Mr. Johnson Joseph reports

PEAK FILES 2016 YEAR END RESULTS AND OPERATING HIGHLIGHTS

Peak Positioning Technologies Inc. has released its financial results and has reviewed highlights for the year ended Dec. 31, 2016.

Financial highlights:

• Closing of $3.98-million in private placement financing;
• Elimination of $500,000 worth of debt through exercise of conversion feature of convertible debenture;
• Total revenues of $58.1-million;
• Net loss of $2.6-million.

Operating highlights:

• Establishment of holding subsidiary in Hong Kong and operating subsidiary in Shanghai;
• Strategic investment partnership with Zhonghai Wanyue Group (ZHWY) chairman;
• Signing of raw material purchase order commitment agreements worth combined $600-million;
• Launch of Gold River platform;
• Processing of first transactions on Gold River platform.

Review of 2016

Two thousand sixteen was a pivotal year for Peak in which the company achieved several key milestones, all made possible by the closing of its $3.98-million strategic investment partnership with ZHWY chairman, Jiang Wang. That transaction ushered in a new era of financial stability for the company and provided the resources to allow Peak to set the foundations of its operations in China. Always mindful for the need to eventually repatriate profits from its Chinese operations to Canada, the company adopted a corporate ownership structure according to guidelines prescribed by the Chinese government to allow foreign-owned parent companies of operating Chinese subsidiaries to repatriate profits made by their subsidiaries outside of China. The company therefore created subsidiary holding companies in both Hong Kong and Shanghai prior to establishing its first operating subsidiary, Asia Synergy Technologies (AST) in Shanghai to manage its Gold River raw materials product procurement and financial services platform. Once created, AST was able to quickly secure a series of purchase order commitments for transactions to be processed through December, 2017, approximately worth a combined $600-million. Gold River was officially launched in third quarter 2016 and went on to process $26-million worth of orders that same quarter, which validated the demand for the services offered by the platform.

Following the launch of Gold River and after carefully studying the commercial lending space in China, the company saw an opportunity to not only help buyers of raw materials with the financial assistance they needed through the Gold River platform, but to also potentially impact the commercial lending industry as a whole. After discussions with a handful of solution providers with products that could potentially make lending easier in China, the company settled on a commercial lending solution developed by Canadian fintech company Cubeler Inc. Discussion with Cubeler accelerated quickly, to the point where the company was confident enough of an eventual agreement with Cubeler to begin formulating a model for commercializing the platform in China. While working the business model for the commercialization of Cubeler, the company was presented with an opportunity to have its very own financial institution subsidiary, which would be able to assume the primary financial roles on both the Gold River and the Cubeler platforms and add a completely different dimension to the company's revenue potential. Having an affiliated financial partner as part of Gold River's operations meant that the company would have to make a slight adjustment to AST's business model. The adjustment implied that AST would now earn a slightly lower financing referral fee on Gold River and would have to postpone Gold River's financing transactions until those financing opportunities could be referred to the affiliated financial institution. This in turn meant that AST's revenues for fourth quarter 2016 would be less than originally projected.

Outlook for 2017

Ever since the idea of having its own financial institution subsidiary began to circulate in fourth quarter 2016, the company began the process to find the right financial partners for a potential joint venture that would lead to the creation of that subsidiary, named Asia Synergy Financial Capital (ASFC). Considering the impact that ASFC is expected to have on the company's Chinese operations and its bottom line, a great deal of attention will be allocated by the company's management in 2017 to sign agreements with one or more financial partners to get ASFC established as quickly as possible. As of the date of this news release, the company was in discussions with a number of potential financial partners which had expressed an interest in making a direct investment in a joint venture transaction with the company for the creation of ASFC.

