LD MicroCap

OneSoft Solutions Inc. Reports Results for the Quarter ended May 31, 2018

Provides Business Outlook and AGSM Update and Grant of Stock Options

Edmonton, Alberta, Canada (July 26, 2018) – OneSoft Solutions Inc. (the “Company” or “OneSoft”) (TSX-V: OSS, OTCQB: OSSIF), a North American developer of cloud-based business solutions, is pleased to announce its financial results for the quarter ended May 31, 2018 (“Q1, Fiscal 2019”). Unless otherwise stated, all dollar amounts are Canadian dollars. Please refer to the interim unaudited Consolidated Financial Statements and Management’s Discussion and Analysis (“MD&A”) for the three months ended May 31, 2018 filed on SEDAR at www.sedar.com for more information.

“The Company is well poised to achieve its primary objectives of completing the commercial release of Polaris and increasing revenues in Fiscal 2019,” said Dwayne Kushniruk, OneSoft’s CEO. “Management believes that revenue from the current sales opportunities, coupled with cash of $3.5 million on-hand, is sufficient to achieve these objectives, with no requirement to raise additional capital.”

FINANCIAL SUMMARY FOR Q1 ENDED MAY 31, 2018

The following chart summarizes the first quarter ended May 31, 2018, compared to May 31, 2017:

  • Revenue for the quarter increased 31.2% year-over-year from $223,093 to $292,783. The Company’s commercial customers processed more miles and inspection logs in our Cognitive Integrity ManagementTM (“CIM”) SaaS-based Machine Learning solution. During the quarter, the Company also recognized the revenue from one Pilot Program.
  • Gross profit improved from $206,255 to $279,620, due to the increase in revenue.
  • Expenses were $1,013,763, up from $721,100 a year ago. The increase was due to higher salaries associated with the development of Polaris and increased sales and marketing activity, offset by lower G&A expenses as one-time expenses in the year ago quarter for listing on the OTCQB and pertaining to intellectual property did not repeat.
  • The increase in expenses caused the comprehensive loss to increase from $500,745 in Q1 last year to $766,809 this quarter.

OPERATIONAL HIGHLIGHTS FOR Q1 ENDED MAY 31, 2018

  • Revenue continued to increase from previous quarters, as a result of current clients adding more pipeline infrastructure into CIM and new clients using CIM.
  • The Company continued its Pilot Program initiative during the quarter, which allows prospective customers to evaluate CIM in a compressed timeline using their own data for a small segment of their pipeline. While pilots can be completed within days by OneBridge, they typically last weeks or months due to the multitudes of people at customer sites that are required to investigate, assess and adjudicate the impact CIM will have on their current systems and processes.
  • In March 2018, OneBridge entered into a reseller arrangement with WorleyParsons [ASX:WOR], one of the largest, international engineering services firms in the oil and gas industry. WorleyParsons will offer OneBridge’s solutions to its pipeline clients based on their strategy to utilize OneBridge solutions to drive demand for high value engineering services that they provide for their clients.
  • OneBridge continued our collaborative marketing and sales efforts with Microsoft, who is motivated by CIM’s demonstrated ability to drive consumption of (and revenue from) Microsoft Azure and other cloud products and services. In May 2018, OneBridge showcased CIM to Europe and Middle East Oil and Gas executives at a conference hosted by Microsoft in Brussels, Belgium.
  • On March 15, 2018 the Company reported that all outstanding warrants had been exercised, generating $567,050, improving the Company’s share structure. Exercised employee stock options also added $30,000 to working capital in the quarter.

SUBSEQUENT TO QUARTER END

BUSINESS OUTLOOK

OneSoft is transitioning from a research and development phase to revenue generation, which we believe will accelerate as the Company’s new technology and solutions gain traction in our marketplace.

We have estimated the industry costs associated with oil and gas pipeline integrity management to be USD $7.4 billion annually in the United States and USD $11.9 billion annually on a global basis, of which approximately 9%, 22% and 69% of these total figures are expended on Evaluation, Inspection and Maintenance, respectively. We believe that Data Science and Machine Learning technologies, like our CIM and Polaris solutions, may be able to disrupt a significant portion of the Evaluation, some portion of the Inspection, and potentially some portion of the Maintenance components of the legacy processes currently being used in the industry.

