EXO U announces its fiscal 2014 financial results

MONTREAL, July 29, 2014 /CNW Telbec/ - EXO U Inc. ("EXO U" or the "Company"), a software provider that develops cross platform operating system agnostic software that enables development of highly customizable touch-based user interfaces and experiences, today announced its financial results for the fiscal year ended March 31, 2014. All amounts are stated in Canadian dollars, unless otherwise noted.


    Q4 Fiscal 2014   Q4 Fiscal 2013   Full Year 2014   Full Year 2013
Revenue   $65,667   $77,380   $138,974   $272,750
Adjusted negative EBITDA 1   $(1,342,693)   $(497,509)   $(3,928,926)   $(1,781,994)
Net loss   $(1,640,416)   $(768,122)   $(7,670,579)   $(2,634,612)
Basic and diluted loss per share   $(0.05)   $(0.04)   $(0.24)   $(0.12)
  1. Adjusted EBITDA as defined by the Company 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.

Fiscal Year 2014 and Subsequent

  • On June 13, 2013 the Company became a public company as a result of its successful Qualifying transaction and concurrent private placement. During the process the Company received gross proceeds of $5,200,600.

  • on February 10, 2014, the Company 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 March 6, 2014, the Company announced the closing of its bought deal placement offering of 4,517,000 units of EXO U at $1.55 per unit for gross proceeds of $7,001,350.

  • on June 19, 2014 the Company announced that it had delivered the 100,000 licence keys for students and teachers as well as the installation of three additional digital classrooms in Panama.

  • on June 27, 2014 the Company announced the appointment of four highly qualified individuals to its newly formed Board of Advisors. They were Andy Brown, currently CEO of Sand Hill East Ventures and Street Scale IT Group; Pierre Marc Johnson, former Premier of Quebec and current advisor to Western governments around the world; Thierry Karsenti, Special Advisor to the Canadian Government on the integration of technology into the classroom; and Becky Wanta, former CIO of MGM International, Best Buy and former CTO of Pepsico and Wells Fargo.

  • on June 27, 2014 the Company announced the appointment of Sophic Capital as its investor relations firm.

"We are very pleased with the progression of our company in the last year" said Shan Ahdoot, President and Chief Executive Officer of EXO U. "The financings completed in June 2013, and March 2014 coupled with the recent warrant exercises, has given us good financial flexibility to invest in and expand the business. We are attracting excellent talent for the Company, as well as for our newly formed Advisory Board. In addition, we made our first significant digital classroom delivery in Panama. Finally, we are confident that new orders will be soon forthcoming from the numerous opportunities that we are well advanced on"

Financial Results

EXO U had $65,667 of revenue in the fourth quarter fiscal 2014 which was marginally down from the $77,380 reported in the same period last year. The Company also had deferred revenue of $386,925 in the quarter with the delivery of the first element of the Panama contract.

Full year revenue was $138,974, down from the $272,750 recorded last year. Due to the mix of revenue, gross margin in the current fiscal year was $127,599, which was down $9,652 from a year ago.

Research and development (R&D) expense in the Quarter of $747,845 represented an increase of $572,751 from that incurred in the same period last year. Causals of the increase included a step up in R&D staffing, no longer capitalizing development costs, and expensing in the current period previously capitalized development costs.

Full year research and development expenses, for the same reasons as noted above, increased from $391,694 incurred in fiscal 2013 to the $1,539,159 recorded in fiscal 2014.

Selling, general and administrative (SG&A) expenses for the fourth quarter were $754,596 versus the $428,133 incurred in the same period last year. The overall increase in staffing, public company costs, a new facility in Palo Alto, as well as a write-off of some intangible assets all contributed to the increase.

Likewise, full year SG&A expenses for the full fiscal year increased from $1,595,382 to $2,762,405. This run rate will continue to increase as the Company drives to get into new markets and expands its staff.

Listing expenses of $2,380,331 were incurred during the year, of which $2,128,336 was in equity and hence did not impact cash.

Stock based compensation for the quarter and full year were $194,101 and $1,050,968 respectively.

In the quarter ended March 31, 2014, net financial costs were $344, versus the $222,407 recorded in the same period last year. On a year to date basis, costs were $14,656 versus the $775,147 recorded last year. Last year expense was mainly driven by the $768,135 non-cash charge for interest accretion on the redeemable shares.

Adjusted EBITDA was a loss of $1,342,693 in the fourth quarter ended March 31, 2014, compared to a loss of $497,509 in the corresponding period last year. For the full year the Adjusted EBITDA loss was $3,928,926 compared to a loss of $1,781,994 in fiscal 2013. An increase in staffing, public company costs, and the expensing of R&D as incurred versus capitalization were major causals of the increase.

As of March 31, 2014, the Company held cash of $6,986,455, a significant increase from the $123,359 position it held at the beginning of the fiscal year.  Proceeds from the Qualifying transaction as well as the private placement were the major contributors to this increase.

The quarterly and year to date consolidated financial statements and related notes and Management's Discussion and Analysis for the three month and full year ended March 31, 2014 and 2013, are available under the Company's profile on SEDAR at www.sedar.com.

Re-pricing of Options to Sophic Capital

Further to the news release dated June 27, 2014, EXO has been granted conditional approval from the TSX Venture Exchange ("TSXV") with respect to the granting of options to Sophic Capital Inc. ("Sophic") to purchase up to 100,000 common shares of EXO (the "Options"), subject to the re-pricing of such options to a new exercise price of $1.80, up from the original $1.55. EXO and Sophic have agreed to the re-pricing and Sophic will be granted the re-priced Options in consideration for the services to be provided by Sophic to EXO pursuant to an investor relations services agreement. All other terms of the re-priced Options will remain the same in accordance with EXO's option plan.

The appointment of Sophic and granting of Options remain subject to final TSXV approval.

About EXO U

EXO U (TSXV:EXO) enables true mobility for businesses and educational organizations by solving important mobility issues such as security, privacy, collaboration, and application and content management. EXO U's technology agnostic framework delivers to end users a safe, reliable, and intuitive Smart Workspace designed for connecting with people, accessing services, and sharing information and digital content, while requiring minimal infrastructure and optional Internet connectivity. It simplifies management of the entire application lifecycle, freeing you to focus on building engaging apps that work across different operating systems and form factors, thus increasing productivity for developers and reducing total cost of ownership for organizations. By offering an engaging and exceptional user experience on all your computing devices, without compromising security or protected information, the EXO U Solution allows organizations to embrace consumerization and enjoy all the benefits of mobile. 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 Company'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.


    Q4 Fiscal 2014   Q4 Fiscal 2013   Full Year Fiscal 2014   Full Year Fiscal 2013
Net loss   ($1,640,416)   ($768,122)   ($7,670,579)   ($2,634,612)
Financials expenses   $344   $222,407   $14,656   $755,147
Depreciation of property & equipment   $11,531   $11,909   $41,542   $46,663
Amortization Intangible assets   $19,425   $1,542   $128,997   $6,168
Negative EBITDA   ($1,609,116)   ($532,264)   ($7,485,384)   ($1,806,634)
Stock-based Compensation   $194,101   $ -   $1,050,968   $ -
Listing expenses   ($173)   $ -   $2,380,3311   $ -
Foreign exchange   ($2,005)   $34,755   $50,659   $24,640
Impairment of assets   $74,500   $ -   $74,500   $ -
Negative Adjusted EBITDA   ($1,342,693)   ($497,509)   ($3,928,926)   ($1,781,994)

Adjusted EBITDA

  1. $2,128,336 of this was a non-cash expense.





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Sean Peasgood

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