EDMONTON, ALBERTA--(Marketwired - Oct. 26, 2016) - OneSoft Solutions Inc. (the "Company" or "OSS") (TSX VENTURE:OSS), a North American developer of cloud-based software solutions, announces settlement of its legal dispute with Sylogist Ltd. ("Sylogist"), its financial results for the three months ended August 31, 2016 ("Q2 Financial Report"), and provides a business update. Please refer to the Q2 Management's Discussion and Analysis ("MD&A") and Financial Statements filed on SEDAR for more information.


The Company is pleased to announce that it has resolved all matters associated with OneSoft's statement of claim against Sylogist, and Sylogist's counterclaims against OneSoft, its subsidiaries and its senior executives and directors, which is a compromise of disputed claims and without admission of liability by either side. The accounting for recovery of the Company's contingent asset associated with this matter is disclosed in Notes 8 and 10 of the Financial Statements and in the Post Reporting Date Event section on page 12 of the MD&A.


Financial results for Q2 are summarized as follows:

(in $,000)'s, per share in $ Three months ended
August 31,
Six months ended
August 31,
2016 2015 Increase/
2016 2015 Increase/
$ $ % $ $ %
Continuing Operations
Revenue 52 74 (29.7 ) 155 141 10.1
Net loss (360 ) (673 ) (46.5 ) (764 ) (1,200 ) (36.3 )
Discontinued operations:
Net loss - - - (92 ) (100.0 )
Consolidated net loss (360 ) (673 ) (46.5 ) (764 ) (1,292 ) (40.9 )
Weighted average common shares outstanding - basic and fully diluted (000)'s 65,862 39,276 64,403 34,175
Per share:
Continuing operations - loss (0.01 ) (0.02 ) (50.0 ) (0.01 ) (0.04 ) (75.0 )
Discontinued operations - loss - - - -
Consolidated net loss (0.01 ) (0.02 ) (50.0 ) (0.01 ) (0.04 ) (75.0 )


Technology, Software and IP Development Regarding Our OneBridge Pipeline Integrity Management Solutions

During the quarter, we completed our initial technology and business development sprints at Microsoft Accelerator, wherein our senior personnel resided in Seattle in order to best leverage knowledge transfer from Microsoft key personnel who are the drivers of their cloud technology and strategy. We continued our development efforts with internal personnel and contracted teams who have expertise and technical knowledge to advance our proprietary Machine Learning algorithms, which are key and unique intellectual property embodied in our application.

Following completion of Accelerator in early June, we engaged with our initial Private Preview ("PP") customers, whose feedback has contributed significantly to the advancement of our Cognitive Integrity Management ("CIM") solution. These PP customers provided us with actual historical data for segments of their pipelines, as well as their internal analyses of that data. This is enabling OneBridge personnel to compare the results generated by our Machine Learning algorithms to the PP "Truth Data" (i.e. their internal analyses which they place reliance on). Early results are, in our opinion, most encouraging, as our automated OneBridge algorithms were successful in matching the manually generated Truth Data results with 95% or higher accuracy in a significantly reduced processing time. We expect that our algorithms will continue to be optimized further by the time the first phase of CIM functionality is released to market scheduled for Fiscal Q4, 2017.

The most significant value and benefit that OneBridge CIM provides over current industry practices is that we can automate manual processes that require significant amounts of time and resource and achieve similar or better results. Because industry processes in use today to analyze inline inspection ("ILI") data are highly manual and very time intensive, pipeline operators typically prioritize the data that could signal potential pipeline failures in the near future. OneBridge CIM, on the other hand, is fully automated and can ingest and analyze data very efficiently through the use of Machine Learning and other Microsoft cloud platform tools and services. We can analyze all the data rather than just subsets of data, which is highly advantageous as this provides the opportunity to scrutinize currently insignificant anomalies and determine patterns of anomaly growth earlier, which may assist operators to better predict and mitigate pipeline failures.