Statistics published by the Pipeline and Hazardous Materials Safety Administration (“PHMSA”) report that the average cost per pipeline incident involving a release of oil or gas product into the environment in the USA was approximately $456,000 per incident (1). Our preliminary analysis of costs associated with data evaluation and predictive analytics indicates that the use of CIM resulted in an average of 52% and 81% savings of those costs for two of our clients. Additionally, significant cost avoidance has been identified in one client case because 31 serious threats were detected by CIM that were not discovered by their legacy processes, thereby potentially saving this client USD $25 million (USD $800,000 per incident) in property, environmental and remedial costs, had these threats resulted in failures and releases. The cost savings arising from the use of CIM versus legacy systems is very significant, as corroborated by our clients, and creates highly compelling motivations for prospective customers to consider and adopt our solutions.

(1) PHMSA, All Pipeline Incidents, Total costs, 3-year Average: Retrieved from: https://hip.phmsa.dot.gov/analyticsSOAP/saw.dll?Portalpages

We believe our own internal initiatives and our solid business relationships with three large, high profile companies – Microsoft, Phillips 66, and WorleyParsons – will greatly assist us to evolve our technology and grow revenues:

  • Leveraging Microsoft’s ongoing collaborative marketing and sales initiatives in the USA, Canada, Europe, Middle East and Africa provides significant reach to potential customers globally, which would be very difficult and costly to replicate without Microsoft’s marketing and sales support.
  • Phillips 66 is evangelizing the high value proposition of our technology and solutions amongst its peers, which is generating interest from similar potential customers.
  • WorleyParsons is initiating marketing and sales activities for our solutions in Canada, Australia, New Zealand and other selected international markets.

Our own internal marketing and sales activities continue to create awareness of our solutions and accelerate interest by prospective customers in our Pilot Programs to assess the value proposition of our solutions. We anticipate that pilots will continue to operate in various stages of progression with numerous potential customers throughout Fiscal 2019, which are expected to generate nominal revenue to recover direct costs. Management remains optimistic that most pilot projects will eventually convert to long term commercial use of our solutions, some of which are expected to occur in Fiscal 2019. We also anticipate some revenue growth from our existing clients in Fiscal 2019, as they increase use of our solutions by ingesting additional pipeline segment data into CIM and transitioning new divisions and operating partners to replace legacy processes with CIM and Polaris.

Additionally, the Polaris program is highly important to the Company, and we expect Polaris’ commercial release to occur in Q3 of Fiscal 2019. All three private preview participants are enthusiastic about adopting the solution for ongoing commercial use, tentatively commencing in September 2018. We anticipate the completion of Polaris and acceptance of it by Phillips 66 will result in the transfer of a significant portion of the Company’s deferred revenue to earned revenue, and thereafter commence to generate Polaris revenue late in calendar 2018.

AGSM UPDATE AND GRANT OF STOCK OPTIONS

On July 24, 2018 the Company held its Annual General and Special Meeting (“AGSM”). All resolutions as set forth in the Management Information Circular distributed to shareholders prior to the meeting were passed, including disinterested shareholder approval of the amended escrow share release schedule. Accordingly, these shares will be released from escrow on September 24, 2018. Following the AGSM, 275,000 stock options were granted to the Directors and Officers of the Company and 325,000 stock options were granted to senior executives as part of compensation plans. All options granted have a strike price of $0.44 per share, vest 50% on each of the grant and anniversary dates and will expire in five years if not exercised.

ON BEHALF OF THE BOARD OF DIRECTORS

ONESOFT SOLUTIONS INC.

Douglas Thomson

Chair    

For more information, please contact

Dwayne Kushniruk, CEO

dkushniruk@onesoft.ca

780-437-4950

Sean Peasgood, Investor Relations

Sean@SophicCapital.com

647-494-7710

Forward-looking Statements

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 to deliver 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 efficacy of its software; our interpretation based on various industry information sources regarding the total miles of pipeline in the USA and globally, which segments are piggable; our understanding of metrics, activities and costs regarding evaluation, inspection and maintenance is in alignment with various industry information sources and costs of performing pipeline evaluation, inspection and maintenance in the USA are representative of those in the rest of the world, are reasonably accurate; 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 many 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 because 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.

