CALGARY, April 25, 2018 /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
months and year ended December 31,
2017 (all figures are in Canadian dollars unless otherwise
noted).
During the year ended December 31,
2017, Acceleware was successful in its objectives relating
to the research, development and commercialization of its RF
heating technology. Acceleware filed three RF heating patent
applications and commenced preparation of additional applications;
completed a successful field test of critical components of the RF
XL technology; and was conditionally awarded $10 million in non-repayable funding for a
commercial-scale field test of RF XL. Acceleware continues to
make progress in negotiating agreements with funding sources and
potential oil sands partners to complete the commercial-scale test
of its RF XL technology, as more fully disclosed in the Company's
news release dated November 3,
2017.
During the year ended December 31,
2017 the Company raised gross proceeds of $837,192 in equity to finance further development
of its RF heating technology and converted $1,014,302 in convertible debentures plus accrued
interest into common shares and warrants.
During the three months ended December
31, 2017 ("Q4 2017") Acceleware recorded higher revenue than
both the three months ended December 31,
2016 ("Q4 2016") and the three months ended September 30, 2017 ("Q3 2017"). The higher
revenue resulted in lower total comprehensive loss in Q4 17
compared to both Q4 16 and Q3 17. However, for the year as a whole,
the Company's software and services business continued to face a
challenging oil and gas market, with decreased product sales
leading to lower revenue compared to the year ended December 31, 2016. The decline in revenue year
over year was primarily due to lower seismic imaging software
sales, particularly AxRTM and work related to a major custom RTM
solution for Repsol, which was completed in 2017. Consulting
services work for RF heating increased in 2017 compared to 2016. In
line with the decrease in total revenue combined with increased
investment in research and development ("R&D") and general and
administrative ("G&A") expense, total comprehensive loss
increased in 2017 compared to 2016. Cash flow used in operating
activities increased in 2017 compared to 2016 due to increased
investment in the RF heating business segment including R&D,
and a significantly higher investment in working capital.
During Q4 2017, the Company recognized revenue of $271,690 representing a 55% increase over the
$175,639 recognized during Q4 2016,
due to higher maintenance revenue. Revenue rose 14% compared to the
$237,576 recognized in Q3 2017
primarily on higher software product and consulting revenue.
|
|
|
|
|
|
Revenue
|
Three months
ended
Dec 31, 2017
|
Three months
ended
Dec 31, 2016
|
Three months
ended
Sept 30, 2017
|
% change
Q4 2017
over Q4
2016
|
% change
Q4 2017
over Q3
2017
|
RF
Heating
|
$
|
3,953
|
$
|
—
|
$
|
20,700
|
N/A
|
-81%
|
Software &
Services
|
|
267,737
|
|
175,639
|
|
216,876
|
52%
|
23%
|
|
$
|
271,690
|
$
|
175,639
|
$
|
237,576
|
55%
|
14%
|
During Q4 2017, Acceleware had a total comprehensive loss of
$745,937, compared to a total
comprehensive loss of $953,737 for Q4
2016. The difference is a result of an 55% increase in
revenue, combined with a 6% increase in expenses. Total
comprehensive loss of $745,937 in Q4
2017 was also lower than the loss of $913,38 recorded in Q3 2017 due to higher
revenue, and a gain on derivative instruments related to the
Company's convertible debentures which were converted in Q4
2017.
During the year ended December 31,
2017, Acceleware recognized revenue of $1,320,067 - 5% lower than the $1,395,169 recognized during the year ended
December 31, 2016. The decrease is
primarily a result of a 70% decline in product revenue, and despite
a 74% increase in maintenance revenue. On a segmented basis, the
Company's RF heating segment recorded a 159% increase in revenue in
2017, climbing to $224,653 from
$86,648 recorded in 2016, the
increase coming from the sale of the field test results to an oil
sands producer. The software and services segment revenue declined
16% in 2017 to $1,095,414 from
$1,308,521 recorded in 2016,
primarily due to lower seismic imaging software revenue.
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|
|
|
|
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Revenue
|
|
Year ended
December 31, 2017
|
|
Year ended
December 31, 2016
|
Percentage
change
2017/2016
|
RF Heating
|
$
|
224,653
|
$
|
86,648
|
159%
|
Software and
Services
|
|
1,095,414
|
|
1,308,521
|
-16%
|
|
$
|
1,320,067
|
$
|
1,395,169
|
-5%
|
The Company had total comprehensive loss for the year ended
December 31, 2017 of $2,749,731, an increase of 37% compared to a
total comprehensive loss of $2,010,009 for the year ended December 31, 2016. The higher total
comprehensive loss for the year ended December 31, 2017 is due to the above noted
decrease in revenue coupled with a 18% increase in expenses, driven
by higher R&D expense associated with RF heating and higher
G&A expenses.
On a segmented basis, loss from operations attributed to the RF
heating segment increased 20% to $2,370,393 in 2017 from $1,969,010 in 2016 due to higher R&D and
G&A expenses. The software and services segment recorded a loss
from operations of $254,027 in 2017,
compared to income from operations of $20,703 in 2016 due to lower revenue.
At December 31, 2017, Acceleware
had $403,501 (December 31, 2016 - $1,616,415) in working capital, including
$781,315 (December 31, 2016 - $1,922,318) in cash and cash equivalents, and
$183,373 (December 31, 2016 - $58,095) in combined short-term and long-term
debt in the form of finance leases. On September 26, 2017, the Company closed a
non-brokered private placement consisting of 4,651,066 units at a
price of $0.18 per unit for gross
proceeds of $837,192, and proceeds
net of issue costs of $825,807. Each
unit consisted of one common share and one-half common share
purchase warrant. Each warrant entitles the holder to purchase an
additional common share of the Company at a price of $0.27 per common share for a period of two years.
The decrease in cash (and consequently working capital) is a result
of the comprehensive loss incurred in 2017, and an increased
investment in working capital, offset by the proceeds from the
private placement. At November 17,
2017, the Company had $1,014,302 (December 31,
2016 - $928,800) (principal
plus accrued interest) in convertible debentures that accrued
interest at 10% per year. On November 17,
2017, the Company forced conversion of the convertible
debentures, exercising the option to convert all outstanding
principal and accrued interest into 6,762,014 units of one common
share of the Company plus ½ common share purchase warrant.
Additional information, including the audited financial
statements for the year ended December 31,
2017, 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 completion of a
commercial-scale test of Acceleware's RF heating technology.
Acceleware assumes that the Company will be able to conclude the
required agreements to access funding and commence the
test.
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.