Mr. Zachariah Mathews reports

WI2WI CORPORATION: FINANCIAL RESULTS FOR THIRD QUARTER ENDED SEPTEMBER 30, 2015

Wi2Wi Corp. has released its unaudited condensed consolidated interim financial results for the three- and nine-month periods ended Sept. 30, 2015.

Highlights:

• The company renewed multiple-year purchasing agreements with four Fortune 100 companies in avionics and space markets.
• Negotiations with other marquee customers are in progress.
• The company also received preferred supplier status with a Fortune 100 company.
• Revenue for the nine-month period increased 250 per cent over the year-earlier period, due to the acquisition of a precision-timing-device business.
• While gross margin as a percentage of revenue has decreased due to business changes, the progress being made to optimize manufacturing processes should help increase margins in the future.
• The company is looking to develop new products in timing devices, frequency controllers, RF and microwave filters, and wireless connectivity solutions, while leveraging its strengths in the exploding Internet of things market.

                                       INCOME STATEMENTS 
          (all amounts herein are in thousands U.S. dollars, unless otherwise stated)

                                                  Three months ended         Nine months ended
                                                       Sept. 30,                  Sept. 30,
                                                   2015         2014         2015         2014

Revenues                                      $   3,123 $      2,061    $  11,757  $     4,699
Cost of revenues                                  1,799          998        7,735        2,327
Gross profit                                      1,324        1,063        4,022        2,372
Operating expenses
Research and development                            512          202        1,054          664
Selling, general and administrative                 660          661        2,006        1,858
Total operating expenses                          1,172          863        3,060        2,522
Income/(loss) from operations                       152          200          962         (150)
(Income) from transfer of technology                 --       (1,688)          --       (1,688)
Interest expense                                     --           28          145           82
Income before income taxes                          152        1,860          817        1,456
Provision for income tax                             10           --           50           --
Net income and total comprehensive income     $     142 $      1,860    $     767  $     1,456
Net income per share, basic and diluted       $    0.00 $       0.02    $    0.01  $      0.02

Overview:

• The significant increase in revenues over the corresponding period was due to a combination of wireless connectivity solutions revenues and revenues from the acquisition of a frequency control device and timing device business. The company typically receives multiyear purchasing agreements from its avionics and space industry customers. The company has renewed with four of its Fortune 100 customers, and is in the process of renewing with other marquee customers purchase agreements for products and services in the avionics and space industries. Such agreements are typically reviewed and revised in the third and fourth quarters of the calendar year and can cause some seasonality in the business.
• The gross margin as a percentage of revenue has decreased because the frequency control and precision device business historically yielded a lower margin. However, successful efforts in manufacturing cost reductions -- including improving manufacturing yield, increasing efficiencies and optimizing manufacturing batch sizes -- should help increase the margins in the future. While this process will take some time to implement, initial results are very favourable. In addition, the company is reviewing its pricing and has been successful in obtaining price increases for some its legacy products.
• The increase in research and development expenses is due to a combination of its wireless connectivity, frequency control and precision device business. The company is looking to develop new products in timing devices, frequency control devices, RF and microwave filters, and wireless connectivity solutions.
• Liquidity and capital resources: As of Sept. 30, 2015, the company had cash of $1,185 compared with $387 as of Sept. 30, 2014, and $645 as at Dec. 31, 2014. The company had a net working capital of $350 as of Sept. 30, 2015, compared with a working capital deficit of $401, as of Dec. 31, 2014, respectively, and shareholders' equity of $1,985 and $1,128 at Sept. 30, 2015, and Dec. 31, 2014, respectively.
• The company exchanged debt for shares (issued Oct. 28, 2015), amounting to approximately $3.7-million. This included a secured subordinated convertible debenture, a note payable and certain other liabilities. At the conclusion of these transactions, the company's liabilities were reduced, and, correspondingly, shareholders' equity was increased materially.
• On Aug. 25, 2015, the company settled a claim by a former executive of the company for a payment of $325 and the issuance of one million common shares of the company.

"This is an increasingly exciting time for us as the substantial improvements we are making in our operations and our business are now beginning to be revealed in our financial results," said Zach Mathews, president and chief executive officer of the company. "We have reduced our debt with the issuance of shares and announced a number of new products. We expect to see particularly strong growth in the coming months and years, resulting from several new initiatives in the Internet of things (IoT) arena -- the fastest-growing market in the wireless world -- as well as from the new design and engineering centre we are setting up in India to help us with this IoT space, especially in Asia."

We seek Safe Harbor.