Perk Labs Reports Third Quarter 2022 Results

Vancouver, Canada, September 28, 2022 ― Perk Labs Inc. (CSE: PERK / OTCQB: PKLBF / FKT: PKLB) (“Perk” or the “Company”) today announced financial results for the third quarter ended August 31, 2022.

Overview 

“From 2020 until the start of this year, valuations and investment were focused almost exclusively on growth, emerging Web3 technologies, and pandemic-driven booms such as direct-to-consumer eCommerce. With rising inflation and interest rates there has been a shift in the way that investors value companies” said Jonathan Hoyles, CEO of Perk. “More than ever before, it is paramount that we demonstrate our execution capabilities, revenue growth and show a clear path to profitability. That is what our team is laser-focused on as we’ve reduced our expenses and concentrated on the fundamental areas where we believe we can most effectively generate high-margin revenue reliably. While our revenue recognized in this past quarter was very modest, we signed a number of annual contracts and are tremendously encouraged to see our annual recurring software-as-a-subscription revenue increase by 61.6%. While the results are still early, we are seeing signs of success as we sign up more monthly subscribing customers and see steady increased usage of our platform.”

“In this fiscal quarter, the company has started to see an increase in demand for our products, confirmed by the signing of new annual contracts” said Vanessa Altamirano, Interim Chief Financial Officer. “The completion of the Deliverect POS integration will allow us to escalate revenue and growth by being able to support enterprise customers. The Company’s focus for the coming quarters will be to increase sales initiatives, and we have started doing so, by recruiting a new Director of Sales who has over 15 years of experience. We are also entering new verticals to increase our total addressable market by being able to support not only restaurants but also other businesses such as salons, health and wellness, fitness and studios.”

2022 Q3 Financial Highlights:

  • Deferred Revenue from cash received from new annual software contracts signed within Q3 2022 encompass 6.4k of the total 14.5k; which will be recognized as revenue on a monthly basis. These new contracts increase our annual recurring software-as-a-subscription revenue by 61.6%.
  • Net loss of $2.8M in Q3 2022 compared to net loss of $839k in Q3 2021. This is primarily driven by the reduction in the valuation of marketable securities due to the decrease in the stock price and the liquidation of our investment securities held in Hero Innovation Group Inc. (formerly Euro Asia Pay Holdings Inc.) which generated an unrealized loss of $1M.
  • Working capital of $600K in Q3 2022 compared to $2.5M in Q3 2021 and $2.0M in Q4 2021.
  • General and administrative expenses increased 7% from $878k in Q3 2021 to $941k in Q3 2022 as the Company is prioritizing investor relations through its market awareness campaign.
  • Research and development expenses decreased 7% from $577k in Q3 2021 to $538k in Q3 2022 as the Company continued with its efforts to decrease costs and be more efficient with its resources.
  • Sales and marketing expenses decreased 33% from $462k in Q3 2021 to $309k in Q3 2022 as the Company refocused marketing efforts on businesses and franchisees instead of end-user customers.

2022 Q3 Operational Highlights 

  • New Merchants Agreements: The company signed agreements with several restaurants to provide them with Perk’s new Online Ordering services and to develop Custom Branded Apps. Perk’s new online ordering feature is an easy-to-launch ordering solution that provides everything restaurants need to quickly start accepting pickup and delivery orders through their existing website.
  • Launch of Custom Branded App: In July 2022, the company completed the build of custom branded apps for Chun Fun How and SoyTalk. Perk Hero has automated its platform and processes so that it takes minimal work from the development team to generate each new custom branded application within one day.
  • Entered into Share Transfer Agreement: On June 28, 2022, the Company’s subsidiary Perk Hero Software Inc. entered into 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.
  • Sale of Remaining HRO Shares: On June 29, 2022, the Company’s subsidiary Perk Hero Software Inc. entered into a share purchase agreement for the sale of its remaining balance of 5,100,000 common shares of HRO at $0.08 for gross proceeds of $408,000. These shares are subject to an escrow agreement, to be released in tranches of 1,275,000 shares every nine months. The sale was completed on August 16, 2022.
  • ATM raise: Between June 1, 2022 and July 13, 2022, the Company issued 3,970,000 common shares through its at-the-market program at an average price of $0.023 for gross proceeds of $92,487. Commissions paid were $2,775 for net proceeds of $89,712.
  • End of At-the-Market Equity Program: On July 14, 2022 the Company announced it has ended its at-the-market equity program. The Company raised a total of gross proceeds of $3,241,596, since announcing the program on July 29, 2020.
  • 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, such as Square, Clover, TouchBistro, Lightspeed, Micros, and many more.  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 Subsequent to August 31, 2022 

