Datawalk S.A. - Interim / Quarterly Report 2023

Raport May 2023 DATAWALK CAPITAL GROUP SUMMARY OF THE CONDENSED INTERIM FINANCIAL STATEMENTS for the 3-month period ended 31 th March, 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, After the slowdown of growth experienced in 2022, we are fully focused on returning to the growth path. We still haven’t fully unlocked our product's market potential - our sales performance remains significantly below expectations. However, Q1 is usually not a good indicator of full-year performance, and we believe 2023 will be much better for us than 2022. The first signs of upcoming improvement are already visible. The value of qualified projects in our sales funnel has grown substantially in the first months of 2023 after stalling through most of 2022, hinting at accelerating revenue growth in the coming months. The total value of advanced projects in our funnel has, for the first time in our history, crossed 40M USD, up 59% year over year - a growth dynamic we have not seen since Q1 2021. In our opinion, this is the first sign that the improvement of our Field Engineering capability is showing results. We are now ready to accommodate potential customers’ expectations regarding deploying a pilot, demonstrating a use case on customers’ data and infrastructure, solving their real analytical problems, etc. These pre-sales processes turned out to be one of our major bottlenecks in the past quarters. There are also other signs that we’re nearing the end of the recent challenges, and we are fully dedicated to making sure our results start reflecting this as soon as possible. Below are some examples based on recent data: • It now takes us on average 40% shorter than in 2021-2022 to complete a new project - from the beginning of implementation to completion; • Partial automation of platform deployment allows saving almost 80% of work effort, compared to projects from 2021-2022; • 50% of projects currently run by our SE teams are expected to be finished between May and July 2023, most importantly, the old projects blocking SE capacity. As for DataWalk’s financial situation - nothing has changed here. Our main goal is to ensure we are financially self- reliant and that we have the comfort of considering any potential fundraising in 2024 at the earliest. We strictly control costs and focus on growing revenues in order to come back to the financing subject when we are back on the growth trajectory we planned for the company. 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. $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 Q2.21 Q3.21 Q4.21 Q1.22 Q2.22 Q3.22 Q4.22 Q1.23 Current 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 QUARTER OF 2023 ............................................................................................................................ 18 DATAWALK GROUP'S CASH-SETTLED INCENTIVE PROGRAM ................................................................. 25 DATAWALK GROUP'S EQUITY-SETTLED INCENTIVE PROGRAM ............................................................. 30 IMPACT OF THE POLITICAL AND ECONOMIC SITUATION IN UKRAINE .................................................. 36 MAJOR EVENTS THAT HAVE AN IMPACT ON THE DATAWALK GROUP'S RESULTS IN THE REPORTING PERIOD ............................................................................................................................................ 36 SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE AFFECTING THE GROUP'S OPERATIONS ................................................................................................................................................................................. 36 FACTORS EXPECTED TO AFFECT FURTHER GROUP’S DEVELOPMENT .................................................. 37 COMPANY'S AUTHORITIES ................................................................................................................................ 38 The Executive Board ............................................................................................................................................ 38 The Supervisory Board ........................................................................................................................................ 39 DESCRIPTION OF THE ORGANISATION OF THE DATAWALK CAPITAL GROUP AND CONSOLIDATED ENTITIES ................................................................................................................................................................ 40 DataWalk S.A. ..................................................................................................................................................... 40 DataWalk Inc. ...................................................................................................................................................... 41 Overview of the DataWalk Capital Group ........................................................................................................... 42 Changes in the management rules of the Capital Group and the Company ......................................................... 42 THE SHAREHOLDING STRUCTURE OF THE DATAWALK S.A. .................................................................... 43 Shareholder structure as at May 18, 2023 (share in the total number of votes) ................................................... 43 Shareholder structure as at April 13, 2023 (share in the total number of votes) .................................................. 44 STRUCTURE OF SHAREHOLDINGS IN DATAWALK S.A. OR RIGHTS ATTACHED TO SHARES, HELD BY MEMBERS OF THE ISSUER’S EXECUTIVE AND SUPERVISORY BOARDS ................................................ 45 STANDALONE FINANCIAL STATEMENT ........................................................................................................ 