Mr. Shafin Tejani reports

VICTORY SQUARE TECHNOLOGIES REPORTS 2023 Q1 FINANCIAL RESULTS

Victory Square Technologies Inc. has filed its condensed interim consolidated financial statements and interim management's discussion and analysis (MD&A) for the three months ended March 31, 2023.

"Although uncertainty abounds domestically and globally, opportunity also abounds for investors -- the challenges ahead are plain to see and, in many respects, timeless: health and safety, the desire to communicate and play, the need to eat, work, and thrive. Victory Square has built a portfolio full of phenomenal companies finding creative new ways to solve these timeless needs.

"We've been very fortunate to have such a passionate, supportive and vocal shareholder base. Victory Square is in a stronger position now than at any time in its past. Our NAV [net asset value] has remained strong, and we've seen significant growth in our portfolio companies so far in 2023. We expect this momentum to continue for the rest of the year. We have a healthy balance sheet, significant assets and have built a pipeline of new opportunities in the digital health space," stated Shafin Diamond Tejani, chief executive officer of Victory Square Technologies.

Company

Victory Square is a venture builder focused on investing in disruptive innovation.

It provides investors a liquid way to invest in early-stage technology companies without buying a venture fund that requires accredited investor status or multiyear commitments:

• A diverse portfolio of 25 innovative companies from around the world (the company's founders come from Ireland, Sri Lanka, Bulgaria, Australia, India, Brazil, the Middle East and North America);
• Sectors include: digital health, artificial intelligence (AI), machine learning (ML), blockchain, virtual and augmented reality (VR/AR), gaming, and climate tech;
• Owner-operated (15-per-cent management ownership).

Victory Square is a good way to diversify into early-stage venture.

Business model

The Victory Square business model is to buy, build and invest in early-stage tech companies. It spends upward of 48 months with those companies until they are ready to spin-off or stand on their own. There are a couple of unique elements to Victory Square's business model:

1. It has unparalleled access to startups through its internal incubator and international network, with over 250 founders, investors, tech accelerators and venture capital firms from more than 60 countries.
2. Its management team and advisers are actively involved in the investments from incubation through monetization, providing them with financial, operational and strategic support to scale globally.
3. The company drives value by monetizing investments and reinvesting the gains in new innovations. The strategy was to build a self-sustaining business.

Financial highlights for the three months ending March 31, 2023:

• Revenue for the period ended March 31, 2023, was $2,877,325 compared with $1,017,097 for the comparative period. The increase in revenues is primarily related to substantial growth in Hydreight revenues and user base, resulting in increasing subscription, pharmacy and net commission revenues.
• Cost of goods sold for the three months ended March 31, 2023, was $1,370,139 compared with $442,957 for the comparative period. The increase in cost of goods sold is related to the above described changes in revenues, primarily due to the cost of pharmacy purchases associated with the increased pharmacy sales of Hydreight.
• The gross margin for the three months ended March 31, 2023, was $1,507,186, compared with $574,140 for the corresponding comparative period. The current period gross margin is driven primarily by the on-line pharmacy sales of Hydreight. Also, Hydreight revenue includes subscription revenue earned over time, which does not have a corresponding cost of expense as with pharmacy purchases.
• Cash and liquid securities at approximately $5,990,918.
• Unaudited NAV of approximately $79,462,849 as at May 29, 2023.

"The KPIs [key performance indicators] that we track more closely for Victory Square, that are a better indicator on performance, are: cash invested, net asset value (NAV), return on invested cash, share price/market cap versus index benchmark and operating costs as a percentage of NAV. Since 2017, we've evaluated over 1,000 companies and start-up ideas, of which 25 have made the cut. We've invested $13-million, and the value of the portfolio sits at $80-million. It has grown from $4-million in 2017 to approximately $80-million today. And our goal is to continue to grow our NAV going forward," said Mr. Tejani, CEO of Victory Square.

This update is made based on Victory Square's established practice of releasing NAV as part of the company's continuing response to shareholder interest in receiving periodic information. NAV is calculated based on the latest audited valuations, third party pricing agency valuations, as well as unaudited management review valuations (based on comparables in the market) as at May 29th, 2023.

The company's consolidated financial statements for the quarter ending March 31, 2022, along with its MD&A are available under the company's profile on SEDAR.

The company trades at an approximately 77-per-cent discount to its current estimated NAV, well below comparable companies.

Notable portfolio highlights

Hydreight -- Hydreight is an on-demand home health care and wellness platform that makes it possible to book health and wellness services at home. Registered nurses and other licenced providers on the platform can be their own bosses and offer services independently, with the oversight of a Hydreight medical director. The platform provides them with access to a digital pharmacy, as well as a full suite of HIPAA (Health Insurance Portability and Accountability Act)-compliant tools to manage their businesses.

