VIQ Solutions Inc. — Management Reports 2024

Mar 29, 2024

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VIQ Solutions Inc.

2023 Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Expressed in United States dollars)

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VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

The following Management’s Discussion and Analysis (“MD&A”) comments on the financial condition and results of operations of VIQ Solutions Inc. for the three months and year ended December 31, 2023. This MD&A should also be read in conjunction with our annual MD&A and audited financial statements for the years ended December 31, 2023, and 2022, which we prepared in accordance with IFRS and are available on SEDAR at www.sedar.com.

Certain information included herein is forward-looking and based upon assumptions and anticipated results that are subject to substantial risks and uncertainties. Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, actual results may vary significantly from those expected. See “Forward-Looking Statements” and “Risk Factors”. The information in this MD&A is provided as of March 28, 2024, unless otherwise indicated.

Unless the context otherwise requires, all references to “VIQ”, “Company”, “VIQ Solutions”, “our”, “us”, and “we” refer to VIQ Solutions Inc. and its subsidiaries.

All amounts herein are presented in United States dollars (“USD”), unless otherwise indicated.

Forward-Looking Statements

This MD&A contains forward-looking statements about our expected achievements, the recovery of the global economy, the timing of disclosure related to key performance indicators, the use of future cash and capital allocation, the remediation of material weaknesses in internal controls, the future adoption of technology, the future success of our business and technology strategies, performance, goals, and other future events. Management’s assessment of future plans and operations, cash flows, methods of financing and the ability to fund financial liabilities and the timing of and impact of adoption of IFRS and other accounting policies may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, the risks identified below.

Therefore, the Company’s actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information, but which may prove to be incorrect. Although the Company currently believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because such statements are subject to substantial risks and uncertainties. The Company can give no assurance that such expectations will prove to be correct.

In addition to other factors and assumptions which may be identified in this document and other documents filed by the Company, assumptions have been made regarding, among other things: the expected impact of increasing competition; the general stability of the economic and political environment in which the Company operates, including significant changes in demand from the Company’s clients as a result of the impact of a global economic crisis and capital markets weakness; the risk of potential non-performance by counterparties, including but not limited to, clients and suppliers, during uncertain economic conditions; the Company’s dependence on a limited number of clients; the Company’s dependence on industries affected by rapid technological change; the Company’s ability to successfully manage its operations internationally including in the United Kingdom, Australia and the United States; the challenge of managing its financial exposures to foreign currency fluctuations; the Company’s ability to obtain and retain qualified staff and services in a timely and costefficient manner; the Company’s ability to obtain financing on acceptable terms when needed, including anticipated sources of funding of working capital and financial losses which may include securing credit facilities, accessing new equity, corporate acquisitions or business combinations or joint venture arrangements; the ability to secure new contracts on terms acceptable to the Company; the ability to successfully develop new products; the Company’s ability to effectively register, for protection, its new and existing technologies and products in certain jurisdictions; the Company’s ability to protect new and existing products from proprietary infringement by third parties and its ability to effectively enforce such proprietary infringements; taxes in the jurisdictions in which the Company operates, including Canada, the United Kingdom, Australia and the United States; and the Company’s ability to successfully market its products. Readers are cautioned that the foregoing list of factors is not exhaustive.

The purpose of the forward-looking statements is to provide the reader with a description of management’s current expectations regarding the Company’s 2024 outlook and may not be appropriate for other purposes. Readers are encouraged

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VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

to read the section entitled “Risk Factors” in this MD&A and the section entitled “Risk Factors” in the Company’s Annual information form filed with the OSC for a broader discussion of the factors that could affect its future performance. Furthermore, the forward-looking statements contained in this document are made as at the date of this document and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Pro Forma Information

This MD&A also contains pro forma financial information, including with respect to annual recurring revenue (“ARR”) for the years ended December 31, 2023, and 2022. The Company believes the pro forma results presented provide relevant and useful information for investors because they clarify the Company's operating performance, make it easier to compare the Company's results with those of other companies and allow investors to review performance in the same way as the Company's management. Since these measures are not calculated in accordance with IFRS, they should not be considered in isolation of, or as a substitute for, our reported results as indicators of the Company's performance, and they may not be comparable to similarly named measurements from other companies. The Company disclaims any intention or obligation to update or revise any pro forma financial information contained in this MD&A, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the pro forma financial information contained in this MD&A should not be used for purposes other than for which it is disclosed herein.

Trademarks

This MD&A includes trademarks, such as “CapturePro”, “aiAssist” and “NetScribe”, which are protected under applicable intellectual property laws and are the property of VIQ. Solely for convenience, our trademarks referred to in this MD&A may appear without the ® or ™ symbol, but such references are not intended to indicate, in any way, that we will not assert our rights to these trademarks, trade names and services marks to the fullest extent under applicable law. Trademarks which may be used in this MD&A, other than those that belong to VIQ, are the property of their respective owners.

Non-IFRS Measures

The Company prepares its financial statements in accordance with IFRS. Non-IFRS measures are used by management to provide additional insight into our performance and financial condition. We believe non-IFRS measures are an important part of the financial reporting process and are useful in communicating information that complements and supplements the consolidated financial statements.

We use the following non-IFRS financial performance measures in our MD&A:

• Adjusted EBITDA

• EBITDA

• Annual Recurring Revenue

• Bookings

• Average Technology Services Revenue per Day

• Technology Services Cost of Sales per Minute of Audio

• Gross Margin for Technology Services

• Gross Margin for Technology and related revenue

For a detailed description of each of the non-IFRS measures and ratios used in this MD&A and a detailed reconciliation to the most directly comparable measure under IFRS, please refer to the “Key Operating Metrics – Non-IFRS Measures” section of this MD&A. The non-IFRS measures and ratios set out in this MD&A are intended to provide additional

MANAGEMENT DISCUSSION & ANALYSIS

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VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

information to investors and do not have any standardized meaning under IFRS, and therefore may not be comparable to other issuers, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Overview

VIQ Solutions is a leading provider of capture software and cloud-based transcription workflow automation solutions that assist government agencies and commercial enterprises to securely digitize information-intensive voice and video content.

Our technology, which delivers a seamless, proprietary workflow and documentation platform securely captures, transforms, distributes, and manages complex digital voice and video content for over 4,567 active clients in the criminal justice, legal, insurance, media, government, and financial services verticals. We have operations in the United States (U.S.), Canada, Australia, and Europe.

Our scalable technology utilizes Artificial Intelligence (“AI”) designed to ingest significant amounts of evidentiary content to produce accurate, verbatim, diarized transcripts for mission critical events that have lasting financial and social impacts. The Company’s proprietary AI models and supervised learnings are built and trained on large set of specialized industry and client specific content not publicly available to large language models.

Our technology solutions are proven to deliver productivity enhancements, which drive down our overall production costs and speed of delivery, leading to meaningful gross margin improvements. Our automated workflow has enabled profitable growth while improving the overall service levels, strengthening our AI learning, and bolstering our competitive advantage.

Revenue

The recurring nature of our revenue base is a key indication of performance. Most of our revenue is tied to major contracts and is expected to remain generally the same or increase in terms of the overall contribution to the Company. Also, these contracts are tied to government entities and multinational Fortune 500 companies that provide little credit risk and accordingly provide a reliable revenue stream.

Our revenue comes from transcription services, software-as-a-service (SaaS), software license fees, support and maintenance and other recurring fees, professional service fees, and hardware sales. Transcription service revenue consists of fees charged for editing documentation services provided to our clients. Technology service revenue consists of fees charged for automated transcription services. Software-as-a-service (SaaS) allows customers to use hosted software over a term without taking possession of the software and is provided on a subscription basis. Software license revenue is comprised of license fees charged for the use of our software products generally licensed under perpetual arrangements and to a lesser extent sale of third-party software licenses. These license sales are larger contracts with longer sales cycles and are more variable in nature. Support and maintenance and other recurring revenue primarily consist of fees charged for client support on our software products post-delivery. Professional service revenue consists of fees charged for customization, implementation, integration, training, and ongoing services associated with our software products and technology services. Hardware revenue includes the resale of third-party hardware that forms part of our client solutions. Occasionally, our clients may purchase a combination of software, maintenance, professional services, and hardware, although the type, mix and quantity vary by client to create a solution for the client’s unique requirements.

Cost of Sales

Cost of sales consists primarily of staff costs, independent contractors, professional services, the cost of hardware and thirdparty licenses to fulfill client arrangements.

Selling and Administrative Expenses

Selling and administrative expenses consist of personnel and related costs for our sales and marketing functions, including salaries and benefits, contract acquisition costs including commissions earned by sales personnel, direct marketing campaigns, public relations, and other promotional activities. Selling and administrative expenses also consist primarily of personnel and related costs associated with the administrative functions of our business including corporate, finance, and

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VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

internal information system support as well as legal, accounting, other professional fees, investor relations, occupancy costs and insurance.

We continue to invest globally in sales, marketing, and business development to continue to diversify across segments, industries and geographies building awareness of global brand to increase our future revenue growth opportunities.

Research and Development Expenses

Research and development expenses include personnel and related costs for ongoing research, development, and product management initiatives.

Business Overview of 2023

In 2023, we diligently focused on implementing cost-cutting measures and migrations and affirming our technology as the leader in capturing, creating and delivering evidentiary content. This focus firmly guided the Company’s direction.

To enable VIQ to strengthen its financial performance without compromising critical migrations, particularly in Australia and protecting revenue, we committed to a two-year plan starting at the beginning of 2022 to significantly reduce selling and administrative expenses. Also, we focused on price increases, where permitted, on certain long-term government contracts to rationalize global inflation and labor rates to pricing.

