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TORONTO, ONTARIO -- (Marketwired) -- 11/07/13 -- EQ Inc. (TSX: EQ) ("EQ Works") a leader in targeted mobile, social, video and display advertising, today announced its financial results for the third quarter ended September 30, 2013. Total revenue from continuing operations for the quarter was $1.9 million, comparable to the $1.9 million recorded in the previous quarter, and adjusted EBITDA loss for the quarter was approximately $550,000, as compared to a loss of $591,000 in the previous quarter.

Highlights for the third quarter ended September 30, 2013

--  At September 30, the Company had cash on hand of $3.5 million and no
    debt
--  Significant investments were made during the quarter to support growth,
    including expansion of sales team and the launch of a comprehensive
    client services interface to improve operational efficiencies
--  Increased number of advertising agency clients by 40%
--  Launched Agency First, a program designed to extend in-house digital
    media buying capabilities to advertising agency partners

"During the third quarter we made significant investments in our people and our platform to better enable us to service our growing client base," said Geoffrey Rotstein, President and CEO. "Our ability to scale while improving customer experience and performance will be more evident in the fourth quarter as the investments we made begin to show results," added Rotstein. "We are now a formidable competitor in one of the most exciting spaces in advertising, and the future of programmatic media buying is only now being recognized."

Non-IFRS Financial Measures

This press release includes a discussion of "Adjusted EBITDA", which is a non-IFRS financial measure. The Company defines Adjusted EBITDA as net loss from operations before; (a) depreciation of property and equipment and amortization of domain properties and other intangibles; (b) share-based payments, (c) restructuring and acquisition costs, (d) impairments of goodwill and intangible assets and other items, net. Management uses Adjusted EBITDA as a measure of the Company's operating performance because it provides information related to the Company's ability to provide operating cash flows for acquisitions, capital expenditures and working capital requirements. The Company also believes that analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of companies in its industry.

The non-IFRS financial measure is used in addition to and in conjunction with results presented in accordance with the Company's consolidated financial statements prepared in accordance with IFRS and should not be relied upon to the exclusion of IFRS financial measures. Management strongly encourages investors to review the Company's consolidated financial statements in their entirety and to not rely on any single financial measure. Because non-IFRS financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-IFRS financial measures having the same or similar names. In addition, the Company expects to continue to incur expenses similar to the non-IFRS adjustments described above, and exclusion of these items from the Company's non-IFRS measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring.

The table below reconciles net loss from continuing operations and Adjusted EBITDA for the periods presented:

Adjusted EBITDA for three and nine months ended 2013
 and 2012
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                                   Three months ended     Nine months ended
                                        September 30,         September 30,
(In thousands of Canadian
 dollars)                             2013       2012       2013       2012
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Net loss from operations         $    (917) $    (716) $  (3,200) $  (2,930)
Add:
Depreciation of property and
 equipment                              64         62        209        213
Amortization of domain
 properties and other
 intangibles                           293        285        862        839
Share-based payments                    10         37         45         22
Adjusted EBITDA                  $    (550) $    (332) $  (2,084) $  (1,856)
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About EQ Works

EQ Works (www.eqworks.com) provides a smarter way to target customers. The Company uses its real-time technology and advanced analytics to detect the actionable data that boosts performance for all web, mobile, social and video initiatives. EQ Works balances the many components that comprise the complex advertising ecosystem and establishes equilibrium for reaching the right audience at the right time through any web or mobile device.

Forward-Looking Statements

This news release may contain forward-looking statements that are based on management's current expectations and are subject to known and unknown uncertainties and risks, which could cause actual results to differ materially from those contemplated or implied by such forward-looking statements. EQ Inc. is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or otherwise.

EQ Inc.
Unaudited Condensed Consolidated Interim Statements of Financial Position
(In thousands of Canadian dollars)
September 30, 2013 and December 31, 2012

                                    September 30, 2013     December 31, 2012
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Assets

Current assets:
Cash and cash equivalents        $               3,460 $               5,419
Accounts receivable                              1,437                 2,425
Other current assets                               282                   303
Income taxes recoverable                             -                    40
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                                                 5,179                 8,187

Non-current assets:
Investment                                          50                    50
Property and equipment                             328                   460
Domain properties and other
 intangible assets                               2,171                 2,889
Goodwill                                           369                   357
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                                                 2,918                 3,756

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Total assets                     $               8,097 $              11,943
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Liabilities and Shareholders'
 Equity

Current liabilities:
Accounts payable and accrued
 liabilities                     $               2,038 $               2,703
Deferred lease inducement                           24                    41
Finance leases                                     140                   155
Deferred revenue                                   536                   549
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                                                 2,738                 3,448

