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Route1 Reports 2019 First Quarter Financial Results

Route1 Inc.May 23, 2019

TORONTO, May 23, 2019 (GLOBE NEWSWIRE) -- Route1 Inc. (OTCQB: ROIUF and TSXV: ROI) (the “Company” or “Route1”), North America’s most advanced provider of industrial-grade data intelligence, user authentication and ultra-secure mobile workforce solutions, today announced its first quarter (Q1) financial results for the period ended March 31, 2019.

Statement of operations Q1 Q4 Q3 Q2 Q1 Q4 In 000s of CAD dollars 2019 2018 2018 2018 2018 2017 --------------------------------- ----- ----- ------ ----- ----- ----- Revenue Subscription revenue and services 1,576 1,628 1,684 1,633 1,264 1,263 Devices and appliances 1,883 2,440 13,207 3,936 388 109 Other 3 6 4 7 32 48 ----- ----- ------ ----- ----- ----- Total revenue 3,462 4,074 14,895 5,577 1,684 1,420 Cost of revenue 1,700 2,216 12,311 3,620 585 331 ----- ----- ------ ----- ----- ----- Gross profit 1,762 1,858 2,584 1,957 1,099 1,089 Operating expenses 1,693 1,714 2,150 1,891 1,135 1,164 ----- ----- ------ ----- ----- ----- Operating profit (loss) 1 69 144 434 65 (36) (75) Total other expenses 2, 3 581 499 246 52 244 170 ----- ----- ------ ----- ----- ----- Net income gain (loss) (513) (355) 188 13 (280) (245) ----- ----- ------ ----- ----- -----

1 Before stock based compensation2 Includes stock based compensation, AirWatch litigation, gain on acquisition and foreign exchange3 The reimbursements received from Bench Walk pursuant to its investment have, based on advice of its auditors, been accounted for as a long-term non-monetary liability within the consolidated financial statements, not as a reduction to patent litigation expense. All such amounts are non-recourse to the Company. In connection with the terms of the agreement, the Company does not have a present obligation to pay any amounts until such time as the litigation has been settled or an event of default has occurred. In the event of an award or settlement of the litigation, the Company will be obligated to pay Bench Walk the greater of 10% of such award or settlement and $2,000,000 or $3,000,000 if the litigation proceeds to trial.

Subscription revenue and services Q1 Q4 Q3 Q2 Q1 Q4 in 000s of CAD dollars 2018 2018 2018 2018 2018 2017 --------------------------------- ----- ----- ----- ----- ----- ----- Application software 1,186 1,169 1,193 1,180 1,260 1,263 Technology as a service (TaaS) 307 329 289 266 - - Other services 83 130 203 186 4 - ----- ----- ----- ----- ----- ----- Total 1,576 1,628 1,684 1,633 1,264 1,263 ----- ----- ----- ----- ----- -----

Adjusted EBITDA Q1 Q1 Q4 Q3 Q2 Q1 Q4 in 000s of CAD dollars 2019 2019 5 2018 2018 2018 2018 2017 ----------------------- ----- ------ ----- ----- ----- ----- ----- Gross Profit 1,762 1,762 1,858 2,584 1,957 1,099 1,089 Adjusted EBITDA 4 322 235 331 627 272 46 24 Amortization 254 186 186 193 207 82 99 ----- ------ ----- ----- ----- ----- ----- Operating profit (loss) 69 49 144 434 65 (36) (75) ----- ------ ----- ----- ----- ----- -----

4 Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation and amortization, stock-based compensation, patent litigation, restructuring and other costs. Adjusted EBITDA does not have any standardized meaning prescribed under IFRS and is therefore unlikely to be comparable to similar measures presented by other companies. Adjusted EBITDA allows Route1 to compare its operating performance over time on a consistent basis.5 Does not include the impact of adopting IFRS 16.

Route1 used cash for operating activities of approximately $0.22 million during Q1 2019 compared with cash used in operating activities of $0.15 million in Q1 2018. Non-cash working capital of $0.50 million was used in Q1 2019 compared to $0.48 million of cash used in the same period a year earlier. Net cash used in the day–to-day operations for the three months ended March 31, 2019 was $0.72 million compared to cash used of $0.63 million in Q1 2018.

Balance sheet extracts Mar 31 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 In 000s of CAD dollars 2019 2019 5 2018 2018 2018 2018 2017 ------ ------ ------ ------ ------ ------ ------ Cash 367 367 1,073 2,289 1,084 600 1,037 Total current assets 5,106 5,100 3,664 5,881 4,872 6,172 2,035 Total current liabilities 6,033 5,689 4,034 5,917 5,227 6,749 1,829 Net working capital (927) (589) (370) (36) (355) (577) 206 Total assets 8,803 8,136 6,673 8,733 7,892 9,179 3,171 Bank debt - - - - - - - Total shareholders’ equity 3 860 994 1,465 1,928 1,888 1,931 1,236 ------ ------ ------ ------ ------ ------ ------

Investor Conference Call and Webcast

The Company will also hold a conference call and webcast to discuss the Company’s financial results and provide a business update on Monday, June 17, 2019 at 4 p.m. eastern.

Participants should dial Toll-Free: 1-800-263-0877 or Toll/International: 1-646-828-8143 at least 10 minutes prior to the conference, pass code 1954942. For those unable to attend the call, a replay will be available on Monday June 17, 2019 after 7:00 p.m. eastern at Toll-Free 1-844-512-2921 or Toll/International 1-412-317-6671, pass code 1954942 until 11:59 am on Monday July 1, 2019.

The webcast will be presented live at http://public.viavid.com/index.php?id=134761.

About Route1 Inc. Route1, operating under the trade name GroupMobile, is North America’s most advanced provider of industrial-grade data intelligence, user authentication, and ultra-secure mobile workforce solutions. The Company helps all manner of organizations, from government and military to the private sector, to make intelligent use of devices and data for immediate process improvements while maintaining the highest level of cyber security. Route1 is listed on the OTCQB in the United States under the symbol ROIUF and in Canada on the TSX Venture Exchange under the symbol ROI. For more information, visit: www.route1.com.

For More Information, Contact: Tony BusseriChief Executive Officer, Route1 Inc.+1 416 814-2635 tony.busseri@groupmobile.com

This news release, required by applicable Canadian laws, does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Neither the 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.

© 2019 Route1 Inc. All rights reserved. No part of this document may be reproduced, transmitted or otherwise used in whole or in part or by any means without prior written consent of Route1 Inc. See https://www.route1.com/terms-of-use/ for notice of Route1’s intellectual property.

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