CALGARY, Aug. 17, 2017 /CNW/ - Acceleware®
Ltd. ("Acceleware" or the "Company") (TSX-V: AXE), a
leading developer of high performance seismic imaging applications
and RF heating technology, today announced results for the three
and six months ended June 30, 2017
(all figures are in Canadian dollars unless otherwise noted).
During the three months ended June 30,
2017 (Q2 2017), Acceleware continued to invest in RF heating
research and development. Activities included analysis of data from
a 1/20 scale field test of critical components of the RF XL
technology completed in March, 2017; simulations of various oil
sands and heavy oil reservoirs using the Company's AxHeat software;
filing one new patent application; and preparation of several
additional potential patent applications. The objectives of
the 1/20 scale field test were to successfully heat a sand
formation with parameters similar to an oil sands reservoir, to
confirm the results predicted from Acceleware's AxHeat RF heating
simulation software, and to prove innovative concepts around the
transmission of RF energy from the RF generator down to the oil
bearing formation. Management determined that the objectives were
met, with other tests and analysis currently on-going. Acceleware
sold the data and results of the field test to an oil sands
producer in the three months ended March 31,
2017 (Q1 2017). While the Company's software and services
business experienced a rebound in Q1 2017, it continued to face a
challenging oil and gas market in Q2 2017, with decreased software
product revenue compared to both Q1 2017 and the three months ended
June 30, 2016 (Q2 2016).
During the three months ended June 30,
2017, Acceleware recognized revenue of $312,612 - 24% lower than the $410,318 recognized during the three months ended
June 30, 2016. The decrease is a
result of lower software and services revenue. Revenue in Q2 2017
also decreased 37% compared to the $498,189 recorded in Q1 2017. The decrease in
revenue compared to the most recent quarter is due to lower RF
heating revenue, and is despite a 5% increase in software and
services revenue including notably higher consulting services for
training. On a segmented basis, there was no RF heating revenue in
either Q2 2017 or Q2 2016 compared to $200,000 recorded in Q1 2017 - a result of the
field test data sale. Software and services revenue was 24% lower
at $312,612 in Q2 2017 compared to
$410,318 in Q2 2016, due in large
part to decreased seismic imaging product sales. However, software
and services revenue was 5% higher in Q2 2017 compared to
$298,189 in Q1 2017 due to higher
training services revenue. For the six months ended June 30, 2017 revenue decreased 5% to
$810,801 from $852,855 in the six months ended June 30, 2016 due to lower seismic imaging
product revenue.
The Company had total comprehensive loss for Q2 2017 of
$641,197, an increase of 75% compared
to a total comprehensive loss of $366,532 for Q2 2016. The higher total
comprehensive loss is a result of higher research and development
(R&D) investment, higher general and administrative (G&A)
expenses in the RF heating business, and lower revenue in the
software and services business. Total comprehensive loss increased
43% in Q2 2017 to $641,197 compared
to $448,859 in Q1 2017, due to lower
revenue and higher G&A expenses related to marketing activities
such as trade shows and stock based compensation.
For the six months ended June 30,
2017 total comprehensive loss was $1,090,056, an increase of 49% compared to a loss
of $731,550 recorded in the six
months ended June 30, 2016. The
increase is a result of greater investment in R&D and higher
G&A expenses.
On a segmented basis, loss from operations attributed to the RF
heating segment was 63% higher in Q2 2017 at $730,579 compared to $442,724 in Q2 2016, due to higher investment in
R&D and higher G&A expense. Operating loss for RF heating
was 19% higher in Q2 2017 compared to the loss of $615,598 recorded in Q1 2017 due to lower
revenue, and higher G&A expenses. Operating income attributed
to software and services decreased to a loss of $23,107 in Q2 2017, compared to income of
$92,556 in Q2 2016 due to lower
revenue, and higher investment in R&D. Software and services
operating loss was also lower in Q2 2017 compared to the operating
income of $13,612 recorded in Q1 2017
due to lower revenue and lower G&A expenses.
For the six months ended June 30,
2017 RF heating operating loss increased 45% to $1,146,178 from $790,952 for the six months ended June 30, 2016 due to higher R&D investment,
higher G&A expense related to stock based compensation, and
despite higher revenue. For the six months ended June 30, 2017 software and services operating
loss was $9,495 compared to operating
income of $112,848 for the six months
ended June 30, 2016 due to lower
seismic product revenue.
At June 30, 2017, Acceleware had
$783,629 (December 31, 2016 - $1,616,415) in working capital, including
$993,573 (December 31, 2016 - $1,922,318) in cash and cash equivalents, and
$71,890 (December 31, 2016 - $58,095) in combined short-term and long-term
debt in the form of finance leases. The Company has $975,050 (December 31,
2016 - $928,800) (principal
plus accrued interest) in convertible debentures that accrue
interest at 10% per year. The decrease in cash (and consequently
working capital) is a result of the comprehensive loss incurred in
the six months ended June 30, 2017,
and an increased investment in working capital. The increase in
working capital other than cash is a result of decrease in accounts
payable and accrued liabilities such as deferred salaries and other
payroll liabilities.
Additional information, including the unaudited financial
statements for the three months ended June
30, 2017, the management's discussion and analysis relating
thereto, the audited financial statements for the year ended
December 31, 2016, and management's
discussion and analysis relating thereto, are available on SEDAR at
www.sedar.com.
About Acceleware:
Acceleware (www.acceleware.com) develops high performance
seismic imaging and modeling software products and provides
innovative technology for radio frequency (RF) heating, an emerging
thermal enhanced oil recovery method. As experts in programming for
multi-core CPUs and massively parallel GPUs, Acceleware's
professional services team specializes in accelerating
computationally intense applications for clients to speed up
product design, analyze data and help make better business
decisions. Acceleware's products and services are used by
some of the world's largest energy and engineering companies.
Acceleware is a public company on Canada's TSX Venture Exchange under the
trading symbol AXE.
Disclaimers
This press release contains "forward-looking
information" within the meaning of Canadian securities legislation.
Forward-looking information generally means information about an
issuer's business, capital, or operations that is prospective in
nature, and includes disclosure about the issuer's prospective
financial performance or financial position.
The forward-looking information in this press
release includes information about the technical and
economic feasibility of Acceleware's RF heating technology.
Acceleware assumes that the results of simulations, testing and
economic modelling conducted to date are indicative of future
performance of the technology.
Actual results may vary from the forward-looking information
in this press release due to certain material risk
factors. These risk factors are described in detail in Acceleware's
continuous disclosure documents, which are filed on SEDAR at
www.sedar.com.
Acceleware assumes no obligation to update or revise the
forward-looking information in this press release,
unless it is required to do so under Canadian securities
legislation.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Acceleware Ltd.