NEWS RELEASE RE-ISSUED ***THIS NEWS RELEASE IS BEING RE-ISSUED TO ENSURE IT COMPLIES WITH CSA STAFF NOTICE 52-306 (REVISED), NON-GAAP FINANCIAL MEASURES (SN 52-306)***
Montreal, Quebec--(Newsfile Corp. - June 22, 2021) - Peak Fintech Group Inc. (CSE: PKK) (OTCQX: PKKFF) ("Peak" or the "Company"), an innovative Fintech service provider to the Chinese commercial lending sector, announced its financial results and operating highlights for the three-month period ended March 31, 2021. All amounts expressed are in Canadian dollars.
Peak generated three and a half times more revenue in the first quarter of 2021 than it did in Q1 2020. Given that the first quarter has historically been the smallest revenue-generating quarter for the Company due to the annual economic slowdown during the Chinese New Year holiday, the balance of the year, and 2021 as a whole, promises to be an exceptional year for Peak not only in terms of revenue but profit as well.
Q1 Financial Highlights:
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Total revenue of $14,239,776
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Adjusted EBITDA* of $121,737
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Net loss of $389,702
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Total assets of $62,147,286
* Adjusted EBITDA is provided as supplementary earnings measure to assist readers in determining the Company's ability to generate cash-flows from operations and to cover finance charges. This is a non-GAAP measure that does not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.
Historical Comparative Revenue and adjusted EBITDA Summary
| | Q1 2021 | Q1 2020 | Q1 2019 | Q1 2018 |
| Revenue | $14,239,776 | $3,949,395 | $949,511 | $5,147 |
| Expenses1 | $14,118,039 | $3,777,350 | $971,233 | $692,873 |
| Adjusted EBITDA2 | $121,737 | $172,045 | ($21,722) | ($687,726) |
| Net loss | $389,702 | $805,695 | $568,779 | $1,055,768 |
1 Expenses do not include interest, taxes, depreciation (including impairment of intangible assets) loss on extinction of debt, gain on bargain purchase and amortization.
2 Adjusted EBITDA equals net income (loss) before finance costs, income taxes, depreciation, amortization and impairment of intangible assets, initial financing costs, expiration of deferred finance cost, loss on extinction of debt, loss on settlement of debt and (gain) loss on bargain purchase. Adjusted EBITDA is a non-GAAP measure that does not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.
Q1 Operating Highlights:
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Over 50% of transactions originating from recently launched social media influencer financing, retailer financing and distributor financing programs
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Partnership agreement with China's top ecommerce software provider ShopEx
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Partnership agreement with China UnionPay subsidiary Rongbang Technology Ltd. to implement payment processing and fund transfer features to Lending Hub ecosystem
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Re-emergence of Gold River ecommerce and logistics platform
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First revenue generated by AST subsidiary in over three years
About First Quarter Financial and Operating Results Summary
The trend toward profitability continued in the first quarter of 2021 with over 50% of the transactions conducted through Peak's Lending Hub ecosystem coming from a combination of social media influencers, wholesale distributors and retailers. As the Company moves to facilitate more of these types of transactions as opposed to those involving supply-chain transactions for which it incurs cost of service expenses, Peak expects to see a steady climb to profitability for the balance of 2021. Although the Company incurred a net loss for the quarter, the results achieved by its new targeted financing programs, the impact that the re-emergence of the Gold River platform is starting to have on reducing the cost of service of its supply-chain services, and the opportunity to dramatically increase the number of new clients on Lending Hub throughout the year through partnerships with the likes of ShopEx and China UnionPay, has Peak believing that Q2 2021 could be the Company's first profitable quarter.
In summary, the Company generated $14,239,776 in revenue for the quarter ended March 31, 2021 compared to $3,949,395 for the same period in 2020. Total expenses for the quarter amounted to $14,327,501, compared to $4,755,090 for the same period in 2020.
The net loss for the the three-month period ending March 31, 2021 was $389,702 compared to $805,695 for the same period of 2020.