In 2023, the Company's selling and administrative expenses were $21.7 million, a decrease of $2.8 million compared to $24.5 million in selling and administrative expenses in 2022. We are on track to realize further reductions in selling and administrative expenses in 2024. Our reduction in selling and administrative expenses has been and will be done, while protecting key initiatives that lead to sustainable improvements in gross margin, scale and commercial viability.

The Company’s common shares were delisted from trading on Nasdaq on October 5, 2023 and remain listed on the TSX as its primary exchange. The Company expects to realize savings from not being a dual listed entity.

In 2023, we also completed significant work on the transcription workflow technology to launch Netscribe migrations for complex court clients in Australia (AU) and the United Kingdom (UK). As a result, we have seen that the completed migrations have improved efficiency and scale reducing our cost of sales and improving gross margins for clients who have successfully migrated in Australia and the UK. This has been demonstrated in our United States (US) acquisitions’ integration, consolidation, and efficiency gains. The requirements for complex courts required extensive development which delayed migrations in AU and the UK but was completed in late 2023.

In 2023, VIQ processed a total of 16.3 million minutes of recorded multi-speaker audio and video, and created approximately 8.7 million pages of evidentiary documentation used by over 4,500 customers worldwide. 34% of the total content was processed through the company's transcription workflow technology. By building a technology that is highly secure, highly reliable and easy to use, we created a unique offering in the non-medical space. Adding enhancements to improve court and legal documentation to the core platform not only accelerates the value internally to improve gross margin and customer value, it delivers a technology highly marketable to our segments of focus.

Our strong and diversified customer base includes some of the marquee names in industries where we service. We have long-standing relationships with our customers and have provided reliable services which optimally position us to deliver our technology to them as they can gain the same advantages from this technology that we have proven over the past 3 years.

Q4 2023 demonstrated an improving trend in the return of our US insurance and criminal justice sectors that have been impacted by post-covid norms. This has contributed to a 2% revenue increase for Q4 2023 compared to Q4 2022.

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VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

As we look to 2024, we will remain highly focused on achieving the cost reduction savings as well as completing the remaining Netscribe migrations in Australia by the end of Q2 2024. This provides the foundation to accelerate our growth in technology in the second half of 2024 and strengthen our financial performance.

Key Operating Highlights during the three months and year ended December 31, 2023

• Total revenue for the three months ended December 31, 2023, was $10,349,733, An increase of $168,153 or 2% from $10,181,580 recognized in the comparative period in 2022. The increase is primarily due higher transcription volumes from Australia and United Kingdom. Excluding the Queensland contract and impact of foreign exchange, we would have reported positive quarter-to-date revenue growth over comparative period 2022 of 3%. Total revenue for the year ended December 31, 2023, was $41,024,024, a decrease of $4,819,905 or 11% from $45,843,929 recognized in the comparative period in 2022. Excluding the Queensland contract and impact of foreign exchange, we would have reported positive year-to-date revenue growth over comparative period 2022 of 2%.

• Gross profit for the three months ended December 31, 2023, was $4,717,150 representing 45.6% of revenue versus 46.8% of revenue in the comparative period in 2022. The decrease in gross profit % of 1.2% was mainly attributed to the expected contractual change in the Queensland contract. Excluding the Queensland contract impact, gross margin % would have been approximately the same for the three months ended December 31, 2023, and December 31, 2022. Gross profit for the year ended December 31, 2023, was $18,112,072 representing 44.1% of revenue versus 47.8% of revenue in the comparative period in 2022. Excluding the Queensland contract impact and foreign exchange, gross profit % would have been lower by 0.9% vs. 3.7% reported.

• Net loss for the three months ended December 31, 2023, was $2,934,336, an increase of $766,314, or 35% from a net loss of $2,168,022 recognized in the comparative period in 2022. Net loss for the year ended December 31, 2023, was $14,331,196, an increase of $5,625,181 or 65% from a net loss of $8,706,015 recognized in the comparative period in 2022. The increase in net loss for the three months ended December 31, 2023, was mainly attributed to $549,646 loss on modification of debt and increase in current income tax expense of $245,768. The increase in net loss for the year ended December 31, 2023, was mainly attributed to $3,871,589 lower gain on revaluation of derivative warrant liability and no gain on revaluation of stock options being recorded for the year ended December 31, 2023 versus $1,511,399 being recorded for the year ended December 31, 2022.

• Adjusted EBITDA[[3]] ~~,~~ for the three months ended December 31, 2023, was a deficit of $655,138, a decrease in Adjusted EBITDA deficit of $541,156, from an Adjusted EBITDA deficit of $1,196,294 recognized in the comparative period in 2022. Adjusted EBITD ~~A~~[[3]] ~~,~~ for the year ended December 31, 2023, was a deficit of $4,032,853, an increase of $618,067 in Adjusted EBITDA deficit, from an Adjusted EBITDA deficit of $3,414,786 recognized in the comparative period in 2022. The decrease in Adjusted EBITDA deficit for the three months ended December 31, 2023 was mainly due to reduced selling and administrative expenses primarily due to lower insurance premiums, reduction in IT related costs as a result of system integrations, lower professional service fees and lower headcount related costs due to organizational restructuring. The increase in Adjusted EBITDA deficit for year ended December 31, 2023 versus comparative period 2022 was due to decreased gross profit. The increase in Adjusted EBITDA deficit was partially offset by reduced selling and administrative expenses primarily due to lower insurance premiums, reduction in IT related costs as a result of system integrations, lower professional service fees and lower headcount related costs due to organizational restructuring.

[1] Annual Recurring Revenue is a non-IFRS measure. Please refer to the section entitled “Non-IFRS Measures.”

[2] Bookings is a non-IFRS measure. Please refer to the section entitled “Non-IFRS Measures.”

[3] Adjusted EBITDA is earnings before stock-based compensation, depreciation, amortization, interest expense, accretion and other financing costs, loss on extinguishment of debt, loss on modification of debt, gain on revaluation of options, RSUs, and derivative warrant liability, restructuring costs, impairment of property and equipment, impairment of intangibles assets, business acquisition costs, other income, foreign exchange loss, and current and deferred income tax expense (recovery), is a non-IFRS measure. Please refer to the section entitled “Non-IFRS Measures.”

MANAGEMENT DISCUSSION & ANALYSIS

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VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

Results of Operations

Key financial performance indicators that we use to manage our business and evaluate our financial results and operating performance include revenue, expenses, net income (loss) and Adjusted EBITDA. We evaluate our performance on these metrics by comparing our actual results to management budgets, forecasts, and prior period performance.

The following table sets forth a summary of our results of operations for the three months and year ended December 31, 2023, and 2022: Unaudited

Revenue Cost of sales Gross profit Gross profit % Expenses Selling and administrative expenses Research and development expenses Loss (Gain) on contingent consideration Stock-based compensation Depreciation Amortization Interest expense Accretion and other financing costs Loss on extinguishment of debt Loss on modification of debt Gain on revaluation of options Gain on revaluation of RSUs Loss (Gain) on revaluation of the derivative warrant liability Restructuring Costs Impairment of property and equipment Impairment of intangible assets Business acquisition costs Other income Foreign exchange (gain) loss Loss before income taxes Current income tax recovery (expense) Deferred income tax recovery (expense) Income tax recovery (expense) Net Loss Adjusted EBITDA (3) Weighted average number of common shares outstanding Basic Diluted Net income (loss) per share Basic Diluted	Three months ended December 31 Period over Period Change Year ended December 31 Period over Period Change
	2023 2022 $ % 2023 2022 $ %
	10,349,733 10,181,580 168,153 2 41,024,024 45,843,929 (4,819,905) (11) 5,632,583 5,416,313 216,270 4 22,911,952 23,918,226 (1,006,274) (4)
	4,717,150 4,765,267 (48,117) (1) 18,112,072 21,925,703 (3,813,631) (17)
	45.6% 46.8% 44.1% 47.8% 5,475,908 5,897,545 (421,637) (7) 21,738,200 24,526,303 (2,788,103) (11) 158,855 91,824 67,031 73 679,589 734,115 (54,526) (7) - (27,808) 27,808 100 (10,389) 80,071 (90,460) (113) 62,470 605,343 (542,873) (90) 955,571 2,779,312 (1,823,741) (66) 175,794 146,766 29,028 20 795,104 579,249 215,855 37 1,075,210 2,289,819 (1,214,609) (53) 4,553,255 5,508,954 (955,699) (17) 361,605 236,885 124,720 53 1,358,579 1,052,618 305,961 29 325,181 475,598 (150,417) (32) 1,472,400 1,231,194 241,206 20 - - - - - 747,865 (747,865) (100) 549,646 - 549,646 100 549,646 - 549,646 100 - (447,737) 447,737 100 - (1,511,399) 1,511,399 100 (27,620) (104,578) 76,958 74 (197,711) (550,260) 352,549 64 25,172 (730,491) 755,663 103 (383,428) (4,255,017) 3,871,589 91 (127,593) 19,385 (146,978) (758) 403,870 323,075 80,795 25 - 15,246 (15,246) (100) - 15,246 (15,246) (100) - - - - 157,464 - 157,464 100 - 14,516 (14,516) (100) - 433,372 (433,372) (100) (4,810) (392) (4,418) (1,127) (26,248) (1,291) (24,957) (1,933) (123,045) (1,049,277) 926,232 88 566,530 (452,068) 1,018,598 225
	(3,209,623) (2,667,377) (542,246) (20) (14,500,360) (9,315,637) (5,184,723) (56)
	(65,697) 180,071 (245,768) (136) (33,596) 105,256 (138,852) (132) 340,984 319,284 21,700 7 202,760 504,365 (301,605) (60)
	275,287 499,355 (224,068) (45) 169,164 609,621 (440,457) (72)
	(2,934,336) (2,168,022) (766,314) (35) (14,331,196) (8,706,015) (5,625,181) (65) (655,138) (1,196,294) 541,156 45 (4,032,853) (3,414,786) (618,067) (18) 40,882,770 34,003,334 37,289,689 31,648,001 40,882,770 34,003,334 37,289,689 31,648,001 (0.07) (0.06) (0.38) (0.28) (0.07) (0.06) (0.38) (0.28)

3 Adjusted EBITDA is earnings before stock-based compensation, depreciation, amortization, interest expense, accretion and other financing costs, loss on extinguishment of debt, loss on modification of debt, gain on revaluation of options, RSUs, and derivative warrant liability, restructuring costs, impairment of property and equipment, impairment of intangibles assets, business acquisition costs, other income, foreign exchange loss, and current and deferred income tax expense (recovery), is a non-IFRS measure. Please refer to the section entitled “Non-IFRS Measures.”

