NYWKF - NTG Clarity Announces Positive Financial Results for First Quarter 2021

(TheNewswire)

Toronto, ON – TheNewswire - May 19, 2021 - NTG Clarity Networks Inc.(TSXV:NCI) (OTC:NYWKF) , announces its first quarter results for the period ended March 31, 2021(all figures in Canadian Dollars).

In 2021, we have continued our road back toprofitability with the third straight quarter of positive results.This quarter’s net income was $249,727, making the total for thethree consecutive positive quarters of $769,562. Our gross margin forthis quarter was 47% and the income from operations was $444,890.

The COVID-19 pandemic continues to present asignificant source of economic uncertainty however despiterestrictions on travel, market/trade shows and client/potential clientvisits, our collections have remained current and we have no bad debtrecorded in Q1 2021. Our outsourced resources and project-focusedstaff are continuing to work remotely as much as possible. Officestaff in Egypt is rotating between working from the office and workingremotely.

In February, we announced the signing of a Memo ofUnderstanding (MOU) with a major bank in the Gulf region to provideoffshore software development and IT resources and facilities throughour Egypt subsidiary.

In February we also announced the receipt of multiplepurchase orders for a total estimated amount of over $1.1 Million CADin contract value. Some of this was for renewal of existing workhowever the majority was for new work.

In March we soft-launched our latest software calledSmart2Go (a Digital Transformation product). We also announced thereceipt of a CAD$550,000 PO for it from a major Health Care Providerto deliver their digital products on the Smart2Go platform.

Consolidated revenue for the three months ended March31, 2021 was $2,298,307 compared to $2,474,766 for the same period in2020. Due to the exchange rate differences, our revenue is lower thisquarter than Q1 2020, as most of our income is in USD (exchange rateof 1.25 compared to 1.42 in Q1 2020).

Professional service revenue continues to be animportant strategic source of revenue for us, given its generallyrecurring nature (82%). The contribution of product-related revenuewas 18% in Q1 2021. We are working on marketing our new low-codeplatform product in an effort to make product sales a more balancedpart of NTG’s revenue stream.

G&A expenses for the three months ended March 31,2021 was down to $420,081 compared to $596,720 in Q1 2020. Thedecrease was due to:

• - salary reductions

  - lower insurance costs in KSA due to a change ininsurance carrier

  - lower rent expenses in KSA and Oman as we work tooptimize rent for offices and housing

Selling and marketing expenses for the three monthsended March 31, 2021 were reduced to $218,120 compared to $273,289 inQ1 2020. The significant decrease in the selling and marketingexpenses was the direct result of COVID-19. Travel, trade shows andmost customer meetings/visits continue to be done virtually.

For Q1 2021, NTG recorded a net income of $249,727 ascompared to a net loss of $598,736 in Q1 2020.

The working capital as at March 31, 2021 was a deficitof $6,333,921 compared to a deficit of $6,336,678 at December 31,2020.

IncomeStatement Highlights for the Three Months Ended March 31, 2021 and2020

Balance Sheet Highlights

Outlook

Providing the offshoring and outsourcing of ourtechnical, IT and professional services resources has proven to be asuccessful strategy as working remotely has become increasing popular.This has helped us grow and expand our business into new verticalsthat include government and financial sectors. We are looking forwardto more contracts such as those announced this quarter.

Additionally, with the release of our latest softwareproduct, Smart2Go, we anticipate being able to further expand into newverticals. Smart2Go allows enterprises to automate their processes andcreate applications by offering rapid application development withoutthe need for knowledge of development languages. Smart2Go is built onNTG’s proven Workflow technology and provides both a Portal andMobile Apps for its users.

About NTG Clarity NetworksInc.

NTG Clarity Networks’ vision is to be a global leaderin providing networking solutions. As a Canadian company establishedin 1992, NTG Clarity has delivered networking, IT and network enabledapplication software solutions to network service providers and largeenterprises. More than 275 network professionals provide design,engineering, implementation, software development and securityexpertise to the industry’s leading network service providers andenterprises.

Forward Looking Information

Certain statements in this release, other thanstatements of historical fact, are forward looking information thatinvolves various risks and uncertainties. Such statements relating to,among other things, the prospects for the company to enhance operatingresults, are necessarily subject to risks and uncertainties, some ofwhich are significant in scope and nature.

These uncertainties may cause actual results to differfrom information contained herein. There can be no assurance that suchstatements will prove to be accurate. Actual results and future eventscould differ materially from those anticipated in such statements.These and all subsequent written and oral forward looking statementsare based on the estimates and opinions of the management on the datesthey are made and expressly qualified in their entirety by thisnotice. The Company assumes no obligation to update forward lookingstatements should circumstances or management's estimates or opinionschange.

The TSX Venture Exchange does not accept responsibilityfor the adequacy or accuracy of this release.

For Further Information:

Kristine Lewis, President, NTG Clarity NetworksInc.

Ph: 905-305-1325

Fax: 905-752-0469

Email: klewis@ntgclarity.com

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