Vancouver, Canada, February 21, 2023 ― Perk Labs Inc. (CSE: PERK / OTCQB: PKLBF / FKT: PKLB) (“Perk Labs” or the “Company”), the parent company of Perk Hero, the company helping businesses transition to the digital economy, today announced financial results for the fourth quarter and fiscal year ended November 30, 2022.
Overview
In fiscal year 2022, the Company invested in research and development and significantly improved its platform with new product offerings and features including Point-Of-Sale (POS) integrations through Deliverect; Order Now, Pay Later; a reservation system; and a standalone downloadable merchant application that serves as a “mini-POS”. Despite still being in the early stages of revenue generation, the Company made great strides towards increasing its gross margins from ~5% to ~30%. The improvement in gross margins was achieved by introducing new high-margin revenue streams and signing new customers to its subscription-based model for three core product offerings: digital dine-in, online ordering, and custom-branded loyalty app. These initiatives enabled the Company to diversify its revenue sources and establish a long term pathway to profitability as it expands and grows. Overall, the success of these efforts demonstrates the Company’s ability to innovate and achieve sustainable growth in the long term as it continues to commercialize its technology. Also of note, the Company experienced a larger net loss for the year of ($3,374,287) over the previous year of ($1,487,312) which was mainly attributable to the decline and sale of the publicly-listed shares the Company held in Hero Innovation Group Inc.
Looking forward to the upcoming year, the Company is focused on achieving several key objectives to drive growth and success. Firstly, the Company is working towards a successful merger with Getit Technologies Inc. (“Getit”), which is expected to expand its revenue generating capabilities and accelerate customer acquisition. The Company also plans to pursue a merger and acquisition strategy to further gain market share. In order to support these initiatives and increase its working capital, Perk Labs is planning to raise new funds to support its growth plans. Lastly, Perk Labs is focused on improving its products by introducing new technologies such as incorporating the recent breakthroughs in artificial intelligence into its products, which will enable the Company to provide more personalized and targeted solutions to its customers and end-users. With these initiatives in place, the Company is well-positioned to build on the progress it made in 2022 and continue to grow and expand.
2022 Financial Summary
| November 30 | November 30 | |
| 2022 | 2021 | |
| $ | $ | |
| Revenue | 31,587 | 28,947 |
| Gross Margin | 9,307 | 1,508 |
| General and administrative expenses | 1,176,414 | 1,169,643 |
| Research and development expenses | 675,448 | 920,927 |
| Sales and marketing expenses | 385,854 | 577,495 |
| Net loss for the year | (3,378,469) | (1,487,312) |
| Total working capital | 187,860 | 1,995,497 |
2022 Operational Highlights
- New Merchant App: Perk Hero announced the launch of its new downloadable merchant app on the Google Play Store. Previously Perk Hero’s merchant app was part of its consumer app. By separating Perk’s merchant and consumer apps, the Company is able to reduce the size, speed up the performance, and improve the reliability of both consumer and merchant apps.
- Order Now, Pay Later: With this new feature, restaurants have the option of setting up Order-from-Table™ as either requiring their customer to pay upon placing an order or the customer can pay (and tip) at the end of the meal. With this new feature, we can also accommodate restaurants that only want to Order-from-Table™ but want to settle their customer’s bill in cash. We see this as a great way to onboard restaurants that are either not ready to go fully digital with mobile payments or are sensitive to credit card payment processing fees.
- Website embedding feature: Perk developed an online ordering feature for pickup and delivery that merchants can embed directly into their own websites. This feature enables Perk to offer an in-demand entry-level feature to restaurants that enables future upselling on more advanced features.
- Entered into Share Transfer Agreement: On June 28, 2022, the Company’s subsidiary Perk Hero Software Inc. entered into a share transfer agreement for the sale of 2,539,000 shares of Hero Innovation Group Inc. (formerly, Euro Asia Pay Holdings Inc., hereafter referred to as “HRO”) at $0.08 per share, for total proceeds of $203,120. On August 15, 2022 the company also entered into a share purchase agreement to sell its remaining balance of 5,100,000 escrow common shares at $0.08 per share, for total proceeds of $408,000.
- ATM raise: For the fiscal year 2022, the Company issued 6,998,000 common shares through its at-the-market program at an average price of $0.029 for gross proceeds of $199,787. Commissions paid were $5,994 for net proceeds of $193,793.
- End of At-the-Market Equity Program: Through the ATM program, the Company raised a total of gross proceeds of $3,241,596, since announcing the program on July 29, 2020. In July 2022 the Company announced that it had ended its at-the-market equity program.
- POS integration – Deliverect Certification: On August 4, 2022 the Company received certification from Deliverect for Point-of-Sale (“POS”) integration. Deliverect supports hundreds of different POS systems, including over 30 different POS systems in the Canadian market. POS integration is a mandatory requirement to support enterprise customers, and with this integration, we are well positioned to demonstrate our value to larger restaurant chains.