OneSoft Receives $2.1 Million from Exercise of All Outstanding Warrants

Edmonton, Alberta, March 15, 2018 (GLOBE NEWSWIRE) — OneSoft Solutions Inc. (the “Company” or “OneSoft”) (TSX-V:OSS, OTC:OSSIF) is pleased to announce that it has received $2.1 million from the exercise of all outstanding warrants. As reported in the Company’s MD&A filed January 25, 2018 on SEDAR, the Company had 16.4 million warrants due to expire in February and March, 2018. The Company is pleased to report that all warrants have been exercised and zero warrants are now outstanding. OneSoft’s current cash balance after the warrant exercise is approximately $4.1 million.

“We believe this full warrant exercise indicates investors’ continued confidence in the future of our Company,” said CEO Dwayne Kushniruk. “We believe this is due to our recent news flow regarding progress with our Fortune 500 clients and pilot programs, as well as the announcement that we’ve teamed up with Phillips 66 to develop and globally market Polaris, a comprehensive SaaS solution for pipeline operators. The additional $2.1 million strengthens our already strong balance sheet and gives us comfortable runway to execute on our objective to maximize new customer additions. We’d like to thank our investors for their strong support and confidence in our vision.”

ABOUT ONESOFT SOLUTIONS AND ONEBRIDGE

OneSoft has developed software technology and products that have capability to transition legacy, on-premise licensed software applications to operate on the Microsoft (NASDAQ “MSFT”) 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 Azure Cloud Platform and Services, with accessibility through any internet capable device.

Visit www.onesoft.ca for more information.

The Company’s wholly-owned subsidiary, OneBridge Solutions Inc., develops and markets revolutionary new SaaS solutions that use data science and Machine Learning to conduct predictive analytics on big data for the Oil & Gas pipeline industry, which assists operators to predict pipeline failures and thereby save lives, protect the environment, reduce operational costs and address regulatory compliance requirements.

Visit www.onebridgesolutions.com for more information.

FOR MORE INFORMATION, PLEASE CONTACT

Dwayne Kushniruk, CEO
dkushniruk@onesoft.ca
(780) 437‐4950

Sean Peasgood, Investor Relations
Sean@SophicCapital.com
(416) 565-2805

FORWARD-LOOKING STATEMENTS

This news release contains forward-looking statements relating to the future operations, product creation revenues and profitability of the Company, the Company’s efforts to develop and commercialize the technology with the capabilities, and Phillips 66’s ability to use the technology, as described, 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 delivering 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 efficacy of its software, its ability to complete projects to expected deadlines, 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 many 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; human capital engagement and availability, ability to access sufficient financial 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.

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.

LD MicroCap

OneSoft Solutions Inc. – Unaware of Any Material Change

Edmonton, Alberta (FSCwire) – At the request of IIROC, OneSoft Solutions Inc. TSX-V:OSS, OTCQB:OSSIF (“OneSoft” or the “Company”) wishes to confirm that the Company’s management is unaware of any material change in the Company’s operations that would account for the recent increase in market activity.

The Company announces that it is not aware of any material, undisclosed corporate developments and has no material change to report at this time. The Company will keep the market informed as required.

About OneSoft and OneBridge

OneSoft has developed software technology and products that have capability to transition legacy, on-premise licensed software applications to operate on the Microsoft (NASDAQ “MSFT”) Cloud, in conjunction with Office 365, 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 Azure Cloud Platform and Services, with accessibility through any internet capable device.

Visit www.onesoft.ca for more information.

The Company’s wholly-owned subsidiary, OneBridge Solutions Inc., develops and markets revolutionary new SaaS solutions that use data science, Machine Learning, predictive analytics and big data to assist Oil & Gas pipeline industry operators to predict pipeline failures and thereby save lives, protect the environment, reduce operational costs and address regulatory compliance requirements.