  • Recruited a new Director of Sales who will be focused on signing up larger customers and enterprise accounts.
  • The Company is exploring ways to increase our cash position, including potential equity, debt financing and special bank loan programs that are available as part of Government of Canada programs for startups.

The Company’s strategic priorities for the balance of 2022 include:

  • Continued improvement of the Perk Hero platform.
  • Developing integrations with leading restaurant point-of-sales systems.
  • Growing the number of end-user customers, restaurants and franchisees using our platform.
  • Expanding our digital franchise program in Canada.
  • Expanding our digital franchise program to the United States.
  • Growing our licensing revenue.
  • Investing 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 quarter ended August 31, 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

Perk Labs Inc. is the owner of Perk Hero, the digital franchise company helping businesses transition to the digital economy. Perk Hero provides restaurateurs with friendly and reliable digital ordering, payment and loyalty tools to help them survive and thrive in a difficult economic environment. Perk Hero is growing through a unique community-driven digital franchise business that is available to entrepreneurs at an attractive start-up price.

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:

Vanessa Altamirano

Interim Chief Financial Officer

vanessa@perhkero.com

833-338-0299

investors@perklabs.io

 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, its work towards Point of Sales integration, that we expect to see a continuing increase in customer adoption, confidence that we can grow our revenue as we continue to build innovative technology and help more and more entrepreneurs digitize their businesses, the goal of reaching profitability in the next twelve to eighteen months growing the number of end-user customers, restaurants and franchisees using our platform, expanding our digital franchise program in Canada, and expanding our digital franchise program to the United States. 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.

 

Perk Labs Announces New Director of Sales

Vancouver, Canada / September 22, 2022 / Perk Labs Inc. (CSE:PERK / OTCQB:PKLBF / FKT:PKLB) (“Perk Labs” or the “Company”) the owner of Perk Hero, the digital franchise company helping businesses transition to the digital economy, is pleased to announce that it has hired Manon Roy as its new Director of Sales. Ms. Roy has over 15 years of business to business sales experience and worked with top 1000 companies and built relationships with key decision-makers at major brands. Her experience includes selling enterprise software, SaaS, professional services, IT solutions, web-based marketing platform solutions, and custom development solutions.

 “I am excited to welcome Manon to our team,” said Jonathan Hoyles, CEO of Perk. “The timing to bring on a sales leader could not be more perfect as we are ready to scale and expand our business across North America. Manon’s extensive experience as a sales leader and proven track record of connecting and creating opportunities with C-level executives will be invaluable to execute on Perk’s next chapter of growth.”

”Throughout my career, I’ve had the fortune to lead sales teams at both established leaders and innovative technology startups,” said Ms. Roy. “I see enormous opportunity for Perk’s innovative ordering, payment and loyalty software to solve many of the problems currently facing the hospitality industry. We are at a pivotal moment where hospitality businesses are adopting digital technologies to address the ongoing labour shortage and inflation challenges and innovation is happening at a faster rate than at any point in the industry’s history. I am excited to roll up my sleeves and execute on this opportunity and help Perk grow quickly to support as many businesses in the hospitality industry as possible.”

