VQS VIQ Solutions Inc

VIQ Solutions Inc. (“VIQ” or the “Company”) (TSX and Nasdaq: VQS), a global provider of secure, AI-driven, digital voice and video capture technology and transcription services, today reported its unaudited financial results for the fourth quarter and full year ending December 31, 2022. Results are reported in US dollars and prepared in accordance with International Financial Reporting Standards ("IFRS").

“We ended a challenging 2022 with a 48% increase in year over year revenue which 93% is Annual Recurring Revenue (“ARR”)1 and a 53% increase in year over year net new bookings,” said Sebastien Paré, VIQ’s Chief Executive Office. “We delivered on our promise to gradually return to organic growth post pandemic in 2023 and to bring end-to-end workflow technologies to clients around the world to solve key problems like the critical shortage of court reporters and the need to move content securely to the cloud. As our customers find more efficient ways to create and digitize delivery of their evidentiary content, we continue to execute our strategy to extend our Artificial Intelligence (“AI”) to targeted verticals through scale, industry specific content, optimized workflow, and human knowledge.”

“The positive impact our AI-powered, NetScribe™ technology has had in our most mature markets was impressive and underscores the value of VIQ IP. Productivity and efficiency gains reflected in gross margin post migration reached 55.8% in the United States and 61.6% in the United Kingdom. This is a material improvement from the gross margin ranges noted post-acquisition. Australia, representing 53% of our revenue exiting 2022 is scheduled to complete migrations onto the platform in 2023 which will further improve margins.”

Fourth Quarter 2022 Financial Highlights

• Revenue of $10.2 million, an increase of $2.7 million, or 35%, from the same period in the prior year.
• Gross profit of $4.8 million, an increase of $1.5 million, or 45%, from the same period in the prior year.
• Net loss of $2.2 million, a decrease of $1.5 million, from the same period in the prior year.
• Adjusted EBITDA of negative $1.2 million, a decrease of $0.6 million, or 35%, from the same period in the prior year.

Full Year 2022 Financial Highlights

• Revenue of $45.8 million, an increase of $14.8 million, or 48%, from the same period in the prior year.
• Gross profit of $21.9 million, an increase of $7.0 million, or 47%, from the same period in the prior year.
• Net loss of $8.7 million, a decrease of $11.0 million, or 56%, for the same period in the prior year.
• Adjusted EBITDA1 was negative $3.4 million, a decrease $1.5 million, or 31% from the same period in the prior year.

1 Represents a non-IFRS measure. Please refer to the "Non-IFRS Measures" section below and the reconciliation tables at the end of this press release.

On January 13, 2023, the Company entered a senior debt facility with Beedie Investments Ltd. (“Beedie”), pursuant to which Beedie has agreed to advance up to $15 million to the Company (the “Loan”). $12 million of the Loan has been advanced to the Company as an initial advance with an additional $3 million available to the Company to be drawn in subsequent advances in a minimum of $1 million for growth initiatives.

“As macroeconomic headwinds changed, we adjusted our focus, aligning our global resources, conducting a 10% reduction in headcount, and restructured to improve Adjusted EBITDA as we work to evolve into a leaner, more data driven company,” said Alexie Edwards, VIQ Chief Financial Officer. “In January 2023, we refinanced our legacy debt facility eleven months ahead of maturity with a built-in facility for growth initiatives. We believe this facility provides us with the necessary liquidity to support growth.”

Nasdaq

As previously disclosed, on September 27, 2022, the Company received a letter from Nasdaq indicating that the Company was not in compliance with Nasdaq Listing Rule 5550(a)(2) because the closing bid price per share for the Company’s common shares had closed below $1.00 for the previous 30 consecutive business days (the “Bid Price Rule”). The Company was given until March 27, 2023, to regain compliance with the Bid Price Rule.

On March 28, 2023, the Company was granted an additional 180-day grace period, or until September 25, 2023, to regain compliance with the Bid Price Rule following the Company’s notification to Nasdaq that it would seek to implement a reverse stock split, if necessary, to regain compliance with the Bid Price Rule. To regain compliance with the Bid Price Rule and qualify for continued listing on the Nasdaq Capital Market, the minimum bid price per share of the Company’s common shares must be at least $1.00 for at least 10 consecutive business days on or prior to September 25, 2023. If the Company fails to regain compliance during the additional compliance period, then Nasdaq will notify the Company of its determination to delist the Company’s common shares, at which point the Company would have an opportunity to appeal the delisting determination to a Nasdaq Listing Qualifications Panel (the “Panel”), but there can be no assurance that the Panel would grant the Company’s request for continued listing.