Visit www.onebridgesolutions.com for more information.
For more information, please contact

Dwayne Kushniruk, CEO

dkushniruk@onesoft.ca

(780) 437‐4950

Sean Peasgood, Investor Relations

Sean@SophicCapital.com

(416) 565-2805

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.

Another US-Based Fortune 500 Company Adopts Onesoft’s CIM Solution for Pipeline Integrity Management and Data Analytics

Edmonton, Alberta, Canada (January 11, 2018) – OneSoft Solutions Inc. (the “Company” or “OneSoft”) (TSX-V:OSS, OTC:OSSIF) is pleased to announce that its wholly-owned subsidiary, OneBridge Solutions, Inc. (“OneBridge”), has entered into an agreement with another Fortune 500 company (the “Client”) to use Cognitive Integrity ManagementTM (“CIM”) as an integral component of its pipeline integrity management process. CIM is a SaaS solution that incorporates proprietary machine learning algorithms and other data science components of Microsoft Azure and cloud technologies to manage and conduct predictive analytics on big data pertaining to oil and gas pipelines.

“We are pleased that another customer who initially commenced using CIM on a pilot project trial basis has now transitioned to use CIM on an ongoing, commercial basis” said Tim Edward, President of OneBridge. “This corroborates our belief that machine learning and data science cloud technologies can deliver better data management and analytics than legacy solutions provide, and that incorporating CIM as an integral component of pipeline integrity management provides a high-value proposition for pipeline operators.”

The Client is a USA-based company, which together with its subsidiaries, is one of the largest petroleum product refiners, marketers and transporters in the United States. Its operations include multiple refineries, comprehensive terminal and transportation systems, extensive wholesale divisions and one of the largest chains of company-owned and operated retail gasoline and convenience stores within the USA. The Company’s major projects include significant investments in software and technology to streamline operations, reduce costs and provide for future growth. A plan to incorporate the Client’s use of CIM through calendar 2018 has been determined, which services will commence immediately.

About OneSoft Solutions and OneBridge

OneSoft has developed software technology and products that have capability to transition legacy, on-premise licensed software applications to operate on the Microsoft (NASDAQ “MSFT”) 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 Azure Cloud Platform and Services, with accessibility through any internet capable device. Visit www.onesoft.ca for more information.

OneBridge develops and markets revolutionary new SaaS solutions that use data science and Machine Learning to apply predictive analytics to big data for the Oil & Gas pipeline industry, which assists operators to predict pipeline failures and thereby save lives, protect the environment, reduce operational costs and address regulatory compliance requirements.

Visit www.onebridgesolution.com for more information.

 

For more information, please contact

Dwayne Kushniruk, CEO

dkushniruk@onesoft.ca

(780) 437‐4950

Sean Peasgood, Investor Relations

Sean@SophicCapital.com

(416) 565-2805

Forward-looking Statements

This news release contains forward-looking statements relating to the future operations, product creation revenues 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 delivering 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 efficacy of its software, its ability to complete projects to expected deadlines, 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 many 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; human capital engagement and availability, ability to access sufficient financial 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.

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.

 

OneSoft Solutions Inc. Provides Business Update and Reports Financial Results for the Three Months Ended May 31st, 2017

Edmonton, Alberta, Canada (July 27, 2017) – OneSoft Solutions Inc. (the “Company” or “OSS”) (Canada TSX-V: OSS; USA OTCQB: OSSIF, a North American developer of cloud-based business solutions announces its financial results for the three months ended May 31, 2017.

Financial results are summarized as follows:

Q1 Fiscal 2018 Operational Highlights

Our Cognitive Integrity Management (“CIM”) and HoloLens solutions were demonstrated at the annual Pipeline Pigging and Integrity Management (“PPIM”) tradeshow held in Houston, Texas between February 27 and March 3, 2017. On March 29, 2017, OneBridge presented its solutions at a Pipeline Asset Management Workshop hosted by Microsoft at their Technology Center in Houston, which was attended by senior managers from approximately 30 companies who are responsible for pipeline integrity roles including integrity management, maintenance, data science, analytics and information technologies. OneBridge presented from a tradeshow booth at the Banff 2017 Pipeline Workshop from April 3-6, 2017 which focused on various aspects of the oil and gas pipeline industry, including regulatory and standards development; corrosion; integrity, and emergency preparedness and response. Microsoft sales teams worked collaboratively with us by donating computer hardware, personnel and other resources which assisted our presence at these venues. We consider these activities as being successful in that they raised awareness of the OneBridge solution, allowed us to make important industry contacts and initiated interest with service organizations which could lead to subscriptions to use our product at some future date.

