Ivrnet Announces Financial Results for Three-Months Ended March 31, 2022 and Provides Update on Trading Halt

CALGARY, AB / ACCESSWIRE / May 25, 2022 / Ivrnet Inc. (TSXV:IVI) ("Ivrnet" or the "Company") announces that it has filed its condensed interim consolidated financial statements for the three-months ended March 31, 2022 (the "Interim Financial Statements") and the accompanying management's discussion and analysis for the three-months ended March 31, 2022 (the "Interim MD&A").

The following Q1 2022 financial highlights should be read in conjunction with the Interim Financial Statements and the accompanying Interim MD&A, which can be found on the Canadian System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com.

Q1 2022 Financial Highlights

• The Corporation saw growth in its financial technology services revenue which increased by an aggregate total of $7,145 or approximately 5% to $141,386 from $134,241 in Q1 2021. Fixed recurring revenue increased by $17,071 or 25% to $86,641 in Q1 2022 compared to $69,570 in Q1 2021 which was partially offset by a decline in variable recurring revenue of $9,926 or 15% to $54,745 in Q1 2022 compared to $64,671 in Q1 2021. This overall increase in financial technology services revenue was driven by the addition of a new customer.
• Fixed recurring revenue from Central services decreased by $10,002 or approximately 18% to $46,099 in Q1 2022 compared to $56,101 in Q1 2021. The decrease was primarily due to a new pricing strategy implemented by the Corporation in Q1 2022 for homeowner association customers which saw a shift from fixed recurring to variable recurring revenue. Variable recurring revenue from Central services increased by $23,733 or approximately 48% to $73,068 in Q1 2022 compared to $49,335 in Q1 2021. This increase is partially due to the change in pricing strategy described above together with an increase in sports registrations in Q1 2022 due to the relaxing of COVID-19 health guidelines as compared to Q1 2021.
• Both fixed recurring and variable recurring revenue from Communications services was relatively consistent in Q1 2022 as compared to Q1 2021. Fixed recurring revenue decreased by $14,107 or approximately 4% to $322,178 in Q1 2022 compared to $336,285 in Q1 2021 and variable recurring revenue from Communications increased by $899 or approximately 1% to $118,198 in Q1 2022 compared to $117,299 in Q1 2021.
• Total direct costs increased by $30,417 to $255,401 or approximately 35% of revenues in Q1 2022 compared to $224,984 or approximately 31% of revenues in Q1 2021. This increase is primarily due to an increase in certain variable communication costs tied to fixed recurring customer contracts and an increase in virtual data center costs.
• Earnings before Interest, Depreciation and Amortization ("EBITDA") for the three-months ended March 31, 2022 was a loss of $402,156 compared to $290,241 for the three-months ended March 31, 2021. This represents a decrease of $111,915 in EBITDA. The decrease is primarily a result of additional expenses incurred in connection with the reverse takeover transaction with Flexity Systems Ltd., previously announced on November 19, 2021 and updated on March 29, 2022, (the "Reverse Takeover Transaction") together with reimbursable expenses submitted by the commercial lender related to the expected settlement of the term loan and credit facility with the issuance of preferred shares which is contingent on the completion of the Reverse Takeover Transaction. These additional expenses were partially offset by one-time non-cash items from Q1 2021 which did not recur in Q1 2022, including share-based compensation of $168,021, a $19,389 loss on the settlement of liabilities through the issuance of common shares and a $77,434 loss on the disposal of property and equipment.

Trading Halt

The Corporation's common shares are currently halted from trading, and the trading of the Corporation's common shares is expected to remain halted pending completion of the reverse takeover transaction with Flexity Systems Ltd. previously announced on November 19, 2021 and updated on March 29, 2022.

About Ivrnet

Ivrnet is a software and communications company that develops, hosts, sells and supports value?added business automation software. The company's products and services are delivered through the Internet and traditional phone network. These applications facilitate automated interaction through personalized communication between people, mass communication for disseminating information to thousands of people concurrently, and personalized communication between people and automated systems.

For further information: please contact Andrew Watts, President and CEO, Ivrnet Inc.; Suite 1400, 350 - 7^th Avenue S.W., Calgary, Alberta T2P 3N9; Tel/fax 1.800.351.7227; E-mail: [email protected]; www.ivrnet.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.

SOURCE: Ivrnet Inc.