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Concerns Regarding CISCOM Corp.'s Financial Communication Strategy


March 28, 2024 Toronto, Ontario – Hummingbird Capital Inc. As a concerned shareholder of CISCOM Corp., I am compelled to address significant concerns regarding the company's recent financial communications. The press release dated March 27, 2024, released at 10:18 PM detailing CISCOM's financial results for the year ending December 31, 2023, has raised pertinent questions about transparency and the portrayal of the company's financial health.


While CISCOM Corp. reported substantial revenue growth and operational achievements attributed to the acquisition of Prospect Media Group, the press release's heavy reliance on non-IFRS financial measures and an overly optimistic tone may not fully capture the complexity of the company's financial situation. Such communication strategies, while not uncommon in corporate reporting, are seldom utilized in public markets. They risk obscuring essential details and presenting an imbalanced view of the company's performance to shareholders and potential investors.


CISCOM’s President and CFO, Michel Pepin, persists in utilizing expressions of normalized EBITDA in reporting financial results, now packaged as “non-IFRS financial measures,” despite concerns raised by shareholders regarding such statements.


In addressing a specific area of concern regarding the growth rate of wages and professional fees, it is noteworthy that the growth rate of wages far surpassed the sales growth touted by management. Wages grew by a staggering nearly 300% to more than $4,402,200, an increase of 293%, significantly outpacing the increase in sales and other positive metrics highlighted by management.


Moreover, with CISCOM's emphasis on downplaying non-cash transactions such as stock-based compensation and so-called “non-recurring expenses,” which lack detailed explanations, it is important to highlight that professional fees of $800,000 continue to exceed those of comparable companies. We anticipate that the first-quarter results of 2024 will confirm our belief that these professional fees and stock-based compensation are ongoing issues rather than one-time transactions. This is among the many concerns voiced by concerned shareholders who have requested clarity and representation on the board of directors since November 2023.


The selective emphasis on positive outcomes, coupled with scant details on the reported net loss and the specific nature of significant expenses, contributes to a potentially misleading portrayal of CISCOM's financial position. It is crucial for stakeholders to have access to a balanced and comprehensive narrative that encompasses both strengths and challenges faced by the company, grounded in both IFRS and non-IFRS metrics.


As concerned shareholders, we strongly urge CISCOM Corp. to adopt a more transparent and balanced approach in its financial communications. Providing a clearer picture of both achievements and obstacles, including a more detailed discussion of net losses and expenses, will enable stakeholders to make more informed decisions. Transparency is not solely about meeting regulatory requirements; it is about building trust and confidence among investors and fostering a healthy relationship between the company and its shareholders.


Despite nearly two months passing since the Annual General Meeting, during which Chairman Paul Gaynor explicitly announced that CISCOM Corp. would initiate dialogue with concerned shareholders in the next couple of weeks, this outreach has yet to occur, despite requests for dialogue from concerned shareholders since November 2023. We eagerly anticipate CISCOM Corp. addressing these concerns, enhancing its communication strategies to reflect a more accurate and comprehensive view of its financial health, and finally engaging with shareholders outside of the entrenched board.


For further information, please contact:


Hummingbird Capital Inc.

Gilles Trahan

President & CEO

Phone: 416-247-2808




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