Mr. Omri Brill reports

ADCORE ANNOUNCES COMPANY-WIDE RESTRUCTURING, ENDS Q3 WITH HIGHER CASH AND TARGETS RETURN TO OPERATING PROFIT IN Q4 2026

Adcore Inc. has released a strategic plan, under which Adcore will operate as a lean, profitable company focused on cash generation and the return of capital to shareholders. The restructuring program that underpins this plan is already in execution and substantially complete. The company expects to return to operating profitability in the fourth quarter of 2026.

Strategic restructuring

The company has implemented a work force reduction of 20 employees, approximately 25 per cent, cut senior management compensation -- including a 35-per-cent reduction for the chief executive officer and chief operating officer and 20 per cent for other members of the executive team, applied retroactively from August, 2026, for the chief executive officer, chief operating officer and chief financial officer -- and renegotiated supplier arrangements to reduce third party costs by approximately 50 per cent. The company's independent directors have also reduced the cash component of their compensation by 20 per cent.

The program is expected to reduce monthly net operating expenses for the company from approximately $1.3-million to approximately $900,000 by the end of 2026.

On that basis, the company is targeting operating profit of approximately $500,000 to $700,000 for the fourth quarter of 2026, compared with an operating loss of $570,000 in the second quarter of 2026, and expects to remain profitable on an operating basis thereafter.

Cash position strengthened through the transition

Notwithstanding the costs of the restructuring, the company's cash position increased during the third quarter. Cash stood at approximately $4.3-million at Sept. 30, 2026, up from approximately $4-million at June 30, 2026.

A growing business underneath

The restructuring was carried out against a growing operating business. In the first half of 2026, Adcore reported revenue of $15.7-million, up 16 per cent year over year, with gross profit of $6.8-million and second quarter gross margin expanding to 51 per cent from 47 per cent a year earlier. The company's losses were a function of a cost structure built for a growth strategy, not of the business itself; the restructuring addresses the cost structure directly while leaving the revenue base intact.

Third quarter 2026 results, expected to be released in November, 2026, will reflect only a partial-quarter benefit from the program. The fourth quarter of 2026 is expected to be the first full quarter on the new cost base, with the full effect of the program visible from the first quarter of 2027.

Capital allocation

Adcore will prioritize the profitability and cash generation of its operating business, finance the growth of its AI (artificial intelligence) products through external capital rather than the company's own balance sheet, and hopes to return surplus capital to shareholders once working capital has been rebuilt. Management intends to present a capital allocation framework and a dividend policy once sustained profitability is evident in reported results. Adcore was a profitable, dividend-paying business before its 2019 listing; the company's stated intention is to return to that footing.

AI product portfolio

Adcore continues to develop its AI product lines -- Proposaly, its agentic quote-to-cash platform; AI Studio, its generative creative engine with live distribution partnerships; and Total Eclipse, its agentic media-buying platform -- and has initiated a review of strategic alternatives for the portfolio, including external financing at the product level, partnerships and divestiture. The company's objective is to unlock value for shareholders from assets that the company believes are not currently reflected in its market capitalization, while removing growth investment from Adcore's reported operating results. No transactions have been agreed to in furtherance of this objective; the company will update the market if and when any transaction is concluded.

Management commentary

"For seven years as a public company, we invested in building Adcore into a global, multiproduct company -- new offices, new products, a bigger team. That was the right strategy for that stage, and it gave us the platform, the client base and the AI products we have today. Underneath it, all along, was a profitable and growing operating business carrying a cost structure built for a much larger operation," said Omri Brill, chief executive officer of Adcore. "In September, we made the decision to stop funding AI development from the operating business and to refocus on our core operation, which has always been profitable. We reduced head count by approximately 25 per cent, reduced management compensation by 20 per cent to 35 per cent and halved our supplier spend -- and we did it while revenue continued to grow and cash increased. We are also our own best case study: with AI handling work that previously required head count, we run this business today with fewer people and lower costs than a year ago while serving our clients at least as well. Q4 will be the first quarter that reflects what this company earns at the right cost base. From there, the plan is straightforward: return capital to shareholders as results allow and bring in external investment for our AI products -- unlocking value the market currently attributes little to."

"The board fully supports management's restructuring plan. We are also committed to pursuing external funding for Adcore's AI initiatives, with the goal of beginning to return capital to shareholders over time," added Ronnie Jaegermann, chair of the audit committee and independent director. "Management has taken the difficult but necessary steps, and the directors have reduced their own compensation alongside the executive team. Our focus now is on ensuring the restructuring delivers lasting results and that Adcore returns to sustainable profitability."

About Adcore Inc.

Adcore is a leading AI-powered marketing technology company. By combining deep industry expertise with its proprietary AI technology, Adcore offers a unique digital marketing solution that empowers entrepreneurs and advertisers to manage and automate their e-commerce advertising and maximize return on investment. Adcore is a certified Google Premier partner, Microsoft Elite Tier partner, Meta partner, Criteo partner and TikTok channel sales partner.

Established in 2006, the company employs over 50 people across its Tel Aviv headquarters and offices in Toronto, Melbourne, Hong Kong and Shanghai.

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