Datawalk S.A. — Interim / Quarterly Report 2023

Sep 6, 2023

Raport September 2023 DATAWALK CAPITAL GROUP SUMMARY OF THE SEMI-ANNUAL REPORT for the 6-month period ended 30 th June, 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, Just like we expected, after a few slow quarters when it comes to sales, the business started picking up in the second quarter of 2023. Our sales performance still remains well below our expectations, but at the same time, we can talk about some successes we haven’t experienced in a while. What was really important for us in the last weeks was closing a new contract with one of our top customers - Ally Financial. The last months brought us an award from them, as well as a new order for a perpetual license - this shows how successful we can be when working closely together with customers who are able to understand and appreciate the power of DataWalk technology. And it wasn’t the only contract we signed in the last weeks - we onboarded more really promising new customers in Q2. Another big news that arrived in the last weeks came from our Americas team. DataWalk has been referenced in four of the July 2023 Hype Cycles released by industry analyst firm Gartner Group. Gartner’s Hype Cycles assess the maturity and potential of emerging technologies across various market sectors. These provide a framework for understanding the various stages in technology adoption and can provide insights into where investments should be made or avoided. Being included brings market recognition and might open doors to projects that have been out of our reach until now. Gartner product mentions were also one of the strategic objectives we set in 2014 for this stage of our development and although we aim to achieve more recognition from Gartner, being included in four Hype Cycles is a major milestone in this regard. One of our main focus in the last few quarters has been improving the capacity of our Field Engineering capability, which has been a bottleneck for our growth. Below are some examples of improvement based on recent data: Thanks to recent work in 2023 we’ve reduced the average system upgrade time for our customers by 82% and 51% vs. 2021 and 2022 respectively - this saves the bandwidth of our engineers who can now focus more on the go-to market activities. Half of the implementation projects we’ve done in 2023 were delivered in 6 months or less, vs. all of them taking more than 12 months in the past. We believe we can greatly improve that even further and are working on it now. We are still bottlenecked by our Field Engineering, although thanks to the increase of capability and capacity in this team, we can now take on more and bigger parallel projects and also invest in pre-sales activities. Right now we are entering the most important part of the year when it comes to closing new contracts. We have high hopes for the remaining few months and are working hard on delivering some really big, positive news. Yours faithfully, 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. $21,03 $21,92 $23,72 $25,76 $24,50 $27,00 $37,00 $40,14 $40,24 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 Q3.21 Q4.21 Q1.22 Q2.22 Q3.22 Q4.22 Q1.23 Q2.23 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 FIRST HALF OF 2023 .................................................................................................................................... 18 BASIS FOR THE PREPARATION OF INTERIM CONDENSED FINANCIAL STATEMENTS ........................ 25 DATAWALK GROUP'S CASH-SETTLED INCENTIVE PROGRAM ................................................................. 26 DATAWALK GROUP'S EQUITY-SETTLED INCENTIVE PROGRAM ............................................................. 31 MAJOR EVENTS THAT HAVE AN IMPACT ON THE DATAWALK GROUP'S RESULTS IN THE REPORTING PERIOD ............................................................................................................................................ 37 SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE AFFECTING THE GROUP'S OPERATIONS ................................................................................................................................................................................. 37 FACTORS EXPECTED TO AFFECT FURTHER GROUP’S DEVELOPMENT .................................................. 38 COMPANY'S AUTHORITIES ................................................................................................................................ 39 The Executive Board ............................................................................................................................................ 39 The Supervisory Board ........................................................................................................................................ 40 DESCRIPTION OF THE ORGANISATION OF THE DATAWALK CAPITAL GROUP AND CONSOLIDATED ENTITIES ................................................................................................................................................................ 41 DataWalk S.A. ..................................................................................................................................................... 41 DataWalk Inc. ...................................................................................................................................................... 42 Overview of the DataWalk Capital Group ........................................................................................................... 43 Changes in the management rules of the Capital Group and the Company ......................................................... 43 THE SHAREHOLDING STRUCTURE OF THE DATAWALK S.A. .................................................................... 44 Shareholder structure as at September 6, 2023 (share in the total number of votes) ............................................ 44 Shareholder structure as at May 18, 2023 (share in the total number of votes) ................................................... 