XTM Provides Corporate Update

The Company Continues its Focus on Cost Reduction, Revenue Growth and Increasing Shareholder Value

XTM, (“XTM” or the “Company”) (QB: XTMIF / CSE:PAID / FSE:7XT) a fintech company specializing in innovative payment solutions including Automated Tip Pooling Calculations and Pay-Outs, and Earned Wage Access (“EWA”) through its AnyDay™ platform, is pleased to announce a corporate update that highlights significant strategic initiatives, recent achievements and the company’s roadmap for continued growth. This update reflects the Company’s commitment to innovation, operational excellence, and delivering enhanced value to its customers, partners, and stakeholders.

The Company is focused on three key initiatives at this time while within a due diligence process announced on Dec 12 2024, XTM, as follows:

Cost Reduction

• The Company has reduced annual payroll by $2M over the past three quarters, while maintaining the commitments associated with audits and compliance surrounding its QRails processor.
• With the recently announced XTM Referral Agreement the Company eliminates its significant Cost of Goods Sold related to the Canadian tip business thereby positioning the company for a neutral cash-flow position in 2025. The Company recently signed an amendment to the Referral Agreement and has met all the obligations including capital requirements under the amended terms. The Company has launched conversions of its users to the KOHO platform and continues to move to complete most conversions within the next 60 days.

Revenue Growth

• There is a renewed focus on conversions in the Earned Wage Access space with targeted digital campaigns commencing in February 2025 with a goal of activating ~100,000 passive users currently within the Company’s onboarded Fortune 100 customer base to create an immediate impact to revenue.
• The Company has introduced a Software as a Service (SaaS) fee for the invaluable services it provides hospitality businesses in Canada. One third of the businesses are now paying a monthly fee for the software and the remaining businesses will transition to SaaS payments by Q2. There are currently ~3,700 restaurants on the platform.
• The Company has experienced a surge upon which it will capitalize on interest in the tip-payout business in the US. The AnyDay solution, currently in use with restaurants in the US and Canada, is a natural solution with third-party claims that it is the best performing Tip Pool Calculator and Pay Out Solution in the market.
• There is an investment underway of an additional six Business Development Reps to the Sales team focused on building the Tip Business in the US and on the thousands of businesses using WorkDay payroll to pay their workforce, fully leveraging our current payroll integrations to convert to revenue. Workday, Inc., is an American on‑demand financial management, human capital management company serving 10,000 customers globally and millions of employees with which QRails is already integrated and driving EWA payments.
• The EWA program has been restructured against three levers as follows:
  • Based on current user behaviour we predict that replacing Same Day direct to bank ACH with RTP (assuming a full migration from same day to RTP) net revenue will improve by ~86%.
  • Based on current forecasts reducing overpayment disbursement losses from 0.2% to %0.05 of advancements and eliminating a SLA-6 penalty will improve gross profit by ~129%.
  • An initiative to shift responsibility for EWA overpayments based on the new US Administration, is expected to work in the Company’s favor, specifically EWA Regulatory Reset.

Increasing Shareholder Value

• The Company continues to seek a path forward that considers current shareholders by focusing on a cash-flow neutral to positive path and creating greater value before the needed financing around an up-list to a senior exchange.
• An offsetting of the costs associated with running the processor, including partial-offshore resourcing, is currently being investigated with a goal to reduce engineering costs by a targeted 50%.

Leadership and Organizational Developments

• The Company will engage in an executive recruitment process for a CEO successor upon the senior exchange up-list. Ms. Schaffer has agreed to stay in her post as CEO as long as needed, through the transformation period to the point of up-list at which time the Company will be able to attract a senior capital markets expert to take the company through its next phase of growth.
• As part of the amended Referral Agreement the Company will issue 5M shares to certain consultants and advisors subject to regulatory approval.

About XTM Inc.

XTM is a leading fintech company that provides innovative payment solutions, including Earned Wage Access (EWA), to businesses in the hospitality, personal care, and staffing industries. Its flagship product, AnyDay™, allows employees to access their earned wages on-demand. XTM’s fully owned subsidiary, QRails, offers a cloud-based payment platform that powers on-demand pay for workers and payroll providers globally.

For more information about XTM, visit xtminc.com

Disclaimer for Forward Looking Statements

This news release contains “forward-looking information” and “forward-looking statements” within the meaning of applicable securities laws (the “forward-looking statements”), within the meaning of applicable Canadian securities legislation, including management’s plans regarding its businesses. Forward-looking statements are statements that are not historical facts and are generally, although not always, identified by words such as “expect,” “plan,” “anticipate,” “project,” “target,” “potential,” “schedule,” “forecast,” “budget,” “estimate,” “intend” or “believe” and similar expressions or their negative connotations, or that events or conditions “will,” “would,” “may,” “could,” “should” or “might” occur. All such forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. These forward-looking statements are made as of the date of this news release. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the future circumstances, outcomes or results anticipated in or implied by such forward-looking statements will occur or that plans, intentions or expectations upon which the forward-looking statements are based will occur.

While we have based these forward-looking statements on our expectations about future events as at the date that such statements were prepared, the statements are not a guarantee that such future events will occur and are subject to risks, uncertainties, assumptions and other factors which could cause events or outcomes to differ materially from those expressed or implied by such forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake any obligation to update or alter any forward-looking statements except as required under applicable securities laws. For the reasons set forth above, undue reliance should not be placed on forward-looking statements.

The CSE has not approved nor disapproved the contents of this press release, and the CSE does not accept responsibility for the adequacy or accuracy of this release.

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