Conference Call Details

VIQ will host a conference call and webcast to discuss its fourth quarter and full year 2022 financial results on Thursday, March 30, 2023 at 11:00 AM Eastern Time. The call will consist of updates by Sebastien Paré, VIQ’s CEO, Alexie Edwards, VIQ’s CFO, and Susan Sumner, VIQ’s President and COO, followed by a question-and-answer period.

Investors may access a live webcast of the call on the Company’s website at www.viqsolutions.com/investors or by dialing 1-888-440-4052 (North America toll-free) or +1-646-960-0827 (international) to be connected to the call by an operator using conference ID number 4983233. Participants should dial in at least 10 minutes prior to the start of the call.

A replay of the webcast will be available on the Company’s website through the same link approximately one hour after the conference call concludes.

For more information about VIQ, please visit viqsolutions.com.

About VIQ Solutions

VIQ Solutions is a global provider of secure, AI-driven, digital voice and video capture technology and transcription services. VIQ offers a seamless, comprehensive solution suite that delivers intelligent automation, enhanced with human review, to drive transformation in the way content is captured, secured, and repurposed into actionable information. The cyber-secure, AI technology and services platform are implemented in the most rigid security environments including criminal justice, legal, insurance, government, corporate finance, media, and transcription service provider markets, enabling them to improve the quality and accessibility of evidence, to easily identify predictive insights and to achieve digital transformation faster and at a lower cost.

Forward-looking Statements

Certain statements included in this press release constitute forward-looking statements or forward-looking information (collectively, “forward-looking statements”) under applicable securities legislation. Such forward-looking statements or information are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes.

Forward-looking statements (typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words, including negatives thereof, suggesting future outcomes or that certain events or conditions “may” or “will” occur. These statements are only predictions. Forward-looking statements in this press release include, but are not limited to statements with respect to the Company’s strategy, improvements to margins, benefits of the Beedie facility, expectations around the Nasdaq delisting and the conference call to discuss the Company’s fourth quarter and full year 2022 results.

Forward-looking statements is based on several factors and assumptions which have been used to develop such statements, but which may prove to be incorrect. Although VIQ believes that the expectations reflected in such forward-looking statements are reasonable, undue reliance should not be placed on forward-looking statements because VIQ can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this press release, assumptions have been made regarding, among other things, recent initiatives and that sales and prospects may increase revenue. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions that have been used.

Forward-looking statements are necessarily based on a number of opinions, assumptions and estimates that while considered reasonable by the Company as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements, including but not limited to the factors described in greater detail in the “Risk Factors” section of the Company’s annual report form on SEC Form 20-F form dated March 31, 2022 and in the Company’s other materials filed with the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission from time to time, available at www.sedar.com and www.sec.gov, respectively.

These factors are not intended to represent a complete list of the factors that could affect the Company, however, these factors should be considered carefully. Such estimates and assumptions may prove to be incorrect or overstated. The forward-looking statements contained in this press release are made as of the date of this press release and the Company expressly disclaims any obligations to update or alter such statements or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.

VIQ Solutions Inc.

(Expressed in United States dollars, Unaudited)

 

 

 

Three months ended December 31

 

Period over Period

Change

 

Year ended December 31

 

Period over Period

Change

 

 

2022

 

2021

 

$

 

%

 

2022

 

2021

 

$

 

%

Revenue

 

10,181,580

 

7,514,421

 

2,667,159

 

35

 

45,843,929

 

31,046,812

 

14,797,117

 

48

Cost of sales

 

5,416,313

 

4,232,474

 

1,183,839

 

28

 

23,918,226

 

16,123,853

 

7,794,373

 

48

Gross profit

 

4,765,267

 

3,281,947

 

1,483,320

 

45

 

21,925,703

 

14,922,959

 

7,002,744

 

47

 

 

46.8%

 

43.7%

 

 

 

 

 

47.8%

 

48.1%

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and administrative expenses

 

5,897,545

 

5,111,108

 

786,437

 

15

 

24,526,303

 

19,119,713

 

5,406,590

 

28

Research and development expenses

 

91,824

 

274,889

 

(183,065)

 

(67)

 

734,115

 

1,092,108

 

(357,993)

 

(33)

