INEO Tech Corp. (TSXV: INEO) (OTCQB: INEOF) (the “Company” or “INEO“), the innovative developer and operator of the INEO Media Network, a digital advertising and analytics solution for retailers, today announced it has filed its Interim Consolidated Quarterly Financial Statements and Management’s Discussion and Analysis on SEDAR.com for the Company’s fiscal first quarter ended September 30, 2023.
Greg Watkin, Chairman and Founder of INEO, commented, “We are excited to end the calendar year on a strong note heading into 2024, as we continue to make advancements on multiple fronts. We are well into the planning for next year’s deployments and installations with our large retail partners and our direct sales pipeline remains promising with several new opportunities. In addition, our global distribution partnership with Prosegur is moving forward as we completed our first shipment of Welcoming Systems to Jumbo Cencosud. Cencosud represents our first entry into the South American market, and we look forward to continuing our work with Prosegur to expand Cencosud’s retail media network into more retail locations. We also have multiple other pilot systems installed with Prosegurs’ clients and will look to convert those pilot trials into full scale roll-outs heading into the new year. Finally, our recently updated key contracts have positioned the Company for increased revenue generation opportunities as well as reducing our cash needs. We expect to capitalize on these updated agreements by working with third-party media partners in 2024.”
Fiscal First Quarter 2024 Financial Highlights:
- INEO generated $365,931 of revenue for the three months ended September 30, 2023, as compared to revenue of $416,086 for the three months ended September 30, 2022. The change in revenue was mainly due to the strategic focus of dedicating resources to expand the INEO Media Network, sign media partners and de-emphasize the sale of Loss Prevention Products.
- INEO generated gross profit for the three months ended September 30, 2023, of $143,735, as compared to gross profit of $207,646 for the quarter ended September 30, 2022. The Company attributes the decrease in gross profit to the declining margin of INEO Loss Prevention Products and Fabrication Operation.
- INEO achieved gross margin percentage of 39.3% for the three months ended September 30, 2023, compared to gross margin percentage of 49.9% for the quarter ended September 30, 2022.
- Net loss for the three months ended September 30, 2023 was $750,540 or $0.01 per share compared to net loss of $590,614 or $0.01 per share for the three months ended September 30, 2022.
- Adjusted EBITDA loss for the three months ended September 30, 2023 was $551,027, compared to Adjusted EBITDA loss of $512,286 for the three months ended September 30, 2022.
- INEO had $232,626 of cash and cash equivalents at September 30, 2023, compared to $362,510 of cash and cash equivalents at June 30, 2023.
- As at March 31, 2023, the Company had 76,143,709 shares issued and outstanding.
Fiscal First Quarter 2024 Business Highlights:
- On September 19, 2023, the Company signed an updated commercial agreement with its large national retail and regional liquor store network locations. The updated contracts feature 5-year and 6-year contract lengths, exclusive in-store advertising rights, deployment of additional in-store media screens, the right to assign the ownership of the INEO Welcoming System hardware deployed in the retail stores and the right to assign ownership of INEO’s exclusive advertising contracts to a third-party media partner. The updated agreements are expected to position the Company for rapid growth and improved margins.
- On September 27, 2023, the Company introduced INEO ORCA. ORCA, which stands for Organized Retail Crime Alerts, is INEO’s latest AI-driven solution and it represents a monumental leap forward in security and crime prevention. By leveraging advanced computer vision and machine learning algorithms, the latest feature of the patented INEO Welcoming System can meticulously analyze stored CCTV footage, captured during loss prevention events, enabling it to detect and recognize patterns associated with organized retail criminal activities.
Events Subsequent to September 30, 2023:
- On October 24, 2023, the Company announced the first shipment of INEO Welcoming Systems, as per the Company’s distribution agreement with partner Prosegur Security, for installation at various locations of Jumbo Cencosud in Columbia. As per the agreement, before the end of October, the Company will be selling and shipping a total of 59 systems, comprised of both Welcoming Systems and Welcoming GATEs, which will be installed in four Jumbo retail locations. With approximately 15 systems installed per store, the Company will be managing an immersive in-store retail media network. In addition, it will receive revenue from the sale of the systems as well as ongoing SaaS-based revenues from the deployment of the installed INEO Welcoming Systems.
Kyle Hall, CEO of INEO commented on the Company’s progress, “We continue to have a positive outlook as we head into the final months of the year. Our partners continue to have trust in our capabilities and would like us to move even quicker next year in installing the network across all their retail locations. Furthermore, our focus on expanding the INEO Media Network has led to de-emphasizing the sale of our legacy loss prevention products and increasing our advertising sales. As a result, we saw our advertising sales grow by over 50% year over year in the quarter and we expect this revenue segment to continue growing into a larger segment for us in the future.”
