INEO Announces 144% Revenue Increase in Fiscal Third Quarter 2021

• Revenue growth driven by retailers and advertisers as they start to put the uncertainty of COVID-19 behind them.
• Positive outlook for the rest of calendar 2021 based on INEO's strong cash position, numerous customer trials, large pipeline of additional opportunities and global partnership with Prosegur.

SURREY, BC, May 27, 2021 /CNW/ - INEO Tech Corp. (TSXV: INEO) (the "Company" or "INEO"), an innovative provider of location-based digital advertising, analytics and loss prevention solutions for retailers, today announced it has filed its Interim Consolidated Quarterly Financial Statements and Management's Discussion and Analysis on SEDAR.com for the Company's fiscal third quarter ended March 31, 2021.

INEO Tech Corp., through its wholly owned subsidiary, INEO Solutions Inc., provides retailers with the INEO Welcoming Network, a patented in-store and online location-based advertising network which enhances the customer experience, monetizes the entrances of retail stores and protects against retail theft. (CNW Group/INEO Tech Corp.)

"We are very pleased with our fiscal third quarter in which we reported 144% increase in revenue, and we signed a monumental Letter of Intent (LOI) with our global distribution partner Prosegur," said Greg Watkin, Chairman and Founder of INEO.  "We have been working very closely with Prosegur on meeting their technology requirements, testing the pilot systems and advancing discussions with their large retail customers. In addition, we continued to prove our technology in the quarter through the expansion of the number of locations and advertisers on INEO's Welcoming Network.  Furthermore, we strengthened our balance sheet in the fiscal third quarter with an equity offering resulting in total gross proceeds of approximately $7.0 million.  We feel very optimistic with our outlook for the rest of calendar 2021 given our strong cash position, partnership with Prosegur, numerous customer trials and a large pipeline of additional opportunities." 

Fiscal Third Quarter 2021 Financial Highlights:

• INEO generated $195,518 of revenue for the three months ended March 31, 2021, representing an increase of 144% as compared to revenue of $80,020 for the three months ended March 31, 2020. The increase in revenue is primarily attributable to an increase in the Company's online sales of loss prevention products and the inclusion of advertising revenue on INEO's Welcoming Network, as retailers started putting the uncertainty of COVID-19 behind them and started investing in their businesses again.
• INEO generated gross profit for the three months ended March 31, 2021 of $67,358, as compared to gross profit of $42,731 for the year ended March 31, 2020, representing an increase of 58%. The Company attributes this growth to an increase in revenue.
• Net loss and comprehensive loss for the three months ended March 31, 2021 was $576,400 or $0.01 per share compared to net loss of $7,536,367 or $0.23 per share for the three months ended March 31, 2021. The Company had a greater loss in 2020 due to costs associated with the completion of the RTO transaction (non-cash).
• INEO had $6,288,001 of cash and cash equivalents at March 31, 2021, compared to $1,252,638 of cash and cash equivalents at June 30, 2020.
• As of March 31, 2020, the Company had 60,145,768 shares issued and outstanding.

Fiscal Third Quarter 2021 Business Highlights:

• On January 7, 2021, INEO announced it entered into a Letter of Intent (LOI) with Prosegur EAS USA Inc., a wholly owned subsidiary of Prosegur Compania de Seguridad (collectively "Prosegur"), to distribute and install INEO's Welcoming Pedestals in Prosegur's retail customer locations in North America, Latin America and Europe. Under the terms of the LOI, Prosegur will be responsible for the funding, manufacturing, distribution, in-store setup and in-store maintenance of INEO's Welcoming Pedestals, while INEO will receive a monthly SaaS recurring revenue fee for operating and managing the network of digital advertising screens and providing valuable analytics data.
• On February 1, 2021, INEO announced its initial Welcoming Pedestal units have been shipped to Prosegur with the successfully completed integration of INEO's technology with Prosegur's tag detection technology. Upon completion of final validation testing, Prosegur will be begin installing INEO's pilot Welcoming Pedestals at select locations within some of the largest retailers in Canada and the United States.
• On March 10, 2021, the Company closed a brokered short-form prospectus offering at a price of $0.36 per unit (each a "Unit") for aggregate proceeds of $7,003,638. Each Unit consisted of one common share and one-half of one common share purchase warrant. Accordingly, the Company issued aggregate of 19,454,550 common shares and 9,727,275 common share purchase warrants. Each warrant will entitle the holder to acquire one common share of the Company at an exercise price of $0.55 per common share for a period of 24 months from the date of issuance. Pursuant to the offering, the Company also issued 1,482,233 broker warrants. Each broker warrants entitles the holder to acquire one common share of the Company for an exercise price of $0.36 for a period of 24 months.

Events Subsequent to March 31, 2021:

• On May 19, 2021, the Company announced the appointment of Dave Jaworski to the Company's Board of Directors. Jaworski is currently the principal Program Manager for Microsoft Teams development and he has previously held several senior roles at Microsoft including Global Digital Advisor and General Manager of US Sales and Operations.