Loss (Gain) on contingent consideration

 

(27,808)

 

(265,592)

 

237,784

 

(90)

 

80,071

 

(332,569)

 

412,640

 

(124)

Stock-based compensation

 

605,343

 

862,283

 

(256,940)

 

(30)

 

2,779,312

 

8,495,189

 

(5,715,877)

 

(67)

Depreciation

 

146,766

 

67,707

 

79,059

 

117

 

579,249

 

257,099

 

322,150

 

125

Amortization

 

2,289,819

 

1,102,465

 

1,187,354

 

108

 

5,508,954

 

4,384,502

 

1,124,452

 

26

Interest expense

 

236,885

 

334,489

 

(97,604)

 

(29)

 

1,052,618

 

1,331,100

 

(278,482)

 

(21)

Accretion and other financing costs

 

475,598

 

211,136

 

264,462

 

125

 

1,231,194

 

967,106

 

264,088

 

27

Loss on extinguishment of debt

 

-

 

-

 

-

 

100

 

747,865

 

-

 

747,865

 

100

Gain on revaluation of options

 

(447,737)

 

(526,081)

 

78,344

 

(15)

 

(1,511,399)

 

(1,028,055)

 

(483,344)

 

47

Gain on revaluation of RSUs

 

(104,578)

 

(123,583)

 

19,005

 

(15)

 

(550,260)

 

(242,595)

 

(307,665)

 

127

Gain on revaluation of the derivative warrant liability

 

(730,491)

 

(604,681)

 

(125,810)

 

21

 

(4,255,017)

 

(1,368,180)

 

(2,886,837)

 

211

Restructuring Costs

 

19,385

 

37,378

 

(17,992)

 

(48)

 

323,075

 

432,702

 

(109,627)

 

(25)

Impairment of PPE

 

15,246

 

-

 

15,246

 

100

 

15,246

 

-

 

15,246

 

100

Business acquisition costs

 

14,516

 

356,410

 

(341,895)

 

(96)

 

433,372

 

539,734

 

(106,362)

 

(20)

Other income

 

(392)

 

(1,483)

 

1,091

 

(74)

 

(1,291)

 

(12,003)

 

10,712

 

(89)

Foreign exchange (gain) loss

 

(1,049,277)

 

99,382

 

(1,148,659)

 

1,156

 

(452,068)

 

22,130

 

(474,198)

 

(2,143)

Loss before income taxes

 

(2,667,377)

 

(3,653,880)

 

986,503

 

27

 

(9,315,636)

 

(18,735,022)

 

9,419,386

 

50

Current income tax recovery (expense)

 

180,071

 

(40,329)

 

220,400

 

(547)

 

105,256

 

875

 

104,381

 

11,929

Deferred income tax recovery (expense)

 

319,284

 

40,416

 

278,868

 

690

 

504,365

 

(944,602)

 

1,448,967

 

(153)

Income tax recovery (expense)

 

499,355

 

87

 

499,268

 

(573,871)

 

609,621

 

(943,727)

 

1,553,348

 

165

Net Loss

 

(2,168,022)

 

(3,653,793)

 

1,485,771

 

41

 

(8,706,015)

 

(19,678,749)

 

10,972,734

 

56

Adjusted EBITDA (1)

 

(1,196,294)

 

(1,838,458)

 

642,163

 

35

 

(3,414,786)

 

(4,956,293)

 

1,541,507

 

31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

 

     

 

 

 

   

 

 

Basic

 

23,061,227

 

29,880,185

 

 

 

 

 

31,648,001

 

26,448,594

 

 

 

 

Diluted

 

23,061,227

 

29,880,185

 

 

 

 

 

31,648,001

 

26,448,594

 

 

 

 

Net income (loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

(0.09)

 

(0.12)

 

 

 

 

 

(0.28)

 

(0.74)

 

 

 

 

Diluted

 

(0.09)

 

(0.12)

 

 

 

 

 

(0.28)

 

(0.74)

     

1Adjusted EBITDA is earnings before stock-based compensation, depreciation, amortization, interest expense, accretion and other financing expense, loss on extinguishment of debt, gain on revaluation of options, RSUs, and derivative warrant liability, restructuring costs, impairment of PPE, business acquisition costs, other income, foreign exchange (gain) loss, and current and deferred income tax expense (recovery), is a non-IFRS measure. Please refer to the section entitled “Non-IFRS Measures.”

     

VIQ Solutions Inc.

