Slyce Inc.

Slyce Inc.

June 28, 2016 20:02 ET

Slyce Inc. Reports Q2, 2016 Financial Results

CALGARY, ALBERTA--(Marketwired - June 28, 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 second quarter ended April 30, 2016.

The interim financial statements and Management Discussion and Analysis for the quarter ended April 30, 2016 are available at

Business Highlights

Key customer announcements during the six-month period ended April 30, 2016 include the following:

• On November 25, 2015, Slyce announced a new contract with ToysRus, which is expected to significantly increase revenue over the contract term for the provision of several of Slyce's visual search and digital coupon services.

• On the same date, Slyce also announced its new and 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. The Slyce Link solution enables retailers to show visually similar products to their customers at highly strategic points in their online purchasing journeys in order to increase sales and reduce cart abandonment.

• 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 December 18, 2015, Slyce announced that it had integrated fully automated, 3D search technology that is now live with online shoe-and-clothing retailer,, to power visual search for mobile commerce. is a subsidiary of

• On March 22, 2016, Slyce announced that it has officially launched visual search technology with leading US footwear and accessories retailer, Shoe Carnival. The integrated, fully automated 3D visual search technology enables mobile visitors to to snap a picture of any footwear, either in the real‐world, or alternatively, from sources such as magazine pages, and, with no time latency, be presented with all direct or closest matching products from the extensive Shoe Carnival product line. These items can then be purchased with just a few taps.

• On May 16, 2016, Best Buy expanded its relationship with Slyce to introduce 3D search capabilities, alongside barcode and catalog scanning, into its iOS and Android apps. The visual search functions were moved to the primary search bar of the app, accessible when a user taps on the camera icon.

• On June 22, 2016, Slyce announced that leading apparel retailer Express had signed a contract to integrate and utilize Slyce's "universal scanner" - including barcode scanning, catalog scanning, and 3D visual search. Express currently operates more than 600 retail and outlet stores, and is based in Columbus, Ohio.

• On June 28, 2016, Slyce announced that American Eagle Outfitters had contracted to use Slyce's visual search technology in the retailer's app. Headquartered in Pittsburgh, Pennsylvania, American Eagle Outfitters operates more than 1,000 stores, and ships to 81 countries worldwide.

Financing Update

On June 23, 2016, the Company closed $750,000 as part of a $1 Million convertible debenture ("CD") offering. CDs pay 10% annual interest, payable in kind with Common Shares issued at a price per share equal to the volume weighted average trading price for the Common Shares on the TSX Venture Exchange (the "TSXV") for the 20 consecutive trading days ending five trading days prior to the date on which the Corporation submits an application to the TSXV for issuance of Common Shares as payment of the principal and interest under the CD. The CD matures on December 31, 2017. Interest shall be payable on June 30th and December 31st in each year commencing on December 31, 2016. The outstanding amount of each CD, including all interest accrued thereon will be convertible, for no additional consideration, at a conversion price of $0.10 per security or such other price as approved by the TSX Venture once the conversion terms of the CD are met.

Technology Update

Slyce brought aboard a new Chief Technology Officer, Adam Turkelson, who succeeded Dan Grigsby. Adam has a wealth of experience in computer vision and machine learning. He was one of the principal architects of the Neat Company's innovative document scanning software, which utilizes several image-recognition techniques to scan anything from receipts to business cards. Prior to joining Slyce, he was CTO Angus Analytics, a business intelligence company in the energy space. Adam works alongside me in our Philadelphia office.

Slyce has three development teams-1 in Philadelphia, 1 in Minneapolis, and 1 in Tel Aviv. Previously these teams operated somewhat independently, and without a great deal of collaboration. This has all changed under Adam's leadership. We now have 1 unified sprint cycle, 1 project management tool, and a shared product roadmap. Adam has worked very closely with our VP Product, Kyle Martin, to build out this roadmap, and identify opportunities for new automated systems and modules that will improve our solution and/or open new market opportunities for Slyce.

Operations Update

Erika Racicot, Slyce's cofounder, is the company's Chief Operating Officer, and has worked hard to implement an onboarding process to reduce the time needed to take a client from signed contract to having Slyce live on their app or website. We have also made some difficult cuts in our New Waterford office, where we identified an opportunity to reduce the number of data specialists on our team by 10 people. We are also happy to report that we were able to transition two of these employees to our sales team, to provide much needed support there.

Part of our Operations team's mandate isn't just to get retailers live with Slyce, but to deliver the best possible implementation. We judge our solutions based on overall search volume, but also based on the speed and accuracy of the solution. On search volume, we've seen the average retailer search volume rise to 28,000 searches per month, growing 18%, month over month. Our current accuracy with 3D detection is rated at 9.2, on a scale of 1-10. This score has been independently verified by customers such as Neiman Marcus. This accuracy is head and shoulders above any of our competitors in the visual search space.

Our 1D and 2D scanning returns results in sub-second response time, due in part to the fact that we can do most of this processing device side. With 3D scanning, we currently average 12 sec, across all retailers, and are aiming to get this below 10 seconds by the next quarter-thanks to more device-side processing and automation. However, we will never trade accuracy for speed, as we have found that even lightning-fast results, if incorrect, do not yield repeat usage.

