Get a free quote now.
Edmonton, Alberta, Canada (January 30, 2017) – OneSoft Solutions Inc. (the “Company” or “OSS”) (TSX‐V: OSS), a North American developer of cloud‐based software solutions announces its financial results for the three and nine months ended November 30, 2016 (“Q3 Financial Report”), and provides a business update. Please refer to the Q3 Management’s Discussion and Analysis (“MD&A”) and Financial Statements filed on SEDAR for more information.
FINANCIAL RESULTS PERIOD ENDED NOVEMBER 30, 2016
Financial results for Q3 are summarized as follows:(in $,000)'s, per share in $Continuing operationsThree months ended November 30Nine months ended November 30,20162015Increase /(Decrease)20162015Increase /(Decrease)$$%$$%Revenue17312340.732726324.4Net loss(223)(719)(69.0)(987)(1,919)(48.6)Discontinued operationsNet income (loss)244‐100.0244(92)365.6Consolidated net income (loss)21(719)102.9(743)(2,011)(63.1)Weighted average common shares outstanding ‐ basic and fully diluted (OOO)'s66,61246,92765,00035,395Per share:Continuing operations ‐ loss‐(0.02)(100.0)(0.02)(0.05)(60.0)Discontinued operations ‐ income (loss)‐‐‐‐Consolidated net loss‐(0.02)(100.0)(0.02)(0.05)(60.0)
Q3 FINANCIAL REPORT HIGHLIGHTS
Revenues in the three and nine months ended November 30, 2016 improved as noted above, reflecting the Company’s decision to focus solely on its OneBridge business unit and curtail its OneNFP products which were divested in February, 2016. The reduced net loss of $222,907 from continuing operations for the quarter and for the nine‐months of $987,174 is primarily attributed to a higher margin on this period revenue, as well as to the capitalization of development costs associated with OneBridge’s Cognitive Integrity Management (“CIM”) product. Margins are higher because third party software royalties are not being incurred for OneBridge products. In the current quarter, the Company capitalized$258,828 of software development costs and $823,656 in the nine‐month period, compared to $nil for both respective periods in the prior year. In the current quarter, the Company also recorded one‐time gains of $88,268 from the forgiveness of third‐party software royalties owed and $244,306 in discontinued operations as a result of settling a legal action that also resulted in a discontinuance of all claims between the parties on a without costs basis and as a compromise of the disputed claims.
Q3 2017 BUSINESS HIGHLIGHTS
We continued to engage with our private preview customers during the quarter, who provided valuable input and feedback that assisted us to advance our CIM product during the latter half of calendar 2016. Although development costs associated with the Company’s use of the Microsoft Azure computing platform have been incurred, these have been off‐set by credits granted by Microsoft. The Company was granted cost‐free Azure usage of US $500,000 (approximately CAD $675,000) as a result of our participation in Microsoft Ventures’ first Accelerator program that focused on Machine Learning and big data, which the Company participated in between February and June, 2016. Approximately US $55,000 (approximately CAD $74,000) of Azure fee credits have been used to date and the remaining Azure fee credits can be used through February, 2019.Our proprietary Machine Learning algorithms, which are key and unique intellectual properties (“IP”) embodied in our software solutions, continue to be refined and optimized as they process more and more data, and have now been progressed to what we consider to be a commercially viable state. To supplement our product development efforts, we announced on October 31, 2016 that we had formalized a collaborative working arrangement with the University of British Columbia, Okanagan School of Engineering (“UBC Okanagan”) who is assisting to research and develop algorithms for our cloud IP. UBC Okanagan received approval from the Natural Sciences and Engineering Research Council of Canada ("NSERC") for a funding grant, and their project was also awarded a research funding grant from Microsoft, based on our OneBridge project. The UBC project is scheduled to operate between November 1, 2016 through April 30, 2017, and OneBridge will retain full and sole ownership of all intellectual property developed in connection thereof.During the quarter, one of our private preview customer agreements expired and was replaced with a short‐term arrangement which allowed the customer to continue uninterrupted use of our CIM solution. We anticipate that this customer will continue to utilize CIM as a subscriber to our software‐as‐a‐service (“SaaS”) recurring revenue business model, at full commercial rates, commencing in early calendar 2017. The Company also signed several small consulting contracts with new pipeline customers. One such contract was completed in fiscal Q3 and the others are expected to complete prior to the end of February, 2017. Such contracts are highly beneficial because they initiate involvement with new customers who have interest in our vision and solutions.