47 Standalone Statement of Financial Position (in thousands of PLN) .................................................................... 47 Standalone Profit and Loss Account with The Statement of Comprehensive Income (in thousands of PLN) ..... 49 Standalone Statement of Changes in Equity (in thousands of PLN) .................................................................... 51 Standalone Cash Flow Statement (in thousands of PLN) .................................................................................... 52 CHANGES IN ACCOUNTING POLICIES USED ................................................................................................. 53 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 03/31/2023 from 01/01/2022 to 03/31/2022 from 01/01/2023 to 03/31/2023 from 01/01/2022 to 03/31/2022 in thousands of PLN in thousands of PLN in thousands of EUR in thousands of EUR Revenues from sales 3 219 4 183 685 900 Profit/Loss on sales 8 099 -7 471 1 723 -1 608 Operating profit (loss) 8 420 -7 405 1 791 -1 593 Pre-tax profit (loss) 8 993 -7 130 1 913 -1 534 Net profit (loss) 4 275 -7 286 909 -1 568 Total comprehensive income 4 089 -7 198 870 -1 549 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) 0,83 -1,49 0,18 -0,32 Net cash generated (used) in operating activities -6 641 -3 770 -1 413 -811 Net cash generated (used) in investing activities -2 568 -3 114 -546 -670 Net cash (used) in financing activities -174 -164 -37 -35 Total net cash flows -9 382 -7 048 -1 996 -1 517 SELECTED FINANCIAL DATA 03/31/2023 12/31/2022 03/31/2023 12/31/2022 in thousands of PLN in thousands of PLN in thousands of EUR in thousands of EUR Total assets/equity and liabilities 93 153 110 575 19 924 23 577 Non-current assets 34 965 37 501 7 478 7 996 Current assets 58 188 73 074 12 445 15 581 Equity 36 711 29 399 7 852 6 268 Total liabilities 56 442 81 176 12 072 17 309 Long-term liabilities 44 787 69 733 9 579 14 869 Short-term liabilities 11 655 11 443 2 493 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 03/31/2023 from 01/01/2022 to 03/31/2022 from 01/01/2023 to 03/31/2023 from 01/01/2022 to 03/31/2022 in thousands of PLN in thousands of PLN in thousands of EUR in thousands of EUR Revenues from sales 2 335 2 545 497 548 Profit/Loss on sales -10 307 -3 146 -2 193 -677 Operating profit (loss) -9 787 -3 080 -2 082 -663 Pre-tax profit (loss) -14 469 -7 060 -3 078 -1 519 Net profit (loss) -13 983 -7 216 -2 975 -1 553 Total comprehensive income -13 983 -7 216 -2 975 -1 553 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) -2,72 -1,48 -0,58 -0,32 Net cash generated (used) in operating activities -1 417 -3 230 -301 -695 Net cash generated (used) in investing activities -7 015 -3 114 -1 492 -670 Net cash (used) in financing activities -167 -164 -36 -35 Total net cash flows -8 599 -6 508 -1 829 -1 400 SELECTED FINANCIAL DATA 03/31/2023 12/31/2022 03/31/2023 12/31/2022 in thousands of PLN in thousands of PLN in thousands of EUR in thousands of EUR Total assets/equity and liabilities 73 819 86 239 15 788 18 388 Non-current assets 25 344 22 186 5 421 4 731 Current assets 48 475 64 053 10 368 13 658 Equity 64 724 75 483 13 843 16 095 Total liabilities 9 095 10 756 1 945 2 293 Long-term liabilities 610 712 130 152 Short-term liabilities 8 485 10 044 1 815 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 03/31/2023 12/31/2022 1 EUR 4,6755 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 03/31/2023 to 03/31/2022 1 EUR 4,7005 4,6472 DATAWALK CAPITAL GROUP SUMMARY OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS for the 3-month period ended 31 th March 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 03/31/2023 12/31/2022 A. Non-current assets 34 965 37 501 I. Fixed assets 424 486 II. Goodwill 0 0 III. Intangible assets 22 282 19 530 IV. Right-of-use assets 1 074 1 075 V. Long-term receivables 151 152 VI. Long-term prepayments 693 1 199 VII. Deferred tax assets 10 341 15 059 B. Current assets 58 188 73 074 I. Contract assets 851 927 II. Trade receivables 3 648 9 654 III. Receivables from income tax 101 104 IV. Other receivables 2 141 1 476 V. Financial assets 0 0 VI. Prepayments 3 224 3 315 VII. Cash and cash equivalents 48 222 57 598 TOTAL ASSETS 93 153 110 575 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 03/31/2023 12/31/2022 A. Equity 36 711 29 399 Equity attributable to shareholders of the parent company 36 711 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 34 877 31 653 VI. Net profit (loss) for the current year 4 275 -116 744 VII. Foreign exchange translation differences 827 1 014 Non-controlling interests 0 0 B. Long-term liabilities 44 787 69 733 I. Deferred tax liabilities 0 0 II. Lease liabilities 500 557 III. Bank loans and borrowings 657 719 IV. Incentive program liabilities 43 631 68 457 C. Short-term liabilities 11 655 11 443 I. Trade liabilities 3 775 4 559 II. Income tax liabilities 0 0 III. Lease liabilities 613 547 IV. Bank loans and borrowings 38 0 V. Other liabilities 769 702 VI. Other provisions 1 932 1 925 VII. Contract liabilities 4 528 3 710 TOTAL EQUITY AND LIABILITIES 93 153 110 575 NET ASSET VALUE PER SHARE 03/31/2023 12/31/2022 Net asset value 36 711 29 399 A number of shares (pcs.) 5 132 988 5 132 988 Net asset value per share (in PLN) 7,15 5,73 A diluted number of shares (pcs.) 5 395 934 5 365 406 Diluted net asset value per share (in PLN) 6,80 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 March 31, 2023 amounted to 5,395,934, including 262,946 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 – 03/31/2023 01/01/2022 – 03/31/2022 Continuing operations A. Revenues 3 219 4 183 B. Operating costs -4 880 11 654 Materials and Energy 85 218 Employee benefits 7 287 6 042 Employee benefits - Share-based Payment -21 602 0 Amortization and depreciation 1 139 645 External services 7 396 4 514 Other costs 816 235 C. Profit/Loss on sales 8 099 -7 471 Other operating income 158 68 Other operating costs 