45 STRUCTURE OF SHAREHOLDINGS IN DATAWALK S.A. OR RIGHTS ATTACHED TO SHARES, HELD BY MEMBERS OF THE ISSUER’S EXECUTIVE AND SUPERVISORY BOARDS ................................................ 46 STANDALONE FINANCIAL STATEMENT ........................................................................................................ 48 Standalone Statement of Financial Position (in thousands of PLN) .................................................................... 48 Standalone Profit and Loss Account with The Statement of Comprehensive Income (in thousands of PLN) ..... 50 Standalone Statement of Changes in Equity (in thousands of PLN) .................................................................... 52 Standalone Cash Flow Statement (in thousands of PLN) .................................................................................... 53 CHANGES IN ACCOUNTING POLICIES USED ................................................................................................. 54 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 06/30/2023 from 01/01/2022 to 06/30/2022 from 01/01/2023 to 06/30/2023 from 01/01/2022 to 06/30/2022 in thousands of PLN in thousands of PLN in thousands of EUR in thousands of EUR Revenues from sales 13 558 18 162 2 939 3 912 Profit/Loss on sales -5 401 -113 725 -1 171 -24 496 Operating profit (loss) -10 230 -113 585 -2 218 -24 465 Pre-tax profit (loss) -9 425 -113 403 -2 043 -24 426 Net profit (loss) -13 298 -77 742 -2 883 -16 745 Total comprehensive income -13 763 -76 992 -2 984 -16 584 The weighted average number of ordinary shares (pcs.) 5 132 988 4 886 048 5 132 988 4 886 048 Profit (loss) per share (in PLN/EUR) -2,59 -15,91 -0,56 -3,43 Net cash generated (used) in operating activities -18 057 -7 403 -3 914 -1 595 Net cash generated (used) in investing activities -13 761 -6 241 -2 983 -1 344 Net cash (used) in financing activities -349 -352 -76 -76 Total net cash flows -32 167 -13 996 -6 973 -3 015 SELECTED FINANCIAL DATA 06/30/2023 12/31/2022 06/30/2023 12/31/2022 in thousands of PLN in thousands of PLN in thousands of EUR in thousands of EUR Total assets/equity and liabilities 81 481 110 575 18 309 23 577 Non-current assets 32 244 37 501 7 245 7 996 Current assets 49 237 73 074 11 064 15 581 Equity 21 999 29 399 4 943 6 268 Total liabilities 59 482 81 176 13 366 17 309 Long-term liabilities 47 769 69 733 10 734 14 869 Short-term liabilities 11 713 11 443 2 632 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 06/30/2023 from 01/01/2022 to 06/30/2022 from 01/01/2023 to 06/30/2023 from 01/01/2022 to 06/30/2022 in thousands of PLN in thousands of PLN in thousands of EUR in thousands of EUR Revenues from sales 9 366 13 092 2 030 2 820 Profit/Loss on sales -15 793 -108 -3 424 -23 Operating profit (loss) -20 579 32 -4 461 7 Pre-tax profit (loss) -28 249 -7 940 -6 124 -1 710 Net profit (loss) -27 525 -8 376 -5 967 -1 804 Total comprehensive income -27 525 -8 376 -5 967 -1 804 The weighted average number of ordinary shares (pcs.) 5 132 988 4 886 048 5 132 988 4 886 048 Profit (loss) per share (in PLN/EUR) -5,36 -1,71 -1,16 -0,37 Net cash generated (used) in operating activities -8 670 -5 562 -1 879 -1 198 Net cash generated (used) in investing activities -20 287 -8 376 -4 398 -1 804 Net cash (used) in financing activities -339 -352 -73 -76 Total net cash flows -29 295 -14 291 -6 350 -3 078 SELECTED FINANCIAL DATA 06/30/2023 12/31/2022 06/30/2023 12/31/2022 in thousands of PLN in thousands of PLN in thousands of EUR in thousands of EUR Total assets/equity and liabilities 63 646 86 239 14 301 18 388 Non-current assets 22 481 22 186 5 051 4 731 Current assets 41 165 64 053 9 250 13 658 Equity 54 322 75 483 12 206 16 095 Total liabilities 9 324 10 756 2 095 2 293 Long-term liabilities 733 712 165 152 Short-term liabilities 8 591 10 044 1 931 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 06/30/2023 12/31/2022 1 EUR 4,4503 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 06/30/2023 to 06/30/2022 1 EUR 4,6130 4,6427 DATAWALK CAPITAL GROUP SUMMARY OF THE CONDENSED CONSOLIDATED SEMI-ANNUAL FINANCIAL STATEMENT for the 6-month period ended 30 th June 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 06/30/2023 12/31/2022 A. Non-current assets 32 244 37 501 I. Fixed assets 378 486 II. Goodwill 0 0 III. Intangible assets 19 530 19 530 IV. Right-of-use assets 895 1 075 V. Long-term receivables 152 152 VI. Long-term prepayments 103 1 199 VII. Deferred tax assets 11 186 15 059 B. Current assets 49 237 73 074 I. Contract assets 1 188 927 II. Trade receivables 9 990 9 654 III. Receivables from income tax 5 104 IV. Other receivables 1 474 1 476 V. Financial assets 8 179 0 VI. Prepayments 2 965 3 315 VII. Cash and cash equivalents 25 435 57 598 TOTAL ASSETS 81 481 110 575 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 06/30/2023 12/31/2022 A. Equity 21 999 29 399 Equity attributable to shareholders of the parent company 21 999 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 -185 714 -68 970 V. Reserve capital 38 017 31 653 VI. Net profit (loss) for the current year -13 298 -116 744 VII. Foreign exchange translation differences 548 1 014 Non-controlling interests 0 0 B. Long-term liabilities 47 769 69 733 I. Deferred tax liabilities 0 0 II. Lease liabilities 337 557 III. Bank loans and borrowings 625 719 IV. Incentive program liabilities 46 807 68 457 C. Short-term liabilities 11 713 11 443 I. Trade liabilities 4 100 4 559 II. Income tax liabilities 0 0 III. Lease liabilities 605 547 IV. Bank loans and borrowings 36 0 V. Other liabilities 1 032 702 VI. Other provisions 1 150 1 925 VII. Contract liabilities 4 790 3 710 TOTAL EQUITY AND LIABILITIES 81 481 110 575 NET ASSET VALUE PER SHARE 06/30/2023 12/31/2022 Net asset value 21 999 29 399 A number of shares (pcs.) 5 132 988 5 132 988 Net asset value per share (in PLN) 4,29 5,73 A diluted number of shares (pcs.) 5 425 629 5 365 406 Diluted net asset value per share (in PLN) 4,05 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 June 30, 2023 