VANCOUVER, Aug. 28, 2019 /CNW/ - Datable Technology Corp. (TSXV: DAC) (OTCQB: TTMZF) (the "Company" or "DTC"), a technology company whose core product PLATFORM³ is an integrated suite of digital marketing applications sold as Software-as-a-Service (SaaS), announces its financial results for the quarter ended June 30, 2019 ("Q2 2019").
For six months ended June 30, 2019, the Company achieved the following milestones:
- DTC signed 15 new license agreements to provide PLATFORM³ to leading Consumer Packaged Goods (CPG) brands.
- The average dollar value of license agreements has increased by approximately 5% to $56,000 compared to 2018, including short-term targeted shopper marketing promotions and annual/multi-year SaaS licenses.
- Many of these agreements represent a growing trend of repeat business from leading U.S based consumer brands.
- Signed a Letter of Intent (LOI) with uBuck Technologies SEZC ("uBuck"), a wholly owned subsidiary of LiteLink Technologies Inc. (CSE:LLT) (OTC:LLNKF), to enter into a strategic commercial relationship. Under the terms of the LOI, uBUCK will integrate PLATFORM³, Datable's loyalty and rewards program into uBUCK's digital payments platform. This would allow account holders of uBUCK Pay — who can now make online payments and send worldwide payment transfers within seconds without paying for transfer fees — to also earn rewards for purchases and payments made within the uBUCK Pay digital wallet or on their uBUCK Mastercard. uBUCK and Datable will share transaction fee revenue from the convenience fees charged for uBUCK pin vouchers and debit card transactions. (See press release dated May 30, 2019)
- Signed addendum to the uBuck LOI, under which Datable and uBUCK will cooperate to develop a digital payments and loyalty solution for the eSports industry by integrating uBucks Streambucks digital payments solution with PLATFORM³, Datable's digital rewards and loyalty platform. (See press release dated June 26, 2019)
- Signed a definitive agreement with the Circadian Group ("Circadian") to launch flexxiNVEST, a shareholder loyalty platform. flexxiNVEST helps publicly traded companies enhance shareholder loyalty, expand investor awareness and build a database of investors and shareholder via ongoing digital engagement and rewards. In the process, flexxiNVEST captures valuable investor data that can be used to develop and improve investor relations messaging and strategy. (See press release dated July 29th.)
- Revenue for Q2 2019 decreased by 4% to $376,302 compared to revenue for the period ended June 30, 2018, partly due to the timing of revenue recognition for license agreements signed in prior periods and during six months ended June 30, 2019.
The Company is also pleased to provide the following 2019 updates:
- In 2019 year to date, DTC has license agreements which account for approximately $1.9 million (2018 - $1.64 million) in total contract value, of which 74% is expected to be recognized as revenue in 2019. About 60% of the new license agreements are with returning customers.
- DTC has several annual agreements where PLATFORM³ hosts an ongoing digital loyalty and rewards program. DTC is generally paid an annual license fee plus transactions fees based on the number of times consumers validate purchases using PLATFORM³. The $1.9 million in contracted revenues noted above only accounts for license and service fees and does not include any transaction fees.
- During Q2 2019, DTC signed two master service agreements ("MSAs") The first MSA was signed with a U.S. marketing and promotions agency with clients such as Johnson & Johnson, Kraft Heinz, and Unilever. The second MSA was signed with a leading manufacturer of infant and children's nutrition products and their Canadian infant care division, owned by a large British multinational consumer goods company.
- On August 23, 2019, the Company completed the shares for debt transaction (the "Shares for Debt") with certain arms-length creditors (the "Creditors") originally announced on July 17, 2019. Pursuant to the Shares for Debt, the Company issued to the Creditors an aggregate of 946,875 common shares (the "Debt Shares") at a deemed price of $0.08 per Debt Share to settle an aggregate of $75,750 of unpaid consulting and advisory fees for consulting and advisory services by provided by the Creditors. The Debt Shares had a fair value of $47,344. Accordingly, the Company recorded a gain on settlement of $28,406. The issuance of the Debt Shares was approved by the TSX Venture Exchange on August 23, 2019. The Debt Shares issued to the Creditors are subject to a statutory hold period which expires on December 24, 2019 in accordance with applicable securities legislation.
"Our core SaaS business is getting stronger each quarter. The first eight months of this year we saw a significant increase in total contract value (by approximately 16%), about 60% of which were returning customers. Development work on the Company's Consumer Loyalty and Rewards Portals - the flexxi Rewards Network – continued and we are now in discussions with potential launch partners," said Robert Craig, DTC's CEO. "The flexxi Rewards Network will be an important step towards Datable owning its' own 1st Party Data which we anticipate being a big driver of revenue in the coming years. The flexxi Rewards Network is built on top of Datable's proprietary PLATFORM³ technology which dramatically reduces costs and time to market."
