Hi <>,

2022 has been a year full of both expected and unexpected turbulence and volatility.

Elon Musk is losing USD470 million per day after his USD47 billion purchase of Twitter. Australian software unicorn Canva is an indication of the market volatility in the past year. At the end of 2021, two institutional investors took significant stakes in Canva, and by March 2022 they had both marked down the value of their stake by 45-58.5%. To finish the year the larger institutional investor marked the value of its stake in Canva back up by almost 22%.

This fluctuation was by no means isolated to Canva, with market volatility hitting the tech sector more broadly around the globe. Two notable collapses in November were FTX and Deliveroo's Australian operations. The USD32 billion FTX collapsed in stunning fashion after a run on deposits left the company owing more than a million customers and organisations in excess of USD8 billion.

Deliveroo entered voluntary administration, raising concerns far beyond dollars. Deliveroo does not have many Australian assets meaning administrator KordaMentha will be looking at all avenues to recover money for creditors - including selling the data they have collected on the 27% of Australians who have ordered through the delivery app (if they're permitted to do so).

Surprisingly, the continued increase in cybercrime resulted in the theft of over 12 million Australian customer records in high-profile data breaches. And while inflation and an economic downturn were expected, heartbreakingly, Russia's invasion of Ukraine was an unexpected key accelerator.

With our sustained organic history of growth, stability and stable customers as well as promoting the innovative course set out in our strategic roadmap, LAB successfully navigated these choppy waters of 2022 that heavily impacted other technology providers. We've getting stuck into a scaling journey which will be transformational and we're seeing signs of accelerated growth with Q1 FY2023 showing growth tracking to 44% which is a fantastic profile in the B2B SaaS and enterprise space. Sustained growth with proven track record and reputable customers with low churn is exactly what the market like now more than ever, especially when it is in the regulatory technology space.

We saw very recently a RegTech in the Australian market raising $23M in Series A. I have heard firsthand from advisers and investors that this waves a flag in today's more cautious market that this is the kind of area that is attracting the backing of reputable investors, so this does wonders to promote the reputation and attractiveness of our industry.

We have worked ourselves into the privileged position to call the shots on who we take money from (very rare in today's market), with a low to zero cash burn and a runway that projects us into positive earnings, it is a good thing that we can take our time to ensure funds are deployed to increase the chances of achieving our long-term strategic goals.

You would have noticed in the market and media our building of the narrative and promotion around our product offering, technology and capability:

The LAB Platform

The LAB Platform being made up of three pillars and the deployed instances that power our client's digital onboarding.

The three pillars of the Platform are:

• Onboarding Framework
• Application Manager
• Elevate

You can read about and follow the LAB Platform on our new LinkedIn Product Page.

Enhanced benefits and functionality of the LAB platform delivered this year are:

Enhanced remediation functionality

Reducing the burden of maintaining accurate, timely and useful KYC data. This enhancement enables clients to create a correct customer risk rating on an ongoing basis. Read the full article here.

Speed to spin up in new jurisdictions

We can now rapidly deploy our platform on any global AWS availability zone. This enhancement significantly expanded our international capabilities, integrations, infrastructure & offering.

Enhanced data warehousing capabilities

We brought the full power "data warehouse-as-a-service" Snowflake to members of the LAB Network. This enhancement means that clients can gain insights and dashboarding to visualise their onboarding data, as well as the ability to work with other Snowflake-enabled businesses to leverage Snowflake's shared data warehousing to create combined analytics.

The LAB Network

The LAB Network is to provide active members with unprecedented connectivity across products and jurisdictions.

The three core elements of the LAB Network are:

• An API that allows for consumer data to be received into the LAB Network from external sources
• The LAB Network itself, which allows for the consented transfer of data within and between organisations on the LAB Platform
• Connectivity that allows data to move out of the LAB Network and into downstream systems and vendors, facilitating automated account activation

We are evolving and refining our message around re-inventing what we offer in relation to digital onboarding by promoting the innovation and potential capability of the LAB Network, we will continue to strive to enhance product origination and distribution for our clients as well as further increase investor efficiencies to empower them with choice by reducing friction in the onboarding and regulatory process.

