Mr. Hylton Karon reports

IFABRIC CORP. REPORTS RESULTS FOR ITS SECOND QUARTER ENDED MARCH 31, 2018

iFabric Corp. has released its financial results for its second quarter and six months ended March 31, 2018.

"Another solid quarter for iFabric," said Hylton Karon, president and chief executive officer of iFabric. "We have sustained profitability, and have further strengthened our balance sheet by both substantially increasing our cash balance and at the same time we have substantially reduced our liabilities. I am pleased to report that the first shipments of our chemically enhanced finished product programs for a major retailer, as referenced in our press release of April 24, is on schedule for Q3. Q3 will also see the launch of a unique intimates product that I believe will prove revolutionary in our industry. I would like to express my appreciation to our talented design team that developed this product, for which we have filed a patent. The long-term growth potential of both divisions remains most encouraging," concluded Mr. Karon.

Q2 2018 highlights:

• Revenues were virtually unchanged at $4,201,249 compared with $4,255,192 in second quarter of 2017. Revenues in the intimate apparel division increased by 11 per cent or $343,026 to $3,365,522 from $3,022,496 in Q2 2017, whilst revenues in the intelligent fabrics division decreased by 33 per cent or $396,967 to $810,129 from $1,207,096. The increase in intimate apparel revenue in Q2 2018 versus 2017 was achieved through increased seasonal sleepwear sales as well as improved demand for its core bras and accessories. This increase was offset by lower revenues in the intelligent fabrics division during the second quarter of 2018 compared with 2017, caused by timing differences in the production of certain major customers of the division, which will now take place in Q3 2018, approximately one month later than the comparatively similar programs in 2017, which commenced production in Q2 2017.
• Net earnings before tax of $590,585 compared with net earnings of $647,399 in 2017, representing a decrease of $56,814. The decrease in earnings was mainly as a result of higher operating costs and share based compensation costs.
• Adjusted earnings before interest, taxes, depreciation and amortization of $707,527 compared with adjusted EBITDA of $755,269 in Q2 2017, a decrease of $47,742 for the reasons discussed in this news release.
• Gross profit was virtually unchanged at $2,096,914 (50 per cent of revenue) compared with $2,082,915 (49 per cent of revenue) in Q2 2017.
• Net earnings after tax attributable to shareholders were $371,076 (1.4 cents per share basic and 1.4 cents per share diluted) compared with net earnings attributable to shareholders of $488,321 in Q2 2017 (1.9 cents per share basic and 1.8 cents per share diluted). As a result of the increasing importance of United-States-dollar denominated transactions in the operations of its two main operating divisions, these division changed their functional currency to U.S. dollars with effect from Oct. 1, 2017. The effect of this change is that unrealized currency gains on translation to Canadian dollars (the presentation currency), that were previously considered as earnings are now recognized in other comprehensive earnings. This is the primary reason for the decrease in earnings between Q2 2018 and Q2 2017.
• Other comprehensive earnings, being unrealized currency gains on the translation of foreign operations, amounted to $165,254 compared with zero in Q2 2017. Total comprehensive earnings totalled $535,314 in Q2 2018 compared with $483,959 in 2017 representing an increase of $51,355.
• Working capital (excluding a demand-term loan classified as current under international financial reporting standards) increased by $372,362 to $9,481,795 compared with $9,109,433 at the end of the previous quarter ended Dec. 31, 2017,
• Cash increased by $1,587,983 to $4,352,233 compared with $2,764,250 at the end of the previous quarter ended Dec. 31, 2017.
• The company's bank operating line was unutilized as at March 31, 2018. Following an accelerated payment of $250,000 against the company's demand term-loan, the company's operating line was increased from $3.5-million to $3.75-million during the quarter. Accordingly, the full amount of $3.75-million is available to finance future business of the company.
• Total liabilities at the end of Q2 2018 were $3,474,739 compared with $4,633,613 at the end of the previous quarter, representing a decrease of $1,158,874.
• Shareholder equity attributable to common shareholders was $11,344,477 compared with $10,760,252 at the end of the previous financial quarter representing an increase of $584,225.

Six-month highlights:

• Revenues increased by $1,980,710 to $9,338,021 compared with $7,357,311 for the corresponding six months in 2017, representing an increase of 27 per cent. With respect to its two operating divisions, intimate apparel revenues increased by 42 per cent or $2,036,882 while intelligent fabrics division revenues decreased by 2 per cent or $56,172.
• Gross profit for the six months ended March 31, 2018, increased by 45 per cent or $1,454,106 to $4,684,107 (50 per cent of revenues) from $3,230,001 (44 per cent of revenues) for the comparable six months of 2017. The increase in gross profit percentage for the six months was the result of a higher proportion of sales in the intimate apparel segment which carries higher margins than the intelligent fabrics segment, as well as improved margins in the intelligent fabrics segment resultant from improved pricing arrangements with its suppliers.
• The net earnings attributable to iFabric shareholders for the six months ended March 31, 2018, were $1,231,556 (5.1 cents per share basic and 4.8 cents per share diluted) compared with earnings of $362,946 (1.4 cents per share basic and 1.3 cents per share diluted) in the corresponding six months of 2017, representing an increase of $868,610. This increase was mainly as a result of higher revenues and improved margins.
• Other comprehensive earnings, being unrealized gains on the translation of foreign operations, amounted to $178,561 compared with zero for the six months ended March 31, 2017. Total comprehensive earnings totalled $1,499,577 at the end of Q2 2018 compared with $360,672 in 2017 representing an increase of $1,138,905.

                                       FINANCIAL HIGHLIGHTS

                                                              Quarter ended March 31, Six months ended March 31,
                                                                   2018         2017          2018         2017

Revenue                                                      $4,201,249   $4,255,192    $9,338,021   $7,357,311
Income (loss) from operations                                   660,362      654,955     1,887,693      515,070
Share based compensation                                         44,494       16,101        89,977       32,560
Adjusted EBITDA * (note)                                        707,527      755,269     2,134,857      696,714
Net earnings (loss) before tax                                  590,585      647,399     1,889,478      495,460
Net income (loss) after tax attributable to shareholders        371,076      488,321     1,321,556      362,946
Other comprehensive earnings (loss)                             165,254            -       178,561            -
Total comprehensive earnings (loss)                             535,314      483,959     1,499,577      360,672
Net income (loss) per share -- basic                              0.014        0.019         0.051        0.014
Net income (loss) per share -- diluted                            0.014        0.018         0.048        0.013

* Note: adjusted EBITDA represents earnings before interest, taxes, depreciation, amortization and share based
compensation.

About iFabric Corp.

Headquartered in Markham, Ont., through its wholly owned subsidiaries, Intelligent Fabric Technologies (North America) Inc. (IFTNA) and Coconut Grove Pads Inc., iFabric offers a variety of products and services in both of its strategic divisions:

• IFTNA is focused on proprietary chemical formulations that render fabrics, foams, plastics and numerous other surfaces intelligent, thereby improving the safety and well-being of the consumer.
• Coconut Grove, operating as Coconut Grove Intimates, is a designer, manufacturer, distributor, licensor and licensee of ladies intimate apparel products, accessories and sleepwear.

We seek Safe Harbor.