Featuring $109 Million in Revenue and Launch of Business Hub in Canada
Toronto, Ontario--(Newsfile Corp. - April 3, 2023) - Tenet Fintech Group Inc. (CSE: PKK) (OTC Pink: PKKFF) ("Tenet" or the "Company"), an innovative AI service provider and operator of the Business Hub, today announced its financial results for the year ended December 31, 2022. The Company reported revenues of $109.87 million, a negative adjusted EBITDA of $6.88 million and a net loss of $53.0 million for the year. All amounts in this news release are in Canadian dollars unless otherwise indicated.
"One of our biggest achievements in 2022 was the launch of our Business Hub in Canada," said Johnson Joseph, CEO of Tenet. "This milestone marks the start of a new era for the Company, one in which Tenet expects to begin showcasing the true value of the data it is collecting and will collect in the future from SMEs in Canada, in China, and eventually from SMEs around the world. We also took significant strides towards the strategic diversification of our revenue streams in China to manage our way through COVID-19 restrictions over the past year."
2022 Financial Highlights
- Total Revenue of $109.87 million
- Adjusted EBITDA of ($6.88 million)
- Net Loss of ($53 million)
Summary of Key Financial Metrics from 2019-2022
| 2022 | 2021 | 2020 | 2019 | |
| Revenue | $109,878,515 | $103,632,774 | $42,698,047 | $11,708,653 |
| Expenses1 | $116,763,184 | $101,145,243 | $44,556,226 | $10,173,034 |
| Adjusted EBITDA2 | ($6,884,669) | $2,487,531 | ($1,858,179) | $1,535,619 |
| Net Income (Loss) 3 | ($53,013,185) | ($48,561,968) | ($5,513,511) | ($1,830,362) |
- Expenses, for the calculation of adjusted EBITDA, do not include finance costs, income taxes, depreciation, amortization of intangible assets and financing issuance costs, impairments, change in fair value of contingent consideration payable, loss on investment in associate company, loss on settlement of debt, expiration of deferred finance costs and gain on bargain purchase.
- Adjusted EBITDA equals net income (loss) before finance costs, income taxes, depreciation, amortization of intangible assets and financing issuance costs, impairments, change in fair value of contingent consideration payable, loss on investment in associate company, loss on settlement of debt, expiration of deferred finance costs and gain on bargain purchase. Adjusted EBITDA is a non-IFRS financial measure provided to assist readers in determining the Company's ability to generate cash-flows from operations and to cover finance charges. Adjusted EBITDA and EBITDA are also widely used for business valuation purposes. Adjusted EBITDA does not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.
- The net loss for 2022 includes a combined impairment of $38,433,119 related to the Company's acquisition of Cubeler Inc. for which forecasted revenues shifted by almost another year due to the delayed launched of the Company's Canadian Business Hub. The portion of the above-mentioned impairment related to the intangible assets totalling $2,735,229 may be reversed in the future following the launch of the Company's Canadian operations.
Adjusted EBITDA Reconciliation
| 2022 | 2021 | 2020 | 2019 | |
| Net Income (loss) | (53,013,185) | (48,561,968) | (5,513,511) | (1,830,362) |
| Income taxes (recovery) | (3,549,246) | (1,611,819) | 852,010 | 523,837 |
| Finance costs | 194,033 | 181,943 | 990,053 | 1,042,707 |
| Depreciation of property and equipment | 89,664 | 90,139 | 86,931 | 47,548 |
| Depreciation of right-of-use assets | 615,179 | 286,850 | 406,762 | 407,611 |
| Amortization of intangible assets | 6,764,493 | 2,267,281 | 379,850 | 595,079 |
| Amortization of financing issuance costs | 29,020 | 26,974 | 18,924 | 30,217 |
| Impairment of goodwill | 35,697,890 | 41,386,422 | ||
| Impairment of intangible assets | 6,954,055 | 11,978,283 | 584,189 | |
| Change in fair value of contingent consideration payable | (591,220) | (3,556,574) | (217,325) | 259,000 |
| Loss on investment in associate company | 34,253 | |||
| Gain on bargain purchase | (109,605) | (941,000) | ||
| Loss on settlement of debt | 784,750 | 816,793 | ||
| Expiration of deferred finance cost | 353,377 | |||
| Adjusted EBITDA | (6,884,669) | 2,487,531 | (1,858,179) | 1,535,619 |
2022 Highlights:
Despite obstacles throughout the year preventing Tenet from accessing the capital it was expected to have to reach its growth objectives and COVID related lockdowns in China, the Company achieved several important milestones in 2022, including:
- Launch of the Business Hub in Canada with approximately 5,000 pre-registered SMEs;
- Partnership agreement with eHi Auto Services;
- Launch of Yun Fleet shipping and transportation platform;
- Collaboration with China Energy Engineering Corporation on two clean energy pilot projects;
- Launch of "Driver's Seat", the first insurance policy to be exclusively available through Tenet's Heartbeat insurance brokerage platform;
- Successful participation in the 618 Shopping Festival, generating $10.1 million in revenue; and
- National strategic cooperation agreement with Shanghai Electric Power Company.
