TORONTO, ON (May 19, 2023) - EQ Inc. (TSXV: EQ) (“EQ Works” or the “Company”), a leader in geospatial data and artificial intelligence driven software and solutions, announced its financial results today for the first quarter ended March 31, 2023.

During the quarter, EQ reported revenue of $1.7 million, an increase in gross margin and a significant improvement in its adjusted EBITDA. EQ’s plan for 2023 is to focus more on solutions that utilize the full extent of its A.I. driven intelligence products and its proprietary data assets and partnerships and less on its legacy, lower margin, less strategic, media business. Demand for first party and zero party data increased during the quarter, and continues to increase, as companies across the country understand the urgency to invest in A.I. solutions and understand that all these solutions require deep data at scale. EQ has been building and investing in its proprietary data for over a decade through the aggregation of geospatial data, the on-going enhancements to its consumer facing app Paymi, and by solidifying deep partnerships with the best data companies in the country for our key verticals of retail, financial services and automotive.

The gross margin for the quarter of 38% was an improvement both sequentially and over the same period a year ago and the adjusted EBITDA loss of $0.98 million was approximately a 40% improvement over the same period a year ago. In addition, with the deployment of EQ’s new suite of data products, its pipeline is stronger than it has been in years and the Company is forecasting second quarter revenue to increase by more than 60% compared to what was generated in the first quarter.

The Company continues to focus on higher margin recurring revenue and profitability. With the changes made in late 2022 and continuing into the first quarter of 2023, EQ expects to realize cost savings of approximately $3.0 million annually, while continuing to invest adequately in its core recurring revenue products. The result of our ongoing shift of resources into new recurring revenue products is yielding higher margins and contributing to our goal of achieving cash flow profitability in the near term. With last year’s investments into the development of Clear Lake (“CL”), a proprietary consumer insight platform, and Paymi, a proprietary consumer facing cashback app that generates data on a continuous basis, substantially completed, the current year’s focus is sales and marketing execution and monetization. Based on current forecasts, the Company expects to be profitable in the second half of 2023 and will continue to monitor its business outlook and make additional changes if required.

“Our focus for 2023 is profitability and growth of our core recurring revenue products. With our significant investments over the past 24 months on proprietary data and A.I. led solutions, we believe we are very well positioned to drive this next stage of growth” said Geoffrey Rotstein, President and CEO of EQ Works. “Our product mix of recurring license revenue and first party data analytics has been very well received in the market and the unique nature of our value proposition is gaining traction. The changes to our team and our operations have streamlined our focus, made us a stronger and more nimble organization, and positioned us well for profitable growth. The market challenges have provided us with a number of exciting opportunities that we will take full advantage of in the coming quarters.”

Non-IFRS Financial Measures

EQ Works measures the success of the Company’s strategies and performance based on Adjusted EBITDA, which is outlined and reconciled with net loss in the section entitled “Reconciliation of Net Loss for the period to Adjusted EBITDA” in the MD&A. The Company defines Adjusted EBITDA as net loss from operations before: (a) depreciation of property and equipment and amortization of intangible assets, (b) share-based payments, (c) finance income and costs, net, (d) depreciation of right-of-use assets (e) restructuring costs. Management uses Adjusted EBITDA as a measure of the Company's operating performance because it provides information on the Company's ability to provide operating cash flows for working capital requirements, capital expenditures, and potential acquisitions. The Company also believes that analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of companies in its industry.

The non-IFRS financial measure is used in addition to, and in conjunction with, results presented in the Company’s consolidated financial statements prepared in accordance with IFRS and should not be relied upon to the exclusion of IFRS financial measures. Management strongly encourages investors to review the Company's consolidated financial statements in their entirety and to not rely on any single financial measure. Because non-IFRS financial measures are not standardized, it may not be possible to compare these financial measures with other companies non-IFRS financial measures having the same or similar names. In addition, the Company expects to continue to incur expenses similar to the non-IFRS adjustments described above, and exclusion of these items from the Company's non-IFRS measures should not be construed as an inference that these costs are unusual, infrequent, or non-recurring.

The table below reconciles net loss from operations and Adjusted EBITDA for the periods presented:

About EQ Works

EQ Works (www.eqworks.com) enables businesses to understand, predict, and influence customer behaviour. Using unique data sets, advanced analytics, machine learning and artificial intelligence, EQ Works creates actionable intelligence for businesses to attract, retain, and grow the customers that matter most. The Company’s proprietary SaaS platform mines insights from movement and geospatial data, enabling businesses to close the loop between digital and real-world consumer actions.

Neither the TSX-V nor its Regulation Services Provider (as that term is defined in policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

Certain statements contained in this press release constitute “forward-looking statements”. All statements other than statements of historical fact contained in this press release, including, without limitation, those regarding the Company’s future financial position and results of operations, strategy, plans, objectives, goals and targets, and any statements preceded by, followed by or that include the words “believe”, “expect”, “aim”, “intend”, “plan”, “continue”, “will”, “may”, “would”, “anticipate”, “estimate”, “forecast”, “predict”, “project”, “seek”, “should” or similar expressions, or the negative thereof, are forward-looking statements. These statements are not historical facts but instead represent only the Company’s expectations, estimates, and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks, and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied, or forecasted in such forward-looking statements. Additional factors that could cause actual results, performance, or achievements to differ materially include, but are not limited to, the risk factors discussed in the Company’s MD&A for the three months ended March 31, 2023. Management provides forward-looking statements because it believes they provide useful information to investors when considering their investment objectives but cautions investors not to place undue reliance on forward-looking information. Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements and any other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. These forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect subsequent information, events, or circumstances or otherwise, except as required by law.

EQ Inc. • Peter Kanniah, Chief Financial Officer • 1235 Bay Street, Suite 401 | Toronto, Ontario | M5R 3K4 • press@eqworks.com