Expert ai S p A : .ai Group Half Year Report 2023 - IFRS

EXPERT.AI GROUP

HALF-YEARLY FINANCIAL REPORT

PREPARED IN ACCORDANCE WITH IFRS ACCOUNTING STANDARDS APPROVED BY THE EUROPEAN UNION

AS AT 30 June 2023

Table of contents

EXPERT.AI MANAGEMENT REPORT AS AT 30/06/2023	2
CONDENSED HALF-YEARLY CONSOLIDATED FINANCIAL STATEMENTS	AS AT 30/06/2023
29

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EXPERT.AI MANAGEMENT REPORT AS AT 30/06/2023

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TABLE OF CONTENTS
I. PROFILE OF EXPERT.AI	4
CORPORATE BODIES	4
KEY SHAREHOLDERS OF PARENT COMPANY	6
APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS	7
GROUP STRUCTURE	7
BUSINESS	9
CUSTOMERS	10
II. RESEARCH AND DEVELOPMENT ACTIVITIES	11
III. OPERATING PERFORMANCE	13
EXAI.MI SHARE PRICE	13
MAIN CORPORATE EVENTS OCCURRED IN THE YEAR	14
GENERAL ECONOMIC PERFORMANCE	16
THE SCENARIO OF THE NATIONAL ECONOMY	16
REFERENCE MARKET	17
OPERATING PERFORMANCE OF THE GROUP	18
MAIN ECONOMIC DATA	18
MAIN BALANCE SHEET DATA	21
FORESEEABLE EVOLUTION OF MANAGEMENT	23
TREASURY SHARES	24
IV. ENVIRONMENT, PERSONNEL AND RISKS	24

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I. PROFILE OF EXPERT.AI

Dear Shareholders,

This report supplements the consolidated financial statements so as to provide all additional information for a better and clearer understanding of the performance of the consolidated companies, which cannot result from the mere reading of the consolidated financial statements and the explanatory notes.

CORPORATE BODIES

Board of Directors

Chairman of the Board of Directors	DARIO PARDI
Director - CEO	WALTER LLOYD MAYO III
Director - CTO	MARCO VARONE
Deputy Chairman of the Board of Directors	STEFANO SPAGGIARI
Director	SARA POLATTI
Independent Director	ALAN PACKER
Independent Director	ANDREA GABOLA
Independent Director	ETTORE LEALE
Independent Director	KAREN JO CAMBRAY
Independent Director	STEFANO PEDRINI
Independent Director	MARCO DI TEODORO

In light of new appointments (3 May 2023) and of Governance renewal (25 July 2023), the members of the Board of Directors are:

Dario Pardi - Chairman, legal representative and major shareholder of GUM Group S.p.A., has decades of experience working for major ICT multinationals, holding senior positions both internationally and in Italy;

Walt Mayo - Chief Executive Officer, accomplished manager with more than two decades of experience in sales, marketing and strategic leadership of development;

Marco Varone - Co-founder and Chief Technology Officer, one of the world's leading experts in semantic technology applied to natural language understanding and processing;

Stefano Spaggiari - Deputy Chairman and Head of investor relations, one of the founding partners of the company which, under his leadership, has become an artificial intelligence technology market leader;

Sara Polatti - Director, Associate and CFO at CC & Soci S.r.l., where she provides financial advice on extraordinary finance transactions in Italy and abroad, club deal organisation and structuring as well as company set up and operational;

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Alan Packer - Independent Director, former Technical Director of Amazon's Alexa natural language understanding team, has almost 30 years of experience in artificial intelligence, machine learning and language technologies;

Andrea Gabola - Independent Director, Chartered Accountant and Auditor, partner of the firm Ranalli e associati in Turin, holds senior positions in several companies in various industry and service sectors;

Ettore Leale - Independent Director, U.S.-based executive and investor working in software and digital education. He has led Yahoo's search engine business in emerging markets, launched new digital products and opened new markets for Harvard Business School, Instill, Digital Impact and Adaptec;

Karen Jo Cambray - Independent Director, Chief Financial Officer with over 25 years of experience in planning and executing financial strategies for early and mid-stage growth companies, finance and operations executive with significant experience in strategic planning, scaling transactions and M&A activities;

Stefano Pedrini - Independent Director, Professor of Economics and Design Organization at the Polytechnic of Turin, expert in management consulting and advisory in corporate finance, management control and strategy;

Marco di Teodoro - Independent director, Chartered Accountant and Auditor at corporations as well as trainer at SDA Bocconi and the Cattolica del Sacro Cuore University.

