QUIS Quisitive Technology Solutions Inc

Quisitive Technology Solutions Inc. (“Quisitive” or the “Company”) (TSXV: QUIS, OTCQX: QUISF), a premier Microsoft solutions provider and payments solutions provider, today reported financial results for the third quarter ended September 30, 2023.

Management Commentary“We’ve recently begun to experience stable growth, a testament to the successful implementation of our strategic cost-cutting and disciplined management,” said Quisitive CEO Mike Reinhart. “Over the last six months, our sales figures have demonstrated resilience and stability, with our Global Cloud Solutions business showing a promising rebound. We anticipate this trend in our financial health and Global Cloud Solutions to persist in the coming quarters as we continue to execute prudent financial management and navigate through challenging market conditions.”

“Yesterday’s announcement of the sale of PayiQ is a significant next step in our payments solutions business as we execute a revised strategy that alleviates the pressure of investment in the platform while providing a tremendous opportunity for the development of the solution. Across both Cloud and Payments, the adjustments to strategy have positioned us for improved results today and moving forward. We remain focused on diligent execution to continue to enhance our trajectory through the remainder of the year.”

Third Quarter 2023 Financial ResultsThe Company’s condensed consolidated interim financial statements for the three months ended September 30, 2023, and related management’s discussion and analysis can be found on the Company’s website and the Company’s issuer profile on SEDAR at www.sedar.com. All figures are expressed in United States dollars unless otherwise stated.

• Revenue decreased 2% to $44.4 million compared to $45.3 million for the quarter ended June 30, 2023. Revenue decreased 9% to $44.4 million compared to $48.8 million for the quarter ended September 30, 2022.
• Gross profit increased 10% to $18.3 million compared to $16.7 million for the quarter ended June 30, 2023. Gross profit decreased 10% to $18.3 million compared to $20.3 million for the quarter ended September 30, 2022.
• Adjusted EBITDA increased 61% to $7.0 million compared to $4.4 million for the quarter ended June 30, 2023. Adjusted EBITDA decreased 8% to $7.0 million compared to $7.6 million for the quarter ended September 30, 2022.
• Global Cloud Solutions revenue was $30.7 million compared to $30.2 million for the quarter ended June 30, 2023 and compared to $36.0 million for the quarter ended September 30, 2022.
• Global Cloud Solutions gross profit as a percentage of revenue was 43% compared to 39% for the quarter ended June 30, 2023 and compared to 40% for the quarter ended September 30, 2022.
• Global Payment Solutions revenue decreased to $13.7 million compared to $15.1 million for the quarter ended June 30, 2023. Global Payment Solutions revenue increased to $13.7 million compared to $12.8 million for the quarter ended September 30, 2022.
• The Company’s total senior debt to Adjusted EBITDA ratio was 2.62:1.00 at September 30, 2023.

Third Quarter 2023 and Recent Operational Highlights

• Announced sale of PayiQ
• Recognized as the 2023 Solution Partner of the Year by Board International at the Board Americas Partner Summit for its outstanding channel marketing collaboration and introduction of the Microsoft Dynamics 365 Trial Balance Extractor solution to Board
• Announced the appointment of two new directors to the board of directors
• Collaborated with Microsoft to leverage new healthcare data solutions in Microsoft Fabric for Ontario Workers Network, the Ottawa Hospital, and other hospitals in the network
• Ranked #2 on the Dallas Business Journal’s Ninth Annual Middle Market 50 List
• Selected for the Dallas Journal’s Ninth Annual Middle Market 50 List
• Completed the migration of a global manufacturer of diversified products, from Microsoft Dynamics AX to Dynamics 365 Finance & Supply Chain Management
• Awarded the Information Protection and Governance and Service advanced specializations, marking the 15th and 16th Microsoft advanced specializations awarded to the Company
• Announced the launch of MazikCare Care Planner, a new care treatment pathing application designed to streamline patient care coordination and improve communication between healthcare providers and patients
• Collaborated with Heart-Tech Health to implement MazikCare as an Integrated Care Delivery Tool to prevent women’s heart disease
• Announced the successful migration of its patented AgeChecker.Net to PayiQ’s payments processing, a significant milestone in its continued evolution of the PayiQ cloud-enabled payments platform

Conference CallQuisitive management will hold a conference call today (November 29, 2023) at 5:30 p.m. Eastern time (2:30 p.m. Pacific time) to discuss these results.

Company CEO Mike Reinhart and CFO Scott Meriwether will host the call, followed by a question-and-answer period.

Toll Free dial-in: 1-877-704-4453International dial-in: 1-201-389-0920Webcast Link: Here

Please call the conference telephone number 10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Group at 949-574-3860.

A telephonic replay of the conference call will be available after 8:30 p.m. Eastern time today and will expire after December 13, 2023.

Toll-free replay number: 1-844-512-2921International replay number: 1-412-317-6671Replay ID: 13742269

For additional information, please visit the Investor Relations section of Quisitive’s website at: https://quisitive.com/investor-relations/.

