Mr. Ryan Hamlin reports

POSABIT REPORTS FIRST QUARTER 2023 FINANCIAL RESULTS

Posabit Systems Corp. has released its financial results for the three months ended March 31, 2023.

"We delivered solid results in the first quarter that were in line with our expectations," said Ryan Hamlin, co-founder and chief executive officer of Posabit. "Our team continues to build out exciting new features and products for our merchants while gaining market share. We are seeing strong demand for our products and services from both new and existing customers. We believe this demand is being driven by the structural trend to cashless PIN debit payments and our focus on customer experience, support and compliance. During a tumultuous period in the industry, Posabit remains in a strong position."

Mr. Hamlin continued: "Based on our current visibility, we are reaffirming our full-year 2023 revenue guidance of between $58.5[-million] and $61.5-million, which represents growth of more than 62 per cent at the midpoint compared to 2022, gross profit of between $12.5[-million] and $14.5-million, and adjusted EBITDA of slightly negative."

Recent operational highlights:

• The full integration of the Hypur team and its products of PIN debit, business-to-consumer and business-to-business payments has been progressing on schedule; the company expects it to be complete by the end of Q2 2023.
• Posabit enjoyed its sixth consecutive year of 100-per-cent uptime on April 20, 2023.
• Posabit is the No. 1 point-of-sale provider in its home state of Washington with nearly 40-per-cent market share and growing.
• With the acquisition of Hypur's compliance tools and expertise, Posabit continues to differentiate itself with a focus on compliance.

First quarter 2023 financial highlights:

• Transactional sales for payment services totalled $136-million, up 33 per cent compared with $102.5-million in the first quarter of 2022, and down (5 per cent) compared with $143.5-million in Q4 2022.
• Total revenue was $11.5-million, up 82 per cent compared with $6.3-million in the first quarter of 2022.
• Gross profit was $2.3-million, or 20 per cent of revenue, up 56 per cent on a dollar basis compared with $1.5-million, or 24 per cent of revenue, in the first quarter of 2022.
• Operating loss was $(2.9-million), inclusive of a $300,000 non-cash change in the fair value of foreign currencies, compared with an operating loss of $(2-million), inclusive of a $(300,000) non-cash change in the fair value of foreign currencies, in the first quarter of 2022.
• Net loss was $(3-million), inclusive of a $100,000 non-cash change in fair value of derivative liabilities, compared with a net loss of $(500,000), inclusive of a $1.6-million non-cash change in fair value of derivative liabilities in the first quarter of 2022.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $(1.9-million), or (17 per cent) of revenue, compared with $(1-million), or (20 per cent) of revenue, in the first quarter of 2022.

Balance sheet

As of March 31, 2023, the company had cash and cash equivalents of $7.3-million compared with $3.1-million as of Dec. 31, 2022.

The company is reiterating its guidance for the full year 2023. The company's guidance does not include additional acquisitions or other strategic transactions.

Conference call information

Date: May 31, 2023

Time: 4:30 p.m. Eastern Time

Toll-free: 888-506-0062

International: 973-528-0011

Participant access code: 478379

Conference call replay information

The replay will be available approximately one hour after the completion of the live event.

Toll-free: 877-481-4010

International: 919-882-2331

Replay passcode: 48472

Financial reports

Full details of the financial and operating results are described in the company's consolidated financial statements for the three-month period ended March 31, 2023, with accompanying notes. The consolidated financial statements and additional information about Posabit are available on the company's website or on SEDAR.

About Posabit Systems Corp.

Posabit is a financial technology company that delivers unique and innovative payment processing and point-of-sale systems for cash-only businesses. Posabit specializes in resolving pain points for complex, high-risk, emerging industries like cannabis with an all-in-one solution that is compliant, user-friendly and utilizes top-of-the-line hardware. Posabit's unique solution provides a safer and transparent environment for merchants while creating a better overall experience for the consumer.

We seek Safe Harbor.