In the quarter, the Company added to its operational capabilities by hiring additional software development staff, data scientists, and a marketing director whom together we believe will reduce our development timelines and increase our sales and marketing effectiveness.

On March 6, 2017, certain insiders sold some of their shares and used a portion of the sale proceeds to exercise warrants to replace the shares sold, which raised $1,822,389 for the Company without incurring any dilution for other shareholders. The Company completed listing its shares on the U.S. OTCQB market in May 2017 to provide a venue for U.S. citizens to trade the Company’s shares.

The three months ended May 31, 2017 (“Q1 Fiscal 2018”) was the first full quarter wherein revenue generation from the Company’s CIM product was recorded following its commercial market release in January 2017. Revenue for the quarter was $223,093, of which $210,593 was derived from a CIM SaaS subscription, versus $102,528 in the same quarter last year, none of which was due to CIM. Gross profit was $206,255 this quarter versus $85,311 in the comparative quarter last year. $284,705 of costs met the criteria for capitalization as software development costs as compared to $309,435 this period last year. The net loss for the quarter was $500,745 versus $404,473 in the comparative prior year quarter.

Financial outlook for fiscal 2018 and progress in Q1 2018

We continue to focus on the US market with its 2.7 million miles of oil and gas transmission pipeline infrastructure of which approximately 600,000 miles is our initial target market, as these are the sections of pipelines that are accessible by inline inspection tools and have, or could have, ILI data. OneBridge’s commercial pricing of CIM for Fiscal 2018 is at a fixed fee of USD $60 (or CAD $78, assuming a currency exchange premium of 30%) per data mile for one year of service. Azure computing fees are incremental to CIM charge out rates. Cost of goods sold, with the possible exception of staff salaries allocated to direct costs, are expected to remain low for the foreseeable future. In Fiscal 2018, these will be near zero due to Azure costs being offset by unused Azure credits previously granted by Microsoft, and less than 10% of revenue thereafter.

In our Q4, Fiscal 2017 MD&A (published on SEDAR on June 1, 2017), we provided a summary of our revenue and cash expense targets for our fiscal year ending February 28, 2018 (the “Fiscal 2018 Budget”), along with key factors and assumptions made by Management. The following table provides updated disclosure regarding the Company’s Fiscal 2018 Budget and achievement of stated objectives in Fiscal 2018 Q1 ended May 31, 2017.

Objectives stated for the Fiscal 2018 Budget published in the Feb. 28, 2017 MD&A Updates as at May 31, 2017
Management’s stated cash generation objective is to invoice sufficient data miles of CIM subscriptions to pay the majority portion of our cash expenses prior to working capital requirements and to continue increasing the capabilities of CIM by developing additional functionality. Management’s budgetary forecast for the three months ended May 31, 2017 (“Q1 2018”) included in the Fiscal 2018 Budget was achieved. In the quarter, a new data base schema was initiated for CIM to allow the addition of new features. New functionality added during the quarter was the ability to mark pipeline segments as having been repaired, the ability to project corrosion growth 10 years into the future and the ability to export data from the system. Improvements were also made to the algorithms that align the features of multiple pipeline assessment data sets.
Revenue Scenario 1 Using the charge out rate of USD $5.00 per pipeline data mile per month plus Pilot Project and Azure usage fees, revenue of $3,018,000 is projected to be generated, providing the full 359,505 cumulative data miles are invoiced. Under this scenario, cash of $858,000 will be consumed in the year, comprised of a $150,000 cash loss (pre-software capitalization), $594,000 for working capital purposes and $114,000 for computer upgrades and additions. Revenue Scenario 2 – Lower level of SalesOnly 259,753 cumulative data miles are invoiced due to a lower attainment of new customers and our second private preview customer using CIM for a reduced level of mileage than assumed in Revenue Scenario 1. Using the same billing rate per mile and Pilot Project fees as stated above, the invoiced mileage would generate revenue of $2,120,000. Cash expenses would be unchanged from Scenario 1 of the Fiscal 2018 Budget and revenue less cash expenses would leave a shortfall of $1,048,000. Capital assets purchases would be unchanged and working capital requirements would reduce to $396,000. The Company would consume cash of $1,558,000 in the year. After conversion of warrants as stated below, the Company would end the fiscal year with cash of $1,517,000. In Q1 2018, cumulative data miles invoiced, rate per mile and revenue invoiced were achieved in accordance with Fiscal 2018 Budget expectations. As at the quarter end, contract negotiations were underway with one private preview customer and one Pilot Project customer, and sales processes were underway with additional potential customers whom we believe will engage in Pilot Projects to use CIM for their operations. We continue to attempt to engage a second private preview customer to use CIM on a commercial basis, which has not yet occurred as at the quarter end. Expenses were less than those budgeted in the Fiscal 2018 Budget. Cash generated in the first quarter of 2018 was $91,000 higher than that budgeted primarily due to less cash being consumed for working capital purposes than budgeted. 

