Martello Announces Closing of $1.4M Second Tranche of Non-Brokered Private Placement to Insiders at an 80% Premium to Market Price

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OTTAWA, ON, Jan. 27, 2022 /CNW/ - Martello Technologies Group Inc., ("Martello" or the "Company") (TSXV: MTLO), a leading developer of enterprise digital experience monitoring ("DEM") solutions, today announced the closing of the second tranche (the "Second Tranche") of its previously announced non-brokered private placement (the "Private Placement"). The Company also announced the grant of stock options to certain directors and officers of the Company.

Second Tranche

Under the Second Tranche, the Company issued 14,370,000 common shares in the capital of the Company (the "Common Shares") to certain Martello insiders, at a price of CDN$0.10 per Common Share (the "Offering Price"), representing a premium of over 80% to the closing price of the Common Shares on January 26, 2022 for aggregate gross proceeds of CDN$1,437,000. This is an increase of CDN$437,000 from the prior announcements. The total amount raised to date in the Private Placement is CDN$2,437,000.

The Second Tranche was subscribed entirely, either directly or indirectly, by Martello insiders led by Terence Matthews, who invested CDN$1,000,000 through Wesley Clover International Corporation.  Other insiders participating in the Second Tranche include Bruce Linton, John Proctor, Colley Clarke, Michael Michalyshyn, Don Smith, Mike Galvin and Erin Crowe.

The Company anticipates that a subsequent tranche of the Private Placement for 500,000 Common Shares at the Offering Price will close in the coming weeks for aggregate gross proceeds of CDN$50,000. The third tranche is also anticipated to be subscribed for entirely by a Martello insider.

"In my view Martello has a key role in the successful delivery of Cloud-based services such as Microsoft 365 and Teams", said Terence Matthews, Co-Chairman of Martello. "Usage of these services has increased substantially in recent years and the complexities involved with Real Time Cloud Communications provides an opportunity for significant business upside with Martello.  With the launch of Martello Vantage DX, I am confident that the Company is in the right business at the right time, with the capacity to execute well."

"Martello's board of directors and management have chosen to invest in Martello at a significant premium to market, a reflection of our collective confidence in the Company's opportunity", said John Proctor, President and Chief Executive Officer of Martello. "We remain focused on driving revenue growth with Vantage DX and the continued development of key partnerships and look forward to sharing business updates with the market as these activities progress."

The Common Shares issued in the Second Tranche are subject to a four month hold period until May 28, 2022.

The net proceeds from the Private Placement are expected to be used by the Company to pursue sales activities and product features and enhancements, as well as for general working capital purposes. The Private Placement is subject to certain conditions, including, but not limited to, the receipt of all necessary regulatory and other approvals, including the approval of the listing of the Common Shares on the TSX Venture Exchange (the "TSXV").

The Second Tranche constitutes a "related party transaction" within the meaning of TSXV Policies 4.1 and Section 5.9 and Multilateral Instrument 61–101 Protection of Minority Security Holders in Special Transactions ("MI 61–101"). The Company has relied on exemptions from the formal valuation and minority shareholder approval requirements of MI 61–101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61–101 in respect of the Second Tranche as the fair market value (as determined under MI 61-101) of the insider's participation in the Second Tranche is below 25% of the Company's market capitalization (as determined in accordance with MI 61-101).

Stock Option Grant

Martello has granted an aggregate of 300,000 stock options (the "Options") to certain directors and officers of the Company. Each Option is exercisable into one Common Share at a price of $0.10 per Common Share.  The Options granted shall vest in equal annual instalments over 36 months and expire five years from the date of grant.

The Option grants are governed by the terms of the Company's incentive stock option plan, as ratified by Martello shareholders at the Company's Annual and Special Meeting on September 21, 2021. Martello grants Options as part of its strategy to incentivize and retain a strong team that will drive growth.

This press release does not constitute an offer of the securities of the Company for sale in the United States. The securities of the Company have not been registered under the United States Securities Act of 1933, (the "1933 Act") as amended, and may not be offered or sold within the United States absent registration or an exemption from registration under the 1933 Act.

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 state in which such offer, solicitation or sale would be unlawful.

About Martello Technologies Group

Martello Technologies Group Inc. (TSXV: MTLO) is a technology company that provides digital experience monitoring solutions. The company's products provide monitoring and analytics on the performance and user experience of critical cloud business applications, while giving IT teams and service providers control and visibility of their entire IT infrastructure. Martello's software products include Vantage DX, which provides Microsoft 365 and Microsoft Teams end user experience monitoring and analytics. Martello is a public company headquartered in Ottawa, Canada with employees in Europe, North America and the Asia Pacific region. Learn more at http://www.martellotech.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 news release.

Cautionary Note Regarding Forward-Looking Information

This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods and " includes, but is not limited to, statements with respect to activities, events or developments that the Company expects or anticipates will or may occur in the future including the expected proceeds of the Third Tranche and the use of proceeds from the Private Placement.

Forward-looking information is neither a statement of historical fact nor assurance of future performance. Instead, forward-looking information is based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking information relates to the future, such statements are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking information. Therefore, you should not rely on any of the forward-looking information. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking information include, among others, the following:

• Continued volatility in the capital or credit markets and the uncertainty of additional financing.
• Our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so.
• Changes in customer demand.
• Disruptions to our technology network including computer systems and software, as well as natural events such as severe weather, fires, floods and earthquakes or man-made or other disruptions of our operating systems, structures or equipment.
• Delayed purchase timelines and disruptions to customer budgets, as well as Martello's ability to maintain business continuity as a result of COVID-19.
• and other risks disclosed in the Company's filings with Canadian Securities Regulators, including the Company's annual information form for the year ended March 31, 2021 dated January 7, 2022, which is available on the Company's profile on SEDAR at www.sedar.com.

Any forward-looking information provided by the Company in this news release is based only on information currently available and speaks only as of the date on which it is made. Except as required by applicable securities laws, we undertake no obligation to publicly update any forward-looking information, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

SOURCE Martello Technologies Group Inc.

Tracy King, Vice President of Marketing, [email protected], 613.410.7636; John Proctor, President & CEO, [email protected], 613.271.5989