Mr. Ted Hastings reports

IONIK ANNOUNCES THIRD QUARTER 2023 RESULTS

Popreach Corp. (doing business as Ionik) has released its financial results for the three and nine months ended Sept. 30, 2023. All figures are in U.S. dollars, unless otherwise indicated.

Financial highlights for the third quarter 2023:

• Revenue of $37.6-million, compared with $39.1-million for the three months ended June 30, 2023, and $25.5-million for the three months ended Sept. 30, 2022, with growth driven by the acquisition of Ubiquity in September, 2022, and SCS and OpenMoves in April, 2023.
• Gross profit of $15.1-million, compared with $16.2-million for the three months ended June 30, 2023, and $11.3-million for the three months ended Sept. 30, 2022.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $3.9-million, compared with $4-million for the three months ended June 30, 2023, and $3-million for the three months ended Sept. 30, 2022.
• Adjusted free cash flow of $2-million (51-per-cent adjusted free cash flow conversion rate), compared with $3.7-million (91-per-cent adjusted free cash flow conversion rate) for the three months ended June 30, 2023, and $2.5-million (83-per-cent adjusted free cash flow conversion rate) for the three months ended Sept. 30, 2022. The reduction in the third quarter of 2023 is primarily attributable to $1.4-million of 2022 cash taxes paid, which changed the conversion rate from 87 per cent to 51 per cent.
• Net loss of $2.4-million, versus $5-million net loss for the three months ended June 30, 2023, and $1.9-million net loss for the three months ended Sept. 30, 2022. The decrease in quarter-over-quarter net loss was due to lower finance and debt extinguishment costs related to the company's new credit facility which closed in May, 2023. The increase in year-over-year net loss was due to higher finance costs associated with these financing arrangements.
• Cash as at Sept. 30, 2023, was $8.9-million compared with $8.4-million at June 30, 2023, an increase of $500,000. In the three months ended Sept. 30, 2023, the company generated cash flow from operations of $5.9-million, which was well in excess of principal and interest payments of $4-million. At Sept. 30, 2023, the company had not drawn on its revolving facility of $10-million and had available to it $48.5-million of its $105-million term loan facility. Management believes that its current capital position is sufficient to execute its current business and operational strategies.
• Total undiscounted debt as at Sept. 30, 2023, was $64.9-million, including $54.4-million of senior lender debt, $9-million of convertible debt and $1.5-million in a vendor take-back loan, compared with $67-million in total debt as at June 30, 2023. The decrease results from principal payments made on senior lender debt in the current quarter.

"Q3 was an eventful quarter which positioned us to complete a meaningful acquisition postquarter-end with SHIFT44," said Ionik chief executive officer Ted Hastings. "We made $4-million in debt principal and interest payments while increasing our cash position through the quarter, which is a testament to our financially resilient business model. We rebranded the company, and added two new executives soon after the quarter which will accelerate our ability to achieve cost savings integrations. As the industry deals with perennial change, we're staying focused on our long-term vision of creating a data-driven marketing technology company that is profitably assembling a robust, proprietary, first party data warehouse which will be a key element of our platform and our success."

Significant developments in Q3 2023 and subsequent to quarter-end:

• On Sept. 14, 2023, the company announced a rebranding and leadership transition. Moving forward the company will operate under the new, unified brand name of Ionik. Mr. Hastings was appointed as chief executive officer, effective Oct. 1, 2023, and Ben Colabrese was appointed as board chair.
• On Oct. 2, 2023 , the company announced the appointment of Lois Norris as chief financial officer and Reena Bains as chief people officer.
• On Nov. 20, 2023, the company acquired substantially all of the assets of S44 LLC (SHIFT44), a first party data acquisition, lead generation and performance marketing platform, for an aggregate purchase price of approximately $40-million.

Financial statements and MD&A

Ionik's financial statements for the three months and nine months ended Sept. 30, 2023, and management's discussion and analysis for the same period, are posted on its corporate website and available on the company's profile on SEDAR+.

About Popreach Corp.

Ionik, a Tier 1 issuer on the TSX Venture Exchange, with shares also trading on the OTCQX Best Market, is a data-driven marketing technology company focused on assembling the most effective and complete suite of advertising, marketing and monetization solutions for brands, advertisers and publishers while building an extensive proprietary repository of opted-in first party data.

We seek Safe Harbor.