PopReach Corporation (“PopReach” or the “Company“) (TSXV: POPR) (OTCQX: POPRF) is, further to its press release dated April 28, 2022 regarding the business combination (the “Transaction“) of PopReach with 2810735 Ontario Inc. d/b/a Federated Foundry (“Federated” and together with PopReach, the “Parties“), pleased to provide an update on selected unaudited pro-forma consolidated financial information for the combined Parties for the three months ended March 31, 2022 and March 31, 2021. The selected unaudited pro-forma financial information presented is inclusive of the financial information of PopReach for the applicable periods, as previously reported and filed on www.sedar.com.
| 1 Please refer to “Non-IFRS Measures” section of this press release |
(All figures in US dollars, unless otherwise indicated)
Unaudited Pro-Forma Consolidated Financial Information
The following table sets out certain unaudited pro-forma consolidated financial information for the combined PopReach and Federated businesses had: 1) the Transaction been consummated at the beginning of the three month periods ended March 31, 2021 and March 31, 2022; and 2) Federated had acquired Notify AI, LLC (“Notify AI”), Q1Media, Inc. (“Q1Media”), and Crucial Interactive Holdings Inc. (“Contobox”), at the beginning of the same periods.
| Figures in US Dollars Unaudited | 2022 Q1 | 2021 Q1 | YoY | |
| ended Mar | ended Mar | Growth | ||
| Revenue | $19,094,641 | $15,642,845 | 22.1% | |
| Adjusted EBITDA1 | $1,894,392 | $2,149,227 | (13.6%) | |
| Adjusted EBITDA Margin1 | 9.9% | 13.7% | ||
| Net Loss | ($548,633) | ($298,291) | — |
Non-IFRS Measures
The Company prepares its financial statements in accordance with IFRS. However, the Company considers certain non-IFRS financial measures as useful additional information to assess its financial performance. These measures, which it believes are widely used by investors, securities analysts and other interested parties to evaluate its performance, do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other publicly traded companies, nor should they be construed as an alternative to financial measures determined in accordance with IFRS. Non-IFRS measures include “Bookings”, “EBITDA” and “Adjusted EBITDA”.
EBITDA and Adjusted EBITDA
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) and consolidated adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) are non-IFRS measures of financial performance. The presentation of these non-IFRS financial measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with IFRS, and may be different from non-IFRS financial measures used by other companies. Company management defines EBITDA as follows: IFRS Net income (loss) adding back accretion and interest expenses (including amortization of deferred financing fees), income taxes, amortization, gain/loss on disposal of assets, and fair value gain/loss on financial liabilities. Adjusted EBITDA is calculated as EBITDA and excludes discontinued operations and the effects of significant items of income and expenditure which may have an impact on the quality of earnings, such as restructuring costs and impairments where the impairment is the result of an isolated, non-recurring event. It also excludes the effects of equity-settled share-based payments, changes in deferred revenues, and other extraordinary one-time expenses. See reconciliation of EBITDA and Adjusted EBITDA under “Adjusted EBITDA” below.
Management believes EBITDA and Adjusted EBITDA are useful financial metrics to assess its operating performance on a cash basis before the impact of non-cash and extraordinary one-time items.
The following table presents the Company’s calculation of EBITDA and Adjusted EBITDA for each period:
| Figures in US Dollars Unaudited | 2022 Q1 | 2021 Q1 | |
| ended Mar | ended Mar | ||
| Net loss | ($548,633) | ($298,291) | |
| Add: | |||
| Interest and accretion expenses | $875,618 | $327,677 | |
| Current taxes | $76,264 | ($10,556) | |
| Deferred tax recovery | ($719,425) | ($1,198) | |
| Amortization & depreciation | $2,277,535 | $465,745 | |
| Fair value gain on financial liabilities | ($340,644) | ($2,289,933) | |
| EBITDA | $1,620,715 | ($1,806,556) | |
| Add: | |||
| Share-based compensation expense | $51,151 | $3,380,394 | |
| Change in deferred revenue | ($159,741) | $38,015 | |
| Change in deferred cost of sales | ($44,676) | ($35,973) | |
| Extraordinary one-time expenses | $804,702 | $601,736 | |
| Non-recurring income | ($377,759) | ($28,390) | |
| Adjusted EBITDA | $1,894,392 | $2,149,226 |
About PopReach Corporation
PopReach, a Tier 1 Issuer on the TSX Venture Exchange, with shares also trading on OTCQX® Best Market, is a multi-platform technology company focused on acquiring, optimizing and growing companies and assets that provide services, technology or products within the digital media ecosystem. The Company’s portfolio includes: PopReach Games, a free-to-play mobile game publisher with over 25 games enjoyed by millions of players; notifyAI, a push notification subscription and monetization platform; Q1Media, a digital media advertising services provider; and Contobox, an award-winning personalization, eCommerce and creative advertising technology platform.
Additional information about the Company is available 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.
Cautionary Statement Regarding Forward-Looking Information
This news release contains “forward-looking information” within the meaning of Canadian securities legislation. Forward- looking information generally refers to information about an issuer’s business, capital, or operations that is prospective in nature, and includes future-oriented financial information about the issuer’s prospective financial performance or financial position.
PopReach made certain material assumptions, including but not limited to: prevailing market conditions; general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; and the ability of the resulting issuer to execute and achieve its business objectives, to develop the forward-looking information in this news release. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
Actual results may vary from the forward-looking information in this news release due to certain material risk factors. These risk factors include, but are not limited to: adverse market conditions; the unavailability of exemptions from prospectus requirements for the issuance of PopReach common shares; the risks associated with the marketing and sale of PopReach common shares; refusal of the proposed directors or officers to act for any reason, including conflicts of interest; reliance on key and qualified personnel; and regulatory and other risks associated with the technology, media and digital gaming industries in general. The foregoing list of material risk factors and assumptions is not exhaustive.
PopReach assumes no obligation to update or revise the forward-looking information in this news release, unless it is required to do so under Canadian securities legislation.
SOURCE PopReach Corporation
