SOURCE: Axios Mobile Assets Corp.

Axios Mobile Assets Corp.

May 04, 2016 22:30 ET

Axios Provides Additional Details on Restated Financial Statements

MISSISSAUGA, ON--(Marketwired - May 4, 2016) - Axios Mobile Assets Corp. (TSX VENTURE: AXA) ("Axios" or the "Company") announced today that it has re-filed its previously-issued unaudited interim consolidated financial statements and management discussion and analysis ("MD&A") for the periods ended March 31, 2015, June 30, 2015 and September 30, 2015. The Company's earlier press release dated May 4, 2016 provided a summary of the material revisions to the amended and restated financial statements. The discussion below provides additional details on the nature of those revisions.

  • In Q2 and Q3 of 2015, convertible debt of $1,589,594 and $1,648,348, respectively, was reclassified from non-current liabilities to current liabilities. This relates to convertible debt issued in December 2014. It was originally classified as non-current based on the December 2017 maturity date; however, it was reclassified to current beginning in June 2015 because the holders may call for redemption of the debentures at any time subsequent to the 18-month anniversary of the issuance date.

  • Intercompany entries were recorded that resulted in offsetting reductions to revenue and pooling and freight services expenses in Q2 and Q3 in 2015.

  • Several adjustments were made to the Company's accounting for equity transactions:

    • The valuation methodology for broker units and broker options was changed from using the Black-Scholes model to the binomial model to better align with the features of the underlying instruments.

    • Regarding the broker units, management determined that a derivative liability existed and needed to be valued separately from the value of the convertible debt, with changes in the value of that derivative recorded as profit or loss. During the nine months ended September 30, 2015, a $159,118 gain on change in fair value of derivative liability was recorded.

    • Valuation of common shares and warrants issued as part of various transactions during the year was revised to calculate the value of each component based on the relative fair value rather than the residual fair value. In addition, the original valuation of certain common shares and warrants issued did not incorporate the impact of temporary trading restrictions in the months immediately following issuance.

    • Valuation of the units (consisting of a common share and warrant) issued to settle debt were originally recorded at the fair value of equity issued. However, certain transactions took place with debtholders who were acting in their capacity as shareholders of the Company, and not as creditors. Accordingly, the valuation of those equity instruments was reduced to the carrying amount of the debt and a $520,896 debt settlement expense originally recorded during the three months ended September 30, 2015 was reversed.

  • Miscellaneous other errors and timing differences between quarters were corrected.

  • 2014 comparative figures were adjusted to correct timing errors between Q1, Q2, Q3 and Q4 of 2014. These corrections impacted the timing of depreciation and amortization expense, interest expense, accretion expense, and other operating expenses. The entries had no impact on 2014 full year revenue or net loss. Furthermore, there were no material adjustments to the 2014 financial statements identified during the course of the preparation or audit of the Company's 2015 financial statements. The restatement issues from the 2015 interim restatements had no impact on the 2014 annual financial statements and therefore no reason to restate such financial statements.

  • Reallocations were made between line items within the statements of cash flows for Q1, Q2 and Q3 of 2015. These changes related to clerical errors made during the preparation of the original statements of cash flows and they had no impact on the ending cash balance in any period.

  • Changes were made to account groupings and presentation of the statements of loss and comprehensive loss. Revenue previously shown in a single category has been separated into two categories, categories of operating expenses have been updated and expenses previously reported as cost of goods sold are now presented within operating expenses. These changes, along with updates to the discussion in the MD&A, were made in order to more clearly reflect the results of the business in light of a shift in the Company's business model from a pallet manufacturer to a pallet pooling service provider in late 2014 to early 2015.

The restated financial statements and MD&A are available under the Company's profile on www.sedar.com.

About Axios Mobile Assets

Axios Mobile Assets Corp. is a supply chain logistics company. Axios is becoming a key supplier of pooled pallets primarily in the perishable food category. The Axios Solution includes proprietary tracking and information systems that deliver actionable data that helps improve supply chain visibility and food safety. The Axios Solution is gaining market acceptance based on its unique attributes: lower total cost, lighter weight, sanitary pallets and real time data.

Further information concerning the Company can be found at www.axiosma.com and www.sedar.com.

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Contact Information

  • CONTACT:
    Richard MacDonald
    President & CEO
    Email Contact
    877-762-9467 x601

    Peter Murray
    Shareholder Contact
    Email Contact
    778-839-8382