ADCORE Inc. — Interim / Quarterly Report 2021

Nov 10, 2021

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Adcore Reports Record Third Quarter 2021 - Revenue Increases 153% YoY to CAD$10.4 million

TORONTO, ONTARIO – November 10, 2021 – Adcore Inc. (the “ Company ” or “ Adcore ”) (TSX:ADCO) (OTCQX:ADCOF) (FSE:ADQ) (TSX:ADCO-WT), a leading e-commerce advertising management and automation platform to leverage digital marketing in an effortless and accessible way (“ Effortless Marketing” ), today announced its financial results for the three and nine months ended September 30, 2021.

Third Quarter and Year-to-Date Highlights

• Total revenue for the third quarter of 2021 increased 153% to CAD$10.4 million compared to CAD$4.1 million in the third quarter of 2020. Total revenue for the nine months ended September 30, 2021, increased 180% to CAD$26.0 million compared to CAD$9.3 million in the same period in 2020.

• Adjusted EBITDA for the third quarter of 2021 was CAD$585,000 compared to CAD$925,000 for the same quarter in 2020. Adjusted EBITDA for the first nine months of 2021 was CAD$2.7 million, compared to CAD$2.2 million for the same period in 2020, an increase of 23%.

• As of September 30, 2021, total working capital was CAD$13.2 million compared to CAD$7.8 million at December 31, 2020, an increase of CAD$5.4 million.

• As of September 30, 2021, the Company’s cash and cash equivalents were CAD$15.5 million, compared to CAD$11.7 million for the year ended December 31, 2020, an increase of CAD$3.8 million.

• Launched the Adcore Marketing Cloud, which brings together the Company’s four applications under one scalable cloud-based platform.

• Continued growth of the Amphy.com platform, the world’s most diverse 24/7 live learning marketplace. Adcore formally launched Amphy in July 2021 and has screened and onboarded 300+ teachers and is actively offering 1,200 classes across 80 categories to thousands of students to date.

• See consolidated statements of financial position and comprehensive income below and on the Company’s SEDAR profile

“Our third quarter results reflect the continued tremendous momentum the Company has been experiencing since the fourth quarter of 2020. This is our fourth consecutive quarter achieving triple digit YoY growth, generating CAD$39.3 million TTM revenue and 189% YoY growth, establishing Adcore as one of the fastest growing public Ad-tech companies,” commented Omri Brill, Chief Executive Officer of Adcore. “Ecommerce activity continues to grow exponentially, driving momentum and interest in our portfolio of technologies and services, as online retailers seek efficient and targeted advertising technology solutions to drive consumers to their products and demand measurement metrics to evaluate the success of each campaign. We are focused on continuing to capture the attention and business of the core online retail audience by surpassing their marketing technology needs.”

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Mr. Brill continued, “We had several milestone achievements during third quarter 2021, including the launch of the Adcore Marketing Cloud which brings together our four leading applications under one scalable cloud-based platform. By consolidating our solutions in one place, we have made it even easier for our customers and partners to take their digital marketing to the next level. The Adcore Marketing Cloud provides us with a more scalable platform and allows us to lay the foundation for potential third-party application integration and a much wider marketing solution vision.”

“Additionally, we are experiencing rapid growth with Amphy.com, already the world’s most diverse 24/7 live online learning marketplace and we are intent on expanding and enhancing the platform’s offerings to attract an even broader worldwide audience. In October 2021, we launched a “social commerce” feature across all classes, allowing users to invite friends and family to share an Amphy class together with a significant discount to the original price. We expect this feature to further enhance the platform’s brand recognition and drive increased new users to the site.”

“We have also formed a United States subsidiary to establish a strong foothold from which to leverage the increasing demand for digital marketing solutions in the U.S.” Mr. Brill continued. “Since becoming a public company, one of our main focuses has been to broaden our reach and expand our global operations. With the addition of our U.S. subsidiary, we now have seven companies across four continents. We are energized by the opportunities represented by the lucrative U.S. market, which is estimated to reach USD$304 billion in digital ad spend by 2025.”

Mr. Brill concluded, “This is a very exciting time for Adcore as we strategically scale our business to become a leading provider of digital marketing solutions for ecommerce worldwide. We believe that our innovative technologies and growing geographic presence have uniquely positioned us within a global digital advertising market that is valued in the hundreds of billions of dollars.”

Conference Call and Webcast Information

Adcore will host a conference call to discuss its third quarter 2021 financial results at 8:30 a.m. ET on Thursday, November 11, 2021.

To register for the conference call please click here or visit click.adcore.com/q3-conference-call

The conference call will include a brief statement by management and will focus on answering questions about Adcore’s results during the third quarter, which can be sent in advance to invest@adcore.com.

USE OF NON-IFRS MEASURES

Adjusted EBITDA

Management uses Adjusted earnings before interest, income taxes, depreciation, and amortization (“Adjusted EBITDA”) as a key financial metric to evaluate Adcore’s operating performance and for planning and forecasting future business operations. Adjusted EBITDA excludes significant items that are non-operating in nature in order to evaluate Adcore’s core operating performance against prior periods. Adjusted EBITDA is not a measure of financial performance under GAAP and should be considered in addition to, and not as a substitute for net earnings, overall change in cash or liquidity of the business as a whole. Management believes the use of Adjusted EBITDA allows investors and analysts to understand the results of the continuing operations of the Company and its subsidiary, by excluding certain items that have a disproportionate impact on Adcore’s results for a particular period. Management’s method of determining non-GAAP financial measures is evaluated periodically and may differ from other companies’ methods and therefore may not be comparable to those used by other companies.

