EDMONTON, ALBERTA--(Marketwired - Dec. 9, 2016) - OneSoft Solutions Inc. (the "Company" or "OSS") (TSX VENTURE:OSS), a developer of cloud-based software solutions, announces it is retracting certain disclosures published in a News Release dated October 26, 2016 (the "October 26 News Release") and in the Management's Discussion and Analysis for the three and six months ended August 31, 2016 published October 26, 2016 (the "MD&A"). The Company is also providing a list of risks related to information stated in its News Release published October 27, 2016 (the "Clarifying News Release"). We believe it important that our shareholders are informed of the market we are in and the risks associated with introducing new technology to a mature business market and we are pleased to provide this elevated level of disclosure.
The October 26 News Release, on page three, and the MD&A, on page 5, presented a table of values which the Company stated were objectives of Management regarding future potential annualized revenues. No reliance can or should be placed on this financial outlook information as its presentation and related disclosure requirements have not been met, as is required by National Instrument 51-102 Continuous Disclosure parts 4A and 4B. The Company therefore retracts the table of figures along with the two paragraphs immediately preceding the table commencing with "Whereas future revenue generation…." and concluding in the second paragraph with "……are calendar quarters".
The Company also advises and cautions readers that the retracted disclosure may continue to be found in the public domain and the Company advises readers to disregard and not rely on such retracted information.
Clarification of information: Risks Associated with Total Addressable Market ("TAM"), as estimated by the Company
In the Clarifying News Release, the Company explained the term "addressable revenue" (being Management's calculation of the size of the market available to the Company's products and all similar SaaS products in the USA) and the composition and calculation of "total potential addressable revenue of approximately $168 million annually" and "more than $300 million annually" (both, total addressable market, or "TAM"). The Company has determined that it did not provide clear disclosure of the risks that could cause a material change in the TAM. The Company now discloses those risks as follows:
The Company's products are new and different from current industry solutions and therefore have no established markets
Currently there is no established market for the Company's new technologies and products, or for similar technologies and products that might be provided by other software vendors.
- Machine learning, predictive analytics and other big data science technologies are relatively new technologies which the Company believes can be used to improve the safety of oil and gas pipelines in North America and certain other jurisdictions in the world. To the best knowledge of the Company, these sciences have not been successfully applied and used in the pipeline industry, in the manner envisioned by Company management. While the Company believes that such applications may potentially render very favourable results, there can be no assurance that such applications will be successful, or that the Company's potential customers will adopt these new technologies, products and/or practices. Failure of potential customers to adopt these new technologies and products could materially reduce the TAM, in whole, or in part.
Demand for the Company's products is unknown as potential customers may choose to continue to use legacy solutions or alternative technology/solutions;
- Pipeline operators within North America may currently be using technologies, processes and procedures which they and their regulators may consider to be adequate to address the guidelines and regulations that govern the safe operation of oil and gas pipelines. While the Company believes the value proposition of its new cloud technology and products may be sufficiently compelling to potential customers, there can be no assurance that potential customers will adopt the Company's products, or be willing to change their current practices. Accordingly, the TAM as estimated by the Company may not develop in part, or even at all.
The introduction of new products or new technologies could render the Company's products and/or the Company's future products that are currently being planned or developed obsolete;
- The computer software industry, particularly regarding new cloud and big data science technologies, is undergoing rapid and constant change, and new instruments, gauges and machines are being introduced to the pipeline industry on a regular basis. The Company believes it must bring its products to market on a rapid timeline to ensure its software applications are not rendered obsolete or inferior by potentially more efficient and effective competitive products, or otherwise lose market opportunity because of superior products which may be developed and marketed by competing vendors. Such events could materially reduce or eliminate the TAM as estimated by the Company.
The Company's pricing model is different from current industry practices and may not be accepted by the industry
There is no guarantee that the Company will be able to sell its products and services based on a per mile pricing model ("SaaS Fees Structure") as has been anticipated by the Company. We believe that this is a new pricing model that has not been used in the industry to date, and there can be no assurance that this pricing model will be acceptable to and embraced by prospective customers of the Company. Although the Company currently believes that a fee structure of US$60.00 per mile per year for functionality provided by its initial version of Cognitive Integrity Management ("CIM") or by potentially similar competing products, and that a fee structure of between US$90 and US$120 per mile per year for functionality for subsequent versions of CIM as envisioned by the Company, or by potentially similar competing products, are reasonable expectations with respect to revenue assumptions, there can be no assurance that the Company's current pricing model will not need to be altered in the future, and that such potential changes may materially alter the Company's current estimate of TAM. The Company has determined the reasonableness of its SaaS Fees Structure and pricing by communicating with several potential customers and industry followers, and it believes that its planned pricing may generally be accepted by prospective customers; however, the Company to date has not yet entered into long term contracts with customers, and there can be no assurance the Company will be able to realize, either when first contracted or on a continuing basis, revenues that align with the Company's current SaaS Fees Structure and pricing model. Additionally, new competitors could enter and compete within the Company's intended market place. Any or all of these factors could materially alter the Company's current estimate of TAM and its generation of revenue therefrom.
