Datawalk S.A. — Interim / Quarterly Report 2023

Nov 15, 2023

Raport November 2023 DATAWALK CAPITAL GROUP SUMMARY OF THE CONDENSED INTERIM FINANCIAL STATEMENTS for the 9-month period ended 30 th September, 2023 DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 2 THE EXECUTIVE BOARD`S LETTER Dear Investors, We’re in the last weeks of a tumultuous year, 2023. Our sales performance has been far from the potential and expectations we set for ourselves, but the signs pointing to an improvement in the near future are there. There’s also a lot going on inside our organization - we’re optimizing the cost side, pricing, and key business processes. On the revenue side - the quarter was slow, but there were at least two events well worth taking a closer look at. One of them is a follow-up sale to ING Bank - a customer we onboarded just a year ago. We’re already making a difference in their business performance and expanding to new use cases within the organization. Another one worth mentioning is a new customer in North America: Veterinary Emergency Group. This project is very interesting for us, since it’s a totally new use case, something we haven’t done with our platform before, so it might turn out to be an interesting learning experience valuable for our future business. Regarding our work on improving the organization’s effectiveness - just like we guided earlier this year, we can now show you the first effects of our cost-cutting initiatives. In Q3 we managed to reduce the OPEX adj.+RnD costs by 6% year over year and by 11% compared to Q2 2023. This trend should also be visible in the Q4 results. As for the year 2024 - our decisions regarding the cost side will be dependent on the performance of the business in the coming months. Thinking about the next year - our sales funnel points to big sales opportunities. We have more big projects in our pipeline than ever before. It’s the result of our decision to move in the direction of bigger, more profitable deals. We are trying to achieve it by both reviewing our pricing and taking part in bigger projects. Compared to a year ago, the average value of a potential new contract in our sales funnel grew from ca. 320k USD to almost 500k USD - that’s a 50% growth, and we don’t intend to stop here. In the coming years, we would like to focus on projects starting at 1M USD, which would significantly improve our business efficiency. Right now, we are in the final months of the year, so most of our attention is focused on closing new contracts before the end of the year. Paweł Wieczyński, CEO DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 3 Sales funnel methodology and definitions of the stages of the sales process. Quantifiers of our Sales Funnel. Stages of the Sales: 1. Establishing contact with a prospect (including through our campaigns or first business partners). 2. Identification of the situation - this stage ends when we established contact with the appropriate representatives of the client. 3. Validation of customer needs and initial verification of the opportunity. 4. Full Qualification of the opportunity. 5. Engagement with the full client project team (including decision-makers and senior management) in substantive discussions. For example: a pilot implementation may take place during this phase. 6. Purchase negotiations and procedures (initiation of a public tender procedure if applicable). 7. Finalization of the terms of the contract and award of the tender. 8. Execution of implementation and acceptance protocols authorizing the issuing of invoices for licenses and individual stages of implementation. The categorization of a potential customer as a Qualified Lead (Stage 4) occurs only when the customer confirms the readiness to purchase and has an approved budget and a project team to execute the selection process and the will to continue discussions with us. The values presented below do not include projects that left the sales funnel due to the conversion of projects into Completed Sales (conclusion of a contract, obtaining an acceptance protocol, recognition of all or a major part of the project as revenue). Thus, the sales funnel presented below (stages 4-7 of the commercial process) constitutes an overview for understanding the sales dynamics. Based on a review of the funnel methodology in the first quarter of 2021, we started to include expected renewals of term licenses and maintenance agreements, to better reflect anticipated revenue. The overall growth of the funnel is expected to accelerate once we significantly increase our reference pool (especially in North America) and sometime after we increase the sales team staffing. Source: Issuer. $21,92 $23,72 $25,76 $24,50 $27,00 $37,00 $40,14 $40,24 $40,54 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 Q4.21 Q1.22 Q2.22 Q3.22 Q4.22 Q1.23 Q2.23 Q3.23 Obecnie Sales prospects - Qualified+ [mln USD] North and South America Rest of the World Total DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 4 Sales cycles counted from qualification of the lead can range on average from 18 months for the commercial sector to 30 months in the public sector, but off course there are examples that are shorter or longer. Given the “New Vendor” market position of the DataWalk Group, only a portion of leads will be converted into contracts, especially in North America where we have fewer production customers to date than we have in Poland and we are not yet a recognizable brand with a track record. Over time, we will be able to increase our close rate, especially after we gain more customers in the most advanced markets in the world. The data presented above cannot be considered a forecast of the future results of DataWalk S.A. and its capital group because there is great variability in deal values, win rates as well as the impacts of cancelled projects and other variables. The figures above represent the sum of the values of Leads based on the Stage of the Sales Funnel, not including the remaining part of the sales funnel, which contains leads that are earlier in the sales process. The values of individual Leads are calculated on the basis of the estimated size of the sales opportunity. The sales funnel in Poland started being built in late 2015, results began to materialize with the acquisition of the first few contracts including TUiR Warta (2017) and the Ministry of Finance (2018). After these successful implementations resulted in very positive customer testimonials, we started to see more opportunities in the EMEA region. The sales funnel in the Americas started being built in the second quarter of 2019 with the hiring of the first two sales teams and although it is less mature in terms of time, it will address a much larger available market. The key aspects affecting commercial processes in North America relate to the acquisition of the first references among customers such as the intelligence and 6 US ministries (including the Department of Defense and the Department of Justice), as well as the acquisition of the first customers in the commercial sector in 2021 (Ally Bank, MPA, GTL). The first significant reference effects from deployments with the above clients began to appear in 2022. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 5 The table of contents SELECTED CONSOLIDATED FINANCIAL DATA OF THE DATAWALK CAPITAL GROUP ........................ 6 SELECTED STANDALONE FINANCIAL DATA DATAWALK S.A.................................................................... 7 CONSOLIDATED FINANCIAL STATEMENT .................................................................................................... 10 Consolidated Statement of Financial Position (in thousands of PLN) ................................................................. 10 Consolidated Profit and Loss Account with The Statement of Comprehensive Income (in thousands of PLN) . 12 Consolidated Statement of Changes in Equity (in thousands of PLN) ................................................................. 14 Consolidated Cash Flow Statement (in thousands of PLN) ................................................................................. 16 SUMMARY AND ANALYSIS OF THE FINANCIAL RESULTS OF THE DATAWALK CAPITAL GROUP FOR THE THREE QUARTERS OF 2023 ........................................................................................................................ 18 BASIS FOR THE PREPARATION OF THE FINANCIAL STATEMENTS - INCLUDING A DESCRIPTION OF CIRCUMSTANCES INDICATING A GOING CONCERN THREAT .................................................................. 25 DATAWALK GROUP'S CASH-SETTLED INCENTIVE PROGRAM ................................................................. 26 DATAWALK GROUP'S EQUITY-SETTLED INCENTIVE PROGRAM ............................................................ 32 MAJOR EVENTS THAT HAVE AN IMPACT ON THE DATAWALK GROUP'S RESULTS IN THE REPORTING PERIOD ............................................................................................................................................ 39 INFORMATION ON EVENTS OCCURRING AFTER THE END OF THE INTERIM PERIOD THAT HAS NOT BEEN INCLUDED IN THE FINANCIAL STATEMENTS FOR THE INTERIM PERIOD .................................. 39 FACTORS EXPECTED TO AFFECT FURTHER GROUP’S DEVELOPMENT .................................................. 40 COMPANY'S AUTHORITIES ................................................................................................................................ 41 The Executive Board ............................................................................................................................................ 41 The Supervisory Board ........................................................................................................................................ 42 DESCRIPTION OF THE ORGANISATION OF THE DATAWALK CAPITAL GROUP AND CONSOLIDATED ENTITIES ................................................................................................................................................................ 43 DataWalk S.A. ..................................................................................................................................................... 43 DataWalk Inc. ...................................................................................................................................................... 44 Overview of the DataWalk Capital Group ........................................................................................................... 45 Changes in the management rules of the Capital Group and the Company ......................................................... 45 THE SHAREHOLDING STRUCTURE OF THE DATAWALK S.A. .................................................................... 46 Shareholder structure as at November 15, 2023 (share in the total number of votes) .......................................... 46 Shareholder structure as at September 6, 2023 (share in the total number of votes) ............................................ 47 STRUCTURE OF SHAREHOLDINGS IN DATAWALK S.A. OR RIGHTS ATTACHED TO SHARES, HELD BY MEMBERS OF THE ISSUER’S EXECUTIVE AND SUPERVISORY BOARDS ................................................ 48 STANDALONE FINANCIAL STATEMENT ........................................................................................................ 50 Standalone Statement of Financial Position (in thousands of PLN) .................................................................... 50 Standalone Profit and Loss Account with The Statement of Comprehensive Income (in thousands of PLN) ..... 52 Standalone Statement of Changes in Equity (in thousands of PLN) .................................................................... 54 Standalone Cash Flow Statement (in thousands of PLN) .................................................................................... 55 CHANGES IN ACCOUNTING POLICIES USED ................................................................................................. 56 DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 6 SELECTED CONSOLIDATED FINANCIAL DATA OF THE DATAWALK CAPITAL GROUP The following table presents selected data regarding the consolidated financial statements of the DataWalk Capital Group. SELECTED FINANCIAL DATA from 01/01/2023 to 09/30/2023 from 01/01/2022 to 09/30/2022 from 01/01/2023 to 09/30/2023 from 01/01/2022 to 09/30/2022 in thousands of PLN in thousands of PLN in thousands of EUR in thousands of EUR Revenues from sales 18 117 25 841 3 958 5 512 Profit/Loss on sales -10 871 -118 213 -2 375 -25 216 Operating profit (loss) -16 995 -117 974 -3 713 -25 165 Pre-tax profit (loss) -15 682 -117 045 -3 426 -24 967 Net profit (loss) -21 458 -97 922 -4 688 -20 888 Total comprehensive income -21 505 -96 392 -4 698 -20 561 The weighted average number of ordinary shares (pcs.) 5 132 988 4 914 089 5 132 988 4 914 089 Profit (loss) per share (in PLN/EUR) -4,18 -19,93 -0,91 -4,25 Net cash generated (used) in operating activities -25 633 -11 856 -5 600 -2 529 Net cash generated (used) in investing activities -12 486 -40 404 -2 728 -8 619 Net cash (used) in financing activities -547 37 709 -120 8 044 Total net cash flows -38 666 -14 550 -8 447 -3 104 SELECTED FINANCIAL DATA 09/30/2023 12/31/2022 09/30/2023 12/31/2022 in thousands of PLN in thousands of PLN in thousands of EUR in thousands of EUR Total assets/equity and liabilities 66 690 110 575 14 387 23 577 Non-current assets 30 115 37 501 6 496 7 996 Current assets 36 575 73 075 7 890 15 581 Equity 17 280 29 399 3 728 6 268 Total liabilities 49 410 81 177 10 659 17 309 Long-term liabilities 38 907 69 733 8 393 14 869 Short-term liabilities 10 503 11 443 2 266 2 440 DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 7 SELECTED STANDALONE FINANCIAL DATA DATAWALK S.A. The following table presents selected data on the standalone financial statements DataWalk S.A. SELECTED FINANCIAL DATA from 01/01/2023 to 09/30/2023 from 01/01/2022 to 09/30/2022 from 01/01/2023 to 09/30/2023 from 01/01/2022 to 09/30/2022 in thousands of PLN in thousands of PLN in thousands of EUR in thousands of EUR Revenues from sales 13 009 18 165 2 842 3 875 Profit/Loss on sales -24 693 -2 550 -5 395 -544 Operating profit (loss) -30 709 -2 312 -6 709 -493 Pre-tax profit (loss) -41 878 -13 229 -9 149 -2 822 Net profit (loss) -41 165 -13 706 -8 993 -2 924 Total comprehensive income -41 165 -13 706 -8 993 -2 924 The weighted average number of ordinary shares (pcs.) 5 132 988 4 914 089 5 132 988 4 914 089 Profit (loss) per share (in PLN/EUR) -8,02 -2,79 -1,75 -0,59 Net cash generated (used) in operating activities -15 621 -10 967 -3 413 -2 339 Net cash generated (used) in investing activities -22 936 -42 539 -5 011 -9 074 Net cash (used) in financing activities -511 37 709 -112 8 044 Total net cash flows -39 068 -15 797 -8 535 -3 370 SELECTED FINANCIAL DATA 09/30/2023 12/31/2022 09/30/2023 12/31/2022 in thousands of PLN in thousands of PLN in thousands of EUR in thousands of EUR Total assets/equity and liabilities 52 306 86 239 11 284 18 388 Non-current assets 22 245 22 186 4 799 4 731 Current assets 30 061 64 053 6 485 13 658 Equity 43 705 75 483 9 428 16 095 Total liabilities 8 601 10 756 1 855 2 293 Long-term liabilities 838 712 181 152 Short-term liabilities 7 763 10 044 1 675 2 142 DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 8 Applied EUR / PLN rates: • Items of the statement of financial position were translated at the average rate of the euro published by the Polish National Bank, valid on the last day of