Mr. Andrew Duncan reports

BOARDWALKTECH REPORTS FOURTH QUARTER AND FISCAL 2020 FINANCIAL RESULTS

Boardwalktech Software Corp. has released its financial results for the three- and 12-month period ended March 31, 2020. All figures are reported in U.S. dollars, unless otherwise indicated. Boardwalktech's financial statements are prepared in accordance with international financial reporting standards (IFRS).

Financial highlights:

• Revenue for fourth quarter fiscal 2020 was $1.1-million versus $1.2-million of revenue in third quarter fiscal 2020 and $1.3-million in Q4 fiscal 2019. Total revenue for fiscal 2020 was $4.6-million versus $4.9-million with the decrease directly attributable to a decline in legacy hosting contracts and professional services, even as year-over-year recurring licence revenue grew.
• Revenue from subscription licences grew 24 per cent in fiscal 2020 from fiscal 2019. Annualized recurring revenue for Q4 fiscal 2020 of $3.8-million increased 5 per cent from $3.6-million in Q3 fiscal 2020 and up 6 per cent from $3.6-million as of Q4 fiscal 2019, despite $200,000 less of legacy business as the company closed four new customer deals during the quarter. Sales pipeline is now close to pre-COVID levels of $5.5-million to $6.4-million.
• Gross margin in Q4 fiscal 2020 was 85.3 per cent, a 0.9-per-cent decrease from the Q3 fiscal 2020 level of 86.2 per cent, reflecting the impact of the higher allocation to cost of sales from recent customer support investments.
• Cash from operating activities for fiscal 2020 totalled ($1.2-million) compared with ($4.4-million) in fiscal 2019, an improvement of 70 per cent.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of ($500,000) in Q4 fiscal 2020, a 20-per-cent improvement from a loss of ($600,000) in Q3 fiscal 2020, and a 5-per-cent improvement versus Q4 fiscal 2019. Adjusted EBITDA for fiscal 2020 was a loss of ($2.6-million) compared with ($3.2-million) for the same period in fiscal 2019, a 20-per-cent improvement.
• Non-IFRS net loss for Q4 fiscal 2020 totalled ($700,000), or (four cents) per basic and diluted share, versus an ($800,000) loss in Q3 fiscal 2020, or (six cents) per basic and diluted share. Non-IFRS net loss for fiscal 2020 totalled ($3.4-million), or (26 cents) per basic and diluted share, an improvement of 16 per cent compared with ($4.0-million), and (41 cents) per basic and diluted share, in fiscal 2019.
• Reported loss for fiscal 2020 was ($5.8-million), or loss of (45 cents) per basic and diluted share, representing a 72-per-cent improvement versus a ($20.9-million) loss, or ($2.11) per basic and diluted share in fiscal 2019.

Operations highlights:

• On Jan. 7, 2020, the company announced signing of a worldwide master licence and service agreement with a new Fortune 100 consumer product company.
• On Jan. 7, 2020, the company announced a suite of product enhancements, called the BW.Supplychain ecosystem, targeting customers in the retail and consumer packaged goods segments, including a patent-pending Network of Words (NOW) technology for extracting and organizing structured and unstructured data.
• On Feb. 28, 2020, the company completed a previously announced $500,000 debt-to-equity conversion, with its existing investor, SQN Venture Income Fund LP, at a price of 36 U.S. cents per share.
• On March 9, 2020, the company closed a non-brokered private placement of equity units for 3,496,088 units at 45 Canadian cents per unit, for gross proceeds of $1,150,512 ($1,573,240 (Canadian)), including participation by SQN Venture Partners LLP, the company's primary debtholder.
• On March 18, 2020, the company announced closing of a new licence and service contract with Osydo Co. Ltd. (a subcontractor for the world's top-three mobile phone manufacturer).
• On March 24, 2020, the company announced the expansion of a trade promotion, planning, forecasting and pricing program with an existing Fortune 200 food customer.

Subsequent to the quarter:

• On April 1, 2020, the company announced it had signed a new licensing deal with Sekisui Specialty Chemicals.
• On April 9, 2020, the company announced a limited-time free trial promotion of its Diamond Lane product (Excel-based multiuser collaboration tool) to help remote work by business impacted from COVID-19.
• On April 22, 2020, the company announced it had secured $700,100 of financing under the payroll protection program of the CARES Act.
• On May 7, 2020, the company announced the expansion of its recurring licence with HCL Technologies.
• On June 12, 2020, the company closed a non-brokered private placement of equity units for 1,768,389 units at 50 Canadian cents per unit, for gross proceeds of $636,620 ($884,195 (Canadian)).
• On July 3, 2020, the company completed a new amendment with its existing investor, SQN Venture Income Fund LP, to extend the maturity of its loan to August,2020, extend interest-only payment until August, 2020, and a best effort option to prepay another $250,000 of principal (with fees waived).

"We are very pleased with the progress we made towards profitability during the course of fiscal year 2020, even given the impact of COVID-19 exiting the year. The Boardwalk team substantially increased our sales pipeline, increased our recurring revenue base, recognized $1-million in [operating expenditure] savings, reduced our outstanding debt balance by $1.5-million and secured over $3-million in financing to support future growth," said Andrew T. Duncan, chief executive officer of Boardwalktech. "While total revenue was marginally down year over year, reflecting certain older legacy hosting contracts that were converted, and a planned reduction in professional services revenue as more customers are now certified to do this work themselves, revenue from subscription licences (both new and existing customers) grew 24 per cent compared to last year as more and more large-enterprise clients understand the value in having full auditability and detailed insight into day-to-day operations and exchanges with their own vendors and partners."

Mr. Duncan continued: "Our pipeline going into fiscal year 2021 is estimated to be between $5.5-million and $6.4-million, which is a function of the industry tailwinds we have anticipated over the last few years and is also directly attributable to COVID-19 exposing deficiencies in corporate information management systems, which can be resolved and significantly improved using our products. With our pipeline strong and growth capital secured, we anticipate showing profitability within calendar year 2020, which would mark yet another significant milestone for Boardwalktech. Despite the overall economic impact from the COVID-19 pandemic, Boardwalktech remains not simply open for business, but continuing to add value, as we closed several new customer deals and expansions since the beginning of March that we anticipate having a material impact on revenue throughout fiscal year 2021. Furthermore, we believe our recently launched Network of Words platform can be a significant catalyst for upside growth as we have seen very good, early reception by potentially company-altering prospective clients that understand the enormous value in being able to extract, manage and analyze unstructured data."

About Boardwalktech Software Corp.

Boardwalktech has developed a patented digital ledger technology platform currently used by Fortune 500 companies running mission-critical applications worldwide. Boardwalktech's digital ledger technology and its unique method of managing vast amounts of structured and unstructured data is the only platform on the market today where multiple parties can effectively work on the same data simultaneously while preserving the fidelity and provenance of the data. Boardwalktech can deliver collaborative, purpose-built enterprise information management applications on any device or user interface with full integration with enterprise systems of record in a fraction of the time it takes other non-digital ledger technology-based platforms. Boardwalktech is headquartered in Cupertino, Calif., with offices in India and operations in North America.

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