amounted to 5 425 629, including 262 641 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 – 06/30/2023 01/01/2022 – 06/30/2022 04/01/2023 – 06/30/2023 04/01/2022 – 06/30/2022 Continuing operations A. Revenues 13 558 18 162 10 339 13 979 B. Operating costs 18 959 131 888 23 839 120 234 Materials and Energy 126 415 41 197 Employee benefits 15 486 13 036 8 199 6 994 Employee benefits - Share-based Payment -15 286 106 249 6 316 106 249 Amortization and depreciation 2 434 1 320 1 295 675 External services 14 984 10 164 7 588 5 650 Other costs 1 215 703 399 468 C. Profit/Loss on sales -5 401 -113 725 -13 500 -106 254 Other operating income 293 182 135 114 Other operating costs 5 190 39 5 184 38 Loss (profit) from expected credit losses -67 3 101 2 D. Operating profit (loss) -10 230 -113 585 -18 650 -106 180 Financial income 957 206 352 -80 Financial costs 151 24 119 13 E. Pre-tax profit (loss) -9 425 -113 403 -18 418 -106 273 Income tax 3 873 -35 661 -845 -35 817 F. Net profit (loss) from continuing operations -13 298 -77 742 -17 573 -70 456 Discontinued operations 0 0 0 0 Net profit (loss) from discontinued operations 0 0 0 0 G. Net profit (loss) -13 298 -77 742 -17 573 -70 456 NET PROFIT (LOSS) ATTRIBUTABLE TO: 01/01/2023 – 06/30/2023 01/01/2022 – 06/30/2022 04/01/2023 – 06/30/2023 04/01/2022 – 06/30/2022 - shareholders of the parent company -13 298 -77 742 -17 573 -70 456 - non-controlling interests 0 0 0 0 STATEMENT OF COMPREHENSIVE INCOME 01/01/2023 – 06/30/2023 01/01/2022 – 06/30/2022 04/01/2023 – 06/30/2023* 04/01/2022 – 06/30/2022 Net profit (loss) -13 298 -77 742 -17 573 -70 456 Other comprehensive income -465 750 -279 662 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: -465 750 -279 662 a) Exchange differences in translating foreign operations -465 750 -279 662 Total comprehensive income -13 763 -76 992 -17 852 -69 794 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 – 06/30/2023 01/01/2022 – 06/30/2022 04/01/2023 – 06/30/2023 04/01/2022 – 06/30/2022 - shareholders of the parent company -13 763 -76 992 -17 582 -69 794 - non-controlling interests 0 0 0 0 PROFIT (LOSS) PER SHARE ATTRIBUTABLE TO: 01/01/2023 – 06/30/2023 01/01/2022 – 06/30/2022 04/01/2023 – 06/30/2023 04/01/2022 – 06/30/2022 Continuing operations A number of shares (pcs.) 5 132 988 4 886 048 5 132 988 4 886 048 Profit (loss) per share (in PLN) -2,59 -15,91 -3,42 -14,42 A diluted number of shares (pcs.) 5 410 864 4 975 047 5 410 864 4 975 047 Diluted profit (loss) per share (in PLN) -2,46 -15,63 -3,25 -14,17 Discontinued operations A number of shares (pcs.) 5 132 988 4 886 048 5 132 988 4 886 048 Profit (loss) per share (in PLN) 0 0 0 0 A diluted number of shares (pcs.) 5 410 864 4 975 047 5 410 864 4 975 047 Diluted profit (loss) per share (in PLN) 0 0 0 0 Continuing and discontinued operations A number of shares (pcs.) 5 132 988 4 886 048 5 132 988 4 886 048 Profit (loss) per share (in PLN) -2,59 -15,91 -3,42 -14,42 A diluted number of shares (pcs.) 5 410 864 4 975 047 5 410 864 4 975 047 Diluted profit (loss) per share (in PLN) -2,46 -15,63 -3,25 -14,17 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 first half of 2023 was 5 132 988; for the first half of 2022, it was 4 886 048. The weighted average diluted number of shares of the Company in the first half of 2023 amounted to 5 410 864, including 292 641 shares under the incentive program. The weighted average diluted number of shares of the Company in the first half 2022 amounted to 4 975 047, including 88 999 shares under the incentive program. * The data for the second quarter of 2023 was determined by subtracting from the data for the first half of 2023 (covered by the review) the data presented by the Company in the report for the first quarter of 2023. ** The data for the second quarter of 2022 was determined by subtracting from the data for the first half of 2022 (covered by the review) the data presented by the Company in the report for the first quarter of 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 | 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 -465 6 364 -116 744 103 446 -7 399 0 -7 399 Total comprehensive income 0 0 0 -465 0 0 -13 298 -13 763 0 -13 763 Net profit (loss) 0 0 0 0 0 0 -13 298 -13 298 0 -13 298 Exchange differences in translating foreign operations 0 0 0 -465 0 0 0 -465 0 -465 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 6 364 0 0 6 364 0 6 364 Balance as at 06/30/2023 513 171 968 9 965 548 38 017 -185 714 -13 298 21 999 0 21 999 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) 0 0 0 750 0 - 1 648 -76 093 -76 992 0 -76 992 Total comprehensive income 0 0 0 750 0 0 -77 742 -76 992 0 -76 992 Net profit (loss) 0 0 0 0 0 0 -77 742 -77 742 0 -77 742 Exchange differences in translating foreign operations 0 0 0 750 0 0 0 750 0 750 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 -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 06/30/2022 489 133 859 9 965 1 097 2 771 -68 970 -77 742 1 469 0 1 469 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 – 06/30/2023 01/01/2022 – 06/30/2022 Cash flows from operating activities Net profit (loss) - 13 298 -77 742 Adjustments, including: - amortization and depreciation 2 434 1 320 - foreign exchange gains (losses) -567 806 - interest expenses 49 24 - income from interest and dividends - 1 466 -5 - profit (loss) on investing activities -126 0 - impairment of intangible assets 5 155 0 - share-based payment (equity-settled) 6 364 0 - share-based payment (cash-settled) -21 649 106 249 - change in receivables -334 -323 - change in provisions -777 639 - change in liabilities other than incentive program -130 1 026 - change in prepayments 5 469 -35 536 - change in contract assets and contract liabilities 819 -3 829 - other adjustments 0 -32 Net cash generated (used) in operating activities -18 057 -7 403 Cash flows from investing activities Purchase of intangible assets 7 166 6 018 Purchase of property, plant, and equipment 12 170 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) 8 090 90 Proceeds from governmental