Quarterhill Inc. — Capital/Financing Update 2021

Oct 29, 2021

FORM 51-102F3 MATERIAL CHANGE REPORT

Item 1 – Name and Address of Company

Quarterhill Inc. (the “ Company ”) 25 King Street West, Suite 1101 Toronto, ON M5L 2A1 Canada

Item 2 – Date of Material Change

October 20, 2021 and October 27, 2021

Item 3 – News Release

The Company disseminated news releases by Canada News Wire on October 20, 2021 and October 27, 2021, copies of which are attached at Exhibit “A” and Exhibit “B” , respectively, to this Material Change Report (collectively, the “ Press Releases ”).

Item 4 – Summary of Material Change

The Company announced (1) on October 20, 2021 that it had entered into a $50 million boughtdeal financing of convertible unsecured subordinated debentures with a syndicate of underwriters including granting the underwriters an over-allotment option to purchase up to an additional $7.5 million aggregate principal amount of debentures and (2) on October 27, 2021 that it had completed the previously announced offering pursuant to which the underwriters had fully exercised their over-allotment option.

Item 5 – Full Description of Material Change

See the Press Releases at Exhibit “A” and Exhibit “B” to this Material Change Report.

Item 6 – Reliance on subsection 7.1(2) of National Instrument 51-102

N/A

Item 7 – Omitted Information

N/A

Item 8 – Executive Officer

Prashant R. Watchmaker, Senior Vice-President, General Counsel & Corporate Secretary (613) 688-4331

Item 9 – Date of Report

October 28, 2021

EXHIBIT “A”

PRESS RELEASE

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Quarterhill Inc. Announces $50 Million Bought Deal Public Offering of Convertible Debentures

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Toronto, Canada – October 20, 2021 – Quarterhill Inc. (“Quarterhill” or the “Company”) (TSX: QTRH) (OTCQX: QTRHF), is pleased to announce that it has entered into a $50 million bought-deal financing (the "Convertible Debenture Financing") of convertible unsecured subordinated debentures (the "Debentures") with a syndicate of underwriters (the "Underwriters") led by Raymond James Ltd. The Debentures will have a coupon of 6.0% per annum, and a conversion price of $3.80 per Quarterhill common share (a "Common Share"), subject to adjustments in certain circumstances. The Company has granted the Underwriters an over-allotment option to purchase up to an additional $7.5 million aggregate principal amount of Debentures on the same terms, exercisable in whole or in part at any time up to the 30th day following the closing of the Convertible Debenture Financing. The Debentures will mature on October 30, 2026 (the “Maturity Date”).

The net proceeds from the Convertible Debenture Financing will be used to support growth of Quarterhill through potential acquisitions and to provide additional working capital to support the continued operations of the Company’s business.

Except in certain circumstances involving a “Change of Control”, the Debentures will not be redeemable at the option of the Company before October 31, 2024. On or after October 31, 2024 and prior to October 31, 2025, the Debentures may be redeemed in whole or in part at the option of the Company on not more than 60 days’ and not less than 30 days’ prior notice at a price equal to the principal amount thereof plus accrued and unpaid interest, provided that the volume weighted average trading price of the Common Shares on the Toronto Stock Exchange for the 20 consecutive trading days ending on the fifth trading day preceding the date on which the notice of redemption is given is not less than 125% of the conversion price. On or after October 31, 2025 and prior to the Maturity Date, the Debentures may be redeemed in whole or in part at the option of the Company on not more than 60 days and not less than 30 days prior notice at a price equal to their principal amount plus accrued and unpaid interest.

The offering is subject to normal regulatory approvals, including approval of the Toronto Stock Exchange, and is expected to close on or about October 27, 2021.

The Debentures will be offered by way of a prospectus supplement in all of the provinces and territories of Canada, except Quebec, and may also be offered by way of private placement in the United States. The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), and may not be offered or sold within the United States or to or for the account or benefit of a

PRESS RELEASE

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U.S. Person (as defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration requirements is available. 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.