the reporting period. Rate on the last day of the period 09/30/2023 12/31/2022 1 EUR 4,6356 4,6899 • Items in the statement of profit or loss and other comprehensive income and statement of cash flows were translated at the average rate of the euro which is the arithmetic average of euro exchange rates published by the Polish National Bank and valid on the last day of each month of the reporting period. The average exchange rate in a given period from 01/01/2023 from 01/01/2022 to 09/30/2023 to 09/30/2022 1 EUR 4,5773 4,6880 DATAWALK CAPITAL GROUP SUMMARY OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS for the 9-month period ended 30 th September 2023 DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 10 CONSOLIDAT ED FINANCIAL STATEMENT Consolidated Statement of Financial Position (in thousands of PLN) ASSETS 09/30/2023 12/31/2022 A. Non-current assets 30 115 37 501 I. Fixed assets 342 486 II. Goodwill 0 0 III. Intangible assets 19 530 19 530 IV. Right-of-use assets 739 1 075 V. Long-term receivables 152 152 VI. Long-term prepayments 68 1 199 VII. Deferred tax assets 9 283 15 059 B. Current assets 36 575 73 074 I. Contract assets 709 927 II. Trade receivables 8 247 9 654 III. Receivables from income tax 26 104 IV. Other receivables 1 983 1 476 V. Financial assets 4 199 0 VI. Prepayments 2 503 3 315 VII. Cash and cash equivalents 18 908 57 598 TOTAL ASSETS 66 690 110 575 DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 11 EQUITY AND LIABILITIES 09/30/2023 12/31/2022 A. Equity 17 280 29 399 Equity attributable to shareholders of the parent company 17 280 29 399 I. Share capital 513 513 II. Share premium 171 968 171 968 III. Other capitals 9 965 9 965 IV. Profit (loss) from previous years -185 713 -68 970 V. Reserve capital 41 039 31 653 VI. Net profit (loss) for the current year -21 458 -116 744 VII. Foreign exchange translation differences 966 1 014 Non-controlling interests 0 0 B. Long-term liabilities 38 907 69 733 I. Deferred tax liabilities 0 0 II. Lease liabilities 187 557 III. Bank loans and borrowings 661 719 IV. Incentive program liabilities 38 059 68 457 C. Short-term liabilities 10 503 11 443 I. Trade liabilities 3 418 4 559 II. Income tax liabilities 0 0 III. Lease liabilities 605 547 IV. Bank loans and borrowings 38 0 V. Other liabilities 746 702 VI. Other provisions 1 195 1 925 VII. Contract liabilities 4 502 3 710 TOTAL EQUITY AND LIABILITIES 66 690 110 575 NET ASSET VALUE PER SHARE 09/30/2023 12/31/2022 Net asset value 17 280 29 399 A number of shares (pcs.) 5 132 988 5 132 988 Net asset value per share (in PLN) 3,37 5,73 A diluted number of shares (pcs.) 5 455 786 5 365 406 Diluted net asset value per share (in PLN) 3,17 5,48 The net asset value per share was calculated in relation to the number of the Company's shares at the balance sheet date. The diluted number of shares in the Company on September 30, 2023 amounted to 5 455 786, including 322 798 shares under the incentive program. The diluted number of shares in the Company on December 31, 2022 amounted to 5 365 406, including 232 418 shares under the incentive program. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 12 Consolidated Profit and Loss Account with The Statement of Comprehensive Income (in thousands of PLN) PROFIT AND LOSS ACCOUNT 01/01/2023 – 09/30/2023 01/01/2022 – 09/30/2022 07/01/2023 – 09/30/2023 07/01/2022 – 09/30/2022 Continuing operations A. Revenues 18 117 25 841 4 559 7 679 B. Operating costs 28 989 144 053 10 029 12 165 Materials and Energy 166 528 40 113 Employee benefits 22 062 20 306 6 576 7 269 Employee benefits - Share-based Payment -21 011 103 314 -5 725 -2 935 Amortization and depreciation 3 562 1 996 1 128 676 External services 22 385 16 667 7 401 6 503 Other costs 1 824 1 243 609 540 C. Profit/Loss on sales -10 871 -118 213 -5 470 -4 488 Other operating income 385 276 92 94 Other operating costs 7 131 39 1 941 0 Loss (profit) from expected credit losses -622 -2 -555 -5 D. Operating profit (loss) -16 995 -117 974 -6 765 -4 389 Financial income 1 401 964 444 758 Financial costs 88 35 -63 11 E. Pre-tax profit (loss) -15 682 -117 045 -6 257 -3 642 Income tax 5 776 -19 123 1 903 16 538 F. Net profit (loss) from continuing operations -21 458 -97 922 -8 160 -20 180 Discontinued operations 0 0 0 0 Net profit (loss) from discontinued operations 0 0 0 0 G. Net profit (loss) -21 458 -97 922 -8 160 -20 180 NET PROFIT (LOSS) ATTRIBUTABLE TO: 01/01/2023 – 09/30/2023 01/01/2022 – 09/30/2022 07/01/2023 – 09/30/2023 07/01/2022 – 09/30/2022 - shareholders of the parent company -21 458 -97 922 -8 160 -20 180 - non-controlling interests 0 0 0 0 STATEMENT OF COMPREHENSIVE INCOME 01/01/2023 – 09/30/2023 01/01/2022 – 09/30/2022 07/01/2023 – 09/30/2023* 07/01/2022 – 09/30/2022 Net profit (loss) -21 458 -97 922 -8 160 -20 180 Other comprehensive income -47 1 529 418 779 1. Items that will not be reclassified to profit or loss 0 0 0 0 2. Items that will be reclassified to profit or loss: -47 1 529 418 779 a) Exchange differences in translating foreign operations -47 1 529 418 779 Total comprehensive income -21 505 -96 392 -7 742 -19 400 DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 13 TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: 01/01/2023 – 09/30/2023 01/01/2022 – 09/30/2022 07/01/2023 – 09/30/2023 07/01/2022 – 09/30/2022 - shareholders of the parent company -21 505 -96 392 -7 742 -19 400 - non-controlling interests 0 0 0 0 PROFIT (LOSS) PER SHARE ATTRIBUTABLE TO: 01/01/2023 – 09/30/2023 01/01/2022 – 09/30/2022 07/01/2023 – 09/30/2023 07/01/2022 – 09/30/2022 Continuing operations A number of shares (pcs.) 5 132 988 4 914 089 5 132 988 4 969 256 Profit (loss) per share (in PLN) -4,18 -19,93 -1,59 -4,06 A diluted number of shares (pcs.) 5 426 002 5 003 088 5 426 002 5 058 255 Diluted profit (loss) per share (in PLN) -3,95 -19,57 -1,50 -3,99 Discontinued operations A number of shares (pcs.) 5 132 988 4 914 089 5 132 988 4 969 256 Profit (loss) per share (in PLN) 0 0 0 0 A diluted number of shares (pcs.) 5 426 002 5 003 088 5 426 002 5 058 255 Diluted profit (loss) per share (in PLN) 0 0 0 0 Continuing and discontinued operations A number of shares (pcs.) 5 132 988 4 914 089 5 132 988 4 969 256 Profit (loss) per share (in PLN) -4,18 -19,93 -1,59 -4,06 A diluted number of shares (pcs.) 5 426 002 5 003 088 5 426 002 5 058 055 Diluted profit (loss) per share (in PLN) -3,95 -19,57 -1,50 -3,99 The value of net profit (loss) per share was calculated in relation to the weighted average number of DataWalk S.A. shares for the period. The number of shares calculated this way for the three quarters of 2023 was 5 132 988, and for the three quarters of 2022, it was 4 914 089. The weighted average number of DataWalk S.A. shares in the third quarter of 2023 was 5 132 988, while in the third quarter of 2022, it was 4 969 256. The weighted average diluted number of shares of the Company in the three quarters of 2023 amounted to 5 426 002, including 322 798 shares under the incentive program. The weighted average diluted number of shares of the Company in the three quarters of 2022 amounted to 5 003 088, including 88 999 shares under the incentive program. The weighted average diluted number of shares of the Company in the third quarter of 2023 amounted to 5 426 002, including 322 798 shares under the incentive program. The weighted average diluted number of shares of the Company in the third quarter of 2022 amounted to 5 058 255, including 88 999 shares under the incentive program. * The data for the third quarter of 2023 was determined by subtracting from the data for the three quarters of 2023 the data presented by the Group in the report for the first half of 2023 (covered by the review). ** The data for the third quarter of 2022 was determined by subtracting from the data for the three quarters of 2022 the data presented by the Group in the report for the first half of 2022 (covered by the review). DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 14 Consolidated Statement of Changes in Equity (in thousands of PLN) STATEMENT OF CHANGES IN EQUITY Share capital Share premium Other capitals Foreign exchange translation differences Reserve capital Profit (loss) from previous years Net profit (loss) for the current period Equity attributable to shareholders of the parent company Equity attributable to non- controlling interests Total equity Balance as at 01/01/23 513 171 968 9 965 1 014 31 653 -68 970 -116 744 29 399 0 29 399 Equity increase (decrease) 0 0 0 -47 9 387 -116 744 95 286 -12 118 0 -12 118 Total comprehensive income 0 0 0 -47 0 0 -21 458 -21 505 0 -21 505 Net profit (loss) 0 0 0 0 0 0 -21 458 -21 458 0 -21 458 Exchange differences in translating foreign operations 0 0 0 -47 0 0 0 -47 0 -47 Share capital increase 0 0 0 0 0 0 0 0 0 0 Distribution of profit (loss) for the previous year 0 0 0 0 0 -116 744 116 744 0 0 0 Changes in equity resulting from IFRS 2 0 0 0 0 9 387 0 0 9 387 0 9 387 Balance as at 09/30/2023 513 171 968 9 965 966 41 039 -185 713 -21 458 17 280 0 17 280 DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 15 STATEMENT OF CHANGES IN EQUITY Share capital Share premium Other capitals Foreign exchange translation differences Reserve capital Profit (loss) from previous years Net profit (loss) for the current period Equity attributable to shareholders of the parent company Equity attributable to non- controlling interests Total equity Balance as at 01/01/2022 489 133 859 9 965 347 2 771 -67 321 -1 648 78 462 0 78 462 Equity increase (decrease) 25 38 109 0 1 529 0 -1 648 -96 273 -58 259 0 -58 259 Total comprehensive income 0 0 0 1 529 0 0 -97 922 -96 392 0 -96 392 Net profit (loss) 0 0 0 0 0 0 -97 922 -97 922 0 -97 922 Exchange differences in translating foreign operations 0 0 0 1 529 0 0 0 1 529 0 1 529 Share capital increase 25 38 109 0 0 0 0 0 38 134 0 38 134 Distribution of profit (loss) for the previous year 0 0 0 0 0 -1 648 1 648 0 0 0 Changes in equity resulting from IFRS 2 0 0 0 0 0 0 0 0 0 0 Balance as at 09/30/2022 513 171 967 9 965 1 877 2 771 -68 970 -97 922 20 202 0 20 202 DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 16 Consolidated Cash Flow Statement (in thousands of PLN) CASH FLOW STATEMENT 01/01/2023 – 09/30/2023 01/01/2022 – 09/30/2022 Cash flows from operating activities Net profit (loss) -21 458 -97 922 Adjustments, including: - amortization and depreciation 3 562 1 996 - foreign exchange gains (losses) -22 1 545 - interest expenses 88 35 - income from interest and dividends -1 527 -116 - profit (loss) on investing activities -146 -86 - impairment of intangible assets 7 026 0 - share-based payment (equity-settled) 9 387 0 - share-based payment (cash-settled) -30 398 103 314 - change in receivables 978 1 056 - change in provisions -731 563 - change in liabilities other than incentive program -1 099 1 002 - change in prepayments 7 719 -18 754 - change in contract assets and contract liabilities 1 009 -4 455 - other adjustments -20 -32 Net cash generated (used) in operating activities -25 633 -11 856 Cash flows from investing activities Purchase of intangible assets 9 957 10 292 Purchase of property, plant, and equipment 26 170 Proceeds from the sale of property, plant and equipment 40 0 Inflow from bank deposits (over 3 months) 0 0 Outflows from bank deposits (over 3 months) 4 090 30 090 Proceeds from governmental subsidies 20 32 Interest received 1 527 116 Net cash generated (used) in investing activities -12 486 -40 404 Cash flows from financing activities Proceeds from issue of share capital 0 38 242 Payment of finance lease liabilities 441 518 Repayments of bank loans and borrowings 19 0 Interest paid 88 15 Other outflows 0 0 Net cash generated (used) in financing activities -547 37 709 Total net cash flows -38 666 -14 550 Opening balance of cash 57 598 51 650 Change in cash due to foreign currency translation -24 -14 Change in the cash balance, net -38 690 -14 564 Closing balance of cash 18 908 37 085 DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 17 COMMENTARY AND ADDITIONAL INFORMATION FOR THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE DATAWALK CAPITAL GROUP DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 18 SUMMARY AND ANALYSIS OF THE FINANCIAL RESULTS OF THE DATAWALK CAPITAL GROUP FOR THE THREE QUARTERS OF 2023 Commentary on the financial results of the DataWalk Group In the three quarters of 2023, the value of the DataWalk Group's revenue amounted to PLN 18 117 thousand, down 30% compared to the three quarters of 2022. The sales potential of the Group, as well as of the Company, in 2023, as in the whole of 2022, was still limited due to insufficient capacity in so-called Field Engineering. Our pre- and post-sales teams turned out to be unable to handle the growing number of customers and the complexity of contracts we've been working on. This problem was identified and addressed over a year ago. There are now noticeable effects of the changes made to how these teams operate. However, a sustained return to a growth path of more than 50% year-on-year requires further work on process improvement and the development of the staff involved. The revenue in the Americas market in the three quarters of 2023 amounted to PLN 11 888 thousand, while in the comparable period, it was PLN 14 592 thousand, which means a decrease of 19%. The U.S. team is steadily building DataWalk's position in America's market. Although operations are still in the early market expansion stage, the Group has acquired another two customers from this area in the public sector and one in the commercial sector. The Group is also expanding cooperation with existing customers, as exemplified by the receipt of additional orders, particularly from Ally Financial. In the three quarters of 2023, the Group recorded a decrease in revenue in the other markets (EMEA and APAC regions), which amounted to PLN 6 229 thousand, down 45% from the PLN 11 248 thousand revenue reached in the comparable period. It was mainly due to the lack of acquisition of new customers in this segment and the focus on completing implementation projects and maintaining cooperation with existing customers, thanks to which the Group maintains a 80% retention rate of customers. As of the balance sheet date, September 30, 2023, the deferred revenue amounts to PLN 4 502 thousand and represents the Group's obligation to provide customers with the contracted licenses or services and, at the same time, represents the value of revenue to be recognized in subsequent quarters in the amount resulting from the realization of these obligations. These revenues mainly relate to delivering technical support services (the so-called "maintenance") for PLN 4 094 thousand and implementation services for PLN 408 thousand. The DataWalk Group manages the investment process through triggers linked to business performance and financial models. The above approach allows monitoring and steering costs and capital expenditure (R&D) dynamics. In light of this, due to lower-than-expected revenue growth, the Group limits cost growth until it achieves the expected improvement in the sales dynamic. In the third quarter of 2023, operating expenses adjusted for non-cash items (OPEX adj.) and increased by capital expenditures for development work stood at approximately PLN 17 400 thousand, compared to PLN 18 605 thousand in the third quarter of 2022. The cost decrease of about 6% was mainly due to the efforts taken, as mentioned above. In 2022, the Group implemented incentive programs using cash-settled and equity-settled share-based payment transactions. The