In her new role as Director of Sales, Mr. Roy will be responsible for developing Perk’s sales team and growing Perk Hero’s network of merchants with a focus on acquiring new enterprise accounts.

 About Perk Labs Inc.

Perk Labs Inc. is the owner of Perk Hero, the digital franchise company helping businesses transition to the digital economy. Perk Hero provides restaurateurs with friendly and reliable digital ordering, payment and loyalty tools to help them survive and thrive in a difficult economic environment. Perk Hero is growing through a unique community-driven digital franchise business that is available to entrepreneurs at an attractive start-up price.

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, contact:

Jonathan Hoyles CEO

(833) 338-0299

investors@perklabs.io

Forward-Looking Statements

Certain statements made in this press release may constitute “forward-looking information”, “future oriented financial information” or “financial outlooks” (collectively, “forward-looking information”) within the meaning of applicable securities laws. Forward-looking information may relate to anticipated events or results including, but not limited to the Company is ready to scale and expand our business across North America; that the Company will realize the tremendous opportunity to grow its business; that there is an enormous opportunity for Perk’s innovative ordering, payment and loyalty software to solve many of the problems currently facing the industry; that Perk will grow quickly to support as many businesses in the hospitality industry as possible; and other statements that are not historical facts. Particularly, information regarding our expectations of future results, targets, performance achievements, prospects or opportunities is forward-looking information. Often, but not always, forward-looking statements can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “believe”, “estimate”, “plan”, “could”, “should”, “would”, “outlook”, “forecast”, “anticipate”, “foresee”, “continue” or the negative of these terms or variations of them or similar terminology. Forward-looking information is current as of the date it is made and is based on reasonable estimates and assumptions made by us at the relevant time in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we believe are appropriate and reasonable in the circumstances. However, we do not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws in Canada. There can be no assurance that such estimates and assumptions will prove to be correct.

Perk Labs Provides Corporate Update

Vancouver, Canada / September 14, 2022 / Perk Labs Inc. (CSE: PERK / OTCQB: PKLBF / FKT: PKLB) (“Perk” or the “Company”), the company helping businesses transition to the digital economy, is pleased to provide a corporate update on its product traction, sales and growth plans, product roadmap, marketing and rebranding, cost reductions and financing initiatives, and investor relations activities.

Product Traction

Our business has evolved dramatically in the past year, as we changed our business model from a transaction based B2C marketplace to a B2B software-as-a-service subscription based model. In the second and third quarters of the year we recruited our first few subscription-based paying customers – this was critical work as these customers helped us validate and refine our product, improve our product positioning, and provide us with important social proof.

We are continuing to sign up new paying customers and continue to see increases in the number of orders through our platform.

Sales and Growth Plans

With much of the heavy R&D work now completed to get our platform robust and scalable and building upon our early successes in signing new customers, we are now moving to a “sales-first organization”: We recently engaged a consultant with deep domain knowledge in the hospitality software space to work with our sales team, completed a review of the state of our sales program and made several improvements on how to increase our execution in lead generation, market positioning and partnership opportunities.

We’ve recruited a new Director of Sales who will be focused on signing up larger customers and enterprise accounts. We plan to make a further announcement about this within the next two weeks. We’ve also recently added to our sales team by engaging Allenton Deazle as a sales executive, and aim to add three sales representatives across Canada. As part of Mr. Deazle’s compensation, he will be compensated in shares of the Company.

We also have ongoing discussions with a group in the United States whom we plan to partner with to grow our presence in the U.S. We expect to make an announcement in the next 30 days.

As part of our growth plan, we are also developing partnerships with several distribution channel partners, including partnerships with a large reseller of digital services, a major point-of-sales provider, a nationwide payment processing and loyalty provider, and we are pursuing a partnership with a well-known hospitality equipment provider. We believe that forming partnerships with the right incentives in place such as mutual referral programs is the way that we can significantly scale customer growth through a much broader distribution of our products.

We will provide further updates on these partnerships as they develop and progress.