About Quarterhill

Quarterhill is a growth-oriented company in the Intelligent Transportation System (ITS) industry as well as, through its Wi-LAN Inc. subsidiary, a leader in Intellectual Property licensing. Our goal is to execute an investment strategy that capitalizes on attractive growth opportunities within ITS - and its adjacent markets - to become a global leader in that industry. Quarterhill is listed on the TSX under the symbol QTRH and on the OTCQX Best Market under the symbol QTRHF. For more information: www.quarterhill.com

For media and investor inquiries, please contact:

Dave Mason Investor Relations T: 416.247.9652 E: ir@quarterhill.com

Forward looking and other cautionary statements

This news release contains forward-looking statements regarding Quarterhill and its business. In particular, this press release includes forward-looking statements pertaining to the proposed timing of completion of the Convertible Debenture Financing and Quarterhill’s intended use of proceeds of the Convertible Debenture Financing. Forward-looking statements are based on estimates and assumptions made by Quarterhill in light of its experience and its perception of historical trends, current conditions, expected future developments and the expected effects of new business strategies, as well as other factors that Quarterhill believes are appropriate in the circumstances. The forward-looking events and circumstances discussed herein may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting Quarterhill, including: potential risks and uncertainties relating to the ultimate geographic spread of the novel coronavirus ("COVID-19"); the severity of the disease; the duration of the COVID-19 outbreak; actions that may be taken by governmental authorities to contain the COVID-19 outbreak or to treat its impact; the potential negative impacts of COVID-19 on the global economy and financial markets and any resulting impact on Quarterhill and/or its business. Other factors include, without limitation, the risks described in Quarterhill's March 11, 2021 annual information form for the year ended December 31, 2020 (the "AIF"). Copies of the AIF may be obtained at www.sedar.com. Quarterhill recommends that readers review and consider all of these risk factors and notes that readers should not place undue reliance on any of Quarterhill's forward-looking statements. Quarterhill has no 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 by law.

EXHIBIT “B”

PRESS RELEASE

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Quarterhill Announces Completion of $57.5 Million Bought Deal Public Offering of Convertible Debentures

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Toronto, Canada – October 27, 2021 – Quarterhill Inc. (“Quarterhill” or the “Company”) (TSX: QTRH) (OTCQX: QTRHF), is pleased to announce that it has completed its previously announced offering (the “Offering”) of 6.00% convertible unsecured subordinated debentures (the “Debentures”) due October 30, 2026, at a price of $1,000 per Debenture for total gross proceeds of $57,500,000, which included the full exercise of the over-allotment option by the underwriters.

The Offering was completed on a bought deal basis by a syndicate of underwriters led by Raymond James Ltd., and including Canaccord Genuity Corp., CIBC World Markets Inc., Cormark Securities Inc., ATB Capital Markets Inc., M Partners Inc. and Stifel Nicolaus Canada Inc. The Debentures are expected to be listed on the TSX under the symbol “QTRH.DB” on October 27, 2021.

The net proceeds from the Convertible Debenture Financing will be used to support Quarterhill’s growth through potential acquisitions and to provide additional working capital to support the continued operations of the Company’s business.

The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), and may not be offered or sold within the United States or to or for the account or benefit of a U.S. Person (as defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration requirements is available. 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.

About Quarterhill

Quarterhill is a growth-oriented company in the Intelligent Transportation System (ITS) industry as well as, through its Wi-LAN Inc. subsidiary, a leader in Intellectual Property licensing. Our goal is to execute an investment strategy that capitalizes on attractive growth opportunities within ITS - and its adjacent markets - to become a global leader in that industry. Quarterhill is listed on the TSX under the symbol QTRH and on the OTCQX Best Market under the symbol QTRHF. For more information: www.quarterhill.com

PRESS RELEASE

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For media and investor inquiries, please contact:

Dave Mason Investor Relations T: 416.247.9652 E: ir@quarterhill.com

Forward looking and other cautionary statements

This news release contains forward-looking statements regarding Quarterhill and its business. In particular, this press release includes forward-looking statements pertaining to Quarterhill’s intended use of proceeds of the Offering. Forward-looking statements are based on estimates and assumptions made by Quarterhill in light of its experience and its perception of historical trends, current conditions, expected future developments and the expected effects of new business strategies, as well as other factors that Quarterhill believes are appropriate in the circumstances. The forward-looking events and circumstances discussed herein may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting Quarterhill, including: potential risks and uncertainties relating to the ultimate geographic spread of the novel coronavirus ("COVID-19"); the severity of the disease; the duration of the COVID-19 outbreak; actions that may be taken by governmental authorities to contain the COVID-19 outbreak or to treat its impact; the potential negative impacts of COVID-19 on the global economy and financial markets and any resulting impact on Quarterhill and/or its business. Other factors include, without limitation, the risks described in Quarterhill's March 11, 2021 annual information form for the year ended December 31, 2020 (the "AIF"). Copies of the AIF may be obtained at www.sedar.com. Quarterhill recommends that readers review and consider all of these risk factors and notes that readers should not place undue reliance on any of Quarterhill's forward-looking statements. Quarterhill has no 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 by law.