To underscore the value of the efficiency of OneBridge technology, in one ongoing software trial, we ingested historical data associated with nearly 10,000 miles of pipeline collected over a 23-year period, which involves almost 9 million features (anomalies) associated with 300 segments of pipe, which is contained within approximately 850 ILI data files. The time required by skilled personnel to manually assimilate and process this data, using current processes, was more than 10 work-weeks. This manual work only involved matching of girth welds of the pipe between the different datasets, and required approximately 30 minutes of human time to process each file. The OneBridge automated solution, using Machine Learning algorithms, accomplished this entire task in less than 2 hours of total time by analyzing, on average, one file every 14 seconds. It is this combination of functionality and efficiency in the OneBridge solution that we believe will be disruptive to current industry practices, once we release CIM for commercial use.

We continued to augment our in-house expertise during the quarter, by hiring new employees with specialized industry knowledge that pertains to Safety Management System/Compliance Analytics ("SMS/CA") and advanced programming expertise to create 3-D graphics for use with Microsoft HoloLens technology. Our objective is to release software components that introduce augmented reality functionality in Q1 of next fiscal year, which will allow pipeline personnel to view digital data layered onto actual pipeline infrastructure from any field or office location that has access to the internet.

Further to our participation in Microsoft Accelerator, we have continued to work with key members of the Microsoft field sales team to introduce the OneBridge products to Microsoft's Oil, Gas and Mining customers. Microsoft was instrumental in enabling OneBridge to acquire its first enterprise level customer to participate in our PP program. Our PP customers were invoiced at significantly reduced prices as compared to the SaaS software subscription fees that we intend to charge after the CIM solution is released to market, in exchange for providing their input and feedback to advance our software. A portion of these billings met our criteria to be recognized as revenue during the quarter.

Operational Matters

Further to the sale of the OneNFP assets to Tangicloud Technologies Inc. as previously reported, our OneCloudCo subsidiary concluded its obligations to assist with the transition of the OneNFP business to Tangicloud. Revenue from the OneNFP business unit has now ceased, and personnel who had been providing transitionary services are now fully engaged in the OneBridge business unit.

In the quarter, the Company had consolidated revenues of $52,165, with a gross margin $41,781. The low cost of sales occurred because our pipeline software costs are essentially royalty - free, pursuant to Microsoft's commitment to provide up to US $500,000 of free Azure fees for Accelerator participants. This compares with revenue and gross loss of $74,000 and $2,354, respectively, in the same quarter last year. Software development costs of $255,393 were capitalized in the current quarter. The net loss for the quarter was $359,807, which compares with a net loss of $672,853 recorded in the comparable quarter last year.

During the quarter, certain shareholders exercised a total of 2,930,000 warrants with a weighted-average strike price of $0.1171, to acquire the same number of shares for cash proceeds of $343,000. Management anticipates that other warrant holders may exercise their warrants in the coming months, which may generate additional funding of up to approximately $4,100,000 between now and February of 2018, which is the warrants' expiry date.

We continued to explore potential alternatives to increase value for shareholders during the quarter, including consideration of various capital markets strategies. In June, 2016, the Company engaged a market maker to reduce the trading volatility of the Company's shares, which we believe has had positive results. Stock options were granted to key staff members in the quarter to recognize their contributions and as a strategy to both retain them and entice them to continue their performance into the future.


Management's immediate priority is to complete development of the initial phase of OneBridge CIM software functionality and release it for commercial use in fiscal Q4. Phase 1 CIM functionality will enable customers to ingest ILI data and perform weld alignment, anomaly alignment and anomaly growth analysis between multiple ILI data sets. We believe that OneBridge is the only company that can offer this full range of functionality today, using Microsoft's cloud platform and services. We anticipate that release to market of Phase 1 CIM will advance the Company from essentially pre-revenue start-up mode to revenue generation mode. Based on research we have conducted regarding functionality and anticipated product pricing, we believe that our potential customers will find our SaaS deployment model, pricing and value proposition to be compelling. Our pricing model based solely on currently installed pipeline in the USA equates to total potential addressable revenue of approximately USD $168 million annually for Phase 1 CIM functionality.

