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POSaBIT Reports First Quarter 2019 Financial Results

TORONTO & SEATTLE–(BUSINESS WIRE)–POSaBIT Systems Corporation (CSE: PBIT), a leading financial technology
company delivering unique blockchain-enabled payment processing and
point-of-sale (POS) systems for cash-only businesses with a focus on the
cannabis industry, is pleased to report its financial results for the
quarter ended March 31, 2019.

“POSaBIT is off to a solid start in 2019 with revenue growing 311% over
last year driven by our continued rapid expansion into California,
Colorado, Oklahoma and Washington,” said Ryan Hamlin, co-founder and CEO
of POSaBIT. “This is a very exciting time for POSaBIT, and we are
pleased with our continued progress and solid market share gains. With
great sales execution and continued expansion into existing growing
markets, like California, we believe POSaBIT is on track to deliver on
our 2019 financial commitments.”

Financial Summary

in United States Dollars   Three Months Ended
March 31,
2019   2018
 
Total Revenue $ 1,065,004 $ 258,919
Total Cost of Sales   939,621   257,613
Gross Profit $ 125,383 $ 1,306
 
Total Operating Expenses $ 932,048 $ 422,271
Total Other Income (Expenses)   32,298   (483,994)
Loss and Comprehensive Loss $ (774,367) $ (904,959)
 
Basic and Diluted Loss per Common Share $ (0.03) $ (0.05)
 
Basic and diluted weighted average number of common shares
outstanding
25,373,371 20,066,535

First Quarter 2019 Financial Summary

Transactional Sales

Transactional sales totaled $13.7 million, representing an increase of
370% compared with $2.9 million in first quarter 2018.

Revenue

Total revenue was $1.1 million, up 311% compared with $259 thousand in
first quarter 2018.

Gross Profit

Gross profit was $125.4 thousand, compared with a gross profit of $1.3
thousand in first quarter 2018.

Loss and Comprehensive Loss

Loss and comprehensive loss was $774.4 thousand, or a loss of $0.03 per
basic and diluted share, compared with a comprehensive loss of $905.0
thousand, or a loss of $0.05 per basic and diluted share in first
quarter 2018.

Financial Reports

Full details of the financial and operating results for the first
quarter 2019 are described in the company’s consolidated financial
statements with accompanying notes. The consolidated financial
statements and additional information about POSaBIT are available on the
company’s website at www.posabit.com/investor-relations
or on SEDAR at www.sedar.com.

Financial Outlook

POSaBIT provides guidance based on current market conditions and
expectations. Please refer to the comments below regarding
forward-looking statements.

POSaBIT reaffirms its full year 2019 outlook of:

  • Transactional sales will grow by more than 400% to over USD $100
    million, assuming the average store processes between USD $350,000 and
    USD $500,000 per year through the POSaBIT service
  • Revenue to grow in the range of approximately 80% to 100%
  • Cost of sales in the range of $5.5 million to $6.0 million
  • To expand its footprint to 5 additional recreational states and up to
    10 additional medical states, based approximately on adding 2 states
    in the first quarter, 3 in the second quarter, 4 in the third quarter
    and 6 in the fourth quarter.

Forward-Looking Statements

This press release contains forward-looking statements, including
statements regarding our business strategy, product development, timing
of product development, events and courses of action. Statements which
are not purely historical are forward-looking statements and include any
statements regarding beliefs, plans, outlook, expectations or intentions
regarding the future including words or phrases such as “anticipate,”
“objective,” “may,” “will,” “might,” “should,” “could,” “can,” “intend,”
“expect,” “believe,” “estimate,” “predict,” “potential,” “plan,” “is
designed to” or similar expressions suggesting future outcomes or the
negative thereof or similar variations. Forward-looking statements may
include, among other things, statements about: our expectations
regarding our expenses, sales and operations; our future customer
concentration; our anticipated cash needs and our estimates regarding
our capital requirements and our need for additional financing; our
ability to anticipate the future needs of our customers; our plans for
future products and enhancements of existing products; our future growth
strategy and growth rate; our future intellectual property; and our
anticipated trends and challenges in the markets in which we operate.
Such statements and information are based on numerous assumptions
regarding present and future business strategies and the environment in
which POSaBIT will operate in the future, including the demand for our
products, anticipated costs and ability to achieve goals. Although we
believe that the assumptions underlying these statements are reasonable,
they may prove to be incorrect. Given these risks, uncertainties and
assumptions, you should not unduly rely on these forward-looking
statements.

Forward-looking statements are subject to known and unknown risks,
uncertainties and other important factors that may cause the actual
results to be materially different from those expressed or implied by
such forward-looking statements, including but not limited to, business,
economic and capital market conditions; the ability to manage our
operating expenses, which may adversely affect our financial condition;
our ability to remain competitive as other better financed competitors
develop and release competitive products; regulatory uncertainties;
market conditions and the demand and pricing for our products; our
relationships with our customers, distributors and business partners;
our ability to successfully define, design and release new products in a
timely manner that meet our customers’ needs; our ability to attract,
retain and motivate qualified personnel; competition in our industry;
our ability to maintain technological leadership; our ability to manage
risks inherent in foreign operations; the impact of technology changes
on our products and industry; our failure to develop new and innovative
products; our ability to successfully maintain and enforce our
intellectual property rights and defend third-party claims of
infringement of their intellectual property rights; the impact of
intellectual property litigation that could materially and adversely
affect our business; our ability to manage working capital; and our
dependence on key personnel. POSaBIT is an early stage company with a
short operating history; it may not achieve profitability; and it may
not actually achieve its plans, projections, or expectations.

Important factors that could cause actual results to differ materially
from POSaBIT’s expectations include, consumer sentiment towards
POSaBIT’s products and blockchain/cryptocurrency exchange technology
generally, litigation, global economic climate, loss of key employees
and consultants, additional funding requirements, changes in laws,
technology failures, competition, and failure of counterparties to
perform their contractual obligations.

Except as required by law, we undertake no obligation to update or
revise any forward-looking statements, whether as a result of new
information, future event or otherwise, after the date on which the
statements are made or to reflect the occurrence of unanticipated
events. Neither we nor any of our representatives make any
representation or warranty, express or implied, as to the accuracy,
sufficiency or completeness of the information in this news release.
Neither we nor any of our representatives shall have any liability
whatsoever, under contract, tort, trust or otherwise resulting from the
use of the information in this news release or for omissions from the
information in this presentation.

About POSaBIT

POSaBIT (CSE: PBIT) is a financial technology company that delivers
unique and innovative, blockchain-enabled 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. For additional
information, visit: www.posabit.com.

Contacts

Investor Relations:
Chelsea Lish
The Blueshirt Group
for POSaBIT
415-217-7722
[email protected]

Media
Relations:

Jeff Fox
The Blueshirt Group for POSaBIT
415-828-8298
[email protected]

Management:
Ryan
Hamlin
Co-founder and CEO of POSaBIT
415-217-7722
[email protected]

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