Management’s priority is to continue the development of the OneBridge CIM solution, which was released for commercial use on January 16, 2017. Phase 1 CIM functionality enables customers to ingest in‐line inspection (“ILI”) data which has been gathered over past years using an automated process, to match girth weld and anomaly alignment between multiple ILI data sets, and to analyze anomaly growth over time. Although pipeline operators haveability to conduct parts of these processes today, such ability is typically limited to only small segments of data because such analyses are too onerous and costly to conduct with manual methodologies. CIM proprietary algorithms, on the other hand, provide capability to automatically perform such analyses on 100% of the data very quickly – i.e., in minutes or hours versus weeks or months using manual processes. This allows pipeline operators to manage their assets as smart infrastructure, and thereby derive all the benefits associated with full analytics of their pipeline assets.We anticipate that lengthy sales cycles may generally be the norm, for several reasons. Our sales process typically involves senior executives of the prospective customers, as our concepts are somewhat disruptive to the status quo processes and products that have served the industry to this point. CIM is powered by Machine Learning operating on a single geo‐spatial database platform, and incorporates various other new cloud technologies including Microsoft’s Azure cloud computing platform, Power BI Embedded and HoloLens, which collectively represent new data analytic methodologies for the pipeline industry. These new concepts typically require education and understanding as to their benefits and advantages over legacy on‐premise solutions. As a result, numerous successive meetings are generally required with prospective customers to analyze benefits of cloud versus desk‐top processes and to determine, articulate and understand the value proposition that the OneBridge solutions operating on the Microsoft cloud platform provides. During the quarter, Company personnel worked collaboratively with Microsoft’s Houston‐based sales teams who have expertise with the oil and gas pipeline industry and customers, to commence sales efforts with new prospective customers. We anticipate that we will continue this sales process in the immediate future. We believe once key industry participants who have embraced our new solutions are able to share their experience with their industry peers, which typically occurs at industry gatherings, work‐shops and conventions, our CIM solution will gain traction as a compelling alternative to on‐premise desktop solutions that serve the industry today. OneBridge personnel attended two such industry conferences in the quarter, including one that focused on new pipeline industry regulatory requirements that are expected to take effect in the future.We anticipate that the 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 sufficiently compelling to move from the on‐premise solutions that serve the industry today. We plan to continue to enhance CIM by adding new functionality in successive development phases, which we anticipate may provide additional SaaS recurring revenue sources in the future.We believe that the combination of (i) OneSoft’s alignment with Microsoft cloud deployment strategies; (ii) our expertise and capability to release new cutting edge software applications based on Microsoft cloud technology and services; (iii) the high degree of interest and motivation of oil and gas pipeline customers to improve their pipeline infrastructure safety practices; and (iv) the need for hazardous pipeline operators to comply with increasingly stringent operational, safety and regulatory requirements have potentially positioned the Company for significant future growth and opportunity. We believe that the Company may be ideally poised to provide comprehensive, cost‐effective functionality and capability that legacy desk‐top systems are simply not able to replicate, and that our solutions are sufficiently revolutionary to be disruptive to legacy systems that are typically used in the industry today.Our corporate development strategy continues to encompass pursuit of initiatives that support value creation for our shareholders, potentially including joint ventures and M&A scenarios that are synergistic and supportive of our objectives.On January 18, 2017, the Company announced its intention to complete a Private Placement financing of up to $3,000,000, through an offering of 12,000,000 Units. Each Unit is priced at $0.25 and includes one common share and one‐half common share purchase warrant. One whole purchase warrant entitles the holder to purchase one additional common share at a price of $0.375 per common share. The term to exercise the purchase warrants will be twelve months following the date of closing. The Company has incurred costs of approximately $13,000 for comprehensive on‐boarding services, listing fees, and marketing and media fees payable to P2P Financial Inc., who conducts business as The OCMX, an online portal which connects companies with investors. A success fee equal to four percent (4%) of any financing received from any investor through The OCMX is also payable. Readers should review the Company News Release filed on SEDAR for further information regarding this financing.The funds raised will be used to address an expected working capital shortfall as development work continues and accounts receivable grow, and to provide funds for aggressive development of new companion products to CIM that are expected to be beneficial to accelerate growth of the business, as well as for associated marketing and sales plans as envisioned. Cash may also be increased from the potential exercise of outstanding warrants that could generate $4.1 million in aggregate if all warrants are exercised, all of which are currently in the money.
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 may allow the pipeline operator 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 – Cognitive Integrity Management (“CIM”) and Safety Management Systems and Compliance Analytics (“SMS/CA”) 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.
ON BEHALF OF THE BOARD OF DIRECTORS
ONESOFT SOLUTIONS INC.Douglas Thomson ChairFor more information, please contact Dwayne Kushniruk, CEO email@example.com (780) 437‐4950
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.
+1 111 000 111
+1 111 000 111
+1 111 000 111
+1 111 000 111