Mr. Robert Craig reports

DATABLE TECHNOLOGY CORPORATION ANNOUNCES FINANCIAL RESULTS FOR Q1 2023 AND UPDATE FOR YEAR-TO-DATE 2023

Datable Technology Corp. has released its financial results for the quarter ended March 31, 2023 (Q1 2023).

For the three-month period ended March 31, 2023, the company achieved the following milestones:

• Decreased total operating expenses by 51 per cent to $736,714 compared with $1,510,768 in the same period in 2022 mainly due to implementation of cost-cutting and improved operational efficiencies, resulting in a 57-per-cent reduction of net loss to $571,785 compared with $1,225,745 in the same period in 2022.
• Revenue decreased slightly to $857,948 compared with $860,586 in the same period in 2022 due to a reduction in new annual and long-term licences signed in 2022.
• At the end of Q1 2023 total contracted revenue for 2023 and future periods was approximately $2.9-million, compared with approximately $3.1-million in the same period in 2022. Total contracted revenue includes agreements signed in the year and multiyear agreements carried forward from prior years.
• 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.

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

• Due to the continued cost-cutting and improved operational efficiencies, total operating expenses are expected to be reduced by approximately 50 per cent for the year ended Dec. 31, 2023, compared with the same period in 2022.
• As of the date of this news release, Datable has agreements, which together with licence agreements signed in prior periods 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 be between 40 per cent and 50 per cent in 2023, depending on product mix and an increase and expected improvements in operational efficiency.

"We are pleased that we have maintained our revenue base in Q1 2023 while reducing operating expenses by over 50 per cent. Our core customers continue to renew their licences, and we expect revenue growth in the second half of 2023 due to upsizing of existing customers and new customers that are in our sales pipeline," said Robert Craig, Datable's chief executive officer. "We are working with LMSG to leverage their sales team and products to drive growth in 2023, as we work towards a definitive agreement to sell our business to LMSG and scale up as part of a larger and better capitalized company."

Results of operations

Revenue for the three months ended March 31, 2023, decreased by nil per cent to $857,948 compared with $860,586 in the same period in 2022 due to a flat growth in contracted project deliveries and transactional orders compared with 2022. 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 years of 2021 and 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 three months ended March 31, 2023, decreased by 15 per cent to $314,991 compared with $368,620 in the same period in 2022. The company's cost of sales for the three months ended March 31, 2023, increased by 10 per cent to $542,957, compared with $491,966 in the same period in 2022 due to a change in product mix and an increase in delivery resources during the period in 2023.

Gross margin as a percentage of revenue for the three months ended March 31, 2023, was 37 per cent compared with 43 per cent in the same period in 2022. The decrease for the three months ended March 31, 2023, 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.

Cost of sales includes an API (application programming interface) 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 three months ended March 31, 2023, decreased by 42 per cent to $233,457 compared with $402,792 in the same period in 2022. The decrease for the three months ended March 31, 2023, 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 three months ended March 31, 2023, decreased by 51 per cent to $127,849, compared with $261,279 in the same period in 2022. The decrease for the three months ended March 31, 2023, 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 three months ended March 31, 2023, decreased by 35 per cent to $340,529 compared with $527,844 in the same period in 2022. The decrease in research and development expenses for the three months ended March 31, 2023, was related to reduction in staff and consulting resources while maintaining the quality enhancement to Platform3. Research and development expense is expected to be significantly lower in 2023 compared with 2022, since the development of the next generation of Platform3 is complete. The enhanced version of Platform3 delivers improved efficiency and reduced implementation cost along with new tools to further monetize first party consumer data customers.

Net and comprehensive loss for the three months ended March 31, 2023, decreased by 57 per cent to $521,785 compared with $1,225,745 in the same period in 2022. The decrease in net loss for the three months ended March 31, 2023, was mainly due to the reduction of sales and marketing expenses, general and administrative expenses, and research and development 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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