OTTAWA, May 29, 2019 /CNW/ - Leonovus Inc., ("Leonovus, the Company, We, and Our") (TSXV: LTV) (OTC: LVNSF) today announced its operating and financial results for the quarter ended March 31, 2019. All amounts are in USD.
The most recent new customer contract from the mining resource sector was announced on April 23rd, 2019. A large government department Proof of Concept ("PoC") has been completed with contract negotiations ongoing. Though these PoCs were successfully completed in Q1 2019, contract negotiations and approvals have taken longer to close than anticipated. The two most recent PoCs were from an enterprise partnership that we will disclose following the successful completion of a few more joint transactions. We are actively working several accounts with this large partner.
The Government of Canada BCIP program funding with three large departments has been delayed until late in the year. In April 2019 one of these departments decided to delay their consideration of Leonovus technology until 2020.
The FIPS 140-2 certification was also delayed as we upgraded the operating system underlying the cryptographic module which impacted our place in the NIST certification process. The Company expects to receive this certification before the end of the year.
"The Company will launch an evolved production solution at the end of June to address the problem of our very long sales cycles by providing our customers with a feature set that solves an immediate need regarding data storage growth. This new feature builds on our current technology and is based on feedback from our current customer prospects," said Michael Gaffney, CEO Leonovus.
Our Galaxa project has significantly evolved since we first announced a plan to launch an ICO on December 21. 2017. The ICO became an STO (Security Token Offering) and it has since become a DSO (Digital Security Offering). These changes do not reflect a fundamental change in the underlying Galaxa project but instead reflect a change in the legal framework of this new asset class. We have been very careful to ensure that we are fully compliant with regulators in whatever jurisdiction we plan to operate or sell securities. Having moved from and ICO to a DSO puts the Leonovus Galaxa project at the forefront of this new digital asset class.
The Galaxa whitepaper was released on November 12, 2018, at a special event during the Singapore Fintech Festival and we expect to update the market regarding the evolution of the Galaxa project within the next few weeks.
Leonovus has eight patents issued, with an additional one in final review stage and six more as active applications across Canada, EU and USA. Over 350 claims are covered in the issued patents. The patent issued in the past quarter gained further protection in the USA.
The Company incurred a net loss of $2,177,000 for the quarter ended March 31, 2019 compared to a net loss of $740,000 for the quarter ended March 31, 2018. During the first quarter of 2019, Leonovus had 24,404,000 warrants and 2,172,000 broker units exercised providing cash of $1,560,000.
Predominantly due to the expansion of our development and go-to-market team our operating expenses increased to $1,557,000 for the quarter ended March 31, 2019 as compared to $1,022,000 for the quarter ended March 31, 2018.
Revenue for the first quarter of 2019 was nil, as it was in the quarter ended March 31, 2018.
The previously announced Canadian banking client was meant as a bridge contract. Revenue for this customer was planned to begin late in Q1 but has now been pushed out two quarters.
The Company ended the quarter with a cash balance of $2,799,000 on March 31, 2019, as compared to $9,499,000 on March 31, 2018 with receivables of $545,000 due from the SHRED program and our annual GST refund. In April the company also took steps to reduce costs, allocate resources to the new product features while continuing to monitor cost saving initiatives.
Reminder: The Annual Special Meeting Leonovus common shares holders as of the May 10, 2019 record date will be held on June 17, 2019 at 10:00 am (Ottawa time) at 1274 Carling Avenue, Ottawa, Ontario.
Leonovus is a cloud solutions software provider that offers the leading blockchain hardened hyper-secure software-defined object storage solution. Designed with the IT manager in mind, Leonovus' patented algorithms encrypt, shred and spread 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 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 and www.galaxa.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.