Martello Technologies Group Inc. — M&A Activity 2020

Jun 2, 2020

MARTELLO TECHNOLOGIES GROUP INC.

390 March Rd., Suite 110 Ottawa, Ontario K2K 0G7

MATERIAL CHANGE REPORT

June 2, 2020

Item 1. Name and Address of Company

The name of the reporting issuer is Martello Technologies Group Inc. (the “ Issuer " or “ Martello ”). Its head office is located at 390 March Rd., Suite 110 Ottawa, Ontario K2K 0G7.

Item 2. Date of Material Changes

The material change occurred on May 29, 2020.

Item 3. News Releases

The Issuer disseminated a News Release via Cision on May 29, 2020 and filed the News Release on SEDAR on May 29, 2020.

Item 4. Summary of Material Changes

The Issuer announced that it has completed the acquisition of GSX Participations SA ("GSX"), a provider of end-user experience monitoring for Microsoft Office 365 (the "Transaction"). All conditions required to close the Transaction have been met.

Item 5. Full Description of Material Changes

Further to its press release dated April 28, 2020, the Issuer has acquired 100% of the shares of GSX, which is headquartered in Geneva, Switzerland with more than 400 enterprise customers globally. The consideration for the acquisition was 22,000,000 common shares and CDN$13,860,000 cash for an aggregate purchase price of $18,370,000.

The Issuer has closed debt financing concurrent with the closing of the Transaction. A US$8M subordinated secured term loan provided by Vistara Capital Partners has partially funded the acquisition of GSX. As previously announced, the Issuer has also entered into a credit agreement with National Bank of Canada for a $7.5MM secured revolving facility, which the Issuer expects will close by June 1. Additional information about the transaction and the debt financings above are detailed in the press release dated April 28, 2020.

Oak Hill Financial will receive a fee of $175,000 for advisory services in connection with the debt financings from Vistara Capital Partners and National Bank.

Items 6 and 7. Reliance on Subsection 7.1(2) of National Instrument 51-102 and Omitted Information

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The Issuer is not relying on sub-section 7.1(2) of National Instrument 51-102 or the equivalent provisions of the securities legislation in other jurisdictions governing the Issuer for the filing of this report nor is any information being omitted in reliance thereon.

Item 8. Executive Officers

For further information, please contact John Proctor, President and Chief Executive Officer of the Issuer, at 613-271-5989.

Item 9. Date of Report

Dated this 2nd day of June, 2020.