purpose of the program is to attract and retain members of key personnel for both DataWalk S.A. and its subsidiaries by creating additional market-attractive tools and identifying key personnel within the Group and its long-term goals, motivating them to pay special attention to the Group's long-term performance, maintain the dynamic growth of its value, and connect the interests of these individuals to the interests of the Group, and consequently, the interests of its shareholders. The goal of the Incentive Program is to link the long-term value of the Company and its Group with the long-term goals of the key personnel. As a result of the conclusion of agreements with participants of the RSU-based program, as of September 30, 2023, the Group estimated the value and recognized the cost and liability arising from the ongoing program at PLN 38 059 thousand. In the three quarters of 2023, the Group recognized the effects of the remeasurement of RSUs in the negative amount of PLN -30 398 thousand. Negative operating costs of PLN 30 398 thousand consisted of recognition in the reporting period of the estimated amount of RSUs vested in the three quarters of 2023 amounting to PLN 2 367 thousand, as well as a value of PLN -32 764 thousand, which represents the negative difference in the valuation of RSUs as of the balance sheet date of September 30, 2023, against the valuation as of December 31, 2022. The real value of the incentive program has yet to be discovered. The value of the cash amounts payable under the incentive program depends, among other things, on the fulfillment of conditions dependent on the participants, DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 19 primarily on the occurrence of a "sale transaction" defined in the program's regulations and the value of this transaction. Accordingly, the program implementation at this time is considered a future and uncertain event, and the liability is not due until the date of approval for the publication of this report. The “DATAWALK GROUP'S CASH-SETTLED INCENTIVE PROGRAM” includes details of this program. In addition, as a result of the conclusion of agreements with participants in the Company's equity-settled program, the Group estimated the value and recognized in the consolidated financial result for the three quarters of the 2023 the cost and a corresponding increase in equity resulting from the program at a total amount of PLN 9 387 thousand. Thus, the total value of the Company's ongoing share-based incentive program reported in equity as of September 30, 2023, amounted to PLN 41 040 thousand. The “DATAWALK GROUP'S EQUITY-SETTLED INCENTIVE PROGRAM” includes details of this program. Other factors having the most significant impact on the increase in the Group's operating expenses relative to the three quarters of 2022 include the increase in the costs of salaries and external services related to the growth and increasing scale of the Group's operations, both in the area of increasing the number of implementation, programming and sales specialists, as well as ongoing processes related to international commercialization. Moreover, during the last twelve months, the Company completed further development work related to the DataWalk platform. As a result, the value of completed development work was increased by PLN 27 381 thousand. The Company began depreciating them, which increased this cost item relative to the three quarters of 2022. Because the growth rate of revenues and costs achieved in the three quarters of 2023 did not differ materially from the assumptions used in the 2022 impairment tests, the Executive Board decided that there were no reasons to make a new test of the value of intangible assets. Based on the principle of prudent valuation and the significant uncertainty regarding changes in key assumptions resulting in the recoverable amount being above the result obtained as of December 31, 2022, the Executive Board decided to recognize the impairment loss at the value of intangible assets. These assets were allocated to a cash-generating unit responsible for creating and developing the DataWalk platform and selling DataWalk software licenses, which is part of the DataWalk S.A. operating segment. As a result, the balance sheet value of the assets mentioned above, as of September 30, 2023, reflects the value obtained in the impairment test of intangible assets carried out as of the December 31, 2022, balance sheet date. Thus, the recoverable value of the CGU, both as of that date and as of the balance sheet date of September 30, 2023, amounted to PLN 19 530 thousand. Accordingly, the determined amount of the impairment loss at the end of the three quarters of 2023 was PLN 7 026 thousand and fully recognized in the income statement under other operating expenses. The above operation is non-cash and does not affect the Issuer and the Group's current financial situation. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 20 The DataWalk Group financial results The table below presents selected consolidated financial data for the three quarters of 2023 and the comparable period of 2022. Position 01/01/2023 – 09/30/2023 01/01/2022 – 09/30/2022 Change Change % Revenues 18 117 25 841 -7 724 -30% Operating costs 28 989 144 053 -115 065 -80% Profit/Loss on sales -10 871 -118 213 107 341 -91% Other operating income 385 276 Other operating costs 7 131 39 Loss (profit) from expected credit losses -622 -2 EBIT -16 995 -117 974 100 980 -86% Net profit (loss) attributable to shareholders of the parent company -21 458 -97 922 76 464 -78% Operating costs 28 989 144 053 -115 065 -80% Amortization and depreciation 3 562 1 996 1 566 78% Share-based incentive program costs -21 011 103 314 Operating costs excluding amortization and depreciation as well as share-based incentive program 46 438 38 744 7 693 20% Impairment of intangible assets 7 026 0 EBITDA -13 432 -115 979 102 546 -88% Adjusted EBITDA -28 040 -12 666 -15 373 121% CFO bt -25 633 -11 856 -13 777 116% CAPEX -9 983 -10 462 479 -5% FCF -35 616 -22 318 -13 298 60% Financial assets (bank deposits over 3 months) 4 199 0 4 199 Closing balance of cash 18 908 37 085 -18 177 -49% Cash and bank deposits over 3 months at the end of the period 23 107 37 085 -13 978 -38% Source: Issuer. EBIT = Operating profit (loss), EBITDA = EBIT + Amortization and depreciation, Adjusted EBITDA = EBITDA + estimated costs related to the incentive program payable in the Group's own shares (settled in cash and equity instruments) + non-cash allowance resulting from asset impairment test + loss (profit) from expected credit losses, CFO bt = Net cash generated (used) in operating activities (i.e. before income tax paid), CAPEX = expenditure on acquisition of tangible fixed assets + expenses for intangible assets + expenses related to development work, FCF = CFO bt - |CAPEX|. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 21 The net loss for the three quarters of 2023 attributable to shareholders of the parent company amounted to PLN 21 458 thousand, while in the corresponding period of 2022, the Group reported a net loss of PLN 97 922 thousand. The most significant impact on the change in the Group's consolidated financial result for the three quarters of 2023 relative to the comparable period was: • a decrease in costs related to the share-based incentive program in the total amount of PLN 124 325 thousand to the comparable period, when the Group, for the first time, recognized in the financial statements the valuation of the incentive program under IFRS 2 (non-cash expense, with no impact on the current financial position of the Issuer and the Group; • a difference in the valuation of the deferred tax asset main component, i.e., incentive program liability, amounted to PLN 26 212 thousand following the RSU's revaluation as of the September 30, 2023 balance sheet date; • an increase in the costs of salaries and external services related to the development and growing scale of the Group's operations, both in the area of increasing the number of specialists in engineering, solution design, and sales, as well as ongoing processes related to international commercialization, amounting to PLN 8 656 thousand, or 31% compared to the comparable period; • a decrease in sales revenue amounting to PLN 7 724 thousand, or 30% compared to the comparable period; • a recognition of an impairment loss on intangible assets for a total of PLN 7 026 thousand, under IAS 36 (non-cash expense, with no impact on the current financial position of the Issuer and the Group), based on current impairment tests. The revenue structure of the DataWalk Group In the three quarters of 2023, revenue from license sales amounted to PLN 8 673 thousand, represented 48% of the Group's total revenue and was 48% lower than in the comparable period. The decrease in license revenue compared to the three quarters of 2022 is due to the number of new customers acquired who decided to purchase the DataWalk platform. The Group acquired four customers in the three quarters of 2023, while it was eight customers in the comparable period. Revenues from the sale of implementation services amounted to PLN 2 229 thousand and were 20% lower than in the three quarters of 2022. In the discussed period, revenue from technical support services amounted to PLN 6 953 thousand, accounted for 38% of the Group's total revenues and was 10% higher than in the comparable period of 2022. Other revenues result from sales of DataWalk software-related additional services. The table below presents consolidated revenues for the three quarters of 2023, and in the comparable period of 2022. Position 01/01/2023 – 09/30/2023 01/01/2022 – 09/30/2022 Change Licenses sale 8 673 16 539 -48% Implementation services 2 229 2 788 -20% Technical support 6 953 6 323 10% Other 262 190 38% Total 18 117 25 841 -30% Source: Issuer. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 22 The table below presents the currency structure of revenue in the three quarters of 2023, and in the comparable period of 2022. Position 01/01/2023 – 09/30/2023 01/01/2022 – 09/30/2022 PLN (Polish zloty) 24% 29% USD (U.S. Dollar) 76% 71% Total 100% 100% Source: Issuer The revenue structure of the DataWalk Group by regions The table below presents the revenues of the DataWalk Group in the three quarters of 2023 by regions (in thousands of PLN). Revenues by region 01/01/2023 – 09/30/2023 Share in total revenues (%) Poland 4 294 24% North and South America 11 888 66% Other regions 1 935 11% Total 18 117 100% Source: Issuer. The table below presents the revenues of the DataWalk Group in the three quarters of 2022 by region (in thousands of PLN). Revenues by region 01/01/2022 – 09/30/2022 Share in total revenues (%) Poland 7 444 29% North and South America 14 592 56% Other regions 3 804 15% Total 25 841 100% Source: Issuer. Cash flow of the DataWalk Group The Group's cash flow from operating activities (CFO) in the three quarters of 2023 amounted to PLN -25 633 thousand. The most significant influence on the CFO was: i) operating loss adjusted for amortization and depreciation, costs of the incentive program, and the change in asset impairment allowances (adjusted EBITDA) of PLN -28 040 thousand; b) decrease in trade receivables by PLN 1 407 thousand; and c) increase in contract liabilities by PLN 792 thousand. The Group's cash flow from investing activities (CFI) in the three quarters of 2023 amounted to PLN -12 486 thousand. CFI was most affected by: i) capitalized development costs of DataWalk software of PLN 9 957 thousand; ii) outflow resulting from establishing bank deposits with maturities of more than three months in the total amount of PLN 4 090 thousand, presented under financial assets; and iii) interest received on bank deposits of PLN 1 527 thousand. The Group's cash flow from financing activities (CFF) in the three quarters of 2023 amounted to PLN -547 thousand. CFF was most affected by the net outflow of funds from the repayment of the Issuer's lease liabilities of PLN 511 thousand. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 23 The table below presents the cash flow of the DataWalk Group for the three quarters of 2023 and comparable period of 2022. Position 01/01/2023 – 09/30/2023 01/01/2022 – 09/30/2022 Change CFO -25 633 -11 856 116% CFI, including: -12 486 -40 404 -69% - CAPEX -9 983 -10 462 -5% CFF -547 37 709 -101% Total net cash flows -38 666 -14 550 166% Source: Issuer. CFO = Net cash generated (used) in operating activities, CFI = Net cash generated (used) in investing activities, CAPEX = expenditure on acquisition of tangible fixed assets + expenses for intangible assets + expenses related to development work, CFF = Net cash (used) in financing activities. Balance sheet of the DataWalk Group The table below presents selected balance sheet items as at September 30, 2023, and December 31, 2022. Assets 09/30/2023 12/31/2022 Change Intangible assets 19 530 19 530 0% Right-of-use assets 739 1 075 -31% Contract assets 709 927 -23% Trade receivables 8 247 9 654 -15% Other short-term receivables 2 009 1 580 27% Cash and cash equivalents 18 908 57 598 -67% Deferred tax assets 9 283 15 059 -38% Other assets 7 265 5 152 41% Total assets 66 690 110 575 -40% Source: Issuer. Equity and liabilities 09/30/2023 12/31/2022 Change Equity 17 280 29 399 -41% Incentive program liabilities 38 059 68 457 -44% Trade payables 3 418 4 559 -25% Bank loans and borrowings 700 719 -3% Lease liabilities 791 1 103 -28% Contract liabilities 4 502 3 710 21% Other liabilities 1 941 2 627 -26% Total equity and liabilities 66 690 110 575 -40% Source: Issuer. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 24 The table below presents selected financial ratios of the DataWalk Group as at September 30, 2023, as well as December 31, 2022. Position 09/30/2023 12/31/2022 Current ratio 3,5 6,4 Quick Ratio 3,2 6,1 Cash Ratio 1,8 5,0 Debt ratio 17% 12% Debt / Equity 0,0 0,0 Debt-to-Equity Ratio 21% 13% Working Capital (in thousands PLN) 26 073 61 630 Source: Issuer. Current ratio = Current assets (short-term) / Current liabilities (short-term), Quick Ratio = (Cash and cash equivalents + Short-term investments + Account receivables) / Current liabilities (short-term), Cash Ratio = Cash and cash equivalents / Current liabilities (short-term), Debt ratio = (Total liabilities excluding RSU-based incentive program liabilities) / Total assets × 100%, Debt / Equity = (Interest-bearing bank loans + Debt securities + Liabilities due to finance leases) / Total Shareholders’ Equity + non-cash cost of RSU-based incentive program), Debt-to-Equity Ratio = (Total Liabilities excluding RSU-based incentive program liabilities) / (Total Shareholders’ Equity + non-cash cost of RSU-based incentive program) × 100%, Working Capital = Current assets (short-term) - Current liabilities (short-term). The Executive Board decided to adjust the Debt ratio, Debt/Equity, as well as the Debt-to-Equity ratio for the cost of the RSU-based incentive program both due to the materiality of this item in liabilities and equity (in the income items), as well as due to the future and contingent nature of this liability and the fact, that the recognized costs are currently non-cash and have no impact on the Group's current financial position. The “DATAWALK GROUP'S CASH-SETTLED INCENTIVE PROGRAM” includes details of this program. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 25 BASIS FOR THE PREPARATION OF THE FINANCIAL STATEMENTS - INCLUDING A DESCRIPTION OF CIRCUMSTANCES INDICATING A GOING CONCERN THREAT The interim condensed financial statements have been prepared in accordance with the historical cost convention, except for financial assets carried at fair value through profit or loss or through other comprehensive income, financial assets carried at amortized cost, and financial liabilities carried at fair value through profit or loss. The interim condensed financial statements have been prepared on a going-concern basis, assuming the DataWalk Group will continue its business activities for at least 12 months from the balance sheet date. The Management analyzed circumstances affecting the entity's ability to continue as a going concern. During the analysis, significant uncertainties regarding events and circumstances that may cast doubt on the entity's ability to continue as a going concern were identified, including: • decline in sales; • negative cash flows from operating activities; • unfavorable profitability ratios. To the best knowledge of the Company's Management and based on a comprehensive sales forecast and analysis of the sales funnel (qualified leads), the Company plans to generate higher revenue streams in the upcoming months compared to the last six months, which is essential to sustain its current scale of operations. These forecasts align with market trends and do not require significant capital expenditures or the attainment of additional operating or financial resources. Simultaneously, the Company's Management is undertaking several initiatives to improve operational performance and liquidity, including: • Increased the efficiency of implementation teams through standardization and automation of most deployment stages, significantly reducing the time required for effective DataWalk platform deployment to customers and thereby increasing the throughput of the entire sales and implementation team. • Conducted a cost reduction program through employment rightsizing and renegotiating purchase prices with key service providers. As a result, the Company expects reduced operating costs and improved net cash flow. Management analyzed the abovementioned circumstances and, based on its results, assumed the continuation of the business activities in the foreseeable future when preparing the financial statement. In the opinion of the Executive Board, the working capital currently available to the Company, future planned contract inflows that the Company intends to secure by 31.12.2023, as well as measures taken to manage operating costs, are aimed at improving financial liquidity in the next 12 months. The existing circumstances did not indicate significant uncertainties to the entity's ability to continue as a going concern. Therefore, the financial statements were prepared on a going-concern basis. However, at the same time, the Executive Board notes that at the current stage of the Company's development, when the Company is generating negative cash flow from operations, the Company's continued operation in its current form and development is closely linked to securing external financing, in the form of equity and/or debt financing. Proactive steps have been taken to explore available sources of financing to support planned further capital expenditures. These activities will likely contribute to the Company's further development in both product and market expansion areas and will positively impact the Company's long-term profitability. The effects of the planned financing activities should be known by the end of the current calendar year. The Company's Executive Board emphasizes that business operations involve inherent uncertainties and risks. Despite the measures taken by the Company's Executive Board to support the Company's financial stability, it is necessary to recognize that factors such as changes in market conditions, customer demand, the regulatory environment and unexpected events may affect the Company's ability to achieve its projected results and secure the necessary financing. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 26 DATAWALK GROUP'S CASH-SETTLED INCENTIVE PROGRAM Information on estimates The Group carries out an incentive program using cash-settled share-based payment transactions. The program is based on derivative financial instruments, entitling the holder to receive payment of a cash amount in the amount and under the conditions specified in the Regulations and the Participation Agreement (so-called Restricted Stock Units, hereinafter "RSUs"). This program is recognized in the consolidated financial statements following IFRS 2. To comply with IFRS 2, the Group recognizes an amount for services received during the vesting period, using the best available estimate of the number of equity instruments for which vesting will occur. If necessary, the entity revises these estimates if subsequent information indicates that the number of equity instruments to be vested differs from previous estimates. At the vesting date, the entity adjusts the estimate to the level of the number of equity instruments that ultimately vest. Recognition of an incentive program requires the performance of an analyzis that involves making certain assumptions and applying professional judgment, particularly regarding the number of equity instruments that will vest during the reporting period and the valuation of the RSU. At each balance sheet date, the Group estimates the number of equity instruments for which vesting will occur and their fair value during the reporting period to recognize in the financial statements the relevant liabilities and the Group's costs resulting from the incentive program. The character and principles of the long-term cash-settled Incentive Program of the DataWalk Capital Group On June 30, 2020, the General Meeting of DataWalk S.A. adopted a resolution to introduce an Incentive Program (the "Program") aimed at members of key personnel who are Employees, Associates or members of the Executive Board ("Eligible Persons") of the Group. The Program's Regulations were adopted by the Company's Executive Board and subsequently approved by the Supervisory Board in a resolution of March 18, 2022. The Program's provisions are effective as of the date of adoption of the Regulations by the Supervisory Board and shall remain in force until the date of termination by the Executive Board with the effects referred to in the Regulations. The Executive Board may at any time, with the approval of the Supervisory Board, decide to terminate the Program or make changes to it. The purpose of the Program is to attract and retain members of key personnel on a long-term basis for both the Company and/or its Subsidiaries by creating: additional market-attractive tools to fully identify and identify key personnel with the Group, its long-term goals, motivating them to pay special attention to the Group's long-term performance, maintaining the Group's dynamic growth in value, and linking the interests of these individuals to the interests of the Group and, consequently, to the interests of its shareholders, thereby linking the long-term value of the Group to the long-term goals of the individuals comprising the key personnel. In the case of the Program, the entity required to settle the Program is the company which is the recipient of the services performed under the Program and has entered into the relevant Participation Agreement with the Eligible Persons. Each company, i.e. DataWalk S.A. and DataWalk Inc., is a party to agreements with Program participants providing work or services to DataWalk S.A. or DataWalk Inc., respectively. The maximum number of RSUs that may be granted in aggregate to all Eligible Persons under the Program may not exceed 1 120 000 units. The maximum duration of the Eligible Persons' right to exercise RSUs is 10 years from the signing of the Program Participation Agreement, under which the Eligible Person becomes entitled to receive cash upon meeting certain vesting conditions. In share-based payment transactions, the Group receives services from Eligible Persons and incurs an obligation to spend cash, which is based on the price (or value) of the Company's shares as remuneration. The Eligible Persons were offered to enter into agreements regarding participation in the Program (the "Participation Agreement"), which set forth the terms and conditions for the Eligible Persons' entitlement to receive derivative financial instruments within the meaning of the Financial Instruments Trading Act of July 29, 2005 (Journal of Laws DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 27 No. 183, item 1538, as amended) entitling them to receive payment of a cash amount in the amount and under the terms and conditions set forth in the Regulations and the Participation Agreement (so-called Restricted Stock Units, hereinafter "RSUs"). The conditions related to the acquisition of RSUs imply the fulfillment of the established individual goals, if provided for in the Participation Agreement, and/or the maintenance of the Employee's and/or Associate's and/or Executive Board Member's status in the Group for the period specified in the Participation Agreement and under the terms and conditions set forth in the Regulations. The conditions related to the fulfillment of the established individual goals (performance vesting conditions) do not depend on the market price of the Group's equity instruments and are therefore classified as non-market conditions. The conditions related to maintaining the status of an Employee and/or Associate and/or Executive Board Member in the Group (service period vesting conditions) are for a period of up to four years, taking into account the period of service to the Group before approval of the Regulations. Vesting takes place on an annual basis (one-year cliff). Under IFRS 2, vesting conditions other than market conditions should not be considered when estimating the fair value of shares or stock options at the measurement date. Instead, vesting conditions should be considered by adjusting the number of equity instruments used in measuring the value of the entire transaction, so that the value of the services recognized in exchange for the equity instruments granted takes into account the number of instruments that will eventually vest. The condition for the Realization of payments under the Program provisions is the fulfillment of the vesting conditions (vesting conditions) and the execution of the Sale Transaction (non-vesting condition) together. A Selling Transaction means a situation in which all of the following conditions occur: (i) an entity or group of entities acting in concert, as referred to in Article 87 of the Polish Offering Act, will exceed 50% of the total number of votes in the Company as a result of the announcement of a tender offer for the sale of all the Company's shares, as referred to in Article 74 (1) or (2) or Article 91 (5) of the Polish Offering Act. 5 of the Polish Act on Public Offering, whereby, for the purposes of calculating the total number of votes in the Company, the sum of the number of votes held - regardless of legal title - by all entities belonging to the same capital group and the number of votes attached to the shares is taken into account, even if the exercise of voting rights therefrom is limited or excluded pursuant to the Company's Articles of Association or an agreement or provisions of law, or a transformation, merger or division of the Company takes place, which would not require the announcement of a tender offer pursuant to Article 92 of the Polish Act on Public Offering; and (ii) FGP Venture will dispose of at least [587,500] (in words, [five hundred eighty-seven thousand five hundred]) of its shares in the Company or their equivalent received as a result of the transformation, merger or demerger of the Company (in response to the tender offer referred to in clause (i) or independently of such tender offer), or an entity (acting alone, through a group of companies or in concert with other entities), other than the shareholders of FGP Venture as of June 30, 2020, will reach more than 50% of the shares in FGP Venture, (iii) notwithstanding the above, a transaction will not constitute a Sale Transaction if it does not result in a change of control within the meaning of Article 409A, i.e. (a) the entity or group of entities acting in concert exceeds 50% of the total number of votes in the Company or ownership of 50% of the Company's assets, or (b) the achievement of effective control over the Company understood as achieving at least 30% of the total number of votes, or (c) the acquisition of the Company's assets representing at least 40% of the gross market value of all the Company's assets; According to the Regulations of the Program, the one-time payment resulting from the exercise of RSUs will be settled within 90 days of the Sale Transaction but no later than March 14 of the year following the year in which the Transaction occurred. Under IFRS2, the Sale Transaction is understood as a condition other than vesting conditions (so-called non-vesting condition). Since the occurrence of the Sale Transaction is a probable future event, however, dependent on factors not fully controlled by the Group, and does not depend on the market price of the Group's shares - it has not been included in the valuation estimates of the RSUs. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 28 The realization of RSUs consists of a one-time payment by the Group of a cash amount in an amount equal to the product of the number of RSUs granted and the value of the RSUs set forth in the Regulations, which will depend on the value/price of the shares from the Sale Transaction, less any mandatory withholdings for income tax, social security, health insurance contributions or any other public and legal dues in the part charged to the Participant, which the Group, as the payer, is required to withhold under applicable laws. Once the RSUs have been exercised, i.e., as to which there has been payment of the cash amount due, the Participant is not entitled to any additional cash or non-cash benefits from the Group under the Program. If a Sale Transaction does not occur within the period indicated in the Participation Agreement entered into with the relevant Participant's right to receive RSUs, in view of the inability to meet the Performance Conditions, the Participation Agreement shall be automatically and immediately terminated to the extent of the RSUs in question, without any performance obligation on the part of the Company or the Subsidiary. The Participant shall not be entitled to any claims for payment, including any claims for damages against the Company, the Subsidiary, their shareholders, or members of their management boards. Assumptions used for valuation of the Program Employee services received in cash-settled share-based payments are measured indirectly at the liability's fair value at the grant date. The initial liability measurement is based on the fair value of the underlying instruments. Measurement of the liability takes into account the extent to which services have been rendered. The entity determines the fair value of a cash-settled liability by considering only market and non-vesting conditions. It means that vesting conditions and non-market conditions affect liability measurement by adjusting the number of rights to receive cash based on estimates of the performance to be met. At each reporting date, and ultimately at the settlement date, the recognized liability's fair value is subject to remeasurement. The remeasurement applies to the recognized liability portion up to the vesting date. The full amount is subject to remeasurement from the vesting date to the settlement date. The cumulative net cost and amounts recognized in the income statement that will ultimately be recognized in connection with the transaction will equal the amount paid to settle the liability. The effects of remeasurement during the vesting period are recognized immediately in the income statement (in the corresponding expense item) to the extent that they relate to past services, and to the extent that they relate to future services the effect of remeasurement is spread over the remaining vesting period. It means that in the repricing period there is a supplementary adjustment for previous periods so that the recognized liability at each reporting date is equal to the total fair value of the liability. As of the balance sheet date of September 30, 2023, the Group has revalued the RSUs for which vesting has occurred based on the Group's internal estimates. A decision on the final number of RSUs granted and their value had not been made as of the date of the financial statements, as there were no events specified in the Regulations giving Eligible Persons the right to grant and benefit from the RSUs granted. The fair value of the RSUs as of the balance sheet dated September 30, 2023, was determined based on the market price of DataWalk S.A. shares. As stipulated in the Regulations, the value of the RSUs will be determined based on the share price from the Sale Transaction. The RSUs will be granted at no cost to the Eligible Persons. RSUs do not carry the right to dividends; therefore, the expected dividend yield is 0. There are no other market conditions in the valuation of RSUs in the Program. In this situation, the valuation of the RSUs at a given balance sheet date should be equal to the fair value of the Company's shares at that date. On the other hand, the total cost of the Program should be determined at each balance sheet date taking into account other non-market factors. The Company performed a sample simulation of the RSU valuation using the Black-Scholes model to confirm the validity of this approach. The valuation result confirms that it is reasonable to take the RSU valuation at the fair value of the shares under the assumptions mentioned above. The average annual percentage of forfeitures for RSUs, based on expectations of, for example, the number of employees and associates leaving the Group before the vesting date, was assumed to be 0%. The Group periodically revises these estimates and updates them to actual forfeitures. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 29 The recognition of the Program from January 1, 2023, to September 30, 2023 The following table shows the number of RSUs granted as of September 30, 2023, by vesting conditions and degree of performance. Vesting conditions Granted rights (in pcs.) Degree of fulfillment of vesting conditions Number of vested rights (in pcs.) Estimated number of vested rights (in pcs.) Remains under vesting (in pcs.) Vested rights 722 650 100,00% 722 650 0 0 Providing services until 12/31/2023 61 625 85,10% 0 52 440 9 185 Providing services until 06/30/2024 7 900 46,96% 0 3 710 4 190 Providing services until 12/31/2024 49 125 26,33% 0 12 935 36 190 Providing services until 06/12/2025 6 650 26,77% 0 1 780 4 870 Providing services until 12/31/2025 3 125 25,28% 0 790 2 335 Providing services until 06/30/2026 6 025 18,09% 0 1 090 4 935 Providing services until 12/31/2026 3 125 18,88% 0 590 2 535 Providing services until 06/30/2027 3 525 6,52% 0 230 3 295 Total 863 750 83,66% 722 650 73 565 67 535 Following IFRS 2, the Group has updated the fair value of the RSUs as of the balance sheet date of September 30, 2023, and revised the estimated vesting of the RSUs. Accordingly, the Group has determined the following events affecting the estimates: a) the fair value as of September 30, 2023, differed from the value obtained as of the previous balance sheet date (difference resulting from the change in the Company's share price), b) in the three quarters of 2023, further RSUs were valued and recognized for which acquisition conditions are estimated to have been met, c) in the three quarters of 2023, some events resulted in the need to adjust the cost of the Program by RSUs lost as a result of failure to meet vesting conditions. The following table shows the items affecting the value of the liability and the cost of the Program recognized in the financial statements. Description Quantity Weighted average fair value (in PLN) Cost by weighted average fair value (in PLN thous.) Estimated number of vested rights as of 01/01/2023 749 388 91,35 68 457 Estimated number of vested rights as of 12/31/2022 746 690* -43,55 -32 518 Estimated number of vesting during the three quarters of 2023 49 525 47,80 2 367 Number of forfeited rights during the three quarters of 2023 -2 698 91,35 -246 Estimated number of vested rights as of 09/30/2023 796 215 47,80 38 059 * The estimated number of vested rights as of December 31, 2022 includes an adjustment for the number of estimated rights forfeited in the current year. ** The difference between the weighted average fair values of RSUs as of September 30, 2023 and December 31, 2022. There were no RSUs that were exercised during the reporting period, as well as no RSUs that were exercisable as of the balance sheet date of September 30, 2023. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 30 The total cost of the Program recognized in the consolidated financial statements for the nine months ending September 30, 2023, estimated according to vesting, amounted to PLN -30 398 thousand. The Group classifies the Program liabilities as long-term due to the liquidity criterion (following IAS1 paragraph 64). Given the nature of the Program's liabilities, in particular, the inability to reliably determine the maturity date, in the opinion of the Group's Management, IAS1 paragraph 69 d, which refers to liabilities with a fixed maturity date (or that can be reliably estimated) as to which the Group has unconditional rights to defer the maturity of the liability for at least twelve months after the end of the reporting period, is not applicable. Under the Regulations of the Program, the liabilities under this Program will become due only upon the occurrence of the Sale Transaction. As of the balance sheet date and date of approval of these financial statements for publication, the Program Entitlements were not exercisable because no Sale Transaction had occurred. In addition, the Group's Management had not taken any actions, nor was it in possession of any information indicating a high probability of the occurrence of events as a result of which, in the next 12 months, a Sale Transaction could be concluded, and thus the process of executing the Program (cash settlement) could be initiated. Due to the above, indicating that the cash outflow associated with the Program's liability will not occur within 12 months from the end of the reporting period, this liability has been classified as a long-term liability. The following table presents the recognition of the Program's costs by line item in the consolidated financial statements. Financial statement element Item Weighted average fair value (in PLN thous.) Profit and Loss Account/Operating costs Employee benefits - Share-based Payment -30 398 Equity Profit (loss) from previous years 68 457 Long-term liabilities Incentive program liabilities 38 059 Due to the Program's long-term duration and the expected execution date, liabilities under the Program have been classified as long-term liabilities. The total amount of liabilities under the Program as of September 30, 2023 was PLN 38 059 thousand. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 31 The following table shows the settlement of RSUs under the Program by exercise status and their fair values as of September 30, 2023. Description Number of units % of the Program Fair value (in PLN) Cost by fair value (in PLN thous.) The maximum number of units in the Program, including: 1 120 000 100% 47,8 53 536 - RSUs granted under the Participation Agreements 897 000 80% 47,8 42 877 - Tranche as of 04/01/2022 799 900 71% 47,8 38 235 - Tranche as of 07/01/2022 14 000 1% 47,8 669 - Tranche as of 01/01/2023 19 000 2% 47,8 908 - Tranche as of 05/01/2023 45 000 4% 47,8 2 151 - Tranche as of 07/01/2023 19 100 2% 47,8 913 - Number of forfeited rights -33 250 -3% 47,8 -1 589 - Number of RSUs to be granted in future periods 256 250 23% 47,8 12 249 RSUs granted under the Participation Agreements, including: 897 000 80% 47,8 42 877 - Vested rigths 722 650 65% 47,8 34 543 - Remaining in the process of vesting, including: 141 100 13% 47,8 6 745 (a) for which it is estimated that vesting conditions have been met 73 565 7% 47,8 3 516 - Forfeited rights 33 250 3% 47,8 1 589 As of the balance sheet date of September 30, 2023, the incentive program remains in progress. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 32 DATAWALK GROUP'S EQUITY-SETTLED INCENTIVE PROGRAM Information on estimates The Group carries out an incentive program using equity-settled share-based payment transactions. The program is based on DataWalk's shares and entitles the holder to receive equity instruments in the amount and under the conditions specified in the Regulations and the Participation Agreement. This program is recognized in the consolidated financial statements following IFRS 2. To comply with IFRS 2, the Group recognizes an amount for services received during the vesting period, using the best available estimate of the number of equity instruments for which vesting will occur. If necessary, the entity revises these estimates if subsequent information indicates that the number of equity instruments to be vested differs from previous estimates. At the vesting date, the entity adjusts the estimate to the level of the number of equity instruments that ultimately vest. Recognition of an incentive program requires the performance of an analyzis that involves making certain assumptions and applying professional judgment, particularly regarding the number of equity instruments that will vest during the reporting period and the valuation of options per share on the date of their granting. At each balance sheet date, the Group estimates the number of equity instruments for which vesting will occur and their fair value during the reporting period to recognize in the financial statements the relevant increases in equity and the Group's costs resulting from the incentive program. Reserve capital 09/30/2023 (in thous. PLN) 12/31/2022 (in thous. PLN) Incentive program 41 040 31 653 Total 41 040 31 653 The character and principles of the long-term equity-settled Incentive Program of the DataWalk Capital Group On June 30, 2022, the General Meeting of DataWalk S.A. adopted a resolution to introduce an Incentive Program (the "Program") aimed at members of key personnel who are Employees, Associates or members of the Executive Board ("Eligible Persons") of the DataWalk S.A. The Company's Executive Board adopted the Program's Regulations in a resolution of August 31/2022, then approved by the Supervisory Board in a resolution of September 9, 2022 ("Regulations"). The Program's provisions are effective as of the date of adoption of the Regulations by the Supervisory Board and shall remain in force until the date of termination by the Executive Board with the effects referred to in the Regulations. The Executive Board may at any time, with the approval of the Supervisory Board, decide to terminate the Program or make changes to it. The purpose of the Incentive Program is to attract and retain members of the Company’s key personnel on a long- term basis by creating additional tools attractive on the market, which support full identification of the key personnel with the Company, its long-term goals, motivate this personnel to pay special attention to maintain the Company’s dynamic growth, and link the interests of these individuals with attention to the Company’s interests and, consequently, the interests of its shareholders. Therefore the Incentive Program enables participation in the expected growth of the Company and, as a consequence, strengthens the relationship of these individuals with the Company. The maximum number of Entitlements giving the right to subscribe for and/or acquire shares in the Company, shall not exceed a total number of 430,000 (in words: four hundred and thirty thousand) shares in the Company. The Incentive Program is implemented by granting to Participants who have been designated to participate in the Incentive Program following the Regulations and who have subsequently entered into an Incentive Program Participation Agreement (the "Participation Agreement") with the Company conditional entitlements to subscribe for and/or acquire shares in the Company (the "Entitlements"). Granting of the Entitlements and the conclusion of DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 33 the Participation Agreements do not yet result in the vesting of the Entitlements or their exercise by subscribing for or acquiring the corresponding number of shares. The Entitlements are not securities and do not include any claims under civil law (including commercial company law) beyond the claim for the exercise of the Entitlements in accordance with the Program, and in particular do not create any shareholder rights on the part of the Participant, including incorporating the right to vote, the right to share in the Company’s profit (dividends), or any other shareholder rights until the Company’s Shares are purchased or acquired. The entitlements are non-transferable to third parties and may not be encumbered by property or bond rights, but are subject to inheritance. The vesting of the Entitlements by the Participants shall occur upon the fulfillment of the Vesting Conditions, defined as the fulfillment of the financial or non-financial individual or Company criteria set forth in the Participation Agreement, including: (a) maintenance of the Relationship for the period specified in the Participation Agreement, and/or (b) meeting additional criteria, if provided for in the Participation Agreement. The Entitlements will be acquired free of charge. Performance vesting conditions are not dependent on the market price of the Company's equity instruments and are therefore classified as non-market conditions. Under IFRS 2, vesting conditions other than market conditions should not be considered when estimating the fair value of shares or stock options at the measurement date. Instead, vesting conditions should be taken into account by adjusting the number of equity instruments that are used in measuring the value of the entire transaction so that the value of the services recognized in exchange for the equity instruments granted takes into account the number of instruments that will ultimately vest. The condition for the Exercise of Entitlements is fulfilling the vesting conditions and the execution of the Sale Transaction together (non-vesting condition). According to the Regulations, the exercise of the Entitlements will take place within 6 months of the occurrence of the Sale Transaction. Exercise of the Entitlement shall occur in the event of cumulative fulfillment of the following conditions: a) fulfillment of the Vesting Conditions specified each time in the individual Participation Agreement (vesting condition) – e.g. length of cooperation, b) the occurrence of a „Sale Transaction”, i.e. a situation in which all of the following conditions occur (non-vesting condition): (i) an entity or group of entities acting in concert referred to in Art. 87 sec. 1 item 5 of the Act on Offering, will exceed 50% of the total number of votes in the Company as a result of the announcement of a tender offer for the sale of all shares in the Company, in accordance with the Act on Offering (hereinafter: „Tender Offer”), whereby, for the purposes of calculating the total number of votes in the Company, the sum of the number of votes held – regardless of the legal title – by all entities belonging to the same capital group and the number of votes from the shares is taken into account, even if the exercise of voting rights from them is limited or excluded by the Company’s Articles of Association or agreement or by law, or a transformation, merger or division of the Company takes place, which, in accordance with the applicable regulations, will not require the announcement of a Tender Offer; and (ii) FGP Venture will dispose of at least 587500 (in words: five hundred eighty-seven thousand five hundred) of its shares in the Company or their equivalent received as a result of the Company’s transformation, merger or demerger (in response to the Tender Offer or independently of the Tender Offer), or an entity (acting alone, through a group of companies or in concert with other entities) other than the shareholders of FGP Venture as of June 30, 2022 will reach more than 50% of the shares in FGP Venture, (iii) notwithstanding the foregoing, a given transaction will not constitute a Sale Transaction if it does not result in a change of control, i.e.: a) exceeding by an entity or group of entities acting in concert 50% of the total number of votes in the Company or ownership of 50% of the Company’s assets, or b) achieving actual control over the Company, understood as reaching at least 30% of the total number of votes, or c) acquisition of assets of the Company constituting at least 40% of the gross market value of all assets of the Company. