Q4

Q4 Inc. (TSX:QFOR) (“Q4” or the “Company”), the leading capital markets access platform, today sent a letter to shareholders and issued a presentation highlighting reasons to support the proposed arrangement transaction (the “Arrangement”) whereby Q4 would be acquired by a newly formed entity controlled by Sumeru Equity Partners (“Sumeru”), a leading technology-focused investment firm. A special meeting (the “Special Meeting”) of holders (the “Shareholders”) of the Company’s common shares (the “Common Shares”) related to the proposed Arrangement will be held on January 24, 2024 at 10:00 a.m. (Toronto Time).

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The presentation is available on the Company’s website at https://investors.q4inc.com/Special-Meeting-Vote/Special-Meeting/.

Further, Q4 announced that a leading proxy advisory firm, Institutional Shareholder Services Inc. (“ISS”), has recommended Shareholders vote “FOR” the transaction, citing as reasons for its conclusion the “significant premium,” “reasonable” sale process, and “credible downside risk” if the Arrangement is not approved.

The full text of the letter follows:

Reminder to Vote Today.

Deadline to Submit Your Proxy Vote is January 22, 2024 at 10 a.m. (Toronto Time).

Dear Shareholders,

Thank you for your investment in Q4 Inc. (TSX:QFOR) (“Q4” or the “Company”).

As part of our ongoing commitment to delivering value to you, we recently agreed to a proposed Arrangement (the “Arrangement”) whereby Q4 would be acquired by a newly formed entity controlled by Sumeru Equity Partners (“Sumeru”), a leading technology-focused investment firm.

Under the terms of the proposed Arrangement, Shareholders – other than certain Shareholders rolling over their equity interest (“Rolling Shareholders”) – would receive an all-cash payment of C$6.05 per share, representing a 36% premium to the closing price of the Company’s Common Shares on November 10, 2023, the last trading day prior to the Arrangement being announced.

The Arrangement, if approved, will provide Shareholders with immediate, significant, and certain value following a robust strategic review process overseen by an independent Special Committee (“Special Committee”) of the Board of Directors.

The Board (other than conflicted directors) unanimously recommends that you vote “FOR” the proposed Arrangement at the Special Meeting of Shareholders (“Special Meeting”) to be held on January 24, 2024, at 10 a.m. (Toronto Time). The Special Meeting will be held virtually via live audio webcast at: https://meetnow.global/MA5VC62.

Why the Arrangement is the Best Path Forward

We believe that the rationale for the Arrangement is clear and that it represents the optimal pathway for Shareholders. Selected reasons for this include:

• Premium Consideration: The Consideration to be received by Shareholders (other than the Rolling Shareholders) represents a 36% premium to the closing price of Q4’s Common Shares as of November 10, 2023, the last day of trading before the Arrangement was announced. The purchase price is a 43% premium to the 20-day volume-weighted average trading price and a 46% premium to the 60-day volume-weighted average prior to the announcement.
  
• Certainty of Value and Liquidity: The Consideration offered to Shareholders (other than the Rolling Shareholders) is all cash, which provides immediate liquidity, value realization and certainty for their entire investment.
  
• Highest Proposal: The Special Committee concluded after extensive negotiations with Sumeru that the Consideration, which represents an increase from Sumeru’s original proposal, was the highest price that could be obtained from Sumeru and that further negotiation could potentially have caused Sumeru to withdraw its proposal, denying Shareholders the right to vote on the proposed Arrangement.
  
• Go-Shop Provision: The Company undertook a Go-Shop process to solicit alternative proposals and was in contact with 23 different parties. None of these discussions resulted in an alternative proposal being presented.
  
• Independent Formal Valuation and Fairness Opinions: Stifel Nicolaus Canada Inc. (“Stifel Canada”) provided an independent formal valuation that concluded that as of November 12, 2023, the fair market value of the Company’s Common Shares was in the range of C$5.50 to C$6.80 per Share. Both Stifel Canada and Raymond James & Associates concluded that the Consideration to be received by the Shareholders (other than the Rolling Shareholders) pursuant to the Arrangement was fair from a financial point of view to these Shareholders.
  
• Minority Vote and Court Approval: The Arrangement must be approved by not only two-thirds of the votes cast by Shareholders, but also by a majority of the minority Shareholders in accordance with applicable securities laws, and by the Ontario Superior Court of Justice (Commercial List), which will consider the fairness and reasonableness of the Arrangement to all Shareholders.

Third Party Support for the Transaction

Don’t just take our word for it. Notably, the reactions from objective parties have reinforced the merits of the transaction.

Leading proxy advisory firm Institutional Shareholder Services Inc. (“ISS”) recently recommended shareholders vote FOR the Arrangement, stating:¹

• “The offer represents a significant premium to the unaffected price and the valuation appears credible.”
• “The sale process was ultimately conducted on a comparable basis to other recent notable Canadian software transactions and helped facilitate price discovery.”
• “Based on the company's operational and share price history as well as, at minimum, some expected reversion in share price in the event of non-approval, the standalone case is not an inherently safe path.”
• “On balance, shareholder support for this proposal is warranted.”

