Empower Technologies™ Reports Fiscal 2013 Financial Results

FOR IMMEDIATE RELEASE

Empower Technologies™ Reports Fiscal 2013 Financial Results

May 2, 2014 – Vancouver, British Columbia, CanadaEmpower Technologies Corporation (TSX.V: EPT) (“Empower”) today reports financial results for the three months and fiscal year ended December 31, 2013. All financial information is expressed in Canadian dollars and has been prepared in accordance with International Financial Reporting Standards (“IFRS”), except as otherwise noted.

Empower Technologies (the “Company”) has completed its transformation from an embedded technology company into a full fledge revenue producing corporation through its operating subsidiaries.

The Company was found on its core technology – engineered embedded hardware and software and later real-time image processing technology. Leveraging on its embedded and imaging technology knowhow and expertise, the Company has acquired a telecommunication company on July 31, 2013 to provide the sale and marketing platform for the fully developed embedded and real-time image processing products and services.

On July 31, 2013, Empower has closed the purchase of AIC Global Communications Inc. (“AIC”). By acquiring AIC, Empower has gained a very strong and recognizable brand in the Canadian telecommunication market, a sale and marketing platform for its embedded and video technologies, products and services and a telecommunication operating system platform. It also increases the revenue base of the Company. The Acquisition will provide AIC ability to access the growth capital from the public market when the needs arise. This ability will enable AIC to grow its VoIP phone services and fuel its expansion to full service SME Information Technology (“IT”) and managed business solution market that include security and surveillance, cloud based applications and other IT products and services. AIC will also leverage on Empower’s embedded hardware and software expertise to offer state-of-the-art communication, mobile and video technologies, products and services to their customers. For example, Empower’s Image Signal Correction (ISC) enabled surveillance camera can be sold through AIC’s sales and marketing channels to shopping malls, schools, universities and commercial/industrial buildings/parks for their cloud based video surveillance network needs. The main objective of AIC’s expansion in the near term is to achieve rapid revenue growth and market penetration in metro Vancouver, Calgary and Toronto. Over the longer term, Empower is positioning AIC as a dominant VoIP phone service, security and surveillance, IT and managed business solutions, products and services provider for the small and medium enterprises in North America and leverage Empower’s advanced embedded and video technologies to give it the competitive advantage.

Results of Operations

 

 

Year Ended December 31, 2013

 

Year Ended December 31, 2012

 

Year Ended December 31, 2011

 

 

 

 

Sales

Canada

$ 803,842

$ –

$ 30,000

United States of America

$ –

$ 104,673

Asia

46,532

23,099

803,842

46,532

157,772

Cost of Goods sold

368,103

10,152

51,127

Write-off of inventory

73,292

368,103

10,152

124,419

Gross Margin

435,739

36,380

33,353

Total expenses

2,044,731

1,243,320

1,405,370

Other items (expenses)

(529)

 

(246,833)

 

(422,788)

Total expenses without stock-based compensation

(2,044,731)

(1,216,008)

1,405,370 

Loss for the period

Canada

(1,584,167)

(1,442,665)

(1,824,253)

United States of America

(11,108)

29,448

$ (1,584,167)

$ (1,453,773)

$ (1,794,805)

Loss per share

$ (0.03)

 

$ (0.03)

 

$ (0.04)

Total assets

1,132,998

 

64,888

 

163,983

Fiscal 2013 Financial Results

For the year ended December 31, 2013, revenue increased to $803,842, compared to $46,352 for the year ended December 31, 2012. The Company has incurred a loss of $1,584,167 or $0.03 per share, compared with a loss of $1,453,773 or $0.03 per share in 2012. This loss represents expenditures related to the ongoing development and marketing of the Company’s products and the operation of its subsidiary, AIC. This is consistent with the Company’s business plan.

The total expenses excluding share-based payments increased to $1,584,167, compared with $1,216,008 for the year ended December 31, 2012. The Company expects overall operating expenses will stay at current levels until significant product shipments begin.

As at December 31, 2013 the Company had cash of $364,080 compared to $3,052 at December 31, 2012.

Summary of Quarterly Results (i)

Three Months Ended December 31, 2013

Three Months Ended September 30, 2013

Three Months Ended June 30, 2013

Three Months Ended March 31, 2013

Total assets

$ 1,132,998

$ 406,489

$ 68,058

$ 130,250

Share-based payments

Working capital (deficiency)

(3,944,244)

(3,455,983)

(3,152,484)

(2,900,555)

Shareholders’ deficiency

(5,447,749)

(6,148,833)

(4,687,683)

(5,593,282)

Revenues

226,880

555,097

21,865

Net loss

(120,728)

(327,982)

(301,901)

(312,270)

Loss per share

$ (0.01)

$ (0.01)

$ (0.01)

$ (0.01)

Three Months Ended December 31, 2012

Three Months Ended September 30, 2012

Three Months Ended June 30, 2012

Three Months Ended March 31, 2012

Total assets

$ 64,888

$ 342,945

$ 356,335

$ 207,936

Share-based payments

(5,017)

8,615

11,857

11,857

Working capital (deficiency)

(2,760,858)

(2,282,776)

(2,006,692)

(1,840,981)

Shareholders’ deficiency

(5,452,562)

(4,965,348)

(4,687,683)

(4,521,304)

Revenues

24,667

21,865

Net loss

(481,427)

(286,280)

(259,286)

(426,780)

Loss per share

$ (0.01)

$ (0.01)

$ (0.01)

$ (0.01)

(i) Presented using accounting policies consistent with International Financial Reporting Standards

Fourth Quarter Fiscal 2013 Financial Results

Revenue for the fourth quarter ended December 31, 2013 was $226,880 compared to $24,667 for the fourth quarter ended December 31, 2012. The increase is due to the sales from the newly acquired subsidiary AIC. Due to holiday season, the sales in fourth quarter were less than the third quarter of 2013.

