ARHT Media Announces Its Financial Results For The Three And Six Months Ending June 30, 2019

Network Growth for Permanent Installations in both Education and through third party Resellers 

First six months Revenue 85% of entire 2018, while use of cash is reduced by 69% year over year

Flagship European Headquarters Studio opens in London

TORONTO, CANADA – Aug 13, 2019 – ARHT Media Inc. (“ARHT” or the “Company”) (TSXV:ART), a global leader in the development, production and distribution of high-quality hologram content through its patented Augmented Reality Holographic Telepresence technology announces its financial results for the three and six months ended June 30, 2019. ARHT reported revenue of $566k for the three months, and $1,360k for the six months ended June 30, 2019. Compared to $508k and $811k for the three and six months ended July 31, 2018. An increase of 11% in Q2 and 68% in the first six months of 2019. A net loss of ($1,113k) ($0.02/share) was reported for Q2 2019 and ($1,998k) ($0.04/share) for the six months ended June 30, 2019. Compared to a net loss of ($1,403k) ($0.05/share) in Q2 2018 and ($3,528k) (0.13/share) for the six months ended July 31, 2018. The Company used $870k in cash for operating activities during Q2 2019 vs $1,469k in Q2 2018, and $1,800k vs $5,878k for the first six months, a reduction in cash burn of 69% for the first six months versus the prior year.

In May 2019, the Company issued $800,000 principal amount of secured debentures of the Company. The Debentures are secured against the assets of the Company and will bear interest at the rate of 12% per annum. The Debentures will mature on the earlier of: (i) 12 months from the date of issuance; and (ii) the date upon which ARHT completes a private placement financing raising gross proceeds of no less than $2 million. The Company also issued 1,400 warrants per $1,000 principal amount of Debenture. Each warrant entitles the holder thereof to acquire one common share of the Company at an exercise price of $0.21 for a period of 12 months.

In April 2019, the Company opened its European flagship studio in Hammersmith, West London, with facilities to both capture and display holograms. London joins Hong Kong, Fuzhou, Los Angeles, New York and Toronto as permanent facilities to demonstrate and utilize ARHT’s technology platform. These locations will soon be joined by Tel Aviv (as recently announced) and others expected to come on line later this year.

In April 2019, ARHT installed a permanent capture and display studio at the Singapore Institute of Technology. In May 2019, ARHT was contracted to install its third permanent university location at the University of Hawaii and its fourth permanent university location at The American Samoa Community College. The pipeline for educational institutions globally is growing substantially.

At a recent Board of Directors Meeting of the Company, Rick Blum was approved as Chief Financial Officer (while also retaining his COO role) and Linda Wu was appointed Corporate Secretary. The Company would like to thank Deborah Battiston and Neil Said, respectively, for their contributions in these roles over the past few years.

On Aug 2, 2019, the Company announced a non-brokered private placement of up to 15,384,615 units of the Company at a purchase price of $0.13 per unit, to raise gross proceeds of up to CDN$2,000,000 (the “Offering”).  Each unit will be comprised of one common share of the Company and one common share purchase warrant (a “Warrant”).  Each Warrant will be exercisable to purchase one additional common share of the Company at an exercise price of $0.18 per share for a period of three years following the closing of the Offering.  Proceeds from the offering are to fund continued sales and marketing activities including a digital marketing campaign scheduled to launch in August 2019.

Highlights for the quarter end include:

• Revenue of $566k for the three months, and $1,360k for the six months ended June 30, 2019 compared to $508k and $811k respectively for the three and six months ended July 31, 2018, an increase of 11% in Q2 and 67% in the first six months of 2019, and 85% of the entire 2018 revenue.
• A net loss of ($1,113k) ($0.02/share) was reported for Q2 2019 and ($1,998k) ($0.04/share) for the six months ended June 30, 2019 compared to net loss of ($1,403k) ($0.05/share) in Q2 2018 and ($3,528k) (0.13/share) for the six months ended July 31, 2018.
• The Company used $870k in cash in operating activities during Q2 2019 vs $1,469k in Q2 2018, and $1,800k vs $5,878k for the first six months, a reduction in cash burn of 69% for the first six months versus the prior year.
• The Company placed second in the 3rd Annual China (Shenzhen) Innovation & Entrepreneurship International Competition. The Company was initially shortlisted from over 190 Canadian entries during the Toronto competition held in March 2019 and invited to the final rounds alongside over 130 other innovators from around the world. The Company competed in the Internet of Things category winning second place and a prize of RMB 100,000 (approx. $20,000). Over 40 venture capital organizations participated as judges during the international competition.
• Contracted by global network technology leader Ericsson, the Company beamed a hologram of Malaysian viral star ‘Aishah London’ to greet the Prime Minister of Malaysia, Dr. Mahathir Bin Mohamad, who was in attendance to help launch the 5G Malaysian Showcase. Engineering University UTM beamed in professors from the university to provide lectures as part of the showcase. The four-day conference that took place in Putrajaya, Malaysia acted as a platform to explore the potential of 5G for the country.
• The Company beamed Colombia University Professor and Author, Rita Gunther McGrath, from New York City into Hong Kong to deliver an address on “The Power of Purpose’.
• The Company provided services to two major international financial institutions for events a week apart in Shenzhen and Shanghai, China.
• The Company delivered the first two of a bundled three pack of events for a major international pharmaceutical company with experts captured in Los Angeles and presented in Hong Kong and Tokyo.
• The Company was contracted to install its third permanent university location at the University of Hawaii and its fourth permanent university location at The American Samoa Community College.
• The Company utilized a third party trained AV partner to deliver trainings to a group of doctors in Abu Dhabi from Toronto, the second such event with this global pharmaceutical company, further validating its strategy of successfully training third party operators to utilize ARHT’s technology platform globally.
• The Company worked with China Unicom and Huawei Technologies to deliver its second Chinese 5G showcase in Shanghai, China.
• The Company was a featured technology at the annual JP Morgan technology showcase in Shenzhen, China.
• The Company collaborated with Sun Life Financial to bring a live hologram of a Senior Vice-President from Sun Life Financial to the Canadian Pension & Benefits Institute’s (CPBI) Annual National FORUM 2019 in Vancouver, BC.
• The Company entered into a reseller agreement in Sao Paulo, Brazil with an affiliate of one of the leading independent advertising agencies in the country. A permanent display studio is expected to open in Q3 2019.
• The Company was contracted by a major international pharmaceutical company to capture doctors and patients in two locations and then simultaneously beam them to four locations in the US as part of their ongoing training. This training event will be delivered in Q3 2019 and is seen as a pilot for the pharmaceutical company.
• The Company was the featured technology for a keynote address at the National Speakers Association annual conference in Denver, Colorado. Attended by over 12,000 speakers from across the United States, attendees learned how they can increase their annual revenues and deliver more presentations by utilizing the ARHT platform.

“We are seeing significant adoption of our strategy to contract and train third party operators and resellers, which will allow ARHT’s end users more localized expertise and a lower cost of delivery leading to more frequent use of our platform,” stated ARHT CEO Larry O’Reilly. “This combined with an ever increasing sales pipeline of both permanent sales, and repeat event clients, has our entire organization excited about the potential of the last half of 2019.”