Toronto, On (FSCwire) - EQ Inc. (TSXV: EQ) (“EQ Works” or the “Company”), North America’s leader in mobile location-based data, today announced its financial results for the second quarter ended June 30, 2017.

 

Revenue for the second quarter grew significantly to over $1.4 million, an increase of 61% from the first quarter of 2017 and an increase of 98% from the same period a year ago.  The adjusted EBITDA loss for the second quarter was substantially improved and reduced to approximately $0.1 million, an improvement of 45% from the first quarter and 66% over the same period a year ago.

 

“We are gaining traction because clients are seeing results" said Geoffrey Rotstein, President and CEO of EQ Works.  “The addition of over 30 new portfolio of clients for the first half of the year shows that our mobile location data platform, and its ability to find and target the audiences our clients need is working better than ever before.  We are pleased with the improved results for the second quarter, but remain focused on building a profitable growing company and continuing to develop new business relationships and market expansion opportunities.”

 

Another exciting development announced during the quarter was the launch of Locus:  the most sophisticated platform for location-based targeting.  Using Locus, advertisers can now measure the effectiveness of their digital media buying and target audiences based on where people go “in the real world”.  By combining these benefits with attribution models for home and work locations, EQ is able to identify and reach anyone, anywhere on any of their devices at scale. 

 

Highlights for the Second Quarter ended June 30, 2017

 

• Increased revenue by 61% when compared to the first quarter of 2017 and by 98% compared to the same period  a year ago

 

• Improved gross profit resulting in $0.6 million for the second quarter of 2017, compared with $0.4 million in the same period of 2016

 

• Added over 30 new portfolio of clients during the first half of the year

 

• Completed an equity financing of $1.6 million

 

• Recognized by “the Drum” as a market leader for best publisher – innovation

 

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,  (g) gain from extension of loan and borrowings (h) loss on derivative liability . 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 six months ended June 30, 2017 and 2016
(In thousands of Canadian dollars)	Three months ended June 30,		Six months ended June 30,
	2017	2016	2017	2016
Net loss	(259)	(546)	(709)	(749)
Add:
Finance costs, net	143	92	285	133
Depreciation expenses	8	3	10	7
Amortization of domain properties and other intangible assets	38	30	76	60
Share-based payments	6	-	13	-
Gain from extension of loans and borrowings	(80)	-	(80)	-
Gain on sale of  investment	-	-	-	(201)
Adjusted EBITDA	(144)	(421)	(405)	(750)

About EQ Works

 

EQ Works (www.eqworks.com) provides a smarter way to target customers. Using first-party, location-based behavior signals, advanced data analytics, and proprietary software, EQ creates and targets customized, performance-boosting audience segments. Proprietary algorithms and data generate attribution models that connect consumer behavior in the physical world to consumer behavior in the digital world, solving complex challenges for brands and agencies.

 

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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.

1235 Bay Street, Suite 401| Toronto, Ontario |M5R 3K4

press@eqworks.com

www.eqworks.com

 

EQ Inc.
Unaudited Consolidated Interim Statements of Financial Position
(In thousands of Canadian dollars)
		June 30, 2017	December 31, 2016
Assets
Current assets:
Cash		$                    1,022	$                      151
Accounts receivable		963	890
Other current assets		228	138
		2,213	1,179
Non-current assets:
Leasehold Improvements		95	-
Property and equipment		50	8
Domain properties and other intangible assets		45	121
		190	129
Total assets		$                    2,403	$                    1,308
Liabilities and Shareholders' Deficiency
Current liabilities:
Accounts payable and accrued liabilities		$                    1,844	$                    1,892
Deferred lease inducement		-	63
Loans and borrowings		2,198	268
Deferred revenue		42	7
		4,084	2,230
Non-current liabilities:
Loans and borrowings		562	2,421
		562	2,421
Shareholders' deficiency		(2,243)	(3,343)
Total liabilities and Shareholders' deficiency		$                    2,403	$                    1,308

EQ Inc.
Unaudited Consolidated  Interim Statements of Loss and Comprehensive Loss
(In thousands of Canadian dollars, except per share amounts)
Three and six months ended June 30, 2017 and 2016
		Three months ended June 30,		Six months ended June 30,
		2017	2016	2017		2016
Revenue		$              1,430	$                 724	$              2,320		$              1,678
Expenses:
	Publishing costs	799	345	1,245		826
	Employee compensation and benefits	501	422	965		825
	Other operating expenses	280	378	528		777
	Depreciation expenses	8	3	10		7
	Amortization of domain properties and other intangible assets	38	30	76		60
		1,626	1,178	2,824		2,495
Loss from operations		(196)	(454)	(504)		(817)
Finance income		24	-	30		50
Realized gain on sale of investment		-	-	-		201
Gain from extension of loans and borrowings		80	-	80		-
Finance costs		(167)	(92)	(315)		(183)
Loss before income taxes		(259)	(546)	(709)		(749)
Net loss		(259)	(546)	(709)		(749)
Other comprehensive income reclassified
to profit or loss in subsequent periods, (net of tax):
	Net loss on sale of investment	-	-	-		(201)
Total comprehensive loss for the period		(259)	(546)	(709)		(950)
Loss per share:
	Basic and diluted	(0.01)	(0.03)	(0.04)		(0.05)

EQ Inc.
Unaudited Consolidated  Interim Statements of Cash Flows
(In thousands of Canadian dollars)
Six months ended June 30, 2017 and 2016
			2017	2016
Cash flows used in operating activities:
	Net loss		(709)	(749)
	Adjustments to reconcile net loss to net cash flows
	from operating activities:
		Depreciation expenses	10	7
		Amortization of domain properties and other intangible assets	76	60
		Amortization of deferred lease inducement	(63)	(11)
		Gain on extension of loans and borrowings	(80)	-
		Share-based payments	13	-
		Unrealized foreign exchange (gain) loss	10	(7)
		Finance costs, net	302	133
		Gain on sale of investment	-	(201)
	Change in non-cash operating working capital		(183)	248
	Net cash used in operating activities		(624)	(520)
Cash flows from financing activities:
	Repayment of term-loan		-	(87)
	Repayment of loans and borrowings		(765)	-
	Issuance of promissory notes		765	350
	Proceeds from exercise of warrants		588	-
	Proceeds from equity financing, net of issuance cost		1,057	-
	Interest paid		(8)	(7)
	Net cash from financing activities		1,637	256
Cash flows from (used) in investing activities:
	Proceeds from disposal of investment		-	251
	Leasehold improvements		(91)	-
	Purchase of property and equipment		(41)	-
	Net cash from (used) in investing activities		(132)	251
Increase (decrease) in cash			881	(13)
Foreign exchange gain (loss) on cash held in foreign currency			(10)	7
Cash, beginning of the period			151	115
Cash, end of period			$              1,022	$                 109

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Source: EQ Inc. (TSX Venture:EQ)

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