Axios Provides Additional Details on Restated Financial Statements

MISSISSAUGA, ON--(Marketwired - May 4, 2016) - Axios Mobile Assets Corp. (TSX VENTURE: AXA) ("Axios" or the "Company") announced today that it has re-filed its previously-issued unaudited interim consolidated financial statements and management discussion and analysis ("MD&A") for the periods ended March 31, 2015, June 30, 2015 and September 30, 2015. The Company's earlier press release dated May 4, 2016 provided a summary of the material revisions to the amended and restated financial statements. The discussion below provides additional details on the nature of those revisions.

• In Q2 and Q3 of 2015, convertible debt of $1,589,594 and $1,648,348, respectively, was reclassified from non-current liabilities to current liabilities. This relates to convertible debt issued in December 2014. It was originally classified as non-current based on the December 2017 maturity date; however, it was reclassified to current beginning in June 2015 because the holders may call for redemption of the debentures at any time subsequent to the 18-month anniversary of the issuance date.
  
  
• Intercompany entries were recorded that resulted in offsetting reductions to revenue and pooling and freight services expenses in Q2 and Q3 in 2015.
  
  
• Several adjustments were made to the Company's accounting for equity transactions:
  
  
  • The valuation methodology for broker units and broker options was changed from using the Black-Scholes model to the binomial model to better align with the features of the underlying instruments.
    
    
  • Regarding the broker units, management determined that a derivative liability existed and needed to be valued separately from the value of the convertible debt, with changes in the value of that derivative recorded as profit or loss. During the nine months ended September 30, 2015, a $159,118 gain on change in fair value of derivative liability was recorded.
    
    
  • Valuation of common shares and warrants issued as part of various transactions during the year was revised to calculate the value of each component based on the relative fair value rather than the residual fair value. In addition, the original valuation of certain common shares and warrants issued did not incorporate the impact of temporary trading restrictions in the months immediately following issuance.