Mr. Rob Anson reports

FOBI AI ENTERS INTO DEFINITIVE AGREEMENT TO ACQUIRE SPANISH DIGITAL WALLET AGENCY WALLET-COM TO EXPAND GLOBAL WALLET PASS PORTFOLIO & EXPERTISE

Fobi AI Inc. has entered into an asset purchase agreement (APA) dated Oct. 13, 2023, with Wallet Communication SL, a Spanish limited liability company (the vendor), pursuant to which the company proposes to acquire certain business assets and intellectual property related to Wallet-Com, a leading digital wallet agency based in Spain.

Wallet-Com provides communications and marketing technology to over 200 global customers, including Lacoste, Hyundai and McDonald's. With operations in Spain, France, Portugal, Chile, Peru and Mexico, Wallet-Com specializes in communication and marketing technology and possesses extensive experience in mobile and digital marketing, loyalty programs, media, and customer relationship and data management.

Agency acquisition to enhance Fobi's solution suite with the addition of formal strategy and consulting services

The acquisition of Wallet-Com is expected to enable Fobi to strategically build a service offering on top of its existing technology stack, expanding the company's portfolio to formal consulting services and extensive mobile marketing expertise. Services may also be potentially expanded to other complementary loyalty solutions, ultimately enabling Fobi to deliver more encompassing solutions and impactful marketing campaigns to its enterprise clients around the world.

The company has partnered with Wallet-Com in the past, recently working together to implement a smart transportation and cities initiative for the Velez-Malaga City Council, a government entity in the Spanish municipality committed to improving citywide sustainable mobility. With additional wallet pass success across Europe, the company expects this acquisition to continue to strengthen Fobi's position as a technology innovator, enabling the company to gain access to Wallet-Com's customer base and increase its ability to further penetrate Spanish-speaking markets.

Terms of the transaction

Pursuant to the APA, the purchase price of the transaction will be 29,010 euros, payable by the issuance of that number of common shares of the company as is equal to a fraction, the numerator of which is the Canadian-dollar equivalent of 29,010 euros, calculated using the Bank of Canada monthly exchange rate for September, 2023, and the denominator of which is the volume-weighted average price (VWAP) for the period ending 10 TSX Venture Exchange trading days prior to the closing date of the transaction.

As additional consideration of the purchased assets and in addition to the initial purchase price, subject to applicable laws and approval of the TSX-V at the time of issuance, upon the achievement of certain revenue targets before the first anniversary of the closing date, the company has agreed to pay to the vendor an additional 81,000 euros, payable in common shares of the company.

The number of earnout shares issuable will be that number of common shares of the company as is equal to a fraction, the numerator of which is the earnout share value converted into Canadian funds using the Bank of Canada daily exchange rate on the date that is five TSX-V trading days prior to the date of the earnout notice (as defined in the APA), and the denominator of which is the greater of (i) the VWAP of the common shares of the company existing at the time of calculation on the TSX-V for the 10-trading-day for the TSX-V ending five TSX-V trading days prior to the date of the earnout notice, and (ii) the lowest price permissible under the policies of the TSX-V; or any combination of the foregoing.

All consideration shares will be subject to a hold period of four months and one day from the date of issuance thereof in accordance with applicable securities laws.

The parties to the APA are arm's-length parties (as defined in the policies of the TSX-V) and there are no finder's fees payable pursuant to the transaction.

The transaction is subject to customary items, including satisfaction of closing conditions by both parties and TSX-V approval.

Colby McKenzie, chief revenue officer of Fobi AI, states: "We outlined an aggressive M&A strategy earlier this year and have focused on supporting the expansion of our wallet business. The acquisition of Wallet-Com brings another exciting layer to this burgeoning business unit. Given the legacy relationship, the synergies should be immediate."

Rob Anson, chief executive officer of Fobi AI, states: "This agreement with Wallet-Com not only marks Fobi's fifth wallet pass acquisition, but also the strategic acquisition of a leading digital wallet agency that will help reinforce Fobi's strength and scale as a global wallet pass leader. This collaboration not only broadens our global footprint but also opens doors to exciting new prospects and innovative opportunities, such as the smart cities project that we delivered for Velez-Malaga. With the relationship we've already built together, I am confident that the integration of Wallet-Com will result in prompt growth and added value to the Fobi brand."

Fobi is also pleased to announce that it has retained Paradox Public Relations Inc. to provide capital markets advisory and investor relations services to the company. Founded in 2001, Paradox is a boutique investor relations consultancy firm that has been driving high-performing results for its clients for over 20 years. Paradox will focus on developing and expanding the company's communications and visibility with the investment community. In connection with the engagement, Paradox commenced the provision of services effective Oct. 9, 2023, for an initial one-year term and for a fee of $10,000 per month. Fobi has also granted Paradox incentive stock options to purchase 1.5 million common shares in the capital of the company at a price of 21 cents per common share. The options are granted pursuant to the company's stock option plan and, in accordance with the policies of the TSX Venture Exchange, vest quarterly over 12 months and expire on Oct. 17, 2028.

About Fobi AI Inc.

Founded in 2017 in Vancouver, Canada, Fobi is a leading artificial intelligence and data intelligence company that provides businesses with real-time applications to digitally transform and future-proof their organizations. Fobi enables businesses to action, leverage and monetize their customer data by powering personalized and data-driven customer experiences, and drives digital sustainability by eliminating the need for paper and reducing unnecessary plastic waste at scale.

Fobi works with some of the largest global organizations across retail and consumer packaged goods, insurance, sports and entertainment, casino gaming, and more. Fobi is a recognized technology and data intelligence leader across North America and Europe, and is the largest data aggregator in Canada's hospitality and tourism industry.

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