Mr. Yona Shtern reports

HAPBEE ISSUES SHAREHOLDER LETTER

Hapbee Technologies Inc. has provided a shareholder letter from Hapbee chief executive officer Yona Shtern.

Dear shareholders,

I would like to begin this update by thanking all of our shareholders for your support and confidence in Hapbee. Although the current volatile macro environment has hindered the capital markets, we are full steam ahead in growing Hapbee's one-of-a-kind wellness platform. Shareholders' support of our mission during these volatile times has not gone unnoticed by our team. The best way to show our appreciation is to continue accelerating growth.

Our team remains deeply focused on the four pillars of growing our business:

1. Getting Hapbee into more customers' hands so they can experience the wellness benefits for themselves;
2. Expanding our product pipeline -- the Hapbee Sleep & Relief Pillow just started selling on our website;
3. Increasing our subscriber base -- the most significant long-term value driver for Hapbee and our shareholders;
4. Accelerating market penetration through enterprise sales.

Hapbee's platform -- for both consumer and enterprise channels -- is built upon a recurring revenue model (subscription for consumers and licensing for enterprise). This offers the most attractive value proposition from an investment perspective because of the long-term, predictable and repeatable nature of revenue streams matched with higher revenue multiples typically afforded ARR (annual recurring revenue) technology businesses. At the end of Q1, 2022 we had nearly 3,000 active subscribers on the platform, an increase of 246 per cent over Q1 2021. Paid subscriber retention after six months increased from 22 per cent in September, 2021, to 65 per cent in March, 2022, driven by significant improvements to our in-app experience, expansion of blends and investment in an automated back-end billing system. The monthly subscription fee ranges from $12 (U.S.) to $19 (U.S.) -- a high-margin aspect of our business. I like to reiterate that we are a software subscription and licensing company first; hardware second.

Long story short, the platform is gaining traction and demonstrating stickiness. We continue to invest in improving user engagement and retention and will leverage critical customer feedback to enhance the user experience.

Over the last six months, we have learned a ton from the investments made in the marketing of our wellness platform. These learnings include: effective platforms to market the Hapbee Neckband; how to better educate prospective buyers before a call to action; more cost-effective lead generation, and how we should pursue our B2B (business-to-business) strategy -- which I believe will become a key driver of sales for Hapbee in 2023. I anticipate making significant progress on the B2B front in the nearer term and look forward to sharing any material developments.

Diving into the sleep market

The sleep market has quickly become our most important sector, which is why we are pursuing the launch of three new sleep-related products this year: The Sleepbee Mattress Topper, Sleepbee Sleep Mask, and the Hapbee Sleep & Relief Pillow. The pillow, which launched on our website earlier this week, is specially designed to be compatible with and enhance the functionality of the Hapbee Neckband as a sleep and relief device. It helps position Hapbee as a sleep solution and provides new and existing Hapbee users with an affordable, product-enhancing accessory. At the same time, the pillow will be another high-margin offering for our company. I anticipate the Sleepbee Mattress Topper will be a premium offering, and the Sleepbee Sleep Mask will have a mid-level price point.

The sleep-tech market is massive and anticipated to grow at a rapid clip. In 2021, the sleep tech devices market was valued at roughly $15-billion, and it is projected to reach $67-billion by 2030. We want to be a major player in this space within 24 months. It is a market with extreme potential for our platform, given the fact that over 60 per cent of Hapbee customers primarily use Hapbee to optimize their sleep routines.

Validating our platform and direction

We conducted our first sleep-related user study/survey spanning roughly five months to highlight our platform's advantage within the sleep tech space. We now have quantifiable data that shows Hapbee helped improve consumer wearable sleep tracker scores (utilizing Oura Ring) for quality of sleep, length of sleep, reduced restlessness and the time it took to fall asleep.

The results of our study amplified our motivation to focus on this opportune sector. I encourage everyone to read our press release dated May 9, 2022, to learn more about these initial study results.

In March, 2021, Hapbee entered into agreements with two United States military non-profit groups to collect feedback on the impact of Hapbee signals on users' stress and productivity levels. The results after one year were inspiring and edifying. In March of this year, The Hapbee Neckband was selected as an integral and essential part of Grey Team's (U.S. veterans support group) wellness solution for military veterans. Again, if you have not read our press release about this project from March 22, 2022, I encourage you to do so. This was a gratifying project that I think will open other doors for Hapbee to help military veterans in the future.

This May, Hapbee was recognized in Fast Company's 2022 World Changing Ideas Awards as an honourable mention for our innovative platform in the wellness category.

Onward

When I meet with Hapbee customers, be it one on one or at conferences and gatherings, their feedback from using the Hapbee Neckband energizes me. I know from meeting with customers that we are already having a profound impact on many. That inspires us to continually advance our wellness platform while improving our ability to educate new audiences on the potential benefits of this one-of-a-kind technology.

There is a technology adoption curve for an innovative platform like ours, and I can appreciate people's questions when first learning about Hapbee. There is nothing else like it on the market today. One strategy to encourage people to try our product, especially if they have a healthy degree of skepticism, is the recent implementation of our 90-day money-back guarantee. As I stated near the onset of this update, we are focused on getting Hapbee into as many people's hands as possible to help mainstream our brand and transformative wellness platform.

I look forward to updating our shareholders over the coming months. Thank you for your continued support.

Sincerely,

Yona Shtern

CEO and chairman, Hapbee Technologies Inc.

About Hapbee Technologies Inc.

Hapbee products are available for purchase on its website and through a growing network of authorized Hapbee dealers.

Hapbee is a leading wearable wellness technology platform with a mission to help people improve their well-being and enhance how they feel. The company is the creator of the Hapbee Neckband, the Sleepbee Sleep Mask and the Sleepbee Bed Topper, which are all powered by an ultralow radio frequency energy (ulRFE) biostreaming platform that delivers low-power electromagnetic signals and blends designed to help optimize users' sleep, productivity, recovery and downtime.

We seek Safe Harbor.