 

Warrant Financings under Revenue Scenario 1Management believes that $4,050,000 will be raised from exercise of the share purchase warrants currently outstanding due to their average exercise price of $0.13 being less than the price of the Company’s shares in the publicly traded markets and due to the warrants expiry date in February and March of 2018. Warrant Financings under Revenue Scenario 2 

Due to lower revenue, only 50% of the outstanding warrants may be exercised, generating cash of $2,983,000

Cash received from warrants exercised during the quarter was $1,907,680. Management’s Fiscal 2018 Budget forecasts for exercise of Warrants remains unchanged as at Fiscal 2018 Q1 ended May 31, 2017.
Expenses in $000’s (for both Revenue Scenarios 1 & 2), Year ending Feb. 28, 2018. Salaries & Benefits 2,702 General & Administrative 387Sales & Marketing 375

Non-cash expense: stock compensation costs (295)

Total cash expenses 3,168

Revenue less cash expenses (150)

Note: Revenue is expected to increase monthly during the year while expenses will be essentially unchanged each quarter.

Expenses in $000’s for Q1 2018. Direct costs – salary allocation 12
Salaries & Benefits 659

General & Administrative 162

Sales & Marketing 74

Non-cash expense: stock compensation costs (102)

Total cash expenses 805

Revenue less cash expenses (582)

Fiscal 2018 Q1 ended May 31, 2017 essentially met our operational budget expectations.

Business outlook

We are actively engaged in discussions and actions with multiple potential new customers. As is often the case with the adoption of disruptive technologies, our two main challenges appear to be long sales cycles which we anticipate may be six months or more and the reluctance to embrace a new solution to replace legacy practices.

To address these challenges, OneBridge created a Pilot Project program to allow prospective customers to use CIM on a trial basis by submitting their data for a portion of their pipeline and using CIM to quickly analyze and report on it so they can experience first-hand the value proposition of using CIM. Pricing for a Pilot Project participant has been set within the typical financial authorization levels of integrity management personnel, to reduce sales cycles and to expedite the onboarding of new customers using CIM. We believe the value proposition of using CIM, once demonstrated with a customer’s specific data, will be highly compelling and lead to quicker acceptance by new customers to use our product. We further believe that once key industry participants who have used our solution share their CIM user experience with their peers, which typically occurs at industry gatherings, work-shops and conventions, our CIM solution will gain traction as a credible alternative to less effective and efficient legacy solutions used by industry today.

It is our belief that the combination of: (i) OneSoft’s alignment with Microsoft cloud deployment strategies; (ii) our deep domain expertise with respect to the pipeline industry and development expertise regarding cloud computing; (iii) the high degree of interest and motivation of oil and gas pipeline customers to improve their safety practices; and (iv) the need for hazardous pipeline operators to comply with increasingly stringent operational, safety and regulatory requirements are compelling factors that have potentially positioned the Company for significant future growth and opportunity. We believe that our solutions are ideally poised to provide the comprehensive and cost-effective functionality that our potential customers are seeking. We also believe that legacy systems in use today are not able to replicate the capabilities that our cloud-based solutions that leverage big data and machine learning data science can provide.