Product Roadmap Update

Providing an update on the Company’s product roadmap, Gary Zhang, CTO of Perk said “Omnichannel order management is the foundation of our next-generation membership-based sales and marketing solution. Our product team is working on the top 5 sales order channels: QR-based on-site orders, pickup orders, neighbourhood delivery orders, reservation orders and subscription orders.  Our team plans to complete work on reservations and subscriptions by the end of October 2022. In the last quarter of 2022, our product team will deliver more advanced functions such as an advanced reward system, white-label customization, notification-driven omnichannel marketing and branded token.”

By adding subscription orders, the Company believes it will open up additional revenue opportunities by being able to support many other types of businesses that require recurring subscription-based payments such as club and gym memberships, fitness studios, services and product subscriptions.

With respect to blockchain and NFT technology, the Company believes that while much of the hype and excitement that captured the market’s attention surrounding blockchain and NFT technologies in the earlier part of the year has cooled, there still exists very practical uses of blockchain in the loyalty space and that NFTs can be a tool to provide access to things like club memberships or executing a subscription to a service. The Company plans to further develop its loyalty token on the Solana blockchain to provide a white-label loyalty platform to brands that will also include NFTs as a mechanism for unlocking memberships, subscriptions, events, and special benefits. As validation of this business opportunity, Starbucks recently announced that it is launching its own NFT marketplace with exclusive Web3 benefits for its members:

https://stories.starbucks.com/press/2022/starbucks-brewing-revolutionary-web3-experience-for-its-starbucks-rewards-members/

Rebranding

To better reflect our new direction, we are currently working with a branding expert and plan to unveil our new brand in October with updates to our website, messaging and marketing materials.

Cost Reductions and Financing Initiatives

We’ve taken several steps to reduce our monthly cash burn and, unfortunately, over the past few months, had to let go of a few team members. Another planned cost reduction measure is to phase out our digital gift card offering for which we currently incur a minimum monthly fee.

As previously announced, to increase our cash position, we recently sold over $600,000 in Hero Innovation Group stock. We are also exploring other ways to increase our cash position, including potential equity, debt financing and special bank loan programs that are available as part of Government of Canada programs for startups.

Investor Relations Activities

We also plan to ramp up our investor relations activities to help build Company awareness and increase exposure within the global investment community. As previously announced, the Company has engaged MarketOne, Stockhouse and Proactive Investors, and plans to ramp up its activities through those partners, including attending investor conferences and videos and articles on media platforms such as the Financial Post and Business News Network (BNN Bloomberg).

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 experiences that are more engaging, convenient and rewarding. Perk Hero is growing through a unique community-driven digital franchise business that is available to entrepreneurs at an attractive start-up price.

For more information contact:

Jonathan Hoyles

CEO

Perk Labs Inc.

(833) 338-0299

investors@perklabs.io

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 the Company’s business strategies and its expectations concerning future operations, including statements regarding the Company effectively generating high-margin revenue reliably, that we will be adding three sales representatives across Canada, that by adding subscription payments, it will open up additional revenue opportunities. Although the Company 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. The Company cautions investors that any forward-looking information provided by the Company 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.

Perk Labs Announces New Customers and Reservation Feature

Vancouver, Canada / August 25, 2022 / Perk Labs Inc. (CSE: PERK / OTCQB: PKLBF / FKT: PKLB) (“Perk” or the “Company”), the Company helping businesses go digital, is pleased to announce 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.

“We are excited by the opportunities that the development of our new reservation feature offers. In addition to improving our offering for restaurants, we can support many new verticals with our custom app offering, including salons, health and wellness, fitness and studios,” said Perk CEO, Jonathan Hoyles. “This also improves the value of our franchise offering and opens up many new potential revenue opportunities for our digital franchisees.”

“Our new reservation feature will make our custom branded app offering even more powerful. Businesses can now use our platform for online ordering, pickup and delivery, and in-store QR code payment. With the addition of the reservation feature, we are closer to being the leading omnichannel solution provider,” said Perk CTO, Gary Zhang. “We believe there is a strong market fit for this suite of products and features, as traditional businesses increasingly adopt digital tools. Our team is excited by the momentum we see as our pipeline of customers continues to grow.”

