Turnium Technology Group Inc. Announces Execution of Share Purchase Agreement with Claratti Limited and Non-Brokered Private Placement

Vancouver, Canada–(Newsfile Corp. – May 30, 2024) – Turnium Technology Group Inc. (TSXV: TTGI) (FSE: E48) (“Turnium” or the “Company“), an industry leader in cloud-native software-defined wide area networking solutions (SD-WAN), further to its news release dated February 28, 2024, announces that it has entered into a definitive share purchase agreement dated May 30, 2024 (the “Share Purchase Agreement“) with Claratti Limited (which will convert to Claratti Pty Ltd on 28 June 2024) ACN 642 169 337 (“Claratti“) and each of the securityholders of Claratti (the “Vendors“) in connection with the proposed acquisition of 100% of the issued and outstanding ordinary shares (the “Claratti Shares“) in the capital of Claratti, which will result in Claratti becoming a wholly-owned subsidiary of Turnium (the “Acquisition“).

Pursuant to the Share Purchase Agreement, the Company will acquire 100% of the issued and outstanding Claratti Shares in exchange for:

1. a closing purchase price of CAD$6.0 million, payable through the issuance of Class A Common shares in the capital of the Company (“Turnium Shares“) at a deemed price of CAD$0.15 per Turnium Share, being a total of 40,000,000 Turnium Shares; and

2. potential earn-out payments of up to CAD$4.0 million, payable through the issuance of up to 26,666,666 Turnium Shares if certain EBITDA thresholds are achieved in fiscal 2025 and in fiscal 2026 (the “Earn-Out Payments“).

The Turnium Shares issuable to the Vendors in connection with the Acquisition, including Turnium Shares issuable in connection with the Earn-Out Payments, will be subject to a contractual resale restriction (the “Contractual Hold Period“), such that:

1. 25% of the issuable Turnium Shares will not be subject to the Contractual Hold Period on the date of issuance thereof (the “Issue Date“);

2. 25% of the issuable Turnium Shares will be released from the Contractual Hold Period on the date which is 6 months from the Issue Date;

3. 25% of the issuable Turnium Shares will be released from the Contractual Hold Period on the date which is 12 months from the Issue Date; and

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   the final 25% of the issuable Turnium Shares will be released from the Contractual Hold Period on the date which is 18 months from the Issue Date.

The Earn-Out Payments are contingent on the Company achieving the following EBITDA projections (which requires all current and future entities to have positive EBITDA):

1. upon achievement of an EBITDA of CAD$1 million for the 2025 fiscal year, an Earnout Payment of CAD$1 million payable through the issuance of up to 6,666,666 Turnium Shares; and

2. upon achievement of an EBITDA of CAD$3 million for the 2026 fiscal year, an Earnout Payment of CAD$3 million payable through the issuance of up to 20,000,000 Turnium Shares.

The Turnium Shares issuable in connection with the Earn-Out Payments will be issued at a deemed price equal to the higher of: (i) CAD$0.15; and (ii) the maximum Discounted Market Price (as such term is defined in the policies of the TSX Venture Exchange (the “Exchange“)) of the Turnium Shares at closing on the date prior to the issuance the applicable Turnium Shares. The same Contractual Hold Period will apply to the Earn-Out Payments.

The Turnium Shares issued to the Vendors pursuant to the Acquisition will be subject to: (i) a hold period under applicable securities laws, which will expire four months plus one day from the date of closing of the Acquisition; and (ii) in the case of Vendors who will become directors, officers or shareholders holding 10% or more of the issued and outstanding shares of the Company on a post-Acquisition basis, be subject to the Exchange Hold Period, which will expire four months plus one day from the date of closing of the Acquisition.

Upon completion of the Acquisition, Claratti will become a wholly-owned subsidiary of Turnium, and the Vendors will own approximately 24.84% of the issued and outstanding common shares of Turnium, assuming the Offering (as defined below) is fully subscribed for.

Upon the closing of the Acquisition, it is anticipated that Doug Childress, Craig Pentland, Ralph Garcea, Johan Arnet, Erin Campbell and Jim Lovie will constitute the Board of Directors of the Turnium. It is also anticipated that the new senior management team of Turnium will be comprised of Doug Childress (Chief Executive Officer) and Konstantin Lichtenwald (Chief Financial Officer). The Company anticipates that completion of the Acquisition will effectively double the size of the Company on a consolidated basis, which is expected to provide a larger base from which to cross-sell revenue and seek further acquisitions for growth.

