VANCOUVER, BC, CANADA – Snipp Interactive Inc. (“Snipp”, the “Company”, “We” and “Our”) (TSX-V: SPN; OTCPK: SNIPF), a global provider of digital marketing promotions, rebates, and loyalty solutions, provides a status update on the completion and filing of its audited financial statements and associated management’s discussion and analysis for the years ended December 31, 2022 and 2021 (together, the “Annual Financials”) and announces its preliminary unaudited financial results for the year ended December 31, 2022 (“Fiscal 2022”) .
On August 2, 2023, the Company announced that it was expecting to file the Annual Financials by August 15, 2023. Since that time, while significant progress has been made towards completing the audit of the Company’s Annual Financials the audit remains incomplete as of the date hereof, due to primarily the identification of a possible prior period adjustment that, among other things, requires the involvement of the Company’s previous audit firm, Davidson & Company LLP, who audited the financial statements for the years ended December 31, 2021 and 2020 (“Fiscal 2021”). We are currently working with both our current auditors, RSM Canada LLP, and Davidson & Company LLP to complete an analysis of the impact of such an adjustment, which we have been currently advised is expected to be less than $500k. Despite the potential 2021 adjustment to the levels currently advised, the Company expects Fiscal 2021 to still show positive EBITDA growth and a significant revenue uplift.
Fiscal 2022 Highlights in U.S. dollars1
(Refer to the Non-GAAP Measures, Gross Margin, EBITDA and Bookings Backlog (each as defined herein) discussion below for more information on how these metrics are calculated and utilized by the Company)
- For the full Fiscal 2022 period, the Company expects revenue to total between $24 million to $25 million, which represents an increase of between 57% to 64% when compared to Fiscal 2021.
- For Fiscal 2022, Gross Margin is expected to be approximately 38%, as compared to 57% in Fiscal 2021. We have continued to invest in the growth of Gambit Rewards, a B2C business, which has temporarily impacted our margins.
- For Fiscal 2022, EBITDA is expected to be positive and between $0.1 million and $0.2 million, which represents a decrease of approximately 94% or 89%, compared to positive EBITDA of $1.8 million for Fiscal 2021.
- Bookings Backlog as at December 31, 2022, is expected to be approximately $10 million compared to $10.9 million as at December 31, 2021.
- Cash at the end of 2022 stood at $5.5 million and the Company continues to be debt free.
“2022 was a pivotal year for Snipp, with our new solutions, Gambit and Snipp Media, showing early and continued success. Our audit has taken an unusually long period of time given the change in audit firms and our acquisition of the Gambit business in early 2022, and now the possible prior period adjustment which requires the involvement of our prior audit firm as well. We hope the unaudited results that we announced today will inspire confidence in our shareholders that the underlying fundamentals of our business and operations remain sound. We are excited about our growth prospects and are focused on scaling the business, as we build out the core SnippCARE Platform solution and the Gambit Rewards Platform and the soon to be deployed SnippMEDIA solution. The team is working diligently to complete the Annual Filings so that our stock can once again trade. We apologize for any inconvenience or hardship that this may have caused to our shareholders”, said Atul Sabharwal, Founder of Snipp.
1All financial highlights outlined herein are provided on a preliminary unaudited basis.
Snipp uses certain performance measures throughout this press release that are not recognizable under Canadian generally accepted accounting principles (“GAAP”) or International Financial Reporting Standards (“IFRS”). These performance measures include Gross Margin and EBITDA. Management believes that these measures provide supplemental financial information that is useful in the evaluation of the Company’s operations.
Investors should be cautioned, however, that these measures should not be construed as alternatives to measures determined in accordance with GAAP and IFRS as an indicator of Snipp’s performance. The Company’s method of calculating these measures may differ from that of other organizations, and accordingly, these may not be comparable.
Snipp defines earnings before interest, taxes, depreciation and amortization (“EBITDA”) as revenue minus operating expenses excluding non-cash operating expenses of share-based payments, depreciation and amortization (interest and taxes are not included in the Company’s operating expenses).
Snipp defines Gross Margin as revenue less campaign infrastructure. The Company’s calculation of Gross Margin is not a financial measure that is recognized under GAAP. Investors should be cautioned that the Company’s defined Gross Margin should not be construed as an alternative measure to other measures determined in accordance with GAAP.
Snipp defines Bookings Backlog as future revenue from existing customer contracts to be recognized in future quarters. Bookings get translated into revenues based on IFRS principles and the Bookings Backlog reflects how revenues in future quarters are steadily being booked today.