subsidies 0 32 Interest received 1 466 5 Net cash generated (used) in investing activities -13 761 -6 241 Cash flows from financing activities Proceeds from issue of share capital 0 0 Repayments of bank loans and borrowings 10 0 Payment of finance lease liabilities 290 341 Interest paid 49 11 Other outflows 0 0 Net cash generated (used) in financing activities -349 -352 Total net cash flows -32 167 -13 996 Opening balance of cash 57 598 51 650 Change in cash due to foreign currency translation 4 -6 Change in the cash balance, net -32 163 -14 002 Closing balance of cash 25 435 37 648 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 FIRST HALF OF 2023 Commentary on the financial results of the DataWalk Group In the first half of 2023, the value of the DataWalk Group's revenue amounted to PLN 13 558 thousand, down 25% compared to the first half of 2022. The sales potential of the Group, as well as of the Company, in the first half of 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 Group is still in a dynamic growth stage, as evidenced by regular double-digit increases in projects qualified for the sales funnel. The revenue in the Americas market in the first half of 2023 amounted to PLN 8 678 thousand, while in the comparable period, it was PLN 8 453 thousand, which means an increase of 3%. 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). The Group is also expanding cooperation with existing customers, as exemplified by the receipt of additional orders, particularly from Ally Financial. In the first half of 2023, the Group recorded a decrease in revenue in the other markets (EMEA and APAC regions), which amounted to PLN 4 880 thousand, down 50% from the PLN 9 709 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 100% retention rate of customers. As of the balance sheet date, June 30, 2023, the deferred revenue amounts to PLN 4 790 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 4 408 thousand and implementation services for PLN 382 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. As a result of the measures taken, operating expenses adjusted for the cost of the incentive program stabilized in the last three quarters at an average level of about PLN 17 200 thousand, as well as the value of capital expenditures in the further development of the DataWalk platform at an average of about PLN 3 500 thousand. 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 June 30, 2023, the Group estimated the value and recognized the cost and liability arising from the ongoing program at PLN 46 807 thousand. In the first half of 2023, the Group recognized the effects of the remeasurement of RSUs in the negative amount of PLN 21 649 thousand. Negative operating costs of PLN 21 649 thousand consisted of recognition in the reporting period of the estimated amount of RSUs vested in the first half of 2023 amounting to PLN 1 844 thousand, as well as a value of PLN -23 493 thousand, which represents the negative difference in the valuation of RSUs as of the balance sheet date of June 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 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 depends, among other things, on the fulfillment of conditions dependent on the participants, 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 first half of the 2023 the cost and a corresponding increase in equity resulting from the program at a total amount of PLN 6 364 thousand. Thus, the total value of the Company's ongoing share-based incentive program reported in equity as of June 30, 2023, amounted to PLN 38 017 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 first half 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 25 419 thousand. The Company began depreciating them, which increased this cost item relative to the first half of 2022. Because the growth rate of revenues and costs achieved in the first half 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 prudence principle, the Executive Board recognized an impairment loss on intangible assets allocated to the cash-generating unit responsible for developing the DataWalk platform and selling DataWalk software licenses, part of the DataWalk S.A. operating segment. As a result of the write-down, the carrying value of the assets mentioned above, as of the balance sheet date of June 30, 2023, reflects the value obtained under last year's impairment test. As a result of the impairment test of intangible assets carried out as of the balance sheet date of December 31, 2022, the estimated recoverable amount of the CGU both as of that date and as of the balance sheet date of June 30, 2023, was PLN 19 530 thousand. Accordingly, the determined amount of the impairment loss at the end of the first half of 2023 was PLN 5 155 and fully recognized in the consolidated financial statements under other operating expenses. In the opinion of the Executive Board, reasonably possible changes in key assumptions will not result in an excess of the CGU's carrying value over its recoverable amount. 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 first half of 2023 and the comparable period of 2022. Position 01/01/2023 – 06/30/2023 01/01/2022 – 06/30/2022 Change Change % Revenues 13 558 18 162 -4 605 -25% Operating costs 18 959 131 888 -112 929 -86% Profit/Loss on sales -5 401 -113 725 108 324 -95% Other operating income 293 182 Other operating costs 5 190 39 Loss (profit) from expected credit losses -67 3 EBIT -10 230 -113 585 103 355 -91% Net profit (loss) attributable to shareholders of the parent company -13 298 -77 742 64 444 -83% Operating costs 18 959 131 888 -112 929 -86% Amortization and depreciation 2 434 1 320 1 114 84% Share-based incentive program costs -15 286 106 249 Operating costs excluding amortization and depreciation as well as share-based incentive program 31 811 24 319 7 492 31% Impairment of intangible assets 5 155 0 EBITDA -7 796 -112 265 104 469 -93% Adjusted EBITDA -17 994 -6 013 -11 981 199% CFO bt -18 057 -7 403 -10 654 144% CAPEX -7 178 -6 188 -990 16% FCF -25 235 -13 591 -11 