Completion of the proposed Acquisition is subject to, among other things, receipt of all necessary regulatory and shareholder approvals, including the approval of the Exchange. As the proposed Acquisition is not a “Non-Arm’s Length Transaction” (within the meaning of Policy 2.4 of the Exchange), the Acquisition does not require approval of the shareholders of Turnium.

The Share Purchase Agreement

Pursuant to the Share Purchase Agreement, certain conditions precedent must be met prior to the closing of the Acquisition, including, but not limited to: (a) acceptance by the Exchange, and receipt of other applicable regulatory approvals; (b) no material adverse change in the business, affairs, financial condition or operations of Claratti or Turnium having occurred between the date of entering into the Share Purchase Agreement and the closing date of the Acquisition; (c) the Company being satisfied with its due diligence review of Claratti; (d) Claratti having sufficient working capital to operate the business consistent with past practice for a period of twelve (12) months from closing and a maximum of CAD$2,500,000 in debt; (e) Claratti causing all outstanding options, warrants and securities exercisable or convertible into shares of Claratti to be exercised or converted, as applicable, into Claratti Shares to be purchased by Turnium pursuant to the Share Purchase Agreement; (f) termination of Claratti’s existing shareholders’ agreement; (g) entry into an executive employment agreement with Doug Childress in connection with his appointment as CEO of the Company; and (h) other customary closing conditions for a transaction of this nature. There can be no assurance that the Acquisition will be completed as proposed or at all.

The Acquisition will not constitute a Non-Arm’s Length Transaction (as such term is defined in the policies of the Exchange). No person which is a Non-Arm’s Length Party (as such term is defined in the policies of the Exchange) of Turnium has any direct or indirect beneficial interest in Claratti or its assets prior to giving effect to the Acquisition and no such person is an insider of Claratti. Similarly, there is no known relationship between or among any person which is a Non-Arm’s Length Party of Turnium and any person who or which is a Non-Arm’s Length Party to Claratti.

Upon completion of the Acquisition, it is expected that Turnium will be a Tier 2 Technology Issuer on the Exchange.

Non-Brokered Private Placement

The Company also announces that it intends to complete a non-brokered private placement (the “Offering“) of up to 8,214,285 units (each a “Unit“) at a price of CAD $0.07 per Unit for aggregate proceeds of up to CAD$575,000. Each Unit will consist of one common share of the Company (a “Unit Share“) and one-half of one common share purchase warrant (a “Warrant“).

Each whole Warrant will be exercisable into one common share in the capital of the Company at an exercise price of $0.105 per share for a period of two years from the date of issuance.

In connection with the Offering, the Company may pay finder’s fees of up to 7% in cash or securities or a combination of both to eligible finders, as permitted by the policies of the Exchange. Insiders of the Company may participate in the Offering, however no such participation has been confirmed as of the date of this press release.

The securities issued pursuant to the Offering will be subject to a hold period under applicable securities laws, which will expire four months plus one day from the date of closing of the Offering. Closing of the Offering is subject to receipt of all necessary corporate and regulatory approvals, including approval of the Exchange.

The Offering is anticipated to be completed on or around June 14, 2024.

The net proceeds of the Offering will be allocated towards expenses related to the Acquisition and working capital requirements for the six-month period after the Acquisition.

About Turnium Technology Group Inc.

Turnium is a public, Exchange-listed company, which was incorporated on October 17, 2017 pursuant to the laws of the Province of British Columbia. We make internet connections more secure and reliable for businesses. Our proprietary software-defined wide area networking (SD-WAN) platform is used to deliver highly reliable and secure connections using standard internet, wireless, or low-earth orbit satellite services for maintaining uninterrupted internet connectivity. Compared to other options, our SD-WAN solution is easier to manage, more flexible and faster to deploy, and more cost-effective than virtual private network (VPN) solutions or the services offered by traditional telecommunication carriers.

Turnium delivers its SD-WAN solution as a white label, disaggregated software platform that OEM channel partners host, manage, brand, and price. Turnium is also available to Resellers as a Turnium-branded managed service. Turnium SD-WAN is sold through a channel partner program designed for Communications Service Providers, Internet and Managed Service Providers, System Integrators, and Value-Added Resellers.

About Claratti

Claratti is an Australian unlisted public company (which will convert to private company on June 28, 2024) registered in Western Australia since June 29, 2020. Claratti is an Australian Communications and Media Authority (ACMA) licensed telecommunications carrier (#485), ISO27001:2019 accredited provider of telecommunications services and managed IT and cybersecurity solutions for SMB and enterprise level customers. Claratti sells its products and services across Australia via direct client sales, referrals, wholesale partners and through white labelled offerings.

