increase in the team driving the R&D effort.

R&D expense for the nine month period increased from the $216,600 to $791,314 for the same reasons as noted above.

Selling, general, and administrative expenses for the three months ended December 31,2013 were  $719,566, an increase of $324,272 from that spent last year in the same period. Increases in sales, marketing and business development expense coupled with the administrative and external costs of being a public company account for the increase.

Likewise, SG&A expenses for the nine month period increased from $1,167,249 to $2,007,809.

Year to date listing expenses are $2,380,504, of which $2,121,935 are non-cash expenses mainly consisting of equity.

Stock based compensation for the quarter and year to date were $281,191 and $856,867 respectively.

In the quarter ended December 31, 2013, net financial costs were $25,452, versus the $$209,483 recorded in the same period last year. Year to date expenses were $$69,976 versus the $542,625 incurred last year. The major factor in the difference was last year's accretion of interest expense on redeemable shares which have now been redeemed..

Adjusted EBITDA was a loss of $979,724 in the quarter ended December 31, 2013, compared to a loss of $452,680 in the corresponding period last year. For the nine month period the Adjusted EBITDA loss was $2,586,233 compared to a loss of $1,283,925 in the same period last year. An increase in staffing, public company costs, and the decision of the Company to expense versus capitalizing R&D were the major causals of the increase.

As of December 31, 2013, the Company held cash of $1,275,810, an increase from the $123,359 position at year end March 31, 2013. The proceeds from a private placement which was completed on June 13, 2013 less cash usage since then is the main reason for the increase. It is expected that further liquidity will be provided by the upcoming bought-deal private placement expected to close in March 2014 as well as the impact of warrant exercises.

The quarterly and year to date financial statements and related notes and Management's Discussion and Analysis for the three and nine months ended December 31, 2013 and 2012, are available under the Corporation's profile on SEDAR at www.sedar.com.

About EXO U

EXO U (TSX-V:EXO) enables businesses and educational organizations to securely manage information and empower people to communicate their best ideas through application interoperability across desktop and mobile computing environments. The software simplifies the management of the entire application lifecycle, helping clients manage enterprise mobility and BYOD initiatives, ensure the security and privacy of information, increase productivity, and reduce the total cost of ownership for existing and future IT investments. The technology agnostic framework offers end users a unified collaborative workspace with a unique, safe and attractive experience for current and future digital content and applications. For more information, visit http://www.exou.com and follow us on Twitter @exo_u.

Disclaimer in Regards to Forward Looking Statements

Certain statements made in this press release that are not historical facts are forward-looking and are subject to important risks, uncertainties and assumptions. The results or events predicted in these forward -looking statements may differ materially from actual results or events. As a result, readers are cautioned not to place undue reliance on these forward-looking statements. 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 dated September 26, 2014 available under the Corporation's profile on SEDAR at www.sedar.com. The forward- looking information contained in this press release represents EXO U's current expectations. EXO U disclaims any intention and assumes no obligation to update or revise any forward-looking information, except by applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts any responsibility for the adequacy of this release.

ANNEX

Adjusted EBITDA

  Q3 Fiscal 2014   Q3 Fiscal 2013   YTD Fiscal 2014   YTD Fiscal 2013
                       
Net loss $ (1,333,138)   $ (675,001)   $ (6,030,163)   $ (1,865,930)
               
Financials expenses $ 25,452   $ 209,483   $ 66,976   $ 542,625
Depreciation of property & equipment $ 10,247   $ 11,297   $ 30,011   $ 34,754
Amortization Intangible assets $ 9,507   $ 1,541   $ 28,523   $  4,626
Amortization of deferred development cost $ 27,017   $  -   $ 81,049   $ -
                       
EBITDA $ (1,260,915)   $ (452,680)   $ (5,823,604)   $ (1,283,925)
                       
Stock-based Compensation $ 281,191   $ -   $ 856,867   $ -
Listing expenses $ -   $ -   $ 2,380,5042   $ -
                       
Adjusted EBITDA $ (979,724)   $ (452,680)   $ (2,586,233)   $ (1,283,925)
1. $2,121,935 of this was a non-cash expense.

 

 

SOURCE EXO U Inc

For further information:

For investor or media inquiries, please contact:

Doug McCollam
Chief Financial Officer
dmccollam@exou.com
(514) 207-1190