INEO Announces Fiscal First Quarter 2024 Financial Results
Nov 29, 2023
- INEO is hosting an investor webinar to discuss its quarterly results on November 30, 2023 at 9:00 am PT (12:00 pm ET)
SURREY, BC, Nov. 29, 2023 /PRNewswire/ – INEO Tech Corp. (TSXV: INEO) (OTCQB: INEOF) (the "Company" or "INEO"), the innovative developer and operator of the INEO Media Network, a digital advertising and analytics solution for retailers, today announced it has filed its Interim Consolidated Quarterly Financial Statements and Management's Discussion and Analysis on SEDAR.com for the Company's fiscal first quarter ended September 30, 2023.
Greg Watkin, Chairman and Founder of INEO, commented, "We are excited to end the calendar year on a strong note heading into 2024, as we continue to make advancements on multiple fronts. We are well into the planning for next year's deployments and installations with our large retail partners and our direct sales pipeline remains promising with several new opportunities. In addition, our global distribution partnership with Prosegur is moving forward as we completed our first shipment of Welcoming Systems to Jumbo Cencosud. Cencosud represents our first entry into the South American market, and we look forward to continuing our work with Prosegur to expand Cencosud's retail media network into more retail locations. We also have multiple other pilot systems installed with Prosegurs' clients and will look to convert those pilot trials into full scale roll-outs heading into the new year. Finally, our recently updated key contracts have positioned the Company for increased revenue generation opportunities as well as reducing our cash needs. We expect to capitalize on these updated agreements by working with third-party media partners in 2024."
Fiscal First Quarter 2024 Financial Highlights:
- INEO generated $365,931 of revenue for the three months ended September 30, 2023, as compared to revenue of $416,086 for the three months ended September 30, 2022. The change in revenue was mainly due to the strategic focus of dedicating resources to expand the INEO Media Network, sign media partners and de-emphasize the sale of Loss Prevention Products.
- INEO generated gross profit for the three months ended September 30, 2023, of $143,735, as compared to gross profit of $207,646 for the quarter ended September 30, 2022. The Company attributes the decrease in gross profit to the declining margin of INEO Loss Prevention Products and Fabrication Operation.
- INEO achieved gross margin percentage of 39.3% for the three months ended September 30, 2023, compared to gross margin percentage of 49.9% for the quarter ended September 30, 2022.
- Net loss for the three months ended September 30, 2023 was $750,540 or $0.01 per share compared to net loss of $590,614 or $0.01 per share for the three months ended September 30, 2022.
- Adjusted EBITDA loss for the three months ended September 30, 2023 was $551,027, compared to Adjusted EBITDA loss of $512,286 for the three months ended September 30, 2022.
- INEO had $232,626 of cash and cash equivalents at September 30, 2023, compared to $362,510 of cash and cash equivalents at June 30, 2023.
- As at March 31, 2023, the Company had 76,143,709 shares issued and outstanding.
Fiscal First Quarter 2024 Business Highlights:
- On September 19, 2023, the Company signed an updated commercial agreement with its large national retail and regional liquor store network locations. The updated contracts feature 5-year and 6-year contract lengths, exclusive in-store advertising rights, deployment of additional in-store media screens, the right to assign the ownership of the INEO Welcoming System hardware deployed in the retail stores and the right to assign ownership of INEO's exclusive advertising contracts to a third-party media partner. The updated agreements are expected to position the Company for rapid growth and improved margins.
- On September 27, 2023, the Company introduced INEO ORCA. ORCA, which stands for Organized Retail Crime Alerts, is INEO's latest AI-driven solution and it represents a monumental leap forward in security and crime prevention. By leveraging advanced computer vision and machine learning algorithms, the latest feature of the patented INEO Welcoming System can meticulously analyze stored CCTV footage, captured during loss prevention events, enabling it to detect and recognize patterns associated with organized retail criminal activities.
Events Subsequent to September 30, 2023:
- On October 24, 2023, the Company announced the first shipment of INEO Welcoming Systems, as per the Company's distribution agreement with partner Prosegur Security, for installation at various locations of Jumbo Cencosud in Columbia. As per the agreement, before the end of October, the Company will be selling and shipping a total of 59 systems, comprised of both Welcoming Systems and Welcoming GATEs, which will be installed in four Jumbo retail locations. With approximately 15 systems installed per store, the Company will be managing an immersive in-store retail media network. In addition, it will receive revenue from the sale of the systems as well as ongoing SaaS-based revenues from the deployment of the installed INEO Welcoming Systems.
