Mr. Richard Adair reports

PLURIBUS TECHNOLOGIES CORP. ANNOUNCES Q3 2023 FINANCIAL RESULTS

Pluribus Technologies Corp. has released its financial results for the third quarter ended Sept. 30, 2023. The company's consolidated financial statements and accompanying notes for the quarters ended Sept. 30, 2023, and Sept. 30, 2022, are available under Pluribus's profile on SEDAR+. All dollar amounts are in thousands of Canadian dollars unless otherwise noted. Certain metrics, including adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), are non-IFRS (international financial reporting standards) measures.

"We continue to experience a challenging macroeconomic environment, impacting customer spending at e-learning and increased churn within e-commerce," said Richard Adair, chief executive officer of Pluribus Technologies. "In light of the lack of growth in 2023, we have announced a second round of restructuring to right-size our cost base to current revenue levels. We are also exploring strategic alternatives to maximize shareholder value through a strategic review process, announced today. The management team will continue to execute on our business strategy to drive revenue growth during the strategic review."

Selected financial and business highlights for the fourth quarter:

• Revenue for the three months to Sept. 30, 2023, was $9,166, a decline of 15 per cent when compared with the prior-year quarter. The decline in revenue was primarily driven by lower customer spending at the Learning Network. Adjusted EBITDA (1) for the quarter decreased by $1,009 or 49 per cent.
• Revenue for the nine-month period ended Sept. 30, 2023, declined by 2 per cent to $27,542 in 2023. For the nine months ended Sept. 30, 2023, adjusted EBITDA was $2,847, a decrease of 30 per cent versus the comparable period. The decrease was the result of lower adjusted EBITDA from the e-learning business unit.
• A second round of restructuring, which will reduce annualized costs by $1,600 to $1,800, was initiated in November, 2023. This is in addition to the announcement in August, 2023, of an initial restructuring with annualized savings of $1,200 to $1,400. These cost savings will be achieved through the reduction of the employee base across a number of businesses. These annualized costs, totalling $2,800 to $3,200, are expected to be fully implemented in 2023 and fully reflected in operating results in Q1 2024.
• Net loss for the quarter ended Sept. 30, 2023, was $2,264, an increase of 19 per cent versus the comparable period. The increase in net loss is attributable to the decline in adjusted EBITDA and income tax recovery, primarily offset by a decrease in share-based compensation, foreign exchange and the gain on deferred consideration recognized the quarter.
• For the nine months ended Sept. 30, 2023, net loss was $6,139, a decrease of 35 per cent versus the comparable period. The loss to September, 2023, declined due to a reduction in acquisition costs, share-based compensation, foreign exchange and nil transaction costs, offset by an increase in the income taxes and a decline in adjusted EBITDA.
• Cash on hand at Sept. 30, 2023, was $1.7-million, compared with $5.3-million on Dec. 31, 2022. During Q4, the company determined that it was not in compliance with its external debt covenants under the fiscal year (FY) 2022 credit facility relating to its financial position as at Sept. 30, 2023. The company has advised National Bank of such default and National Bank has issued a reservation of rights letter in relation thereto. The company is currently in discussions with National Bank regarding potential steps to rectify this default, including further amendments to the terms of the covenants under the facility.

(1) Adjusted EBITDA is a non-IFRS measure as described in the non-IFRS measures section of this news release. These measures are not recognized measures under IFRS, do not have a standardized meaning under IFRS and are therefore unlikely to be comparable with similar measures presented by other companies.

Outlook

While management believes all the business units have significant opportunity, the company continues to be negatively affected by lower customer spending in the e-learning and e-commerce verticals in a difficult macroeconomic recessionary environment.

Management continues to closely monitor cash to meet the company's operating obligations and debt service requirements. To address its financing requirements, the company will explore the viability of raising capital through debt financing/refinancing, equity rights offerings, and the sale of core and/or non-core assets. The company will also focus on increasing cash flow from operations by restructuring its cost base to align to current revenues and prioritizing projects with a greater expected rate of return.

To facilitate finding a solution to address these challenges, in November, 2023, the company announced a review and evaluation of strategic alternatives that may be available to the company to further enhance the company's growth, development and prosperity in the short term and long term with the goal of maximizing shareholder value. The company has established a special committee of the board of directors for such purpose and has engaged Canaccord Genuity as its strategic adviser. There can be no assurances that the strategic review process will result in a transaction and whether such transaction will have its intended outcome.

Conference call details

Pluribus's management team will host a conference call to discuss its fiscal 2023 second quarter financial results on Thursday, Nov. 30, 2023.

Date:  Thursday, Nov. 30, 2023

Time:  8:30 a.m. EST

To join the conference call without operator assistance, you may register and enter your phone number on-line to receive an instant automated callback.

Dial-in number:  416-764-8650 or 888-664-6383

Conference ID No.:  84045051

Webcast:  available on the events and presentations page of the company's investor website

Replay:  416-764-8677 or 888-390-0541 (playback code 045051 followed by the pound key) (available until 12 a.m. EST on Dec. 7, 2023)

About Pluribus Technologies Corp.

Pluribus is a technology company that is a value-based acquirer and operator of small, profitable business-to-business technology companies in a range of verticals and industries. Pluribus provides its acquisitions access to experienced sales and marketing resources, strategic partnership opportunities, a diverse portfolio of customers in different geographical markets, and enabling technologies to create new revenue streams and provide the opportunity for these companies to grow in their respective markets. When market conditions are conducive to raising capital at reasonable costs, Pluribus focuses on rapidly acquiring and integrating new acquisitions to accelerate growth. When the environment does not support this, Pluribus focuses on implementing strategies to maximize organic growth and increase cash flow from operations in its existing portfolio companies.

Non-IFRS measures

The company uses non-IFRS measures to assess its operating performance. Securities regulations require that companies caution readers that earnings and other measures adjusted to a basis other than IFRS do not have standardized meanings and are unlikely to be comparable with similar measures used by other companies. Accordingly, they should not be considered in isolation. The company uses adjusted EBITDA as a measure of operating performance. Management uses adjusted EBITDA to evaluate operating performance as it excludes amortization of software and intangibles (which is an accounting allocation of the cost of software and intangible assets arising on acquisition), any impact of finance and tax related activities, asset depreciation, foreign exchange gains and losses, and other income, restructuring and transition costs primarily related to acquisitions and other one-time non-recurring transactions.

Reconciliation of non-IFRS measures

The company uses the non-IFRS measure adjusted EBITDA to evaluate performance. An attached table presents the reconciliation from net income (loss) to adjusted EBITDA for the three and nine months ended Sept. 30, 2023.

We seek Safe Harbor.