Hydreight's performance for the first quarter of 2023 has seen a significant increase across all revenue streams over the first quarter of 2022:

• Total top-line non-GAAP (generally accepted accounting principles) adjusted revenue for Q1 2023 increased 211 per cent over Q1 2022, reaching $4,167,670;
• Total revenue for Q1 2023 increased 329 per cent over Q1 2022, reaching $2,631,817;
• Contract revenue from business partners that provide services through the platform has increased by approximately 386 per cent;
• Commission revenue on services booked through the platform has increased by approximately 118 per cent;
• Pharmacy sales through the company's digital pharmacy have increased by approximately 333 per cent.

Hydreight management believes the following non-GAAP financial measures provide meaningful insight to aid in the understanding of Hydreight's performance and may assist in the evaluation of the Hydreight's business relative to that of its peers:

• Q1 2023 key milestones:
• Hydreight completed several key improvements from Jan. 1 to March 31, 2023, that played a pivotal role in the growth throughout 2023 thus far:
  • The platform attracted 185 new business partner account sign ups in the first quarter of 2023, an over-250-per-cent increase over the first quarter of 2022;
  • The app received a significant update to enable service providers to take greater control of their service offering, and also access additional in-app training;
  • Hydreight commenced operations with its second pharmacy white label;
  • Hydreight achieved record sales across all revenue streams in March, 2023, and April, 2023;
  • Hydreight entered into a co-marketing agreement with one of the largest aesthetic manufacturers in the United States;
  • Hydreight released a major enterprise-level software upgrade to provide additional functionality for the company's expansion across a variety of areas;
  • Major partnerships were secured with pharmaceutical partners, including Empower, McKesson, Medline and Olympia, to ensure consistent supply as well as preferred pricing on products and medications.

Note: Numbers are approximate and provided by Hydreight management.

Victory Square Digital Health -- Victory Square Digital Health provides a white label virtual care platform and nationwide clinician network to customers, including other digital health startups, brick and mortar clinics, retailers, and pharmacies as an alternative to the considerable time and money organizations might otherwise invest in creating their own virtual care service (which can sometimes cost between $250,000 and $500,000).

A number of factors make virtual-first care a priority right now, including the pandemic, but there are other overarching reasons for why virtual care has become a necessity, that is, the shrinking pool of clinicians -- many of whom are burned out or even leaving their profession -- will not be able to scale with the growing demand for patient care. Virtual-first care models allow clinicians to be more efficient with their time by leaning on technology to easily triage patients and their care needs.

The future of health care is hybrid, and so the future of the clinician work force is also hybrid. Victory Square Digital Health is enabling that journey and ensuring that the clinician is supported along the way.

The focus for Victory Square Digital Health in 2023 is to ramp up sales and marketing to provide its full-suite of mobile digital health solutions and telemedicine platform to surgery centres, skilled nurses, home care agencies and hospice care.

VS Health, doing business as Safetest Comercio de Diagnosticos -- VS Health is 360-degree health care offering smart, connected devices, at-home diagnostic tests, personalized digital guidance and monitoring, 24/7/365 access to health care professionals, and prescription delivery in Brazil:

• Safetest was selected to receive a federal grant in Brazil for a project using artificial intelligence in the diagnosis of neglected diseases, generating quantitative results and data processing to generate epidemiological information in real time. Safetest will receive approximately one-million Brazilian reals in grants for investing in R&D (research and development) payroll, inventory, software development, and equipment for the development of smart phone-based rapid tests.
• Safetest and Biominas partnered up on a project called artificial intelligence in a point-of-care cervical cancer test, which was selected for a state grant, being the second-best project among hundreds of companies that submitted for this grant. The project will receive approximately 1.54-million Brazilian reals for investing in R&D payroll, inventory and lab services for the development of a smart phone-based rapid test for the detection of cervical cancer.
• Safetest was selected for a national open innovation program called IBMP (Molecular Biology Institute of Parana) hunting. The goal of the program was to find projects that can add innovative solutions to IBMP's in vitro diagnostics and therapeutic biomolecules technological platforms. Safetest and IBMP are signing an NDA (non-disclosure agreement) to develop a rapid PCR (polymerase chain reaction) point-of-care test, which has the potential to change the point-of-care diagnostics sector.
• Safetest signed a contract with one of the largest vet products companies in Latin America for the development and production of an unprecedented rapid test that has the potential to be a game changer in the vet diagnostics sector.
• Safetest concluded the development of the HTLV 1 and 2 rapid test, and is now going to perform the clinical validation for registering the test at ANVISA (Brazilian health regulatory agency). There are currently no tests in the market that differentiate HTLV 1 from 2.
• The development of the cervical cancer rapid test is moving forward quickly with good results. The next step is to expand the number of samples and the clinical validation.
• Safetest has been granted ANVISA approval for their lab facility, which can produce approximately two million tests per month.

Draft Label Technologies -- Draft Label subsidiary inks definitive agreement to complete business combination. Draft Label will become a wholly owned subsidiary of AcquisitionCo, which is launching microsites focused on men's and women's health (that is, hormone testing, TRT (testosterone replacement therapy), perimenopause, PCOS (polycystic ovary syndrome), fertility and weight loss). Draft Label is preparing for a 2023 public listing.