644 86% Financial assets (bank deposits over 3 months) 8 179 90 8 089 8962% Closing balance of cash 25 435 37 648 -12 213 -32% Cash and bank deposits over 3 months at the end of the period 33 614 37 738 -4 124 -11% 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 Net profit attributable to shareholders of the parent company at the end of the first half of 2023 amounted to PLN 13 298 thousand, while in the corresponding period of 2022, the Group reported a net loss of PLN 77 742 thousand. The most significant impact on the change in the Group's consolidated financial result for the first half 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 121 535 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 39 534 thousand following the RSU's revaluation as of the June 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 7 240 thousand, or 41% compared to the comparable period; • a decrease in sales revenue amounting to PLN 4 605 thousand, or 25% compared to the comparable period; • an increase in depreciation and amortization costs by PLN 1 114 thousand due to the release of new versions of DataWalk software, or 84% compared to the comparable period. The revenue structure of the DataWalk Group In the first half of 2023, revenue from license sales amounted to PLN 7 100 thousand, represented 52% of the Group's total revenue and was 43% lower than in the comparable period. The decrease in license revenue compared to the first half of 2022 is due to the number of new customers acquired who decided to purchase the DataWalk platform. The Group acquired three customers in the first half of 2023, while it was six customers in the comparable period. Revenues from the sale of implementation services amounted to PLN 1 855 thousand and were 16% higher than in the first half of 2022. In the discussed period, revenue from technical support services amounted to PLN 4 460 thousand, accounted for 33% 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 first half of 2023, and in the comparable period of 2022. Position 01/01/2023 – 06/30/2023 01/01/2022 – 06/30/2022 Change Licenses sale 7 100 12 351 -43% Implementation services 1 855 1 603 16% Technical support 4 460 4 052 10% Other 142 156 -9% Total 13 558 18 162 -25% 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 first half of 2023, and in the comparable period of 2022. Position 01/01/2023 – 06/30/2023 01/01/2022 – 06/30/2022 PLN (Polish zloty) 26% 36% USD (U.S. Dollar) 74% 64% 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 first half of 2023 by regions (in thousands of PLN). Revenues by region 01/01/2023 – 06/30/2023 Share in total revenues (%) Poland 3 461 26% North and South America 8 678 64% Other regions 1 419 10% Total 13 558 100% Source: Issuer. The table below presents the revenues of the DataWalk Group in the first half of 2022 by region (in thousands of PLN). Revenues by region 01/01/2022 – 06/30/2022 Share in total revenues (%) Poland 6 503 36% North and South America 8 453 47% Other regions 3 207 18% Total 18 162 100% Source: Issuer. Cash flow of the DataWalk Group The Group's cash flow from operating activities (CFO) in the first half of 2023 amounted to PLN -18 057 thousand. The most significant influence on the CFO was operating loss adjusted for amortization and depreciation, costs of the incentive program, and the change in asset impairment allowances (adjusted EBITDA) of PLN 17 994 thousand. The Group's cash flow from investing activities (CFI) in the first half of 2023 amounted to PLN -13 761 thousand. CFI was most affected by: i) capitalized development costs of DataWalk software of PLN 7 166 thousand; ii) outflow resulting from establishing bank deposits with maturities of more than three months in the total amount of PLN 8 090 thousand, presented under financial assets; and iii) interest received on bank deposits of PLN 1 466 thousand. The Group's cash flow from financing activities (CFF) in the first half of 2023 amounted to PLN -349 thousand. CFF was most affected by the net outflow of funds from the repayment of the Issuer's lease liabilities of PLN 339 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 first half of 2023 and comparable period of 2022. Position 01/01/2023 – 06/30/2023 01/01/2022 – 06/30/2022 Change CFO -18 057 -7 403 144% CFI, including: -13 761 -6 241 120% - CAPEX -7 178 -6 188 16% CFF -349 -352 -1% Total net cash flows -32 167 -13 996 130% 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 June 30, 2023, and December 31, 2022. Assets 06/30/2023 12/31/2022 Change Intangible assets 19 530 19 530 0% Right-of-use assets 895 1 075 -17% Contract assets 1 188 927 28% Trade receivables 9 990 9 654 3% Other short-term receivables 1 479 1 580 -6% Cash and cash equivalents 25 435 57 598 -56% Deferred tax assets 11 186 15 059 -26% Other assets 11 778 5 152 129% Total assets 81 481 110 575 -26% Source: Issuer. Equity and liabilities 06/30/2023 12/31/2022 Change Equity 21 999 29 399 -25% Incentive program liabilities 46 807 68 457 -32% Trade payables 4 100 4 559 -10% Bank loans and borrowings 661 719 -8% Lease liabilities 942 1 103 -15% Contract liabilities 4 790 3 710 29% Other liabilities 2 182 2 627 -17% Total equity and liabilities 81 481 110 575 -26% 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 June 30, 2023, as well as December 31, 2022. Position 06/30/2023 12/31/2022 Current ratio 4,2 6,4 Quick Ratio 4,0 6,1 Cash Ratio 2,2 5,0 Debt ratio 16% 12% Debt / Equity 0,0 0,0 Debt-to-Equity Ratio 18% 13% Working Capital (in thousands PLN) 37 524 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 INTERIM CONDENSED FINANCIAL STATEMENTS 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 Company 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 t 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 Management 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. 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 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"). 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 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; 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. 