Consolidated Statements of Financial Position

(Expressed in United States dollars, Unaudited)

     

 

 

December 31, 2022

 

December 31, 2021

(Restated)

Assets

 

 

 

 

Current assets

 

 

 

 

Cash

 

$

1,657,571

 

 

$

10,583,534

 

Trade and other receivables, net of allowance for doubtful accounts

 

 

5,305,728

 

 

 

5,594,368

 

Income tax recoverable

 

 

104,670

 

 

 

–

 

Inventories

 

 

37,807

 

 

 

49,557

 

Prepaid expenses and deposits

 

 

2,050,661

 

 

 

2,054,793

 

 

Non-current assets

 

 

9,156,437

 

 

 

18,282,252

 

Restricted cash

 

 

463,743

 

 

 

303,945

 

Property and equipment

 

 

1,432,133

 

 

 

460,974

 

Right-of-use assets, net

 

 

1,058,600

 

 

 

1,134,493

 

Intangible assets, net

 

 

10,731,917

 

 

 

14,928,984

 

Goodwill

 

 

12,047,048

 

 

 

12,440,557

 

Deferred tax assets

 

 

655,004

 

 

 

464,800

 

Total assets

 

$

35,544,882

 

 

$

48,016,005

 

 

Liabilities

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables and accrued liabilities

 

$

5,937,880

 

 

$

5,679,628

 

Income tax payable

 

 

45,212

 

 

 

97,784

 

Share-based payment liability

 

 

31,487

 

 

 

551,201

 

Derivative warrant liability

 

 

290,712

 

 

 

1,862,876

 

Current portion of long-term debt

 

 

8,634,258

 

 

 

1,109,713

 

Current portion of lease obligations

 

 

487,673

 

 

 

287,901

 

Contract liabilities

 

 

1,745,415

 

 

 

1,003,187

 

 

Non-current liabilities

 

 

17,172,637

 

 

 

10,592,290

 

Deferred tax liability

 

 

868,643

 

 

 

1,224,640

 

Long-term debt

 

 

19,812

 

 

 

11,999,108

 

Long-term contingent consideration

 

 

–

 

 

 

166,603

 

Long-term lease obligations

 

 

718,575

 

 

 

900,868

 

Other long-term liabilities

 

 

1,121,805

 

 

 

1,042,938

 

Total liabilities

 

 

19,901,472

 

 

 

25,926,447

 

 

Shareholders' Equity

 

 

 

 

Capital stock

 

 

74,690,527

 

 

 

72,191,764

 

Contributed surplus

 

 

5,892,192

 

 

 

4,842,208

 

Accumulated other comprehensive income (loss)

 

 

(1,214,354

)

 

 

74,526

 

Deficit

 

 

(63,724,955

)

 

 

(55,018,940

)

Total shareholders’ equity

 

 

15,643,410

 

 

 

22,089,558

 

Total liabilities and shareholders' equity

 

$

35,544,882

 

 

$

48,016,005

 

   

VIQ Solutions Inc.

Consolidated Statements of Loss and Comprehensive Loss

(Expressed in United States dollars, Unaudited)

       

 

 

Year ended December 31

 

 

 

2022

 

 

 

2021

 

Revenue

 

$

45,843,929

 

 

$

31,046,812

 

 

 

 

 

 

Cost of sales

 

 

23,918,226

 

 

 

16,123,853

 

Gross profit

 

 

21,925,703

 

 

 

14,922,959

 

 

 

 

 

 

Expenses

 

 

 

 

Selling and administrative expenses

 

 

24,526,303

 

 

 

19,119,713

 

Research and development expenses

 

 

734,115

 

 

 

1,092,108

 

Stock-based compensation

 

 

2,779,312

 

 

 

8,495,189

 

Gain on revaluation of options

 

 

(1,511,399

)

 

 

(1,028,055

)

Gain on revaluation of RSUs

 

 

(550,260

)

 

 

(242,595

)

Gain on revaluation of the derivative warrant liability

 

 

(4,255,017

)

 

 

(1,368,180

)

Foreign exchange loss (gain)

 

 

(452,068

)

 

 

22,130

 

Depreciation

 

 

579,249

 

 

 

257,099

 

Amortization

 

 

5,508,954

 

 

 

4,384,502

 

Interest expense

 

 

1,052,618

 

 

 

1,331,100

 

Accretion and other financing costs

 

 

1,231,194

 

 

