Mr. Cihan Tuncay reports

PAYFARE ANNOUNCES UNAUDITED FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL RESULTS

Payfare Inc. has released summarized unaudited results for the fourth quarter and year ended Dec. 31, 2023.

Unaudited Q4 2023 highlights:

• Increased revenue to a record $50.0-million for the three months ended Dec. 31, 2023, representing an $11.6-million (30-per-cent) increase compared with the same period in 2022;
• Ended Q4 2023 with 1,400,127 active users, up 346,255 (33 per cent) compared with active users count as at the end of Q4 2022;
• Total gross dollar value in Q4 2023 was $3.3-billion, an increase of $900-million (36 per cent) over Q4 2022;
• Net income of $4.9-million, or 10 cents per share, for the three months ended Dec. 31, 2023, up $2.0-million (69 per cent), compared with the same period in 2022;
• Adjusted net income of $7.4-million, or 15 cents per share, for the three months ended Dec. 31, 2023, representing growth of $2.8-million (60 per cent) over the prior-year period;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $7.5-million for the three months ended Dec. 31, 2023, reflecting a $3.9-million increase (108 per cent) compared with the same period in 2022;
• Free cash flow of $6.5-million for the three months ended Dec. 31, 2023, which equates to growth of $500,000 (8 per cent) over the prior-year period.

Unaudited full-year 2023 highlights:

• Payfare achieved record revenue of $186.0-million, representing a $56.1-million (43-per-cent) increase over 2022 and met its full-year 2023 revenue guidance;
• Total gross dollar value in 2023 was $11.8-billion, an increase of $3.9-billion (49 per cent) over 2022;
• Net income of $13.1-million or 28 cents per share, representing an increase of $16.1-million (547 per cent) compared with 2022;
• Adjusted net income of $23.0-million or 48 cents per share, reflecting an increase of $17.0-million (283 per cent) compared with 2022;
• Payfare generated adjusted EBITDA of $21.6-million, representing growth of $17.2-million (394 per cent) over 2022, and met its full-year 2023 adjusted EBITDA guidance;
• Free cash flow of $17.0-million, which equates to growth of $9.9-million (137 per cent) over the prior-year period.

The amounts disclosed in this press release are unaudited as the company's auditor, KPMG LLP, has not yet completed its audit procedures on the consolidated financial statements as at and for the year ended Dec. 31, 2023.

Executed strategic objectives for fiscal 2023:

• Payfare issued 2023 revenue and adjusted EBITDA guidance of $185-million to $195-million and $21-million to $24-million, respectively.

Update: Payfare achieved its full-year 2023 revenue and adjusted EBITDA guidance based on unaudited financial results for the year ended 2023:

• The company is actively working on winning several new significant white-label partnerships and establishing infrastructure in international markets including potential expansion with existing partners.

Update: Subsequent to year-end, the company launched new programs in Canada, including with Uber (the Uber Pro Card powered by Payfare) and a new embedded finance product with an international big box retailer, to provide earnings payouts to the retailer's delivery gig work force in Canada:

• Expand into new business verticals, including earned wage access for full-time employees.

Update: In first quarter 2024, the company signed a commercial agreement with ADP, a leading global provider of human capital management solutions, to offer EWA to the Canadian market:

• Payfare has made progress with its existing gig platform and banking partners to launch credit or credit-like products for its user base.

Update: The Uber Pro Card powered by Payfare includes the backup balance feature, providing qualifying cardholders access to up to $50 when they need it most at no cost and no interest:

• Partner with new merchants to expand Payfare's compelling suite of cashback and loyalty rewards for cardholders.

Update: The company has partnered with Upside (retail technology platform) to launch a cashback rewards program, enabling Dasher Direct cardholders to claim personalized price promotion offers on all major spend categories (fuel, restaurants and grocery). The company has also partnered with Avibra (financial, insurance and wellness platform), providing free and low-cost access to a suite of health and wellness perks to Dasher Direct cardholders.

Strategic objectives for 2024:

• Payfare has issued 2024 revenue and adjusted EBITDA guidance of $235-million to $245-million (midpoint 29 per cent over 2023) and $30-million to $35-million (midpoint 51 per cent over 2023), respectively.
• The company is actively working on extending partnerships with existing gig platform partners. Payfare expects to announce meaningful progress on this initiative over the course of the year.
• Payfare continues to expand into new business verticals, including developing and offering Payfare's payment platform and technology solutions for EWA for hourly paid employees. Payfare expects to execute on its recently signed commercial agreement with ADP to offer EWA to the Canadian market by building out its technology platform. The company will also continue to work on additional payroll platform and employer integrations over 2024.

