Mr. Hylton Karon reports

IFABRIC CORP REPORTS A RECORD 91% INCREASE IN SECOND QUARTER REVENUES

iFabric Corp. has released its record financial results for the second quarter and six months ended March 31, 2023, an outcome directly related to the company's commitment to accelerating revenue growth through product design innovation, technology integration and new customer acquisitions.

"We are proud to announce record revenue for Q2 2023. Both divisions have delivered programs built on the growth strategy of innovative design, technology and licensing," stated Hylton Karon, president and chief executive officer of iFabric. "The launch of our Roots-branded swimwear program (in the intelligent fabric division) was a tremendous success for the company. The 2023/2024 program has already been renewed at 150 per cent of the inaugural delivery. This program brought with it the addition of a further major national retail chain, which we see as potentially becoming one of our largest Canadian customers, in this and many other categories, as we continue to build out our business with them," added Mr. Karon.

"We also continue to make excellent progress in executing our strategic growth plan and diversifying our business. We are continuing to grow across Canada and the U.S. at a great pace. Underpinning our progress and strong results are our best-in-class technologies, our strong internal design team, and our commitment to meeting the evolving performance and product needs of our customers and partners. In addition to the expanding growth in our core businesses, we have made important progress on the regulatory front with a new, breakthrough registration for PROTX2, allowing for public health claims on non-apparel products. While an important milestone for the company and a potential driver of new business opportunities, we intend to build upon this initial registration to achieve similar public health claims for use of PROTX2 in apparel. Given our growing momentum in sales, new products, new customers and new registrations, management is excited and confident in the upward trajectory of its businesses for the remainder of the year and beyond," concluded Mr. Karon.

Q2 2023 highlights:

• Revenues of $6,642,563 in Q2 2023 compared with $3,477,287 in Q2 2022, representing an increase of $3,165,276, or 91 per cent. This represents a record second quarter for iFabric.
• Revenues in the intelligent fabrics division increased by 101 per cent, or $2,223,346, to $4,413,977 from $2,190,631 in 2022, attributable to new swimwear programs for a major retail customer, which commenced shipping in the current quarter.
• Revenues in the intimate apparel division increased by 76 per cent, or $963,183, to $2,223,336 from $1,260,153 in Q2 2022. The increase in intimate apparel revenue in 2023 versus 2022 was primarily attributable to increased sales in Canada.
• Gross profit as a percentage of revenue increased to 40 per cent in Q2 2023, from 36 per cent in Q2 2022, as a result of lower shipping costs from Asia and the repricing of a number of products.
• Selling, general and administrative costs increased by $578,655, or 40 per cent, to $2,027,891 in Q2 2023 compared with $1,449,236 in Q2 2022. Increased personnel costs, commissions, royalties, rent, advertising, travel and freight costs incurred to support revenue growth, current and future, were the main drivers of this increase.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $655,693 compared with negative adjusted EBITDA of $403,051 in Q2 2022, an increase of $1,058,744.
• Net earnings after tax attributable to shareholders was $469,419 (1.5 cents per share basic and diluted) compared with a net after tax loss of $671,680 (2.3 cents per share basic and diluted) in Q2 2022, representing an increase of $1,141,099.
• Working capital (excluding a demand loan classified as current, but not requiring repayment in 2023) amounted to $20,423,643 at the end of Q2 2023 compared with $19,735,013 at the end of the previous quarter, representing an increase of $688,630, as a result of the earnings for the quarter.
• Cash decreased to $2,019,844 at the end of Q2 2023 compared $2,239,491 at the end of the previous quarter.
• The company's bank operating line was unutilized at both March 31, 2023, and at the end of the previous quarter, leaving the full line of $6.75-million available to finance future business.
• Shareholders equity attributable to common shareholders was $23,431,321 as at March 31, 2023, compared with $22,800,145 at the end of the previous quarter, an increase of $631,176.

Six-month highlights:

• Total revenues of $11,558,928 for the six months ended March 31, 2023, compared with of $8,471,158 in 2022, representing an increase of $3,087,770, or 36 per cent, attributable new swimwear programs and increased intimate apparel sales in Canada.
• Gross profit as a percentage of revenue increased to 40 per cent for the six months ended March 31, 2023, from 36 per cent in the same period of 2022, as a result of lower shipping costs from Asia and the repricing of a number of products.
• The net after tax earnings attributable to iFabric's shareholders during the six months ended March 31, 2023, was $603,985 (two cents per share basic and diluted), compared with a net loss attributable to shareholders of $503,720 for the six months ended March 31, 2022 (1.7 cents per share, basic and diluted), representing an increase of $1,107,705. Adjusted EBITDA for the six months ended March 31, 2023, amounted to $845,470, compared with negative adjusted EBITDA of $8,525 for the comparable period in 2022.

Complete financial statements are available on SEDAR.

About iFabric Corp.

Headquartered in Markham, Ont., iFabric is listed on the Toronto Stock Exchange and currently has 30.3 million shares issued and outstanding. Its two strategic divisions offer a variety of products and services through wholly owned subsidiaries, namely Intelligent Fabric Technologies (North America) Inc. (IFTNA) and Coconut Grove Pads Inc.

IFTNA is focused on development and sale of high-performance sports apparel, medical protective apparel, consumer protective apparel and proprietary treatments that provide intelligent properties to fabrics, foams, plastics and numerous other surfaces, thereby improving the safety and well-being of the user. Such intelligent properties include anti-viral and anti-bacterial characteristics, water-repellence, and UV (ultraviolet) protection, among others.

Coconut Grove, operating as Coconut Grove Intimates, is a designer, manufacturer, distributor, licensor and licensee of ladies' intimate apparel products and accessories.

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