Mr. Ryan Hamlin reports

POSABIT REPORTS FIRST QUARTER 2024 FINANCIAL RESULTS

Posabit Systems Corp. has released its financial results for the three months ended March 31, 2024.

"The market challenges we faced with our payments business at the end of 2023 and earlier this year are now behind us and Posabit is poised for long-term profitability and growth through our recurring inflow of cash from our licensing contracts, increased adjusted gross profit margins and a refactored cost structure pushing us to profitability. We now have multiple payment options in place for our customers to use and our point-of-sale business continues to grow and take more and more market share," said Ryan Hamlin, co-founder and chief executive officer of Posabit.

Mr. Hamlin continued: "Despite the reduction in top-line revenue, this is offset by the decrease in cost of goods sold and the recognition of incoming cash from our licensing contracts, which puts us close to the same gross profit dollars we had prior to the recent payment interruptions. In fact, in March, our annualized adjusted gross profit was approximately $10-million and adjusted revenue was $21-million, setting us up to exit the quarter profitably."

Adjusted revenue and adjusted gross profit

Posabit believes it is important for investors to understand adjusted revenue and adjusted gross profit. Posabit's management team uses these metrics to measure the true cash available to operate the company. The company defines adjusted revenue as gross revenue, minus licence support revenue, plus actual licensing cash received as part of Posabit's licensing deals. The company defines adjusted gross profit as adjusted revenue less company cost of goods sold.

Recent operational highlights:

• Recently launched revised Apple and Android Posabit Pay application -- available for download now;
• Received settlement from an outstanding claim due to Posabit from a prior processing partner;
• Closed the company's fastest-growth month in March for its point-of-sale installs, with over 25 new locations across Washington, Oregon, Colorado and Massachusetts;
• Finalized banking and software requirements to be ready to support full credit card processing if rescheduling occurs and credit cards are allowed.

Balance sheet

As of March 31, 2024, the company had cash and cash equivalents of $900,000 compared with $1.5-million as of Dec. 31, 2023.

Run rate guidance

For the month of March, Posabit generated adjusted revenue of approximately $1.8-million and adjusted gross profit of approximately $800,000 implying approximately $21.6-million and approximately $10-million of annualized adjusted revenue and adjusted gross profit, respectively. As the company continues to execute on its business plan it expects these run rates to increase and will be updated as part of its quarterly earnings release.

Conference call information

Date: June 13, 2024

Time: 4:30 p.m. Eastern Time

Toll-free: 888-506-0062

International: 973-528-0011

Participant access code: 291073

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: 50729

Financial reports

Full details of the financial and operating results are described in the company's consolidated financial statements for the periods ended March 31, 2024, with accompanying notes. The consolidated financial statements and additional information about Posabit are available on the company's website at or on SEDAR+.

About Posabit Systems Corp.

Posabit is a fintech, working exclusively within the cannabis industry. It provides a best-in-class point-of-sale solution and is the leading cashless payment provider for cannabis retailers. It works tirelessly to build better financial services and transaction methods for merchants. Posabit brings cutting-edge software and technology to the cannabis industry so that all merchants can have a safe and compliant set of services to solve the problems of a cash-only industry.

We seek Safe Harbor.