6 1 Loss (profit) from expected credit losses -168 1 D. Operating profit (loss) 8 420 -7 405 Financial income 605 286 Financial costs 32 11 E. Pre-tax profit (loss) 8 993 -7 130 Income tax 4 718 156 F. Net profit (loss) from continuing operations 4 275 -7 286 Discontinued operations Net profit (loss) from discontinued operations 0 0 G. Net profit (loss) 4 275 -7 286 NET PROFIT (LOSS) ATTRIBUTABLE TO: 01/01/2023 – 03/31/2023 01/01/2022 – 03/31/2022 - shareholders of the parent company 4 275 -7 286 - non-controlling interests 0 0 STATEMENT OF COMPREHENSIVE INCOME 01/01/2023 – 03/31/2023 01/01/2022 – 03/31/2022 Net profit (loss) 4 275 -7 286 Other comprehensive income -186 88 1. Items that will not be reclassified to profit or loss 0 0 2. Items that will be reclassified to profit or loss: -186 88 a) Exchange differences in translating foreign operations -186 88 Total comprehensive income 4 089 -7 198 TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: 01/01/2023 – 03/31/2023 01/01/2022 – 03/31/2022 - shareholders of the parent company 4 089 -7 198 - non-controlling interests 0 0 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 PROFIT (LOSS) PER SHARE ATTRIBUTABLE TO: 01/01/2023 – 03/31/2023 01/01/2022 – 03/31/2022 Continuing operations A number of shares (pcs.) 5 132 988 4 886 048 Profit (loss) per share (in PLN) 0,83 -1,49 A diluted number of shares (pcs.) 5 395 934 4 975 047 Diluted profit (loss) per share (in PLN) 0,79 -1,46 Discontinued operations A number of shares (pcs.) 5 132 988 4 886 048 Profit (loss) per share (in PLN) 0 0 A diluted number of shares (pcs.) 5 395 934 4 975 047 Diluted profit (loss) per share (in PLN) 0 0 Continuing and discontinued operations A number of shares (pcs.) 5 132 988 4 886 048 Profit (loss) per share (in PLN) 0,83 -1,49 A diluted number of shares (pcs.) 5 395 934 4 975 047 Diluted profit (loss) per share (in PLN) 0,79 -1,46 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 quarter of 2023 was 5,132,988; for the first quarter of 2022, it was 4,886,048. The weighted average diluted number of shares of the Company in the first quarter of 2023 amounted to 5,395,934, including 262,946 shares under the incentive program. The weighted average diluted number of shares of the Company in the first quarter 2022 amounted to 4,975,047, including 88,999 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 | 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 -186 3 224 -116 744 121 019 7 312 0 7 312 Total comprehensive income 0 0 0 0 0 0 4 275 4 275 0 4 275 Net profit (loss) 0 0 0 0 0 0 4 275 4 275 0 4 275 Exchange differences in translating foreign operations 0 0 0 -186 0 0 0 -186 0 -186 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 3 224 0 0 3 224 0 3 224 Balance as at 03/31/2023 513 171 968 9 965 827 34 877 -185 714 4 275 36 711 0 36 711 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 88 0 - 1 648 -5 638 -7 198 0 -7 198 Total comprehensive income 0 0 0 88 0 0 -7 286 -7 198 0 -7 198 Net profit (loss) 0 0 0 0 0 0 -7 286 -7 286 0 -7 286 Exchange differences in translating foreign operations 0 0 0 88 0 0 0 88 0 88 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 03/31/2022 489 133 859 9 965 435 2 771 -68 970 -7 286 71 263 0 71 263 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 – 03/31/2023 01/01/2022 – 03/31/2022 Cash flows from operating activities 4 275 -7 286 Net profit (loss) Adjustments, including: - amortization and depreciation 1 139 645 - foreign exchange gains (losses) -206 109 - interest expenses 26 11 - income from interest and dividends -1 073 -5 - profit (loss) on investing activities -37 0 - share-based payment (equity-settled) 3 224 0 - share-based payment (cash-settled) -24 826 0 - change in receivables 5 341 1 802 - change in provisions 6 1 144 - change in liabilities other than incentive program -718 522 - change in prepayments 5 315 137 - change in contract assets and contract liabilities 894 -849 - other adjustments 0 0 Net cash generated (used) in operating activities -6 641 -3 770 Cash flows from investing activities Purchase of intangible assets 3 680 3 006 Purchase of property, plant, and equipment 0 24 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) 0 90 Proceeds from governmental subsidies 0 0 Interest received 1 073 5 Net cash generated (used) in investing activities -2 568 -3 114 Cash flows from financing activities Proceeds from issue of share capital 0 0 Payment of finance lease liabilities 141 159 Interest paid 26 5 Other outflows 7 0 Net cash generated (used) in financing activities -174 -164 Total net cash flows -9 382 -7 048 Opening balance of cash 57 598 51 650 Change in cash due to foreign currency translation 6 -7 Change in the cash balance, net -9 376 -7 055 Closing balance of cash 48 222 44 595 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 QUARTER OF 2023 Commentary on the financial results of the DataWalk Group In the first quarter of 2023, the value of the DataWalk Group's revenue amounted to PLN 3,219 thousand, down 23% compared to the first quarter of 2022. The sales potential of the Group, as well as of the Company, in the first quarter 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 started addressing it 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 70% 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 the significant increase in projects qualifying for the sales funnel, the value of which exceeded USD 40 million for the first time in the Group's history. The revenue in the Americas market in the first quarter of 2023 amounted to PLN 1,849 thousand, while in the comparable period, it was PLN 2,511 thousand, which means a decrease of 26%. 