Mr. John Gillberry reports

QUARTERHILL ANNOUNCES THE SALE OF WI-LAN INC.

Quarterhill Inc. has completed the sale of all of the shares of Wi-LAN Inc. to an arm's-length purchaser for gross proceeds of up to approximately $71.4-million subject to certain adjustments, including working capital adjustments. As part of the consideration, after this transaction Quarterhill will own 10 per cent of Wi-LAN and Owlpoint IP Opportunities JVF LP, a joint venture between Arena Investors, LP and Owlpoint Capital Management, LLC, will, directly or indirectly, own the other 90 per cent. No current or prior Quarterhill insiders are investors in Wi-LAN. All financial information in this press release is reported in Canadian dollars, unless otherwise indicated.

In addition to the 10-per-cent ownership stake in Wi-LAN, the consideration for this transaction will consist of approximately $48.0-million in cash, approximately $8.0-million as an earn-out and approximately $15.4-million pursuant to an unsecured promissory note, which earn-out and note are payable on Wi-LAN achieving certain revenue milestones. Quarterhill's 10-per-cent ownership stake can be repurchased by Wi-LAN for between approximately $13.0-million and $16.0-million subject to Wi-LAN meeting certain revenue milestones. Quarterhill will be entitled to receive its pro rata portion of any dividend distributions made by Wi-LAN.

"We are pleased to have completed this transaction, which delivers significant growth capital to Quarterhill's balance sheet and provides an excellent home for this specialized and storied business to prosper as a private company," said John Gillberry, interim chief executive officer of Quarterhill. "This sale was the logical conclusion of Wi-LAN's strategic review that started at the beginning of 2022 and enables Quarterhill to now focus exclusively on its exciting intelligent transportation system (ITS) business."

Mr. Gillberry added: "This transaction marks the end of a pivot that began in 2017 and saw Quarterhill transform from a leading patent licensing company to having one of the largest ITS footprints in North America as well as extensive international operations. With two strong platforms in tolling and enforcement, Quarterhill will continue as a stand-alone ITS company seeking to capitalize on the compelling growth rate and tailwinds within the industry today."

Owlpoint focuses on credit investments backed by alternative asset classes, including intellectual property (IP), film, TV and music copyrights, among others. Gustav Brismark, a senior advisor to Owlpoint, said, "Wi-LAN has a rich history in the business of intellectual property and patents and the experienced management team at Wi-LAN will be a great partner to Owlpoint, as we move forward and build on that track record."

"Arena is looking forward to working with Wi-LAN as part of our ongoing relationship with Owlpoint, to leverage Wi-LAN's IP licensing platform and expand into new technologies and licensing models," said Vivek Nayar, managing director at Arena Investors.

Quarterhill was advised by Stout Capital, LLC as its financial adviser for the Wi-LAN strategic review process.

About Quarterhill Inc.

Quarterhill is a leading provider of tolling and enforcement solutions in the intelligent transportation system (ITS) industry. Its goal is global leadership in ITS, via organic growth of the Electronic Transaction Consultants, LLC (ETC) and International Road Dynamics, Inc. (IRD) platforms, and by continuing an acquisition-oriented investment strategy that capitalizes on attractive growth opportunities within ITS and its adjacent markets.

About Arena Investors, LP

Arena Investors is an institutional asset manager founded in partnership with The Westaim Corp. With $3.5-billion of invested and committed assets under management as of Dec. 31, 2022, and a team of over 100 employees in offices globally, Arena provides creative solutions for those seeking capital in special situations. The firm brings individuals with decades of experience, a record of comfort with complexity, the ability to deliver within time constraints and the flexibility to engage in transactions that cannot be addressed by banks and other conventional financial institutions.

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