Mr. Kim Oishi reports

DATABLE TECHNOLOGY ANNOUNCES LOI TO SELL SAAS BUSINESS TO LOCAL MARKETING SOLUTIONS GROUP

Datable Technology Corp. has signed a letter of intent (LOI) to sell its software-as-a-service (SaaS) business to Local Marketing Solutions Group Inc. (LMSG) on June 15, 2023. Under the LOI, LMSG will purchase all of material assets and liabilities related to Datable's SaaS business for equity in LMSG, such that post-transaction Datable will own 15 per cent of LMSG.

After the transaction, LMSG is expected to have pro-forma 2023 consolidated revenues of approximately $24-million and positive EBITDA (earnings before interest, taxes, depreciation and amortization). The acquisition of Datable's SaaS business adds high-margin recurring revenues and major enterprise customers to LMSG's suite of marketing technology products and services.

LMSG provides marketing solutions and technology to national and international brands that drive revenue through local sales and marketing channels across the United States LMSG offers marketing automation technology and a comprehensive set of supporting marketing services allowing corporate marketing control of brand image while facilitating dissemination of product and service content and materials for local channels. LMSG's customers include some of the largest global companies as well as small and medium-sized businesses (SMBs) across the United States.

Datable and LMSG signed a previous letter of intent on Sept. 23, 2022, under which, Datable was to acquire LMSG at a base value of $14.35-million by paying the owners of 287 million LMSG common shares of Datable at a deemed price of five cents per share (see press release dated Sept. 23, 2022). Datable and LMSG decided to mutually terminate the previous letter of intent on March 17, 2023, due to market conditions for small cap technology companies (see press release dated April 14, 2023).

Both Datable and LMSG believe that a combination of the two companies will result in a company that can accelerate organic growth by better serving its customers with expanded products and services sold by a consolidated U.S.-based sales team. To that end, the companies signed a cross-selling agreement (see press release dated Jan. 30, 2023) and are working together to sell integrated products and services to the combined customer base.

Benefits of the acquisition

LMSG has a national sales and operations team in the U.S. that will scale the sales of Datable's high-margin SaaS platform:

• Datable has proven SaaS platform with a growing number of the largest enterprises in the U.S., winning competitive RFPs and achieving 100-per-cent renewals of long-term licences in 2022 and 2023;
• LMSG adds a U.S.-based sales team eager to introduce new products for its customer base of large enterprises and SMBs;
• Bench strength enables Datable's team to focus on near-term opportunities to upsize existing customers while LMSG accelerates the building of the sales pipeline with new national and regional customers.

LMSG has a complementary portfolio of marketing technology products and services.

• Datable's enterprise customers have massive advertising and marketing budgets that are not addressed by its SaaS platform;
• The management and sales teams are prioritizing the immediate cross-selling opportunities to major enterprises.

Increased scale enhances access to capital and human resources and establishes a platform for growth by M&A (mergers and acquisitions).

• Larger scale provides easier access to small cap institutional growth capital and has attracted support from small cap investment banks;
• Combined company is a foundation for further growth by acquisition in a fragmented sector with challenging market conditions that provides a wealth of accretive and complementary targets;
• LMSG brings a strong team with a record of managing growth by acquisition in the U.S. consumer marketing space, and an infrastructure to attract and retain senior sales and product development professionals.

Terms of the acquisition

Under the LOI, LMSG will acquire Datable's SaaS business in return for 15-per-cent equity ownership in LMSG. The LOI sets the value of LMSG pretransaction at $19.7-million, equal to approximately one times LMSG's 2023 revenues, such that Datable's 15-per-cent ownership of LMSG posttransaction will have a deemed value of approximately $3.5-million.

The LOI is non-binding and subject certain conditions, including due diligence. Under the LOI, a definitive agreement is to be signed no later than July 31, 2023, and the acquisition is to be closed no later than Nov. 30, 2023, unless extended by mutual agreement. The definitive agreement is expected to include terms customary to an acquisition including, but not limited to:

• A concurrent financing of $2.0-million to finance the growth of the combined company, with terms under discussion to be disclosed at a later date;
• Employment agreements to retain key members of the Datable management team;
• Shareholder and stakeholders' approval as required by regulatory authorities.

After the execution of the definitive agreement, it is expected the acquisition will be subject to TSX-V approval.

"We've invested significant time and capital into building our SaaS platform and proving its value to some of the largest enterprises in the U.S. through the monetization of first party consumer data. The time has come to find a partner with the capacity to further leverage our consumer marketing and data platform," said Rob Craig, chief executive officer of Datable. "By becoming part of LMSG, we see a clear path to scalability and the opportunity to enhance the value we provide to our customers, shareholders and debenture holders.

"Datable's solutions and team mesh with our product and service strategy perfectly and will provide greater opportunities to expand the solution sets with our current clients and will open doors to additional client brand relationships," said Al Croke, president and chief executive officer of LMSG. "After navigating through the hurdles posed by COVID, LMSG is set to return to our growth-through-acquisition strategy, and that begins with integrating Datable's SaaS platform, team and clientele into our operations. We do see the appeal of becoming a public entity, but for now, we believe that the prospects for access to capital and valuation are more advantageous in the private sector."

About Datable Technology Corp.

Datable has developed Platform3, a proprietary consumer life cycle and data management platform that is sold to global consumer brands. Platform3 is delivered as a subscription service (software-as-a-service model) and used by some of the world's most valuable consumer brands to access new consumer communities and engage them while collecting, analyzing and managing their first party data. Platform3 incorporates proprietary technology to monetize the consumer data, including demographics and purchasing behaviour, by sending consumers targeted offers by e-mail and text messages.

About Local Marketing Solutions Group Inc.

Local Marketing Solutions Group (LMSG) was formed in 2012 by the executive management team of JGSullivan Interactive Inc. The purpose of LMSG, through merger and acquisition activity and organic growth, is to continue the expansion of offering the broadest and most efficient marketing solutions to national and international brands that drive revenue through local sales and marketing channels. LMSG provides marketing automation technology and a comprehensive set of supporting marketing services capabilities, allowing corporate marketing control of brand image while facilitating dissemination of product and service content and materials for local channels.

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