Snipp Interactive Inc. (TSX-V: SPN; OTCPK: SNIPF) is a leading Platform-as-a-Service (PaaS) company in the global loyalty and promotions sector. Snipp’s proprietary and modular SnippCARE (Customer Acquisition, Retention & Engagement) Platform allows its marquee list of Fortune 500 clients and world-class agencies and partners to use various modules of the Platform to run long-term and short-term programs and promotions, while continually generating and capturing unique zero party data that is invaluable in providing insights to drive sales. SnippCHECK, the Platform’s Receipt Processing Module has established itself as an industry leader and standard by powering a large majority of all receipt-based promotions in North America. SnippLOYALTY, the Platform’s full scale modular loyalty engine allows clients the flexibility of deploying any/all aspects of a standard loyalty program on a case-by-case basis. SnippREWARDS, the Platform’s modular catalogue of digital and physical rewards provides clients with global and easily deployable access to an extensive catalogue of digital and physical rewards. SnippWIN, the Platform’s gaming module solves for the implementation and compliance difficulties of offering games of chance and skill on a global basis and allows for the global deployment and administration of legally compliant games of chance and skill. For more information, visit Snipp’s website at www.snipp.com and its profile on SEDAR+ at www.sedarplus.ca.
Snipp is headquartered in Vancouver, Canada with a presence across the United States, Canada, Ireland, Europe, and India. Snipp is publicly listed on the TSX Venture Exchange in Canada and is also quoted on the OTC Pink marketplace under the symbol SNIPF.
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Cautionary Note Regarding Forward-Looking Statements
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. These statements relate to future events or future performance. The use of any of the words “could”, “intend”, “expect”, “believe”, “will”, “projected”, “estimated” and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Company’s current belief or assumptions as to the outcome and timing of such future events.
The forward-looking information and forward-looking statements contained herein include, but are not limited to, statements regarding: the Company’s business objectives and milestones and the anticipated timing of, and costs in connection with, the execution or achievement of such objectives and milestones; the Company’s future growth prospects and intentions to pursue one or more viable business opportunities; the development of the Company’s business and future activities following the date hereof; expectations relating to market size and anticipated growth in the jurisdictions within which the Company may from time to time operate or contemplate future operations; expectations with respect to economic, business, regulatory and/or competitive factors related to the Company; the market for the Company’s current and proposed product offerings, as well as the Company’s ability to capture market share; the Company’s strategic investments and capital expenditures, and related benefits; the distribution methods expected to be used by the Company to deliver its product offerings; the competitive landscape within which the Company operates and the Company’s market share or reach; the performance of the Company’s business and the operations and activities of the Company; the Company completing and filing their Annual Financials on the timelines indicated herein; the Annual Financials’ results not materially changing from what has been disclosed herein, with the exception of the applicable adjustments; the Annual Financials showing a positive EDITDA growth and a significant revenue uplift; the Company hitting its forecasted revenue, Gross Margin, EDITDA and Bookings Backlog; the Company building an audience for each business and beginning monetization efforts; the impact of the Gambit Rewards business on the Company’s Annual Financials and business; the Company focussing on scaling the business, including building out the core SnippCARE solution, Gambit Rewards and SnippMEDIA solution; the Company launching SnippMEDIA solution on the timelines indicated herein; and the recommencement of the trading of the Company’s stock.
Forward-looking information in this press release are based on certain assumptions and expected future events, namely: current and future members of management will abide by the Company’s business objectives and strategies from time to time established by the Company; the Company will retain and supplement its board of directors and management, or otherwise engage consultants and advisors having knowledge of the industries (or segments thereof) within which the Company may from time to time participate; the Company will have sufficient working capital and the ability to obtain the financing required in order to develop and continue its business and operations; the Company will continue to attract, develop, motivate and retain highly qualified and skilled consultants and/or employees, as the case may be; no adverse changes will be made to the regulatory framework governing cannabis, taxes and all other applicable matters in the jurisdictions in which the Company conducts business and any other jurisdiction in which the Company may conduct business in the future; the Company will be able to generate cash flow from operations; the Company will be able to execute on its business strategy as anticipated; general economic, financial, market, regulatory, and political conditions, including the impact of the COVID-19 pandemic, will not negatively affect the Company or its business; the Company will be able to successfully compete in the industry; the Company will be able to effectively manage anticipated and unanticipated costs; the Company will be able to maintain internal controls over financial reporting and disclosure, and procedures in order to ensure compliance with applicable laws; the Company will be able to conduct its operations in a safe, efficient and effective manner; general market conditions will be favourable with respect to the Company’s future plans and goals; the Company will complete and file their Annual Financials on the timelines indicated herein; the Annual Financials’ results will not materially changing from what has been disclosed herein, with the exception of the applicable adjustments; the Annual Financials will show a positive EDITDA growth and a significant revenue uplift; the Company will hit its forecasted revenue, Gross Margin, EDITDA and Bookings Backlog; the Company will build an audience for each business and beginning monetization efforts; the Gambit Rewards business will have the anticipated impact on the Company’s Annual Financials and business; the Company will focus on scaling the business, including building out the core SnippCARE solution, Gambit Rewards and SnippMEDIA solution; the Company will launch SnippMEDIA solution on the timelines indicated herein; and the Company’s stock will resume trading.
These statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from those expressed or implied by such statements, including but not limited to: the Company’s inability to attract and retain qualified members of management to grow the Company’s business and its operations; unanticipated changes in economic and market conditions (including changes resulting from the COVID-19 pandemic) or in applicable laws; the impact of the publications of inaccurate or unfavourable research by securities analysts or other third parties; the Company’s failure to complete future acquisitions or enter into strategic business relationships; unanticipated changes in the industry in the jurisdictions within which the Company may from time to time conduct its business and operations, including the Company’s inability to respond or adapt to such changes; risks relating to projections of the Company’s operations; the Company’s inability to effectively manage unanticipated costs and expenses; risk that the Company will not complete and file their Annual Financials on the timelines indicated herein; risk that the Annual Financials’ results will materially changing from what has been disclosed herein; risk that the Annual Financials will not show a positive EDITDA growth and/or a significant revenue uplift; risk that the Company will not hit its forecasted revenue, Gross Margin, EDITDA and Bookings Backlog; risk that the Company will be unable to build an audience for any or all of the Company’s businesses and/or be unable to begin monetization efforts and/or monetize any or all of the businesses; risk that the Gambit Rewards business with not have the anticipated impacts on the Company’s Annual Financials and business; risk that the Company will be unable to focus on or unable to scale the business and/or be unable to build out any or all of the core SnippCARE solution, Gambit Rewards and SnippMEDIA solution; risk that the Company will be unable to launch SnippMEDIA solution on the timelines indicated herein or at all; risk that the Company’s stock will be unable to recommence trading on the timelines indicated herein or at all; and risks associated with utilizing certain performance measures not recognizable under Canadian GAPP or IFRS.
Readers are cautioned that the foregoing list is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated.
Forward-looking statements contained in this press release are expressly qualified by this cautionary statement and reflect the Company’s expectations as of the date hereof and are subject to change thereafter. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, estimates or opinions, future events or results or otherwise or to explain any material difference between subsequent actual events and such forward-looking information, except as required by applicable law.
Cautionary Note Regarding Future Oriented Financial Information
This press release may contain future oriented financial information (“FOFI”) within the meaning of Canadian securities legislation, about prospective results of operations, financial position or cash flows, based on assumptions about future economic conditions and courses of action, which FOFI is not presented in the format of a historical balance sheet, income statement or cash flow statement. The FOFI has been prepared by management to provide an outlook of the Company’s activities and results and has been prepared based on a number of assumptions including the assumptions discussed under the heading above entitled “Cautionary Note Regarding Forward-Looking Statements” and assumptions with respect to the costs and expenditures to be incurred by the Company, capital expenditures and operating costs, taxation rates for the Company and general and administrative expenses. Management does not have, or may not have had at the relevant date, firm commitments for all of the costs, expenditures, prices or other financial assumptions which may have been used to prepare the FOFI or assurance that such operating results will be achieved and, accordingly, the complete financial effects of all of those costs, expenditures, prices and operating results are not, or may not have been at the relevant date of the FOFI, objectively determinable.
Importantly, the FOFI contained in this press release are, or may be, based upon certain additional assumptions that management believes to be reasonable based on the information currently available to management, including, but not limited to, assumptions about: (i) the future pricing for the Company’s products, (ii) the future market demand and trends within the jurisdictions in which the Company may from time to time conduct the Company’s business, (iii) the Company’s operating cost estimates, (iv) the Company’s unaudited financial results for the year ended December 31, 2022, and (vi) the Annual Financials’ results not materially changing from what has been disclosed herein, except as outlined herein. The FOFI or financial outlook contained in this press release do not purport to present the Company’s financial condition in accordance with IFRS as issued by the International Accounting Standards Board, and there can be no assurance that the assumptions made in preparing the FOFI will prove accurate. The actual results of operations of the Company and the resulting financial results will likely vary from the amounts set forth in the analysis presented in any such document, and such variation may be material (including due to the occurrence of unforeseen events occurring subsequent to the preparation of the FOFI). The Company and management believe that the FOFI has been prepared on a reasonable basis, reflecting management’s best estimates and judgments as at the applicable date. However, because this information is highly subjective and subject to numerous risks including the risks discussed under the heading above entitled “Cautionary Note Regarding Forward-Looking Statements” and under the heading “Risk Factors” in the Company’s public disclosures, FOFI or financial outlook within this press release should not be relied on as necessarily indicative of future results.
Readers are cautioned not to place undue reliance on the FOFI, or financial outlook contained in this press release. Except as required by Canadian securities laws, the Company does not intend, and does not assume any obligation, to update such FOFI.
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.
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