- New Reservation feature: On August 25, 2022 the Company announced a new vertical for its custom branded app with the signing of iBEAUTI Skincare, and that it will be expanding its product offering by adding a new reservation feature. The Company will be able to support many new verticals with the custom app offering, including salons, health and wellness, fitness and studios.
Highlights Post Fiscal Year-End
- Non-Brokered Private Placement: On December 13, 2022, the Company announced a non-brokered private placement offering of debentures units at a price of $10,000 per Debenture Unit. Each Debenture Unit will consist of: (i) a 15% unsecured convertible debenture of the Company (“Debenture”) in the principal amount of $10,000; and (ii) 200,000 common share purchase warrants (“Warrant”).
- Binding Letter of Intent with GetIt Technologies: On January 4, 2023, the Company announced a binding letter of intent (“LOI”) to combine with GetIt. The terms of the binding LOI are as follow:
- The Company will acquire 100% of the outstanding shares of Getit in exchange for a number of shares of Perk equal to 90% of the issued and outstanding shares of the Company;
- Perk will change its name and rebrand as “Getit Local”;
- Ryan Hardy, the CEO of Getit, will be appointed as CEO and Jonathan Hoyles will remain with the Company as in-house legal counsel;
- on closing of the Transaction, two members of Perk’s board of directors will be stepping down and two new directors will be appointed representing Getit;
- a “break fee” will be payable by the terminating party if either party terminates the LOI without cause or for convenience prior to the completion of the Transaction.
- Appointment of New Board Member: On January 4, 2023, the Company announced the appointment of Patrick Power to its Board of Directors. Mr. Power is the Chairman and President of James Edward Capital Corporation, an Ottawa-based boutique investment bank focused on emerging growth companies, and is advising the Company on its strategic options.
- CFO Transition: On January 20, 2023, the Company announced that Andrew Bailes will succeed Vanessa Altamirano as Interim CFO of the Company, effective February 17, 2023.
Outlook
The Company’s strategic priorities for 2023 include:
- A successful merger and integration with Getit Technologies Inc.
- Further mergers and acquisitions to gain market share
- Continued improvement of the Perk Hero platform.
- Developing further integrations with leading restaurant point-of-sales systems.
- Grow the number of end-user customers and businesses using our platform.
- Grow our licensing and transactional revenue.
- Invest in sales, marketing, and communication strategies to drive growth.
The Company’s complete financial results are available in its Consolidated Financial Statements and Management’s Discussion and Analysis for the year ended November 30, 2022, each filed with Canadian securities regulators at www.sedar.com.
IFRS
The operational and financial information in this release is based on the consolidated figures in accordance with International Financial Reporting Standard (IFRS).
About Perk Labs Inc.
Perk Labs Inc. (CSE: PERK) (OTCQB: PKLBF) (FKT: PKLB) is the owner of Perk Hero, the mobile commerce platform on a mission to empower business owners with the digital tools to provide their customers with dining experiences that are more engaging, convenient and rewarding.
For more information about Perk Labs, please visit www.perklabs.io. Visit Perk Hero at www.perkhero.com.
For more information on a Perk Franchise, visit www.perkfranchise.com.
For more information, please contact:
Jonathan Hoyles, CEO
Perk Labs Inc.
(833) 338-0299
Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
This press release contains forward-looking information or forward-looking statements (collectively “forward-looking information”) within the meaning of applicable securities laws. Forward-looking information is typically identified by words such as: “may”, “believe”, “thinks”, “expect”, “exploring”, “expand”, “could”, “anticipate”, “intend”, “estimate”, “plan”, “pursue”, “potentially”, “projected”, “should”, “will” and similar expressions, or are those, which, by their nature, refer to future events. These forward-looking statements, which involve risks and uncertainties, relate to, among other things, the discussion of Perk Labs’ business strategies and its expectations concerning future operations, that the Company has established a long term pathway to profitability as it expands and grows, that the Company will achieve sustainable growth in the long term as it continues to commercialize its technology, a successful merger with Getit, which is expected to expand its revenue generating capabilities and accelerate customer acquisition, the Company’s ability to pursue a merger and acquisition strategy to further gain market share, the Company’s plan to raise new funds to support its growth plans, that the Company will incorporate the recent breakthroughs in artificial intelligence into its products, which will enable the Company to provide more personalized and targeted solutions to its customers and end-users, and that the Company is well-positioned to build on the progress it made in 2022 and continue to grow and expand. Although Perk Labs considers these forward-looking statements 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. For additional information with respect to these and other factors and assumptions underlying the forward-looking statements in this press release, see the section entitled “Risk Factors” in the most recent Annual Information Form and Prospectus of Perk Labs, which may be accessed through Perk Labs’ profile on SEDAR at www.sedar.com. Perk Labs cautions investors that any forward-looking information provided by Perk Labs is not a guarantee of future results or performance, and that actual results may differ materially from those in forward-looking statements. Undue reliance should not be placed on such forward-looking information, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur.