Axios Files Annual Financial Statements and MD&A
April 30, 2012 --
VAUGHAN, ON -- (Marketwire) -- 04/30/12 -- Axios Mobile Assets Corp. (the "Company") (CNSX: AXA), reports that it has filed its audited financial statements and Management Discussion & Analysis ("MD&A") for the year ended December 31, 2011. In conjunction with these filings, the Company has also filed restated audited financial statements and an amended MD&A for the year ended December 31, 2010.
In its MD&A the Company also reports on its success in achieving milestones set in 2010:
- Complete a private placement financing of not less than $1,400,000 and complete a listing of Axios' shares on the CNSX - completed.
- Obtain certification (FM Global - fire retardancy; and green protocols) for at least 1 initial product, a rackable 40" x 48" pallet - FDA compliance and ISO 8611 durability tests passed successfully.
- Initiate a brand development campaign: product differentiators - quality; economic and environmental benefits of its green protocols, utility of its tracking systems, and its overall value proposition, trademarks - branding and marketing efforts have been ongoing.
- Complete tooling and produce samples of production-like pallets from a third party manufacturing site - tooling of a pallet design has been completed and production of initial samples has begun.
- Convince major end users of pallets to sign letters of intent to use Axios pallets, and to purchase units for testing purposes. - first order delivered subsequent to year end, see "Subsequent Events" to financial statements.
- Distribute at least 500 production intent pallets to potential customers for testing purposes. - completed.
- Convert at least 1 test customer to a formal contract to supply Axios pallets - not yet completed
- Continue developing enhancements to software tracking systems to meet market needs - enhancements have been ongoing
- Complete any necessary or appropriate follow-on financing - plans continue.
Subsequent to its year end, the Company has reported:
- The Company signed a Memorandum of Understanding with a third party whereby the third party agreed to purchase guaranteed volumes of Axios pallets, in exchange for exclusive use of the Axios solution in certain defined verticals.
- The Company purchased two presses for a total capital cost of $287,300 to provide the ability to produce pallets internally and to demonstrate the scalability of the production process.
- On January 8, 2012, the Company completed a private placement, which raised gross proceeds of $31,800 for 265,000 Units at a price of $0.12 CAD per Unit. Each Unit is comprised of one fully paid and non-assessable Common Share ("Share") of the Company and one-half share purchase warrant exercisable at a price of $0.25. Each full warrant ("Warrant") entitles the holder to purchase one fully paid and non-assessable Share of the Company and the Warrants expire two years after the date of issue.
- On March 8, 2012, the Company completed a private placement, which raised gross proceeds of $2,302,252 for 17,709,631 common shares at a price of $0.13 CAD per share.
Readers are referred to the Company's Financial Statements and MD&A.
The Company has reported revenue of Nil (2010 - Nil) and a net loss of $795,692 (2010 - $4,839,256), net loss per share of $0.01 (2010 - $0.07 per share).
The net loss for the year ended December 31, 2011 was principally a result of administrative costs, insurance costs, occupancy costs, professional fees in connection with operations, compliance and listing matters, telecommunications costs, travel costs of the Company and its management, and amortization of capital assets, whereas for 2010. By contrast, the largest components of the net loss for 2010 are related to the revaluation and restatement of intangible assets owned by the Company, and a restatement to expense rather than capitalize certain costs.
This is the first year in which the Company has prepared its financial statements under International Financial Reporting Standards ("IFRS"). IFRS considerations have also influenced the changes in reporting. Notably: acquisition accounting rules under IFRS3 have resulted in expensing $2,322,950 as a 'cost' of completing the acquisition of Microlab by Axios Mobile Assets Inc. in 2010 which was not a 'cost' under GAAP; a change in accounting assumptions under IFRS from GAAP resulted in recording of $246,653 of additional expense for share based payments; and accounting for deferred income taxes has changed.
Restatements were made to correct the accounting, presentation and disclosure of the following as at and for the year ended December 31, 2010:
- The Company initially accounted for the acquisitions of Axios Mobile Assets Inc. ("Axios Canada") and Axios Mobile Assets, Inc. ("Axios USA") by identifying Microlab Online Inc. ("Microlab", the former name of the Company), the legal parent, as the acquirer. However, in substance, Axios Canada, the legal subsidiary, should have been identified as the acquirer of Axios USA and Microlab. The consolidated balance sheet as at December 31, 2010 and the statement of operations, deficit and cash flows for the year then ended have been restated to account for the acquisitions with Axios Canada as the acquirer.
- Both the December 31, 2010 and 2009 balance sheets were restated to correct for errors in the valuation of the intangible assets owned by Axios Canada, the resulting effect on capital stock issued in exchange for these assets, and to correct the accounting for future income taxes relating thereto.
- Cash, capital assets, deferred research and development costs, and accounts payable and accrued liabilities were all revised as a result of transactions that were not accounted for properly as at December 31, 2010.
- Contributed surplus was restated as the value was not accounted for as at December 31, 2010.
- Certain balances described as loans payable have been reclassified to accounts payable and accrued liabilities in order to reflect their nature as amounts owing to reimburse expenditures incurred by a shareholder and director on behalf of the Company.
- As at and for the period ended December 31, 2009, the comparative information of Microlab had been previously presented in error.
The above restatements have been applied retrospectively and the consolidated balance sheet as at December 31, 2009 and the statement of operations, deficit and cash flows for the one month period from December 1, 2009 to December 31, 2009 have been restated to reflect the continuation of the financial statements of Axios Canada. Where required, note disclosures have also been updated to reflect appropriate descriptions of transactions and/or revisions to balances previously disclosed.
As a consequence of the restatements made to the 2010 financial statements, the Company's quarterly financial statements for both 2010 and 2011 will be restated, and accompanying amended MD&A filed. Management anticipates filing same no later than June 15, 2012.
About Axios Mobile Assets
Axios Mobile Assets Corp. is a logistics enabler, featuring next generation, composite pallet technology, which can be bundled with its proprietary tracking and information system that helps improve the value chain in the logistics market. The Axios bundled offering is gaining market acceptance based on its unique attributes: lower total cost, longer useful life, customized configurations and a revenue stream through carbon credit generation, monitoring and the monetizing of carbon emissions reductions. Axios was incorporated under the Business Corporations Act (Ontario) and is a reporting issuer in the Province of Ontario. Axios is traded on the Canadian National Stock Exchange (CNSX) under the symbol AXA.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements included in this report and the documents that we incorporate by reference, are forward-looking statements and can generally be identified by words such as "will," "allow," "outlook," or the negative of these terms, and other comparable terminology. Various risks and other factors could cause actual results, and actual events that occur, to differ materially from those contemplated by the forward-looking statements, such as whether Axios and the pallet management company are able to agree on the terms of a definitive supply agreement, and whether Axios is able to meet price, performance, quality and delivery requirements. Axios undertakes no obligation to update the information in this press release to reflect events or circumstances after the date hereof or to reflect the occurrence of anticipated or unanticipated events.
No exchange or regulating authority has approved or disapproved the contents of this press release.
This press release is not an offer or a solicitation of an offer of securities for sale in the United States.
Lambert, Edwards & Associates
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