Outlook:

Kyle Hall, CEO of INEO commented, "INEO has now entered into the next phase of the Company's life cycle with the commercialization and scalability of our technology being the key goals over the next 12 months. We have invested in additional head count for our development and our operations teams to take advantage of the opportunities in front of us and we expect these additional costs to remain close to the current level over the next few quarters. Our technology has been proven out through the independent liquor store network and has now been validated by a large multi-national company such as Prosegur.  INEO is well positioned to expand into large national and international retailers in the coming quarters."

The Company currently has over 90 locations operating on the INEO Welcoming Network and has a healthy pipeline of additional independent liquor store retail locations ready for installations in the coming months. The Company is also witnessing increasing advertising fill rates on the INEO Welcoming Network, with some advertisers repeating their initial advertising contracts. The partnerships with Consumer Media Solutions, as the Company's advertising sales representatives, and with Hivestack's programmatic advertising platform are proving to be fruitful in introducing INEO's product and services to new potential advertisers.

Meanwhile, the Company continues to make progress with its distribution partner, Prosegur. INEO has already successfully integrated Prosegur's tag detection technology, designed and manufactured new circuit boards to support Prosegur's specifications, modified its Welcoming Pedestals to support European power requirements and is expecting to soon launch a "Self-Serve Retail Portal" so Prosegur's retail customers can upload their own marketing ads, images and manage their own campaigns.  INEO is actively working with Prosegur on securing retailers in North America and Europe to utilize INEO Welcoming Systems.  Initial manufacturing of systems for Prosegur's retail customers is expected to be fulfilled in INEO's Surrey, BC facility while Prosegur's manufacturing facility with expanded production capacity is expected to come online before the end of the calendar year.

INEO is currently in the process of expanding its development, sales and marketing expertise within the organization. The Company plans on continuing to innovate in the areas of integrated digital screen and loss prevention technology, improving data analytics with machine learning algorithms, adding retailer self-serve capabilities, incorporating retail cash register data into its systems and optimizing its cloud based digital advertising network. 

Video Conference Call:

INEO will host a video conference call to discuss its fiscal third quarter financial results as follows:

Date:	May 28, 2021
Time:	1:00pm EST (10:00 am PST)
Dial-in:	778-907-2071 (Vancouver local)
	647-374-4685 (Toronto local)
Confirmation #:	989 4128 9116
Webcast:	https://www.ineosolutionsinc.com/news-and-events/category/Events

Select Financial Highlights:

CAD ($)	For the three months ended 31-Mar-2021	For the three months ended 31-Mar-2020
Revenue	195,518	80,020
Cost of Sales	(128,160)	(37,289)
Gross Profit	67,358	42,731
Gross Profit Margin	34.45%	53.40%
Total Expenses	(642,394)	(507,415)
Other Income (Expenses)	(1,364)	(7,071,682)
Basic and diluted loss per share	(0.01)	(0.23)
Weighted average number of common shares outstanding (basic and diluted)	45,221,881	32,269,504
EBITDA^(1) reconciliation:
Net loss for the period	(576,400)	(7,536,367)
Amortization	27,151	8,762
Interest Expense	8,984	13,186
EBITDA^(1)	(540,264)	(7,514,419)

Footnotes:

^1.

Readers are cautioned that EBITDA (earnings before interest, taxes, depreciation and amortization), does not have standardized meanings prescribed by IFRS and is considered a non-IFRS measure. EBITDA is a useful supplemental measure of the Company's performance prior to consideration of how operations are financed or how results are taxed or how depreciation and amortization affects results. EBITDA is not intended to represent net earnings calculated in accordance with IFRS.

About INEO Tech Corp.        

INEO Tech Corp., through its wholly owned subsidiary, INEO Solutions Inc., provides retailers, advertisers and brands with The INEO Welcoming Network, a patented in-store and online location-based advertising network that enhances the customer experience, monetizes the entrances of retail stores and protects against retail theft.  The INEO Welcoming Network is a revolutionary cloud-based digital advertising and data analytics system, which sends customized advertising to digital screens integrated with theft detection sensor gates at the entrance of retail stores.  INEO is headquartered in Surrey, Canada and publicly traded on the TSX-Venture Exchange under the symbol "INEO".

For more information please visit:  www.ineosolutionsinc.com.

Forward-Looking Statements

Investors are cautioned that, except as disclosed in the disclosure document, any information released or received with respect to the Company may not be accurate or complete and should not be relied upon.  Trading in securities of the Company should be considered highly speculative.

This news release contains forward-looking information, which involves known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from current expectations. Important factors – including the availability of funds, acceptance of the Company's products, competition, and general market conditions – that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed on SEDAR, including the Annual Information Form for the year ended June 30, 2020 filed on SEDAR December 3, 2020. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE INEO Tech Corp.

Pardeep Sangha, Investor Relations, INEO Tech Corp., [email protected], [phone]