Interim Report - Q2 2017

Comments from CEO

VirtualWorks Group experienced a good second quarter where the main activities included finalizing our private placement and subsequent offering, continued development of our ayfie text analytics platform for eDiscovery and contract management, and the rollout of ViaSuggest – a query suggestion tool for external websites. Because of a quiet quarter from Konica Minolta following their financial year end, VirtualWorks Group saw a slight decrease in quarter over quarter revenue from Q1 2017, however, have experienced an 83% increase in year over year revenue from Q2 2016. On a year to date basis, our 2017 revenues have increased 118% when compared to 2016.

Our cost of sales and operating expenses saw a slight increase for the second quarter as we continued to utilize third party developers to accommodate Roll Call’s accelerated schedule. Relocating and expanding our New York office also contributed to the increase in operating expense quarter over quarter, however, these are one of costs. On a year to date basis, our 2017 operating expenses decreased 9% when compared to 2016. Combining the year over year increase in revenues and decrease in operating expenses results in an 38% decrease in our operating loss. The receipt of funding along with the positive development in our business operations confirms management’s outlook regarding VirtualWorks Group.

Additionally, VirtualWorks Group signed Siw Ødegaard who will serve as the Group’s Chief Financial Officer. She will take up the position 1^st September 2017. We are excited to add a seasoned executive with experience within finance, mergers & acquisitions, and investor relations to the team.

Erik Baklid

CEO, VirtualWorks Group AS

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