Katipult Releases 2022 Q3 and Year-to-Date Results

CALGARY, AB, Nov. 23, 2022 /CNW/ - Katipult Technology Corp. (TSXV: FUND) ("Katipult" or the "Corporation"), provider of an industry leading and award-winning cloud-based software infrastructure for powering the exchange of capital in equity and debt markets, is pleased to announce its financial results for the three- and nine- month period ended September 30, 2022.

"We experienced modest revenue growth in the quarter as private capital deal activity slowed significantly from the previous period," said Gord Breese, Katipult CEO. "Our Q3 results reflect the current uncertainty and volatility in capital markets. While the market for private capital deal flow also continues to be weak, we remain focused on delivering the product and service innovation our customers will need when investment activity recovers". 

The following provides a summary of the results for the third quarter of 2022. The full results and related management discussion and analysis are available on the Corporation's SEDAR profile (www.sedar.com). 

Q3 and YTD 2022 Summary

Revenue 

Revenue consists of subscription revenue which increased by 11.5% to $476,000 in the third quarter of 2022 from $427,000 recognized in the third quarter of 2021.  Revenue for the nine-month period ended September 30, 2022 increased by 10.5% to $1.4 million from $1.2 million in the prior year.

Gross Profit Percentage ⁽¹⁾

Gross Profit Percentage was 79.4% in the third quarter of 2022 compared to 79.6% in the prior year quarter of 2021.

Adjusted EBITDA ⁽¹⁾

Adjusted EBITDA losses decreased to ($283,000) in the three-month period ended September 30, 2022 from ($415,000) in the three-month period ended September 30, 2021, due to management's focus on prudent expense management and operational efficiency as a response to the slowdown in capital market activity.  Adjusted EBITDA was ($1.1 million) f or the nine-month period ended September 30, 2022 comparable to the prior year period.

Net loss and comprehensive loss

Net loss and comprehensive loss decreased to ($559,000) in the third quarter of 2022 compared to ($648,000) in the third quarter of 2021 due to the above noted higher expenditures in addition to a change in the non-cash fair value the Corporation's outstanding 2018 Debentures, and higher finance costs from the accretion of the 2021 Debenture. The net loss and comprehensive loss was ($1.8 million) for the nine-month period ended September 30, 2022 and 2021, respectively.

Financial Position

As at September 30, 2022, the Corporation had a cash and cash equivalents balance of $1.7 million, working capital of $1.0 million, and total assets of $1.8 million, compared to cash and cash equivalents balance of $2.5 million, working capital of $1.8 million, and total assets of  $2.6 million as at December 31, 2021.

About Katipult

Katipult (www.katipult.com) is a provider of industry leading and award-winning software infrastructure for powering the exchange of capital in equity and debt markets. Our cloud-based platform and solutions digitize investment workflow by eliminating transaction redundancy, strengthening compliance, delighting investors, and accelerating deal flow. Katipult provides unparalleled adaptability for regulatory compliance, asset structure, business model, and localization requirements.

Neither the 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. 

