NOWVERTICAL GROUP INC. ANNOUNCES PRICING OF MARKETED PUBLIC OFFERING

/NOT FOR DISTRIBUTION TO THE U.S. NEWSWIRE OR FOR DISSEMINATION IN THE UNITED STATES/

TORONTO, Sept. 22, 2022 /CNW/ - NowVertical Group Inc. ("NowVertical", or the "Company") (TSXV:NOW) is pleased to announce the pricing and terms of its previously announced marketed offering (the "Offering"). The Offering will be completed on a commercially reasonable "best efforts" agency basis and consist of convertible debenture units (the "Debenture Units") of the Company for gross proceeds of C$5,000,000.

Each Debenture Unit will consist of one 10% senior unsecured convertible debenture (each a "Convertible Debenture") of the Company having a face value of C$1,000 (the "Principal Amount") and 715 subordinate voting share purchase warrants of the Company (each a "Warrant"), representing 75% warrant coverage.

The Convertible Debentures will mature 36 months from the Closing Date (as hereinafter defined) (the "Maturity Date"). The Principal Amount per Convertible Debenture, together with then accrued and unpaid interest thereon, shall be convertible, for no additional consideration, into subordinate voting shares of the Company (the "Subordinate Voting Shares") at the option of the holder (with the exception of the Company Conversion as set out below) in whole or in part at any time and from time to time prior to the earlier of: (i) the close of business on the Maturity Date, and (ii) the business day immediately preceding the date specified by the Company for redemption of the Convertible Debentures upon a Change of Control at a conversion price per share equal to C$1.05 subject to adjustment in certain events (the "Conversion Price").  

The Company will be entitled to force the conversion (the "Company Conversion") of the Principal Amount of the then outstanding Convertible Debentures at the Conversion Price on not more than 60 days' and not less than 30 days' notice (i) in the event that the daily volume weighted average trading price of the Subordinate Voting Shares on the TSX Venture Exchange ("TSXV") is greater than C$1.60 per share for 10 consecutive trading days of the Subordinate Voting Shares on the TSXV preceding such notice, or (ii) in connection with a qualified equity or similar financing involving Subordinate Voting Shares, or warrants exercisable for Subordinate Voting Shares, resulting in aggregate gross proceeds to the Company of not less than C$12,500,000 (the "Qualified Financing"), in each case, subject to the Company Conversion being permitted under the policies of the TSXV for any trading of the Subordinate Voting Shares at that time. If the Qualified Financing is completed at a price per security less than the Conversion Price (in the case of warrants calculated by adding the issue and exercise price), the Conversion Price in connection withthe Convertible Debentures will get ratcheted down to equal the price per security under the Qualified Financing. 

The Convertible Debentures shall bear interest at a rate of 10% per annum from the date of issue, payable quarterly in arrears on the last day of March, June, September, and December in each year, commencing December 31, 2022. Interest shall be computed on the basis of a 360-day year composed of twelve 30-day months. The December 31, 2022 interest payment will represent accrued interest for the period from the Closing Date to December 31, 2022.

Each Warrant shall entitle the holder thereof to acquire one Subordinate Voting Share for an exercise price of C$1.25 for a period of 36 months following the Closing Date.

The Offering will be completed by way of a prospectus supplement to the short form base shelf prospectus of the Company dated January 21, 2022 to be filed in with the securities commissions in all the Provinces of Canada except Quebec. The Company intends to file a prospectus supplement to its short form base shelf prospectus prior to closing the Offering. Additionally, the Offering will be conducted by way of a private placement in the United States pursuant to exemptions from the registration requirements of the United States Securities Act of 1933, as amended (the "U.S. Securities Act") and outside Canada and the United States on a basis which does not require the qualification or registration of any of the Company's securities under domestic or foreign securities laws.

The size of the Offering and the price of the Offering, as well as certain terms of the Warrants (including the term and the exercise price), will be finalized in the context of the market prior to the filing of the prospectus supplement.

The Company may also complete, concurrent with the completion of the Offering, a private placement of Debenture Units with investors in the Province of Quebec for total gross proceeds of C$500,000 pursuant to available prospectus exemptions (the "Concurrent Placement").

The Offering and Concurrent Placement will be conducted by Echelon, as lead agent and sole bookrunner, and is subject to customary closing conditions, including the receipt of all necessary regulatory and other approvals including the approval of the TSX Venture Exchange.

The Offering and Concurrent Placement is expected to close on or about September 29, 2022, or such other date as the Company and Echelon may agree (the "Closing Date").

The Company has granted Echelon an option (the "Over-Allotment Option") to purchase up to an additional 15% of the Debenture Units sold under the Offering. The Over-Allotment Option may be exercised in whole or in part to purchase Convertible Debentures, Subordinate Voting Shares, Warrants or Debenture Units as determined by Echelon upon written notice to the Company at any time up to 30 days following and including the Closing Date.

The Company intends to use the net proceeds of the Offering and Concurrent Placement for sales, marketing, research and development, acquisitions, working capital and general corporate purposes.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the U.S. Securities Act or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

NOW is a big data, analytics and VI software and solutions company growing organically and through acquisition. NOW's VI solutions are organized by industry vertical and are built upon a foundational set of data technologies that fuse, secure, and mobilize data in a transformative and compliant way. The NOW product suite enables the creation of high-value VI solutions that are predictive in nature and drive automation specific to each high-value industry vertical. For more information about the Company, visit www.nowvertical.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this release.

This news release may contain forward-looking statements (within the meaning of applicable securities laws) which reflect the Company's current expectations regarding future events. Forward-looking statements are identified by words such as "believe", "anticipate", "project", "expect", "intend", "plan", "will", "may", "estimate" and other similar expressions. These statements are based on the Company's expectations, estimates, forecasts and projections and include, without limitation, statements regarding the closing of the Offering and the Concurrent Placement, the use of proceeds from the Offering and the Concurrent Placement, regulatory approval for the Offering and the Concurrent Placement and the future success of the Company's business.

The forward-looking statements in this news release are based on certain assumptions. The forward-looking statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Several factors could cause results to differ materially from those discussed in the forward-looking statements, including, among other things, failure to complete the proposed Offering and Concurrent Placement and the need to satisfy regulatory and legal requirements with respect to the proposed Offering and Concurrent Placement. Therefore, readers should not rely on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, the Company assumes no obligation to update or revise any forward-looking statement publicly, whether as a result of new information, future events or otherwise.

SOURCE NowVertical Group Inc.

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