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. 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 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 June 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 June 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 June 30, 2023 The following table shows the number of RSUs granted as of June 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 722 775 100,00% 722 775 0 0 Providing services until 12/31/2023 62 125 70,03% 0 43 505 18 620 Providing services until 06/30/2024 7 000 53,21% 0 3 725 3 275 Providing services until 12/31/2024 49 625 11,74% 0 5 825 43 800 Providing services until 06/12/2025 5 750 34,87% 0 2 005 3 745 Providing services until 12/31/2025 5 500 21,91% 0 1 205 4 295 Providing services until 06/30/2026 2 500 25,00% 0 625 1 875 Providing services until 12/31/2026 3 500 13,00% 0 455 3 045 Total 858 775 84,16% 722 775 57 345 78 655 Following IFRS 2, the Group has updated the fair value of the RSUs as of the balance sheet date of June 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 June 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 first half of 2023, further RSUs were valued and recognized for which acquisition conditions are estimated to have been met. 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 748 511 -31,35 -23 466 Estimated number of vesting during the first half of 2023 31 609 60,00 1 897 Number of forfeited rights during the first half of 2023 -877 91,35 -80 Estimated number of vested rights as of 06/30/2023 780 120 60,00 46 808 * The difference between the weighted average fair values of RSUs as of June 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 June 30, 2023. The total cost of the Program recognized in the consolidated financial statements for the six months ending June 30, 2023, estimated according to vesting, amounted to PLN -21 649 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 | 30 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 -21 649 Equity Profit (loss) from previous years 68 457 Long-term liabilities Incentive program liabilities 46 807 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 June 30, 2023 was PLN 46,807 thousand. The following table shows the settlement of RSUs under the Program by exercise status and their fair values as of June 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% 60 67 200 - RSUs granted under the Participation Agreements 877 900 78% 60 52 674 - Tranche as of 04/01/2022 799 900 71% 60 47 994 - Tranche as of 07/01/2022 14 000 1% 60 840 - Tranche as of 01/01/2023 19 000 2% 60 1 140 - Tranche as of 05/01/2023 45 000 4% 60 2 700 - Number of forfeited rights -19 125 -2% 60 -1 148 - Number of RSUs to be granted in future periods 261 225 23% 60 15 674 RSUs granted under the Participation Agreements, including: 877 900 78% 60 52 674 - Vested rigths 722 775 65% 60 43 367 - Remaining in the process of vesting, including: 136 000 12% 60 8 160 (a) for which it is estimated that vesting conditions have been met 57 345 5% 60 3 441 - Forfeited rights 19 125 2% 60 1 148 As of the balance sheet date of June 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 | 31 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 06/30/2023 (in thous. PLN) 12/31/2022 (in thous. PLN) Incentive program 38 017 31 653 Total 38 017 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 | 32 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). 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. Under IFRS2, the Sale Transaction is understood as a condition other than vesting conditions (so-called non-vesting condition). 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 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. 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. 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 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 June 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 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. 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 Program valuation date (Grant Date) 01.10.2022 r. 01.01.2023 r. Valuation model Black–Scholes–Merton Black–Scholes–Merton The number of Entitlements granted resulting from the Participation Agreements 275 518 pcs. 118 710 pcs. Stock Price 136,26 PLN 91,35 PLN Exercise Price 0,10 PLN 0,10 PLN Expected price volatility 4,16% 4,13% Time to Maturity 5 years 5 years Risk-free rate 7,14% 6,05% Fair value 136,19 PLN 91,28 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 June 30, 2023 took place in two 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. 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 recognition of the Program from January 1, 2023, to June 30, 2023 The following table shows the number of vesting Entitlements granted to the Company's shares as of June 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 85 666 54% 0 46 158 39 508 Providing services until 06/30/2024 5 000 43% 0 2 132 2 868 Providing services until 12/31/2024 60 910 25% 0 15 053 45 857 Providing services until 12/31/2025 2 500 17% 0 413 2 087 Total 382 961 76% 228 885 63 756 90 320 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 six months ending June 30, 2023, and the recognition in expense at weighted average fair value. 