The business of Claratti began its life as Intelligent IP Hosting Pty Ltd 619 361 018 (“Intelligent IP“) on May 26, 2017 when it was co-founded by Mr. Doug Childress and Mr. Chuck Bartle. On June 30, 2020, Intelligent IP became a wholly owned subsidiary of Claratti as part of the group’s “top-hat” restructure. The vision behind Claratti was to build a platform-style offering where Technology as a Service (TaaS) could be sourced from a single vendor, thus bridging the dispirit technical gaps between telecommunications, Internet Service Providers, Hardware, Software, and Consulting product and service providers. Step forward to 2024, where Claratti have established its self as a Tier 3 National carrier’s network, Private cloud services, voice, video, managed services, managed security and 24×7 global Network, IT and Security Operations Centre.

On an unaudited basis, for the trailing twelve months, Claratti generated AUD$4.96M in revenue with an EBITDA of (AUD$581K).

As of immediately prior to closing of the Acquisition, there will be 21,435,085 Claratti Shares outstanding. The following persons own, control or direct 10% or more of the outstanding Claratti Shares immediately prior to closing of the Acquisition:

Following closing of the Acquisition, Doug Childress and Chuck Bartle are expected to own the following Turnium Shares:

Notes:
(1) Assuming the Offering is fully subscribed for.

Doug Childress: Current CEO and Director of Claratti

See the biography for Doug Childress under the heading “Proposed Directors and Senior Management Team“.

Chuck Bartle: Director of Claratti

Chuck Bartle is an experienced company director with over 26 years’ experience within the mining and technology sectors. Mr. Bartle is currently a director of: Taplan Pty Ltd (appointed 23 January 1996); Beta Investments (1993); Pty Ltd (appointed 27 June 1996); Intelligent IP Hosting Pty Ltd (appointed 26 May 2017); Mining Projects Management Group Pty Ltd (appointed 22 May 2017); and Design Works Pty Ltd (appointed 23 April 1996). Mr. Bartle was previously a director of Intelligent IP Communications Pty Ltd (appointed 1 September 2006, resigned 13 September 2013) and Margosa Graphite Ltd. He has not held any other listed directorships in the past three years.

Proposed Directors and Senior Management Team

The following are brief resumes of the currently proposed directors and officers of Turnium following the Acquisition:

Doug Childress, CEO and Director (Current CEO and Director of Claratti)

Doug Childress is an experienced company director with over 37 years’ experience as an IT & Telecommunications specialist, having spent his past 26 years as Chairman and Chief Executive Officer. Mr. Childress is currently a director of Intelligent IP Hosting Pty Ltd (appointed 17 May 2017). Mr. Childress was previously a director of Intelligent IP Communications Pty Ltd (appointed 1 September 2005). He has not held any other listed directorships in the past three years.

Konstantin Lichtenwald, CFO (Current CFO of the Company)

Konstantin Lichtenwald has over 16 years of finance and accounting experience, including corporate compliance, accounting and financial management, initial public offerings and reverse takeovers, providing corporate finance, financial reporting, consulting and other accounting services to both small businesses as well as public companies.

Craig Pentland: Non-Executive Director (Current Director and Secretary of Claratti)

Craig Pentland is an experienced company director with over 25 years’ experience working within the Public accounting industry. He is a Chartered Accountant, Certified Practicing Accountant, Chartered Tax Adviser and holds an MBA. Mr. Pentland is currently a director of SLS Advisory, a boutique chartered accounting practice (appointed 10 May 2011). Mr. Pentland is a director of Margosa Graphite Ltd, a publicly unlisted graphite resource company and CGS Australia Ltd, a publicly unlisted silica quartz resource company. He has not held any other listed directorships in the past three years.

Ralph Garcea: Non-Executive Director (Current Chairman and Director of the Company)

Ralph Garcea co-founded Focus Merchant Group in September 2018 and has more than 22 year’s experience in senior positions at major domestic, international, and boutique investment firms. He was a top-ranked research analyst, well regarded for the depth and breadth of knowledge of Canadian technology, gaming and industrial companies across a broad range of market capitalizations. Over the years, he has received top three rankings from Brendan Woods, Greenwich, Starmine and Thomson Reuters surveys.