The Company also announced today that it has signed its first restaurant location in Montreal, Ta Chido Snackbar. Recently a competitor, the Sunday App, whose Canadian operations were based in Montreal, announced that it exited the Canadian market, which has opened up opportunities for the Company to acquire new accounts previously held by the Sunday App. Perk has also signed up a number of new restaurants in Vancouver and is seeing strong and steady growth in the number of users, orders and payments placed through its platform.

About Perk Labs Inc.

Perk Labs Inc. (CSE: PERK) (OTCQB: PKLBF) (FKT: PKLB) is the owner of Perk Hero, the company empowering business owners with the digital tools to provide their customers with experiences that are more engaging, convenient and rewarding. Perk Hero is growing through a unique community-driven digital franchise business that is available to entrepreneurs at an attractive start-up price.

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 contact:

Jonathan Hoyles

CEO

Perk Labs Inc.

(833) 338-0299

investors@perklabs.io

 

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 the Company’s business strategies and its expectations concerning future operations, including statements regarding demand for the Company’s offerings. Although the Company 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. The Company cautions investors that any forward-looking information provided by the Company 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.

Perk Labs Announces Deliverect Certification for POS Integration

Vancouver, Canada / August 4, 2022 / Perk Labs Inc. (CSE:PERK / OTCQB:PKLBF / FKT:PKLB) (“Perk” or the “Company”) the parent company of Perk Hero, the digital franchise company helping businesses transition to the digital economy, announced today that it received certification from Deliverect for Point-of-Sale (“POS”) integration.

Founded in 2018, Deliverect is a SaaS company that simplifies online food delivery management. Deliverect seamlessly integrates online orders from food ordering channels, allowing 25,000 establishments to improve operational service and increase customer satisfaction. Deliverect automatically sends incoming orders from ordering platforms to a restaurant’s POS system, saving time and eliminating mistakes. Deliverect supports hundreds of different POS systems, including over 30 different POS systems in the Canadian market, such as Square, Clover, TouchBistro, Lightspeed, Micros, and many more.

“Today’s announcement is an important milestone in our product roadmap and the culmination of months of dedicated work by our development team,” says Gary Zhang, Perk Labs’ CTO. “As we build on a strong ordering, payment and loyalty technology stack, integration with POS systems was a logical next step. We’re excited to work with a partner like Deliverect to provide our customers with powerful, integrated solutions.”

“We are excited to partner with Deliverect to enable restaurants to streamline their operations and accept orders from table, for pickup and delivery directly from their POS,” says Jonathan Hoyles, Perk Labs’ CEO. “With our integration with Deliverect, we are removing a critical barrier in the ordering process, by reducing the friction for restaurants when they receive an order through our platform. We know 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.”

The next steps for Perk to be fully integrated with Deliverect are to register live restaurant partners for beta testing. As part of Perk’s partnership with Deliverect, Perk signed a referral agreement with Deliverect providing that Perk will receive a referral fee for each new restaurant that Perk signs up to Deliverect.

About Deliverect

Deliverect is a SaaS company that simplifies online food delivery management. It seamlessly integrates online orders from food delivery channels (Uber Eats, Doordash, Just Eat Takeaway.com, etc.), allowing 25,000 establishments to improve operational service and increase customer satisfaction. Operating in over 40 markets around the world, Deliverect is trusted by restaurants and FMCGs companies such as Taco Bell, Burger King, and Unilever, as well as small and midsize restaurants and dark kitchens around the world. To find out more information, visit www.deliverect.com.

 About Perk Labs Inc.

Perk Labs Inc. is the owner of Perk Hero, the digital franchise company helping businesses transition to the digital economy. Perk Hero provides restaurateurs with friendly and reliable digital ordering, payment and loyalty tools to help them survive and thrive in a difficult economic environment. Perk Hero is growing through a unique community-driven digital franchise business that is available to entrepreneurs at an attractive start-up price.

