Slyce Inc.
TSX VENTURE : SLC
FRANKFURT : 06O1

Slyce Inc.

March 31, 2016 18:02 ET

Slyce Inc. Reports First Quarter 2016 Financial Results

TORONTO, ONTARIO--(Marketwired - March 31, 2016) - Leading visual search and image recognition company Slyce Inc. (TSX VENTURE:SLC)(FRANKFURT:06O1) ("Slyce" or the "Company") today announced its financial results for the first quarter ended January 31, 2016.

The interim financial statements and Management Discussion and Analysis for the quarter ended January 31, 2016 are available at www.SEDAR.com.

Business Highlights

Key customer announcements during the three-month period ended January 31, 2016 include the following:

  • On November 25, 2015, Slyce announced a new contract with Toys"R"Us, which features increasing revenue over the contract term for the provision of several of Slyce's visual search and digital coupon services.
  • On December 8, 2015, Slyce announced a signed contract with leading specialty fashion retailer, Nordstrom, to power visual search for mobile commerce. Founded in 1901, Nordstrom is a Fortune 500 retailer with more than 323 stores in 39 US states and Canada.
  • On January 28, 2016, Best Buy began a rollout of Slyce's visual search technology in its Android app. Slyce powers 3D image recognition, 2D catalog scanning, as well as barcode and QR code scanning. Slyce's Software Development Kit ("SDK") is now live in Best Buy's Android and iOS apps, with a camera icon featured prominently in the app search bar.
  • On March 22, 2016, Slyce announced that it had officially launched visual search technology with leading US footwear and accessories retailer, Shoe Carnival. The integrated, fully automated 3D visual search technology enables a mobile visitor to ShoeCarnival.com to snap a picture of any footwear, either in the real world or from sources such as magazine pages, and, with no time latency, be presented with all exact and closest matching products from the extensive Shoe Carnival product line. These items can then be purchased with just a few taps.

Financing Update

On February 10, 2016, the Company terminated its short-form prospectus offering and proceeded with a private placement financing of up to $7 million following agreement with a lead investor to subscribe for up to $5 million in units of the Company. On February 12, 2016, the lead investor subscribed for an aggregate of $1.6 million in 6% interest bearing unsecured promissory notes, which notes have been converted as a subscription for units pursuant to the terms under the Private Placement. As of February 29, 2016 the lead investor has subscribed for an additional $1.9 million in units of the company to bring the current lead investor aggregate to $3.5 million in units of the Company.

On March 11, 2016, the Company announced that it has completed the first tranche of its previously announced non-brokered private placement of up to 70,000,000 units of the Corporation ("Units"), at a price of $0.10 per Unit. The first tranche of the Private Placement involved the issuance of 44,690,669 Units for aggregate gross proceeds of approximately $4,469,067.

Technical Highlights

Slyce's main product development focuses during first quarter of 2016 were adding robustness around its core visual search offering, and introducing new use cases for visual search. Significant attention was paid to creating a system that enables easy onboarding by minimizing the integration efforts required of new customers. This was achieved by expanding automation of product feeds and packaging products to enable various capabilities within unified Software Development Kits ("SDKs").

  • On November 25, 2015, Slyce launched its proprietary retail technology solution, Slyce Link, a purpose-built platform that has been in development for over a year and is currently in beta testing with its first major retail customer. Slyce Link is a visual product recommendation system that increases shopping conversions on ecommerce websites. The system enables retailers to show visually similar products to their customers at highly strategic points in the online purchasing process in order to increase sales and mitigate cart abandonment. The system is delivered to retailers in the form of JavaScript and native SDKs for both iOS and Android. By embedding a few lines of code, a retailer can add a full visual recommendation experience to its existing website. The User Interface is customizable according to customer needs. At the back end of the system, there is a product feed processing mechanism, image matching engine and search logic that ensures data consistency between the search results and the product catalogue in the retailer's website. Meta-data filtering is enabled in addition to visual relevancy (e.g. filter according to stock availability, price range, size, product ratings).

