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Peak Positioning Files First Quarter Results and Operating Highlights(May 18, 2012)
MONTREAL, QUEBEC -- (Marketwire) -- 05/18/12 -- Peak Positioning Technologies Inc. ("Peak") (TSX VENTURE:PKK) today announced its financial results and reviewed highlights for the three-month period ended March 31, 2012.
-- $4,875 in revenues from royalties; -- R&D expenditures of $196,109, before tax credits; -- Net loss of $507,112 for the quarter; -- $661,572 of new equity capital (net of commissions) from private placement closed on April 5, 2012.
-- Completed co-development of AiNi(TM)3.0 Mobile Cloud Platform. -- Renegotiated royalty agreement with LongKey-Hong Kong Ltd. ("LongKey"). -- Established physical presence in China through shared-cost office with LongKey.
"Our most significant milestone in the first quarter was completing the co-development of the AiNi(TM)3.0 Mobile Cloud Platform for smartphones, tablets and other mobile devices", said Johnson Joseph, Peak's President and CEO. "In early April, AiNi(TM)3.0 was released commercially to China Telecom by our partner, LongKey. What's more, a very positive working relationship with LongKey over the past twelve months led to the renegotiation of our royalty-sharing agreement and the decision to jointly open an office in Taizhou", Mr. Joseph added.
As previously announced, the parties now share royalties generated by the sale of all of LongKey's web and mobile applications, rather than only those co-developed with Peak. Furthermore, to better reflect Peak's contribution to the partnership, the percentage of royalties to be paid to Peak was increased from 15% to 30%.
Looking ahead to the balance of the year, Mr. Joseph is optimistic about Peak's revenue prospects. "The Chinese mobile market is enormous and the most significant opportunity today is a wave of transition from 2G devices to 3G devices that is sweeping the country with a 250% constant average annual growth rate since 2009. The AiNi(TM) platform and the applications it supports put us in great position to ride that wave so I can't overemphasize the significance of the commercial release and the timing of the release of AiNi(TM)3.0 for both Peak and LongKey. With the new royalty structure now in place, the stage is set for us to generate sustained revenue growth from our business in China through to the year-end and in the years ahead", he stated.
First Quarter Financial Results Summary
Peak generated $4,875 in royalty revenues for the three months ended March 31, 2012 as a result of an ongoing pilot project in China and the sharing of royalties with LongKey. There were no revenues in the first quarter of the prior year. Although the early returns from the Chinese partnership continue to be modest, they are indicative of the success Peak and LongKey are enjoying in co-developing software with the potential for significant revenue growth in future quarters.
Expenses for the three-month period amounted to $511,987 in 2012 compared to $1,082,648 in the comparable period of 2011. The higher 2011 expenses included $563,000 of costs associated with Peak becoming a public company.
The first quarter expenses include R&D expenditures of $196,109 compared to $84,579 in the comparable period of 2011. These costs are before deducting investment tax credits, which are accounted for on an annual basis only.
The net loss for the three-month period ending March 31, 2012 was $507,112 compared to $1,082,648 in the comparable period of 2011.
On April 5, 2012, Peak raised $661,572 (net of commissions) of new equity capital through a private placement.
Further details on the Company's first quarter 2012 financial results can be found in the Unaudited Interim Consolidated Financial Statements and Management's Discussion and Analysis (MD&A) for the three-month periods ended March 31, 2012 and 2011, which are available at www.sedar.com.
About The Chinese Telecom market:
China is the world's largest mobile phone market with over 1.01 billion mobile subscribers as of March 2012 according to the Ministry of Industry and Information Technology of the People's Republic of China and based on published data from China's three largest telecom service providers. Since 2008, the Chinese government has made a concerted effort to increase the use of 3G technology in China and the Chinese smartphone market is growing dramatically. U.S.-based International Data Corporation recently released a report indicating that China will account for 20.7%, or 137 million, of the projected 660 million global smartphone shipments in 2012, leapfrogging the United States to also become the biggest smartphone market in the world, measured by annual shipments.
About Peak Positioning Technologies Inc.:
Peak Positioning Technologies Inc. (TSX VENTURE:PKK), is a Canadian software developer for smartphones and other mobile computing devices, conducting business primarily in China and North America. In association with its partner, LongKey-Hong Kong Ltd, the company has developed a suite of applications for mobile devices that includes: cloud-based calendar, e-mail and contacts synchronization, automated device configuration, and HomeWave(TM) mobility security. While LongKey markets the applications in China through its partnerships with major Chinese telecommunication companies and banks, Peak plans to similarly market the applications for its own account in North America. For more information: www.peakpositioning.com.
About LongKey-Hong Kong Ltd.:
LongKey Hong Kong Ltd., through its subsidiary LongKey Software Technology Ltd., provides a wide range of IT solutions, business management applications, and mobile applications based on its proprietary Unified Information Services Platform (UISP). LongKey's applications are distributed to end-users in China by some of China's largest telecom and banking entities. For more information: www.longkeysoft.com.
Forward-Looking Statements / Information
This news release may include certain forward-looking information, including statements relating to business and operating strategies, plans and prospects for revenue growth, using words including "anticipate", "believe", "could", "expect", "intend", "may", "plan", "potential", "project", "seek", "should", "will", "would" and similar expressions, which are intended to identify a number of these forward-looking statements. Forward-looking information reflects current views with respect to current events and is not a guarantee of future performance and is subject to risks, uncertainties and assumptions. The Company undertakes no obligation to publicly update or review any forward-looking information contained in this news release, except as may be required by applicable laws, rules and regulations. Readers are urged to consider these factors carefully in evaluating any forward-looking information.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Peak Positioning Technologies Inc.
President and CEO
514-340-7775 ext.: 501
Pinnacle Capital Markets
Spyros P. Karellas
President and CEO
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