The general and administrative cost for the fourth quarter ended December 31, 2013 increased due to the cost of coming from the newly acquired subsidiary AIC and the increase in interest expense for the new loan in 2013.

R&D costs for the fourth quarter ended December 31, 2013 were $4,861 compared to $27,581 for the fourth quarter of 2012 and $18,584 for the third quarter ended September 30, 2013.

The Company Focus

The Company is currently focused on generating significant revenue from AIC Global Communications Inc. and to build a sales channel for Empower’s core technologies products and solutions such as LEOs embedded computer platforms, ISC (Image Signal Correction) and IMS (Image Motion Stablizer) enabled surveillance cameras and video stabilizers and from offering embedded engineering and full service manufacturing to developers and manufacturers.

The Company intends to generate and increase revenue by deploying the following strategy:

  1. Using AIC Global Communications as the catalyst and the main driver to generate sales and profit growth and,

  1. Empower Canada will focus their sales and marketing of their respective embedded and real-time Image processing technologies, products and services by leveraging on AIC Global Communications customers and sales channel;

  1. Empower will accelerate its M&A activity of complementary businesses to leverage Empower’s technologies, products and services, sales and marketing platforms to achieve rapid revenue and profit growth;

Business Strategy

Subsequent to year-end, the Company has closed its wholly-owned subsidiary “Empower Defense Systems Inc.” to focus 100% of the Company’s resources in its two main lines of business. The first is a provider of Linux-based embedded system and real-time image processing technologies and solutions for the consumer electronic industry, security and surveillance, and the intelligent appliance market. The second is a provider of telecommunication and IT services for the residential and commercial market.

In order for the Company to gain market penetration and recognition of its advanced embedded and imaging technologies, products and services, the Company has commenced a growth strategy based on Merger and Acquisition of revenue producing companies.

Empower’s fiscal 2013 financial results are a drastic improvement over last year and the years before that. We are very pleased with the results of our new business strategy to acquire and build revenue producing subsidiaries. The Company will continue the course we set in 2013 to grow revenue producing business toward profitability as well as looking out for excellent merger and acquisition opportunities.” Said Paul Leung, CEO of Empower Technologies.

Neither 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.

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This news release includes certain “forward-looking information” within the meaning of Canadian securities legislation. Forward-looking statements include predictions, projections and forecasts and are often, but not always, identified by the use of words such as “seek”, “anticipate”, “believe”, “plan”, “estimate”, “forecast”, “expect”, “potential”, “project”, “target”, “schedule”, budget” and “intend” and statements that an event or result “may”, “will”, “should”, “could” or “might” occur or be achieved and other similar expressions and includes the negatives thereof. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding the expected benefits of the acquisition of AIC are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are based on a number of material factors and assumptions. Important factors that could cause actual results to differ materially from Empower’s expectations include actual sales results, availability of capital and financing on acceptable terms, general economic, market or business conditions, uninsured risks, regulatory changes, delays or inability to receive required approvals, and other risks detailed herein and from time to time in the filings made by Empower with securities regulators. Although Empower has attempted to identify important factors that could cause actual actions, events or results to differ from those described in forward-looking statements, there may be other factors that cause such actions, events or results to differ materially from those anticipated. There can be no assurance that forward-looking statements will prove to be accurate and accordingly readers are cautioned not to place undue reliance on forward-looking statements which speak only as of the date of this news release. Empower disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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About Empower Technologies™

Founded in 2000, Empower Technologies Corporation (TSX.V: EPT) is the holding company for Empower Technologies, Inc. and its subsidiary Empower Technologies (Canada) Inc. and AIC Global Communications Inc. Empower Technologies and its subsidiaries have transformed from an embedded technology group of companies to a full-fledged revenue producing enterprise through its subsidiaries. Empower Technologies as a group caters to communication, VoIP service, TV and media, IT, security and surveillance, military, automotive and transportation, healthcare, industrial control and consumer electronics industries. For more information, please visit www.empowertechnologies.com.

Empower Technologies group of companies’ brands are “AIC”, “LEOs®”, Linux-based embedded operating systems, “BullsEye”, Real-Time Video Stabilizer, “PowerPlay™”, smart consumer electronics.

Contact Information:

Media Enquiries:info@empowertechnologies.com or via Tel @ (604) 278-3100

Investor Relations: investorline@empowertechnologies.com

More Information on Empower Technologies: www.empowertechnologies.com

Sales Enquiries: sales@empowertechnologies.com or via Tel @ (604) 278-3100

Paul Leung

Chairman, President and CEO

Empower Technologies Corporation

Suite 951 – 409 Granville Street

Vancouver, BC, Canada V6C 1T2

Empower Technologies, LEOs, PowerPlay and BullsEye are the trademarks of Empower Technologies, Inc. AIC is the trademarks of AIC Global Communications Inc. All other brands are trademarks of their respective owners.