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June 13, 2019

M. Marin

312-265-9211 mmarin@

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VIQ Solutions

(VQSLF-OTC)

10 S. Riverside Plaza, Chicago, IL 60606

VQSLF: Zacks Company Report

VIQ Solutions operates a technology platform that offers AI-enabled video capture software and audio recording with voice-to-text capabilities that management believes is highly secure. Speech recognition is an underlying core foundation of the platform. The company is focused on highly compliant, security-focused and regulated markets and believes its customers usually obtain higher volume per worker and production efficiency with its platform.

Current Price (06/12/19) Valuation

$0.09 $0.30

OUTLOOK

VIQ management believes that the substantial increase of data captured from audio, video, sensors, body cameras, drones and smart devices will lead to rising use of AI-enabled digital technology to convert data to documents and transcripts. Thus, the backdrop of industry transition provides a positive tailwind for the potential growth of the company s transcription platform towards higher margin SaaS and AI offerings, with market research firm estimating that the speech and voice recognition market will reach $21.5 billion by 2024, a 19.2% CAGR. The company is looking to complement its organic growth with an industry rollup consolidation strategy.

SUMMARY DATA

52-Week High 52-Week Low One-Year Return (%) Beta Average Daily Volume (sh)

Shares Outstanding (mil) Market Capitalization ($mil) Short Interest Ratio (days) Institutional Ownership (%) Insider Ownership (%)

Annual Cash Dividend Dividend Yield (%)

5-Yr. Historical Growth Rates Sales (%) Earnings Per Share (%) Dividend (%)

P/E using TTM EPS P/E using 2019 Estimate P/E using 2020 Estimate

Zacks Rank

$0.18 $0.08

-49 -1.25 31,500

188 $17

1 10% 21%

$0.00 0.00

255 N/A N/A

N/A 3.4 1.9

N/A

Risk Level

Type of Stock Industry Zacks Rank in Industry

High

N/A Technology Services

N/A

ZACKS ESTIMATES

Revenue

(in millions of $)

Q1

(Mar)

2017

2.9

2018

3.0

2019

6.4

2020

Q2 (Jun) 3.2 3.3 6.6E

Q3 (Sep)

3.2 3.1 6.1E

Q4 (Dec)

2.4 2.1 8.4E

Year (Dec) 11.7 11.5 27.5E 36.3E

Per Share Data Q1 (Mar)

2017 0.00 2018 -0.00 2019 -0.00 2020

Q2 (Jun) 0.00 -0.00 0.00E

Q3 (Sep) 0.00 -0.00 0.00E

Q4 (Dec) 0.00 -0.03 0.04E

Year (Dec) 0.00 -0.04 0.03E 0.05E

Quarters might not add to annual reflecting rounding Disclosures on page 18

? Copyright 2019, Zacks Investment Research. All Rights Reserved.

KEY POINTS

VIQ Solutions operates a technology platform that offers artificial intelligence (AI) enabled video capture software and audio recording with voice-to-text capabilities. Management believes the platform is highly secure. Speech recognition is an underlying foundation of the VIQ AI-enabled transcription platform. The company is focused on highly compliant, security-focused and regulated markets. VIQ, customers can obtain higher volume per worker and lower unitary cost and production time, according to management.

Affordable devices that enable the collection of significant volumes of audio and video information are expected to drive new opportunities for VIQ. The volume of data continues to grow with rising data capture from audio and video devices, next generation of intelligent microphones, sensors, body cameras, drones and smartphones, among other devices. Management believes that as this trend continues, pressure to transform data to documents and transcripts digitally leveraging AI technology will mount.

VIQ began to transition toward a SaaS (software as a service) and AI revenue model that provides services to customers on a recurring monthly fee basis based on VIQ s average customer contract length of 5+ years.

The company has implemented a roll-up strategy to drive growth. VIQ acquired three companies in 2018 Net Transcripts, Transcription Express and HomeTech -- and has several others under review. These

were accretive acquisitions that expanded VIQ s customer base, adding 450 customers and the increased opportunity to cross sell the company's platform and services.

The company's platform provides a turnkey digital content conversion solution, according to VIQ. Its product portfolio enables customers to leverage AI tools that allow them to capture, mine and process large amounts of data faster than they could using traditional techniques. In turn, this reduces conversion time and costs and also allows customers to access review and analyze their data more quickly.

The backdrop of industry transition could imply a positive tailwind for the company's growth strategy. Market research firm estimates the speech and voice recognition market at $7.8 billion in 2018, and predicts that it will reach $21.5 billion by 2024, representing a 19.2% CAGR. The expected transition to digital transcription is also supported by data from the Bureau of Labor Statistics, which notes that "Technological advances have changed the way transcription is done [with] speech recognition" and other advances.

OVERVIEW

Toronto, Canada and Phoenix, Arizona-based VIQ Solutions (VQSLF-OTC and VQS-TSXV) operates a technology platform that offers artificial intelligence (AI) enabled video capture software and audio recording with voice-to-text capabilities. VIQ s platform, which management believes is highly secure, is based on cyber-secure AI technology, which the company markets primarily to law enforcement, insurance, judicial, legal, medical and transcription service providers. For example, VIQ subsidiary Net Transcripts targets law enforcement transcription, while Transcription Express targets insurance.

