OTTAWA, Aug. 29, 2018 /CNW/ - Leonovus Inc., ("Leonovus") (TSXV: LTV) today announced its operating and financial results for the quarter ended June 30, 2018. All amounts are in USD.
As of this date, the Company has identified and qualified 51 customer projects including nine federal government projects. Most of these customers are large organizations. All previously announced proof of concept ("POCs") and trials continue to operate and based on current information we expect to convert close to 100% of these POC's into sales with production deployments.
The company is executing to plan. Since the completion of the December 2017 financing, the productization of the core offering is now largely complete. Leonovus 4.0 will be released at the end of September 2018 with our first full blockchain integration and application for law enforcement and chain of evidence applications. We have recruited and excellent team with thirty-two staff on board and plan to grow to forty employees by the end of the year.
Because we are an enterprise software-defined storage solution, the sales cycle from POC or trial installations is twelve to eighteen months. Revenue will start in Q3 2018 and we expect the revenue ramp to begin in Q2 of 2019. Current market feedback is that the core Leonovus platform is rock solid and is uniquely positioned as a cloud-based software-defined storage solution.
The Company incurred a net loss of $1,236,000 in the second quarter of 2018 and a net loss of $1,970,000 for the first half of 2018 compared to a net loss of $308,000 in the comparable quarter of 2017 and a net loss of $950,000 for the first half of 2017. Total operating expenses increased from $1,236,000 for the second quarter of 2018 and $2,258,000 for the first half of 2018 as compared to $326,000 and $717,000 for the second quarter and first half of 2017, respectively. Revenue for the second quarter of 2018 was nil compared to the same quarter for 2017. As mentioned on May 30, 2018, the Company increased investment in Sales, Marketing, Product Development and G&A in the second quarter of 2018 and expects to further increase spending in the third quarter of 2018.
The Company has a strong balance sheet and cash balance which was $8,019,000 at June 30, 2018, as compared to $187,000 at June 30, 2017.
After June 30, 2018, the company settled past salaries owed for $426,000 including legal fees which will reduce accrued compensation by $736,000 for a net gain on settlement of $310,000.
Leonovus is the only software-defined storage solution that shreds and spreads data securely across multiple public clouds while making it unintelligible to anyone with direct access to the cloud storage. Using its patented data fragmentation and distribution techniques, Leonovus also ensures that data can be recovered should any of the cloud storage endpoints become unavailable, providing high levels of data durability and enabling customers to avoid vendor lock-in.
The white paper for our ICO project was drafted over the summer. We plan to announce the next steps in our ICO plans before the end of Q3 2018. "Since our financing closed in December 2017 the company has grown to thirty-two employees and will grow to approximately forty by the end of 2018. Significant effort over the past six months to productize our technology and gain awareness with channel partners is beginning to show results. We expect to announce several more significant sales partners this fall. Our blockchain development team is also making great strides, and we expect to announce a new enterprise product offering in the next few weeks," said Michael Gaffney, Chairman & Chief Executive Officer.
Leonovus is a cloud solutions software provider that offers the leading blockchain enabled software-defined object storage solution (SDOSS) and governance, risk management and compliance (GRC) solution for the modern enterprise. Designed with the IT manager in mind, Leonovus' patented algorithms virtualize, transform, slice and disperse data across a network of on-premises, hybrid or multi-cloud storage nodes – allowing for the most secure yet internally accessible form of object-based data storage that provides GRC across the entire solution. The advanced geo-distributed architecture minimizes latency, optimizes geo-availability, reduces remote backup costs and meets data sovereignty requirements. With its software and hardware agnostic design, Leonovus provides Petabyte scalability and allows the enterprise to utilize its existing idle storage resources, extend the useable lifespan of depreciated resources and improve the enterprise's overall ROI. To learn more, please visit www.leonovus.com.
This press release may contain forward-looking statements and information, which may involve risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Factors that might cause a difference include, but are not limited to, competitive developments, risks associated with Leonovus' growth, the state of the financial markets, regulatory risks and other factors. There can be no assurance or guarantees that any statements of forward-looking information contained in this release will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. These and all subsequent written and oral statements containing forward-looking information are based on the estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. Unless otherwise required by applicable securities laws, Leonovus disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers should not place undue reliance on any statements of forward-looking information that speak only as of the date of this release. Further information on Leonovus' public filings, including its most recent audited consolidated financial statements, are available at www.sedar.com.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Leonovus Inc.
For further information: Christopher Benk, CPA, CA, CBV, VP Finance & Chief Financial Officer, cbenk@Leonovus.com