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 customer from this area (in the public sector). In the first quarter of 2023, the Group recorded a decrease in revenue in the other markets (EMEA and APAC regions), which amounted to PLN 1,370 thousand, down 18% from the PLN 1,672 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 its customers. As of the balance sheet date, March 31, 2023, the deferred revenue amounts to PLN 4,528 thousand and represent Group's obligation to provide customers with the contracted licenses or services and 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 4,137 thousand and implementation services for PLN 391 thousand. The DataWalk Group manages the investment process through triggers linked to business performance and financial models. The above approach allows monitoring and steering costs and capital expenditure (R&D) dynamics. In light of this, due to lower-than-expected revenue growth, the Group limits cost growth until it achieves the expected improvement in the sales dynamic. In 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 March 31, 2023, the Group estimated the value and recognized the cost and liability arising from the ongoing program at a total amount of PLN 43,631 thousand. The incentive program total cost recognized in the first quarter of 2023 in the Group's operating expenses amounted to PLN -21,602 thousand. The increase in RSU costs resulting from the recognition in the reporting period of the estimated amount of RSUs vested in the first quarter of 2023 amounted to PLN 781 thousand, while the value of PLN -25,607 thousand represents the difference in the valuation of RSUs as of the balance sheet date of March 31, 2023 relative to the valuation as of December 31, 2022. The real value of the incentive program has yet to be discovered. The value of the cash amounts payable under the incentive program depends, among other things, on the fulfillment of conditions dependent on the participants, 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. 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 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 statements the cost and a corresponding increase in equity resulting from the program at a total amount of PLN 3,224 thousand. Thus, the total value of the Company's ongoing share-based incentive program reported in equity as of March 31, 2023, amounted to PLN 34,877 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 quarter 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. In addition, during the last twelve months, the Company completed further development work and started to amortize it, which increased this cost item relative to 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 | 20 The DataWalk Group financial results The table below presents selected consolidated financial data for the first quarter of 2023 and the comparable period of 2022. Position 01/01/2022 – 12/31/2022 01/01/2021 – 12/31/2021 Change Change % Revenues 3 219 4 183 -964 -23% Operating costs -4 880 11 654 -16 534 -142% Profit/Loss on sales 8 099 -7 471 15 570 -208% Other operating income 158 68 Other operating costs 6 1 Loss (profit) from expected credit losses -168 1 EBIT 8 420 -7 405 15 824 Net profit (loss) attributable to shareholders of the parent company 4 275 -7 286 Operating costs -4 880 11 654 Operating costs excluding amortization and depreciation as well as share-based incentive program 15 583 11 010 4 574 42% Amortization and depreciation 1 139 645 494 77% Share-based incentive program costs -21 602 0 EBITDA 9 559 -6 760 Adjusted EBITDA -12 044 -6 760 -5 284 78% Adjusted EBIT -13 183 -7 405 CFO bt -6 641 -3 770 -2 871 76% CAPEX -3 680 -3 029 -651 21% FCF -10 321 -6 799 -3 522 52% Closing balance of cash 48 222 44 595 3 627 8% Source: Issuer. EBIT = Operating profit (loss), Adjusted EBIT = EBIT + 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, 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, 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|. Net profit attributable to shareholders of the parent company at the end of the first quarter of 2023 amounted to PLN 4,275 thousand, while in the corresponding period of 2022, the Group reported a net loss of PLN 7,286 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 | 21 The most significant impact on the change in the Group's consolidated financial result for the first quarter of 2023 relative to the comparable period was: • recognition of incentive program costs using cash-settled share-based payment transactions in the total amount of PLN -24,826 thousand, in accordance with IFRS 2. The increase in RSU costs resulting from the recognition in the reporting period of the estimated amount of RSUs vested in the first quarter of 2023 amounted to PLN 781 thousand, while the value of PLN -25,607 thousand represents the difference in the valuation of RSUs as of the balance sheet date of March 31, 2023 relative to the valuation as of December 31, 2022; • recognition of incentive program costs using equity-settled share-based payment transactions in the total amount of PLN 3,224 thousand, in accordance with IFRS 2; • a decrease in the financial result of PLN 5,204 thousand, resulting from recognizing the difference in the valuation of the deferred tax asset. The identified deferred tax asset's main component is the incentive program's liability. The decrease in the incentive program liability resulted from the difference between the value as of March 31, 2023, and the valuation as of December 31, 2022; • 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 3.485 thousand, or 42% compared to the comparable period; • a decrease in sales revenue amounting to PLN 964 thousand, or 23% compared to the comparable period; • an increase in the cost of other third-party services by PLN 641 thousand, related to the development and growing scale of the Group's operations, or 30% compared to the comparable period; • an increase in depreciation and amortization costs by PLN 494 thousand due to the release of new versions of DataWalk software, or 77% compared to the comparable period. The