The following table summarizes results for the third quarter ended September 30, 2023 and 2022:

	Three Months Ended								Nine Months Ended
	September 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
Revenue (Note 14)	$	44,371			$	48,814			$	138,004			$	141,361
Cost of Revenue		26,039				28,486				84,774				83,803
Gross Margin		18,332				20,328				53,230				57,558
Operating Expenses
Sales and marketing expense		3,504				3,501				10,917				10,803
General and administrative		7,822				9,217				23,941				25,916
Development		108				111				332				317
Share-based compensation (Note 9)		548				1,334				3,209				2,575
Interest expense (Note 6)		1,584				1,275				4,899				3,168
Amortization (Note 5)		4,080				4,312				12,367				12,893
Earn-out settlement loss		-				1,406				-				1,478
Acquisition related compensation		-				663				638				2,153
Depreciation (Note 4)		430				520				1,328				1,541
Foreign exchange loss (gain)		(165	)			(364	)			55				(255	)
Acquisition-related, transaction and other expenses		1,474				164				2,896				723
Other expenses (income)		(7	)			(14	)			3				(14	)
Loss Before Income Taxes		(1,046	)			(1,797	)			(7,355	)			(3,740	)
Income tax expense — current		1,243				1,363				3,224				3,683
Deferred income tax expense (recovery)		(1,010	)			(1,019	)			(3,294	)			(3,252	)
Net Loss for the Period	$	(1,279	)		$	(2,141	)		$	(7,285	)		$	(4,171	)

About Quisitive:Quisitive (TSXV: QUIS, OTCQX: QUISF) is a premier, global Microsoft partner that harnesses the Microsoft cloud platform and complementary technologies, including custom solutions and first-party offerings, to generate transformational impact for enterprise customers. Our Cloud Solutions business focuses on helping enterprises move, operate, and innovate in the three Microsoft clouds. Quisitive serves clients globally from seventeen employee hubs across the world. For more information, visit www.Quisitive.com and follow @BeQuisitive on X (formerly Twitter).

Quisitive Investor ContactMatt Glover and John YiGateway GroupQUIS@gateway-grp.com 949-574-3860

Tami AndersChief of Stafftami.anders@quisitive.com972.573.0995

Reconciliation of Non-GAAP Financial Measures - Adjusted EBITDA and Adjusted EBITDA as a percentage of revenue

Financial Measures and Adjusted EBITDAThere are measures included in this news release that do not have a standardized meaning under generally accepted accounting principles (GAAP) and therefore may not be comparable to similarly titled measures and metrics presented by other publicly traded companies. The Company includes these measures because it believes certain investors use these measures and metrics as a means of assessing financial performance. EBITDA (earnings before interest, taxes, depreciation and amortization is calculated as net earnings before finance costs (net of finance income), income tax expense, and depreciation and amortization of intangibles) is a non-GAAP financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.

We prepare and release quarterly unaudited and annual audited financial statements prepared in accordance with IFRS. We also disclose and discuss certain non-GAAP financial information, used to evaluate our performance, in this and other earnings releases and investor conference calls as a complement to results provided in accordance with IFRS. We believe that current shareholders and potential investors in the Company use non-GAAP financial measures, such as Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues, in making investment decisions about the Company and measuring our operational results.

The term "Adjusted EBITDA" refers to a financial measure that we define as earnings before certain charges that management considers to be non-operating expenses and which consist of interest, taxes, depreciation, amortization, stock-based compensation (for which we include related fees and taxes), changes in fair value of derivatives, transaction and acquisition-related expenses, US payroll protection plan loan forgiveness, earn-out settlement losses and non-recurring development costs associated with obtaining bank sponsorship and operational certifications required to complete PayiQ. Adjusted EBITDA as a percentage of revenues divides Adjusted EBITDA for a period by the revenues for the corresponding period and expresses the quotient as a percentage.

Management considers these non-operating expenses to be outside the scope of Quisitive' ongoing operations and the related expenses are not used by management to measure operations. Accordingly, these expenses are excluded from Adjusted EBITDA, which we reference to both measure our operations and as a basis of comparison of our operations from period-to-period.

Management believes that investors and financial analysts measure our business on the same basis, and we are providing the Adjusted EBITDA financial metric to assist in this evaluation and to provide a higher level of transparency into how we measure our own business. However, Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues are non-GAAP financial measures and may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues should not be construed as a substitute for net income determined in accordance with IFRS or other non-GAAP measures that may be used by other companies, such as EBITDA. The use of Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues does have limitations. As these acquisition-related expenses charges may continue as we pursue our consolidation strategy, some investors may consider these charges and expenses as a recurring part of operations rather than expenses that are not part of operations.

Cautionary Note Regarding Forward Looking Information

This news release contains certain “forward‐looking information” and “forward‐looking statements” (collectively, “forward‐ looking statements”) within the meaning of applicable Canadian securities legislation regarding Quisitive and its business. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward‐looking statements. Forward‐ looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward‐looking statements. These forward-looking statements include, but are not limited to, statements relating to: internal business integrations, full commercialization and success of the PayiQ platform, expectations regarding go-to-market strategy and growing partnerships in the payments business, growth prospects, projected milestones and timelines.

The risks and uncertainties that may affect forward-looking statements, or the material factors or assumptions used to develop such forward-looking information, are described under the heading "Risks Factors" in the Company's annual information form dated June 23, 2022, which are available under the Company’s issuer profile on SEDAR at www.sedar.com. There can be no assurance that forward-looking information, or the material factors or assumptions used to develop such forward-looking information, will prove to be accurate. The Company does not undertake any obligations to release publicly any revisions for updating any voluntary forward-looking statements, except as required by applicable securities law.

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.