Mr. Geoffrey Rotstein reports

EQ INC. REPORTS FIRST QUARTER FINANCIAL RESULTS

EQ Inc. has released its financial results for the first quarter ended March 31, 2023.

During the quarter, EQ reported revenue of $1.7-million, an increase in gross margin and a significant improvement in its adjusted EBITDA (earnings before interest, taxes, depreciation and amortization). EQ's plan for 2023 is to focus more on solutions that utilize the full extent of its AI-driven (artificial intelligence) intelligence products and its proprietary data assets and partnerships and less on its legacy, lower-margin, less strategic media business. Demand for first party and zero party data increased during the quarter and continues to increase as companies across the country understand the urgency to invest in AI solutions and understand that all these solutions require deep data at scale. EQ has been building and investing in its proprietary data for over a decade through the aggregation of geospatial data, the continuing enhancements to its consumer-facing app Paymi, and by solidifying deep partnerships with the best data companies in the country for EQ's key verticals of retail, financial services and automotive.

The gross margin for the quarter of 38 per cent was an improvement both sequentially and over the same period a year ago and the adjusted EBITDA loss of $980,000 was approximately a 40-per-cent improvement over the same period a year ago. In addition, with the deployment of EQ's new suite of data products, its pipeline is stronger than it has been in years and the company is forecasting second quarter revenue to increase by more than 60 per cent compared with what was generated in the first quarter.

The company continues to focus on higher-margin recurring revenue and profitability. With the changes made in late 2022 and continuing into the first quarter of 2023, EQ expects to realize cost savings of approximately $3-million annually while continuing to invest adequately in its core recurring-revenue products. The result of the company's continuing shift of resources into new recurring-revenue products is yielding higher margins and contributing to EQ's goal of achieving cash flow profitability in the near term. With last year's investments into the development of Clear Lake (CL), a proprietary consumer insight platform, and Paymi, a proprietary consumer-facing cashback app that generates data on a continuous basis, substantially completed, the current year's focus is sales and marketing execution and monetization. Based on current forecasts, the company expects to be profitable in the second half of 2023 and will continue to monitor its business outlook and make additional changes if required.

"Our focus for 2023 is profitability and growth of our core recurring-revenue products. With our significant investments over the past 24 months on proprietary data and AI-led solutions, we believe we are very well positioned to drive this next stage of growth," said Geoffrey Rotstein, president and chief executive officer of EQ Works. "Our product mix of recurring licence revenue and first party data analytics has been very well received in the market and the unique nature of our value proposition is gaining traction. The changes to our team and our operations have streamlined our focus, made us a stronger and more nimble organization, and positioned us well for profitable growth. The market challenges have provided us with a number of exciting opportunities that we will take full advantage of in the coming quarters."

About EQ Inc.

EQ Works enables businesses to understand, predict and influence customer behaviour. Using unique data sets, advanced analytics, machine learning and artificial intelligence, EQ Works creates actionable intelligence for businesses to attract, retain and grow the customers that matter most. The company's proprietary SaaS (software as a service) platform mines insights from movement and geospatial data, enabling businesses to close the loop between digital and real-world consumer actions.

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