EXO U Inc. ('EXO U' or the "Company") Provides a Business Update

MONTREAL, Feb. 3, 2016 /CNW Telbec/ -EXO U Inc. ("EXO U") (TSXV: EXO) the developer of the 'ormi' Mobile Engagement Platform, provides a business update to inform shareholders, investors, and the market of changes that have taken place in the business since the appointment of the new CEO, Mr. Kevin Pawsey, in October 2015.

Organization

A new senior management was recruited in October and November with significant industry experience to accelerate the acquisition of distribution channels and improve the go to market strategy.

Two new board members were appointed at the last AGM. Matt Cooper who brings significant education business experience operating as CFO in large education businesses, and Sean Maniaci who brings significant capital markets and legal experience.

Since November 2015, we have been working to review all aspects of the business to improve customer and operational success.

Product

We are seeing a significant opportunity to be the platform of choice to bridge the requirements of whole class teaching and 'Bring Your Own Device' (BYOD) initiatives employed by school districts. BYOD is whereby students are able to bring in their own tablets, phones, Chromebooks and laptops to use for school based lessons and activities.

In the last 3 months we have reviewed both the User Interface and User Experience of the EXO U Platform to be much more focused on addressing the needs of education end users. As a result of significant market research, we have focused the product development and go to market strategy around addressing these needs in a BYOD environment, resulting in a focused iteration of the Platform to initially target K-12 market. This product, known as 'ormi' (meaning momentum in Greek), was successfully launched in January 2016 at BETT, the world's largest educational technology conference held each year in London.

Ormi allows teachers to teach from the front of the class using large screen interactive screens and then share and push content, activities, assessments, assignments to students directly from the screen or the teacher device. BYOD initiatives in education are gaining popularity as over 50% of districts are now encouraging the use of personal devices in the classroom, yet it is one of the most important challenges to manage. Ormi offers the tools to give educators an easy to use, easy to manage and affordable platform that makes teaching with technology and managing the classroom's device ecosystem simple and painless.

We will be formally launching the 'ormi' BYOD platform in the US at TCEA (one of the largest dedicated Educational Technology Conferences in the US) from February 3^rd to 5^th in Austin, Texas. There, we will be working with both QOMO and Panasonic and their distribution channels.

In order to address the needs of Higher Education, EXO U will be releasing a focused Higher Education product to the market in April with features specifically targeted at addressing a market which is currently US$130millon in the US, which the management team has significant experience operating within. We will provide an additional update on the Higher Education Strategy in March 2016.

We recently held our first Product Advisory board meeting with leading CTO's from K-12 Districts and experienced staff from our distribution and reseller network. This is an important step to work to further refine and develop future development within the EXO U platform to ensure everything we build follows our strategy of being easy to implement, easy to use and provide educators with the right tools for the right tasks.

Business Development

The Company's new strategy has been to target known and proven distribution and reseller channels selling into Education in North America, Europe and the Middle East. We are anticipating 60% of EXO U's business to originate in the US, although there are also focused initiatives in Europe where the company's technology is very well aligned.

To date, we have agreements with:

• QOMO, a manufacturer of high technology electronic products located in Wixom, Michigan, USA. The agreement stipulates that an 'ormi' classroom license will be bundled with everyone of their large format, interactive screens sold into the US. We have completed significant training with QOMO's team and have been presenting to districts across the US in association with them. We are actively engaged in growing the pipeline for installations during the summer holidays, which is when most school districts refresh and implement new solutions ready for when the students return from summer break.
• Panasonic Corporation of North America (Panasonic). With this agreement, Panasonic and their extensive network of distribution channels and resellers are licensed to bundle EXO U's technology with their technology devices. We are co-presenting with Panasonic at many of their roadshows to districts across the US and are actively engaged in pipeline generation with them.

Between QOMO and Panasonic there over 800 resellers that now have access to EXO U across the US.

