PopReach Announces New US$115 Million Syndicated Credit Facility

/NOT FOR DISTRIBUTION TO US WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/

The credit facility will support the continued execution of the Company's acquisition strategy

TORONTO, May 25, 2023 /CNW/ - PopReach Corporation ("PopReach" or the "Company") (TSXV: POPR) (OTCQX: POPRF) today announced a new US$115 million syndicated credit facility (the "Credit Facility") with Bank of Montreal ("BMO" or "Agent") as the sole arranger, sole bookrunner and administrative agent, and including National Bank of Canada, Export Development Canada and Toronto Dominion Bank as syndicate lenders (collectively the "Syndicate"). The Credit Facility replaces and represents an increase from the Company's current senior secured credit facility with BMO, totaling US$43 million ("Original BMO Facility").

The Credit Facility consists of a US$10 million revolving facility ("Revolver"), a US$45 million non-revolving term facility ("Term Loan"), and US$60 million in Delayed Draw Term Loans ("DDTL"). The Revolver will be used for general working capital and general corporate requirements, the Term Loan is being used to replace the Original BMO Facility and to refinance other existing indebtedness of the Company, and the DDTL will be used to finance previous and future acquisitions. On closing of the Credit Facility ("Closing"), US$6.5 million of the DDTL was used to refinance a portion of the vendor take back note issued, and the bridge financing sourced, to complete the acquisition of Schiefer Media, Inc. ("SCS") on April 18, 2023 (the "SCS Refinancing"). In addition, US$5 million of the DDTL was used to refinance the bridge financing sourced to complete the acquisition of OpenMoves, LLC ("OpenMoves") on April 26, 2023.

"Since partnering with BMO in 2022 through our initial credit facility, we have successfully acquired three businesses that have helped solidify our position as a multi-platform digital technology company, while substantially increasing our financial scale and capacity to further expand our portfolio," said Jon Walsh, CEO of PopReach. "We are thrilled to continue our partnership with BMO and excited to add National Bank, EDC and TD to our group of top tier lending partners, as we increase capital availability to continue executing on our growth strategy."

"We are excited to see the progress PopReach has made to date and are pleased to be expanding our partnership to help them achieve their business objectives," said Sean Collins, Senior Director, Technology & Innovation Banking Group at BMO Financial Group.

The Credit Facility carries a term of 3 years and will bear interest at a rate, as determined at the Company's option, of either the Agent's U.S. Base Lending Rate ("Base Rate") plus an applicable margin, or at a rate based on the Agent's U.S. Secured Overnight Financing Rate ("Adjusted Term SOFR") plus an applicable margin. The Revolver is repayable in full at maturity and the Term Loan and DDTL will amortize monthly beginning the first full quarter post-Closing, with structured amortization of 50% over the 3 year term with the remaining balance due at maturity. Interest on the Credit Facility will be payable monthly in arrears.

Prepayments of the Credit Facility at the Base Rate are permitted without penalty. Adjusted Term SOFR loans cannot be prepaid but may be cash collateralized on terms satisfactory to the Agent. The Credit Facility is guaranteed by certain material subsidiaries of PopReach and secured by a first ranking security interest granted in favour of the Syndicate over all of the assets and properties of the Company and the guarantors, subject to customary permitted liens approved by the Syndicate.

As a condition precedent to Closing, the Company entered into the following amendments, each dated May 24, 2023: (i) an amendment (the "Ubiquity Debenture Amendment") to the convertible debenture issued to the former membership interest holders of Ubiquity Agency LLC ("Ubiquity") with an existing principal amount of US$6.25 million (the "Ubiquity Debenture"); (ii) an amendment (the "SCS Debenture Amendment") to the convertible debenture issued to the former stockholders of SCS (the "SCS Sellers") with an existing principal amount of US$0.75 million (the "SCS Debenture"); (iii) an amendment (the "SCS VTB Amendment" and together with the SCS Debenture Amendment, collectively, the "SCS Amendments") to the vendor take back note issued to the SCS Sellers with an existing principal amount, after taking into account the SCS Refinancing, of US$1.5 million (the "SCS VTB Note"); and (iv) an amendment (the "OpenMoves Debenture Amendment") to the convertible debenture issued to the former membership interest holders of OpenMoves with an existing principal amount of US$2.0 million (the "OpenMoves Debenture").