revenue structure of the DataWalk Group In the first quarter of 2023, revenue from license sales amounted to PLN 534 thousand, represented 17% of the Group's total revenue and was 69% lower than in the comparable period. The decrease in license revenue compared to the first quarter of 2022 is due to the number of new customers acquired who decided to purchase the DataWalk platform. The Group acquired one customer in the first quarter of 2023, while it was two customers in the comparable period. Revenues from the sale of implementation services amounted to PLN 590 thousand and were 24% higher than in the first quarter of 2022. In the discussed period, revenue from technical support services amounted to PLN 2 072 thousand, accounted for 64% of the Group's total revenues and was 10% higher than in the comparable period of 2022. The decrease in the other revenue was due, in particular, to the completion of the sale of ancillary services related to the DataWalk software to one of the Group's customers. The table below presents consolidated revenues for the first quarter of 2023, and in the comparable period of 2022. Position 01/01/2023 – 03/31/2023 01/01/2022 – 03/31/2022 Change Licenses sale 534 1 716 -69% Implementation services 590 475 24% Technical support 2 072 1 891 10% Other 22 100 -78% Total 3 219 4 183 -23% 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 quarter of 2023, and in the comparable period of 2022. Position 01/01/2023 – 03/31/2023 01/01/2022 – 03/31/2022 PLN (Polish zloty) 26% 11% USD (U.S. Dollar) 74% 89% 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 quarter of 2023 by regions (in thousands of PLN). Revenues by region 01/01/2023 – 03/31/2023 Share in total revenues (%) Poland 832 26% North and South America 1 849 57% Other regions 537 17% Total 3 219 100% Source: Issuer. The table below presents the revenues of the DataWalk Group in the first quarter of 2022 by region (in thousands of PLN). Revenues by region 01/01/2022 – 03/31/2022 Share in total revenues (%) Poland 469 11% North and South America 2 511 60% Other regions 1 203 29% Total 4 183 100% Source: Issuer. Cash flow of the DataWalk Group The Group's cash flow from operating activities (CFO) in the first quarter of 2023 amounted to PLN -6,641 thousand. The most significant influence on the CFO had: (i) operating loss adjusted for amortization and depreciation as well as costs of the incentive program (adjusted EBITDA) of PLN 12,044 thousand; (ii) decrease in receivables in the first quarter by an amount of PLN 5,341 thousand. The Group's cash flow from investing activities (CFI) in the first quarter of 2023 amounted to PLN -2 568 thousand. CFI was most affected by capitalized development costs of DataWalk software of PLN 3,680 thousand and interest received on bank deposits in the amount of PLN 1,073 thousand. The Group's cash flow from financing activities (CFF) in the first quarter of 2023 amounted to PLN -174 thousand. CFF was most affected by the net outflow of funds from the repayment of the Issuer's lease liabilities of PLN 714 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 quarter of 2023 and comparable period of 2022. Position 01/01/2023 – 03/31/2023 01/01/2022 – 03/31/2022 Change CFO -6 641 -3 770 76% CFI, including: -2 568 -3 114 -18% - CAPEX -3 680 -3 029 21% CFF -174 -164 6% Total net cash flows -9 382 -7 048 33% 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 March 31, 2023, and December 31, 2022. Assets 03/31/2023 12/31/2022 Change Intangible assets 22 282 19 530 14% Right-of-use assets 1 074 1 075 0% Contract assets 851 927 -8% Trade receivables 3 648 9 654 -62% Other short-term receivables 2 243 1 580 42% Cash and cash equivalents 48 222 57 598 -16% Deferred tax assets 10 341 15 059 -31% Other assets 4 492 5 152 -13% Total assets 93 153 110 575 -16% Source: Issuer. Equity and liabilities 03/31/2023 12/31/2022 Change Equity 36 711 29 399 25% Incentive program liabilities 43 631 68 457 -36% Trade payables 3 775 4 559 -17% Bank loans and borrowings 694 719 -3% Lease liabilities 1 113 1 103 1% Contract liabilities 4 528 3 710 22% Other liabilities 2 701 2 627 3% Total equity and liabilities 93 153 110 575 -16% 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 March 31, 2023, as well as December 31, 2022. Position 03/31/2023 12/31/2022 Current ratio 5,0 6,4 Quick Ratio 4,7 6,1 Cash Ratio 4,1 5,0 Debt ratio 14% 12% Debt / Equity 0,0 0,0 Debt-to-Equity Ratio 16% 13% Working Capital (in thousands PLN) 46 533 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 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 analysis 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 | 26 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 | 27 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 March 31, 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 March 31, 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 | 28 The recognition of the Program from January 1, 2023, to March 31, 2023 The following table shows the number of RSUs granted as of March 31, 2023, by vesting conditions and degree of performance. Vesting conditions Granted rights (in pcs.) Degree of fulfillment of vesting conditions Estimated number of vested rights (in pcs.) Number of forfeited rights (in pcs.) Remains under vesting (in pcs.) Vested rights 728 275 98,46% 717 025 11 250 0 Providing services until 06/30/2023 5 875 75,74% 4 450 125 1 300 Providing services until 12/31/2023 64 625 53,47% 34 557 0 30 068 Providing services until 06/30/2024 7 125 40,64% 2 895 125 4 105 Providing services until 12/31/2024 7 125 13,85% 987 2 500 3 638 Providing services until 06/12/2025 5 875 25,87% 1 520 125 4 230 Providing services until 12/31/2025 6 750 12,62% 852 0 5 898 Providing services until 06/30/2026 2 500 18,70% 467 0 2 033 Providing services until 12/31/2026 4 750 6,10% 290 0 4 460 Total 832 900 91,61% 763 043 14 125 55 732 