Consumer Apps Group Update

Following Ted Mann's move to running the overall Slyce business, Nicole Harris was promoted to General Manager of the Slyce Consumer Apps Group, made up of SnipSnap, Pounce, and Craves. Nicole oversees development, sales, and client management. Under her leadership, the SnipSnap app continues to be one of the strongest revenue drivers at Slyce, generating $80,000 CAD per month, on average. We recently signed our 80th SnipSnap retailer, Road Runner Sports, which joins other new retailers who pay to feature and target their coupons on SnipSnap. Among the others signed in Q2: Children's Place, Pep Boys, Calvin Klein, Reebok, and Ruby Tuesday.

We continue to invest in our consumer apps. SnipSnap is currently preparing version 4.0 of the iconic coupon app, which features all new branding and scanning user experience. Pounce has seen a spike in usage in the Middle East, where we are discovering that many people see visual search and image recognition as a kind of translation tool-a way for an Arabic speaker to search English-language retailers. And finally, Craves, our fashion-discovery app, which has been particularly popular for those looking to find out what celebrities wore, is about to launch version 2.0. This is remarkable update with all new functionality and curated content built for those interested in finding celebrity fashion. It will launch in July.

Financial Highlights for the Quarter and Six Months Ended April 30, 2016

For the three months ended April 30, 2016 For the three months ended April 30, 2015 For the six months ended April 30, 2016 For the six months ended April 30, 2015
Services rendered $ 739,814 $ 391,147 $ 1,262,131 $ 498,309
Other income 24,518 6,890 169,751 13,702
Total revenue 764,332 398,037 1,431,882 512,011
General and administrative 2,908,110 2,235,553 4,996,019 3,900,884
Amortization of intangible assets 978,663 334,338 1,460,849 671,295
Share-based payments 275,348 619,890 469,825 1,180,760
Consulting fees 162,395 496,560 381,586 912,905
Professional fees 58,100 208,989 947,341 486,071
Amortization of property and equipment 41,603 35,662 288,802 72,074
Business development 2,500 188,747 49,949 420,615
Total expenses 4,426,719 4,119,739 8,594,371 7,644,604
Other expenses
Exchange gain (18,870 ) (13,485 ) (28,345 ) (10,159 )
Changes in fair value of contingent consideration and commons shares held in escrow, presented as a liability (595,100 ) - (745,475 ) -
Change in deferred consideration (330,723 ) 6,829 (223,001 ) 179,829
Total other expenses (944,693 ) (6,656 ) (996,821 ) 169,670
Net loss (2,717,694 ) (3,715,046 ) (6,165,668 ) (7,302,263 )
Foreign exchange loss on translation of foreign subsidiaries (72,611 ) 81,350 (62,124 ) (90,002 )
Net and comprehensive loss $ (2,790,305 ) $ (3,633,696 ) $ (6,227,792 ) $ (7,392,265 )
Loss per share - Basic and Diluted $ (0.02 ) $ (0.03 ) $ (0.04 ) $ (0.07 )
Weighted average number of shares outstanding - Basic and Diluted 164,601,798 110,991,926 147,823,514 113,133,034
  • Revenue for the quarter ended April 30, 2016, increased to $764,332 compared to $398,037 for same period in 2015, an increase of 92 percent. For the six months ended April 30, 2016 revenues increased to $1,431,882 compared to $512,011 for the same period in 2015, an increase of 180 percent. $739,814 for the three months ended and $1,262,131 for the six months ended April 30, 2016 was generated primarily from proof-of-concept services, integration charges and monthly recurring usage fees derived from initial customers. $24,518 for the three months ended and $169,751 for the six months ended April 30, 2016 was generated from interest income, SR&ED claim refund and an incentive program. Of the $169,751 for the six months ended April 30, 2016, SR&ED claim refund amounted to $140,373;
  • Total expenses for the quarter ended April 30, 2016, was higher by $306,980 to $4,426,719 and for the six months ended April 30, 2016 was higher by $949,767 to $8,594,371. The increase for the three-months and six-months ended April 30, 2016 was due to one-time termination costs paid by the Company to members of the previous management team and other staff terminations which totaled to $586,650. The Company also incurred over $800,000 in various professional fees relating to financing activities during the first quarter that was unsuccessful. All those costs have been expensed and are included in the total expenses for the six-months ended April 30, 2016;
  • Total comprehensive loss for the quarter ended April 30, 2016 was lower by $843,391 to $2,790,305 compared to $3,633,696 for the same period last year and for the six-months ended April 30, 2016 total comprehensive loss was lower by $1,164,473 to $6,227,792 compared to $7,392,265 for the same period last year;
  • Loss before amortization, share-based payments, depreciation, changes in fair value of contingent consideration and fair value changes to deferred consideration for the quarter ended April 30, 2016 was lower at $2,347,903 compared to $2,718,297 for the same quarter last year, a decrease of loss by 14 percent and for the six months it was lower at $4,914,668 compared to $5,201,305 for the same period last year, a decrease of loss by 6 percent.

Conference Call

On June 29, 2016 at 4:00 PM EST, the company will be hosting a live video conference to discuss this news, featuring a live Q&A session and demos of our most recent deployments. Access to the live conference call will be available via the following link. Shareholders will be able to login to the live video and audio conference through the link provided. Shareholders can also access the conference call by a number available through the same link. 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 Slyce will be hosting and moderating a Q&A period on the call which will be conducted via the in-program chat function, moderated by the Slyce team. 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 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 Calgary, Alberta, 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


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.

Contact Information