A struggling publicly traded Ottawa software firm that brought in less than $100,000 last year says it hopes a standing offer to supply the federal government with its secure file-sharing and cloud storage platform will lift it out of the doldrums.
In financial filings last week, Leonovus reported revenues of just $78,000 for the fiscal year ending Dec. 31, 2021, down from $327,000 the previous year. The firm did not generate any income in the final six months of 2021.
Leonovus reported a net loss of $2.6 million, up from a net loss of $1.8 million in 2020, thanks to increased administration costs and foreign exchange losses.
Still, the company says it’s hoping for a turnaround after receiving a standing offer in March to sell its technology – which has been rebranded from XVault to Torozo – to the federal government.
CEO Michael Gaffney said in a news release last week that two federal departments, Justice and Shared Services, finished testing the product in mid-April. He said the company has moved on to the “next evaluation phase” with the feds, adding the product was released to private-sector customers last week with “additional features needed by the business and enterprise markets.”
Leonovus’s solution distributes and encrypts clients’ stored data across numerous cloud servers rather than a single on-premise location. The company is now selling the platform on a monthly subscription basis.
In last week’s news release, Gaffney touted the secure file-sharing and data-transfer space as a multibillion-dollar market opportunity. The company said the industry is growing rapidly as the Internet of Things requires more and more connected devices to wirelessly communicate with one another.
“Leonovus is well positioned with its technology to capitalize on the data storage growth trends in cloud computing,” management said in a report filed with regulators last week.
Leonovus got the green light last spring to sell its secure data-transfer technology to more than 100 federal departments and agencies. In May 2021, the company announced it closed a public offering that raised about $3.4 million to help finance its customer acquisition drive and new product development efforts.
The firm said then it saw the approved-vendor status as the key to finally unlocking a revenue stream that’s been shut tight for years as the company continually searched for the right market fit.