MANAGEMENT DISCUSSION & ANALYSIS

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VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

Comparison of the three months and year ended December 31, 2023, and 2022

Revenue

Total revenue for the three months ended December 31, 2023, was $10,349,733, an increase of $168,153, or 2%, from $10,181,580 recognized in the comparative period in 2022. The increase in revenue for the three months ended December 31, 2023, was primarily due to higher transcription volumes from Australia and United Kingdom. Excluding the Queensland contract and impact of foreign exchange, we would have reported positive quarter to date revenue growth over comparative period 2022 of 3%

Total revenue for the year ended December 31, 2023, was $41,024,024, a decrease of $4,819,905, or 11%, from $45,843,929 recognized in the comparative period in 2022. The decrease is primarily attributed to the expected change in the Queensland contract, where in comparative period 2022 we had 100% of the volumes versus approximately 50% starting October 2022 where the contract is now shared with another transcription service provider, as disclosed in Q4 2022 MD&A. For the year ended December 31, 2023, revenue was impacted negatively by approximately $1M due to the weakening Australian dollar and UK pound sterling in comparison to the USD. Excluding the Queensland contract and impact of foreign exchange, we would have reported positive year-to-date revenue growth over comparative period 2022 of 2%.

Cost of Sales

Cost of Sales for the three months ended December 31, 2023, increased by $216,270, or 4%, to $5,632,583, from $5,416,313 for the comparative period in 2022. The increase Cost of Sales for the three months ended December 31, 2023, is primarily due to higher transcription volume in UK and Australia than comparative period 2022.

Cost of Sales for the year ended December 31, 2023, decreased by $1,006,274, or 4%, to $22,911,952, from $23,918,226 for the comparative period in 2022. The decrease in Cost of Sales for the year ended December 31, 2023, is primarily due to lower transaction volume than comparative period 2022. Cost of Sales for the year ended December 31, 2023, was impacted positively by approximately $0.7M due to weakening Australian and UK currencies in comparison to the USD.

During the year ended December 31, 2022, the Company received and recorded $129,247 of COVID-19 wage subsidies compared to nil in 2023.

Gross Profit

Gross Profit for the three months ended December 31, 2023, decreased by $48,117 or 1%, to $4,717,150, from $4,765,267, for the comparative period in 2022. Gross Profit for the three months ended December 31, 2023, represented 45.6% of revenue versus 46.8% of revenue in the comparative period in 2022. The decrease in gross profit % mainly attributed to the expected contractual change in the Queensland contract. Excluding the Queensland contract impact, gross margin % would have been the similar for the three months ended December 31, 2023 and December 31, 2022.

Gross Profit for the year ended December 31, 2023, decreased by $3,813,631 or 17%, to $18,112,072, from $21,925,703, for the comparative period in 2022. Gross Profit for the year ended December 31, 2023, represented 44.1% of revenue versus 47.8% of revenue in the comparative period in 2022. The decrease in Gross Profit for the year ended December 31, 2023, is primarily due to lower revenue than comparative period 2022 which is mainly attributed to the Queensland contract change. In addition, the comparative period 2022 includes $129,247 in COVID-19 wage subsidies compared to nil in the year ended December 31, 2023. Excluding the Queensland contract impact and foreign exchange, gross profit margin % would have been lower by 0.9% vs. 3.7% reported.

Selling and Administrative Expenses

Selling and Administrative Expenses for the three months ended December 31, 2023, decreased by $421,637, or 7%, to $5,475,908, from $5,897,545, for the comparative period in 2022. The decrease for the three months ended December 31, 2023, is primarily due to a decrease in headcount related costs due to organizational restructuring, lower professional service

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VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

fees and reduction in IT related costs as a result of system integrations.

Selling and Administrative Expenses for the year ended December 31, 2023, decreased by $2,788,103, or 11%, to $21,738,200 from $24,526,303, for the comparative period in 2022. The decrease for the year ended December 31, 2023, is primarily due to a decrease in headcount related costs due to organizational restructuring, lower insurance premiums, lower professional fees and reduction in IT related costs as a result of system integrations.

Research and Development Expenses

Research and Development Expenses for the three months ended December 31, 2023, increased by $67,031, or 73%, to $158,855, from $91,824, for the comparative period in 2022. The increase in Research and Development Expenses for the three months ended December 31, 2023, is primarily due to higher project costs than the comparative period in 2022.

Research and Development Expenses for the year ended December 31, 2023, decreased by $54,526, or 7%, to $679,589, from $734,115, for the comparative period in 2022. The decrease in Research and Development Expenses for the year ended December 31, 2023, is primarily due to a reduction of projects and R&D related headcount in 2023 due to cost saving initiatives.

Loss (Gain) on Contingent Consideration

For the three months ended December 31, 2023, Contingent Consideration was nil compared to a gain of $27,808 recognized in the comparative period in 2022. The earnout period ended in Q223 resulting in no adjustment being required in Q4 2023.

For the year ended December 31, 2023, Contingent Consideration changed by $90,460, from a loss of $80,071 recognized in the comparative period in 2022 to a gain of $10,389. The change for the year ended December 31, 2023, is mainly due to changes in anticipated acquisition earnout payments primarily as a result of revised forecasted revenue for the wordZXpressed, Inc. (“WordZ”) acquisition.

Stock-Based Compensation

For the three months ended December 31, 2023, Stock-based Compensation decreased by $542,873 to $62,470 from $605,343, recognized in the same period of 2022. The decrease is due lower fair value of RSUs issued in 2023 versus 2022 due to decline in stock price. There were no options or RSUs granted during the three months ended December 31, 2023.

For the year ended December 31, 2023, Stock-based Compensation decreased by $1,823,741 to $955,571 from $2,779,312, recognized in the same period of 2022. The decrease in Stock-based Compensation is due to lower fair value of options and RSUs granted during 2023 compared to 2022 as a results of lower share price. Included in the Stock-based Compensation during the year ended December 31, 2023, was approximately $150,000 of accelerated expense due to the voluntary cancellation of options by certain employees and directors.

Depreciation

For the three months ended December 31, 2023, Depreciation increased by $29,028, to $175,794 from $146,766 recognized in the comparative period in 2022. For the year ended December 31, 2023, Depreciation increased by $215,855, to $795,104 from $579,249 recognized in the comparative period in 2022. The increase in depreciation for the three months and year ended December 31, 2023, is due primarily to the addition of property and equipment purchased in 2022.

Amortization

For the three months ended December 31, 2023, Amortization decreased by $1,214,609, to $1,075,210, from $2,289,819 recognized in the comparative period in 2022. The decrease in amortization for the three months ended December 31, 2023, is mainly attributable to lower amortization of intangible assets than comparative period 2022 due to accelerated amortization of intangible brand assets in 2022 which were no longer in use.

For the year ended December 31, 2023, Amortization decreased by $955,699, to $4,553,255, from $5,508,954 recognized

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VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and

Results of Operations for 2023

in the comparative period in 2022. The decrease in amortization for the year ended December 31, 2023, is mainly attributable to lower amortization of intangible assets than comparative period 2022 due to accelerated amortization of intangible brand assets in 2022 which were no longer in use.

Interest Expense

For the three months ended December 31, 2023, Interest Expense increased by $124,720, to $361,605, from $236,885 recognized in the comparative period in 2022. The increase in Interest Expense for the three months ended December 31, 2023, is primarily due to higher debt outstanding and at higher interest rate paid on the Company’s secured debt facility.

For the year ended December 31, 2023, Interest Expense increased by $305,961, to $1,358,579, from $1,052,618 recognized in the comparative period in 2022. The higher Interest Expense for the year ended December 31, 2023, is primarily due to higher debt outstanding and at a higher interest rate paid on the Company’s secured debt facility.

Accretion and Other Financing Costs

For the three months ended December 31, 2023, Accretion and Other Financing Costs decreased by $150,417, to $325,181, from $475,598 recognized in the comparative period in 2022. The decrease in Accretion and Other Financing Costs for the three months ended December 31, 2023, is due to debt amendment fees paid in Q4 2022 relating to the previous debt facility. For the year ended December 31, 2023, Accretion and Other Financing Costs increased by $241,206, to $1,472,400, from $1,231,194 recognized in the comparative period in 2022. The increase in Accretion and Other Financing Costs for the year ended December 31, 2023, is due to the refinancing of secured debt facility which resulted in higher financing costs in comparison to the previous debt facility.

Loss on Extinguishment of Debt

Loss on extinguishment of debt in comparative period 2022 relates to amendment to the Company’s previous debt facility.

