Mr. Dwayne Kushniruk reports

ONESOFT SOLUTIONS REPORTS Q4 AND ANNUAL RESULTS FOR FISCAL 2023 AND REITERATES FISCAL 2024 GUIDANCE

OneSoft Solutions Inc. has released its financial results for the year ended Dec. 31, 2023.

Please refer to the audited consolidated financial statements, management's discussion and analysis (MD&A), and the annual information form for the year ended Dec. 31, 2023, filed on SEDAR+, for more information. The MD&A contains a comprehensive analysis of fiscal 2023, the financial quarter ended Dec. 31, 2023 (Q4 2023), and other information.

Management will host an investor call (details below) on April 2, 2024, at 11 a.m. Eastern Time/9 a.m. Mountain Time to discuss the financial results and answer investor questions.

Financial highlights:

• Revenue for fiscal 2023 was $10.4-million, a 51-per-cent, or $3.5-million, increase over fiscal 2022. Revenue in Q4 2023 was $2.9-million, a 33-per-cent increase over Q4 2022.
• Gross profit for fiscal 2023 increased 60 per cent from $4.9-million to $7.8-million. Gross margin for fiscal 2023 increased to 75 per cent from 71 per cent, as is explained later in this report. Gross profit for Q4 2023 increased 44 per cent, or $700,000, from $1.6-million in Q4 2022 to $2.3-million in Q4 2023. Gross margin improved quarter-over-quarter from 71 per cent to 77 per cent.
• The fiscal 2023 net loss improved by $1.6-million, from $3-million in fiscal 2022 to $1.4-million in fiscal 2023. The net loss in Q4 2023 improved by $300,000 from $600,000 in Q4 2022 to $300,000 in Q4 2023.
• Cash and cash equivalents increased by $500,000 to $4.9-million in fiscal 2023, an improvement from fiscal 2022, where these assets decreased by $1.2-million from the previous year.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), a non-GAAP (generally accepted accounting principles) measure, improved from a loss of $2-million in fiscal 2022 to a near-breakeven loss of $100,000 in fiscal 2023. In Q4 2023, adjusted EBITDA improved by $500,000 from a loss of $400,000 in Q4 2022 to positive $200,000.

Quarterly revenue historical growth

Quarterly revenue has increased over the past 30 quarters as a result of continued addition of new customers, and expanded use of CIM (Cognitive Integrity Management) by existing customers and augmented by the acquisition of IM Operations' customers acquired June 30, 2022. Management's objective is to continue to increase revenue to drive cash flow and profitability, which it believes will increase future company value for shareholders.

Fiscal 2023 operational update:

• The company's customer relationships continued to strengthen, supporting management's beliefs that customer retention is expected to remain near 100 per cent, and its current and new software-as-a-service (SaaS) products under development will continue to be adopted by existing and new customers.
• The Cognitive Integrity Management SaaS platform is currently being used as the primary integrity management solution for oil and gas (O&G) pipeline companies which collectively operate approximately 20 per cent of the piggable pipeline infrastructure in the United States. Management believes that use of the company's solutions for the balance of non-piggable pipelines, which are currently managed using legacy systems and processes, represents significant future opportunity for the company.
• The company's CIM platform includes core CIM and various functionality modules that integrate with CIM, including internal corrosion management (ICM), external corrosion management (ECM), crack management (CM), probabilistic risk management (RM) and geohazard strain management (GS). Management's optimism for the business is bolstered by expressions of interest from customers and from the formalized steering committee initiated at the October, 2023, CIM user group event, composed of senior industry personnel whose roles generally direct integrity management functions and control the associated budgets.
• The company invested resources in fiscal 2023 to advance marketing, sales and product development initiatives, with a view to enhance its competitive moat and maintain its global technology lead by leveraging cloud computing, data science and machine learning to assist O&G pipeline operators to mitigate failure threats and reduce operating costs.
• The company attended several key O&G industry tradeshow and exhibition events during fiscal 2023, participated in industry educational events wherein company personnel presented white paper research learnings and hosted its first annual user group conference, in collaboration with the Microsoft team that focuses on O&G customers. OneBridge benefits from being a Microsoft managed partner, which O&G sales team members participate in joint sales efforts to pursue sales opportunities involving the company's solutions that operate on Microsoft's Azure cloud platform.
• Use of the CIM platform by customers increased essentially in accordance with management's expectations during fiscal 2023, with higher pipeline miles operated by customers and miles under SaaS subscriptions driving revenue. OneBridge onboarded five additional pipeline operators during fiscal 2023, which became new CIM users due to direct sales efforts or after being acquired by existing CIM customers. Some customers expanded their use of the CIM platform to include ICM and other new functionality modules, a trend the company believes will generate recurring revenue in future periods.
• The company's development team had a highly productive year in 2023, having released six major CIM platform updates, evolved the ICM, ECM, CM, RM and GS functionality modules, and advanced various data science and machine learning projects. This team also addressed 221 user stories, 180 bugs and 2,496 commitments for customers, and upgraded the CIM platform to .NET 6 status. Development staff trained in new Microsoft technologies and systems during fiscal 2023, and this, together with the company's new customer additions, resulted in the company earning the Microsoft Solutions partner designation for digital and app innovation (Azure). This provides the company access to accelerated support and discounted or free internal user rights for a wide swath of Microsoft products.
• The company's client services team addressed 17 projects during fiscal 2023, primarily involving six clients and five core CIM platform implementations, collectively involving 15 divisional operators and more than 700 pipeline systems. Projects included work associated with integrity management and compliance, geographic information system (GIS) integrations, loading of more than 3,700 ILI assessments and 67 million anomalies into CIM, migrating data from legacy systems into CIM, integrating with various customer software applications, and training.
• The associated table estimates the aggregate pipeline miles operated by all customers, miles of customers' pipeline assets that are subject to multiyear SaaS agreements and miles of pipeline data ingested into the company's CIM platform for which revenue was earned (data-miles) in fiscal 2023. Please refer to the MD&A for more information regarding data-mile.