Kyle Hall, CEO of INEO commented on the Company's progress, "We continue to have a positive outlook as we head into the final months of the year. Our partners continue to have trust in our capabilities and would like us to move even quicker next year in installing the network across all their retail locations. Furthermore, our focus on expanding the INEO Media Network has led to de-emphasizing the sale of our legacy loss prevention products and increasing our advertising sales. As a result, we saw our advertising sales grow by over 50% year over year in the quarter and we expect this revenue segment to continue growing into a larger segment for us in the future."
INEO is now actively deploying systems and ramping up its installation locations with contracted customers across North and South America. INEO is landing pilot wins and receiving orders with large retailers, expanding its location footprint, and ramping up its revenues. In particular, the Company is making significant progress with a major retail partner who has over 1,000 store locations across the United States.
INEO's key objectives for fiscal 2024 are as follows:
- Increase revenues through the deployment and expansion of the INEO Media Network to INEO's leading retail customers.
- Support Prosegur with its growth and initiatives with key retailers across the globe, including converting large retail customers from trialing the Welcoming System to fully contracted customer roll-outs.
- Leverage INEO's updated contract agreements to expand the business faster while optimizing capital allocation, to significantly reduce cash needs and expenditures while generating increased revenues and cash flows through the monetization of customer contracts.
INEO's technology has been proven out and has been validated by large retailers and a global partnership with Prosegur. INEO has created a healthy sales pipeline consisting of both direct sales customers and Prosegur's customers, including grocery, home hardware, apparel and wholesale club retail chains from North America, South America and Europe. INEO has seeded the market with trial systems and is converting these trials into full scale roll-outs with the goal of creating a critical mass of systems.
Advertising and AI driven analytics are becoming increasingly important in the modern retail environment as retailers continue to invest in retail technology to improve the customer experience. INEO is well positioned to take advantage of these trends with its restructured key contract agreements. INEO expects its new customer agreements to fuel the monetization of its customer contracts as well as provide the framework for significantly reducing the Company's cash needs and expenditures.
The Company will hold a webinar to discuss its results and provide an outlook on the business, on Thursday, November 30, 2023 at 9:00 am PT (12:00 pm ET).
November 30, 2023
9:00 am PT (12:00 pm ET)
778-907-2071 (Vancouver local)
647-374-4685 (Toronto local)
861 3022 6874
Select Financial Highlights:
The following table highlights operational information for the three months ended September 30, 2023, and 2022. It has been derived from the unaudited interim condensed consolidated financial statements and should be read in conjunction with these statements and related notes.
1 See the section Reconciliation of Net Loss to Adjusted EBITDA
- Readers are cautioned that Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization and Stock Compensation), does not have standardized meanings prescribed by IFRS and is considered a non-IFRS measure. Adjusted EBITDA is a useful supplemental measure of the Company's performance prior to consideration of how operations are financed or how results are taxed or how depreciation and amortization affects results. Adjusted EBITDA is not intended to represent net earnings calculated in accordance with IFRS.
On behalf of the Board of Directors
Kyle Hall, CEO,
INEO Tech Corp.
About INEO Tech Corp. (TSXV: INEO; OTCQB: INEOF)
INEO Tech Corp., through its wholly owned subsidiary, INEO Solutions Inc., operates the INEO Media Network, a digital advertising and analytics solution for retailers. INEO's patented technology integrates and monetizes digital screens with theft detection sensor gates at the entrance of retail stores. The Company's cloud-based platform uses IoT (Internet of Things) and AI (Artificial Intelligence) technology to deliver customized digital advertising to each retail location based on the demographic mix, such as age and gender, of customer traffic at each location. The Company also deploys the INEO Welcoming Network technology through a SaaS-based solution to larger retail chains. INEO is headquartered in Surrey, Canada and publicly traded on the TSX-Venture Exchange under the symbol "INEO" and on the OTCQB-Venture Market under the symbol "INEOF".
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Investors are cautioned that, except as disclosed in the disclosure document, any information released or received with respect to the Company may not be accurate or complete and should not be relied upon. Trading in securities of the Company should be considered highly speculative.
This news release contains forward-looking information, which involves known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from current expectations. Important factors – including the availability of funds, acceptance of the Company's products, competition, and general market conditions – that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed on SEDAR, including the Annual Information Form for the year ended June 30, 2022 filed on SEDAR on November 4, 2022. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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