Members of the sell side analyst community have also been in favor of the Arrangement:

• “We believe the acquisition is attractive and provides certainty to shareholders.” — RBC Capital Markets, November 13, 2023
• “We consider the announcement a positive outcome for the broader shareholder base, given the headwinds to QFOR’s growth profile as it transitions to breakeven profitability.” — Canaccord Genuity, November 13, 2023
• “We believe the current deal price is reasonable.” — Eight Capital, November 14, 2023

Shareholders are urged to read the Circular and its appendices carefully and in its entirety as the Circular contains extensive detail regarding the background to the Arrangement, detailed reasons for the recommendation of the Special Committee and the Board (including the above reasons) and other factors considered.

After careful consideration of all these factors, including the recommendations of the Company’s financial advisors and the unanimous recommendation of the Special Committee, the Board (with conflicted directors not in attendance or participating in the decision) unanimously determined the Arrangement is the best interests of the Company and is fair to Shareholders (other than the Rolling Shareholders).

As such, we strongly encourage you to vote “FOR” the proposed Arrangement.

Thank you for your continued support of Q4.

Sincerely,

The Special Committee of the Board of Directors of Q4

Due to the Essence of Time, Shareholders are encouraged to vote online or by telephone as describe in the enclosed voting form and on Q4’s website at: https://investors.q4inc.com/Special-Meeting.

The proxy voting deadline is on January 22, 2024 at 10 a.m. Toronto Time.

Shareholder Questions and Assistance

Shareholders who have questions regarding the Arrangement or require assistance with voting may contact Laurel Hill Advisory Group, the Company’s shareholder communications advisor and proxy solicitation agent at:

Laurel Hill Advisory Group

North American Toll Free: 1-877-452-7184 (+1 416-304-0211 Outside North America)

Email: assistance@laurelhill.com.

About Q4 Inc.

Q4 Inc. (TSX: QFOR) is the leading capital markets access platform that is transforming how issuers, investors, and the sell-side efficiently connect, communicate, and engage with each other.

The Q4 Platform facilitates interactions across the capital markets through IR website products, virtual events solutions, engagement analytics, investor relations CRM, shareholder and market analysis, surveillance, and ESG tools. The Q4 Platform is the only holistic capital markets access platform that digitally drives connections, analyzes impact, and targets the right engagement to help public companies work faster and smarter.

The company is a trusted partner to more than 2,500 public companies globally, including many of the most respected brands in the world, and maintains an award-winning culture where team members grow and thrive.

Q4 is headquartered in Toronto, with offices in New York and London. Learn more at investors.Q4inc.com.

All dollar figures in this release are in Canadian dollars unless otherwise indicated.

About Sumeru Equity Partners

Sumeru Equity Partners provides growth capital at the intersection of people and innovative technology. Sumeru seeks to embolden innovative founders and management teams with capital and scaling partnership. Sumeru has invested over US$3 billion in more than fifty platform and add-on investments across enterprise and vertical SaaS, data analytics, education technology, infrastructure software and cybersecurity. The firm typically invests in companies throughout North America and Europe. For more information, please visit sumeruequity.com.

Cautionary Note Regarding Forward-Looking Information

This release includes “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of applicable securities laws. Forward-looking statements include, but are not limited to, statements with respect to the purchase by the Purchaser of all of the issued and outstanding Common Shares, the rationale of the Board for entering into the Arrangement Agreement, the anticipated timing and the various steps to be completed in connection with the Arrangement, including receipt of Shareholder and court approvals, the anticipated timing for closing of the Arrangement.

In some cases, but not necessarily in all cases, forward-looking statements can be identified by the use of forward-looking terminology such as “plans” “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking statements. Forward-looking statements are not historical facts, nor guarantees or assurances of future performance but instead represent management’s current beliefs, expectations, estimates and projections regarding future events and operating performance. Forward-looking statements are necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by the Company as of the date of this release, are subject to inherent uncertainties, risks and changes in circumstances that may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ, possibly materially, from those indicated by the forward-looking statements include, but are not limited to, the possibility that the proposed Arrangement will not be completed on the terms and conditions, or on the timing, currently contemplated, or at all, the possibility of the Arrangement Agreement being terminated in certain circumstances, the ability of the Board to consider and approve a Superior Proposal for the Company, and the other risk factors identified under “Risk Factors” in the Company’s latest annual information form and management’s discussion and analysis for the year ended December 31, 2022 and in the management’s discussion and analysis for the period ended September 30, 2023, and in other periodic filings that the Company has made and may make in the future with the securities commissions or similar regulatory authorities in Canada, all of which are available under the Company’s SEDAR+ profile at www.sedarplus.ca. These factors are not intended to represent a complete list of the factors that could affect the Company. However, such risk factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. You should not place undue reliance on forward-looking statements, which speak only as of the date of this release.

Although the Company has attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other risk factors not currently known to us or that we currently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking statements. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, you should not place undue reliance on forward-looking statements. The forward-looking statements represent the Company’s expectations as of the date of this release (or as the date it is otherwise stated to be made) and are subject to change after such date. However, the Company disclaims any intention and undertakes no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable Canadian securities laws. All of the forward-looking statements contained in this release are expressly qualified by the foregoing cautionary statements.

¹ Permission to quote ISS was neither sought nor obtained.

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