GameOn -- GameOn had a great finish to 2022. It closed 11 deals, including Karate Combat (KC), YOOM (formerly Tetavi) and Gaming Society (in collaboration with the WNBA). Partnered with Karate Combat to launch playable digital fighter NFTs (non-fungible tokens) and a fantasy game. The digital fighters are set to launch in Q2 2023, with GameOn keeping 80 per cent of revenue. KC37 saw a league-record 10 million total viewers. Karate Combat has global distribution in over 100 countries and is partnered with CBS, Globo, Eurosport, BeIN and ESPN. GameOn is projected to exit 2022 with approx $1-million in revenue and the management team is confident it will close out 2023 with approximately $3-million in revenue.

XR Immersive (XRI) -- XR Immersive is projected to exit 2022 with approximately $1-million in revenue and is forecasted to exit 2023 with approximately $2-million in revenue, with a profit margin between 18 per cent and 20 per cent.

XRI recently announced strategic partnerships with two development studios: Mighty Coconut Studios and Better Than Life. By strategically partnering with various developers, SynthesisVR aims to bring some of the most popular, amazing games, and educational and enterprise training content in a frictionless manner to VR businesses all over the world. These games include Walkabout Mini Golf VR, Kayak VR, Escape Room VR and Zephyrus.

Stardust Solar -- The company is very bullish on the clean tech space and it feels Stardust Solar is well positioned to take advantage of the solar wave. Revenues have been doubling year-over-year since inception. Stardust exited 2021 with $946,000 in revenue, and are expected to close out 2022 with more than $2-million, with a total of 15 active franchise territories. Additionally, it recently became authorized as a Tesla distribution partner, which is a huge milestone for Stardust as very few solar installers are able to achieve this certification level. We anticipate Stardust revenues to double in 2023. Stardust is preparing for a 2023 public listing.

Covalent CQT -- Covalent announced a partnership with Coinbase to launch a blockchain network. This partnership allows Coinbase to look beyond currency exchange and toward decentralized finance, gaming and social media.

Next Decentrum -- Next Decentrum, the creative force behind the hashtag CryptoPharaohs_, has officially partnered with flovatar, Piggos_nft, The_Goobz_NFT and Bl0xNFT to bring the best digital collectibles to PopCon ME, the largest pop culture and gaming event in the Middle East.

FansUnite -- Achieved total revenue in the range of $26-million to $27.3-million for the full year of fiscal 2022, an increase of at least 364 per cent year-over-year. FansUnite continued its growth by obtaining a gaming supplier licence for Ohio (United States) and recently submitted a supplier license application to the Virginia Lottery Board in order to become a legal sports betting and i-gaming supplier in the commonwealth of Virginia.

Turnium Technology Group Inc. -- Turnium generated $5.2-million in revenue in 2022, a year-over-year increase of 31 per cent compared with 2021. The year also saw substantial operating achievements and cost-cutting initiatives combined with management and staffing changes, strengthening its financial foundation for Turnium and positioning the company for future growth. Turnium has a non-binding letter of intent with respect to a potential share purchase transaction with one of its publicly listed strategic partners, ActivePort Group Ltd., an Australian software company. The parties are now in due diligence and the special committee will undergo a process of negotiation and consideration of a definitive and binding purchase agreement. If the potential transaction goes through, Turnium anticipates closing the transaction before the end of the third quarter of 2023.

CloudAdvisors -- CloudAdvisors listed as 2022 New Innovators in Canadian Business and was named as a five-star insurance technology provider in 2022 by Insurance Business Canada Magazine.

Cassia, doing business as CoPilot -- CoPilot exited FY 2022 with $520,000 MRR (monthly recurring revenue) and are projected to achieve 40-per-cent revenue growth in 2023. In 2022, CoPilot raised $9-million in non-dilutive financing.

Recent investor webinars:

• Victory Square Technologies portfolio company Hydreight investor question-and-answer;
• Victory Square Technologies portfolio company Stardust Solar investor Q&A;
• Victory Square Technologies investor Q&A webinar with Mr. Tejani, CEO;
• Victory Square Technologies investor webinar February, 2023.

"We have a solid portfolio, a strong team and a robust pipeline of catalysts to continue our growth trajectory. We are confident that this momentum will continue in the second half of 2023 and beyond. We'd like to thank our loyal shareholders and look forward to creating long-term value for Victory Square, its network of companies and our shareholders," stated Mr. Tejani, CEO, Victory Square

About Victory Square Technologies Inc.

Victory Square builds, acquires and invests in promising startups, then provides the senior leadership and resources needed for fast-tracked growth. Victory Square's sweet spot is cutting-edge technology that is shaping the fourth industrial revolution. The company's corporate portfolio consists of 25-plus global companies using AI, VR/AR and blockchain to disrupt sectors as diverse as fintech (financial technology), insurance, health and gaming.

We seek Safe Harbor.