Once it is up and running, ASFC will be the only financial institution on Gold River and, as such, will earn interest only on the credit it extends on the platform. However, things will be different on Cubeler as the platform is intended to have many other lenders, which will be extending loans and credit on the platform along with ASFC. Under the Cubeler business model, Asia Synergy Data Solutions (ASDS), Peak's newly created subsidiary and the platform operator, will charge and collect a 2-per-cent fee on all credit products offered on the platform. That fee will be shared between ASDS, ASFC and the insurance company providing insurance of the platform's credit products. So in addition to earning interest on its own loans, ASFC will also earn a percentage of the value of every loan and credit product extended on the platform by all platform lenders. The more lenders on the platform, the more credit transactions facilitated by the platform, the more revenues ASFC will earn.

"We couldn't be more excited about the prospect of owning our very own financial institution," commented Johnson Joseph, president and chief executive officer of Peak. "From the discussions that I've had with some investors since the release of our revised executive summary presentation, it would unfortunately appear that many of them are so focused on our lower revised target revenues for AST that they fail to realize that the financial impact that ASFC is expected to have on the company will more than offset AST's reduced revenue targets. Hopefully, that will be clear once we publish our revenue targets for ASFC in a few weeks," concluded Mr. Joseph.

Fiscal 2016 financial results summary

The company generated $58,091,907 in the sale of raw material products in fiscal 2016 ($36,400 in consulting revenues in fiscal 2015). The transactions that contributed to the company's revenues and gross profit were limited to a specific category of transactions. Some purchase order transactions that would have required financing were postponed until such a time that ASFC would be in a position to provide the financing needed to complete the purchase orders. So the lower-than-expected gross margins realized by AST on the reported revenues can be attributed to the fact that transactions on which AST was expected to make higher profit margins did not happen in fiscal 2016. On a cumulative basis, revenues generated were at $58,091,907 with a gross profit of $289,669 of compared with $36,400 for the same period last year.

Expenses (excluding the cost of sales) for fiscal 2016 amounted to $2,938,773, compared with $1,864,494 in 2015. If the company excludes the non-recurring items such as impairment of loss of investments of $350,000 compared with nil in 2015, nil in impairment in goodwill in 2016 compared with $698,750 in 2015, nil impairment of technology in 2016 compared with $491,084 in 2015, forgiveness of debt and extinguishment of debt of $196,452 in 2016 compared with ($524,801) in 2015, and gain in 2015 on contingent compensation payable of $230,000, the difference can be explained by an increase in salaries given the start of Chinese operations, consulting fees, public relations, rental expenses and travel. Finance costs went down in 2016 since some debentures were converted reducing de facto the interests costs.

The net loss for the year was $2,649,104 compared with $1,828,399 in 2015. Full details of the company's 2016 financial results can be found in the audited consolidated financial statements and management's discussion and analysis for the years ended Dec. 31, 2016, and 2015, which are available at SEDAR.

Investor conference call

Peak will hold a 30-minute investor conference call at 4:15 p.m. EST on May 8, 2017, to discuss the company's fourth quarter 2016 financial results, the adjustment to its business model with the planned creation of a financial institution subsidiary, and its revenue targets for 2017. Those interested in attending the investor conference call can do so by dialling toll-free: 855-453-6961 and enter the passcode 4569772. The conference call will be in a question-and-answer format, which will be preceded by a brief overview of the company's 2016 operational highlights. The company's investors are invited to submit their questions to investors@peakpositioning.com with the subject line: "year-end 2016 conference call." All questions received by 5 p.m. EST on May 4, 2017, will be answered during the call by the company's president and chief executive officer Johnson Joseph. Investors attending the call can also submit additional questions during the call on the company's Twitter or Facebook page, which, time permitting, may also be answered during the call. The company will then compile a list of the questions and answers covered during the call and post them on its website and Facebook page by 6 p.m. EST on May 10, 2017.

About Peak Positioning Technologies Inc.

Peak Positioning Technologies is an IT portfolio management company whose mission is to assemble, finance and manage a portfolio of high-growth-potential companies and assets in some of the fastest-growing tech sectors in China, including fintech, e-commerce and cloud computing. Peak provides its shareholders with exceptional growth potential by giving them access to the fastest-growing sectors of the world's fastest-growing economy.

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