Before becoming a sell-side analyst, Ralph was a research engineer for Bombardier Aerospace, and a business unit manager for Michigan-based LMS North America, managing sales, marketing, and services. He holds a Bachelor’s degree (Honours) in Engineering Science (Aerospace) from the University of Toronto and an M.B.A. (Honours) from the Schulich School of Business at York University. Ralph is a member of the Professional Engineers of Ontario (PEO), the American Institute of Aeronautics and Astronautics (AIAA), and the Society of Automotive Engineers (SAE). He currently serves as a Director on the board of TSX-listed Converge Technology Solutions, TSXV-listed Edgewater Wireless Systems, and TSX-V listed Spitfyre Capital.

Johan Arnet: Executive Director (current Director and Founder of the Company)

Johan Arnet has founded and grown six IT, internet, and telecom companies since 1995. He began developing the proprietary software that is now Turnium’s SD-WAN platform in 2009. After studying Computer Science at Simon Fraser University he left to become an entrepreneur and continue the IT Consulting work that he had started in high school. In 1999, he received the Young Entrepreneur of the Year Award from the Business Development Bank of Canada (BDC). In 2009, Johan also started Rocket Networks, an Internet Service Provider business, and sold it to TeliPhone Navigata in 2014.

Erin Campbell: Non-Executive Director (Current Director of the Company)

Erin Campbell, ICD.D has over 25 years as an entrepreneur and business advisor experience with board and corporate governance in growth and rapidly evolving technology and industrial companies. Erin has led financing, corporate transactions, re-structuring, M&A for private and public companies operating in Canada and US. Erin is the founding partner of Moneta Partners, an organization providing capital markets and corporate finance advisory services.

Jim Lovie: Non-Executive Director (Current Director of the Company)

Jim Lovie has over 30 years of experience in the technology and communications sectors. He has held senior executive roles with Xerox, Bell Canada, and most recently, with Rogers Communications. Jim’s expertise in Sales, Service and Distribution have allowed him to support the growth of these corporations. Jim is very community minded and has participated on the board of Southlake Regional Hospital for 12 years and was the Chair of the Southlake Foundation.

Further Information

Turnium will provide further details in respect of the Acquisition in due course by way of a subsequent news release, however, Turnium will make available to the Exchange all information, including financial information, as may be requested or required by the Exchange.

All information contained in this news release with respect to Turnium and Claratti was supplied by the respective party, for inclusion herein, without independent review by the other party, and each party and its directors and officers have relied on the other party for any information concerning the other party.

Completion of the Acquisition is subject to a number of conditions, including but not limited to, Exchange acceptance. There can be no assurance that the Acquisition will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in any disclosure document of Turnium required to be prepared in connection with the Acquisition, any information released or received with respect to the Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of Turnium should be considered highly speculative.

The Exchange has not in any way passed upon the merits of the proposed Acquisition and has neither approved nor disapproved the contents of this news release.

The securities have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

# # #

Turnium Contact:

Chairman: Ralph Garcea, Email: rgarcea@ttgi.io, Telephone: +1 416-304-9125

Investor Relations: Bill Mitoulas, Email: investor.relations@ttgi.io, Telephone: +1 416-479-9547

Media inquiries: please email media@ttgi.io.

Sales inquiries: please email sales@ttgi.io, www.ttgi.io, www.turnium.com

CAUTIONARY NOTES

Neither the TSX Venture Exchange 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.

FORWARD-LOOKING STATEMENTS

Certain statements and information herein, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or information include but are not limited to statements or information with respect to: the terms and conditions of the Acquisition and the Offering, including receipt of necessary regulatory and shareholder approval; the anticipated directors, officers and insiders of Turnium upon completion of the Acquisition; the closing of the Acquisition and the Offering; Claratti’s products and ability to create increased shareholder value; and forthcoming news releases and other disclosure. Often, but not always, forward-looking statements or information can be identified by the use of words such as “anticipate”, “believe”, “continue”, “expect”, “intend”, “may” or “will” and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information.

With respect to forward-looking statements and information contained herein, Turnium and Claratti have made numerous assumptions including among other things, assumptions about general business and economic conditions of Claratti and the market in which it operates. The foregoing list of assumptions is not exhaustive.

Although management of Turnium and Claratti believe that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that forward-looking statements or information herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. These factors include, but are not limited to: risks relating to the receipt of all requisite shareholder and regulatory approvals for the Acquisition and the Offering; changes in interest and currency exchange rates; risks relating to unanticipated operational difficulties; changes in general economic conditions or conditions in the financial markets; changes in laws; the ability to obtain financing as required; and other risk factors as detailed from time to time in Turnium’s Management Discussion and Analysis dated February 28, 2024 and other documents available under Turnium’s profile at www.sedarplus.ca. Turnium and Claratti do not undertake to update any forward-looking information, except in accordance with applicable securities laws.

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