Following IFRS 2, the Group has updated the fair value of the RSUs as of the balance sheet date of March 31, 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 March 31, 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 quarter 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 12/21/2022 749 388 -34,17 -25 607 Estimated number of vesting during the first quarter of 2023 13 655 57,18 781 Number of forfeited rights during the first quarter of 2023 0 91,35 0 Estimated number of vested rights as of 03/31/2023 763 043 57,18 -24 826 * The difference between the weighted average fair values of RSUs as of March 31, 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 March 31, 2023. The total cost of the Program recognized in the consolidated financial statements for the three months ending March 31, 2023, estimated according to vesting, amounted to PLN -24,826 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 | 29 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 -24 826 Equity Profit (loss) from previous years 68 457 Long-term liabilities Incentive program liabilities 43 631 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 March 31, 2023 was PLN 43,631 thousand. The following table shows the settlement of RSUs under the Program by exercise status and their fair values as of March 31, 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% 57,18 64 042 - RSUs granted under the Participation Agreements 832 900 74% 57,18 47 625 - Tranche as of 04/01/2022 799 900 71% 57,18 45 738 - Tranche as of 07/01/2022 14 000 1% 57,18 801 - Tranche as of 01/01/2023 19 000 2% 57,18 1 086 - Number of forfeited rights -14 125 -1% 57,18 -808 - Number of RSUs to be granted in future periods 301 225 27% 57,18 17 224 RSUs granted under the Participation Agreements, including: 832 900 74% 57,18 47 625 - Vested rigths 717 025 64% 57,18 40 999 - Remaining in the process of vesting, including: 101 750 9% 57,18 5 818 (a) for which it is estimated that vesting conditions have been met 46 018 4% 57,18 2 631 - Forfeited rights 14 125 1% 57,18 808 As of the balance sheet date of March 31, 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 | 30 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 analysis 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 03/31/2023 (in thous. PLN) 12/31/2022 (in thous. PLN) Incentive program 34 877 31 653 Total 34 877 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 | 31 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 | 32 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 | 33 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 March 31, 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. 120 710 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 March 31, 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 | 34 The recognition of the Program from January 1, 2023, to March 31, 2023 The following table shows the number of vesting Entitlements granted to the Company's shares as of March 31, 2023, by vesting conditions and degree of exercise. Vesting conditions Granted rights (in pcs.) Degree of fulfillment of vesting conditions Estimated number of vested rights (in pcs.) Number of forfeited rights (in pcs.) Remains under vesting (in pcs.) Vested rights 222 985 99% 220 535 2 450 0 Providing services until 06/30/2023 5 600 67% 3 730 0 1 870 Providing services until 12/31/2023 92 683 31% 28 909 500 63 274 Providing services until 06/30/2024 5 000 28% 1 419 0 3 581 Providing services until 12/31/2024 65 060 12% 7 952 0 57 108 Providing services until 12/31/2025 4 900 8% 401 0 4 499 Total 396 228 66% 262 946 2 950 130 332 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 three months ending March 31, 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 30 528 105,59 3 224 Number of forfeited rights during the period 0 0 0 Estimated number of vested rights as of 03/31/2023 262 946 132,64 34 877 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 3 224 Equity Profit (loss) from previous years 31 653 Equity Reserve capital 34 877 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 March 31, 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 | 35 The following table shows the settlement of Program Entitlements by exercise status and their fair value as of March 31, 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% 132,64 57 034 - Rights granted under the Participation Agreements 396 228 92% 132,64 52 555 - Entitlements related to 2017-2019 program 84 999 20% 132,64 11 274 - Tranche as 10/01/2022 190 519 44% 132,64 25 270 - Tranche as 01/01/2023 120 710 28% 132,64 16 011 - Number of forfeited rights -2 950 -1% 132,64 -391 - Number of rights to be granted in future periods 36 722 9% 132,64 4 871 Rights granted under the Participation Agreements, including: 396 228 92% 132,64 52 555 - Vested rigths 220 535 51% 132,64 29 252 - Remaining in the process of vesting, including: 172 743 40% 132,64 22 912 a) for which it is estimated that vesting conditions have been met 42 411 10% 132,64 5 625 - Forfeited rights 2 950 1% 132,64 391 As of the balance sheet date of March 31, 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 | 36 IMPACT OF THE POLITICAL AND ECONOMIC SITUATION IN UKRAINE Since February 24, 2022, there has been a war in Ukraine that has created a new, constantly changing, and economically unpredictable situation in the world. Representatives of the European Union, the United States, the United Kingdom, and many other countries have imposed sanctions that are severe on Russia, which mainly affect strategic sectors of the Russian economy by blocking access to technology and markets, and have announced the introduction of new ones. Currently, the Group has not identified any significant negative impact on its operations. In the first quarter of 2023, as in previous periods, the Group did not sell DataWalk software to customers and partners from Russia, Belarus or Ukraine. The Group does not have a supply chain that could potentially be exposed to the risks of interrupting the continuity of supplies, which could adversely affect the Group's operating capabilities. The Group also does not have any investments or 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. 