You can read about and follow the LAB Platform on our new LinkedIn Product Page and also the recent media article here https://www.fintechaustralia.org.au/lab-group-scales-through-critical-mass-with-125-members-of-the-lab-network/

Expanding our operations, reach and connectivity

RegTech Awards Finalist Export of the Year (Australian Founded)

In this highly challenging category, we were recognised as a finalist based on the global scale that we achieved through our technology enhancements and expanded strategic integrations. As part of the submission for this award, we highlighted our impressive and growing global capabilities:

• Multi-lingual and multi-jurisdictional capability - LAB has processed applications from residents from over 150 different countries
• Multi-country cloud deployment capability that allows us to host in various AWS availability zones (driven by our work with Citi in Singapore)
• Going live with corporate onboarding for IG in Japan
• Progressing integrations with parties such as Kyckr in order to verify corporations across multiple jurisdictions

Expanded integrations and connectivity

We expanded our global and industry reach with a high pedigree of strategic integrations:

Kyckr - Global corporate and ultimate beneficial owner verification

Praemium - Streamlined user experience for investors

XPlan - Increased efficiencies for advisers and kicking off an important cornerstone for the LAB Network journey

Complii - Reduced double handling of data

Australian Payments Plus - Age verification and expanded Digital ID verification

Expanded our team in key roles

Steve McGovern

Technology leader Steve joined LAB Group as a Non-Executive Director, bringing over 25 years of experience as an executive in the fields of telecommunications, media sales, pay TV and regulation. Steve is the CEO, Managing Director and Founder of AUD450 million market cap Dubber Pty Ltd.

Jason Marsham

Jason was appointed as the Head of Business Development. Jason has already built out a strong pipeline of global and domestic enterprise clients. He has also been instrumental in driving the evolution of our strategy with key leaders throughout the business.

If you missed it at the start of the year, you can see Jason on ausbiz TV here.

Ahmed Nassar

Ahmed was appointed as Platform Engineering Lead and has already expanded his role and impact on the business as he works with key teams to deliver the modernisation of LAB's stack for further product enhancements and expansions.

Envisioning the year ahead

At LAB we continue to strive towards being at the forefront of digital onboarding globally. The rapid pace of change and evolution in technology and financial markets means we need to be in constant communication with the market to ensure we are staying ahead of rapidly changing regulatory and customer requirements.

As part of this constant communication, this year we've been working diligently to validate our evolved problem statements and how we solve this for the industry globally.

The solutions to the below challenges facing the industry will be the cornerstone of how we envisage and approach the year ahead.

Lack of Industry Standardisation

Provide a standardised framework that can be easily distributed and upgraded over time.

Customer records re-keyed

Deliver multi-product, multi-vertical scale through connectivity across the LAB Network (products, organisations and platforms), enhancing LAB clients' origination and distribution capabilities.

Duplication of regulatory processes

Create a centralised customer profile that can undergo ongoing due diligence facilitated by interaction with the LAB Network.

Lack of digitised complex

Digitise this process such as institutional and corporate onboarding that remains largely manual in many industries, verifying data through globally approved sources and reduce manual intervention using technologies such as document reading AI and exception frameworks.

Billions of outdated records

Use an end-to-end remediation and outreach framework for the re-engagement of customers to validate their records.

Storage risk & vulnerability of personal data

Handle PII temporarily and process the minimum data to activate accounts with depersonalisation applied to all audit trails and allowing for the minimum duplication of PII.

Extending a massive thank you

Lyndon and I would like to extend a massive thank you to the entire team. We recognise the hard work and commitment it has taken to get us to a point that has created the opportunities where there is huge potential in an evolved offering.

We all hope you can enjoy a well-earned summer break with your friends and family.

We're excited for another great year ahead!