OTTAWA, April 27, 2018 (GLOBE NEWSWIRE) -- Leonovus Inc., (“Leonovus”) (TSXV:LTV) today announced its operating and financial results for the year ended December 31, 2017. All numbers are in USD unless otherwise noted.
Current assets of the Company significantly increased to $10,888,000 on December 31, 2017 compared to $237,000 at the end of 2016. Cash is the main asset on the balance sheet and was the result of three financings - $1.3M CAD in March 2017, $1.5M CAD in September 2017 and a bought deal of $13.75M CAD in December 2017. As of April 25, 2018 Leonovus, has a bank cash balance of $9,289,000.
In the first quarter of 2018, 7,300,000 September 2017 warrants were exercised at a price of $0.075 CAD leaving a balance of 24,700,000 unexercised warrants, and 500,000 March 2017 $0.10 CAD warrants were exercised leaving a balance of 11,983,500 unexercised warrants from these private placements. Since January 1, 2018, the company has received $472,000 from warrant exercises. Both the March 2017 and September 2017 warrants are in the money with a potential cash inflow value of approximately $3.1M CAD. Both the March and September 2017 warrants expire in March 2019. The December 2017 $13.75M CAD bought deal financing has 13,750,000 warrants with a strike price of $0.65 CAD and these warrants expire on December 8, 2019.
Revenue for the year ending 2017 was minimal compared to $Nil revenue in 2016. Revenue started in the fall of 2017 with the announcement of three proof of concepts (“POC”). One of these POC’s converted into a regular customer in March 2018 and the remaining two are ongoing and are expected to convert in 2018 and four new POC’s were started in Q1 2018.
Accounts payable and accrued liabilities decreased by 20% from $2.67M at fiscal year-end 2016 to $2.14M at fiscal year-end 2017. Most of this liability relates to unpaid salary claims by former officers and directors of Leonovus. The Company is vigorously defending its position with regard to these claims while providing for this potential liability.
Sales and marketing expenses increased by 145% to $236,000 in 2017 from $96,000 in 2016. Product Development expenses increased by 26% to $495,000 in 2017 from $392,000 in 2016. The Company will significantly expand its investment in sales, marketing and product development in 2018.
“In the four months since the closing of our bought deal, the company has initiated a comprehensive recruitment program to build a world class product development, sales and marketing team. The volumes of sales leads and early adopter prospects are increasing each week. Last week we signed off on the Leonovus 3.3 version of our software and we plan to issue major software releases on a quarterly basis. Our partner channels continue to grow. We launched a complete new branding of the company in Q1 and look forward to further development of our content and event marketing plans.
As announced in December, the planning and technical details for the fall launch of an ICO remain on track,” said Michael Gaffney, Chairman and 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.
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