Edge Total Intelligence Inc. Reports Second Quarter 2022

ARLINGTON, Va., Aug. 29, 2022 (GLOBE NEWSWIRE) — Edge Total Intelligence Inc. (TSXV: CTRL; FSE:Q5i) (“edgeTI”, “we”, “our” or the “Company”), a leader in real-time digital operations, announces operating and consolidated results for the second quarter 2022 (“Q2-2022”). Financial information is expressed in United States (US) dollars unless otherwise indicated. The Company’s related financials and management discussion and analysis for the second quarter, 2022 are posted on its profile on SEDAR (www.sedar.com).

Financial Highlights for Q2-2022

  • Total revenue of $951K versus $961K for the quarter ending June 30, 2021 (“Q2-2021”), roughly flat over the prior quarter ending March 31, 2022 (“Q1-2022”) at $956K.
  • Subscription revenue grew 6% to $814,749 from $765,367 Q2-2021.
  • Gross profit increased 11% to $701,193 from $633,117 in Q2-2021.
  • Reduced net loss by 51% or $663K over Q2-2021 as the Company works to reach profitable operations.

Operational Highlight for Q2-2022

  • Teaming with SD3IT, LLC for the TechNet Indo-Pacific Spring Symposium resulted in a strategic partnership for work in data transformation and led to the Company being invited to the opening of the Hawai’i Indo-Pacific Innovation Campus (HIPIC), an Independent Test Organization (ITO) supporting the U.S. Army Pacific Command.

Subsequent to Q2-2022

  • The Company secured a $1 million operating line of credit with Lotus Domaine III (“Lotus”), its largest shareholder, based on the Company’s projected cash flows through summer.
  • On July 1, the Company was one of 27 companies awarded an indefinite delivery/ indefinite-quantity (IDIQ) contract by the U.S. Air Force with a ceiling of $950 million through May 2025 for the maturation, demonstration, and proliferation of capability across platforms and domains, leveraging open systems design, modern software and algorithm development in order to enable Joint All Domain Command and Control (JADC2) for U. S. Armed Forces and Allies.
  • edgeTI and OnSolve formed a strategic partnership to deliver OnSolve’s AI-driven risk intelligence and critical communications into edgeTI’s platform to provide full operational visibility and control for smart cities and enterprises looking to achieve organizational resilience in their operations, logistics, and supply chain. The strategic partnership establishes referral relationships between each company’s sales teams and formalizes the integration between the two company’s products.
  • The Company’s new low code and intelligent automation capabilities produced significant cost and time savings in live operational trials and is receiving strong interest from service providers, which management believes will open additional high-revenue growth opportunities in the remainder of 2022 and beyond.
  • Jim Barrett, CEO was accepted into Forbes Technology Council, an invitation-only community for world-class CIOs, CTOs, and technology executives, which will improve management’s access to a wide range of business leaders.

“We continue to build upon our government program as a trusted technology supplier to the U.S. Government as evidenced by our inclusion in the JADC2 contract and building new partnerships with SD3IT and OnSolve,” said Jim Barrett, Chief Executive Officer.

“I am proud of the work our development team has done to create additional low-code and new automation capabilities within our edgeCore platform. Live operational trials with strategic customers have delivered tremendous cost and time savings, like speeding up existing operations by more than 80%,” said Jim Barrett. “These capabilities have not only proven beneficial to these early customers, but we think the advances will serve as an exciting accelerator of revenue growth for the Company in the future.”

Operational Outlook
Ongoing global business challenges and uncertainty, which are well reported, led to delayed customer decisions on expansions and new projects that impacted Q2 revenue growth. In contrast, the same business challenges and uncertainty are driving increased demand from government and service providers. National defense and smart cities initiatives demonstrate increased need to improve the visualization of their operations in real-time and accelerate data-driven decision making and automation. Business process outsourcers and managed services providers experiencing talent shortages and rising inflation costs that cut into their profit margins are demanding novel approaches to the automation of business operations. In both cases, the Company believes these trends will drive further pipeline development leading to new growth, while it navigates continued uncertainty and new challenges.

