NowVertical Revamps Smartlytics Agreement to Complete Product Group Integration

NowVertical Group Inc. (TSXV: NOW) (OTCQB: NOWVF) (“

NOW”

 or the “

Company

”), is pleased to announce that NOW and Mostafa Hashem, NOW’s EVP Product & Technology have agreed to amend the outstanding earnout obligations governing NOW’s acquisition of Smartlytics Consultancy Limited (“

Smartlytics

”). In connection with the amendment, the incentives that Mr. Hashem would have received as a former owner of Smartlytics have been adjusted with the objective of rewarding Mr. Hashem for building an integrated product group that encompasses all of NOW’s existing software assets; whereas the former earn-out provisions were based on performance of the Smartlytics business unit only. Mr. Hashem was promoted to the EVP Product & Technology role in early 2024.

“With the amendment of the purchase agreement, we're shifting focus to commercializing NOW's software suite and capitalizing on cross-selling opportunities across our NA, EMEA, and LATAM markets. Mr. Hashem's commercial acumen and success in generating revenue streams by combining NOW's software with services for tangible business outcomes are commendable. This marks a major step towards deeper integration within our business, with NVG software playing a crucial role in expanding our footprint within strategic accounts," remarked Sandeep Mendiratta, NOW's CEO.

Transaction Details

In executing its integration strategy, the Company has amended the share purchase agreement dated December 10, 2022, that governed the acquisition of Smartlytics, restructuring its ongoing obligations with Mr. Hashem as follows:

• the future earn-out payments for years 2024 and 2025 will be settled through a payment by the Company tied to the EBITDA of NOW’s product group payable to Mr. Hashem equally in cash and through the issuance of Class A subordinate voting shares in the capital of NOW, subject to TSX Venture Exchange approval prior to the time of each issuance; and
• the deferral of the payment of the previously due holdback amount of $100,000.

Multilateral Instrument 61-101 – Protection of Minority Security Holders in Related Party Transactions

Mostafa Hashem is the EVP Product & Technology of the Company (the “Related Party”). As a result, the entering into of the Deed and certain of the transactions contemplated thereby are considered to be “related party transaction”, subject to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). Notwithstanding the foregoing, the Company is exempt from the formal valuation requirement per sections 5.5(a) and 5.5(b) of MI 61-101, as neither the fair market value of the subject matter of the transactions, nor the fair market value of the consideration for the transactions, insofar as it involves interested parties, exceeds 25% percent of the Company’s market capitalization and Company is not listed on any of the exchanges specified in Section 5.5(b) of MI 61-101, and the Company confirms that it has not obtained any valuations relevant to the transactions in the 24 months preceding entering into the Deed. In addition, the Company is exempt from the requirement to obtain minority shareholder approval per section 5.7(1)(a) of MI 61-101, as neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involves interested parties, exceeds 25% percent of the Company’s market capitalization.

The terms of the Deed were settled through arm’s length negotiations between independent representatives of the Company and the Related Party, with each party separately represented by legal counsel. The entering into of the Deed and the transactions contemplated thereby was considered and unanimously approved by the Company’s board of directors, having regard to, among other things, the impact of the transactions on the Company’s balance sheet, liquidity and overall stability.

The Company did not file a material change report 21 days in advance of implementing the transactions as the negotiations were only recently concluded.

About NowVertical Group Inc.

NowVertical Group is a Vertical Intelligence (VI) software and services provider that delivers vertically-specific data, technology, and artificial intelligence (AI) applications to industry and governments through its global platform. NOW's proprietary solutions sit at the foundation of the modern enterprise by transforming AI investments into VI, enabling its customers to minimize their risk, accelerate the time to value, and reduce costs. NOW is rapidly growing organically and through targeted acquisitions. For more information about NOW, visit www.nowvertical.com.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.For further information, please contact:

Andre Garber, Chief Development [e-mail]

Glen Nelson, Investor Relations and Communicationse: [e-mail] t: [phone]Non-IFRS Measures

This news release refers to certain non-international financial reporting standards (“IFRS”) measures, including “EBITDA”. For the purposes of this news release, EBITDA is defined as the consolidated earnings before interest, taxes, depreciation and amortization. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. The Company’s definitions of non-IFRS measures used in this news release may not be the same as the definitions for such measures used by other companies in their reporting. Non-IFRS measures have limitations as analytical tools and should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. These non-IFRS measures are used to provide investors with supplemental measures of our operating performance and to eliminate items that have less bearing on our operational performance or operating conditions and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. The Company believes that securities analysts, investors and other interested parties frequently use non-IFRS financial measures in the evaluation of issuers. The Company’s management also uses non-IFRS financial measures to facilitate operating performance comparisons from period to period and prepare annual budgets and forecasts.Forward Looking Statements

This news release contains forward-looking information and forward-looking statements within the meaning of applicable Canadian securities laws (together “forward-looking statements”), including, without limitation regarding the settlement of obligations owing to Mr. Hashem, the form and amount of future payments to be made by the Company, the number of Class A subordinate voting shares issuable and the price at which such shares will be issuable, the payment of the Future Earn-Outs, the alignment of management and the business unit leaders, the approval of the TSXV and the ability and timing of certain payments by the Company. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, and contingencies. Investors are cautioned that forward-looking statements are not based on historical facts but instead reflect the Company’s expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Forward-looking statements generally can be identified by the use of forward-looking words such as “may”, “should”, “will”, “could”, “intend”, “estimate”, “plan”, “anticipate”, “expect”, “believe” or “continue”, or the negative thereof or similar variations. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause future results, performance, or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by the forward-looking statements and the forward-looking statements are not guarantees of future performance. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed thereon, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Company. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are the following: direct and indirect material adverse effects from the COVID-19 pandemic; timing and receipt of regulatory approvals, adverse market conditions; risks inherent in the data analytics and artificial intelligence sectors in general; regulatory and legislative changes; that future results may vary from historical results; inability to obtain any requisite future financing on suitable terms; any inability to realize the expected benefits and synergies of acquisitions; that market competition may affect the business, results and financial condition of the Company and other risk factors identified in documents filed by the Company under its profile at www.sedarplus.ca, including the Company’s managements’ discussion and analysis for the year ended December 31, 2022 dated April 28, 2023 and the prospectus supplement (including all documents incorporated by reference therein) dated February 22, 2023. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. 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 and such changes could be material. All of the forward-looking statement contained in this press release are qualified by the foregoing cautionary statements, and there can be no guarantee that the results or developments that we anticipate will be realized or, even if substantially realized, that they will have the expected consequences or effects on our business, financial condition or results of operation. Unless otherwise noted or the context otherwise indicates, the forward-looking statements contained herein are provided as of the date hereof, and the Company does not intend, and does not assume any obligation, to update the forward-looking statements except as otherwise required by applicable law. Investors are cautioned that trading in the securities of the Company should be considered highly speculative.