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Human to machine collaboration via an integrated cloud-based platform driven by speech recognition is one of the underlying core foundations of the VIQ AI-enabled transcription platform. VIQ s platform enables clients to streamline their document-creation process and to improve efficiency by leveraging AI tools. With VIQ, customers can obtain results faster with higher volume per worker and reduced unitary cost and production time, according to management. The company s strategy is to enable machines to perform most of high-volume speech to text conversion so that workers can focus more on quality assurance. This is similar to trends noted in a recent New York Times article on the rising use of AI in journalism. The article notes that As the use of artificial intelligence has become a part of the industry s toolbox, journalism executives say the idea is to allow journalists to spend more time on substantive work. VIQ expects AI to represent some 80% of the conversion process in a few years, up from roughly 20% currently.

Growing Use of AI in Document Conversion

Source: Company reports

The rise in sources of data that will be converted to content and the need to access and analyze the content is driving the need to convert data more efficiently. Management believes that as the volume of data continues to increase, pressure to transform digital evidence to documents and transcripts will mount. Technological trends that will drive this, management believes, include the growing need to secure the transfer of media and a proliferation of low-cost devices that enable the collection of significant volumes of audio and video information. Rising data capture from audio and video devices, sensors, body cameras, drones and smartphones, among other devices, lead to a growing volume of data. Management believes that as this trend continues, pressure to transform data to documents and transcripts digitally leveraging AI technology will mount. VIQ enables clients to transform audio to content digitally via a cyber-secure AI speech recognition technology,

VIQ expects roughly 33% and 60% of the content it works on in 2019 and 2020, respectively, will use some element of automated AI technology. Moreover, VIQ began to transition its recurring revenue toward a SaaS and AI revenue model that provides services to customers on a recurring monthly fee basis based on VIQ s average customer contract length of 5+ years.

VIQ has about 1,200 customers globally. The company s single largest market is the U.S., which accounts for about 60% of total revenue as illustrated below. Australia represents another roughly 25% of total revenue, with Canada and EMEA account for the remaining approximately 15%.

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VIQ Global Revenue Breakdown

USA, 60%

Australia, 25%

Source: Company reports

EMEA, 10%

Canada, 5%

M&A Roll-up Strategy Drives Growth

The company is pursuing a roll-up strategy within the digital transcription space and has completed several transactions. VIQ acquired three companies in 2018, investing $20 million over the past few years in M&A and product development, and has several others under review. VIQ s M&A strategy helps expand its portfolio of services. In fiscal year 2018, the company also expanded its product portfolio by developing new technologies based on mobility, secure workflow, Cloud-based and SaaS offerings. As noted, the company completed three accretive acquisitions in 2018 that expanded its customer base, adding 450 customers. These transactions also increased the company s opportunity to cross-sell its growing product portfolio.

In November 2018, the company acquired Net Transcripts, a leading provider of documentation services to the law enforcement sector. The transaction added more than 350 law enforcement clients throughout the U.S. and $6.8 million in annual recurring revenue.

In December 2018, the company acquired two leading providers of transcription services to the insurance, government and legal markets based in the U.S. One company is Transcription Express, in Gilbert, Arizona. The other is Seattle, Washington-based HomeTech. Together these companies added $6.4 million in annualized recurring revenue and more than 55 insurance clients, including more than a dozen Fortune 500 insurance customers covering 49 states.

New Technologies: End-to-End Solution

The company believes its turnkey solutions allow customers to access one single platform to capture manage and mine digital data. The company s emphasis on cybersecurity also allows it to target growth niches in highly regulated sectors.

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Company reports

The company s platform provides a turnkey voice to digital content solution. Its AI-enabled products include:

o aiAssistTM, an AI patented analytics engine o CapturePROTM o MobileMicTM PRO o NetScribeTM, and its secured cloud-based transcription workflow

These products allow the company s customers to leverage AI tools that enable them to mine and process large amounts of data faster than they could using traditional techniques. In turn, this produces significant time and cost savings and also allows legal professionals to review and assess their data, including transcribed legal records, much sooner than they could if traditional conversion techniques are used.

In mid-2018, the company released MobileMic with AI, which represented the first commercial deployment of VIQ s aiAssist AI platform. Management believes that MobileMic offers studio-quality recording with AI to generate professional level automated transcriptions. MobileMic can be used by mobile insurance adjustors, police and public safety officials for field interviews and medical professionals for in office and patient home care, among other professionals.

INDUSTRY OUTLOOK

The backdrop of industry trends could provide a positive tailwind for the company s growth. Market research firm estimates the speech and voice recognition market at $7.8 billion in 2018, and predicts that it will reach $21.5 billion by 2024, representing a 19.2% CAGR. The expected transition to digital transcription is also supported by data from the Bureau of Labor Statistics, which notes that employment of medical transcriptionists is projected to decline 3% from 2016 to 2026. Technological advances have changed the way medical transcription is done [with] speech recognition and other advances.

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