Our corporate development strategy continues to encompass investigation and pursuit of initiatives that foster value creation for our shareholders, including synergistic joint ventures and potentially merger and acquisition scenarios.

Please review the Management’s Discussion and Analysis and Condensed Consolidated Financial Statements for the three months ended May 31, 2017 on SEDAR (www.sedar.com) for more detailed information regarding the Company’s results.

Grant of stock options

On July 25, 2017, the Company granted 275,000 stock options to the Directors and Officers of the Company as a result of their reappointment following the Annual General Meeting of the shareholders. 325,000 stock options were also granted to senior executives as part of their compensation. All options have a strike price of $0.27 per share, vest 50% on grant date and 50% on the anniversary date, and will expire in five years if not exercised.

ON BEHALF OF THE BOARD OF DIRECTORS 
ONESOFT SOLUTIONS INC.
Douglas Thomson
Chair

For more information, please contact:
Dwayne Kushniruk, CEO
dkushniruk@onenfp.com
780-868-9507

Forward-looking Statements

This Press Release contains historical information, descriptions of current circumstances and statements about potential future developments and anticipated financial results, performance or achievements of the Company. The latter statements, which are forward-looking statements, are presented to provide guidance to the reader but their accuracy depends on several assumptions and are subject to various known and unknown risks and uncertainties. Forward-looking statements are included under the headings, “Business Outlook” and “Financial Outlook for Fiscal 2018 and Progress in Q1 2018”, When used in this Press Release, such statements may contain such words as “may,” “will,” “intend,” “should,” “expect,” “believe,” “outlook,” “predict,” “remain,” “anticipate,” “estimate,” “potential,” “continue,” “plan,” “could,” “might,” “project”, “targeting” or the negative of these terms or other similar terminology. Forward looking information in this Press Release includes, without limitation, statements regarding funding requirements. These statements are based on management’s current expectations regarding future events and operating performance, are based on information currently available to management, speak only as of the date of this Press Release and are subject to risks which are referenced on page 16 of the Management Discussion and Analysis for the year ended February 28, 2017 and in the Company’s other public filings on the Canadian Securities Administrators’ website at www.sedar.com (“SEDAR”) and as updated from time to time, and would include, but are not limited to, dependence on market economic conditions, sales and margin risk, acquisition and integration risks, competition, information system risks, risks associated with the introduction of new products, product design risk, environmental risks, customer and vendor risks, credit risks, currency risks, tax risks, risks of legislative changes, risks relating to remote operations, key executive risk and litigation risks. In addition, there are numerous risks associated with an investment in the Company’s common shares, which are also further described in the “Risks and Uncertainties” section referenced on page 16 of the Management Discussion and Analysis for the year ended February 28, 2017, and as updated from time to time, the Company’s other public filings on SEDAR. These risks and uncertainties may cause actual results to differ materially from those contained in the statements. Such statements reflect management’s current views and are based on certain assumptions. Some of the key assumptions include, but are not limited to: assumptions regarding the performance of the Canadian and the United States economies; interest rates; exchange rates; capital availability; the amount of the Company’s cash flow from operations; tax laws; laws and regulations relating to the protection of the environment; and capital spending requirements or planning in respect thereto, including but not limited to the performance of any such business and its operation. They are, by necessity, only estimates of future developments and actual developments may differ materially from these statements due to several known and unknown factors. Investors are cautioned not to place undue reliance on these forward-looking statements. All forward-looking information in this Press Release is qualified by these cautionary statements. Although the forward-looking information contained in this Press Release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Certain statements included in this Press Release may be considered “financial outlook” for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this Press Release.

The forward-looking statements contained in this Press Release are made as of the date of this report, and should not be relied upon as representing management’s views as of any date subsequent to the date of this report. Except as required by applicable law, the Company undertakes no obligation to publicly update or otherwise revise any forward-looking statement, whether because of new information, future events, or otherwise.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.