The Board of Directors also resolved to set up an Executive Committee, whose members are:

• Dario Pardi, who also serves as Chairman of the Committee;
• Walt Mayo; and
• Marco Varone;

and also appointed Director Marco di Teodoro as a member of the Management Control Committee, whose members are thus:

Andrea Gabola - Chairman

Stefano Pedrini - Member

Marco di Teodoro - Member

Superv isory Body

Costantino di Miceli - Chairman

Stefano Termanini - External Member

Nicola Bortoletto - Internal Member

Audit Firm

BDO Italy S.p.A.

KEY SHAREHOLDERS OF PARENT COMPANY

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Expert.ai S.p.A. is a company with registered office in Rovereto, in Via Fortunato Zeni 8 and with operational headquarters in Modena, in Viale Virgilio 56/Q. Its shareholders are shown in the table below.

Shareholder	% of total share capital
Ergo S.r.l.	8.14
GUM Group S.p.A.	7.24
Marco Varone	5.17
Stefano Spaggiari	5.02
Floating	74.43
Total	100

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APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS

The half-yearly financial report as at 30/06/2023 was approved by the Board of Directors on 28/09/2023 and is not audited.

GROUP STRUCTURE

Over the last few years, the Group has consolidated its physiognomy as a company offering services to corporate and government intelligence, taking on the structure represented by the following chart:

The current corporate organisational chart has not changed substantially from that of 31/12/2022.

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The expert.ai group currently has a global presence and infrastructure, with headquarters in Italy, Spain, France,

Germany, UK, Switzerland, USA and Canada:

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BUSINESS

Expert.ai is listed on the Euro Growth Milan (EXAI:IM) market and is a leader in artificial intelligence applied to natural language understanding and natural language processing. The company's main goal is to help companies and public organisations transform language into useful data to improve decision-makingprocesses, accelerate intelligent

process automation, analyse complex documents and identify market risks and opportunities.

In today's world, characterised by the centrality of mostly unstructured business data (expressed in the language we usually use to communicate - natural language), the ability to effectively exploit the plethora of information available, which is constantly growing exponentially, is fundamental to gaining a competitive advantage. Expert.ai has more than

30 years of experience with hundreds of successful projects and implementations. It employs a team of experts in

natural language technology and a unique artificial intelligence technology, which has won major awards from analysts and industry experts, including Gartner1 and Forrester2. The most distinctive and cutting-edge aspect of expert.ai's platform and solutions is its ability to make the most of and offer a hybrid approach to artificial intelligence ('Hybrid AI').

Expert.ai Platform: expert.ai's platform is capable of handling even very complex use cases and, at the same time, is simple and intuitive enough to be used easily even by novices. Taking advantage of the best solutions offered by different artificial intelligence (hybrid AI) technologies, it 'understands' the language used in business activities to enhance any process or application that requires the processing of unstructured data, expressed in natural language.

Symbolic understanding based on knowledge graphs and language rules, machine learning, large language models (such as GPT) and an open platform, which makes the most of and offers the strengths and benefits of all artificial intelligence approaches. Expert.ai's unique mix of technology and solutions ensures maximum accuracy in linguistic analysis as well as the speed, flexibility and scalability needed to transform any information content into valuable knowledge and

immediately usable data.

The company also collaborates with a global partner network. Leveraging the integration of its platform and solutions with other technologies, expert.ai is able to respond effectively to any challenges and opportunities related to intelligent process automation, natural language interaction and 'intelligent' information management.

1. 'Hype Cycle for Natural Language Technologies, 2023' Gartner - Bern Elliot, Adrian Lee, Gabriele Rigon - 27 July 2023. Expert.ai, listed by Gartner for four consecutive years in the 'Hype Cycle for NLT' report, is a 'Sample Vendor' in several categories, including ontologies and knowledge graphs, semantic search and insight engine.
2. 'The Forrester Wave™: People-Oriented Text Analytics Platforms, Q2 2022' - 'The Forrester Wave™: Document-Oriented Text Analytics Platforms, Q2 2022'. Both reports focus on the selection of the best text analytics platforms (only 13 platforms/companies for the 'people-oriented' wave and 12 for the 'document-oriented' wave). Expert.ai was rated as a strong performer in both searches, scoring highest in several criteria, including data enrichment and labelling, support for strategic use cases, knowledge-based artificial intelligence (knowledge graph) and natural language inferences.

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