Risks regarding a patent of the Company's intellectual property;
The Company has filed a preliminary application to patent components of its intellectual property; however, as is the case with some patents, we expect this to be a lengthy procedure which may take several years to complete. The Company may or may not be successful in being granted a patent or patents. The lack of a patent may make the Company's products vulnerable to being copied or infringed upon by a competitor and may negatively impact the ability of the Company to compete effectively to exploit the TAM. If the Company is successfully awarded a patent or patents, it will be necessary to reveal certain details regarding the Company's technology and intellectual property secrets, which could introduce additional risks associated with competitors who may not respect patent protection rights, or may otherwise not be bound by patent protection rights because of the geographic location they operate from. Any or all of these factors could materially alter the Company's current estimate of TAM and its generation of revenue therefrom.
Future planned functionality enhancements may not be feasibly marketable
Planned future enhancements to the Company's products may not be sufficiently compelling to potential customers, which could prevent the Company from attaining its future pricing structure as envisioned. This could materially alter the Company's current estimate of TAM and revenue model.
The Company has previously disclosed its intention to commercially release its CIM product functionality in phases. Phase 1 CIM has not yet been commercialized and launched. Phases 2 and 3 of CIM functionality are in the development stage, and accurate product specification and timelines for their commercial release may be dependent upon factors that are not yet known, including potential technological hurdles and capability to address input and feedback from private preview customers engaged prior to completion of the products. Phased development of CIM is integral to the Company's calculation of TAM, as is the Company's belief that customers will be willing to pay higher per mile prices for additional functionality. There can be no assurance that prospective customers will find such future functionality to be sufficiently compelling to warrant higher pricing as we anticipate today. Additionally, the Company may ultimately determine that it may be uneconomic to pursue subsequent phases of development of CIM, if the current version of the products are not adequately embraced by customers. Any of these factors may cause the Company to not pursue subsequent phases of CIM development and sales, or to continue to provide their availability once launched, which could materially reduce the Company's current estimate of TAM and its generation of revenue therefrom.
The Company's reliance on the Microsoft cloud platform and services
Management believes that the Company currently has a degree of competitive advantage because it was an early adopter of Microsoft's cloud platform and services commencing in 2011, and it was a participant in Microsoft Venture's first Accelerator program for machine learning and data science involving big data. Microsoft is working collaboratively with the Company to assist with the introduction, marketing and sale of our products to selected enterprise level customers within the USA. There can be no assurance that other software vendors will not, either now or in the future, develop competing products to the Company's that are also based on Microsoft's cloud platform and services, and/or on competing cloud technology platforms. Risks associated with the Company's reliance upon Microsoft include Microsoft increasing its rates for its cloud platform and services that power the Company's products, which might render the Company's products uncompetitive because of high cost; and the possibility that Microsoft may elect to work more collaboratively with other software vendors in a manner that is competitive to the Company. Potential changes to Microsoft's current cloud platform and services pricing model, or a reduction in the level of support that Microsoft is currently providing to assist the Company to advance its business, could materially alter the Company's current estimate of TAM and its generation of revenue therefrom.
Personnel risks concerning TAM
In determining the Company's estimate for TAM, the Company is relying on current assumptions regarding its ability to retain current personnel and attract future employees who have specialized knowledge and expertise pertaining to technology development, sales, marketing and servicing of products for oil and gas pipeline customers. There can be no assurance that the Company will be able to replace current employees or hire new employees in the future who have the specialized knowledge that is required to advance our business. The Company's potential inability to replace current skillsets and expertise and/or expand our teams to accommodate growth in a timely manner could materially alter the Company's current estimate of TAM and its generation of revenue therefrom.
Refiling of MD&A
The Company has refiled its MD&A on SEDAR with the above noted retractions deleted from it and the Company has added the above risks to the "Risks and Uncertainties" section of the MD&A. The Company has also filed Form 52-109R2 Certification of Refiled Interim Filings. The financial statements of the Company for the above period were not affected or changed by this refiling.
About OneSoft Solutions Inc.
OneSoft Solutions Inc. has developed software technology and products that have capability to transition legacy, on premise licensed software applications to operate on the Microsoft 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 Cloud platform and services, with accessibility through any internet capable device. Visit www.onesoft.ca for more information.
About OneBridge Solutions Inc.
OneSoft's wholly owned subsidiary, OneBridge Solutions Inc., is developing what Management believes are revolutionary new applications for the Oil & Gas pipeline industry, which we believe will be able to predict pipeline failures and thereby save lives, protect the environment, reduce operational costs and address regulatory compliance requirements. OneBridge utilizes a single geo-spatial database that accommodates pipe-centric, structured and unstructured big data, with capability to address the key functions that pipeline companies require to manage, operate and maintain their pipelines. OneBridge solutions are designed to address two key areas of functionality - Safety Management Systems and Compliance Analytics ("SMS/CA"), and Cognitive Integrity Management ("CIM") solutions, all of which will be deployed as SaaS solutions that leverage Data Science, Azure Machine Learning, HoloLens, Microsoft BI and other components of the Microsoft Cloud platform and services. Visit www.onebridgesolutions.com for more information.
ON BEHALF OF THE BOARD OF DIRECTORS
ONESOFT SOLUTIONS INC.
Douglas Thomson, Chair
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 for the purpose of providing 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 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 a number of 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 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.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.