Financial Highlights for the Quarter Ended January 31, 2016

For the quarter ended January 31, 2016 2015
Revenue:
Services rendered $ 522,317 $ 107,162
Other income 145,233 6,812
667,550 113,974
Expenses:
General and admin and filing fees 2,087,908 1,665,332
Professional fees 889,241 277,081
Consulting fees 219,191 416,346
Business development 47,449 231,868
Amortization, share based payments and other 861,248 1,283,686
4,105,037 3,874,313
Net Comprehensive Loss $ (3,437,487 ) $ (3,760,339 )
  • Revenue for the quarter ended January 31, 2016 totalled $667,550 compared to $113,974 for the comparative quarter ended January 31, 2015, a 486% increase. Recurring revenue follows client integration and deployment, and is now beginning to expand as a percentage of total revenue. Recurring revenue increased to $522,317 in the quarter.
  • Operating expenses for the quarter ended January 31, 2016 totalled $3,243,789 as compared to $2,590,627 for the quarter ended January 31, 2016. The increase in expenses was primarily due to increased sales and marketing initiatives.
  • Total comprehensive loss for the quarter ended January 31, 2016 was $3,437,487 or $0.03 loss per share based on 130 million shares as compared to $3,760,339 for the year ended January 31, 2015 or $0.03 loss per share based on 108 million shares.
  • Loss before amortization, share-based payments, depreciation, and other expenses was $2,276,239 for the quarter ended January 31, 2016 compared to $2,476,653 in same quarter in 2015.
  • In the first quarter, Slyce incurred one-time costs of $810,000 for professional fees and other similar costs relating to financing initiatives, and recorded one-time depreciation expense of approximately $208,000 relating to consolidation of offices. Total operating loss before amortization, share-based payments, depreciation, and other expenses and after subtracting one-time costs of $810,000 was $1,466,239 for the quarter ended January 31, 2016.

Conference Call

On April 4, 2016 at 4:00 PM EST, the company will be hosting a conference call to discuss this news, featuring a live Q&A session. Access to the live conference call will be available by registering at the following web link. Once registered, participants will be emailed their call-in information and access code to the call. The conference call is open to any investor or stakeholder, including shareholders, broker-dealers and other securities professionals. The call will be recorded and available for review at www.slyce.it. Slyce will be hosting and moderating a Q&A period on the call. Participants will be able to enter a moderated queue to ask a question live on the call, or to submit a question via email. To submit one or more questions to the CEO, please email your question to Roy@slyce.it with the words "Investor Question for Conference Call" in the subject line. Slyce management will endeavour to address as many questions as possible in the hour allocated to the call.

This press release does not constitute an offer to sell or a solicitation of any offer to buy the securities in the United States, in any province or territory of Canada or in any other jurisdiction. The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. 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 the U.S. Securities Act and applicable U.S. state securities laws. There shall be no sale of the securities in any jurisdiction in which an offer to sell, a solicitation of an offer to buy or sale would be unlawful.

About Slyce Inc.

Slyce, based in Toronto, ON, delivers sophisticated visual search technologies and is currently focused on enabling a powerful sales channel for major retailers and their customers. Consumers, wherever they are, can conveniently engage with retailers by taking pictures of desired products using their mobile devices, thereby initiating the visual search service with near-instant product recognition capability. The Company delivers its technology both as a white-label visual search platform and as a suite of consumer mobile apps. Slyce's technology is used by large retail brands such as Neiman Marcus, Tilly's, Urban Outfitters, JCPenney and Home Depot.

Slyce's business model features multiple revenue streams arising from its visual search platform, consumer apps and corresponding data services. The revenue streams include fees for software licensing, integration, purchase transactions, program promotions and data analytics.

Slyce is also listed on the Frankfurt exchange trading under (FRANKFURT:06O1).

For image download and further company information, please click for the Slyce Media Kit.

READER ADVISORY

Neither the TSX-V nor its Regulation Services Provider (as that term is defined in policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.

Statements in this press release contain forward-looking information. The words "will," "anticipate," "believe," "estimate," "expect," "intent," "may," "project," "should," and similar expressions are intended to be among the statements that identify forward-looking statements. The forward-looking statements are founded on the basis of expectations and assumptions made by Slyce.

Readers are cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Slyce.

Slyce does not undertake any obligation to update or revise any forward-looking statements except as expressly required by applicable securities laws.

None of the information contained on, or connected to, Slyce's website is incorporated by reference herein.

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