Following release of Phase 1 CIM, our plan is to incorporate additional functionality into CIM based on customer input and feedback arising from our private preview programs, in two successive development sprints. We anticipate that the enhanced functionality developed in Sprints 2 and 3 will be released in Q2 and Q4, respectively, in the next fiscal year. We intend to utilize a SaaS deployment model that will allow customers to purchase the enhanced functionality components they may require for all or selected segments of their pipelines. We anticipate that the future enhanced functionality for CIM may potentially increase the addressable revenue potential for CIM solutions within North America to more than USD $300 million annually. We also believe that our CIM solutions are appropriate for use in numerous other jurisdictions around the world, including Canada and Mexico in N.A., Europe, Middle East, Asia, Australia and New Zealand.

Our plan regarding SMS/CA products is to follow a product commercialization strategy similar to that of CIM, commencing in Q1 next fiscal year. This will include a private preview program we expect will commence in mid-2017, followed by initial product release and subsequent development sprints to incorporate enhanced functionality. The driver for future opportunity with SMS/CA products for US markets is RP1178, which documents the latest revision of recommended practices for US pipeline operators. RP1178, which mandates vastly more data integration than current industry practices require, is presently still in draft form, with likely completion and subsequent staged adoption by the industry expected to commence in 2017. The advantage that OneBridge has over competitive SMS/CA software vendors is that the underlying technology and data that has already been developed and compiled for CIM is also applicable for SMS/CA. Consideration of SaaS pricing models for SMS/CA are early stage at this point, and will evolve as we engage private preview customers to provide input and feedback regarding the SMS/CA functionality components and determinations of value and pricing.

Whereas future revenue generation is impossible to predict with accuracy, the following chart summarizes the operational objectives we have set for ourselves regarding development timelines for CIM and SMS/CA products over the next eight quarters, as well as the associated revenue targets we hope to achieve if the software can be sold as we have envisioned.

Note: We caution the reader that this timeline is for illustrative purpose only, to summarize the objectives of Management. These figures are not meant to represent reliable financial projections. Persons placing reliance upon these predictions do so at their own risk. We do not undertake to update these at regular intervals unless required to do so by securities law. All amounts are in U.S. dollars. The timeline is stated in calendar quarters.

Q4 - 2016 Q1 - 2017 Q2 - 2017 Q3 - 2017 Q4 - 2017 Q1 - 2018 Q2 - 2018 Q3 - 2018
CIM Products Release CIM Phase 1 Start Sprint 2 Marketing Launch at PPIC Houston Feb/17 End Sprint 2 Start Sprint 3 Germany (May/17) End Sprint 3 Pursue N.A. and European markets Expand to International Markets Explore other Smart Infrastructure Markets
SMS/CA Products Resume Dev't Start Sprint 1 Start PP Release MVP End Sprint 1 Start Sprint 2 PP customers End Sprint 2 Pursue N.A. markets Pursue N.A. and European markets Expand to International Markets
CIM Products Chargeable Revenue $60 per mile $90 per mile $120 per mile
SMS/CA Products Chargeable Revenue $30 per mile $60 per mile $90 per mile
CIM Annualized Revenue $2 mm $2 mm $3 mm $3.5 mm $5 mm $7.5 mm $10 mm $20 mm
SMS/CA Annualized Revenue $0 mm $0.5 mm $0.5 mm $0.5 mm $1 mm $2.5 mm $5 mm $10 mm
Potential Annualized Revenue $2 mm $2.5 mm $3.5 mm $4 mm $6 mm $10 mm $15 mm $30 mm

We believe that the combination of (1) OneSoft's alignment with Microsoft cloud deployment strategies; (2) our expertise and capability to release new cutting edge software applications based on Microsoft cloud technology and services; (3) the high degree of interest and motivation of oil and gas pipeline customers to improve their pipeline infrastructure safety practices; and (4) the need for hazardous pipeline operators to comply with increasingly stringent operational, safety and regulatory requirements have positioned the Company for significant future growth, opportunity and profitability. We believe that OneBridge software solutions are revolutionary and disruptive to legacy systems currently in use in the industry, as we are ideally poised to provide comprehensive, cost-effective functionality and capability that legacy systems are simply not able to replicate.

