Toronto, Ontario (FSCwire) - EQ Inc. (TSXV: EQ) (“EQ Works”), a leader in audience targeting for mobile, social, video, and display advertising today announced its financial results for the third quarter ended September 30, 2016.

 

Total revenue from operations for the quarter, which ended on September 30, 2016, was approximately $0.7 million, relatively consistent to the second quarter of 2016 and lower than the $0.9 million recorded in the same period of 2015.  

 

The adjusted EBITDA loss for the quarter was approximately $0.3 million, an improvement of 24% when compared to the second quarter of 2016 and consistent with the same period of 2015. The Company implemented cost-saving measures to better align its cost structure with its strategic focus and was able to reduce the overall operating and compensation expenses for the third quarter of 2016.

 

During the third quarter the Corporation completed first tranche of debt financing (the “Debt Financing”) of approximately $1.2 million non-convertible secured promissory notes (the “Promissory Notes”).   Subsequent to the end of the third quarter, the Company completed the second tranche of the Debt Financing of approximately $0.3 million non-convertible secured Promissory Notes.

 

The Company expects to use the proceeds from the Debt Financing to build its sales and marketing teams and execute its strategic goals for 2016 and prepare for growth in 2017. 

 

Non-IFRS Financial Measures

 

We measure the success of our strategies and performance based on Adjusted EBITDA, which is outlined and reconciled with net income (loss) in the section entitled “Reconciliation of Net Loss for the period to Adjusted EBITDA” in the MD&A. The Company defines Adjusted EBITDA as net income (loss) from operations before; (a) depreciation of property and equipment and amortization of domain properties and other intangible assets; (b) share-based payments, (c) restructuring, (d) impairment of goodwill and domain properties and other intangible assets, (e) Income tax expense and recovery,  (f) finance income and costs, net, and (g)  gain (loss) on derivative liability-warrants. Management uses Adjusted EBITDA as a measure of the Company's operating performance because it provides information related to the Company's ability to provide operating cash flows for working capital requirements, capital expenditures, and potential acquisitions. The Company also believes that analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of companies in its industry.

 

The non-IFRS financial measure is used in addition to and in conjunction with results presented in the Company’s  consolidated financial statements prepared in accordance with IFRS and should not be relied upon to the exclusion of IFRS financial measures. Management strongly encourages investors to review the Company's consolidated financial statements in their entirety and to not rely on any single financial measure. Because non-IFRS financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-IFRS financial measures having the same or similar names. In addition, the Company expects to continue to incur expenses similar to the non-IFRS adjustments described above, and exclusion of these items from the Company's non-IFRS measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring.

 

The table below reconciles net loss from operations and Adjusted EBITDA for the periods presented:

 

Adjusted EBITDA for the three and nine months ended September 30, 2016 and 2015
(In thousands of Canadian dollars)	Three months ended September 30,		Nine months ended September 30,
	2016	2015	2016	2015
Net loss	(534)	(376)	(1,165)	(1,647)
Add:
Finance (income) costs, net	162	(25)	237	40
Depreciation of property and equipment	3	30	10	110
Amortization of domain properties and other intangible assets	29	28	87	83
Share-based payments	-	-	-	5
Loss (gain) on derivative liability - warrants	20	-	(239)	-
Income tax recovery	-	-	-	(18)
Adjusted EBITDA	(320)	(343)	(1,070)	(1,427)

About EQ Works

 

EQ Works (www.eqworks.com) provides a smarter way to target customers. The Company uses its real-time technology and advanced analytics to detect the actionable data that boosts performance for all web, mobile, social and video initiatives. EQ Works balances the many components that comprise the complex advertising ecosystem and establishes equilibrium for reaching the right audience at the right time through any web or mobile device.

 

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Neither the TSX-V nor its Regulation Services Provider (as that term is defined in policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.

 

Forward-Looking Statements

 

This news release may contain forward-looking statements that are based on management’s current expectations and are subject to known and unknown uncertainties and risks, which could cause actual results to differ materially from those contemplated or implied by such forward-looking statements.  EQ Inc. is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or otherwise.

 

EQ Inc.