Loss on Modification of Debt

Loss on modification of debt of $549,646 for the three months and year ended December 31, 2023 relates to a loss recorded due to amendment of the Beedie Investment Ltd. (“Beedie”) loan agreement on November 10, 2023 which increased the paid-in kind interest and an amendment fee. The terms of original Beedie loan agreement were substantially modified resulting in a loss on modification of debt.

Gain on Revaluation of Options

For the year ended December 31, 2023, Gain on Revaluation of Options was nil. The decrease is due to the forfeiture of options that were cash-settled options which resulted in no gain on revaluation of options being required for the current period.

Gain on Revaluation of RSUs

For the three months ended December 31, 2023, Gain on Revaluation of RSUs decreased by $76,958 to $27,620, from $104,578 recognized in the comparative period in 2022. The smaller gain on revaluation of RSUs is due to a lower percentage drop on the Company’s stock price compared to the comparable period.

For the year ended December 31, 2023, Gain on Revaluation of RSUs decreased by $352,549 to $197,711, from $550,260 recognized in the comparative period in 2022. The smaller gain on revaluation of RSUs is due to a lower percentage drop on the Company’s stock price compared to the comparable period.

MANAGEMENT DISCUSSION & ANALYSIS

PAGE 9

VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

Loss (Gain) on Revaluation of Derivative Warrant Liability

For the three months ended December 31, 2023, Revaluation of Derivative Warrant Liability was a loss of $25,172 compared to a gain of $730,491 for the three months ended December 31, 2022, was due to a lower percentage decline in share price in comparison to the drop in the Company’s share price for the three months ended December 31, 2023.

Revaluation of Derivative Warrant Liability was a gain of $383,428 for the year ended December 31, 2023, compared to a gain of $4,255,017 for the year ended December 31, 2022. The lower gain for the year ended December 31, 2023, was due to a lower percentage decline in share price during the period.

Restructuring Costs

For the three months ended December 31, 2023, Restructuring Costs decreased by $146,978, to negative $127,593, from $19,385 recognized in the comparative period in 2022. The decrease in Restructuring Costs for the three months ended December 31, 2023, is due to reversal of prior period provision for severance for certain individuals that were to be terminated however were subsequently retained due to resignation of other individuals or resigned on their own which resulted in elimination of the severance liability.

For the year ended December 31, 2023, Restructuring Costs increased by $80,795, to $403,870, from $323,075 recognized in the comparative period in 2022. The increase in Restructuring Costs for the year ended December 31, 2023, is due to a more significant restructuring plan to optimize the Company’s workforce in 2023 in comparison to 2022.

Impairment of Property and Equipment

For the three months and year ended December 31, 2023, Impairment of Property and Equipment decreased by $15,246, to nil, from $15,246 recognized in the comparative period in 2022. There were no indications of impairment, as the carrying amounts of the assets did not exceed their recoverable amounts throughout the 2023 year.

Impairment of Intangible Assets

For the year ended December 31, 2023, Impairment of Intangible Assets increased by $157,464 from nil recognized in the comparative period in 2022. Impairment of Intangibles recognized due to write-off of capitalized development costs related to a project that has been discontinued in order to focus resources on other development projects such as NetScribe for Australia court customers and certain costs relating to a project that was determined to have no future value.

Business Acquisition Costs

For the three months ended December 31, 2023, Business Acquisition costs decreased by $14,516, to nil from $14,516 recognized in the comparative period in 2022.

For the year ended December 31, 2023, Business Acquisition costs decreased by $433,372, to nil from $433,372 recognized in the comparative period in 2022.

The Business Acquisition Costs for the year ended December 31, 2022, related to the Company’s acquisition of Auscript.

Other Income

For the three months ended December 31, 2023, Other Income increased by $4,418, to $4,810, from $392 recognized in the comparative period in 2022.

For the year ended December 31, 2023, Other Income increased by $24,957, to $26,248, from $1,291 recognized in the comparative period in 2022.

The increase in Other Income for the three months and year ended December 31, 2023, is due to higher interest earned on term deposits.

MANAGEMENT DISCUSSION & ANALYSIS

PAGE 10

VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

Foreign Exchange (Gain) Loss

Foreign exchange gain and losses are primarily related to the unrealized foreign translation gains and losses of certain US Dollar “USD”, Australia Dollar “AUD” and British Pound Sterling “GBP” denominated working capital balances to Canadian Dollar “CAD” and USD denominated working capital balances to AUD. For the three months ended December 31, 2023, Foreign Exchange Gain decreased by $926,232, to $123,045, from a gain of $1,049,277 recognized in the comparative period in 2022. The gain/loss on foreign exchange is due to fluctuations in the foreign exchange rates.

For the year ended December 31, 2023, Foreign Exchange Gain decreased by $1,018,598, to a loss of $566,530, from a gain of $452,068 recognized in the comparative period in 2022. The gain/loss on foreign exchange is due to fluctuations in the foreign exchange rates.

Our businesses are organized geographically so many of our expenses are incurred in the same currency as our revenues, which mitigates some of our exposure to currency fluctuations.

Income Tax Recovery (Expense)

We operate globally and we calculate our tax provision in each of the jurisdictions in which we conduct business. Our effective tax rate on a consolidated basis is, therefore, affected by the realization and anticipated relative profitability of our operations in those various jurisdictions, as well as different tax rates that apply and our ability to utilize tax losses and other credits. For the three months ended December 31, 2023, Income Tax Recovery decreased by $224,068 to a tax recovery of $275,287, from a tax recovery of $499,355 in the comparative period in 2022. The decrease for the three months ended December 31, 2023, is due to reversal of deferred tax liabilities.

For year ended December 31, 2023, Income Tax Recovery decreased by $440,457 to a tax recovery of $169,164, from a tax recovery of $609,621 in the comparative period in 2022. The decrease for the year ended December 31, 2023, is due to the valuation allowance for deferred tax assets relating to tax losses for our Australian subsidiaries.

Net Loss and Earnings Per Share

Net loss for the three months ended December 31, 2023, was $2,934,336 compared to net loss of $2,168,022, for the same period in 2022. On a per weighted average share basis, this translated into a net loss per weighted average per share of $0.07 in the three months ended December 31, 2023, compared to a net loss per weighted average share of $0.06 for the comparative period in 2022.

Net loss for the year ended December 31, 2023, was $14,331,196 compared to net loss of $8,706,015, for the same period in 2022. On a per weighted average share basis, this translated into a net loss weighted average per share of $0.38 in the year ended December 31, 2023, compared to a net loss per weighted average share of $0.28 for the comparative period in 2022.

MANAGEMENT DISCUSSION & ANALYSIS

PAGE 11

VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

Quarterly Results of Operations

The following table sets out selected financial information for each of the eight most recent quarters, the latest of which ended December 31, 2023. Our quarterly operating results have historically fluctuated significantly and may continue to fluctuate significantly in the future. Therefore, we believe that past operating results and period to period comparisons should not be relied upon as an indication of the Company’s future performance.

				(unaudited)	(unaudited)
	Dec-23	Sep-23	Jun-23	Mar-23	Dec-22	Sep-22	Jun-22	Mar-22
Revenue	10,349,733	10,102,827	10,518,893	10,052,571	10,181,580	11,785,713	12,351,655	11,524,981
Net Loss	(2,934,336)	(4,379,016)	(3,558,163)	(3,498,534)	(2,168,022)	(1,329,940)	(3,198,138)	(2,009,916)
Weighted average number of shares		outstanding:
Basic	40,882,770	38,804,967	34,804,004	34,649,697	34,003,334	32,749,800	28,653,056	29,881,717
Diluted	40,882,770	38,804,967	34,804,004	34,649,697	34,003,334	32,749,800	28,653,056	29,881,717
Net Loss per share:
Basic	(0.07)	(0.11)	(0.10)	(0.10)	(0.06)	(0.04)	(0.11)	(0.07)
Diluted	(0.07)	(0.11)	(0.10)	(0.10)	(0.06)	(0.04)	(0.11)	(0.07)

Key factors that account for the fluctuation in quarterly results include the variability in the Company’s revenue due to timing of acquisitions and seasonality of revenue. Seasonality impacts the transcription services industry in some cases by summer holiday seasons, such as court closings in January in Australia, and the Thanksgiving and December holidays in the U.S., Canada, and the UK. It also has a slight impact in the U.S. summer period. Our quarterly results may also fluctuate as a result of the various acquisitions which may be completed by the Company in any given quarter. We may experience variations in our net income(loss) on a quarterly basis depending upon the timing of certain expenses or gains, which may include changes in provisions and acquired contract liabilities.

Key Operating Metrics – Non-IFRS Measures

ARR

The ARR has decreased to $40.3M from $42.7M reported in the prior year. The decrease in ARR is primarily due to changes to the Queensland contracts which was migrated to a new contract as of October 10, 2022, and was negatively impacted by the weakening Australian dollar.

Measure Definition ARR: is the annualized equivalent value of the (i) software support maintenance, (ii) software subscription (iii) SaaS and (iv) technology services revenue of all existing contracts as of the date being measured. This excludes non-recurring revenue from implementation, support, and maintenance fees. The majority of our editing services contracts are volume based. Accordingly, our calculation of ARR assumes that the clients will renew the contractual commitments on a periodic basis as those commitments come up for renewal. A portion of the contract renewals are through a competitive tender process. Contracts may be subject to contract value increases upon renewal reflecting both inflationary increases and the additional value and added products and services provided by our solutions. ARR is not adjusted for the impact of any projected future client cancellations, loss of renewals, service upgrades or downgrades or price increases or decreases.