Cautionary Note Regarding Forward-Looking Statements

Certain disclosure in this release, including statements regarding the recovery of capital markets investment activity, constitute forward-looking statements. In making the forward- looking statements in this release, the Corporation has applied certain factors and assumptions that are based on the Corporation's current beliefs as well as assumptions made by and information currently available to the Corporation, including, but not limited to, the Corporation's anticipated cash needs, that the cash available to the Corporation is as expected, the Corporation's product will continue to operate as expected, the industry will continue to see value in the Corporation's product, the Corporation will be able to recruit talented and experienced sales, support and other individuals required to execute the Corporation's plans, and that the Corporation's employees, consultants, customers, suppliers and other stakeholders will be able to manage successfully throughout the Covid- 19 pandemic. Although the Corporation considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect, and the forward-looking statements in this release are subject to numerous risks, uncertainties and other factors that may cause future results to differ materially from those expressed or implied in such forward-looking statements. Such risk factors may include, among others, the risk that cash available to the Corporation is not as expected, failure to manage growth successfully, lengthier than anticipated sales and implementation cycle, cyber risks, risks related to cloud based solutions, failure to continue to adapt to technological change and new product development, dependence on key personnel, competition, intellectual property risks, economic conditions, the financial and economic fallout due to the Covid-19 pandemic, privacy concerns and legislation, regulatory environment, risk associated with a change in the Corporation's pricing model, risk of defects in the Corporation's solution, dependence on market growth, operational service risk, dependence on partners, delay or failure to realize anticipated benefits of key account installations and such other risks as are noted in the Corporation's MD&A for the period ended September 30, 2022. Readers are cautioned, especially in these uncertain times, not to place undue reliance on forward-looking statements. The Corporation does not intend to, and expressly disclaims any intention or obligation to, update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.

1 Non-GAAP Financial Measures

This news release refers to certain Non-GAAP financial measures that are not determined in accordance with International Financial Reporting Standards ("IFRS").  "Gross Profit", "Gross Profit Percentage," "Working Capital", and "Adjusted EBITDA" are not measures recognized under IFRS and do not have standardized meanings prescribed by IFRS. Management considers these to be important supplemental measures of Katipult's performance and believes these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in its industry. See "Non-GAAP Measures and Additional GAAP Measures" in the Corporation's December 31, 2021 MD&A available on the Corporation's SEDAR profile at www.sedar.com for a discussion of non-GAAP measures and their reconciliations.

"Gross Profit" is used by management to analyze overall and segmented operating performance. Gross Profit is not intended to represent an alternative to net earnings or other measures of financial performance calculated in accordance with IFRS. Gross Profit is calculated from the statements of operations and comprehensive income (loss) and from the segmented information contained in the notes to the financial statements. Gross Profit is defined as revenue less cost of revenue.

"Gross Profit Percentage" is used by management to analyze overall and segmented operating performance. Gross Profit Percentage is calculated from the statements of operations and comprehensive income (loss) and from the segmented information in the notes to the financial statements. Gross Profit Percentage is defined as gross profit divided by revenue.

"Adjusted EBITDA" is a measure of the Corporation's operating profitability. Adjusted EBITDA provides an indication of the results generated by the Corporation's principal business activities prior to how these activities are financed (including mark-to-market movements of the convertible debenture value), assets are depreciated and amortized or how the results are taxed in various jurisdictions, prior to the effect of foreign exchange, other income and expenses, and non-cash share-based payment expense. Adjusted EBITDA is not intended to represent net earnings as calculated in accordance with IFRS.

Adjusted EBITDA is calculated as follows:

For the three months ended September 30,
($ thousands)			2022	2021
Net loss			(559)	(648)
Plus:
Depreciation and amortization			2	8
Finance costs			194	140
Unrealized loss (gain) on convertible debentures			159	59
Foreign exchange (gain) loss			(40)	(14)
Share-based payments			36	65
Other income			(75)	(25)
Adjusted EBITDA			(283)	(415)

"Working Capital" is used by management and the investment community to analyze the operating liquidity available to the Corporation. Working Capital is calculated based on current assets less current liabilities.

Working capital is derived from the statements of financial positions and is calculated as follows:

As at				September 30,	December 31,	Increase (decrease)
($ Cdn thousands) - unaudited				2022	2021	in working capital
Assets
Current assets
Cash and cash equivalents				1,667	2,503	(836)
Accounts receivable				99	33	66
Prepaid expenses				3	13	(10)
Total current assets				1,769	2,549	(780)
Current liabilities
Accounts payable and accrued liabilities				238	373	(135)
Deferred revenue				529	359	170
Current portion of lease obligation				-	21	(21)
Total current liabilities				767	753	14
Working capital				1,002	1,796	(794)

SOURCE Katipult Technology Corp.