Mr. Joel Chin reports

GINSMS ANNOUNCES FINANCIAL RESULTS FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2023 AND PROVIDES FINANCIAL FORECASTS FOR YEAR 2024

GINSMS Inc. has released its financial results for the fourth quarter and 12 months ended Dec. 31, 2023.

The annual audited financial statements of the corporation for the 12 months ended Dec. 31, 2023, are currently under audit and in the process of preparation. As required under Canadian securities law regulations, the corporation will be disclosing and filing on SEDAR+ its annual audited financial statements and the related management's discussion and analysis (MD&A) within 120 days after the end of its year-end of Dec. 31, 2023.

This financial disclosure was done in advance of the filing of the audited financial statements of the corporation to allow GINSMS's ultimate holding company, Beat Holdings Ltd. (BHL), a public company in Japan, to use certain of GINSMS's financial information in the preparation of BHL's financial statements and announcements.

The corporation's financial information for the 12 months ended Dec. 31, 2023, is prepared in accordance with international financial reporting standards (IFRS) as issued by the International Accounting Standards Board (IASB). All amounts are expressed in Canadian dollars unless otherwise noted.

Highlights include:

• Revenue of $3,188,505 for the 12-month period ended Dec. 31, 2023, as compared with revenue of $3,024,133 for the 12-month period ended Dec. 31, 2022;
• Revenue of $755,164 for the three-month period ended Dec. 31, 2023, as compared with revenue of $878,346 for the three-month period ended Dec. 31, 2022;
• Gross profit of $1,316,952 for the 12-month period ended Dec. 31, 2023, as compared with gross profit of $1,161,553 for the 12-month period ended Dec. 31, 2022;
• Gross profit of $347,799 for the three-month period ended Dec. 31, 2023, as compared with gross profit of $357,697 for the three-month period ended Dec. 31, 2022;
• Operating expenses and finance costs of $1,450,602 for the 12-month period ended Dec. 31, 2023, increased from $1,185,701 for the 12-month period ended Dec. 31, 2022;
• Operating expenses and finance costs of $636,353 for the three-month period ended Dec. 31, 2023, increased from $402,644 for the three-month period ended Dec. 31, 2022;
• Net loss of $129,656 for 12-month period ended Dec. 31, 2023, as compared with a net loss of $32,284 for 12-month period ended Dec. 31, 2022;
• Net loss of $280,939 for three-month period ended Dec. 31, 2023, as compared with a net loss of $20,507 for three-month period ended Dec. 31, 2022.

Selected balance sheet information

The balance sheet information reported in the corresponding attached table are based on the unaudited consolidated financial statements of the corporation, which have been prepared in accordance with IFRS.

Total assets of GINSMS, including cash, accounts receivable, deposits and prepayment, current tax asset, property, plant and equipment, and right-of-use assets, as at Dec. 31, 2023, amounted to $1,053,176, compared with $947,927 as at Dec. 31, 2022. Bank and cash balances amounted to $239,824 as at Dec. 31, 2023, an increase of 25.5 per cent compared with $191,126 as at Dec. 31, 2022. The increase was mainly due to more net cash inflow from operating activities during the year.

Outlook

The corporation has released its financial forecasts for the next 12 months ending Dec. 31, 2024. The information included in this news release represents management's guidance as approved on Feb. 13, 2024. The financial outlook was prepared for BHL, the ultimate holding company of the corporation, for its public company reporting obligations in Japan.

The material factors and assumptions used to develop the financial outlook include:

1. Continued business from the corporation's major customers. The actual gross margin of the software products and services segment achieved 45.0 per cent for the year ended Dec. 31, 2023, and with the expected increase in revenue earned from business with key customers of the corporation, the forecasted gross margin of 41.2 per cent in 2024 is reasonable and achievable. The man-hour rates in 2023 were in line with prevailing market rates, hence the increment in man-hour rates in 2024 will be at reduced rate while the salary increments are factored in the 2024 budget. Management believes that the forecast revenue and gross margin is conservative and reasonable;
2. The actual traffic growth rate of A2P (application-to-person) business for the year ended Dec. 31, 2023, decreased by 30.2 per cent compared with the year ended Dec. 31, 2022. Both the Southeast Asia and North Asia regions suffered lower growth due to stiff competition. The corporation also adjusted the prices of its products and services to maintain gross margin. Revenue for the year ended Dec. 31, 2023, decreased by 30.9 per cent while annual gross margin of 33.0 per cent is comparable with gross margin of 33.4 per cent for the year ended Dec. 31, 2022;
3. No significant changes in the environment (including competition) where the corporation operates that will significantly affect the pricing of the corporation's services, resulting in changes of the gross margin for the various business segments, except what is disclosed in notes 1 and 2 above;
4. Timely completion and launch of certain additional value-added services for the corporation's customers;
5. Continued ability to obtain financing through loans and cash advances to support the sales operations of the corporation.

The purpose of this financial outlook is to allow the corporation's ultimate holding company, BHL, to make reference and/or to use such outlook in its own financial disclosure. The operation of GINSMS is a major part of the growth strategy of BHL. As such, BHL believes that disclosing such information would be useful for its shareholders. Consequently, readers of this news release are cautioned that the financial outlook of GINSMS concerning its expected gross margin and revenue is forward-looking information and may not be appropriate for other purposes.

About GINSMS Inc.

GINSMS is a mobile technology and services company focusing on two areas, namely its A2P messaging service and its software products and services. GINSMS operates a cloud-based A2P messaging service that allows the termination of SMS (short messaging service) to mobile subscribers of more than 200 mobile operators globally. GINSMS also develops and distribute innovative software products and services for mobile operators and enterprises and has successfully deployed more than 100 solutions worldwide. GINSMS has offices in China, Singapore, Hong Kong, Malaysia and Indonesia.

We seek Safe Harbor.