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 62 168 98,21 6 106 Number of forfeited rights during the period -1 945 132,64 -258 Estimated number of vested rights as of 06/30/2023 292 641 129,91 38 017 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 6 364 Equity Profit (loss) from previous years 31 653 Equity Reserve capital 38 017 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 June 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 | 36 The following table shows the settlement of Program Entitlements by exercise status and their fair value as of June 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 394 228 92% 122,67 48 359 - 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 - Number of forfeited rights -11 267 -3% - Number of rights to be granted in future periods 47 039 11% Rights granted under the Participation Agreements, including: 394 228 92% 122,67 48 359 - Vested rigths 228 885 53% 136,19 31 172 - Remaining in the process of vesting, including: 154 076 36% 122,67 18 900 a) for which it is estimated that vesting conditions have been met 63 756 15% 107,36 6 845 - Forfeited rights 11 267 3% 107,36 1 210 As of the balance sheet date of June 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 | 37 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 20% share of revenue from customers acquired in the first half of 2023 in the total revenue. In the reported period, the Group acquired another two significant projects, including cooperation with the Northern California Regional Intelligence Center ("NCRIC") and 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. • 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 first half 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 June 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. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE AFFECTING THE GROUP'S OPERATIONS As of the date of these consolidated financial statements for the 6-month ended June 30, 2023, there have been no events after the balance sheet date that have not been but should have been included in these financial statements. 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 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 | 39 COMPANY'S AUTHORITIES The Executive Board On June 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 6-month period ended June 30, 2023, the DataWalk S.A. Executive Board was as follows: The Executive Board Period of performing the function Paweł Wieczyński 01/01/2023 – 06/30/2023 Krystian Piećko 01/01/2023 – 06/30/2023 Łukasz Socha 01/01/2023 – 06/30/2023 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 | 40 The Supervisory Board On June 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 6-month period ended June 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 – 06/30/2023 Wojciech Dyszy 01/01/2023 – 06/30/2023 Roman Pudełko 01/01/2023 – 06/30/2023 Grzegorz Dymek 01/01/2023 – 06/30/2023 Ola Malm 01/01/2023 – 06/30/2023 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 | 41 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 | 42 DataWalk Inc. Basic information about an entity related by capital with the Issuer as at 06/30/2023. 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: 48 939 thous. PLN Revaluation adjustments: -48 939 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 | 43 Overview of the DataWalk Capital Group DataWalk organizational structure of the Group as at June 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 6-month period ended June 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 | 44 THE SHAREHOLDING STRUCTURE OF THE DATAWALK S.A. Shareholder structure as at September 6, 2023 (share in the total number of votes) Source: Issuer. As of this report's publication date, i.e. September 6, 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. 2 400 000 400 000 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 3 253 842 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. 1 According to the current report no. 39/2022 of September 2, 2022. 2 According to the current report no. 16/2015 of September 16, 2015. 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 | 45 Shareholder structure as at May 18, 2023 (share in the total number of votes) Source: Issuer. As at May 18, 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 | 46 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 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" and "Shareholder structure as at May 18, 2023". The table below presents ownership of shares DataWalk SA by managers and supervisors at May 18, 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 May 18, 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 | 47 DATAWALK S.A. CONDENSED STANDALONE SEMI-ANNUAL FINANCIAL STATEMENT for the 6-month period ended 30 th June, 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 | 48 STANDALONE FINANC IAL STA TEMEN T Standalone Statement of Financial Position (in thousands of PLN) ASSETS 06/30/2023 12/31/2022 A. Non-current assets 22 481 22 186 I. Fixed assets 361 455 II. Goodwill 0 0 III. Intangible assets 19 530 19 530 IV. Right-of-use assets 895 1 075 V. Investments in subsidiaries 0 0 VI. Long-term receivables 152 152 VII. Long-term prepayments 103 260 VIII. Deferred tax assets 1 439 715 B. Current assets 41 165 64 053 I. Contract assets 921 641 II. Trade receivables 6 646 8 510 III. Income tax receivables 0 0 IV. Other receivables 1 470 1 472 V. Financial assets 8 179 0 VI. Prepayments 966 1 156 VII. Cash and cash equivalents 22 983 52 274 TOTAL ASSETS 63 646 86 239 EQUITY AND LIABILITIES 06/30/2023 12/31/2022 A. Equity 54 322 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 -27 525 -61 972 VI. Reserve capital 38 017 31 653 B. Long-term liabilities 733 712 I. Deferred tax liabilities 0 0 II. Lease liabilities 337 557 III. Incentive program liabilities 396 155 C. Short-term liabilities 8 591 10 044 I. Trade liabilities 3 059 4 223 II. Income tax liabilities 0 0 III. Lease liabilities 605 547 IV. Other liabilities 698 697 V. Other provisions 886 1 663 VI. Contract liabilities 3 342 2 914 TOTAL EQUITY AND LIABILITIES 63 646 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 | 49 NET ASSET VALUE PER SHARE 06/30/2023 12/31/2022 Net asset value 54 322 75 483 Number of shares (pcs.) 5 132 988 5 132 988 Net asset value per share (in PLN) 10,58 14,71 Diluted number of shares (pcs.) 5 425 629 5 365 406 Diluted net asset value per share (in PLN) 10,01 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 June 30, 2023 amounted to 5 425 629, including 292 641 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 | 50 Standalone Profit and Loss Account with The Statement of Comprehensive