VANCOUVER, Nov. 21, 2019 /CNW/ - Datable Technology Corporation (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 September 30, 2019 ("Q3 2019").
For nine months ended September 30, 2019, the Company achieved the following milestones:
- DTC signed 22 new license agreements to provide PLATFORM³ to leading Consumer Packaged Goods ("CPG") brands.
- Revenue for Q3 2019 increased by 7% to $452,246 compared to revenue for Q3 2018.
- Many of these agreements represent a growing trend of repeat business from leading U.S based consumer brands.
The Company is also pleased to provide the following 2019 updates:
- In 2019 year to date, DTC has license agreements which account for approximately $2.2 million (2018 - $1.8 million) in total contract value, of which 70% is expected to be recognized as revenue in 2019. About 63% 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 $2.2 million in contract value noted above only accounts for license and service fees and does not include any transaction fees.
- DTC expects revenue growth in fourth quarter in 2019 compared to the same period in 2018 based on signed contracts, such that the Company will report revenue growth for the year ended December 31, 2019.
- The Company is in discussions with its largest customers, comprised mosty of leading consumer brands in the USA, to renew their annual and multi-year year licenses. If such discussions are successful, the Company anticipates significant increases in contract values for DTC. These increases are due to the success in driving incremental revenues for leading brands and modules added to PLATFORM³.
- DTC has made progress in lauching new applications for PLATFORM³ with a focus on launch partners for the flexxi Rewards Network for consumer goods and shareholder loyalty.
"Our core SaaS business is getting stronger each quarter. In the first ten months of this year, we saw a significant increase in total contract value (by approximately 22%), of which 63% were returning customers. In addition to growing our core SaaS licensing business, we are continuing development on our consumer loyalty and rewards portal, the flexxi Rewards Network. We are in discussions with potential flexxi launch partners." said Rob 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 DTC's proprietary PLATFORM³ technology which dramatically reduces costs and time to market."
Results of Operations:
Revenue for three months ended September 30, 2019 increased by 7% to $452,246 and revenue for the nine months ended September 30, 2019 decreased by 6% to $1,135,865, compared with the same period in 2018 due to the timing of revenue recognition from prior period and current year contracts. 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 period 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 nine months ended September 30, 2019 was 71% and 72% respectively, compared to 50% and 60% for the three and nine months ended September 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 nine months ended September 30, 2019 compared to the same periods ended September 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 nine months ended September 30, 2019 increased to $328,470 and $935,586 respectively, compared to $293,645 and $772,944 for the three and nine months ended September 30, 2018, mainly due to increase in professional services, corporate consultancy and corporate finance service contracts engaged in 2019 compare 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.
Sales and marketing expenses for the three and nine months ended September 30, 2019 was $156,801 and $419,348 respectively compared to $145,047 and $646,210 for the three and nine months ended September 30, 2018. The decrease for nine months ended September 30, 2019 was mainly due to decreased wages and salaries and consultancy paid in connection with advertising and marketing activities.
Research and development expenditures for the three and nine months ended September 30, 2019 was $239,446 and $559,875 respectively compared to $169,336 and $470,452 for the three and nine months ended September 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 nine months ended September 30, 2019 was $631,092 and $1,440,214 respectively, compared to $403,266 and $1,564,412 for the three and nine months ended September 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.
DTC also announces that it's Board of Directors have received the resignation of Mr. Carlos Yong ("Mr. Yong") and that it has entered into a debt settlement agreement (the "Settlement Agreement") with Mr. Yong to settle an aggregate $150,000 in debt (the "Debt") for unpaid services provided by Mr. Yong as Chief Technology Officer of the Company (the "Services"). In settlement and full satisfaction of the Debt the Company has agreed to issue to Mr. Yong an aggregate of up to 2,500,000 common shares in the capital of the Company (the "Debt Shares") at a deemed issue price of C$0.05 per Debt Share and pay to Mr. Yong a maximum cash consideration of $50,000, subject to certain conditions. The issuance of the Debt Shares is subject to TSX Venture Exchange approval. The Debt Shares will be subject to a statutory hold period of four months plus a day from the date of issuance in accordance with applicable securities legislation.
About Datable Technology Corporation
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 Corporation, Robert Craig, Chief Executive Officer, (604) 639-5441, [email protected]