Management will use these strategic objectives to measure the company's progress, and will update and supplement these objectives over the course of 2024.

Payfare provides update on annual filings

Payfare today provided an update to its previously disclosed management cease trade order in respect of its delayed filing of its audited annual financial statements, management's discussion and analysis, annual information form, and related certifications, all for the year ended Dec. 31, 2023.

The delay in the annual filings is due solely to the delay in receiving the system and organization control auditor's report from its material vendor, which is required for the company's auditor to complete its required audit procedures to issue its opinion.

Based on the updated timing for the delivery of the SOC 1 report confirmed by the vendor's auditor, Payfare anticipates that it will complete its annual filings by May 22, 2024. The company will issue a news release announcing completion of filing of the annual filings at such time as they are completed and filed.

The delay in the company's annual filings is not expected to impact the filing of the company's quarter ended March 31, 2024, unaudited financial statements and the related management's discussions and analysis for such interim period. The Q1 filings are anticipated to be filed on or about May 8, 2024. Work is already under way by the company to ensure timely reporting for this period.

Until the company files the annual filings, it will comply with the alternative information guidelines set out under National Policy 12-203 (Cease Trade Orders for Continuous Disclosure Defaults), including issuing biweekly default status reports by way of news releases, such as this one, which will be filed on SEDAR+.

Conference call

Management will host a conference call on Monday, April 29, 2024, at 8 a.m. ET, to discuss the unaudited 2023 financial 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 listen to the conference call, please dial 289-514-5100 or 1-800-717-1738. 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 May 29, 2024. To listen to the recording, call 416-764-8692 or 1-877-674-7070 and enter passcode 10007.

Summary unaudited 2023 financial results

The attached table displays the company's unaudited summary of consolidated statements of operations and comprehensive income (loss) for the years ended Dec. 31, 2023, and 2022.

Correction of prior-period financial statements resulting in an increase to prior-period cash and cash equivalents balance

The company has restated the comparative information in the consolidated financial statements for the years ended Dec. 31, 2023, and 2022, for identified errors, as described in (i) and (ii) herein. The corrections had no impact on the consolidated statement of operations and comprehensive income for the year ended Dec. 31, 2022.

The corrections had an impact on the consolidated statement of financial position as at Dec. 31, 2022, and Jan. 1, 2022.

The corrections had an impact on the consolidated statement of cash flows for the year ended Dec. 31, 2022.

(i) Prefinanced deposits

In connection with finalizing the unaudited 2023 consolidated financial statements, the company identified an error associated with the classification of cash and cash equivalents with reference to international accounting standard 7 (Statement of Cash Flows) and an agenda decision issued in March, 2022, by the international financial reporting standard interpretation committee, which provided clarification on the interpretation of the standard, which was finalized in March, 2022. This resulted in the majority of the balance previously classified as cash -- restricted -- to be reclassified to prefinanced deposits. In addition, certain balances that were previously presented as cash -- restricted -- now meet the definition of cash equivalents as the funds are liquid in nature with short-term withdrawal restrictions. As a result, these amounts were reclassified from cash -- restricted -- to cash and cash equivalents, accounts receivable, prepaid and other assets, and accounts payable and accrued liabilities. The correction had no impact on the consolidated statement of operations and comprehensive income (loss) for the year ended Dec. 31, 2022.

(ii) Finance costs

In connection with finalizing the unaudited interim financial statements for the three months ended March 31, 2023, the company identified an error associated with finance costs related to a debt amendment that occurred in February, 2021. As a result, certain finance costs should have been recorded during the year ended Dec. 31, 2021, with an associated accounts payable balance. The payable was repaid during the three months ended March 31, 2023. The comparative statements of financial position have been restated to reflect the correction of this error.

The audit committee of the board of directors of the company concluded, after consultation with the company's management and its independent auditor, that the company's previously issued audited annual financial statements for the year ended Dec. 31, 2022, prepared in accordance with international financial reporting standards as issued by the international accounting statements, contained errors as described herein. The corrections had no impact on the consolidated statement of operations and comprehensive income for the year ended Dec. 31, 2022. As noted herein, the company intends to file its annual consolidated financial statements for the year ended Dec. 31, 2023, as soon as possible, which will reflect the correction of the errors in the comparative period.

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.

We seek Safe Harbor.