 

1255 Bay Street, Suite 400| Toronto, Ontario |M5R 2A9

p: 416.597.8889  f: 416.597.2345

press@eqworks.com

www.eqworks.com

 

EQ Inc.
Unaudited Condensed Consolidated Interim Statements of Financial Position
(In thousands of Canadian dollars)
		September 30, 2016	December 31, 2015
Assets
Current assets:
Cash		$                      158	$                      115
Accounts receivable		653	677
Other current assets		145	202
		956	994
Non-current assets:
Investment		-	251
Property and equipment		10	16
Domain properties and other intangible assets		143	242
		153	509
Total assets		$                    1,109	$                    1,503
Liabilities and Shareholders' Deficiency
Current liabilities:
Accounts payable and accrued liabilities		$                    1,745	$                    2,050
Deferred lease inducement		20	20
Loans and borrowings		263	1,323
Derivative liability - warrants		-	259
Deferred revenue		15	22
		2,043	3,674
Non-current liabilities:
Loans and borrowings		1,963	-
Derivative liability - warrants		527	-
Deferred lease inducement		47	63
		2,537	63
Shareholders' deficiency		(3,471)	(2,234)
Total liabilities and Shareholders' deficiency		$                    1,109	$                    1,503

 

EQ Inc.
Unaudited Condensed Consolidated Interim Statements of Loss and Comprehensive Loss
(In thousands of Canadian dollars, except per share amounts)
Three and nine months ended September 30, 2016 and 2015
		Three months ended September 30,			Nine months ended September 30,
		2016	2015		2016	2015
Revenue		$                 731	$                 922		$              2,409	$              2,829
Expenses:
	Publishing cost	369	451		1,195	1,391
	Employee compensation and benefits	411	447		1,236	1,524
	Other operating expenses	271	367		1,048	1,346
	Depreciation of property and equipment	3	30		10	110
	Amortization of domain properties and other intangible assets	29	28		87	83
		1,083	1,323		3,576	4,454
Loss from operations		(352)	(401)		(1,167)	(1,625)
Finance income		21	60		201	41
Gain (loss)  on derivative liability - warrants		(20)	-		239	-
Finance costs		(183)	(35)		(438)	(81)
Loss before income taxes		(534)	(376)		(1,165)	(1,665)
Income tax recovery		-	-		-	18
Loss for the period		(534)	(376)		(1,165)	(1,647)
Other comprehensive income (loss), net of tax:
Items that maybe reclassified to net income (loss)
	Net change in fair value for available-for-sale financial assets	-	-		(201)	-
	Foreign currency translation
	adjustments to equity	(26)	(104)		129	(116)
Other comprehensive loss, net of tax		(26)	(104)		(72)	(116)
Comprehensive loss for the period		(560)	(480)		(1,237)	(1,763)
Loss per share:
	Basic and diluted	(0.03)	(0.02)		(0.07)	(0.10)

 

EQ Inc.
Unaudited Condensed Consolidated Interim Statements of Cash Flows
(In thousands of Canadian dollars)
Nine months ended September 30, 2016 and 2015
			2016	2015
Cash flows from operating activities:
	Net loss		(1,165)	(1,647)
	Adjustments to reconcile net loss to net cash flows
	from operating activities:
		Depreciation of property and equipment	10	110
		Amortization of domain properties and other intangible assets	87	83
		Amortization of deferred lease inducement	(15)	(16)
		Gain on derivative liability - warrants	(239)	-
		Share-based payments	-	5
		Unrealized foreign exchange (gain) loss	(6)	24
		Finance (income) costs, net	72	77
		Gain on sale of available-for-sale financial assets	(201)	-
	Change in non-cash operating working capital		205	(31)
	Cash used in operating activities		(1,252)	(1,395)
	Income taxes received		-	18
	Net cash used in operating activities		(1,252)	(1,377)
Cash flows from financing activities:
	Repayment of finance lease		-	(64)
	Repayment of term loan		(102)	(29)
	Loans and borrowings		1,155	1,510
	Interest paid		(10)	(20)
	Net cash from financing activities		1,043	1,397
Cash flows from investing activities:
	Interest income received		-	4
	Addition to property and equipment		(5)
	Net proceeds from disposal of available-for-sale financial assets		251	-
	Net cash from investing activities		246	4
Decrease in cash			37	24
Foreign exchange gain (loss) on cash held in foreign currency			6	(24)
Cash, beginning of period			115	311
Cash, end of the period			$                 158	$                 311

To view this press release as a PDF file, click onto the following link:
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Source: EQ Inc. (TSX Venture:EQ)

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