MONTREAL, QC–(Marketwired – November 29, 2016) –

– Realignment to focus on TotalSocial Completed

– TotalSocial Revenue of $715k YTD in Launch Year

– $2.4m in Annualized Cost Reductions Implemented

– > 20% Revenue Growth and > 50% Improvement in Adjusted EBITDA Expected for Q4

Engagement Labs Inc. (TSX VENTURE: EL) today released results for its third quarter for the period ending September 30, 2016. Condensed interim consolidated Financial Statements and Management Report are available on SEDAR’s website at www.sedar.com.

Company update: TotalSocial revenues growing, costs sharply reduced

On August 30, 2016 Engagement Labs announced it had substantially re-aligned its day-to-day activities to focus fully on TotalSocial, a new and innovative measurement and analytics technology for brands and marketers launched in 2016. As the first tool to measure a brand’s social impact, TotalSocial encompasses both online and offline conversations, providing a scorecard ranking for 500+ US and 350+ UK brands across 18 major industry categories, in addition to diagnostics to guide improvement. On October 3, 2016, the Company announced the closing of $4.3M in financing to fund the growth and further development of TotalSocial.

TotalSocial has contributed $715,452 of revenue through Q3, with a growing pipeline of new prospects. All sales, client service and product delivery activities for Engagement Labs are now based in the US and the UK. Technology development and senior finance remain in Montreal. As a result of its re-alignment, the Company has substantially reduced its operational expenses, mainly in Toronto, leading to a reduction in annualized costs of approximately $2.4m, ($200k per month), including reduction of headcount, other administrative and overhead cost reductions. This cost reduction is expected to have a positive impact on the net loss and adjusted EBITDA of the Company, on both a short- and long-term basis. For Q4 2016, Management is expecting an increase in revenue over Q3, which combined with the reduction in expenses, taking fully effect at beginning of Q4, is expected to lead to a significant decrease in net loss and adjusted EBITDA.

“I am pleased to report that our early sales efforts for TotalSocial are beginning to bear fruit, with previously announced sales to leading brands in telecom, broadcasting and beauty, as well our most recent sale to a leader in the tax preparation sector. In addition to these sales, we have a pipeline that leads us to believe that 2017 is going to be an exciting year for the company,” said Engagement Labs CEO Ed Keller. “Over the past several months we have also taken significant steps to reduce costs and to ‘right-size’ our operations. Our reduced cost base, combined with the infusion of new capital will allow us to focus squarely on sales and continued product development for TotalSocial, leaving us optimistic about the outlook for the remainder of 2016 and beyond.”

3rd Quarter Financial Highlights

In Q3, the realignment of the Company’s business was implemented and headcount and other cost reductions were implemented. Revenue for the third quarter was $905,056, compared to $1,144,059 in Q2 2016 and $1,744,485 in Q3 2015. The decrease in revenue from quarter-to-quarter is attributable to the decline in Toronto-based revenue, which decreased to $84,364 in Q3 2016 from $436,339 in Q2 2016 and $731,545 in Q3 2015. Revenue from Keller Fay Group increased to $790,521 in Q3 2016 compared to $676,134 in Q2 2016 and $760,580 in Q3 2015. In Q3 2016, revenue for TotalSocial product increased by 66% to $259,503, compared to $156,099 in Q2 2016. Non-GAAP Adjusted EBITDA loss for the third quarter 2016 was $1,332,436, compared to a non-GAAP Adjusted EBITDA loss of $1,180,636 for Q2 2016 and $895,191 for Q3 2015. Basic and diluted loss per share was ($0.06) for the quarter ended September 30, 2016 compared to ($0.04) for the quarter ended September 30, 2015 and ($0.03) for the quarter ended June 30, 2016.

Nine-Month Period Financial Highlights

For the nine-month period ended September 30, 2016, the Company had revenue of $3,382,561 compared to revenue of $3,383,830 for the nine-month period ended September 30, 2105. Revenue for TotalSocial was $715,452 for the nine-month period ended September 30, 2016. Non-GAAP Adjusted EBITDA loss for the nine-month period was $3,717,755 compared to a non-GAAP Adjusted EBITDA loss of $3,494,279 for the nine-month period of 2015. Basic and diluted loss per share decreased by 13% from -$0.15 for the nine-month period of 2015 to -$0.13 for the nine-month period of 2016. As at September 30, 2016, the Company had cash and restricted cash of $6,327,609, compared to $3,593,740 as at June 30, 2016.

About Engagement Labs

Engagement Labs (TSX VENTURE: EL) is the world’s first TotalSocial™ company, offering intelligent data, analytics and insights for marketers. We are leaders in tracking, measuring and benchmarking the social impact of conversations happening around a brand and industry — both online and offline. Consumer conversations are a proven driver of critical business outcomes, including sales. Engagement Labs’ TotalSocial measurement solutions provides brands with unique data fueled insights and powerful analytics to understand online and offline social impact and drive business results.

TotalSocial is the first technology that combines in-depth social listening with comprehensive offline conversation measurement to provide marketers with the only means to measure all the consumer conservation that drive their business results. It identifies the differences between the online and offline conversations about their brands and provides diagnostics about ways to improve performance. TotalSocial includes the power of Engagement Labs’ eValue and amplifies it many times over. eValue is a component of TotalSocial estimated to represent 1/8th of the algorithm. In addition, it builds upon and extends the world’s most extensive word of mouth database developed by the Keller Fay Group and acquired in 2015 when Engagement Labs acquired Keller Fay.

Disclaimer in regards to Forward-looking Statements

Certain statements included herein constitute “forward-looking statements” within the meaning of applicable securities laws. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at this time, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Investors are cautioned not to put undue reliance on forward-looking statements. Except as required by law, Engagement Labs does not intend, and undertakes no obligation, to update any forward-looking statements to reflect, in particular, new information or future events.

Neither 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.

For media inquiries please contact:
Alan Huycke
Investor Cubed Inc
[email protected]
416.366.0010

Ed Keller
CEO
Engagement Labs
[email protected]
732.846.6800