Mr. Kim Oishi reports

DATABLE TECHNOLOGY CORPORATION ANNOUNCES FINANCIAL RESULTS FOR Q4 AND 2022 YEAR END RESULTS AND UPDATE FOR YEAR-TO-DATE 2023

Datable Technology Corp. has released its financial results for the quarter (Q4 2022) and the year ended Dec. 31, 2022 (fiscal 2022).

In 2022, the company achieved the following milestones:

• Revenue increased by 12 per cent to $3,944,911 compared with $3,532,318 in 2021 due to the increase in contracted project deliveries and transactional orders completed in the year.
• One hundred per cent of annual and multiyear SaaS (software-as-a-service) licences renewed, all with leading United States-based large enterprises.
• Had agreements to provide Platform3 to leading Brands, accounting for total contracted revenue of approximately $6.2-million, including over $2.2-million of revenue expected to be recognized in 2023 and future periods. Total contracted revenue includes agreements signed in the year and multiyear agreements carried forward from prior years.
• Total operating expenses decreased by 12 per cent compared with 2021 due to cost-cutting implemented in the second half of 2022.

The company is also pleased to provide the following 2023 updates:

• Datable has implemented significant cost-cutting such that operating expenses are expected to be reduced by approximately 50 per cent in 2023 compared with 2022.
• As of the date of this news release, Datable has licence agreements that amount to approximately $3.6-million in revenue under contract for 2023 and future periods, of which 56 per cent is expected to be recognized as revenue in 2023. This includes approximately $3.2-million in contracted revenues and close to $400,000 in expected program fees from customers. Datable expects gross margin to increase to between 40 per cent and 50 per cent in 2023, due to a change in product mix to a higher percentage of high-margin SaaS licences and improvements in operational efficiency.
• On June 16, 2023, the company announced that it has entered into a non-binding letter of intent with LMSG to sell its software-as-a-service business in exchange for a 15-per-cent interest in LMSG.

"We are encouraged by our revenue growth in 2022 despite a challenging environment. All of our core customers renewed their licences in 2022. Long-term licensees of Platform3 have built valuable first party consumer databases hosted on our platform and use the tools it provides to drive incremental sales and enhance consumer engagement. While it was difficult to secure new customers in 2022, and some of the contracted programs were delayed based on the economic environment, we signed a new major customer in late 20222 and are rebuilding our sales pipeline in 2023," said Robert Craig, Datable's chief executive officer. "We have proven that Platform3 drives strong ROI and meets the scalability and security needs of Fortune 500 companies. We believe that the sale of our business to LMSG will provide the resources needed to scale Platform3 and unlock value for Datable's shareholders, debenture holders and customers."

Results of operations

Revenue for year ended Dec. 31, 2022, increased by 12 per cent to $3,944,911, compared with $3,532,318 in 2021 due to overall increase in average contract value, project deliveries and transactional orders compared with 2021. DTC's Platform3 product is an integrated suite of digital marketing applications sold as SaaS for short-term promotions or on an annual subscription basis with recurring revenues. Revenue in the current year reflected recognition of revenue from previous year contracts and new sales of the Platform3 product offering.

Revenue growth for the year of 2022 was partly due to improvements in the functionality of Platform3. In late 2020, DTC launched version 5.0 of Platform3 which included new modules that extended and deepened its differentiation in the market by launching a breakthrough feature on Platform3 -- Dynamic Messaging and Rewards (DMR). This feature empowers brands to deploy omnichannel communications, retargeting and contextual rewards to induce consumer purchases based on their previous and continuing purchase behaviour and brand engagement. DMR transforms Platform3 into a self-regulating continuous feedback loop for continuing sales.

Gross profit for the year ended Dec. 31, 2022, decreased by 12 per cent to $1,217,892, compared with $1,378,877 in 2021. The company's cost of sales for the year ended Dec. 31, 2022, increased by 27 per cent to $2,727,019, compared with $2,153,441 in 2021 due to change in product mix and increase in delivery resources in 2022.

Gross margin as a percentage of revenue for the year ended Dec. 31, 2022, was 31 per cent, compared with 39 per cent in 2021. The decrease for the year ended Dec. 31, 2022, was due to higher growth in lower-margin services compared with the licensing and software-as-a-service product. Gross margin depends on the product mix for the reporting period. Revenues comprise a combination of higher-margin sales of Platform3, the company's proprietary software-as-a-service product, and reward service combined with some lower-margin third party services. The company's gross margin as a percentage of revenue is expected to improve in 2023, compared with 2022, due to product mix and investments in the company's technology to automate the integration, delivery and testing of the company's services.

Cost of sales includes an API connection to third party digital rewards platforms. This service enables DTC clients to offer digital rewards such as gift cards, movie tickets and virtual visas to incentivize purchase and purchase frequency. DTC purchases these rewards on behalf of the company's clients and charges a transaction fee for the total amount of rewards purchased. Cost of sales also includes the cost of servers to host Platform3, and project management and customer support staff.

General and administrative expenses for the year ended Dec. 31, 2022, decreased by 15 per cent to $1,637,584, compared with $1,928,978 in 2021. The decrease for the year ended Dec. 31, 2022, was mainly due to a decrease in corporate consultancy fees, professional fees, investor relations and general administration.

Sales and marketing expenses include wages and salaries, consulting fees, travel expenses, and advertising and licences. Sales and marketing expenses for the year ended Dec. 31, 2022, decreased by 44 per cent to $803,716, compared with $1,443,503 in 2021. The decrease for the year ended Dec. 31, 2022, was mainly due to reduction in staff resources and consultants paid in connection with advertising, sales and marketing activities.

Research and development expenditures for the year ended Dec. 31, 2022, increased by 5 per cent to $1,827,444, compared with $1,740,083 in 2021. The increase in research and development expenses for the year ended Dec. 31, 2022, was related to enhancement to Platform3, developing platform flexxi and increased staff resources. Research and development expenses in 2023 are expected to decrease due to the completion of enhancements to Platform3.

Net and comprehensive loss for the year ended Dec. 31, 2022, decreased by 1 per cent to $4,520,444, compared with $4,587,712 in 2021. The slight decrease in net loss for year ended Dec. 31, 2022, was mainly due to the delay of sales and marketing expenses, reduction of general and administrative spendings, partially offset by the growth in revenue. Datable expects a decrease in net and comprehensive loss in 2023 due to increased revenues and gross margin, and a decrease in expenses.

About Datable Technology Corp.

Datable has developed Platform3, a proprietary consumer life cycle and data management platform that is sold to global consumer brands. Platform3 is delivered as a subscription service (software-as-a-service model) and used by some of the world's most valuable consumer brands to access new consumer communities and engage them while collecting, analyzing and managing their first party data. Platform3 incorporates proprietary technology to monetize the consumer data, including demographics and purchasing behaviour, by sending consumers targeted offers by e-mail and text messages.

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