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 infuence the possibility of implementing the Group's plans and its future financial results. Therefore, the Management Board of the Group monitors and analyzes the available information and takes steps to minimize the impact of the situation on its operations as the events unfold. MAJOR EVENTS THAT HAVE AN IMPACT ON THE DATAWALK GROUP'S RESULTS IN THE REPORTING PERIOD • 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 quarter 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 analysis 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 March 31, 2023 year is not threatened. The Group has a stable financial situation, monitors and analyses 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 3-month ended March 31, 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 | 37 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 analysis and their usage (Big Data), • Situation on the insurance market in Poland, • Increase in the scale and quality of activities aimed at counteracting money laundering and counteracting tax avoidance, • Automation of data set analysis processes, • Increasing user-friendliness of tools for analyzing data sets, • Growing number of new company registrations in Poland, • 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 | 38 COMPANY'S AUTHORITIES The Executive Board On March 31, 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 3-month period ended March 31, 2023, the DataWalk S.A. Executive Board was as follows: The Executive Board Period of performing the function Paweł Wieczyński 01/01/2023 – 03/31/2023 Krystian Piećko 01/01/2023 – 03/31/2023 Łukasz Socha 01/01/2023 – 03/31/2023 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. As a result of changes to the Commercial Companies Code, which came into effect on October 13, 2022, 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 | 39 The Supervisory Board On March 31, 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 3-month period ended March 31, 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 – 03/31/2023 Wojciech Dyszy 01/01/2023 – 03/31/2023 Roman Pudełko 01/01/2023 – 03/31/2023 Grzegorz Dymek 01/01/2023 – 03/31/2023 Ola Malm 01/01/2023 – 03/31/2023 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). As a result of changes to the Commercial Companies Code, which came into effect on October 13, 2022, 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 | 40 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: [email protected] 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 | 41 DataWalk Inc. Basic information about an entity related by capital with the Issuer as at 03/31/2023. 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: [email protected] www: www.datawalk.com Date of taking control: July 27, 2016 Value of shares: 45 588 thous. PLN Revaluation adjustments: -45 588 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 | 42 Overview of the DataWalk Capital Group DataWalk organizational structure of the Group as at March 31, 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 3-month period ended March 31, 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 | 43 THE SHAREHOLDING STRUCTURE OF THE DATAWALK S.A. Shareholder structure as at May 18, 2023 (share in the total number of votes) Source: Issuer. As at the date of approval of this report for publication, i.e. May 18, 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 | 44 Shareholder structure as at April 13, 2023 (share in the total number of votes) Source: Issuer. As at April 13, 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 | 45 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 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" and "Shareholder structure as at April 13, 2023". The table below presents ownership of shares DataWalk SA by managers and supervisors at April 13, 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 April 13, 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 | 46 DATAWALK S.A. STANDALONE CONDENSED INTERIM FINANCIAL STATEMENTS for the 3-month period ended 31 th March, 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 | 47 STANDALONE FINANC IAL STATEMEN T Standalone Statement of Financial Position (in thousands of PLN) ASSETS 03/31/2023 12/31/2022 A. Non-current assets 25 344 22 186 I. Fixed assets 400 455 II. Goodwill 0 0 III. Intangible assets 22 282 19 530 IV. Right-of-use assets 1 074 1 075 V. Investments in subsidiaries 151 152 VI. Long-term receivables 235 260 VII. Deferred tax assets 1 201 715 B. Current assets 48 475 64 053 I. Contract assets 571 641 II. Trade receivables 1 061 8 510 III. Income tax receivables 0 0 IV. Other receivables 2 138 1 472 V. Financial assets 0 0 VI. Prepayments 1 023 1 156 VII. Cash and cash equivalents 43 681 52 274 TOTAL ASSETS 73 819 86 239 EQUITY AND LIABILITIES 03/31/2023 12/31/2022 A. Equity 64 724 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 -13 983 -61 972 VI. Reserve capital 34 877 31 653 B. Long-term liabilities 610 712 I. Deferred tax liabilities 0 0 II. Lease liabilities 500 557 III. Incentive program liabilities 110 155 C. Short-term liabilities 8 485 10 044 I. Trade liabilities 3 131 4 223 II. Income tax liabilities 0 0 III. Lease liabilities 613 547 IV. Other liabilities 769 697 V. Other provisions 1 611 1 663 VI. Contract liabilities 2 361 2 914 TOTAL EQUITY AND LIABILITIES 73 819 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 | 48 NET ASSET VALUE PER SHARE 03/31/2023 12/31/2022 Net asset value 64 724 75 483 Number of shares (pcs.) 