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The following table presents the Adjusted EBITDA for the periods ended:

	Three months ended September 30, 2021	Three months ended September 30, 2020
	CAD$ in thousands (Unaudited)
Operating profit	27	717
Depreciation and amortization	216	213
Share-based payments	130	(5)
Offering, listing & global expansion	13	-
Other non-recurring items	11	-
Total Adjustments	558	208
Adjusted EBITDA	585	925

Adcore’s third quarter 2021 financial statements are available on the Company’s SEDAR profile at www.sedar.com. All amounts are in CAD and are based on Adcore’s condensed consolidated interim financial statements for the three months ended September 30, 2021 and related notes prepared in accordance with International Financial Reporting Standards (IFRS), unless otherwise noted.

Amounts in this press release are in CAD based on the following USD to CAD average exchange rates for each of the relevant periods: For the three months ended September 30, 2021, and September 30, 2020, 0.80 and 0.73 respectively. Amounts in the below Income Statement and Balance Sheet are in CAD based on USD to CAD average exchange rates for each of the relevant periods in accordance with IRFS.

ABOUT ADCORE

Adcore is empowering entrepreneurs, advertisers, and the future of e-commerce through its advertising management and automation platform. By combining extensive industry knowledge and experience with its proprietary artificial intelligence engine, Adcore offers a unique digital marketing solution that empowers entrepreneurs and advertisers by managing and automating their e-commerce store advertising and monitoring and analyzing the performance of their advertising budget to ensure maximum Return on Investment. In addition to being named numerous times on Deloitte’s Fast 50 Technology list, Adcore is a certified Google Premier Partner, Microsoft Partner, Facebook Partner and TikTok Partner.

Established in 2006, the Company employs over fifty people in its headquarters in Tel Aviv, Israel and satellite offices in Toronto, Canada, Melbourne, Australia, Hong Kong and Shanghai, China.

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For more information about Adcore, please visit https://www.adcore.com/investors/ or follow us on LinkedIn

ABOUT AMPHY

Founded in 2020 in the midst of the pandemic, Amphy is the world’s most diverse 24/7 live online learning marketplace. With Amphy, learners can choose from over 1,200 classes across 80 categories to grow their passions and skills, expand their childrens’ learning opportunities, and much more. Instructors on the Amphy platform join a vibrant virtual teacher community that promotes and supports their success through enrichment seminars, marketing and advertising, and a suite of tools that allow them to run their classes hassle-free and focus on their students. Amphy students gain access to high-quality, personalized classes accessible from 24/7, as well as join a growing community of lifelong learners.

For more on Amphy please visit – https://www.amphy.com/ or follow us on LinkedIn, Facebook, Instagram and YouTube.

FORWARD-LOOKING STATEMENTS

This press release contains certain forward-looking statements, including statements about the Company. Wherever possible, words such as “may”, “will”, “should”, “could”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict” or “potential” or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. These statements reflect management’s current beliefs and are based on information currently available to management as at the date hereof.

Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. 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 new events or circumstances, except as required by law.

For further information please contact:

ADCORE INC.

https://www.adcore.com/investors/

Martijn van den Bemd, U.S. Investor Relations GM North America John Nesbett/Jennifer Belodeau IMS Investor Relations Telephone: 647-497-5337 Telephone: 203-972-9200 Email: Email: martijn@adcore.com jnesbett@imsinvestorrelations.com

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ADCORE INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

CURRENT ASSETS: Cash and cash equivalents Trade accounts receivable, net Other accounts receivable Total current assets NON-CURRENT ASSETS: Long term deposit Property, plant and equipment, net Intangible assets, net Total non-current assets TOTAL ASSETS CURRENT LIABILITIES: Trade accounts payable Other accounts payable Deferred Revenues Lease liability Total current liabilities NON-CURRENT LIABILITIES: Accrued severance pay, net Deferred tax liability, net Derivative liability - warrants Lease liability Long term loan Total non-current liabilities SHAREHOLDERS' EQUITY: Share capital Additional paid in capital Actuarial reserve Retained earnings Total Equity TOTAL LIABILITIES AND EQUITY	September 30, 2021 December 31, 2020 CAD$ in thousands	September 30, 2021 December 31, 2020 CAD$ in thousands	September 30, 2021 December 31, 2020 CAD$ in thousands
		15,510 3,726 176 19,412 36 343 2,413 2,792 22,204 5,668 522 - 66 6,256 65 284 1,255 - - 1,604 * 12,753 (106) 1,697 14,344 22,204	11,742 2,378 88 14,208 96 525 2,233 2,854 17,062 3,861 1,082 1,336 140 6,419 67 101 867 135 250 1,420 * 6,392 (111) 2,942 9,223 17,062

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ADCORE INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Revenues Cost of revenues Gross profit Research and development expenses Selling , general and administrative expenses Operating profit Finance expenses Finance income Profit (Loss) before taxes on income Tax expenses Total comprehensive Profit (Loss) for the period Basic Profit (Loss) per share attributable to shareholders Diluted Profit (Loss) per share attributable to shareholders Weighted average number of ordinary shares Weighted average number of dilutive ordinary shares	Three months ended September 30, 2021 Three months ended September 30, 2020 Nine months ended September 30, 2021	Three months ended September 30, 2021 Three months ended September 30, 2020 Nine months ended September 30, 2021	Three months ended September 30, 2021 Three months ended September 30, 2020 Nine months ended September 30, 2021	Three months ended September 30, 2021 Three months ended September 30, 2020 Nine months ended September 30, 2021	Nine months ended September 30, 2020	Nine months ended September 30, 2020
			CAD $ in thousands*
		10,411 4,121 8,055 1,635 2,356 2,486 346 334 1,983 1,435 27 717 236 155 - (80) (209) 642 114 99 (323) 543 (0.005) 0.010 (0.005) 0.009 63,193,570 55,929,410 63,193,570 59,717,532