Mr. Vicenc Marti reports

TANGELO REPORTS 2017 Q3 FINANCIAL RESULTS; OPERATIONAL FOCUS DRIVES BUSINESS METRICS

Tangelo Games Corp. has released its financial results for the third quarter of 2017 (the three- and nine-month periods ended Sept. 30, 2017).

Highlights:

• Tangelo generated revenue of $8.45-million and $26.70-million for the three and nine months ended Sept. 30, 2017, compared with revenue of $9.31-million and $30.22-million for the three and nine months ended Sept. 30, 2016. The operating loss was $1.08-million and $2.26-million for the three and nine months ended Sept. 30, 2017, compared with $120,000 and $1.45-million for the three and nine months ended Sept. 30, 2016. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $2.03-million and $6.94-million was realized for the three and nine months ended Sept. 30, 2017, compared with $2.96-million and $8.72-million for the three and nine months ended Sept. 30, 2016.
• In the third quarter, Tangelo's operational turnaround began to bear fruit:
  • Paying users at Tangelo Israel grew year over year for this first time since the acquisition of the Diwip business.
  • Revenue from new players at Tangelo Spain grew year over year for the first time since the acquisition of Akamon.

                               THIRD QUARTER FINANCIAL SUMMARY
                     (in millions except for shares and per-share amounts)       
                  
                                              For the three months ended For the nine months ended 
                                                               Sept. 30,                 Sept. 30,
                                                       2017         2016         2017         2016

Revenue                                               $8.45        $9.31       $26.70       $30.22
Adjusted EBITDA                                        2.03         2.96         6.94         8.72
Transaction costs, severance
and restructure costs,
depreciation of equipment,
amortization of intangibles and
stock-based compensation                               3.11         3.07         9.20        10.17
Operating (loss)                                      (1.08)       (0.12)       (2.26)       (1.45)
Financing and other non-operating expenses
Interest and accretion,
interest income, changes in
value of long-term debt,
foreign exchange                                       1.83         5.94         7.79         7.47
(Loss), continuing operations,
before income tax                                     (2.91)       (6.06)      (10.05)       (8.92)
Net (loss), continuing operations                     (2.67)       (5.90)       (9.36)       (8.36)
Net (loss)/income, discontinued operations            (0.00)        0.02        (0.05)        0.03
Total net (loss) for the period                       (2.67)       (5.89)       (9.41)       (8.34)
Basic and diluted (loss) per share, 
continuing operations                                 (0.01)       (0.03)       (0.05)       (0.05)
Basic and diluted (loss)/income
per share, discontinued operations                    (0.00)        0.00        (0.00)        0.00

Vicenc Marti, president of Tangelo, commented: "While our development staff has been focused on the essential tasks of developing a better mobile product and completing our migration from Flash to Unity, our operating teams have been fighting hard to drive user growth and spend across our current platforms. In this quarter, Tangelo delivered several improved business metrics that represent milestones in our operational turnaround of Tangelo's social casino assets."

Tangelo Israel -- monetizing historical user base

Mr. Marti said: "As previously identified, one of our key growth opportunities is unlocking the value in the historical Tangelo Israel database through better data-driven marketing. In the quarter, Tangelo grew paying users at Tangelo Israel year over year and quarter over quarter for the first time since the acquisition of the Diwip business, and in doing so, effectively reversed a two-year decline. This turnaround was driven by a comprehensive range of initiatives, including changing management, technology platform and CRM systems."

Tangelo Spain -- driving new user revenue through new features and markets

Mr. Marti said: "While Facebook desktop continues to decline as a destination for much of the industry, Tangelo Spain is growing revenue from first-time players at its own portal through the release of innovative new features, including the introduction of its coin bank and new missions and tournaments. These new features had the effect of growing portal revenue in Spain and Latin America, including Argentina and Mexico. In the quarter over all, Tangelo grew revenue from new players at Tangelo Spain year over year for the first time since the acquisition of Akamon.

"Remarkably, these milestones were achieved prior to Tangelo launching its new mobile apps scheduled for release in the next two quarters. Additionally, we achieved these important growth metrics while maintaining our focus on migration out of Flash and into Unity, which is nearing completion."

Oscar Fonrodona, Tangelo's managing director, remarked: "Our path is clear: We need to continue optimizing our internal marketing programs to set up Tangelo for its next phase of growth, which will be around the launch of its mundijuegos app for the Latin markets by the end of the fourth quarter of 2017 and the launch of our English language app at the end of the first quarter of 2018.

"Tangelo's first new U.S.-facing app is Best Jackpot, which will deliver a unique jackpot-based gaming experience, is expected to be released by the end of the first quarter of 2018."

James Lanthier, chief executive officer of Tangelo, commented: "We are pleased with our progress in improving the business. While our improvement in operating metrics may take some time to translate into revenue and operating profit growth, the business is demonstrably heading in the right direction, with paying users increasingly slightly quarter over quarter from approximately 53,000 to 54,000. Our decline in overall revenue in the comparative periods was primarily driven by a reduction in revenue from Facebook at both Tangelo Israel and Tangelo Spain, a secular trend affecting most publishers in the sector. Tangelo's Facebook business was further impacted by our lack of new content due to our migration process. Migration is nearly complete, however, and as we have previously stated, our best defence against Facebook desktop's gradual decline as a distribution platform is a better mobile product, and with two upcoming mobile app releases and the Unity migration nearly complete, we believe that we are well positioned in this regard.

"Our costs were essentially flat between periods, and in the fourth quarter we have taken additional steps to reduce our corporate overhead costs and obligations.

"The company reiterates that it is in discussions with a number of parties regarding potential transactions that could result in an acquisition, merger with, or sale to a third party. The company can offer no assurances that these discussions will yield a successful transaction, and the company can offer no further details or commentary regarding the likelihood or nature of the potential transactions."

About Tangelo Games Corp.

Tangelo Games, the parent company of Diwip and Akamon, formerly known as Imperus Technologies Corp., is a developer of social and mobile gaming for PC, Mac, iOS and Android platforms. Diwip and Akamon design, develop and distribute their top-ranked social casino-themed games within on-line social networks (such as Facebook) and mobile platforms (such as Android and iPhone). All of the Diwip and Akamon games are free to play and generate revenue primarily through the in-game sale of virtual coins.

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