Selected Financials

  Three Months Ended June 30 Six Months Ended June 30
Second Quarter and Six Months Ended   2022   2021   2022   2021 
Revenue $ 951,219   $ 960,585   $ 1,907,740   $ 2,184,175  
Cost of revenue   250,026     327,467     485,848     673,132  
Gross profit $ 701,193   $ 633,118   $ 1,421,892   $ 1,511,043  
Gross margin %   74 %   66 %   75 %   69
Selling and marketing expenses   388,966     369,208     780,564     772,088  
Administrative expenses   612,245     702,955     1,343,707     1,139,632  
Research and development expenses   359,673     295,400     779,115     578,697  
Other (income) expenses   111,619     333,242     218,811     (96,434 )
Operating Expense $ 1,472,503   $ 1,700,805   $ 3,122,197   $ 2,393,983  
Operating income (loss) $ (771,310 ) $ (1,067,687 ) $ (1,700,305 ) $ (882,940 )
Interest   229,858     223,441     463,735     493,218  
Change in fair value of warrant liability   (283,362 )       (119,270 )  
Foreign exchange loss   (90,198 )       (50,572 )  
Loss before income taxes $ (627,608 ) $ (1,291,128 ) $ (1,994,198 ) $ (1,376,158 )
Income tax expense                
Net loss $ (627,608 ) $ (1,291,128 ) $ (1,994,198 ) $ (1,376,158 )
Shareholder Equity Three Months Ended June 30 Six Months Ended June 30
2022 to 2021 Comparison   2022   2021   2022
Net loss per share – basic $ (0.03 ) $ (0.16 ) $ (0.11 ) $ (0.17 )
Net loss per share – diluted $ (0.03 ) $ (0.16 ) $ (0.11 ) $ (0.17 )
Share capital – issued and outstanding
Single Voting Shares (SVS) – 41.7%
  18,993,459     8,004,000     18,993,459     8,004,000  
Multiple Voting Shares (MVS) – 58.3%   26,600         26,600      

About edgeTI

edgeTI helps customers sustain situational awareness and accelerate data-driven action with its real-time digital operations software, edgeCore™. Global enterprises, service providers, and governments are more profitable when insight and action are united to deliver fluid experiences via the platform’s low-code development capability and composable experiences. With edgeCore, customers improve their margins and agility by rapidly transforming siloed systems and data across evolving, complex situations in business, technology, and cross-domain operations — helping the achieve the impossible. Traded on: TSXV: CTRL FSE: Q5i

Learn more at https://edgeti.com.

For further Information contact:

Nick Brigman
Phone: 888-771-3343
Email: ir@edgeti.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.

Forward-Looking Information and Statements
Certain statements in this news release are forward-looking statements or information for the purposes of applicable Canadian and US securities law, including statements regarding market projections, customer impacts of product development, the execution of the Company’s growth and marketing strategies, the Company’s expectations for its 2022 and 2023 MRR and revenues, the Company’s ability to enter into strategic partnerships and continue to develop easy to use products, and other matters. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations, or intentions regarding the future. Such information can generally be identified by the use of forwarding-looking wording such as “may”, “expect”, “estimate”, “anticipate”, “intend”, “believe” and “continue” or the negative thereof or similar variations. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company, including but not limited to, business, economic and capital market conditions.

Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which the Company will operate in the future, including the demand for its products, anticipated costs, and the ability to achieve goals. Factors that could cause the actual results to differ materially from those in forward-looking statements include, the continued availability of capital and financing, the impact of COVID-19 or other viruses and diseases on the Company’s ability to operate, competition and general economic, market or business conditions. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The reader is cautioned not to place undue reliance on any forward-looking information. The forward-looking statements contained in this news release are made as of the date of this news release. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Edge Total Intelligence Inc

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