The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate its operating performance. We believe ARR is useful supplemental information as it provides a

MANAGEMENT DISCUSSION & ANALYSIS

PAGE 12

VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and

Results of Operations for 2023

measure of our revenue trend and an indicator of our future revenue opportunity from existing recurring client contracts. Accordingly, we believe that this measure may also be useful to investors in enhancing their understanding of the Company’s operating performance.

This measure provides a fair real-time measure of the performance in a volume and subscription-based environment. ARR provides us with the visibility for consistent and predictable growth to our cash flows. Our total revenue, ARR and bookings allow us to look at the strength of the expansion of our business on a go forward basis.

At December 31, 2023 – Reconciliation of 2023 Technology Services, Support and Maintenance, SaaS, and Subscription revenues to ARR

Technology Services Support & Maintenance SaaS Subscription Add: Client Adjustments	2023
	37,143,942 1,794,189 182,378 658,035 530,983
Total Annual Recurring Revenue	$ 40,309,527

At December 31, 2022 – Reconciliation of 2023 Technology Services, Support and Maintenance, SaaS, and Subscription revenues to ARR

Technology Services Support & Maintenance SaaS Subscription Add: Client Adjustments	2022
	41,812,479 1,872,620 89,692 493,845 (1,532,468)
Total Annual Recurring Revenue	$ 42,736,168

Adjusted EBITDA

Measure Definition:

To evaluate the Company’s operating performance as a complement to results provided in accordance with IFRS, the term “Adjusted EBITDA”, as defined by management, refers to net income (loss) before stock-based compensation, depreciation, amortization, interest expense, accretion and other financing costs, loss on extinguishment of debt, gain on revaluation of options, gain on revaluation of RSUs, gain on revaluation of derivative warrant liability, restructuring costs, impairment of intangibles, business acquisition costs, other expense (income), foreign exchange (gain) loss, current and deferred income tax expense (recovery). We believe that the items excluded from Adjusted EBITDA are not connected to and do not represent the recurring operating performance of the Company. “EBITDA” is a non-IFRS financial measure and is not a standardized financial measure under the financial reporting framework used to prepare the financial statements of the Company and accordingly might not be comparable to similar financial measures disclosed by other issuers. To evaluate the Company’s operating performance as a complement to results provided in accordance with IFRS, the term “EBITDA”, as defined by management, refers to earnings before depreciation, amortization, interest expense, current and deferred income tax expense (recovery).

The Corporation believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate its operating performance. We believe that Adjusted EBITDA is useful supplemental information as it provides an indication of the results generated by the Company’s main business activities prior to taking into consideration how those activities are financed, taxed and expenses related to stock-based compensation, depreciation,

MANAGEMENT DISCUSSION & ANALYSIS

PAGE 13

VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

amortization, restructuring costs, acquisition, other expense (income), and foreign exchange (gain) loss. Accordingly, we believe that this measure may also be useful to investors in enhancing their understanding of the Company’s operating performance.

The data presented is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Investors are cautioned that Adjusted EBITDA should not be construed as an alternative to net income (loss) as determined in accordance with IFRS. These non-IFRS measures should be read in conjunction with the financial statements of the Company.

The following is a reconciliation of Net Loss the most directly comparable IFRS measure to Adjusted EBITDA, for the three months and year ended December 31, 2023, and 2022:

(Unaudited) Net Loss Add: Depreciation Amortization Interest expense Current income tax (recovery) expense Deferred income tax recovery EBITDA Accretion and other financing costs Loss on extinguishment of debt Loss on modification of debt Gain on revaluation of options Gain on revaluation of RSUs Loss (Gain) on revaluation of the derivative warrant liability Impairment of property and equipment Impairment of intangible assets Restructuring Costs Business acquisition costs Other Expense (Income) Stock-based compensation Foreign exchange (gain) loss Adjusted EBITDA	Three months ended December 31 2023 2022 (2,934,336) (2,168,022) 175,794 146,766 1,075,210 2,289,819 361,605 236,885 65,697 (180,071) (340,984) (319,284) (1,597,014) 6,093 325,181 475,598 - - 549,646 - - (447,737) (27,620) (104,578) 25,172 (730,491) - 15,246 - - (127,593) 19,385 - 14,516 257,665 (392) 62,470 605,343 (123,045) (1,049,277) (655,138) (1,196,294)	Year ended December 31
		2023 2022
		(14,331,196) (8,706,015) 795,104 579,249 4,553,255 5,508,954 1,358,579 1,052,618 33,596 (105,256) (202,760) (504,365)
		(7,793,422) (2,174,815)
		1,472,400 1,231,194 - 747,865 549,646 - - (1,511,399) (197,711) (550,260) (383,428) (4,255,017) - 15,246 157,464 - 403,870 323,075 - 433,372 236,227 (1,291) 955,571 2,779,312 566,530 (452,068)
		(4,032,853) (3,414,786)

Bookings

Measure Definition: We calculate “Bookings” for a given period as the estimated contract value (for services tied to volume) of our recurring client contracts entered into during the period from (i) new clients and (ii) net upgrades by existing clients within the same workload, plus the actual (not annualized) estimated value of professional services consulting, advisory or project-based orders received, software licenses, subscriptions, SaaS, and hardware during the period.

Recurring client contracts are any contracts entered into on a multi-year or month-to-month basis, but excluding any professional services contracts for consulting, advisory or project-based work, software license and hardware.

MANAGEMENT DISCUSSION & ANALYSIS

PAGE 14

VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

We use Bookings to measure the amount of new business generated in a period, which we believe is an important indicator of new client acquisition and our ability to cross-sell new services to existing clients. Bookings are also used by management as a factor in determining performance-based compensation for our sales force. While we believe Bookings, in combination with other metrics, are an indicator of our near-term future revenue opportunity, it is not intended to be used as a projection of future revenue. Booking information is a non-IFRS measure, which involves judgments, estimates and assumptions, which does not have a standard industry definition. Our calculation of Bookings may differ from similarly titled metrics presented by other companies.

While we continue to acquire new clients, we also aim to deepen relationships with these clients through high-margin technology services and software bookings. In addition, we are investing in initiatives to drive sales productivity improvements.

(unaudited)

improvements. (unaudited)
	2023	2022
Bookings	$6,299,921	$7,742,112
(unaudited)
	Q4 2023	Q4 2022	Q3 2023
Bookings	$1,026,957	$608,245	$932,183

As our business continues to recover, Q4 2023 Bookings remain strong, and a greater percentage of our Bookings are now tied to technology only sales. Bookings in 2023 was lower than 2022 due to large insurance sales booked at the end of 2022.

Average Technology Services Revenue per Day

Measure Definition: Average Technology Service Revenue per Day is calculated by region based on the total technology services revenue divided by the total billing days during the period. This number is highly impacted by seasonality and should be looked at for monthly trends. As an example, average revenue per day will likely drop in November and December in the US and December and January in Australia and the UK. The billing days represents billing days excluding statutory holidays and court closures in Australia and the UK.

holidays and court closures in Australia and the UK.
(unaudited)
U.S.	Q4 2023	Q4 2022	Q3 2023
Technology Services Revenue	$3,697,603	$3,779,778	$3,958,749
Number of Billing Days	62	62	63
Average Technology Services Revenue per Day	$59,639	$60,964	$62,837

Q4 2023 Average Technology Services Revenue per Day in the U.S. were from Criminal Justice and Insurance when compared to Q4 2022 due to lower volumes but recovery in those segments also began to improve during Q4 2023. Q4 2023 compared to Q3 2023 was lower due to the impact of seasonally between the two quarters.

(unaudited)
Australia	Q4 2023	Q4 2022	Q3 2023
Technology Services Revenue	$5,285,296	$5,097,095	$4,905,102
Average Number of Billing Days	55.1	55.9	60.2
Average Technology Services Revenue per Day	$95,922	$91,182	$81,480

Q4 2023 Australia Average Technology Services Revenue per Day increased when compared to Q3 2023 due to increased demand in Courts and lower abatements and late penalties due and the impact of seasonality with Q4 being the busiest quarter for the Australia courts. Similarly, Q4 2023 Australia Average Technology Service Revenue per day increased compared to Q4 2022 due to increase demand in Courts.

MANAGEMENT DISCUSSION & ANALYSIS

PAGE 15

VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

(unaudited)
UK	Q4 2023	Q4 2022	Q3 2023
Technology Services Revenue	$394,657	$262,762	$333,899
Number of Billing Days	63	63	64
Average Technology Services Revenue per Day	$6,264	$4,171	$5,217

Q4 2023 Average Technology Services revenue per day increased when compared to Q3 2023 and Q4 2022 due to higher volume from a UK governmental contract that has been ramping steadily over the past two years and from an increase in private pay customers. Years.

private pay customers. Years.
(unaudited)
Consolidated	Q4 2023	Q4 2022	Q3 2023
Technology Services Revenue	$9,377,557	$9,139,635	$9,197,750
Average Number of Billing Days	57.9	58.5	61.5
Average Technology Services Revenue per Day	$161,825	$156,233	$149,534

Q4 2023 Consolidated Average Technology Services Revenue per Day increased when compared to Q4 2022 primarily due to increase in UK and Australia noted above offset by decreases in US discussed above.

Technology Services Cost of Sales per Minute of Audio

Measure Definition: Technology Services Cost of Sales per Minute of Audio is defined as the direct labor cost of edited content divided by the volume of audio content delivered. Calculation for number of minutes revised starting 2023 to include volume from additional platforms and to standardize calculation across multiple verticals.