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 34 Under IFRS2, the Sale Transaction is understood as a condition other than vesting conditions (so-called non-vesting condition). Exercise of the Entitlement vested by the Participant shall consist in the acquisition or purchase of shares at the nominal price. One Entitlement shall entitle to subscribe for or acquire one share, with the provision that if the nominal price of a share changes, i.e. does not amount to PLN 0.10 (in words: ten groszy) per share, the Participant shall have the right to subscribe for or acquire the number of shares according to the formula set forth in the AGM Resolution. The Exercise of the Entitlement shall take place either: (i) directly using the institution of a share capital increase, the authorization of the Executive Board to increase the Company’s share capital within the framework of authorized capital, or the acquisition by the Company of its own shares for the purpose of offering them to the Participants; (ii) indirectly using the institution of a conditional share capital increase linked to the issuance of registered subscription warrants directed to the Participants; (iii) or by any other appropriate means, including indirect acquisition by a third party – depending on the Execution Board’s decision in this regard, approved by the Supervisory Board. If the Sale Transaction does not take place within the period indicated in the Terms and Conditions, in the absence of the possibility of fulfilling the Performance Conditions, the Participation Agreement shall be automatically and immediately terminated to the extent of the Eligibility in question, without any obligation of the Company to provide any performance. The Participant will not be entitled to any claims for payment, including any claims for damages against the Company, its shareholders or Members of the bodies. If the Sale Transaction occurs prior to the fulfillment of the specified Vesting Conditions, the Participation Agreement shall be terminated to the extent of the respective Entitlements, and the Eligible Persons shall forfeit any further participation in the Program to the extent above, including the right to acquire and exercise the respective Entitlements. The Eligible Persons shall not be entitled to any claims against the Company, its shareholders or Members of the Bodies, including any claims for payment, delivery of Shares or claims for damages. However, if the Vesting Conditions of a given Eligible Person included only the maintenance of the Relationship on the terms outlined in the Regulations for the period of time specified in the Participation Agreement, excluding the additional criteria referred to in the Regulations, while no Cause occurred, the Conditions of Acquisition shall be deemed to have been fulfilled on the date of the Sale Transaction, and the Eligible Persons shall be entitled to exercise the acquired Entitlements. The Participation Agreement may regulate the consequences of the occurrence of a Sale Transaction differently prior to the fulfillment of the Vesting Conditions. Assumptions used for valuation of the Program Services received as equity-settled share-based payments are measured indirectly at fair value on the grant date. The initial valuation of the Program is based on the fair value of the underlying instruments. The measurement of the value of the goods or services received and the corresponding increase in equity considers the extent to which the services have been rendered. The entity determines the fair value of the equity-settled Program by considering only the market and non-vesting conditions. It means that vesting conditions and non-market conditions affect reserve capital measurement by adjusting the number of rights to receive cash based on estimates of the performance to be met. The value of one right for and/or acquire Company shares is valued only once, on the grant date. At each reporting date, and ultimately at the date of settlement, the fair value of the recognized increase in equity may be revalued by adjusting the number of rights for and/or acquiring Company shares. The revaluation relates to the recognized portion of the increase in equity up to the vesting date. The total value of the increase in equity is subject to revaluation from the vesting date to the settlement date. The cumulative net cost and amounts recognized in the income statement that will ultimately be recognized in connection with the transaction will be equal to the product of the vested rights to subscribe for and/or acquire Company shares and the value of one right for and/or acquire Company shares on the grant date. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 35 The valuation adjustment effects of the increase in equity during the vesting period are recognized immediately in the income statement (in the corresponding expense item) to the extent that they relate to past services, and to the extent that they relate to future services the valuation adjustment effect is spread over the remaining vesting period. It means that during the revaluation period, there may be an additional adjustment to the number of rights to take up and/or acquire the Company's shares for previous periods so that the recognized increase in equity at each reporting date is equal to the total fair value of the increase in equity. As of the balance sheet date of September 30, 2023, the Company adjusted the number of rights to take up and/or acquire Company shares for which, based on the Company's internal estimates, vesting had occurred and thus revalued the corresponding increase in equity. A decision on the final number of rights vested by program participants will be made upon the occurrence of events, as specified in the Regulations, giving eligible persons the right to take up and/or acquire Company shares. The fair value of the Entitlement to subscribe for and/or acquire the Company's shares on the grant date is determined based on the Black-Scholes-Merton model, where the underlying instrument is the market price of DataWalk S.A. shares. The vesting will take place free of charge. Exercise of the vested rights by the participant will consist in the subscription and/or acquisition of shares at a nominal price, which on the grant date was PLN 0.10 per share. The entitlement to subscribe for and/or acquire shares in the Company does not give the right to dividends. Therefore the expected dividend rate is 0. There are no other market conditions in the valuation of the rights to subscribe for and/or acquire shares in the Program. However, the total cost of the Program and the corresponding increase in equity should be determined at each balance sheet date, taking into account other non-market factors. The expected price volatility was determined based on the annualized standard deviation of the stock return using daily observations. The rate of return is an annual interest rate with continuous capitalization (continuous yearly rate). Following IFRS 2, in estimating expected volatility, the Company considered: (a) implied volatility from traded share options on the entity’s shares, or other traded instruments of the entity that include option features, if any; (b) the historical volatility of the share price over the most recent period that is generally commensurate with the expected term of the option (taking into account the remaining contractual life of the option; (c) the length of time the entity's shares have been publicly traded, i.e. since 20/07/2012, so the Company is not considered a newly listed entity, and the historical volatility has been considered relatively stable over a more extended period; (d) appropriate and regular time frames for observed prices, which the Company believes are consistent from period to period - the entity uses the closing price of each day of the week. The observed prices are expressed in the currency where the exercise price is set, i.e. PLN. The average annual percentage of forfeitures for vesting and/or acquisition of the Company's shares, based on expectations of, for example, the number of employees and associates leaving the Company before the vesting date, was assumed to be 0%. The Company periodically revises these estimates and updates them to actual forfeitures. To participate in the first tranche of the Program, the Company's Executive Board nominated 69 employees and associates of the Company, who were assigned individual Vesting Conditions and the number of Entitlements granted. The first tranche amounted to a total of 275,518 Entitlements, of which 84 999 relate to replacing outstanding Entitlements from the Program in effect at the Company from 31.12.2017 to 31.12.2019. As a result of the conclusion, as of 01.10.2022, of agreements with Participants in the Program implemented by the Company in 2017-2019 changing the then existing terms and conditions for the acquisition of Entitlements to the terms and conditions of the Regulations, the Company updated the fair value of the Entitlements covered by the agreement as of the date of their Grant Date and after re-verifying the number of Entitlements acquired, recognized a corresponding adjustment to the number of equity instruments. The difference resulting from the update was recognized in profit or loss by recognizing it as an expense. Issuer recognized the cost resulting from the implementation of the previously effective program valued at PLN 31,14 in the financial statements of the Company and the DataWalk Group (the "Group") in the years it was in effect, and as of 01.01.2022 was included in "Profit (loss) from previous years" and "Reserve capital". The Group presented details of the PLN 31,14 Program valuation as of 01.01.2022 in the financial statements of DataWalk S.A. and the Group starting in 2018 when the Company transitioned to IFRS/IAS. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 36 As a result of the agreements mentioned above, the fair value of all allocated equity instruments granted under the first tranche of the Program was PLN 136,19. As of the balance sheet date of 31.12.2022, the previous Program was no longer in effect, as the new Program replaced it. Due to the valuation of the new Program in 2022, which replaced the previous one and also took into account the new Vesting Conditions and the number of Entitlements granted, the Issuer set the weighted average fair value as of 31.12.2022 at the level of the valuation of Tranche I of the new Program. The table below shows the parameters adopted in the Entitlement pricing model for the first tranche of the Program. Parameters adopted in the valuation model Tranche I Tranche II Tranche III Program valuation date (Grant Date) 01.10.2022 r. 01.01.2023 r. 01.07.2023 r. Valuation model Blacka-Scholes'a- Mertona Blacka-Scholes'a- Mertona Blacka-Scholes'a- Mertona The number of Entitlements granted resulting from the Participation Agreements 275 518 szt. 118 710 szt. 12 450 szt. Stock Price 136,26 PLN 91,35 PLN 60,00 PLN Exercise Price 0,10 PLN 0,10 PLN 0,10 PLN Expected price volatility 4,16% 4,13% 3,56% Time to Maturity 5 years 5 years 5 years Risk-free rate 7,14% 6,05% 5,45% Fair value 136,19 PLN 91,28 PLN 59,92 PLN The vesting of the Entitlements to the Company's employees and associates who joined the Incentive Scheme from its launch until the balance sheet date of September 30, 2023 took place in three tranches. At a further stage of the Incentive Program, the authorized bodies may identify further Incentive Program Participants and offer them a certain number of Entitlements within the limit set by the Resolution of the AGM, i.e. in a total number not exceeding 430,000 (in words: four hundred and thirty thousand) shares of the Company. The Company will announce these events in separate announcements. The recognition of the Program from January 1, 2023, to September 30, 2023 The following table shows the number of vesting Entitlements granted to the Company's shares as of September 30, 2023, by vesting conditions and degree of exercise. Vesting conditions Granted rights (in pcs.) Degree of fulfillment of vesting conditions Number of vested rights (in pcs.) Estimated number of vested rights (in pcs.) Remains under vesting (in pcs.) Vested rights 228 885 100% 228 885 0 0 Providing services until 12/31/2023 85 166 77% 0 65 505 19 661 Providing services until 06/30/2024 11 050 39% 0 4 364 6 686 Providing services until 12/31/2024 60 860 37% 0 22 664 38 196 Providing services until 06/30/2025 6 050 13% 0 757 5 293 Providing services until 12/31/2025 2 500 25% 0 623 1 877 Total 394 511 82% 228 885 93 913 71 713 The following table presents the number of Entitlements for which the acquisition conditions are estimated to have been fulfilled. Therefore, the services are considered to have been rendered during the nine months ending September 30, 2023, and the recognition in expense at weighted average fair value. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 37 Description Quantity Weighted average fair value (in PLN) Cost by weighted average fair value (in PLN thous.) Estimated number of vested rights as of 01/01/2023 232 418 136,19 31 653 Estimated amount of vesting during the period 93 033 104,39 9 712 Number of forfeited rights during the period -2 653 122,68 -325 Estimated number of vested rights as of 09/30/2023 322 798 127,14 41 040 The following table presents the recognition of the Program's costs by line item in the consolidated financial statements. Financial statement element Item Weighted average fair value (in PLN thous.) Profit and Loss Account/Operating costs Employee benefits - Share-based Payment 9 387 Equity Profit (loss) from previous years 31 653 Equity Reserve capital 41 040 During the period covered by the report, there was no redemption or expiration of Entitlements. There were no Entitlements exercised during the reporting period and no Exercisable Entitlements as of the balance sheet date of September 30, 2023. As of the balance sheet date and date of approval of these financial statements for publication, the Program Entitlements were not exercisable because no Sale Transaction had occurred. In addition, the Group's Management had not taken any actions, nor was it in possession of any information indicating a high probability of the occurrence of events as a result of which, in the next 12 months, a Sale Transaction could be concluded, and thus the process of executing the Program (issuing shares) could be initiated. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 38 The following table shows the settlement of Program Entitlements by exercise status and their fair value as of September 30, 2023. Description Number of units % of the Program Fair value (in PLN) Cost by fair value (in PLN thous.) The maximum number of rights in the Program, including: 430 000 100% - Rights granted under the Participation Agreements 406 678 95% 120,75 49 105 - Tranche of 10/01/2022 considering the arrangements of 10/01/2022 275 518 64% 136,19 37 523 - Tranche as 01/01/2023 118 710 28% 91,28 10 836 - Tranche as 07/01/2023 12 450 3% 59,92 746 - Number of forfeited rights -12 167 -3% 116,07 -1 412 - Number of rights to be granted in future periods 35 489 8% Rights granted under the Participation Agreements, including: 406 678 95% 120,75 49 105 - Vested rigths 228 885 53% 136,19 31 172 - Remaining in the process of vesting, including: 165 626 39% 120,75 19 999 a) for which it is estimated that vesting conditions have been met 93 913 22% 105,07 9 868 - Forfeited rights 12 167 3% 116,07 1 412 As of the balance sheet date of September 30, 2023, the incentive program remains in progress. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 39 MAJOR EVENTS THAT HAVE AN IMPACT ON THE DATAWALK GROUP'S RESULTS IN THE REPORTING PERIOD • A substantial setback identified by the Executive Board during the reporting period was the deceleration of revenue growth and the achievement of a 19% share of revenue from customers acquired in the three quarters of 2023 in the total revenue. • In the reported period, the Group acquired another four significant projects, including cooperation with the Northern California Regional Intelligence Center ("NCRIC"), Veterinary Emergency Group, or with an intermediary partner for the sale and implementation of the DataWalk analytics platform in selected units of the Polish public administration, reported on within the ESPI current reports. • In the third quarter of 2023, the Group made another sale to the U.S. Department of Labor and ING Bank Slaski SA. Continued cooperation through the expansion of the DataWalk system and licenses at existing customers confirms the effectiveness of the commercialization model adopted by the Company and the usefulness of the DataWalk product at leading banking and public sector institutions. • On June 30, 2023, the Executive Board learned from the Issuer's subsidiary, DataWalk Inc., that it had received an order from Ally Financial to sell a perpetual license of the DataWalk analytics platform. Continued cooperation through the order of a perpetual license for DataWalk software by an existing customer confirms the effectiveness of the commercialization model adopted by the Company and the usefulness of the DataWalk product in leading banking institutions. • In the Executive Board's opinion, it's particularly noteworthy that the value of sales projects qualified for the sales funnel exceeded $40 million for the first time in the Group's history.. • DataWalk has been given the Technology Disruptor award by Ally Financial, the nation's largest digital-only bank in the US. DataWalk software enables Ally to reduce exposure to financial crimes by finding suspicious connections, patterns, and networks across vast amounts of siloed data. • Political and economic situation in Ukraine In connection with the recommendation sent by the Polish Financial Supervision Authority on February 25, 2022, the Company hereby informs that as at the date of submitting this report for publication, this situation has no significant impact on the operations of the Group companies. In the three quarters of 2023, as in previous periods, the Group did not sell DataWalk software to Russia, Belarus or Ukraine. The Group has no supply chain that could potentially be exposed to additional risks, and does not have investments and subsidiaries in conflict- affected areas. There are no Ukrainian employees among the personnel of the Group companies, where there is a risk related to the possible loss of employees due to military mobilization in a country covered by the war. As at the date of approval of these financial statements for publication, the Management Board, based on the analyzis of risks to date, in particular those resulting from the political and economic situation in Ukraine, concluded that the continuation of the Group's operations for a period of at least 12 months from September 30, 2023 year is not threatened. The Group has a stable financial situation, monitors and analyzes the available information and takes steps to minimize the impact of the situation on its business as the events unfold. Nevertheless, due to the dynamic situation in Ukraine, it cannot be ruled out that the ongoing conflict, depending on its further development and actions taken at the national and international level, may have a significant negative impact on the economic situation in Poland and in the world, which may translate into the possibility of implementing the Group's plans and its future financial results. INFORMATION ON EVENTS OCCURRING AFTER THE END OF THE INTERIM PERIOD THAT HAS NOT BEEN INCLUDED IN THE FINANCIAL STATEMENTS FOR THE INTERIM PERIOD After the end of the interim period, there were no material events that were not included in the financial statements for the reported period. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 40 FACTORS EXPECTED TO AFFECT FURTHER GROUP’S DEVELOPMENT In the opinion of the Executive Board, the most important external and internal factors that may affect the operations of the DataWalk Capital Group and its results include: Elements and external trends that may affect the Group's perspectives • Growing importance of data processing, data analyzis and their usage (Big Data), • Situation on the insurance market in Western Europe and Poland, • Increase in the scale and quality of activities aimed at counteracting money laundering and counteracting tax avoidance, • Automation of data set analyzis processes, • Increasing user-friendliness of tools for analyzing data sets, • Wage upward pressure on the IT market, • Development of political and economic situation in Ukraine. Elements and internal trends that may affect the Group's perspectives • Perspective of total revenues and expenses generated, • Level of planned expenditures on marketing and sales activities, • Level of planned costs related to staff recruitment and purchase of IT services, • Level of planned investments. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 41 COMPANY'S AUTHORITIES The Executive Board On September 30, 2023 and at the date of approval of this report for publication the composition of the Executive Board is as follows: Paweł Wieczyński, Chairman of the Board Coordinates activities related to operations of the Company, shaping and implementing the sales policy, HR (except those reserved for other Executive Board Members) and PR/IR. Krystian Piećko, Member of the Board Responsible for the preparation and development of the product strategy based on the latest technologies. Łukasz Socha, Member of the Board Coordinates activities of the administrative division of the Company, including accounting and financial, legal, tax and financial reporting. In the 9-month period ended September 30, 2023, the DataWalk S.A. Executive Board was as follows: The Executive Board Period of performing the function Paweł Wieczyński 01/01/2023 – 09/30/2023 Krystian Piećko 01/01/2023 – 09/30/2023 Łukasz Socha 01/01/2023 – 09/30/2023 Source: Issuer. The current Executive Board of the Issuer was appointed by the resolutions of the Supervisory Board of June 1, 2021 (except the above-mentioned resolution of December 21, 2021 on appointing Mr. Łukasz Socha to the Executive Board of the Company) for a joint, 3-year term of office, which began on July 1. The above-mentioned term will end on the date the General Meeting approves the Company's financial statements for 2024. Until the date of this report, the composition of the Issuer's Executive Board has not changed. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 42 The Supervisory Board On September 30, 2023, the composition of the Issuer’s Supervisory Board was as follows: • Mr. Filip Paszke - Chairman of the Supervisory Board • Mr. Wojciech Dyszy - Vice Chairman of the Supervisory Board, • Mr. Roman Pudełko - Member of the Supervisory Board, • Mr. Grzegorz Dymek - Member of the Supervisory Board, • Mr. Ola Malm - Member of the Supervisory Board. During the 9-month period ended September 30, 2023, the composition of the Issuer’s Supervisory Board of the Company is as follows: The Supervisory Board Period of performing the function Filip Paszke 01/01/2023 – 09/30/2023 Wojciech Dyszy 01/01/2023 – 09/30/2023 Roman Pudełko 01/01/2023 – 09/30/2023 Grzegorz Dymek 01/01/2023 – 09/30/2023 Ola Malm 01/01/2023 – 09/30/2023 Source: Issuer. The Issuer's current Supervisory Board was appointed for a joint 3-year term, which began on July 1, 2021 (except to the above-mentioned personnel changes in the composition of the Supervisory Board). The above-mentioned term will end on the date the General Meeting approves the Company's financial statements for 2024. Until the date of this report, the composition of the Issuer's Supervisory Board has not changed. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 43 DESCRIPTION OF THE ORGANISATION OF THE DATAWALK CAPITAL GROUP AND CONSOLIDATED ENTITIES DataWalk S.A. Basic information about the Issuer. Name of the parent entity: DataWalk S.A. Country of residence: Poland Legal form: Joint stock company Law: Polish law, in accordance with the Code of Commercial Companies ("CCC") Register address: Rzeźnicza 32-33, 50-130 Wrocław Phone: +48 71 707 21 74 Fax: +48 71 707 22 73 E-mail: biuro@datawalk.com www: www.datawalk.com Tax identification number (NIP): 894-303-43-18 Statistical identification number (REGON): 21737247 Company registration number (KRS): 0000405409 Source: Issuer. The company operates in the "global vendor of products" model, focusing on the development and sale of enterprise IT class products, i.e. globally competitive, specialized software for specific applications. The business model adopted by the Company is characterized by high scalability, translating into potentially high margin. This is possible due to the low participation of services provided individually for every client, both at the pre-implementation stage and after implementation (service). DataWalk S.A. has been established for an indefinite period of time. The company has no branches. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 44 DataWalk Inc. Basic information about an entity related by capital with the Issuer as at 09/30/2023. Name of the entity: DataWalk Inc. Country of residence: United States of America Legal form: Incorporated Register address: 1209 Orange Street, Wilmington, Delaware 19801 Address for correspondence: 2000 Broadway Street, STE 232, Redwood City, CA 94063 TIN 81-3403469 Core business: Activities related to consultancy in the field of computer science Relation: Subsidiary Consolidation method: Full Share in the share capital: 100,00% Share in the total number of votes at the AGM: 100,00% E-mail: info@datawalk.com www: www.datawalk.com Date of taking control: July 27, 2016 Value of shares: 52 884 thous. PLN Revaluation adjustments: -52 884 thous. PLN Unit balance sheet value of shares 0 thous. PLN Source: Issuer. DataWalk Inc. is a company incorporated under US law with a registered office in Wilmington, Delaware, where the Issuer holds 100,00% share in the share capital and votes at the shareholders' meeting. Pursuant to the DataWalk Inc. articles of association, the board of directors conducts the affairs of the company and represents the company. DataWalk Inc.'s role in the Group is to conduct sales and implementation activities related to the DataWalk platform, particularly in the United States and the rest of the Americas. DataWalk Inc. has been established for an indefinite period of time. The financial year of DataWalk Inc. is the calendar year. Financial data of DataWalk Inc. are fully consolidated and are disclosed in the consolidated financial statements of the DataWalk Capital Group. Until the date of approval of this report for publication, the structure of the DataWalk Capital Group has not changed. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 45 Overview of the DataWalk Capital Group DataWalk organizational structure of the Group as at September 30, 2023 year and in the comparative period: Source: Issuer. DataWalk Inc. is consolidated by DataWalk S.A. as part of the consolidated financial statements. Until the date of this report, there were no changes to the structure of the Capital Group. Changes in the management rules of the Capital Group and the Company In the 9-month period ended September 30, 2023 and as at the date of this report, there were no changes regarding the management rules of the DataWalk Group and DataWalk S.A. DataWalk S.A. DataWalk Inc. (100,00% share in the share capital and votes) DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 46 THE SHAREHOLDING STRUCTURE OF THE DATAWALK S.A. Shareholder structure as at November 15, 2023 (share in the total number of votes) Source: Issuer. As of this report's publication date, i.e. November 15, 2023, the number of shareholders holding, directly or through subsidiaries, at least 5.0% of the total number of votes is as follows: Shareholder Number of shares held Number of votes at the AGM Share in the share capital Share in the total number of votes at the AGM FGP Venture sp. z o.o. 1 1 175 000 1 900 000 22,89% 32,43% Funds managed by Investors Towarzystwo Funduszy Inwestycyjnych S.A. 2 400 043 400 043 7,79% 6,83% Funds managed by Nationale- Nederlanden Powszechne Towarzystwo Emerytalne S.A. 3 304 146 304 146 5,93% 5,19% Other shareholders 3 253 799 3 253 799 63,39% 55,55% Total 5 132 988 5 857 988 100,00% 100,00% Source: Issuer. * Mr. Paweł Wieczyński holds 198 000 shares of FGP Venture Sp. z o.o., which constitutes 33.33% of share in the share capital and votes at the shareholders' meeting of FGP Venture Sp. z o.o. Mr. Krystian Piećko holds 198 000 shares of FGP Venture Sp. z o.o., which constitutes 33.33% of share in the share capital and votes at the shareholders' meeting of FGP Venture Sp. z o.o. Mr. Sergiusz Borysławski holds 198 000 shares of FGP Venture Sp. z o.o., which constitutes 33.33% of share in the share capital and votes at the shareholders' meeting of FGP Venture Sp. z o.o. 1 According to the current report no. 39/2022 of September 2, 2022. 