Calgary, Alberta--(Newsfile Corp. - November 15, 2022) - Zedcor Inc. (TSXV: ZDC) (the "Company") today announced its financial and operating results for the three and nine Months Ended September 30, 2022.

Q3 2022 revenues increased to $5.8 million and the Company had net income of $1.0 million or $0.01 per share. This represented a 57% increase in revenues compared to Q3 2021 and a 226% increase in net income for September 2022.

Zedcor recorded $2.1 million and $5.2 million of adjusted EBITDA from continuing operations for the three months and nine Months Ended September 30, 2022. This compares to $1.4 million and $3.5 million of adjusted EBITDA from continuing operations for the three and nine months ended September 30, 2021.

During the quarter, the Company has allocated approximately 10% of its MobileyeZ security Tower Fleet to Ontario. These towers are being utilized at construction and automotive customer sites. Zedcor plans to continue to allocate security towers to Eastern Canada as it completes its 2022 capital asset spending.

Todd Ziniuk, President & CEO said: "I am encouraged about the direction of the Company and the opportunities we are seeing with new and existing customers to meet their surveillance and security requirements with the application of Zedcor's technology. The strong financial results for Q3 2022 reflect the efforts of our team who deliver exceptional service to our customers every day. We continue to see strong demand for our video surveillance as a service offering with customers shifting away from traditional security services. This is further demonstrated by Zedcor's continued expansion across Canada."

Financial and Operating Results for the three and nine months ended September 30, 2022:

¹ Adjusted for severance costs
² See Financial Measures Reconciliations below

Zedcor recorded $2,121 and $5,188 of adjusted EBITDA from continuing operations for the three and nine months ended September 30, 2022. This compares to $1,373 and $3,466 of adjusted EBITDA from continuing operations for the three and nine months ended September 30, 2021.

The Company's security and surveillance services saw increased revenues and EBITDA for the three and nine months ended September 30, 2022 compared to 2021 due to higher customer demand which drove utilization of a larger fleet of MobileyeZ security towers. Zedcor exited the period with 441 MobileyeZ security towers which was an increase of 177 when compared to December 31, 2021 and 220 units when compared to September 30, 2021. While a smaller part of the business, the Company's other two service lines also saw increased revenues when compared to prior periods. Fixed site monitoring contracts and service revenue saw increases of 76% and 132% for the three and nine months ended September 30, 2022 while security personnel revenues also increased significantly as a result of a contract award for integrated security services in February 2022.

Financial and operational highlights for the three and nine months ended September 30, 2022 include:

• Revenue for the three and nine months ended September 30, 2022 increased by $2,111 and $6,208 from $3,684 and $9,474 to $5,795 and $15,682. This increase was driven by a larger fleet of MobileyeZ security towers and high utilization rates of the Company's fleet. The Company's flagship Solar Hybrid MobileyeZ saw utilization rates over 90% for the nine months ended September 30, 2022.

• Net income from continuing operations was $966 for the three months ended September 30, 2022. This compares to a net income of $296 for the three months ended September 30, 2021. For the nine months ended September 30, 2022 net income from continuing operations was $2,922 compared to a net loss of ($1,045) for the nine months ended September 30, 2021. The reversal of the net loss is directly attributable to: 1) a larger fleet of towers and strong customer demand which drove utilization and, in turn, revenues; 2) reduced financing costs as a result of reduced debt load and interest rates when the Company obtained a new financing agreement in Q4 2021 which provided additional capital, and significantly reduced interest rates; and 3) $883 in other income. As part of the sale of the Company's Rental segment assets in 2021, the Company is to receive a 35% bonus for every dollar of EBITDA over certain thresholds. As a result of this agreement, the Company received $883 in 2022.

• The Company expanded to Ontario with equipment and service branch openings in Ottawa and Toronto. As at September 30, 2022, approximately 10% of the Company's MobileyeZ security tower fleet is located in Ontario. We are seeing strong demand for the Company's services in Eastern Canada and additional security towers will be delivered to Ontario in Q4 2022.

• Entering into a one-year contract for a minimum of ten Electric MobileyeZ security towers with a commercial real estate development firm. This contract reflects the Company's efforts to secure more contracted work for multiple MobileyeZ.

• Seeing continued growth in its fixed monitoring service line. Zedcor exited the quarter with 77 fixed monitoring sites which is a 63% increase when compared to September 30, 2021. In addition, the Company has additional contracts signed with customers for fixed monitoring services with camera installations expected to be completed throughout Q4 2022.

• Adding 117 additional Electric MobileyeZ and 59 additional Solar Hybrid MobileyeZ bringing its total fleet to 171 and 249 units, respectively. Of the 249 Solar Hybrid MobileyeZ, 120 are equipped with ground disturbance sensors which further enhances the capabilities of these units. The Company will continue to manage its supply chain and logistics by constructing additional security towers based on customer demand and expansion plans into other strategic markets in Canada.

• On February 17, 2022, the Company announced that it has entered into an agreement to provide integrated security solutions to a Canadian based energy infrastructure company. This contract continued in Q3 2022 and has been expanded beyond the initial introductory term.

• The issuance of 5.2 million common shares and 2.6 million common share purchase warrants for gross proceeds of $3.0 million. This financing was used to grow the Company's fleet of MobileyeZ security towers and expand its geographical footprint.

SELECTED QUARTERLY FINANCIAL INFORMATION

¹ See Financial Measures Reconciliations below

LIQUIDITY AND CAPITAL RESOURCES

Sources and Uses of Cash

The following table shows a summary of the Company's cash flows by source or (use) for the nine months ended September 30, 2022 and 2021:

The following table presents a summary of working capital information:

*Includes $2.2 million of debt and $1.6 million of lease liabilities in 2022 and $2.8 million of debt and $1.5 million of lease liabilities in 2021

The primary uses of funds are operating expenses, maintenance and growth capital spending, interest and principal payments on debt facilities. The Company has a variety of sources available to meet these liquidity needs, including cash generated from operations. In general, the Company funds its operations with cash flow generated from operations, while growth capital and acquisitions are typically funded by issuing new equity, debt or cash flow from operations.

Principal Credit Facility