(unaudited)

(unaudited)
	Q4 2023	Q4 2022	Q3 2023
Technology Services Revenue	$9,377,557	$9,139,635	$9,197,750
Cost of Sales	$5,394,763	$5,142,583	$5,562,027
Number of Minutes	3,964,145	4,114,715	3,978,871
Technology Services Cost of Sales per Minute of Audio	$1.36	$1.25	$1.40

Technology Services Costs of Sales per Minute of Audio Q4 2023 decreased compared to Q3 2023 due to migration of more customers onto Netscribe and improvement in productivity.

Q4 2023 Technology Services Cost of Sales per Minute of Audio compared to Q4 2022 is higher due initial increase in training costs to staff during the migration of customers onto Netscribe.

Gross Margin for Technology Services

Measure Definition: Gross Margin for Technology Services as reported.

(unaudited)

	Q4 2023	Q4 2022	Q3 2023
Technology Services Revenue	$9,377,557	$9,139,635	$9,197,750
Cost of Sales	$5,394,763	$5,142,583	$5,562,027
Gross Margin	$3,982,794	$3,997,052	$3,635,723
Gross Margin %	42.5%	43.7%	39.5%

Technology Services Gross margin % has increased in Q4 2023 compared to Q3 2023 due to capacity recovery leading to lower abatements, discounts and overtime in Australia.

MANAGEMENT DISCUSSION & ANALYSIS

PAGE 16

VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

The decrease in Gross Margin % comparing Q4 2023 to Q4 2022 is mainly attributed to contractual change in the Queensland contract. Excluding the Queensland contract impact, gross margin % would have been similar at 42.5% for Q4 2023 and Q3 2023.

Gross Margin for Technology and related revenue

Measure Definition: Gross margin for technology and related revenue as reported.

Measure Definition:Gross margin for technolo	gy and related revenue as reported.
(unaudited)
	Q4 2023	Q4 2022	Q3 2023
Technology Revenue	$972,176	$1,041,945	$905,077
Cost of Sales	$237,820	$273,730	$208,716
Gross Margin	$734,356	$768,215	$696,361
Gross Margin %	75.5%	73.7%	76.9%

Q4 2023 Technology and related revenue gross margin percentage decreased compared to Q3 2023 primarily due to lower one-time sales of VIQ developed software.

Q4 2023 Technology and related revenue gross margin percentage increased compared to Q4 2022 primarily due to higher proportion of sales of VIQ developed products versus third party develop products which are at higher gross margins.

Key Performance Indicators

VIQ Solutions monitors several Key Performance Indicators “KPIs” to help it evaluate its business, measure its performance, identify trends affecting its business and formulate strategic plans.

Annual Delivered Content

Measure Definition: We define Annual Delivered Content as the annualized equivalent of the total number of unstructured digital audio minutes transformed into client specific structured text that is delivered electronically to the clients in the form of delivered pages.

of delivered pages.
(unaudited)
Annual Delivered Content	Q4 2023	Q4 2022	Q3 2023
Minutes	3,964,145	4,114,715	3,978,871
Pages	2,144,446	2,207,084	2,142,919

Q4 2023 Annual Deliver Content for Minutes and Pages decreased slightly compared to Q4 2022 due to more customers moving to Netscribe where minutes delivered is calculated differently than in the historic manual technologies.

Q4 2023 Annual Delivered Content for Minutes and Pages were relatively consistent compared to Q3 2023.

Productivity

Measure Definition: We define Productivity as the ratio of time the top 30% of editors spend working on a particular document, including idle time, over the duration of the associated recording. This ratio is called OpenRT.

(unaudited)
Productivity	Q4 2023	Q4 2022	Q3 2023
OpenRT	1:2.9	1:3.2	1:3.0

OpenRT continues to improve across, as our contracted editors have more experience with the technology, and the efficiency of the technology continues to improve.

MANAGEMENT DISCUSSION & ANALYSIS

PAGE 17

VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

The Company will accelerate the migrations in Australia and continue to train new and current transcribers which resulted in a slightly lower OpenRT scores for Q4 2023 compared to Q3 2023 and Q4 2022.

Active Clients and Client Retention

Measure Definition: We define Active Clients as customer invoiced accounts who have an active license and technology service agreement with us that remains in effect in the twelve months ending at the specified period. The retention and expansion of our relationships with existing clients are key indicators of our revenue potential. We started tracking this metric in Q4 2021.

(unaudited)

metric in Q4 2021. (unaudited)
Active Clients	Q4 2023	Q4 2022	Q3 2023
Technology	1,209	73	1,190
Technology Services	3,358	4,220	3,442
Total	4,567	4,293	**4,632 **

Q4 2023 Total Active Clients decreased slightly compared to Q3 2023 due to seasonality where Q4 is typically a lower volume month especially as it relates to Court customers due to court closures during Q4 2023.

The Q4 2023 versus Q4 2022 increase in customers is due to adjustment to our Dataworxs clients as well as consolidation of active users in the U.S.

Net Promoter Score

Measure Definition: The Net Promoter Score (“NPS”) measures the loyalty of clients to a company. NPS scores are measured with a survey and reported with a number from the range -100 to +100, a higher score is desirable. We conduct transactional surveys which are sent out after the client interacts with VIQ. It is used to understand client satisfaction on a granular level and provide feedback about a very specific topic and are likely to recommend the Company’s services.

(unaudited)

(unaudited)
	Q4 2023	Q4 2022	Q3 2023
Net Promoter Score	85	92	91

The NPS shows a high probability that customers are secure and likely to recommend VIQ.

Total Number of Minutes of Content Processed on aiAssist

Measure Definition: We define the total number of minutes of content processed on aiAssist.

Measure Definition:We define the total number of minutes of c	ontent processed on ai	Assist.
(unaudited)
	Q4 2023	Q4 2022	Q3 2023
Number of Minutes of Content Processed on aiAssist	1,823,531	1,554,194	1,757,833

Q4 2024 Number of Minutes of Content Processed on aiAssist continues to increase as we migrate more customers tied to AI workflow and move more customers in Australia and the UK to NetScribe. Also, we have been incrementally increasing our SaaS solutions which increases the Minutes of Content Processed on aiAssist.

MANAGEMENT DISCUSSION & ANALYSIS

PAGE 18

VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

Liquidity

As of December 31, 2023, we held cash of $1,621,778 as compared to $1,657,571 as of December 31, 2022.

On January 13, 2023, the Company entered into a secured debt facility (“Note Payable” with Beedie Investments Ltd. (“Beedie”), with maximum available funds of $15 million. $12 million of the Loan has been advanced to the Company as an initial advance with an additional $3 million available to the Company to be drawn in subsequent advances (“Subsequent Advances”) in a minimum of $1 million tranches.

During 2023, in connection with the Note Payable with Beedie, the Company drew the full $3,000,000 Subsequent Advances available ($1,000,000 on July 25, 2023, $1,250,000 on November 10, 2023, and $750,000 on December 22, 2023), increasing the outstanding principal amount of the Note Payable to $15,000,000.

The Note Payable is subject to 9.5% cash interest payable monthly plus 5% paid in kind interest accrued monthly and added to the outstanding principal amount of the Note Payable and to be repaid on January 16, 2027

On November 10, 2023, in connection with the Company’s Note Payable. Beedie was granted a participation right in certain future equity financing of the Company in order to maintain its pro rata equity interest in the Company. Additionally, the Company is to pay an amendment fee of $375,000 on the earlier of (i) prepayment of the loan; (ii) acceleration of the Obligations; and (iii) the maturity date. The amendment fee is subject to waiver in the event that the shareholders of the Company approve an increase to the number of common share purchase warrants issuable to the Lender under the Credit Agreement.

In connection with the Subsequent Advances, the Company has issued 497,423 common share purchase warrants to Beedie on July 25, 2023, and issued 123,365 common share purchase warrants on November 10, 2023. On November 10, 2023, the Company also repriced all existing warrants held by Beedie totaling 8,466,173 to an exercise price of CDN$0.20 per warrant share from CDN$0.35 and CDN$0.45 per warrant share. The completion of the repriced existing warrants was approved by the TSX on November 8, 2023.

7,968,750 warrants expire on January 16, 2030, 497,423 warrants expire on July 25, 2030, and 123,365 warrants expire November 10, 2030.

On November 10, 2023, and December 22, 2023, the Company also amended the Note Payable agreement which amended the minimum balance of unrestricted cash and cash equivalents, minimum monthly adjusted EBITDA and maximum total leverage covenants. Minimum balance of unrestricted cash and cash equivalents covenant was amended up to December 31, 2024. The minimum monthly adjusted EBITDA and maximum total leverage covenants were amended up to December 31, 2026.

MANAGEMENT DISCUSSION & ANALYSIS

PAGE 19

VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

On February 27, 2024, the Company closed a non-brokered private placement. Under the offering, the Company sold 10,239,000 common shares of the Company at a price per common share of $0.12 for gross proceeds of $1,200,000. The Company intends to use the net proceeds from the offering for working capital and general corporate purposes.

Below is a summary of our cash provided by (used in) operating, investing, and financing activities for the periods indicated:

(Unaudited) Cash used in operating activities Cash used in investing activities Cash provided by (used in) financing activities Net increase (decrease) in cash for the year Cash, beginning of year Effect of foreign exchange Cash, end of year	Year ended December 31, 2023 2022
	(2,810,254) (2,335,876) (2,222,522) (4,104,065) $4,986,904 (2,373,816) (45,872) (8,813,757) 1,657,571 10,583,534 10,079 (112,206) 1,621,778 1,657,571

Cash used in operating activities

Cash used by operating activities for the year ended December 31, 2023, was $2,810,254. This resulted from $14,331,196 in net loss plus $9,649,601 of non-cash adjustments and $1,871,341 attributable to movements in non-cash working capital.