Outlook for 2023
Tenet has several important objectives for its operations in 2023. The following is a list of some of the elements the Company will be working on as it continues to build an AI-powered network that links SMEs from around the world and gathers business intelligence to develop data analytics products:
- Launch of first two data-driven products in North America;
- Launch of its Business Hub in the U.S.;
- Gain access to the capital markets in the U.S.;
- Connect Canadian and Chinese Business Hub members through networking features and sales programs;
- Continue geographic and industrial vertical expansion of Chinese operations; and
- Implement transactional capabilities to Business Hub outside of China with global payment processing partner.
Full details of the Company's 2022 financial results can be found in the Audited Consolidated Financial Statements and Management's Discussion and Analysis (MD&A) for the year ended December 31, 2022, which is available at www.sedar.com.
2022 Earnings Call
Tenet will host an earnings call on Tuesday, April 4th, 2023 at 8:30 am EDT, where President & CEO Johnson Joseph and CFO Jean Landreville will discuss the 2022 financial results. Registration for the event is available at: https://app.webinar.net/wG3Xo46AgJv. Please submit your questions related to the 2022 results when you register to attend the event.
About Tenet Fintech Group Inc.:
Tenet Fintech Group Inc. is the parent company of a group of innovative financial technology (Fintech) and artificial intelligence (AI) companies. All references to Tenet in this news release, unless explicitly specified, includes Tenet and all its subsidiaries. Tenet's subsidiaries provide various analytics and AI-based services to businesses and financial institutions through the Business Hub™, a global ecosystem where analytics and AI are used to create opportunities and facilitate B2B transactions among its members. Please visit our website at: http://www.tenetfintech.com
For more information, please contact:
Tenet Fintech Group Inc.
Christina Boyd, Director, Investor Relations
416-428-9954
cboyd@tenetfintech.com
CHF Capital Markets
Cathy Hume, CEO
416-868-1079 ext.: 251
cathy@chfir.com
MZ Group - MZ North America
Mark Schwalenberg, CFA
312-261-6430
mark.schwalenberg@mzgroup.us
Follow Tenet Fintech Group Inc. on social media:
Twitter: @Tenet_Fintech
Facebook: @Tenet
LinkedIn: Tenet
YouTube: Tenet Fintech
Forward-Looking Statements / Information:
Certain statements included in this news release constitute "forward-looking statements" under Canadian securities law, including statements based on management's assessment and assumptions and publicly available information with respect to Tenet. By their nature, forward-looking statements involve risks, uncertainties and assumptions. Tenet cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made, subject to greater uncertainty. Forward-looking statements may be identified by the use of terminology such as "believes," "expects," "anticipates," "assumes," "outlook," "plans," "targets", or other similar words.
Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors which may cause actual results, performance or achievements of Tenet to be materially different from the outlook or any future results, performance or achievements implied by such statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements. Important risk factors that could affect the forward-looking statements in this news release include, but are not limited to, holding company with significant operations in China; general economic and business conditions, including factors impacting the Company's business in China such as pandemics and COVID-19; legislative and/or regulatory developments; Global Financial conditions, repatriation of profits or transfer of funds from China to Canada, operations in foreign jurisdictions and possible exposure to corruption, bribery or civil unrest; actions by regulators; uncertainties of investigations, proceedings or other types of claims and litigation; timing and completion of capital programs; liquidity and capital resources, negative operating cash flow and additional funding, dilution from further financing; financial performance and timing of capital; and other risks detailed from time to time in reports filed by Tenet with securities regulators in Canada. Reference should also be made to Management's Discussion and Analysis (MD&A) in Tenet's annual and interim reports, Annual Information Form, filed with Canadian securities regulators and available on Tenet's website, for a description of major risk factors relating to Tenet.
Forward-looking statements reflect information as of the date on which they are made. Tenet assumes no obligation to update or revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs, unless required by applicable securities laws. In the event Tenet does update any forward-looking statement, no inference should be made that Tenet will make additional updates with respect to that statement, related matters, or any other forward-looking statement.