 

967,106

 

Loss (gain) on contingent consideration

 

 

80,071

 

 

 

(332,569

)

Loss on revaluation of conversion feature liability

 

 

–

 

 

 

–

 

Loss on repayment of long-term debt

 

 

–

 

 

 

–

 

Loss on extinguishment of debt

 

 

747,865

 

 

 

–

 

Impairment of goodwill and intangible assets

 

 

–

 

 

 

–

 

Impairment of property and equipment

 

 

15,246

 

 

 

–

 

Restructuring costs

 

 

323,075

 

 

 

432,702

 

Business acquisition costs

 

 

433,372

 

 

 

539,734

 

Other income

 

 

(1,291

)

 

 

(12,003

)

Total expenses

 

 

31,241,339

 

 

 

33,657,981

 

 

 

 

 

 

Current income tax (recovery) expense

 

 

(105,256

)

 

 

(875

)

Deferred income tax (recovery) expense

 

 

(504,365

)

 

 

944,602

 

Income tax (recovery) expense

 

 

(609,621

)

 

 

943,727

 

Net loss for the year

 

$

(8,706,015

)

 

$

(19,678,749

)

Exchange gain (loss) on translating foreign operations

 

 

(1,288,880

)

 

 

153,432

 

Comprehensive loss for the year

 

$

(9,994,895

)

 

$

(19,525,317

)

 

 

 

 

 

Net loss per share

 

 

 

 

Basic

 

 

(0.28

)

 

 

(0.74

)

Diluted

 

 

(0.28

)

 

 

(0.74

)

Weighted average number of common shares outstanding - basic

 

 

31,648,001

 

 

 

26,448,594

 

Weighted average number of common shares outstanding - diluted

 

 

31,648,001

 

 

 

26,448,594

 

 

VIQ Solutions Inc.

Reconciliation of Non-IFRS Measures

(Expressed in United States dollars) (Unaudited)

The following is a reconciliation of Net Loss to Adjusted EBITDA, the most directly comparable IFRS measure for the periods ended December 31, 2022 and 2021:

 

 

Three months ended December 31

 

Year ended December 31

(Unaudited)

2022

2021

 

2022

2021

Net Loss

(2,168,022)

(3,653,793)

 

(8,706,015)

(19,678,749)

Add:

 

 

 

 

 

Depreciation

146,766

67,707

 

579,249

257,099

Amortization

2,289,819

1,102,465

 

5,508,954

4,384,502

Interest expense

236,885

334,489

 

1,052,618

1,331,100

Current income tax (recovery) expense

(180,071)

40,329

 

(105,256)

(875)

Deferred income tax (recovery) expense

(319,284)

(40,416)

 

(504,365)

944,602

EBITDA

6,093

(2,149,219)

 

(2,174,815)

(12,762,321)

Accretion and other financing costs

475,598

211,136

 

1,231,194

967,106

Loss on repayment of long-term debt

-

-

 

747,865

-

Gain on revaluation of options

(447,737)

(526,081)

 

(1,511,399)

(1,028,055)

Gain on revaluation of RSUs

(104,578)

(123,583)

 

(550,260)

(242,595)

Gain on revaluation of the derivative warrant liability

(730,491)

(604,681)

 

(4,255,017)

(1,368,180)

Impairment of property and equipment

15,246

-

 

15,246

-

Restructuring costs

19,385

37,378

 

323,075

432,702

Business acquisition financing costs

14,516

356,410

 

433,372

539,734

Other income

(392)

(1,483)

 

(1,291)

(12,003)

Stock-based compensation

605,343

862,283

 

2,779,312

8,495,189

Foreign exchange (gain) loss

(1,049,277)

99,382

 

(452,068)

22,130

 

 

 

 

 

 

Adjusted EBITDA

(1,196,294)

(1,838,458)

 

(3,414,786)

(4,956,293)

 

The following is a reconciliation of Technology Services, Support and Maintenance, SaaS and Subscription revenue to ARR, the most directly comparable IFRS measure for the periods ended December 31, 2022 and 2021:

At December 31, 2022 – Reconciliation of 2022 Technology Services, support and maintenance, SaaS, and Subscription revenues to ARR

 

 

2022

 

Technology Services

 

41,812,479

 

Support & Maintenance

 

1,872,620

 

SaaS

 

89,692

 

Subscription

 

493,845

 

Add: Client Adjustments

 

(1,532,468

)