Cash used by operating activities for the year ended December 31, 2022, was $2,335,876. This resulted from $8,706,015 in net loss plus $4,975,042 of non-cash adjustments and $1,395,097 attributable to movements in non-cash working capital.

Cash used in investing activities

Cash used in investing activities for the year ended December 31, 2023, was $2,222,522 which consisted of purchase of property and equipment of $25,792, development costs related to internally generated intangible assets of $1,955,595 and earnout payout of $241,135 for WordZ.

For the year ended December 31, 2022, cash used in investing activities was $4,104,065 which consisted of purchase of property and equipment of $1,202,489 development costs related to internally generated intangible assets of $1,828,983, business acquisition cost of $298,927 related to the Auscript acquisition and settlement of final working capital, a deferred consideration and earnout payout for WordZ and Auscript of $539,380 and change in restricted cash of $234,286.

Cash provided by (used in) financing activities

Cash provided by Financing Activities for the year ended December 31, 2023, was $4,986,904, which consisted of $1,722,868 of cash provided by issuance of common shares net of issuance costs, proceed from debt net of issuance costs of 13,880,518, cash used in repayment of debt of $8,590,295, repayment of lease obligations of $475,050, payment of interest on lease obligations of $83,658, and payment of interest on debt of $1,467,479.

Cash used by Financing Activities for the year ended December 31, 2022, was $2,373,816, which consisted of $4,053,476 of cash provided by issuance of common shares net of issuance costs, cash used in repayment of debt of $4,761,890 payment of amendment fees on debt of $239,880, repayment of lease obligations of $270,795, payment of interest on lease obligations of $114,131, and payment of interest on debt of $1,040,596.

MANAGEMENT DISCUSSION & ANALYSIS

PAGE 20

VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

Going concern uncertainty

The Company's consolidated financial statements were prepared on a going concern basis. The going concern basis assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that would be necessary should the Company be unable to continue as a going concern. Such adjustments could be material. As of December 31, 2023, the Company has cash and cash equivalents of $1,621,778 and negative working capital. The Company has incurred recurring losses has not yet achieved profitable operations, has a deficit of $78,056,151 since its inception. Cash flow from operations was negative for the year ended December 31, 2023, and financial waivers were obtained in relation to Beedie Note Payable for the year ended December 31, 2023. These matters, when considered in the aggregate, indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern for at least 12 months from December 31, 2023. In view of these matters, continuation as a going concern is dependent upon the continued operations of the Company, which will be determined by the Company’s ability to meet its financial requirements, including financial covenants within its debt agreements and its ability to raise additional capital.

The Company is evaluating several different strategies and intends to pursue actions that are expected to increase its liquidity position, including, but not limited to, pursuing additional actions under the Company's cost-savings plan, and seeking additional financing from both the public and private markets through the issuance of equity and/or debt securities. The Company's management cannot provide assurances that the Company will be successful in accomplishing any of its proposed financing plans. Management also cannot provide any assurance as to unforeseen circumstances that could occur within the next 12 months which could increase the Company’s need to raise additional capital on an immediate basis, which may not be available to the Company.

In assessing whether the going concern assumption was appropriate, management identified when events or conditions indicate that material uncertainty may cast significant doubt about the Company’s ability to continue as a going concern. Material uncertainty about the Company’s ability to continue as a going concern would exist when relevant conditions and events, considered in the aggregate, indicate that the Company will not be able to meet its obligations as they become due for a period of at least, but not limited to, twelve months from the balance sheet date. When the Company identifies conditions or events that raise potential for material uncertainty about its ability to continue as a going concern, the Company considers whether its plans that are intended to mitigate those relevant conditions or events will alleviate the potential material uncertainty.

The Company’s ability to continue as a going concern for the next twelve months involves significant judgment and is dependent on its ability to improve its sales and generate positive cash flow from operations and successful cost reduction from workforce optimization.

Debt Covenants

Under the secured debt facility with Beedie, the Company is required to comply with financial covenants regarding (i) a minimum balance of unrestricted cash and cash equivalents (ii) minimum adjusted monthly EBITDA starting May 2023 and (iii) maximum total secured debt leverage ratio.

On September 29, 2023, the Company amended the Note Payable agreement which reduced the minimum balance of unrestricted cash and cash equivalent covenants up to November 30, 2023, and removed the minimum monthly adjusted EBITDA and maximum total leverage covenants up to September 30, 2023. As part of the waiver obtained, the Company agreed to pay Beedie $88,418 which has been added to the outstanding principal amount of the loan to be repaid on January 16, 2027 and bear the same cash interest of 9.5% interest payable monthly and interest rate of 5% to be paid-in-kind per annum compounded monthly and added to the outstanding principal amount of the Note Payable and to be repaid on January 16, 2027.

On November 10, 2023, the Company also amended the Note Payable agreement which amended the minimum balance of unrestricted cash and cash equivalents, minimum monthly adjusted EBITDA and maximum total leverage covenants.

MANAGEMENT DISCUSSION & ANALYSIS

PAGE 21

VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

Minimum balance of unrestricted cash and cash equivalents covenant was amended up to December 31, 2024. The minimum monthly adjusted EBITDA and maximum total leverage covenants were amended up to January 31, 2024.

On December 22, 2023, the Company also amended the Note Payable agreement which amended the minimum monthly adjusted EBITDA and maximum total leverage covenants. The minimum monthly adjusted EBITDA and maximum total leverage covenants were amended up to December 31, 2026.

The Company was in compliance with the cash and cash equivalents, minimum monthly adjusted EBITDA and maximum total leverage covenants from September 30, 2023 to February 29, 2024.

Contractual Obligations

The following table summarizes our contractual obligations as at December 31, 2023, including commitments relating to leasing contracts:

	2024	2025	2026	2027	Total
Trade and other payables	$ 6,269,023	$ –	$ –	$ –	$ 6,269,023
Lease obligations	575,138	238,921	–	–	814,059
Beedie Investments Ltd.	–	–	–	17,994,258	17,994,258
Income taxes payable	59,044	–	–	–	59,044
HomeTech VTB loan	20,000	–	–	–	20,000
Total	$ 6,923,205	$ 238,921	$–	$ 17,994,258	$ 25,156,384

Capital Resources

Our objective in managing capital is to ensure sufficient liquidity to pursue our growth strategy, fund research and development to enhance existing product offerings as well as to develop new product offerings to maintain our competitive advantage, pursue accretive acquisitions and provide sufficient resources to meet day-to-day operating requirements, while managing financial risk. We intend to use our operating income and funds on hand to meet funding requirements for the development and commercialization of our technology products and services based on anticipated market demand and working capital purposes. Our actual funding requirements will vary depending on a variety of factors, including our success in executing our business plan, the progress of our research and development efforts, our commercial sales, and our ability to manage our working capital requirements.

Our officers and senior management are responsible for managing the capital and do so through monthly meetings and regular review of financial information. Our Board of Directors is responsible for overseeing this process. We manage capital to ensure that there are adequate capital resources while maximizing the return to shareholders through the optimization of the cash flows from operations and capital transactions.

Capital Allocation

A significant component of our strategy is to effectively and efficiently allocate capital between opportunities that generate the highest return on our capital with the goal over time to maximize shareholder equity.

The Company's capital allocation is centered on generating organic growth, investment in technologies, mergers and acquisitions, and balance sheet deleveraging. VIQ's focus is on closing and integrating strategic and accretive acquisitions, continuing to grow and drive market share and achieve consolidation efficiencies while maturing its AI engines through technology service volumes.

Paying out dividends, or buying back stock, are not anticipated as being part of our capital allocation strategy for the immediate future. Our goal with capital allocation is to increase the earning power of the Company and reinvest the free

MANAGEMENT DISCUSSION & ANALYSIS

PAGE 22

VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

cash flow of the business to generate more cash.

Other Commitments

Other commitments include operating leases for facilities. The Company has no other commitments.

Contingent Off-Balance Sheet Arrangements

As a general practice, we have not entered into off-balance sheet financing arrangements.

Transactions Between Related Parties

There were no transactions between related parties for the three months and year ended December 31, 2023.

Material Accounting Policy Information and Estimates

General

The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. These estimates and assumptions are affected by management’s application of accounting policies and historical experience and are believed by management to be reasonable under the circumstances. Such estimates and assumptions are evaluated on an ongoing basis and form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ significantly from these estimates.

Going concern - In the preparation of consolidated financial statements, management is required to identify when events or conditions indicate that material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. Material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern would exist when relevant conditions and events, considered in the aggregate, indicate that the Company will not be able to meet its obligations as they become due for a period of at least, but not limited to, 12 months from the consolidated statement of financial position. When the Company identifies conditions or events that raise potential for material uncertainty that may cast significant doubt about its ability to continue as a going concern, the Company considers whether its plans that are intended to mitigate those relevant conditions or events will alleviate the potential substantial doubt.

Our other material accounting policy information are fully described in Note 3 to our financial statements for the years ended December 31, 2023, and 2022 which are available on SEDAR (www.sedar.com). Certain accounting policies are particularly important to the reporting of our financial position and results of operations and require the application of significant judgment by our management. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different, estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could have a material impact on the financial statements. We believe that there have been no significant changes in our critical accounting estimates for the year ended December 31, 2023, from the years presented in our annual financial statements for the years ended December 31, 2023, and 2022.

New Accounting Pronouncements Adopted

We adopted the following accounting amendments that were effective for our annual consolidated financial statements commencing January 1, 2023.