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 contact:

Jonathan Hoyles

CEO

Perk Labs Inc.

(833) 338-0299

investors@perklabs.io

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 the Company’s business strategies and its expectations concerning future operations, that we are well positioned to demonstrate our value to larger restaurant chains, and expectations concerning registering beta merchants and receiving referral fees. Although the Company 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. The Company cautions investors that any forward-looking information provided by the Company 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.

 

Perk Labs Reports Second Quarter 2022 Results

Vancouver, Canada, July 28, 2022 ― Perk Labs Inc. (CSE: PERK / OTCQB: PKLBF / FKT: PKLB) (“Perk” or the “Company”) today announced financial results for the second quarter ended May 31, 2022.

Overview

 “In the second quarter of 2022, we laid the technical foundation and made significant strides towards transforming our business from a B2C transaction-based marketplace to a B2B software-as-a-subscription and digital franchise business model,” said Jonathan Hoyles, Chief Executive Officer of Perk Labs. “As we look ahead, I am confident that we can grow our revenue as we continue to build innovative technology and help more entrepreneurs digitize their businesses. We believe that even after all the change we witnessed during COVID, we are still at the very beginning of the digitization of bricks-and-mortar businesses and ordering, payment and especially digital loyalty will become more in demand. We are tremendously encouraged by the rate of adoption we are seeing at our early order from table and online ordering customers and the reception to our custom branded app product.”

“In this fiscal quarter, the Company achieved numerous milestones including the launch of its new downloadable Merchant App, new mobile feature ‘Order and Pay later’, and web-based features for online ordering, pick-up and delivery; as well as worked towards Point of Sales integration.” said Vanessa Altamirano, Interim Chief Financial Officer. “We invested in our technology through these initiatives to create value for restaurants and end-users, and we expect to see a continuing increase in customer adoption.”

2022 Q2 Financial Highlights:

  • Net loss of $1.9M in Q2 2022 compared to net income of $241k in Q2 2021. This is primarily due to the reduction in the value of our marketable securities which was caused by the decrease in the stock price of Hero Innovation Group Inc. (formerly, Euro Asia Pay Holdings Inc.) which generated an unrealized loss of $781k, combined with an increase in investor relations spending for our market awareness campaign.
  • Working capital of $989k in Q2 2022 compared to $3.0M in Q2 2021 and $2.0M in Q4 2021.
  • General and administrative expenses increased 14% from $568k in Q2 2021 to $645k in Q2 2022 as the Company is prioritizing investor relations through its market awareness campaign.
  • Research and development expenses increased 9% from $372k in Q2 2021 to $406k in Q2 2022 as the Company continued to invest in its technology platform.
  • Sales and marketing expenses decreased 35% from $346k in Q2 2021 to $225k in Q2 2022 as the Company refocused marketing efforts on businesses and franchisees instead of end-user customers.

2022 Q2 Operational Highlights

  •  Private Placement raise: The Company raised gross proceeds of $322,230.72 through a non-brokered private placement and issued 7,672,138 units at a price of $0.042.
  • Launch New Market Awareness Campaign: In March 2022, the Company announced that it entered into agreements with several leading marketing firms such as MarketOne Media, Stockhouse Publishing, Proactive Investors, and Conversionly to assist with investor communication, online marketing, and content creation.
  • 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 optimize reliability and responsiveness of its merchant app.
  • 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 This new feature, also accommodates 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 ordering 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, facilitating future upselling on more advanced features.
  • POS Integrations: Perk commenced research and development on building integrations with some of the most popular restaurant point-of-sale systems through one of the leading POS integration companies.
  • ATM raise: For the quarter ended May 31, 2022, the Company continued its at-the-market offering which was renewed on February 17, 2021 and issued 3,028,000 common shares at an average price of $0.035 for gross proceeds of $107,300.
  • Tradeshows and Letters of Intent: The Company was well received at the Franchise Canada Show in Toronto on March 26-27 and the Restaurant Canada Show in Toronto on May 9-11, 2022. The Company signed a new franchisee from the Franchise Canada Show in Toronto and has been conducting ongoing franchise discovery meetings with other potential franchisees. The Company signed a letter of intent to trial its Digital Dine-in solution with a restaurant group owning several prominent brands with a combined 122 restaurant locations across Canada.