Non-current liabilities:
Finance leases                                      87                   186
Deferred lease inducement                            -                    14
Deferred tax liabilities                            45                   244
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                                                   132                   444

Shareholders' Equity                             5,227                 8,051

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Total liabilities and
 Shareholders' equity            $               8,097 $              11,943
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EQ Inc.
Unaudited Condensed Consolidated Interim Statements of Comprehensive Income
 (Loss)
(In thousands of Canadian dollars, except per share amounts)
Three and nine months ended September 30, 2013 and 2012

                                 Three months ended       Nine months ended
                                      September 30,           September 30,
                                   2013        2012        2013        2012
----------------------------------------------------------------------------

Revenue                      $    1,906  $    3,508  $    5,452  $   10,930

Expenses:
 Publishing and advertising
  costs                           1,018       1,939       2,890       6,276
 Employee compensation and
  benefits                          856       1,237       2,750       3,996
 Other operating expenses           592         701       1,941       2,536
 Depreciation of property
  and equipment                      64          62         209         213
 Amortization of domain
  properties and other
  intangible assets                 293         285         862         839
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                                  2,823       4,224       8,652      13,860
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Loss from operations               (917)       (716)     (3,200)     (2,930)

Finance income                       81         220          26          54
Finance cost                         (6)        (10)       (163)        (63)
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Loss before income taxes           (842)       (506)     (3,337)     (2,939)

Income taxes recovery
 (expense)                           67         (16)        197         145
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Loss for the period from
 continuing operations             (775)       (522)     (3,140)     (2,794)

Discontinued Operation:
Income for the period from
 discontinued operation, net
 of tax                               -           -           -       5,129
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Income (loss) for the period       (775)       (522)     (3,140)      2,335

Other comprehensive income
 (loss):
Foreign currency translation
 adjustments to equity, net
 of tax                            (124)       (327)        271        (167)
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Total comprehensive income
 (loss) for the period             (124)       (327)        271        (167)

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Total comprehensive income
 (loss) for the period       $     (899) $     (849) $   (2,869) $    2,168
----------------------------------------------------------------------------

Income (loss) per share:
 Basic                            (0.05)      (0.03)      (0.20)       0.15
 Diluted                          (0.05)      (0.03)      (0.20)       0.15

Loss per share from
 continuing operations:

 Basic                            (0.05)      (0.03)      (0.20)      (0.18)
 Diluted                          (0.05)      (0.03)      (0.20)      (0.18)

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EQ Inc.
Unaudited Condensed Consolidated Interim Statements of Cash Flows
(In thousands of Canadian dollars)
Nine months ended September 30, 2013 and 2012

----------------------------------------------------------------------------
                                                        2013           2012
----------------------------------------------------------------------------

Cash flows from operating activities:
 Income (loss) for the period                  $      (3,140) $       2,335
 Adjustments to reconcile net loss to net cash
  flows from operating activities:
  Depreciation of property and equipment                 209            481
  Amortization of domain properties and other
   intangible assets                                     862          3,012
  Amortization of deferred lease inducement              (31)           (56)
  Share-based payments                                    45             39
  Foreign exchange loss                                  153             83
  Finance cost, net                                      145            496
  Deferred income taxes recovery                        (197)          (164)
  Restructuring cost                                       -            221
  Gain on sale of Tsavo                                    -         (7,402)
 Change in non-cash operating working capital            307         (3,540)
----------------------------------------------------------------------------
 Cash used in operating activities                    (1,647)        (4,495)
 Income taxes received (paid)                             40            (57)
----------------------------------------------------------------------------
 Net cash used in operating activities                (1,607)        (4,552)

Cash flows from financing activities:
 Repurchase of common shares under NCIB                    -            (29)
 Repayment of finance leases                            (114)           (53)
 Interest paid                                           (21)          (272)
----------------------------------------------------------------------------
 Net cash used in financing activities                  (135)          (354)

Cash flows from investing activities:
 Purchase of long-term investment                          -            (50)
 Interest income received                                 26             34
 Net proceeds from sale of available-for-sale
  investments                                              -            200
 Decrease in restricted cash and short-term
  investments                                              -            201
 Proceeds on sale of Tsavo, net of cash
  disposed                                                 -          6,293
 Additions to domain properties and other
  intangible assets                                      (25)          (153)
 Additions to property and equipment                     (65)          (228)
----------------------------------------------------------------------------
 Net cash from (used in) investing activities            (64)         6,297

Foreign exchange loss on cash held in foreign
 currency                                               (153)           (83)
----------------------------------------------------------------------------

Increase (decrease) in cash and cash
 equivalents                                          (1,959)         1,308

Cash and cash equivalents, beginning of period         5,419          4,050

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Cash and cash equivalents, end of period       $       3,460  $       5,358
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