Mr. Marco Margiotta reports

PAYFARE ANNOUNCES RECORD SECOND QUARTER 2023 FINANCIAL RESULTS

Payfare Inc. has filed its financial statements and management's discussion and analysis (MD&A) for the quarter ending June 30, 2023. A comprehensive discussion of Payfare's financial position and results of operations are provided in the MD&A, which is filed on SEDAR+ under Payfare's profile.

Q2 2023 highlights:

• Increased revenue to a record $46.5-million for the three months ended June 30, 2023, representing a $13.9-million (plus 43 per cent) increase compared with the same period in 2022. Payfare remains on track to meet its full-year 2023 revenue guidance of $185-million to $195-million;
• Ended Q2 2023 with 1,188,325 active users (1), up 304,074 (plus 34 per cent) compared with the active user (1) count as at the end of Q2 2022 and up 60,865 (plus 5 per cent) compared with the active users (1) count as at the end of Q1 2023;
• Total gross dollar value (GDV) (1) in Q2 2023 was $2.9-billion, an increase of $900-million (plus 46 per cent) over Q2 2022 and $200-million (plus 7 per cent) over Q1 2023;
• Net income of $2.1-million, or four cents per share, for the three months ended June 30, 2023, up $4.4-million (plus 191 per cent), compared with the same period in 2022;
• Adjusted net income (1) of $4.6-million, or 10 cents per share, for the three months ended June 30, 2023, representing growth of $4.2-million over the prior-year period;
• Adjusted EBITDA (1) of $4.8-million for the three months ended June 30, 2023, reflecting a $4.5-million increase compared with the same period in 2022. Payfare remains on track to achieve its full-year 2023 adjusted EBITDA (1) guidance of $21-million to $24-million;
• Free cash flow (1) of $600,000 for the three months ended June 30, 2023, which equates to growth of $5.1-million (plus 113 per cent) over the prior-year period. Free cash flow growth in the quarter was impacted by the significant increase in cash generated from operating activities, which was partially offset by a temporary increase in non-cash working capital consumption and an increase in cash used in investing activities;
• The company was successfully selected in two request-for-proposal (RFP) processes to launch new private-label and embedded finance programs for globally recognized strategic partners on its platform. In the quarter, Payfare continued to make significant progress building integrations with these new strategic partners. The company expects to announce the details of these programs with its partners prior to commercial launch;
• Subsequent to the quarter-end, as of July 28, 2023, the company's common shares qualified for trading in the United States on the OTCQX Best Market, having been upgraded from the OTC Pink Market. The shares trade under the symbol PYFRF and will facilitate trading by interested Payfare investors in the United States.

"We were focused on building new partner integrations in the second quarter after successfully winning two RFP processes while expanding profitability," said Marco Margiotta, chief executive officer and founding partner of Payfare. "Our business development pipeline remains active with opportunities in the gig economy and earned wage access for regular employers. We look forward to sharing more as these programs get closer to commercialization."

Conference call

Management will host a conference call on Thursday, Aug. 10, 2023, at 8:30 a.m. ET, to discuss these results. A short presentation in connection with the conference call will be made available on the company's website. Management will also host a live question-and-answer session on the conference call with analysts.

To access the conference call, please dial 416-764-8658 or 1-888-886-7786. Please call the conference telephone number 10 to 15 minutes prior to the start time so that you are in the queue for an operator to assist in registering and patching you through.

An archived recording of the conference call will be available until Sept. 10, 2023. To listen to the recording, call 416-764-8692 or 1-877-674-7070 and enter passcode 855601.

About Payfare Inc.

Payfare is a global financial technology company powering digital banking and instant payment solutions for today's gig work force. Payfare partners with leading platforms and marketplaces, such as Uber, Lyft and DoorDash, to provide financial health for their work force.

(1) Non-IFRS (international financial reporting standards) and supplementary financial measures

This news release contains references to active users, total GDV, adjusted net income (loss), adjusted net income (loss) per share, EBITDA, adjusted EBITDA and free cash flow, which are not measures prescribed by IFRS. These supplementary financial measures are provided as additional information to complement IFRS measures by providing a further understanding of the company's results of operations from management's perspective, to provide investors and security analysts with supplemental measures to evaluate the financial performance of the company and highlight trends in the company's core business that may not otherwise be apparent when relying solely on IFRS financial measures. Management also uses non-IFRS and supplementary financial measures to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and strategic business plans, and to evaluate and price potential acquisitions. Accordingly, non-IFRS and supplementary financial measures should not be considered in isolation or as a substitute for analysis of the company's financial information reported under IFRS. Such measures do not have any standardized meaning prescribed by IFRS and, therefore, may not be comparable with similar measures presented by other corporations. The non-IFRS and supplementary financial measures are not subject to standard industry definition, and the company's definitions and method of calculation may differ from other issuers, and therefore the measures may not be comparable with similar measures presented by other issuers.

The company determines the number of users to its services based on active users. Active users represent users who have loaded earnings and direct deposits on their card in the period. Total GDV is defined as the aggregate dollar amount of active user earnings and direct deposits loaded on their payment card during the period.

EBITDA means net income (loss) before amortization and depreciation expenses, foreign exchange loss (gain), amortization of deferred income, finance and interest costs (income), current tax expense, and change in fair value of derivative liability.

Adjusted EBITDA adjusts EBITDA for stock-based compensation expense, transactional gains or losses on assets, asset impairment charges, loss on extinguishment of debts, gains or losses from changes in fair value of derivative financial instruments and contingent consideration liabilities measured at fair value through profit or loss, gains or losses from disposals of equipment, net income or loss from equity accounted investees, restructuring costs, and non-recurring expense items. Non-recurring expense items are transactions or events that management believes will not reoccur within the foreseeable future, and include legal and professional fees related to claim settlements, acquisitions, divestitures and going-public transactions.

The attached table reconciles net income (loss) to EBITDA and adjusted EBITDA for the three and six months ended June 30, 2023, and June 30, 2022.

Adjusted net income (loss) adjusts net income (loss) for share-based compensation expense, amortization and depreciation expenses, transactional gains or losses on assets, asset impairment charges, loss on extinguishment of debts, gains or losses from changes in fair value of derivative financial instruments, and contingent consideration liabilities measured at fair value through profit or loss, gains or losses from disposals of equipment, net income or loss from equity accounted investees, restructuring costs, and non-recurring expense items. Non-recurring expense items are transactions or events that management believes will not reoccur within the foreseeable future, and include legal and professional fees related to claim settlements, acquisitions, divestitures and going-public transactions. The attached table reconciles net income (loss) to adjusted net income (loss) for the three and six months ended June 30, 2023, and June 30, 2022.

Adjusted net income (loss) per share is calculated as adjusted net income (loss) divided by the basic weighted average number of shares outstanding during the period.

The company defines its free cash flow as cash from operating activities less cash used in investing activities (including additions to intangible assets and purchase of building, property and equipment). The attached table reconciles cash from operating activities to free cash flow for the three and six months ended June 30, 2023, and June 30, 2022.

Additional information on these measure may be found in the MD&A for the three and six months ended June 30, 2023, which is available under Payfare's profile on SEDAR+ and is incorporated by reference to this news release.

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