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.
About Leonovus
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.