Fiscal 2024 outlook

Fiscal 2023 was a pivotal year for OneSoft, with the company achieving its key objectives of: (a) exceeding $10-million revenue; (b) achieving near-zero adjusted EBITDA for the year; and (c) gaining more traction to become the next-generation data management and analytics platform for the O&G pipeline industry. Management believes the company has securely crossed the new technology adoption chasm wherein its technology and solutions have been strongly validated by industry innovators and visionary early adopters. The company's 2024 objectives include completing the new functionality modules currently under development, integrating them into the CIM platform and advancing its role as the sole SaaS vendor to fulfill customers' functionality requirements regarding data management and analytics. Recent new customer acquisitions confirm that the company has successfully progressed to attract pragmatic customers, which are generally more conservative in their adoption of new technology and represent the majority of opportunities in the marketplace.

OneSoft reiterates its fiscal 2024 revenue guidance of $15-million to $16-million, as published in the company's Feb. 20, 2024, news release, representing a 44-per-cent to 54-per-cent increase, respectively, over fiscal 2023 revenue. Most of 2024 revenue is expected to come from increased use of the company's SaaS solutions due to existing and new customers onboarding, more pipeline miles, and commercialization of some of the new modules that are under development. The company intends to invest in sales and marketing to pursue new customers in South America and Europe in 2024, as well as seek relationships with industry partners that can assist the company to broaden the adoption of its solutions world-wide.

The company is also investigating alternatives to accelerate revenue growth and business development, potentially through synergistic M&A (merger and acquisition) activities. Management is optimistic that OneSoft is well positioned to capitalize on its first-mover technology advantage to deliver enhanced benefits to customers and increase value for shareholders.

Given the current business and operational plans for fiscal 2024, management does not anticipate raising additional capital to execute its current business plan.

Webcast: Fiscal 2023 financial results conference call

When:  April 2, 2024, at 9 a.m. Mountain Time

Webcast:  access on-line

Participant numbers

Toll-free:  888-506-0062

International:  973-528-0011

Participant access code:  564316

Participants will be greeted by an operator and asked for the access code. If a caller does not have the code, they can reference the company name. Use of the access code speeds entry into the call.

Duration:  60 minutes

Callers should dial in five minutes to 10 minutes prior to the scheduled start time.

About OneSoft Solutions Inc.

OneSoft has developed software technology and products that have capability to transition legacy, on-premises licensed software applications to operate on the Microsoft Azure Cloud Platform. The company's business strategy is to seek opportunities to incorporate data science and machine learning, business intelligence, and predictive analytics to create cost-efficient, subscription-based software-as-a-service solutions.

OneSoft's wholly owned subsidiaries, OneBridge Solutions Canada Inc. and OneBridge Solutions Inc., develop and market revolutionary new SaaS solutions that use advanced data sciences and machine learning to analyze big data using predictive analytics to assist oil and gas pipeline operators to predict pipeline failures and thereby save lives, protect the environment, reduce operational costs and address regulatory compliance requirements.

We seek Safe Harbor.