Mr. Jonathan Hoyles reports
PERK LABS (FORMERLY GLANCE TECHNOLOGIES) REPORTS FINANCIAL YEAR 2019 RESULTS
Perk Labs Inc. (formerly Glance Technologies Inc.) has released financial results for the fourth quarter and fiscal year ended Nov. 30, 2019.
In the fourth quarter, the company re-envisioned its business model and developed a strategy that it believes aligns its brand and product with what the market wants. This new-found clarity and focus provide the company with a road map that will take the business to the next phase of growth, transform the company and improve its long-term financial position. The company also invested in upgrading its technology and streamlined its development process to accelerate the introduction of new product features.
Perk Labs chief executive officer Jonathan Hoyles said: "During strategy reviews and market research conducted in the fourth quarter, we identified and prioritized operating improvements and business opportunities that will drive financial results. We also went through a period of restructuring and rightsizing in our fourth quarter that has placed our company on a much more sustainable path with a reduced monthly burn rate.
"The steps we took in 2019 to streamline our costs and rebuild our product have placed our company in a better position to deliver value to our customers during the crisis caused by the COVID-19 pandemic," said Mr. Hoyles. "More than ever before, we are seeing the need and demand for mobile ordering and safe contactless digital payments.
"We have more work to do, and we will continue to take actions to strengthen and refocus our business. Two thousand nineteen was a reset year for the company. This is just one quarter in what will be a 12- to 18-month transformation. I remain confident that we will unlock value for our stakeholders as our company's transformation accelerates."
Fourth quarter 2019 compared with fourth quarter 2018 -- financial highlights (all figures are rounded to the nearest thousand):
- Working capital of $3,347,000 at Nov. 30, 2019, compared with $7,059,000 at Nov. 30, 2018, and no long-term debt (nil at Nov. 30, 2018);
- Net loss of $2,533,000 in fourth quarter 2019 compared with a net loss of $527,000 in fourth quarter 2018;
- Net loss in fourth quarter 2019 represented two cents per share while net loss in fourth quarter 2018 represented one cent per share.
Fiscal 2019 financial highlights:
- Revenue of $32,000 in fiscal 2019 decreased 98 per cent from $2,044,000 in fiscal 2018.
- Operating expenses of $7,442,000 decreased 49 per cent from $14,547,000 in 2018.
- Loss from operations was $7.41-million or five cents per share, decreasing 41 per cent, compared with $12,503,000 or nine cents per share in fiscal 2018.
- The overall net loss was $8,079,000 or six cents per share, compared with $13,016,000 or 10 cents per share in fiscal 2018.
Fiscal 2019 highlights:
- Reduced expenditures by rightsizing the team, moving the head office to a smaller space, significantly reducing rent, and decreasing advertising and promotions spend;
- Eliminated non-core products and features, such as Glance PayMe, to focus on offerings that deliver higher returns;
- Completed market research that forms the basis to rebuild and transform its mobile payments platform from the ground up into a more comprehensive, all-in-one preorder, mobile payment and customer loyalty platform that appeals to the primary users of mobile payments: millennials and Generation Z;
- Determined a new revenue model that includes higher transaction fees and white-label offerings for enterprise-level retail chains;
- Hired new talent, including Gary Zhang as chief technology officer, and appointed Neil Crist to the advisory board to assist with sales expansion in the United States;
- Research and development to test and build new platform concepts and technology;
- Nominated fintech company of the year at the fifth annual Canadian FinTech & AI Awards.
Subsequent to the financial year-end, the following events occurred:
- Entered into an agreement with Alipay, the world's largest mobile payment platform, with 900 million Alipay users as of June, 2019, to enable Alipay users to make payments on the company's payment platform, and the company will be harmonizing its QR codes to enable Alipay payment at Perk Hero merchants; this development will add value to Perk Hero merchants, which will be better positioned to benefit from a massive, new base of Alipay users, who represent increased foot traffic, spending power and revenue;
- Started beta testing of the new Perk Hero mobile application; the company's new platform features new capabilities: preorder and pickup, contactless payment using Apple Pay and Google Pay, a gamified loyalty program and merchant analytics; Perk Hero will replace the company's original mobile payment solution, which was limited in its capabilities, and did not appeal to the main demographic using mobile payments;
- Hired Christina Baker as the new head of sales; prior to joining Perk Labs, Ms. Baker served as the regional vice-president, national accounts, Western Canada, at Moneris, Canada's largest financial technology company that specializes in payment processing; while at Moneris, Ms. Baker led the western national sales team to consistently achieve and exceed its annual quotas and the management of a portfolio representing over $23-billion in card processing and 200-plus national accounts in the region;
- Rebranded the company with a name, look and feel that resonate more with a younger demographic;
- Completed a non-brokered private placement for proceeds of $176,495;
- Adopted an RSU (restricted stock unit) plan to incentivize employees and foster an ownership mentality while conserving cash;
- The company named Jonathan Hoyles as permanent chief executive officer;
- Since Dec. 31, 2019, the outbreak of the novel strain of coronavirus, specifically identified as COVID-19, has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally, resulting in an economic slowdown. Global equity markets have experienced significant volatility and weakness. Governments and central banks have reacted with significant monetary and fiscal interventions, designed to stabilize economic conditions. The duration and impact of the COVID-19 outbreak are unknown at this time, as is the efficacy of the government and central bank interventions. It is not possible to reliably estimate the length and severity of these developments, the impact on the financial results, and condition of the company and its operations in future periods.
The company's strategic priorities for 2020 include:
- Official launch of Perk Hero, the all-in-one mobile ordering, payment and customer loyalty platform;
- Continued development of the Perk Hero product through a series of build-measure-learn iterations and moving beyond the restaurant vertical;
- Building an exceptional and world-class brand with a focus on high-quality content;
- Increasing the number of merchants and users using the Perk Hero platform;
- Using data, technology and inbound selling to ramp up sales and revenue generation;
- Sign enterprise accounts for the company's white-label solution.
The company's complete financial results are available in the company's annual audited consolidated financial statements and management's discussion and analysis for the year ended Nov. 30, 2019, each of which has been filed with Canadian securities regulators at SEDAR.
International financial reporting standards
The operational and financial information in this release is based on the consolidated figures in accordance with international financial reporting standards (IFRS).
About Perk Labs Inc.
Perk Labs is the owner of Perk Hero, a digital loyalty management platform that enables merchants to provide their customers with digital rewards and a more engaging and convenient customer experience.
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