• Genee World, a provider of advanced display technology and interactive presentation tools. In February 2016, we signed Genee World as our European distribution partner following BETT 2016. Genee World has been selling education technology into UK and European schools and universities for over 15 years. As part of our channel engagement strategy, we are proactively identifying known and established channels that have existing relationships with key decision makers in educational institutions.  Genee World will be bundling 'ormi' with every large format interactive screen that they ship and also with their own student devices that they ship into education institutions across Europe.

During April 2016, we expect to launch our Higher Education offering into North American universities and colleges. This is a defined market opportunity with an understood revenue potential and EXO U is well placed to develop market share with a competitive offering into known channels.

Revenues and Contracts

Education revenues are more seasonal in nature than other verticals. The new management team understands that most revenues in education are recognized during the third calendar year quarter. This is a consequence of the buying cycle that sees education evaluate potential tools from December to June and with purchase orders being generally sent to vendors by districts from April to July. The contracts that we signed with QOMO, Panasonic and Genee World now give us reach into the right education markets for EXO U and we are working hard with these partners to build our respective pipelines ready for the purchasing cycle from April to July, and then to collect cash on those contracts from July to October.

Outlook

• Our K-12 product are available for sale and is being sold and shipped with 3 distribution partners
• We anticipate to launch our Higher Education Solution in April 2016
• EXO U is expected to have revenue growth with strong margins in 2016
• EXOU is expected to continue to refine operational costs to improve margins and cashflow

Financing

The Company had previously announced on November 27, 2015, in conjunction with the issuance of Quarter 2, 2016 Financial Statements, that it had expected to close the second tranche of the financing it had undertaken earlier in the year.

The Company had closed the first tranche of the financing on October 23, 2015, for gross proceeds of $2,444,750 (CAD), and had reasonable expectations to close the second tranche by the end of Quarter 3 which ended December 31, 2015.

Market Seasonality, coupled with the recent market dynamics, has resulted in not closing the second tranche as planned, and as a result the Company is cancelling this financing. The Company is actively pursuing a number of other financing options.

Stock option grants

The Board of Directors of the Company has approved the grant of an aggregate of 150,000 stock options to two directors of the Company. The grant is subject to regulatory and TSX Venture Exchange approval.

The stock options were granted pursuant to the terms of the Corporation's stock option plan, are exercisable at $0.11 per share and have a 10 year term. One third of the options will vest every six months from the date of the grant.

About EXO U

EXO U's shares trade on the TSX Venture Exchange under the ticker symbol EXO. EXO U develops an innovative software platform that enables businesses and educational institutions to securely mobilize and manage their mobile workforce and students by delivering engaging experiences spanning desktop and mobile applications. At the core of EXO U's platform is the smart and agnostic EXO engine that unifies multiple software platforms, allowing devices to interact and communicate seamlessly together. For more information, visit EXOU.com or follow us on Twitter @exo_u.

Disclaimer in Regards to Forward-Looking Statements

Certain statements included herein, including those that express management's expectations or estimates of EXO U's future performance or future events, constitute "forward-looking statements" within the meaning of applicable securities laws. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at this time, are inherently subject to significant business, economic, regulator and competitive uncertainties and contingencies that could cause actual results or events to differ materially from those expressed or implied in such statements. Readers are cautioned not to place undue reliance on these forward-looking statements. EXO U disclaims any intention and assumes no obligation to update or revise any forward-looking statements, except as required by applicable securities laws. For additional information with respect to certain of these and other assumptions and risk factors, please refer to EXO U's management's discussion and analysis for the year ended March 31, 2015, available under the Company's profile on SEDAR at www.sedar.com.

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.

SOURCE EXO U Inc

Media contacts: Ian Bryan, Vice President, Marketing, EXO U Inc., [phone], [email protected]; Investor contacts: Kevin Pawsey, Chief Executive Officer, EXO U Inc., [phone], [email protected]; Shan Ahdoot, President, EXO U Inc., [phone], [email protected]