Our corporate development strategy continues to encompass pursuit of initiatives that support value creation for our shareholders, including implementation of investor relations programs and pursuit of joint ventures and potential M&A projects which are synergistic and supportive of our objectives. Our involvement in the Microsoft Accelerator program has introduced the Company to investor groups seeking investments in next generation cloud software companies, which may be highly beneficial in the future to advance our corporate development and value creation objectives.

Cash generation and company financing remain at the forefront of our immediate objectives. Management believes that the combination of cash generated from the Private Preview program, revenue generation from commercially released products and the potential exercise of outstanding warrants will be sufficient to finance the Company from its current early-revenue stage through to commercial viability by the end of fiscal 2018.


On October 25, 2016, the Company granted 1,700,000 options to employees which are conditional upon the employees completing certain software development objectives by specified dates. The options will vest upon the completion of the software development objectives, have an exercise price of $0.21 and will expire in five years if unexercised.

About OneSoft Solutions Inc.

OneSoft Solutions Inc. has developed software technology and products that have capability to transition legacy, on premise licensed software applications to operate on the Microsoft Cloud, in conjunction with Office 365, CRM Online, Microsoft BI and Microsoft Azure Machine Learning. OneSoft's business strategy is to seek opportunities to convert legacy business software applications that are historically cumbersome to deploy and costly to operate, to a more cost efficient subscription based business model utilizing the Microsoft Cloud platform and services, with accessibility through any internet capable device. Visit www.onesoft.ca for more information.

About OneBridge Solutions Inc.

OneSoft's wholly owned subsidiary, OneBridge Solutions Inc., is developing revolutionary new applications for the Oil & Gas pipeline industry, which we believe will be able to predict pipeline failures and thereby save lives, protect the environment, reduce operational costs and address regulatory compliance requirements. OneBridge utilizes a single geo-spatial database that accommodates pipe-centric, structured and unstructured big data, with capability to address the key functions that pipeline companies require to manage, operate and maintain their pipelines. OneBridge solutions are designed to address two key areas of functionality - Safety Management Systems and Compliance Analytics ("SMS/CA"), and Cognitive Integrity Management ("CIM") solutions, all of which will be deployed as SaaS solutions that leverage Data Science, Azure Machine Learning, HoloLens, Microsoft BI and other components of the Microsoft Cloud platform and services. Visit www.onebridgesolutions.com for more information.


Douglas Thomson, Chair

Forward-looking Statements

This news release contains forward-looking statements relating to the future operations and profitability of the Company and other statements that are not historical facts. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expects", "believe", "will", "intends", "plans" and similar expressions. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Such forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Investors are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions.

In respect of the forward-looking information and statements the Company has placed reliance on certain assumptions that it believes are reasonable at this time, including expectations and assumptions concerning, among other things: interest and foreign exchange rates; planned synergies, capital efficiencies and cost-savings; applicable tax laws; the sufficiency of budgeted capital expenditures in carrying out planned activities; the availability and cost of labour and services; the success of growth projects; future operating costs; that counterparties to material agreements will continue to perform in a timely manner; that there are no unforeseen events preventing the performance of contracts; and that there are no unforeseen material development or other costs related to current growth projects or current operations. Accordingly, readers should not place undue reliance on the forward-looking information contained in this press release. Since forward-looking information addresses future events and conditions, such information by its very nature involves inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to the risks associated with the industries in which the Company operates in general such as: costs and expenses; interest rate and exchange rate fluctuations; competition; ability to access sufficient capital from internal and external sources; and changes in legislation, including but not limited to tax laws.

Readers are cautioned that the foregoing list of factors is not exhaustive. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release, and the Company undertakes no obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by Canadian securities law.

This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities within the United States. The securities to be offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act or other laws.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information:

OneSoft Solutions Inc.
Dwayne Kushniruk
(780) 437-4950