Revenue Will Start in 3Q18 for Leonovus

Leonovus Inc. announced its operating and financial results for the quarter ended June 30, 2018.

As of this date, the company has identified and qualified 51 customer projects including nine federal government projects. Most of these customers are large organizations. All previously announced proof PoCs and trials continue to operate and based on current information the firm expects to convert close to 100% of these PoC’s into sales with production deployments.

The company is executing to plan. Since the completion of the December 2017 financing, the productization of the core offering is now largely complete. Leonovus 4.0 will be released at the end of September 2018 with its first blockchain integration and application for law enforcement and chain of evidence applications. 

The company have recruited team with thirty-two staff on board and plans to grow to 40 employees by the end of the year.

Because the firm an enterprise software-defined storage solution, the sales cycle from PoC or trial installations is twelve to eighteen months.

Revenue will start in 3Q18 and the firm expects the revenue ramp to begin in 2Q19. Current market feedback is that the core Leonovus platform is rock solid and is positioned as a cloud-based software-defined storage solution.

The company incurred a net loss of $1,236,000 in 2Q18 and a net loss of $1,970,000 for 1H18 compared to a net loss of $308,000 in the comparable quarter of 2017 and a net loss of $950,000 for 1H17.

Total operating expenses increased from $1,236,000 for the second quarter of 2018 and $2,258,000 for the first half of 2018 as compared to $326,000 and $717,000 for the second quarter and first half of 2017, respectively.

Revenue for the second quarter of 2018 was nil compared to the same quarter for 2017. As mentioned on May 30, 2018, the company increased investment in sales, marketing, product development and G&A in 2Q18 and expects to further increase spending in 3Q18.

The company has a balance sheet and cash balance which was $8,019,000 at June 30, 2018, as compared to $187,000 at June 30, 2017.

After June 30, 2018, the company settled past salaries owed for $426,000 including legal fees which will reduce accrued compensation by $736,000 for a net gain on settlement of $310,000.

Leonovus is a software-defined storage solution that shreds and spreads data securely across multiple public clouds while making it unintelligible to anyone with direct access to the cloud storage. Using its patented data fragmentation and distribution techniques, it also ensures that data can be recovered should any of the cloud storage endpoints become unavailable, providing data durability and enabling customers to avoid vendor lock-in.

The white paper for our ICO project was drafted over the summer. The company plan to announce the next steps in our ICO plans before the end of Q3 2018. 

“Since our financing closed in December 2017 the company has grown to thirty-two employees and will grow to approximately forty by the end of 2018. Significant effort over the past six months to productize our technology and gain awareness with channel partners is beginning to show results. We expect to announce several more significant sales partners this fall. Our blockchain development team is also making great strides, and we expect to announce a new enterprise product offering in the next few weeks,” said Michael Gaffney, chairman and CEO.

Read also:
Leonovus: Fiscal 1Q18 Financial Results
Zero revenue and net loss of $740,000
2018.06.06 | Press Release