Total Annual Recurring Revenue

$

42,736,168

 

 

At December 31, 2021 – Reconciliation of 2021 Technology Services, support and maintenance, SaaS, and Subscription revenues to ARR

 

 

2021

 

Technology Services

 

26,676,738

 

Support & Maintenance

 

1,772,203

 

SaaS

 

65,187

 

Subscription

 

189,359

 

Add: The Transcription Agency Revenue Jan 1 – Oct 1, 2021

 

1,083,415

 

Add: Auscript Revenue Jan 1 – Dec 13, 2021

 

10,163,719

 

Add: Client Adjustments

 

8,684,589

 

Total Annual Recurring Revenue

$

48,635,210

 

Non-IFRS Measures

The Company prepares its financial statements in accordance with IFRS. Non-IFRS measures are used by management to provide additional insight into our performance and financial condition. We believe non-IFRS measures are an important part of the financial reporting process and are useful in communicating information that complements and supplements the consolidated financial statements. Adjusted EBITDA and ARR are not a measure recognized by IFRS and does not have standardized meanings prescribed by IFRS. Therefore, Adjusted EBITDA and ARR may not be comparable to similar measures presented by other issuers. Investors are cautioned that Adjusted EBITDA should not be construed as an alternative to net income (loss) as determined in accordance with IFRS.

This news release also includes certain measures which have not been prepared in accordance with IFRS such as Adjusted EBITDA. To evaluate the Company’s operating performance as a complement to results provided in accordance with IFRS, the term “Adjusted EBITDA” refers to net income (loss) before earnings for stock-based compensation, depreciation, amortization, interest expense, accretion and other financing expense, (gain) loss on revaluation of options, (gain) loss on revaluation of restricted share units, gain (loss) on revaluation of derivative warrant liability, restructuring costs, (gain) loss on revaluation of conversion feature liability, loss on repayment of long-term debt, business acquisition costs, impairment of goodwill and intangibles, other expense (income), foreign exchange (gain) loss, current and deferred income tax expense. We believe that the items excluded from Adjusted EBITDA are not connected to and do not represent the operating performance of the Company.

We believe that Adjusted EBITDA is useful supplemental information as it provides an indication of the results generated by the Company’s main business activities prior to taking into consideration how those activities are financed and taxed as well as expenses related to stock-based compensation, depreciation, amortization, impairment of goodwill and intangibles, other expense (income), and foreign exchange (gain) loss. Accordingly, we believe that this measure may also be useful to investors in enhancing their understanding of the Company’s operating performance.

ARR is the annualized equivalent value of the 1- Software Support Maintenance (SSM), 2- Software Subscriptions 3- SaaS and 4- Technology Services revenue of all existing contracts as of the date being measured. This excludes non-recurring revenue from implementation, support, and maintenance fees. The majority of our Editing Services contracts are volumes based. Accordingly, our calculation of ARR assumes that the clients will renew the contractual commitments on a periodic basis as those commitments come up for renewal. A portion of the contract renewals are through a competitive tender process. Contracts agreements may be subject to contract value increases upon renewal reflecting both inflationary increases and the additional value and added products and services provided by our solutions. ARR is not adjusted for the impact of any projected future client cancellations, loss of renewals, service upgrades or downgrades or price increases or decreases.

We use ARR as a measure of our revenue trend and an indicator of our future revenue opportunity from existing recurring client contracts.

We believe that this measure provides a fair real-time measure of performance in a volume and subscription-based environment. ARR provides us with the visibility for consistent and predictable growth to our cash flows. Our total revenue growth coupled with increasing ARR indicates the continued strength in the expansion of our business and will continue to be our focus on a go-forward basis.

Trademarks

This press release includes trademarks, such as “aiAssist”, “NetScribe” and “FirstDraft”, which are protected under applicable intellectual property laws and are the property of VIQ. Solely for convenience, our trademarks referred to in this news release may appear without the ® or TM symbol, but such references are not intended to indicate, in any way, that we will not assert our rights to these trademarks, trade names and services marks to the fullest extent under applicable law. Trademarks which may be used in this press release, other than those that belong to VIQ, are the property of their respective owners.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230329005985/en/

Media: Laura Haggard Chief Marketing Officer VIQ Solutions Phone: (800) 263-9947 Email: marketing@viqsolutions.com Investor Relations: Laura Kiernan High Touch Investor Relations Phone: 1-914-598-7733 Email: viq@htir.net