Results of Operations:
Revenue for the three months ended June 30, 2019 decreased by 4% to $376,302 and revenue for the six months ended June 30, 2019 decreased by 12% to $683,620, compared with the same period in 2018. The Company's PLATFORM³ product is an integrated suite of digital marketing applications sold as SaaS for short-term promotions or on an annual subscription basis with recurring revenues. Revenue in the year reflected recognition of revenue from previous year contracts and new sales of the PLATFORM³ product offering.
Gross margin as a percentage of revenue for the three and six months ended June 30, 2019 was 72% and 72% respectively, compared to 58% and 65% for the three and six months ended June 30, 2018. Gross margin as a percentage of revenue depends on the product mix for the reporting period. Revenues are comprised of a combination of higher margin sales of PLATFORM³, the Company's proprietary SaaS product, combined with some lower margin third party services.
The increase in gross margin as a percentage of revenue for the three and six months ended June 30, 2019 compared to the same periods ended June 30, 2018 was mainly due to improved resource allocation of product deliveries and margin of project design.
DTC launched an API connection to third party digital rewards platforms in prior years. This service enables DTC clients to offer digital rewards such as gift cards, movie tickets and virtual visas to incentivize purchase and purchase frequency. DTC purchases these rewards on behalf of the Company's clients and charges a transaction fee for the total amount of rewards purchased. Cost of sales also includes the cost of servers to host PLATFORM³, and project management and customer support staff.
General and administrative expenses for the three and six months ended June 30, 2019 increased to $357,162 and $607,116 respectively, compared to $220,211 and $479,299 for the three and six months ended June 30, 2018, mainly due to increase in corporate consultancy and new corporate finance service contracts engaged in 2019 compared to the same period in prior year, net of adjustment of operating expenses due to the implementation of the new accounting standard IFRS 16-Leases which was adopted effective on January 1, 2019. General and administrative expenses include salaries and benefits, accounting, legal, investor relations, travel, rent, office, other administrative costs.
Research and development expenditures for the three and six months ended June 30, 2019 was $148,576 and $320,429 respectively compared to $161,739 and $301,116 for the three and six months ended June 30, 2018. The increase in research and development expenses was related to improving PLATFORM³ and developing flexxi Rewards Network. Research and development expenses may continue to increase in the future as the Company seeks to evolve and improve PLATFORM³ and flexxi, as well as to invest in creating new technology and products that will enhance the Company's value proposition to customers and provide additional revenues. Research and development expenses include wages, salaries and consulting fees.
Net and comprehensive loss for the three months and six months ended June 30, 2019 was $419,472 and $809,123 respectively, compared to $448,767 and $1,161,146 for the three and six months ended June 30, 2018. This decrease in net loss was mainly due to the decrease of share-based compensation and sales and marketing expenses, net of the increase of research and development spending and corporate finance services engaged.
Datable also announces that Steven MacDonald has resigned from the Datable board effective immediately. Adam Kniec has been appointed as an independent director of Datable, effective immediately. Adam is a seasoned CFO with Canadian Chartered Professional Accountant (CPA, CA) and US Certified Public Accountant professional designations, and with over 22 years of CFO, senior management, accounting, auditing, financial reporting and regulatory compliance experience with Canadian and US publicly trading companies.
"On behalf of the board of Datable, I would like to thank Steven MacDonald for his service as a director. I and the Datable team appreciate his valuable advice and counsel and wish Steve well," Said Kim Oishi, Executive Chairman of Datable. "I would also like to welcome Adam Kniec to the board, Datable will benefit from his operational and financial expertise and long track record serving public and private companies."
About Datable Technology Corp.
DTC has developed a proprietary, mobile-based consumer marketing platform – PLATFORM3 – that is sold to global Consumer Packaged Goods (CPG) companies and consumer brands. PLATFORM3 is delivered as a subscription service (Software as a Service model) and used by CPG companies to engage consumers, reward purchases and collect valuable consumer data. PLATFORM3 incorporates Artificial Intelligence and Machine Learning to monetize the consumer data, including demographics and purchasing behaviour, by sending consumers targeted offers by email and text messages. For more information, visit datablecorp.com.
For additional information about the company please visit www.sedar.com. The TSX Venture Exchange Inc. has in no way passed upon the merits of the transaction and has neither approved nor disapproved the contents of this press release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. 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 expectation. Important factors – including the availability of funds and the results of financing efforts, – that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time on SEDAR (see www.sedar.com). 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.
SOURCE Datable Technology Corp.
For further information: Datable Technology Corp., Robert Craig, Chief Executive Officer, (604) 639-5441, [email protected]