PopReach Provides Q4 2021 Update on Selected Unaudited Pro-Forma Financial Information with Federated Foundry

/NOT FOR DISTRIBUTION TO US WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/

Inclusive of PopReach, the combined businesses delivered 2021 year-over-year consolidated pro-forma revenue growth of 30%, Adjusted EBITDA¹ growth of 43%, and improvement in net income

TORONTO, April 27, 2022 /CNW/ - PopReach Corporation ("PopReach" or the "Company") (TSXV: POPR) (OTCQX: POPRF) is, further to its press releases dated August 17, 2021, October 18, 2021, October 29, 2021, November 29, 2021, February 14, 2022, February 16, 2022, March 23, 2022 and April 18, 2022, regarding the proposed business combination (the "Transaction") of PopReach with 2810735 Ontario Inc. d/b/a Federated Foundry ("Federated" and together with PopReach, the "Parties"), pleased to provide an update on selected unaudited pro-forma consolidated financial information for the combined Parties for the three months and year ended December 31, 2021. The selected unaudited pro-forma financial information presented is inclusive of the financial information of PopReach for the applicable periods, as previously reported and filed on www.sedar.com.

¹ Please refer to "Non-IFRS Measures" section of this press release

Unaudited Pro-Forma Consolidated Financial Information

The following table sets out certain unaudited pro-forma consolidated financial information for the combined PopReach and Federated businesses had: 1) the Transaction been consummated at the beginning of twelve month periods ended December 31, 2020 and December 31, 2021; and 2) Federated had acquired Notify AI, LLC ("Notify AI"), Q1Media, Inc. ("Q1Media"), and Crucial Interactive Holdings Inc. ("Contobox"), at the beginning of the same periods.

Figures in US Dollars Unaudited	2021 Q4	2020 Q4	YoY		2021 Year	2020 Year	YoY
	ended Dec	ended Dec	Growth		ended Dec	ended Dec	Growth
Revenue	$20,338,915	$17,986,458	13.1%		$73,532,863	$56,579,658	30.0%
Adjusted EBITDA^1	$3,264,508	$2,683,609	21.6%		$10,905,783	$7,628,526	43.0%
Adjusted EBITDA Margin^1	16.1%	14.9%			14.8%	13.5%
Net Income	($2,314,992)	($330,734)	--		($709,941)	($2,505,188)	--

Recent Federated Operating Highlights

• Contobox was named Best Customer Data Platform by Digiday. In addition, Contobox has partnered with Pinterest to bring their True Intent technology to Pin Extensions for brands, and launched a new shoppable integration with Walgreens.
• Q1Media launched new sales teams to cater to the following markets: Albuquerque, Atlanta, Charlotte, Miami, & St. Louis.
• Notify AI was voted SaaS Platform of the year for 2022 at the annual Affiliate Grand Slam Awards held in Dubai on March 21, 2022. The SaaS Platform of the year award recognizes the crucial role software has through the emergence of AI, Big Data and other IT revolutions.

Management Commentary

"The fourth quarter and year end 2021 unaudited consolidated pro-forma financial information further demonstrate the increased scale and cash generating power our platform will have out of the gate as we resume trading shortly, with 30% growth in revenue for the year and approximately $11 million in Adjusted EBITDA," said Jon Walsh, CEO of PopReach. "The breadth of opportunities we are now evaluating together with the Federated team across the digital media ecosystem puts us in a strong position to create greater value for our shareholders through larger transactions that drive faster value accretion."

Non-IFRS Measures

The Parties prepare their financial statements in accordance with IFRS. However, the Parties consider certain non-IFRS financial measures as useful additional information to assess their financial performance. These measures, which the Parties believe are widely used by investors, securities analysts and other interested parties to evaluate their performance, do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other publicly traded companies, nor should they be construed as an alternative to financial measures determined in accordance with IFRS. "EBITDA" and "Adjusted EBITDA" are non-IFRS measures.

EBITDA and Adjusted EBITDA

Earnings before interest, taxes, depreciation and amortization ("EBITDA") and consolidated adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") are non-IFRS measures of financial performance. The presentation of these non-IFRS financial measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with IFRS, and may be different from non-IFRS financial measures used by other companies. Management of the Parties defines EBITDA as follows:  IFRS Net income (loss) adding back accretion and interest expenses (including amortization of deferred financing fees), income taxes, amortization, gain/loss on disposal of assets, and fair value gain/loss on financial liabilities.  Adjusted EBITDA is calculated as EBITDA and excludes discontinued operations and the effects of significant items of income and expenditure which may have an impact on the quality of earnings, such as restructuring costs, legal expenses, and impairments where the impairment is the result of an isolated, non-recurring event. It also excludes the effects of equity-settled share-based payments, and changes in deferred revenues.