• IAS 1 Presentation of Financial Statements

• IAS 37 Provisions Contingent Liabilities and Contingent Assets

MANAGEMENT DISCUSSION & ANALYSIS

PAGE 23

VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

• IFRS 3 Business Combinations

• Deferred Tax related assets and liabilities arising from a Single Transaction (Amendments to IAS 12)

• Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)

• Definition of Accounting Estimates (Amendments to IAS 8)

The adoption of these standards did not have a material impact to our financial results and are not expected to have a material impact in the future.

The following new and amended standard did not have a significant impact on the Company’s consolidated financial statements.

• Reference to Conceptual Framework (Amendments to IFRS 3)

Internal Controls over Financial Reporting and Disclosure Controls and Procedures

Disclosure Controls & Procedures

Management is responsible for establishing and maintaining a system of disclosure controls and procedures to provide reasonable assurance that all material information relating to the Company is gathered and reported to senior management, including the CEO and the CFO, on a timely basis so that appropriate decisions can be made regarding public disclosure, including to ensure that information required to be disclosed by the Company in reports that the Company files or submits under Canadian securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation. Management, under the oversight of the CEO and CFO, has evaluated the design and effectiveness of the Company’s disclosure controls and procedures as of December 31, 2023. Based on this evaluation, the CEO and the CFO concluded that, as of December 31, 2023, the Company’s disclosure controls and procedures (as defined in National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings and in Rule 13a-15I and Rule 15d15(e) under the U.S. Exchange Act) were ineffective as a result of material weaknesses identified in the Company’s internal control over financial reporting, which is further described below.

The Company is no longer subject to these Exchange Act requirements because it filed with the SEC in January 2024 a Form 15 “Certification and Notice of Termination of Registration Under Section 12(g) of the Securities Exchange Act of 1934 or Suspension of Duty to File Reports Under Sections 13 and 15(d) of the Securities Exchange Act of 1934

The Company’s disclosure controls and procedures are designed to provide reasonable assurance that material information relating to the Company is made known to us by others, particularly during the period in which the annual filings are being prepared and of achieving their objectives, and the CEO and CFO do not expect that the disclosure controls and procedures will prevent all errors and fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Notwithstanding the material weaknesses, management has concluded that the Company’s consolidated financial statements for the years ended December 31, 2023 and 2022, present fairly, in all material respects, the Company’s financial position, statement of loss and comprehensive loss, changes in shareholders’ equity and cash flows in accordance with IFRS.

Internal Controls over Financial Reporting

Management is also responsible for establishing and maintaining adequate internal controls over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial reports for external purposes in accordance with IFRS.

There are inherent limitations in the effectiveness of any system of internal control, including the possibility of human error and overriding of controls. Consequently, an effective internal control system can only provide reasonable, not absolute assurance, with respect to reporting financial information. Further, because of changes in conditions, the effectiveness of

MANAGEMENT DISCUSSION & ANALYSIS

PAGE 24

VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

internal control over financial reporting may vary over time.

An evaluation of the design and effectiveness of the Company’s internal controls over financial reporting was carried out by management, under the supervision of the CEO and CFO. In making this evaluation, the CEO and CFO used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control – Integrated Framework (2013). Based on this evaluation, the CEO and CFO have concluded that the Company’s internal control over financial reporting was ineffective as of December 31, 2023, due to the material weaknesses described below. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses that our management identified related to the following:

• the Company did not have sufficient resources, including contractors, in place throughout the reporting period with the appropriate training and knowledge of internal controls to monitor the design, implementation and operating effectiveness of internal control over financial reporting;

• the Company reviews controls in various financial reporting processes did not operate with sufficient precision, particularly with respect to the determination of the appropriate period in which to recognize revenue and expenses;

• the Company did not maintain adequate review controls to ensure that complex accounting areas such as business combinations, impairment of non-financial assets, financial instruments, revenue recognition and accounting for income tax provisions were appropriately recorded in accordance with IFRS; and

• the Company did not effectively design and maintain appropriate segregation of duties and controls over the effective preparation, review and approval, and associated documentation of journal entries.

These material weaknesses resulted in material misstatements, which were corrected prior to the release of the consolidated financial statements for the year ended December 31, 2023.

Remediation

We intend to implement a remediation plan that involves a third-party software solution to formalize the documentation and evidence of our review and approval of subjective and higher risk journal entries in our financial reporting system including implementing improved process over cut-off of transactions. We will implement more formalized documentation and evidence of review over complex accounting transactions. The plan will include the involvement of management and sufficient training of all relevant personnel. We will take the measures necessary to address the material weaknesses, which may require significant management attention, and our efforts may not prove to be successful in remediating the material weaknesses and do not guarantee that we will not suffer additional material weaknesses and/or significant deficiencies in the future.

The CEO and CFO do not expect that internal controls over financial reporting will prevent all misstatements. The design of a system of internal controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that the design will succeed in achieving the stated goals under all potential future conditions.

Except for the material weaknesses described above, there were no changes in the Company’s Internal Control over Financial Reporting that occurred during the period ended December 31, 2023, that has materially affected or reasonably likely to materially affect the Company’s Internal Control over Financial Reporting.

MANAGEMENT DISCUSSION & ANALYSIS

PAGE 25

VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

Risk Factors

A complete description of the risks and uncertainties affecting the Company is included in the most recently filed Annual Information Form. Additional risks and uncertainties not presently known to us or that we currently consider immaterial also may impair our business and operations and cause the price of our common shares (the “Common Shares”) to decline. If any of the noted risks actually occur, our business may be harmed, and the financial condition and results of operation may suffer significantly. In that event, the trading price of the Common Shares could decline, and shareholders may lose all or part of their investment.

Disclosure of Outstanding Share Data

The Common Share trade on the Toronto Stock Exchange under the symbol “VQS.” The Company is authorized to issue an unlimited number of Common Shares. As at March 28, 2024 there were (i) 51,195,838 Common Shares issued and outstanding, (ii) 32,500 stock options outstanding with a weighted average exercise price per Common Share of $2.49 CAD expiring between 2024 and 2025 under the Company’s legacy stock option plan (iii) 734,829 stock options outstanding with a weighted average exercise price per Common Share of $1.02 CAD expiring 2031 and 2032 under the Omnibus Equity Incentive Plan, (iv) 33,333 deferred share units outstanding with an average exercise price per Common Share of $1.29 CAD with no expiry date (v) 1,747,018 RSUs outstanding expiring 2024 and 2031 and selective units with no expiry dates under the Omnibus Equity Incentive Plan (vi) 125,000 PSUs with no expiry dates (vii) warrants to purchase 2,117,647 Common Shares at an exercise price of $5.00 USD expiring 2026(viii) warrants to purchase 3,551,852 Common Shares at an exercise price of $1.39 USD expiring July 21, 2027, (ix) 7,968,750 warrants to purchase Common Shares at an exercise price of $0.20 CAD expiring January 16, 2030, (x) 497,423 warrants to purchase Common Shares at an exercise price of $0.20 CAD expiring July 25, 2030 (xi) 2,900,000 warrants to purchase Common Shares at an exercise price of $0.31 USD expiring June 30, 2024 (xii) 123,365 warrants to purchase Common Shares at an exercise price of $0.20 CAD expiring November 10, 2030.

Diversity

Our success as a company continues to be made possible by our global workforce. We aim to attract, develop, and retain exceptional talent to meet the needs of our clients and create value for our shareholders. We understand that we have more to do to increase our overall representation to better reflect the world we live in. We believe that when people come from diverse backgrounds and have a variety of life experiences, they bring unique perspectives to the table. These perspectives increase innovation, creativity, and overall corporate performance.

In order to continue to produce our innovative technologies and technology services, it is crucial that we continue to attract and retain top talent. To facilitate talent attraction and retention, we strive to make VIQ a diverse and safe workplace, with opportunities for our employees in each region and functional area to grow and develop in their careers, supported by advancements and programs that build connections between our employees and their communities.

We believe that a diverse workforce is critical to our success, and we continue to focus on the hiring, retention and advancement of women and underrepresented populations. Our recent efforts have been focused in three areas: inspiring innovation through a diverse culture; expanding our efforts to recruit and hire world-class diverse talent; and identifying strategic partners to accelerate our diversity, equity and in the coming years inclusion (“DE&I”) programs.

Under the leadership of the current management team and the Board of Directors, VIQ has worked to create an environment and culture that enables all employees to participate and thrive. We know that onboarding people with diverse backgrounds and skillsets is a key ingredient for innovation, which is why our recruitment processes are built around improving our ability to identify the best, most diverse candidate pools. We use gender-neutral language in job descriptions and commit to bringing a diverse slate of candidates to a diverse interview panel at all levels of the Company. VIQ has a variety of diversityrelated data points that exemplify how our workforce looks like the world around us and thrives as a result of it.

MANAGEMENT DISCUSSION & ANALYSIS

PAGE 26

VIQ SOLUTIONS INC.

VIQ Solutions Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for 2023

As of December 31, 2023, VIQ Diversity Metrics were as follows:

• Global Employee Gender Diversification for all roles: 55% Women, 41% Men, 4% Non-binary

• Global Employee Gender Diversification for leadership roles: 54% Women, 46% Men

• Global Race and Ethnicity Representation for all roles: 73% White, 22% Asian, 2% Black and 3% Latino

• Geography where we work: 77% Australia, 9% United States, 2% Canada, 5% India, 2% Mexico, 2% United Kingdom and Philippines 3%

• Brick & Mortar: Five physical Offices in three Countries

Due to its global footprint, VIQ has come to appreciate that amazing perspectives are grown all around the world and that DE&I programs can be most powerful when they are localized to the individual experiences that resonate with people in the countries, cities, and communities where they live.

MANAGEMENT DISCUSSION & ANALYSIS

PAGE 27