2 According to the current report no. 20/2023 of November 14, 2023. 3 According to the current report no. 39/2020 of November 2, 2020. FGP Venture sp. z o.o. 32,43% Funds managed by Investors Towarzystwo Funduszy Inwestycyjnych S.A. 6,83% Funds managed by Nationale-Nederlanden Powszechne Towarzystwo Emerytalne S.A. 5,19% Other shareholders 55,55% DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 47 Shareholder structure as at September 6, 2023 (share in the total number of votes) Source: Issuer. As at September 6, 2023, i.e. as at the date of publication of the previous periodic report, the number of shareholders holding, directly or through subsidiaries, at least 5.0% of the total number of votes was as follows: Shareholder Number of shares held Number of votes at the AGM Share in the share capital Share in the total number of votes at the AGM FGP Venture sp. z o.o. 4 1 175 000 1 900 000 22,89% 32,43% Funds managed by Investors Towarzystwo Funduszy Inwestycyjnych S.A. 5 400 000 400 000 7,79% 6,83% Funds managed by Nationale- Nederlanden Powszechne Towarzystwo Emerytalne S.A. 6 304 146 304 146 5,93% 5,19% Other shareholders 3 253 842 3 253 842 63,39% 55,55% Total 5 132 988 5 857 988 100,00% 100,00% Source: Issuer. * Mr. Paweł Wieczyński holds 198 000 shares of FGP Venture Sp. z o.o., which constitutes 33.33% of share in the share capital and votes at the shareholders' meeting of FGP Venture Sp. z o.o. Mr. Krystian Piećko holds 198 000 shares of FGP Venture Sp. z o.o., which constitutes 33.33% of share in the share capital and votes at the shareholders' meeting of FGP Venture Sp. z o.o. Mr. Sergiusz Borysławski holds 198 000 shares of FGP Venture Sp. z o.o., which constitutes 33.33% of share in the share capital and votes at the shareholders' meeting of FGP Venture Sp. z o.o. 4 According to the current report no. 39/2022 of September 2, 2022. 5 According to the current report no. 16/2015 of September 16, 2015. 6 According to the current report no. 39/2020 of November 2, 2020. FGP Venture sp. z o.o. 32,43% Funds managed by Investors Towarzystwo Funduszy Inwestycyjnych S.A. 6,83% Funds managed by Nationale-Nederlanden Powszechne Towarzystwo Emerytalne S.A. 5,19% Other shareholders 55,55% DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 48 STRUCTURE OF SHAREHOLDINGS IN DATAWALK S.A. OR RIGHTS ATTACHED TO SHARES, HELD BY MEMBERS OF THE ISSUER’S EXECUTIVE AND SUPERVISORY BOARDS Ownership of the shares DataWalk SA by managers and supervisors at the date of approval of this report for publication, i.e. as at November 15, 2023. Shareholder Position Number of shares Nominal value of shares (in PLN) Paweł Wieczyński President of the Executive Board 57 251 5 725,10 Krystian Piećko Member of the Executive Board 56 671 5 667,10 Łukasz Socha Member of the Executive Board 525 52,50 Filip Paszke Chairman of the Supervisory Board 0 0 Wojciech Dyszy Vice-chairman of the Supervisory Board 1 000 100,00 Roman Pudełko Member of the Supervisory Board 15 918 1 591,80 Grzegorz Dymek Member of the Supervisory Board 0 0 Ola Malm Member of the Supervisory Board 0 0 Source: Issuer. * Two members of the Executive Board of the Company are also shareholders and members of the Executive Board of FGP Venture Sp. z o.o., whose share in the Issuer's shareholding structure has been presented in the section "Shareholder structure as at November 15, 2023" and "Shareholder structure as at September 6, 2023". The table below presents ownership of shares DataWalk SA by managers and supervisors at September 6, 2023. Shareholder Position Number of shares Nominal value of shares (in PLN) Paweł Wieczyński President of the Executive Board 57 251 5 725,10 Krystian Piećko Member of the Executive Board 56 671 5 667,10 Łukasz Socha Member of the Executive Board 525 52,50 Filip Paszke Chairman of the Supervisory Board 0 0 Wojciech Dyszy Vice-chairman of the Supervisory Board 1 000 100,00 Roman Pudełko Member of the Supervisory Board 15 918 1 591,80 Grzegorz Dymek Member of the Supervisory Board 0 0 Ola Malm Member of the Supervisory Board 0 0 Source: Issuer. * Two members of the Executive Board of the Company are also shareholders and members of the Executive Board of FGP Venture Sp. z o.o., whose share in the Issuer's shareholding structure has been presented in the section "Shareholder structure as at September 6, 2023". Own shares The Company has no own shares. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 49 DATAWALK S.A. CONDENSED STANDALONE INTERIM FINANCIAL STATEMENT for the 9-month period ended 30 th September, 2023 DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 50 STANDALONE FINANC IAL STA TEMEN T Standalone Statement of Financial Position (in thousands of PLN) ASSETS 09/30/2023 12/31/2022 A. Non-current assets 22 245 22 186 I. Fixed assets 328 455 II. Goodwill 0 0 III. Intangible assets 19 530 19 530 IV. Right-of-use assets 739 1 075 V. Long-term receivables 152 152 VI. Long-term prepayments 68 260 VII. Deferred tax assets 1 427 715 B. Current assets 30 061 64 053 I. Contract assets 425 641 II. Trade receivables 9 422 8 510 III. Income tax receivables 0 0 IV. Other receivables 1 979 1 472 V. Financial assets 4 199 0 VI. Prepayments 854 1 156 VII. Cash and cash equivalents 13 182 52 274 TOTAL ASSETS 52 306 86 239 EQUITY AND LIABILITIES 09/30/2023 12/31/2022 A. Equity 43 705 75 483 I. Share capital 513 513 II. Share premium 171 968 171 968 III. Other capitals 9 965 9 965 IV. Profit loss from previous years -138 616 -76 644 V. Net profit (loss) for the current year -41 166 -61 972 VI. Reserve capital 41 040 31 653 B. Long-term liabilities 838 712 I. Deferred tax liabilities 0 0 II. Lease liabilities 187 557 III. Incentive program liabilities 651 155 C. Short-term liabilities 7 763 10 044 I. Trade liabilities 2 862 4 223 II. Income tax liabilities 0 0 III. Lease liabilities 605 547 IV. Other liabilities 670 697 V. Other provisions 877 1 663 VI. Contract liabilities 2 750 2 914 TOTAL EQUITY AND LIABILITIES 52 306 86 239 DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 51 NET ASSET VALUE PER SHARE 09/30/2023 12/31/2022 Net asset value 43 705 75 483 Number of shares (pcs.) 5 132 988 5 132 988 Net asset value per share (in PLN) 8,51 14,71 Diluted number of shares (pcs.) 5 455 786 5 365 406 Diluted net asset value per share (in PLN) 8,01 14,07 The net asset value per share was calculated in relation to the number of the Company's shares at the balance sheet date. The diluted number of shares in the Company on September 30, 2023 amounted to 5 455 786, including 322 798 shares under the incentive program. The diluted number of shares in the Company on December 31, 2022 amounted to 5 365 406, including 232 418 shares under the incentive program. DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 52 Standalone Profit and Loss Account with The Statement of Comprehensive Income (in thousands of PLN) PROFIT AND LOSS ACCOUNT 01/01/2023 – 09/30/2023 01/01/2022 – 09/30/2022 07/01/2023 – 09/30/2023 07/01/2022 – 09/30/2022 Continuing operations A. Revenues 13 009 18 165 3 643 5 073 B. Operating costs 37 702 20 715 12 542 7 515 Materials and energy 166 485 40 105 Employee benefits 4 007 3 972 1 293 1 287 Employee benefits - Share-based Payment 9 882 154 3 278 74 Amortization and depreciation 3 546 1 965 1 124 665 External services 19 461 13 644 6 544 5 197 Other costs 640 494 263 185 C. Profit/Loss on sales -24 693 -2 550 -8 899 -2 442 Other operating income 385 276 92 94 Other operating costs 7 061 39 1 871 0 Loss (profit) from expected credit losses -660 -2 -549 -5 D. Operating profit (loss) -30 709 -2 312 -10 129 -2 344 Financial income 1 447 1 037 468 534 Financial costs 12 616 11 954 3 967 3 479 E. Pre-tax profit (loss) -41 878 -13 229 -13 628 -5 289 Income tax -712 477 12 41 F. Net profit (loss) from continuing operations -41 165 -13 706 -13 640 -5 330 Discontinued operations 0 0 0 0 Profit (loss) from discontinued operations 0 0 0 0 G. Net profit (loss) -41 165 -13 706 -13 640 -5 330 STATEMENT OF COMPREHENSIVE INCOME 01/01/2023 – 09/30/2023 01/01/2022 – 09/30/2022 07/01/2023 – 09/30/2023 07/01/2022 – 09/30/2022 Net profit (loss) -41 165 -13 706 -13 640 -5 330 Other comprehensive income 0 0 0 0 1. Items that will not be reclassified to profit or loss 0 0 0 0 2. Items that will be reclassified to profit or loss 0 0 0 0 Total comprehensive income -41 165 -13 706 -13 640 -5 330 DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 53 PROFIT (LOSS) PER SHARE ATTRIBUTABLE TO: 01/01/2023 – 09/30/2023 01/01/2022 – 09/30/2022 07/01/2023 – 09/30/2023* 07/01/2022 – 09/30/2022 Continuing operations Number of shares (pcs.) 5 132 988 4 914 089 5 132 988 4 969 256 Profit (loss) per share (in PLN) -8,02 -2,79 -2,66 -1,07 Diluted number of shares (pcs.) 5 426 002 5 003 088 5 426 002 5 058 255 Diluted profit (loss) per share (in PLN) -7,59 -2,74 -2,51 -1,05 Discontinued operations Number of shares (pcs.) 5 132 988 4 914 089 5 132 988 4 969 256 Profit (loss) per share (in PLN) 0 0 0 0 Diluted number of shares (pcs.) 5 426 002 5 003 088 5 426 002 5 058 255 Diluted profit (loss) per share (in PLN) 0 0 0 0 Continuing and discontinued operations Number of shares (pcs.) 5 132 988 4 914 089 5 132 988 4 969 256 Profit (loss) per share (in PLN) -8,02 -2,79 -2,66 -1,07 Diluted number of shares (pcs.) 5 426 002 5 003 088 5 426 002 5 058 255 Diluted profit (loss) per share (in PLN) -7,59 -2.74 -2,51 -1,05 The value of net profit (loss) per share was calculated in relation to the weighted average number of DataWalk S.A. shares for the period. The number of shares calculated this way for the three quarters of 2023 was 5 132 988, and for the three quarters of 2022, it was 4 914 089. The weighted average number of DataWalk S.A. shares in the third quarter of 2023 was 5 132 988, while in the third quarter of 2022, it was 4 969 256. The weighted average diluted number of shares of the Company in the three quarters of 2023 amounted to 5 426 002, including 322 798 shares under the incentive program. The weighted average diluted number of shares of the Company in the three quarters of 2022 amounted to 5 003 088, including 88 999 shares under the incentive program. The weighted average diluted number of shares of the Company in the third quarter of 2023 amounted to 5 426 002, including 322 798 shares under the incentive program. The weighted average diluted number of shares of the Company in the third quarter of 2022 amounted to 5 058 255, including 88 999 shares under the incentive program. * The data for the third quarter of 2023 was determined by subtracting from the data for the three quarters of 2023 the data presented by the Company in the report for the first half of 2023 (covered by the review). ** The data for the third quarter of 2022 was determined by subtracting from the data for the three quarters of 2022 the data presented by the Company in the report for the first half of 2022 (covered by the review). DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 54 Standalone Statement of Changes in Equity (in thousands of PLN) STATEMENT OF CHANGES IN EQUITY Share capital Share premium Other capitals Reserve capital Profit (loss) from previous years Net profit (loss) for the current period Total equity Balance as at 01/01/2023 513 171 968 9 965 31 653 -76 644 -61 972 75 483 Equity increase (decrease) 0 0 0 9 387 -61 972 20 806 -31 779 Total comprehensive income 0 0 0 0 0 -41 166 -41 166 Net profit (loss) 0 0 0 0 0 -41 166 -41 166 Share capital increase 0 0 0 0 0 0 0 Distribution of profit (loss) for previous year 0 0 0 0 -61 972 61 972 0 Changes in equity resulting from IFRS 2 0 0 0 9 387 0 0 9 387 Balance as at 09/30/2023 513 171 968 9 965 41 040 -138 616 -41 166 43 705 STATEMENT OF CHANGES IN EQUITY Share capital Share premium Other capitals Reserve capital Profit (loss) from previous years Net profit (loss) for the current period Total equity Balance as at 01/01/2022 489 133 859 9 965 2 771 -65 746 -10 897 70 440 Equity increase (decrease) 25 38 109 0 0 -10 897 -2 809 24 428 Total comprehensive income 0 0 0 0 0 -13 706 -13 706 Net profit (loss) 0 0 0 0 0 -13 706 -13 706 Share capital increase 25 38 109 0 0 0 0 38 134 Distribution of profit (loss) for previous year 0 0 0 0 -10 897 10 897 0 Changes in equity resulting from IFRS 2 0 0 0 0 0 0 0 Balance as at 09/30/2022 513 171 967 9 965 2 771 -76 644 -13 706 94 867 DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 55 Standalone Cash Flow Statement (in thousands of PLN) CASH FLOW STATEMENT 01/01/2022 – 09/30/2022 01/01/2021 – 09/30/2021 Cash flows from operating activities Net profit (loss) -41 166 -13 706 Adjustments, including: - amortization and depreciation 3 546 1 965 - foreign exchange gains (losses) 24 12 - interest expenses 70 15 - income from interest and dividends -1 527 -116 - profit (loss) on investing activities -146 11 853 - impairment allowance for investments in subsidiaries 12 545 0 - impairment of intangible assets 7 026 0 - share-based payment (equity-settled) 9 387 0 - share-based payment (cash-settled) 496 154 - change in receivables -1 419 -7 122 - change in provisions -786 274 - change in liabilities other than incentive program -1 388 797 - change in prepayments -218 101 - change in contract assets and contract liabilities 51 -5 163 - other adjustments -2 115 -32 Net cash generated (used) in operating activities -15 621 -10 967 Cash flows from investing activities Purchase of intangible assets 9 957 10 292 Purchase of property, plant and equipment 26 170 Purchase of subsidiaries shares, net of cash 10 450 2 135 Proceeds from sale of property, plant and equipment 40 0 Outflows from bank deposits (over 3 months) 4 090 30 090 Proceeds from governmental subsidies 20 32 Interest received 1 527 116 Net cash generated (used) in investing activities -22 936 -42 539 Cash flows from financing activities Proceeds from issue of share capital 0 38 242 Payment of finance lease liabilities 441 518 Interest paid 70 15 Other inflows 0 0 Net cash generated (used) in financing activities -511 37 709 Total net cash flows -39 068 -15 797 Opening balance of cash 52 274 47 655 Change in cash due to foreign currency translation -24 -12 Change in cash balance, net -39 092 -15 809 Closing balance of cash 13 182 31 846 DataWalk Spółka Akcyjna ul. Rzeźnicza 32-33 50-130 Wrocław KRS: 0000405409, NIP: 894 303 43 18, REGON: 021737247 Sąd rejestrowy: Sąd Rejonowy dla Wrocławia- Fabrycznej we Wrocławiu VI Wydział Gospodarczy KRS Kapitał zakładowy: 513.298,80 zł w całości wpłacony Page | 56 CHANGES IN ACCOUNTING POLICIES USED The accounting policies used to prepare the annual standalone and consolidated financial statements are consistent with those used to prepare the Company’s and the Group’s annual financial reports for 2022, except for the changes described below. Beginning 01/01/2023, the Company and the Group recognize as Prepayments any services valued at least PLN 40 000. The Group recognized expenses below this value as one-offs in the month incurred. Beginning 01/01/2023, the Company and the Group recognize in contract assets and liabilities items whose value is at least PLN 40 000. The Group recognized items below this value once as a month's revenue. ……………………………………… ……………………………………… ……………………………………… Paweł Wieczyński Krystian Piećko Łukasz Socha Chairman of the Board Member of the Board Member of the Board Wroclaw, November 15, 2023 DataWalk S.A. Rzeznicza 32-33 50-130 Wroclaw tel.: +48 71 707 21 74 fax: +48 71 707 22 73 e-mail: biuro@datawalk.com Investor Relations investors@datawalk.com