Mr. Shan Ahdoot reports
EXO U ANNOUNCES ITS FISCAL 2014 FINANCIAL RESULTS
EXO U Inc. has released its financial results for the fiscal year ended March 31,
2014. (All amounts are stated in Canadian dollars, unless otherwise
noted.)
FINANCIAL HIGHLIGHTS FOR THE THREE MONTHS AND FULL YEAR
Q4 fiscal 2014 Q4 fiscal 2013 Full-year 2014 Full-year 2013
Revenue $65,667 $77,380 $138,974 $272,750
Adjusted negative EBITDA $(1,342,693) $(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)
Adjusted earnings before interest, taxes, depreciation and amortization as defined by the company mean 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-international financial reporting standard measure.
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 Feb. 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 advisers. They were
Andy Brown, currently chief executive officer of Sand Hill East Ventures and Street Scale
IT Group; Pierre Marc Johnson, former premier of Quebec and current
adviser to Western governments around the world; Thierry Karsenti,
special adviser to the Canadian government on the integration of
technology into the classroom; and Becky Wanta, former chief information officer of MGM
International and Best Buy and former chief technology officer of Pepsico and Wells Fargo.
On June 27, 2014, the company announced the appointment of Sophic Capital
Inc. 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 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 herein, increased from $391,694 incurred in fiscal 2013 to the
$1,539,159 recorded in fiscal 2014.
Selling, general and administrative 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 and 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 with a loss of $497,509 in the corresponding
period last year. For the full year, the adjusted EBITDA loss was
$3,928,926 compared with a loss of $1,781,994 in fiscal 2013. An increase
in staffing, public company costs, and the expensing of research and development 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,
related notes, and management's discussion and analysis for the three
months and full year ended March 31, 2014, and 2013, are available under
the company's profile on SEDAR.
Repricing 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 with
respect to the granting of options to Sophic Capital to
purchase up to 100,000 common shares of EXO, subject to
the repricing of such options to a new exercise price of $1.80, up
from the original $1.55. EXO and Sophic have agreed to the repricing,
and Sophic will be granted the repriced 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 repriced options
will remain the same in accordance with EXO's option plan.
The appointment of Sophic and the granting of options remain subject to
final TSX Venture Exchange approval.
We seek Safe Harbor.
© 2024 Canjex Publishing Ltd. All rights reserved.