5 132 988 5 132 988 Net asset value per share (in PLN) 12,61 14,71 Diluted number of shares (pcs.) 5 395 934 5 365 406 Diluted net asset value per share (in PLN) 11,99 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 March 31, 2023 amounted to 5,395,934, including 262,946 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 | 49 Standalone Profit and Loss Account with The Statement of Comprehensive Income (in thousands of PLN) PROFIT AND LOSS ACCOUNT 01/01/2023 – 03/31/2023 01/01/2022 – 03/31/2022 Continuing operations A. Revenues 2 335 2 545 B. Operating costs 12 642 5 692 Materials and energy 85 202 Employee benefits 1 567 1 162 Employee benefits - Share-based Payment 3 179 0 Amortization and depreciation 1 132 635 External services 6 443 3 557 Other costs 238 135 C. Profit/Loss on sales -10 307 -3 146 Other operating income 259 68 Other operating costs 6 0 Loss (profit) from expected credit losses -267 1 D. Operating profit (loss) -9 787 -3 080 Financial income 593 337 Financial costs 5 275 4 318 E. Pre-tax profit (loss) -14 469 -7 060 Income tax -486 156 F. Net profit (loss) from continuing operations -13 983 -7 216 Discontinued operations Profit (loss) from discontinued operations 0 0 G. Net profit (loss) -13 983 -7 216 STATEMENT OF COMPREHENSIVE INCOME 01/01/2023 – 03/31/2023 01/01/2022 – 03/31/2022 Net profit (loss) -13 983 -7 216 Other comprehensive income 0 0 1. Items that will not be reclassified to profit or loss 0 0 2. Items that will be reclassified to profit or loss 0 0 Total comprehensive income -13 983 -7 216 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 PROFIT (LOSS) PER SHARE ATTRIBUTABLE TO: 01/01/2023 – 03/31/2023 01/01/2022 – 03/31/2022 Continuing operations Number of shares (pcs.) 5 132 988 4 886 048 Profit (loss) per share (in PLN) -2,72 -1,48 Diluted number of shares (pcs.) 5 395 934 4 975 047 Diluted profit (loss) per share (in PLN) -2,59 -1,45 Discontinued operations Number of shares (pcs.) 5 132 988 4 886 048 Profit (loss) per share (in PLN) 0 0 Diluted number of shares (pcs.) 5 395 934 4 975 047 Diluted profit (loss) per share (in PLN) 0 0 Continuing and discontinued operations Number of shares (pcs.) 5 132 988 4 886 048 Profit (loss) per share (in PLN) -2,72 -1,48 Diluted number of shares (pcs.) 5 395 934 4 975 047 Diluted profit (loss) per share (in PLN) -2,59 -1,45 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 quarter of 2023 was 5,132,988; for the first quarter of 2022, it was 4,886,048. The weighted average diluted number of shares of the Company in the first quarter of 2023 amounted to 5,395,934, including 262,946 shares under the incentive program. The weighted average diluted number of shares of the Company in the first quarter 2022 amounted to 4,975,047, including 88,999 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 | 51 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 3 224 -61 972 47 989 -10 759 Total comprehensive income 0 0 0 0 0 -13 983 -13 983 Net profit (loss) 0 0 0 0 0 -13 983 -13 983 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 3 224 0 0 3 224 Balance as at 03/31/2023 513 171 968 9 965 34 877 -138 616 -13 983 64 724 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 3 681 -7 216 Total comprehensive income 0 0 0 0 0 -7 216 -7 216 Net profit (loss) 0 0 0 0 0 -7 216 -7 216 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 03/31/2022 489 133 859 9 965 2 771 -76 644 -7 216 63 223 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 Cash Flow Statement (in thousands of PLN) CASH FLOW STATEMENT 01/01/2022 – 12/31/2022 01/01/2021 – 12/31/2021 Cash flows from operating activities Net profit (loss) -13 983 -7 216 Adjustments, including: - amortization and depreciation 1 132 635 - foreign exchange gains (losses) -6 5 - interest expenses 26 5 - income from interest and dividends -1 073 -5 - profit (loss) on investing activities -37 0 - impairment allowance for investments in subsidiaries 5 249 4 313 - share-based payment (equity-settled) 3 224 0 - share-based payment (cash-settled) -45 0 - change in receivables 6 783 -946 - change in provisions -53 101 - change in liabilities other than incentive program -1 020 886 - change in prepayments -328 -156 - change in contract assets and contract liabilities -484 -851 - other adjustments -802 0 Net cash generated (used) in operating activities -1 417 -3 230 Cash flows from investing activities Purchase of intangible assets 3 680 3 006 Purchase of property, plant and equipment 0 24 Proceeds from sale of property, plant and equipment 40 0 Purchase of subsidiaries shares, net of cash 4 447 0 Inflow from bank deposits (over 3 months) 0 0 Outflows from bank deposits (over 3 months) 0 90 Proceeds from governmental subsidies 0 0 Interest received 1 073 5 Net cash generated (used) in investing activities -7 015 -3 114 Cash flows from financing activities Proceeds from issue of share capital 0 0 Payment of finance lease liabilities 141 159 Interest paid 26 5 Other inflows 0 0 Net cash generated (used) in financing activities -167 -164 Total net cash flows -8 599 -6 508 Opening balance of cash 52 274 47 655 Change in cash due to foreign currency translation 6 -5 Change in cash balance, net -8 593 -6 513 Closing balance of cash 43 681 41 142 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 | 53 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 change 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. ……………………………………… ……………………………………… ……………………………………… Paweł Wieczyński Krystian Piećko Łukasz Socha Chairman of the Board Member of the Board Member of the Board Wroclaw, May 18, 2023 DataWalk S.A. Rzeznicza 32-33 50-130 Wroclaw tel.: +48 71 707 21 74 fax: +48 71 707 22 73 e-mail: [email protected] Investor Relations [email protected]

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Datawalk S.A. — Interim / Quarterly Report 2023

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