The Parties believe EBITDA and Adjusted EBITDA are useful financial metrics to assess operating performance on a cash basis before the impact of non-cash items.

The following table presents the pro-forma consolidated calculation of EBITDA and Adjusted EBITDA, on an unaudited basis, for the three months and year ended December 31, 2021 and three months and year ended December 31, 2020:

Figures in US Dollars Unaudited	2021 Q4	2020 Q4		2021 Year	2020 Year
	ended Dec	ended Dec		ended Dec	ended Dec
Net Profit (Loss)	($2,314,992)	($330,734)		($709,941)	($2,505,188)
Add:
Interest and accretion expenses	$1,189,491	$701,503		$2,599,914	$2,000,100
Loss (gain) on disposal of assets	($831)	$6,953		($5,043)	$13,703
Current taxes	$310,922	($74,480)		$772,217	$106,098
Deferred tax recovery	($8,703)	($21,638)		($22,083)	($205,386)
Amortization & Depreciation	$2,164,040	$878,308		$4,726,279	$3,328,789
Fair value loss (gain) on financial liabilities	($246,533)	$2,294,110		($3,902,715)	$4,448,191
EBITDA	$1,093,394	$3,454,022		$3,458,628	$7,186,307
Add:
Share-based compensation expense (gain)	($7,135)	$49,912		$2,963,475	$180,691
Change in deferred revenue	$71,667	($68,661)		$529,785	($319,037)
Change in deferred cost of sales	($16,736)	$0		($273,344)	$0
Extraordinary one-time expenses	$2,123,318	$21,736		$4,269,187	$1,480,716
Non-recurring income	$0	($773,400)		($41,948)	($900,151)
Adjusted EBITDA	$3,264,508	$2,683,609		$10,905,783	$7,628,526

About PopReach Corporation

PopReach, a Tier 1 Issuer on the TSX Venture Exchange, with shares also trading on OTCQX® Best Market, is a free-to-play game publisher focused on acquiring and optimizing proven franchises. The Company has to date acquired successful game franchises enjoyed by millions of players, including Smurfs' Village (IP under license), PAYDAY Crime War (IP under license), Peak - Brain Training, Kitchen Scramble, Gardens of Time, City Girl Life, War of Nations and Kingdoms of Camelot. PopReach, headquartered in Toronto, employs a team of over 130 experts in Toronto, Vancouver, London, UK, and Bangalore, India.

Additional information about the Company is available at www.sedar.com

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. 

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular dated February 14, 2022 in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of PopReach should be considered highly speculative.

This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

Cautionary Statement Regarding Forward-Looking Information

This news release contains "forward-looking information" within the meaning of Canadian securities legislation. Forward- looking information generally refers to information about an issuer's business, capital, or operations that is prospective in nature, and includes future-oriented financial information about the issuer's prospective financial performance or financial position.

The forward-looking information in this news release includes disclosure about the terms of the Transaction and the proposed structure of the transaction.

PopReach and Federated made certain material assumptions, including but not limited to: prevailing market conditions; general business, economic, competitive, political and social uncertainties; delay or failure to receive board, or regulatory approvals; and the ability of the resulting issuer to execute and achieve its business objectives, to develop the forward-looking information in this news release. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Actual results may vary from the forward-looking information in this news release due to certain material risk factors. These risk factors include, but are not limited to: adverse market conditions; the inability of PopReach or Federated to complete the transaction on the terms disclosed in this news release, or at all; the unavailability of exemptions from prospectus requirements for the issuance of PopReach shares; the risks associated with the marketing and sale of PopReach shares; refusal of the proposed directors or officers to act for any reason, including conflicts of interest; reliance on key and qualified personnel; and regulatory and other risks associated with the technology, media and digital gaming industries in general. The foregoing list of material risk factors and assumptions is not exhaustive.

PopReach assumes no obligation to update or revise the forward-looking information in this news release, unless it is required to do so under Canadian securities legislation.

SOURCE PopReach Corporation

PopReach Corporation, Dennis Fong, Investor Relations, [phone], [email protected]; Christopher Locke, [email protected]; Federated Foundry, Ted Hastings, [email protected]