Highlights Subsequent to May 31, 2022

  •  New Software-as-a-Subscription Agreements for Online Ordering and Custom Branded App: The company signed more agreements with restaurants for Perk’s new online ordering services and custom branded apps with customers agreeing to pay Perk’s monthly software-as-a-subscription fees. Perk’s new online ordering feature is an easy-to-launch ordering solution that provides everything restaurants need to quickly start accepting pickup and delivery orders through their existing website.
  • Launch of Custom Branded App: In July 2022, the company completed the build of custom branded apps for a number of new customers. Perk Hero has automated its platform and processes so that it takes minimal work from the development team to generate each new custom branded application within one day. The Company’s custom branded apps are built on the Perk Hero platform and leverage its downloadable merchant app, merchant web portal, and powerful features such as mobile ordering, contactless payment, digital wallets and loyalty.
  • Sale of HRO Shares: On June 28, 2022, the Company’s subsidiary Perk Hero Software Inc. entered into two share transfer agreements 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.
  • Sale of Remaining HRO Shares: On June 29, 2022, the Company’s subsidiary Perk Hero Software Inc. entered into a share purchase agreement for the sale of its remaining balance of 5,100,000 HRO common shares for proceeds of $408,000, further strengthening the Company’s cash position. It is anticipated that the transaction will be completed on or after August 10, 2022 upon satisfying the conditions set out in the HRO escrow Agreement.
  • ATM raise: Between June 1, 2022, and July 13, 2022, the Company issued 3,970,000 common shares through its at-the-market program at an average price of $0.023 for gross proceeds of $92,487.
  • End of At-the-Market Equity Program: On July 14, 2022, the Company announced it had completed its ATM 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.
  • Introduced “Call Server” Feature: with the new “Call Server” feature, when the restaurant guest is in need, he or she just needs to press the button “Call Server” button, and the server will be alerted by receiving a notification showing the table where the guest is sitting.
  • Reduced expenditures. The Company continues to make strategic cost reductions. It is the priority of the Company’s executive management to continue to reduce costs, with the goal of reaching profitability in the next twelve to eighteen months.

Outlook

The Company’s strategic priorities for 2022 include:

  • Continued improvement of the Perk Hero platform.
  • Developing integrations with leading restaurant point-of-sales systems.
  • Growing the number of end-user customers, restaurants and franchisees using our platform.
  • Expanding our digital franchise program in Canada.
  • Expanding our digital franchise program to the United States.
  • Growing our licensing revenue.
  • Investing 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 quarter ended May 31, 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

Perk Labs Inc. is the owner of Perk Hero, the digital franchise company helping businesses transition to the digital economy. Perk Hero provides restaurateurs with friendly and reliable digital ordering, payment and loyalty tools to help them survive and thrive in a difficult economic environment. Perk Hero is growing through a unique community-driven digital franchise business that is available to entrepreneurs at an attractive start-up price.

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:

Vanessa Altamirano

Interim Chief Financial Officer

vanessa@perkhero.com

833-338-0299

investors@perklabs.io

 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, its work towards Point of Sales integration, that we expect to see a continuing increase in customer adoption, confidence that we can grow our revenue as we continue to build innovative technology and help more and more entrepreneurs digitize their businesses, the goal of reaching profitability in the next twelve to eighteen months growing the number of end-user customers, restaurants and franchisees using our platform, expanding our digital franchise program in Canada, and expanding our digital franchise program to the United States. 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.

 

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