Income (in thousands of PLN) PROFIT AND LOSS ACCOUNT 01/01/2023 – 06/30/2023 01/01/2022 – 06/30/2022 04/01/2023 – 06/30/2023 04/01/2022 – 06/30/2022 Continuing operations A. Revenues 9 366 13 092 7 031 10 547 B. Operating costs 25 159 13 200 12 517 7 508 Materials and energy 126 380 41 178 Employee benefits 2 714 2 685 1 147 1 523 Employee benefits - Share-based Payment 6 604 80 3 425 80 Amortization and depreciation 2 422 1 300 1 290 665 External services 12 917 8 447 6 474 4 890 Other costs 377 309 139 174 C. Profit/Loss on sales -15 793 -108 -5 486 3 038 Other operating income 293 182 34 114 Other operating costs 5 190 39 5 184 39 Loss (profit) from expected credit losses -111 3 156 2 D. Operating profit (loss) -20 579 32 -10 792 3 112 Financial income 979 503 386 166 Financial costs 8 649 8 475 3 374 4 157 E. Pre-tax profit (loss) -28 249 -7 940 -13 780 -880 Income tax -724 436 -238 280 F. Net profit (loss) from continuing operations -27 525 -8 376 -13 543 -1 160 Discontinued operations 0 0 0 0 Profit (loss) from discontinued operations 0 0 0 0 G. Net profit (loss) -27 525 -8 376 -13 543 -1 160 STATEMENT OF COMPREHENSIVE INCOME 01/01/2023 – 06/30/2023 01/01/2022 – 06/30/2022 04/01/2023 – 06/30/2023 04/01/2022 – 06/30/2022 Net profit (loss) -27 525 -8 376 -13 543 -1 160 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 -27 525 -8 376 -13 543 -1 160 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 PROFIT (LOSS) PER SHARE ATTRIBUTABLE TO: 01/01/2023 – 06/30/2023 01/01/2022 – 06/30/2022 04/01/2023 – 06/30/2023 04/01/2022 – 06/30/2022** Continuing operations Number of shares (pcs.) 5 132 988 4 886 048 5 132 988 4 886 048 Profit (loss) per share (in PLN) -5,36 -1,71 -2,64 -0,24 Diluted number of shares (pcs.) 5 410 864 4 975 047 5 410 864 4 975 047 Diluted profit (loss) per share (in PLN) -5,09 -1,68 -2,50 -0,23 Discontinued operations Number of shares (pcs.) 5 132 988 4 886 048 5 132 988 4 886 048 Profit (loss) per share (in PLN) 0 0 0 0 Diluted number of shares (pcs.) 5 410 864 4 975 047 5 410 864 4 975 047 Diluted profit (loss) per share (in PLN) 0 0 0 0 Continuing and discontinued operations Number of shares (pcs.) 5 132 988 4 886 048 5 132 988 4 886 048 Profit (loss) per share (in PLN) -5,36 -1,71 -2,64 -0,24 Diluted number of shares (pcs.) 5 410 864 4 975 047 5 410 864 4 975 047 Diluted profit (loss) per share (in PLN) -5,09 -1,68 -2,50 -0,23 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 first half of 2023 was 5 132 988; for the first half of 2022, it was 4 886 048. The weighted average diluted number of shares of the Company in the first half of 2023 amounted to 5 410 864, including 292 641 shares under the incentive program. The weighted average diluted number of shares of the Company in the first half 2022 amounted to 4 975 047, including 88 999 shares under the incentive program. * The data for the second quarter of 2023 was determined by subtracting from the data for the first half of 2023 (covered by the review) the data presented by the Company in the report for the first quarter of 2023. ** The data for the second quarter of 2022 was determined by subtracting from the data for the first half of 2022 (covered by the review) the data presented by the Company in the report for the first quarter of 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 | 52 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 6 364 -61 972 34 447 -21 161 Total comprehensive income 0 0 0 0 0 -27 525 -27 525 Net profit (loss) 0 0 0 0 0 -27 525 -27 525 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 6 364 0 0 6 364 Balance as at 06/30/2023 513 171 968 9 965 38 017 -138 616 -27 525 54 322 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) 0 0 0 0 -10 897 2 521 -8 376 Total comprehensive income 0 0 0 0 0 -8 376 -8 376 Net profit (loss) 0 0 0 0 0 -8 376 -8 376 Share capital increase 0 0 0 0 0 0 0 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 06/30/2022 489 133 859 9 965 2 771 -76 644 -8 376 62 064 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 Standalone Cash Flow Statement (in thousands of PLN) CASH FLOW STATEMENT 01/01/2022 – 06/30/2022 01/01/2021 – 06/30/2021 Cash flows from operating activities Net profit (loss) -27 525 -8 376 Adjustments, including: - amortization and depreciation 2 422 1 300 - foreign exchange gains (losses) -4 4 - interest expenses 49 11 - income from interest and dividends -1 466 -5 - profit (loss) on investing activities -126 0 - impairment allowance for investments in subsidiaries 8 600 8 465 - impairment of intangible assets 5 155 0 - share-based payment (equity-settled) 6 364 0 - share-based payment (cash-settled) 241 80 - change in receivables 1 866 -3 432 - change in provisions -777 542 - change in liabilities other than incentive program -1 163 621 - change in prepayments -377 51 - change in contract assets and contract liabilities 148 -4 792 - other adjustments -2 075 -32 Net cash generated (used) in operating activities -8 670 -5 562 Cash flows from investing activities Purchase of intangible assets 7 166 6 018 Purchase of property, plant and equipment 12 170 Proceeds from sale of property, plant and equipment 40 0 Purchase of subsidiaries shares, net of cash 6 525 2 135 Inflow from bank deposits (over 3 months) 0 0 Outflows from bank deposits (over 3 months) 8 090 90 Proceeds from governmental subsidies 0 32 Interest received 1 466 5 Net cash generated (used) in investing activities -20 287 -8 376 Cash flows from financing activities Proceeds from issue of share capital 0 0 Payment of finance lease liabilities 290 341 Interest paid 49 11 Other inflows 0 0 Net cash generated (used) in financing activities -339 -352 Total net cash flows -29 295 -14 291 Opening balance of cash 52 274 47 655 Change in cash due to foreign currency translation 4 -4 Change in cash balance, net -29 291 -14 295 Closing balance of cash 22 983 33 360 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 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, September 6, 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