Perk Labs loses $843,000 in six months
2023-07-31 14:56 ET - News Release
Mr. Ryan Hardy reports
PERK LABS REPORTS SECOND QUARTER 2023 RESULTS
Perk Labs Inc. has released its financial results for the second quarter ended May 31, 2023.
Overview
For the second quarter of 2023, the company completed its purchase of Getit Technologies Inc. As a result of this transaction, Ryan Hardy became the chief executive officer of Perk Labs, with Jonathan Hoyles transitioning to the role of chief legal officer. As a result, the company expanded its presence into large enterprise businesses and has dramatically increased its product portfolio and its revenues.
"Over the period of Q2, my primary focus has been to streamline the company's operations and develop a clear and concise strategy for growth. We continue to make significant progress in these areas, quarter over quarter," said Ryan Hardy, Perk chief executive officer. "Our strategy and execution of signing new enterprise clients and leveraging the synergies of both Perk and Getit continue to show solid traction and growth for the company in a large enterprise market for custom digital payments and loyalty offerings."
2023 Q2 financial highlights:
- Revenue of $42,041 for the six months ended May 31, 2023, compared with $15,003 for the comparative period in 2022.
- General and administrative expenses decreased from $645,000 for YTD Q2 2022 to $545,000 for YTD Q2 2023 as the company continued to minimize its administrative expenses.
- Research and development expenses also decreased from $406,000 YTD Q2 2022 to $250,000 YTD Q2 2023 as the company became more efficient at developing its products.
- Sales and marketing expenses remained stable at $218,000 for YTD Q2 2023 compared with $225,000 for the comparative period in 2022.
- Net loss was significantly reduced to $843,000 for the YTD Q2 2023, compared with a loss of $1,928,000 in the comparative period of 2022.
2023 Q2 operational highlights
- Completion of merger with Getit: On March 2, 2023, the company announced it had completed its merger with Getit. The acquisition was completed through a share exchange, with the company issuing an equivalent value of $4,655,000 in common shares of the company in exchange for all of the issued and outstanding shares of Getit. As part of the merger, Steve Cadigan and James Topham stepped down from the board of directors of the company. Ben Lacroix and Ryan Hardy, the co-founders of Getit, were appointed to the board of directors. In connection with the merger, the four largest shareholders of Getit agreed not to sell, assign or otherwise transfer the common shares of the company received, with the lockup period expiring on Feb. 28, 2024.
- Private placement: On April 25, 2023, the company announced that it had closed a private placement of 11,609,909 units, for proceeds of about $190,000 and settled a debt of about $85,900 with a creditor by issuing 5,238,414 units. Each unit included one common share and one common share purchase warrant. The net proceeds of the private placement are to be used for sales, marketing and working capital. The company also announced that Gary Zhang was transitioning from his role as chief technology officer to an advisory role.
- Change of auditor: The company appointed Welch LLP as the independent auditor of the company, effective as of May 3, 2023. Welch LLP replaced Saturna Group Chartered Professional Accountants LLP. There were no reportable events between the company and the former auditor.
Highlights subsequent To May 31, 2023
- Ottawa Dragon Boat Festival: In June, the company announced that its subsidiary, Getit Technologies Inc., was selected as the official ordering and payments partner for the Tim Hortons Ottawa Dragon Boat Festival and BeaverTails Ottawa Ice Dragon Boat Festival in a three-year, multifestival agreement.
- Clocktower Group of Brewpubs: The company was also selected as an ordering and payment technology provider by the Clocktower Group of Brewpubs, encompassing five locations across Ottawa, including Ottawa's original craft brewery.
- Fiazza Fresh Fired: Fiazza selected Getit Technologies Inc. as its technology partner and is implementing Getit's innovative Web-based QR code ordering solution at four of its locations in Ottawa.
- Annual general meeting: The company held its annual general meeting on July 5, 2023. All of the ordinary resolutions were passed, and five of the six incumbent directors were re-elected to serve until the close of the next annual meeting of shareholders. In accordance with the company's majority voting policy, Patrick Power submitted his resignation. The full voting results on all matters voted on at the meeting were filed on SEDAR.
- Private placement of units: In July, the company announced a proposed non-brokered private placement of up to 6.25 million units at a price of 1.6 cents per unit for gross proceeds of up to $100,000. Each unit will consist of one common share of the company and one common share purchase warrant. Each warrant will entitle the holder to purchase one additional common share at a price of five cents per common share for a period of 24 months from the closing date.
- Private placement of convertible debentures: Perk also announced a proposed non-brokered private placement of convertible debentures for gross proceeds of up to $250,000. The convertible debentures will be offered on varying terms, including interest rates ranging from 5 per cent to 15 per cent and differing acceleration terms and maturity dates specific to the terms of each convertible debenture agreement. The convertible debentures will be convertible into common shares of Perk Labs at a conversion price of five cents per share, subject to the terms and conditions set forth in the specific convertible debenture agreement. The private placement of the units and the convertible debentures is expected to close on or before Aug. 24, 2023. All securities issued pursuant to the private placement will be subject to a statutory hold period of four months and one day following the closing. The company intends to use the net proceeds from the private placements for general working capital purposes, accounts payable and employee salaries.
- Resignation of chief legal officer: The company also announced the resignation of Jonathan Hoyles, chief legal officer and director, effective July 13, 2023. Mr. Hoyles is pursuing another opportunity, and his departure from Perk Labs is amicable.
Outlook
In the upcoming quarter, the company expects to sign and launch a number of enterprise clients and roll out improvements and integrations between the Getit and Perk platforms. The company believes that these developments, in conjunction with increased sales and marketing resources, will provide the required visibility to the company's operations that will enable growth.
The company's strategic priorities for 2023 include:
- A successful merger of the operations of Perk Hero Software Inc. and Getit Technologies Inc.;
- Signing enterprise customers to use the company's technologies and services;
- Continued improvement of the company's products and offerings;
- Grow the number of end-user customers and businesses using its technologies and services;
- Grow the company's licensing and transactional revenue;
- Invest in sales, marketing and communication strategies to drive growth.
Additionally, the company is open to opportunities to expand its operations through mergers and acquisitions.
The company's complete financial results are available in its consolidated financial statements and management's discussion and analysis for the quarter ended May 31, 2023, each filed with Canadian securities regulators on SEDAR.
About Perk Labs Inc.
Perk Labs, the owner of Getit Technologies and Perk Hero Software, specializes in apps, payments and loyalty rewards. The company's technologies connect businesses and consumers through mobile apps and Web-based payment services that streamline and optimize the consumer experience and merchant digitalization.
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