The Ubiquity Debenture Amendment extends the maturity date of the Ubiquity Debenture from May 13, 2025 (the "Original Ubiquity Maturity Date") to November 30, 2026 (the "New Maturity Date"), being 6 months following maturity of the Credit Facility, and increases the interest rate thereunder from 4% per annum to 7.5% per annum, calculated from the original issuance date of the Ubiquity Debenture, being September 8, 2022, until full repayment is made. The Ubiquity Debenture Amendment further provides that if the Company does not voluntarily opt to prepay the Ubiquity Debenture in full prior to the Original Ubiquity Maturity Date, the principal amount of the Ubiquity Debenture will increase by US$0.75 million (the "Ubiquity Debenture Contingent Amount") and the interest rate will be further increased from 7.5% per annum to 15% per annum, calculated from the Original Ubiquity Maturity Date until full repayment is made.

The SCS Amendments each extend the respective maturity dates of the SCS Debenture and the SCS VTB Note from May 31, 2025 (the "Original Maturity Date") to the New Maturity Date and further provide that if the Company does not voluntarily opt to (i) prepay the SCS Debenture in full prior to the Original Maturity Date, the principal amount thereunder will increase by US$0.075 million (the "SCS Debenture Contingent Amount"); and (ii) prepay the SCS VTB Note in full prior to the Original Maturity Date, the principal amount thereunder will increase by US$0.15 million, and in the case of (i) and (ii), interest will accrue and be calculated on the outstanding principal amount at the rate of 11% per annum commencing on the Original Maturity Date until full repayment is made.

The OpenMoves Debenture Amendment extends the maturity date of the OpenMoves Debenture from the Original Maturity Date to the New Maturity Date, and further provides that if the Company does not voluntarily opt to prepay the OpenMoves Debenture in full (i) prior to October 23, 2023, the principal amount thereunder will increase by US$0.25 million (the "Initial Contingent Amount"); and (ii) prior to the Original Maturity Date, the principal amount thereunder will increase by an additional US$0.5 million (the "Subsequent Contingent Amount", and together with the Initial Contingent Amount, collectively, the "OpenMoves Debenture Contingent Amount") and the interest rate will increase from 7% per annum to 11% per annum, calculated from the Original Maturity Date until full repayment is made. For greater certainty, the Initial Contingent Amount is in addition to the potential increase of US$0.5 million to the principal amount of the OpenMoves Debenture contemplated pursuant to the terms of the LLC Membership Purchase Agreement entered into in connection with the acquisition of OpenMoves, if the OpenMoves Debenture is not voluntarily repaid in full prior to October 23, 2023.

Neither the Ubiquity Debenture Contingent Amount, the SCS Debenture Contingent Amount, the OpenMoves Debenture Contingent Amount, nor any interest accrued thereon, shall be convertible into common shares of PopReach pursuant to the terms of Ubiquity Debenture, SCS Debenture and the OpenMoves Debenture, respectively, without the approval of the TSX Venture Exchange.

PopReach, a Tier 1 Issuer on the TSX Venture Exchange, with shares also trading on OTCQX® Best Market, is a multi-platform technology company focused on acquiring, optimizing and growing companies and assets that provide services, technology or products within the digital media ecosystem. The Company's portfolio includes: PopReach Games, a free-to-play mobile game publisher; NotifyAI, a push notification advertising platform; Q1Media, an industry-leading advertising and media service provider; Contobox, a leading edge customer engagement platform; Ubiquity, a data driven user acquisition and marketing technology platform; SCS, an integrated agency powering brand performance with data and creativity; and OpenMoves, a Google Premier Partner driving creative and growth across pay-per-click advertising and search engine optimization.

Additional information about the Company is available at www.sedar.com.

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

Certain information in this news release constitutes forward-looking statements and forward-looking information under applicable Canadian securities legislation (collectively, "forward-looking information"). Forward-looking information include, but are not limited to, statements with respect to and the business, financials and operations of the Company. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events. Forward looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by the Company as of the date of this news release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements and future events to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in greater detail in the public documents of the Company available at www.sedar.com. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. Investors are cautioned that undue reliance should not be placed on any such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Company. The Company does not intend, and does not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.

SOURCE PopReach Corporation

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