Thinkific Labs Inc. — Capital/Financing Update 2021

Apr 22, 2021

Thinkific Labs Inc. Initial Public Offering of Subordinate Voting Shares April 22, 2021

A final long form prospectus dated April 22, 2021 (the “final prospectus”) containing important information relating to the securities described in this document has been filed with the securities regulatory authorities in each of the provinces and territories of Canada. A copy of the final prospectus, and any amendment, is required to be delivered with this document. This document does not provide full disclosure of all material facts relating to the securities offered. Investors should read the final prospectus and any amendment for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.

The final prospectus constitutes a public offering of securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities. The securities of the Company described in this document have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons (within the meaning of Regulation S under the U.S. Securities Act, “U.S. Persons”) unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration requirements is available. The final prospectus and this document does not constitute an offer to sell or a solicitation of an offer to buy any of these securities within the United States.

Capitalized terms used but not otherwise defined herein shall have the respective meaning ascribed thereto in the final prospectus. All references to “$” or “dollars” in this document are to Canadian dollars, unless indicated otherwise.

Terms and Conditions

Issuer:	Thinkific Labs Inc. (“Thinkific” or the “Company”)
Offering:	Initial Public Offering of 12,310,000 subordinate voting shares (the “Subordinate
	Voting Shares”) from treasury (14,156,500 Subordinate Voting Shares if the Over-
	Allotment Option is exercised in full).
Offering Price:	$13.00 per Subordinate Voting Share.
Issue Amount:	$160,030,000 ($184,034,500 if the Over-Allotment Option is exercised in full).
Over-Allotment	The Company has granted the Underwriters an option, exercisable, in whole or in
Option:	part, at any time for a period of 30 days after the Closing Date, to purchase up to
	an additional 15% of the aggregate number of Subordinate Voting Shares issued
	under the Offering at the Offering Price solely to cover over-allotments, if any, and
	for market stabilization purposes.
Major Shareholder	The Company understands that Rhino Co-Invest 2 Limited Partnership, a member
Purchase:	of the Rhino Group, has committed to purchase $24,960,000 of Subordinate Voting
	Shares of the Offering (the “Rhino Shares”).
Use of Proceeds:	The Company intends to use the net proceeds of the Offering as follows:
	approximately $81 million to $93 million to strengthen its financial position
	and to allow the Company to pursue future opportunities;
	approximately $29 million to $34 million to pursue its growth strategies by
	investing in sales and marketing; and
	approximately $30 million to $36 million to continue its investment in its
	Platform.
Shares	Upon completion of the Offering, assuming no exercise of the Over-Allotment
Outstanding:	Option, 17,843,812 Subordinate Voting Shares will be issued and outstanding on a
	non-diluted basis (24,592,768 on a fully-diluted basis), and, if the Over-Allotment
	Option is exercised in full, 19,690,312 Subordinate Voting Shares will be issued
	and outstanding on a non-diluted basis (26,439,268 on a fully-diluted basis).

Upon completion of the Offering, 56,993,752 Multiple Voting Shares will be issued and outstanding on a non-diluted basis and on a fully diluted basis.

Upon completion of the Offering, no preferred shares will be issued and outstanding.

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Thinkific Labs Inc. Initial Public Offering of Subordinate Voting Shares April 22, 2021

Voting Rights: The Subordinate Voting Shares will have one vote per share and the Multiple Voting Shares will have ten votes per share.

After giving effect to the Offering, assuming no exercise of the Over-Allotment Option, the Subordinate Voting Shares will collectively represent approximately 23.8% of our issued and outstanding shares and approximately 3.0% of the voting power attached to all of our issued and outstanding shares (approximately 25.7% and 3.3%, respectively, if the Over-Allotment Option is exercised in full) and the Multiple Voting Shares will collectively represent approximately 76.2% of our issued and outstanding shares and approximately 97.0% of the voting power attached to all of our issued and outstanding shares (approximately 74.3% and 96.7%, respectively, if the Over-Allotment Option is exercised in full).

Conversion The Subordinate Voting Shares are not convertible into any other class of shares. Rights: The Multiple Voting Shares are convertible into Subordinate Voting Shares on a one-for-one basis at the option of the holder. In addition, our Articles will provide that Multiple Voting Shares will automatically convert into Subordinate Voting Shares in certain other circumstances. Principal Upon completion of the Offering, and assuming no exercise of the Over-Allotment Shareholders: Option, the Rhino Group, Greg Smith and Matthew Smith (together with the Rhino Group, the “Principal Shareholders”), will, directly or indirectly, own or control 100% of the Multiple Voting Shares of the Company. After giving effect to the Offering, assuming the purchase of $24,960,000 of Subordinate Voting Shares by Rhino CoInvest 2 Limited Partnership and no exercise of the Over-Allotment Option, the Principal Shareholders will hold approximately 78.7% of the Company’s issued and outstanding shares and approximately 97.3% of the voting power attached to all of the Company’s issued and outstanding shares (approximately 76.8% and 97.0%, respectively, if the Over-Allotment Option is exercised in full). Lock-Up Pursuant to the Underwriting Agreement, each of the Company, its management Arrangement: and directors and all of its current shareholders, have agreed that he, she or it will not, directly or indirectly, without the prior written consent of the Underwriters issue, offer, sell, secure, pledge or grant any option, warrant or other right to purchase or agree to issue or sell or otherwise lend, transfer, assign or dispose of any of our equity securities, financial instruments or other securities convertible or exchangeable into or otherwise exercisable into our equity securities or make any short sale, engage in any hedging transaction, enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our equity securities, or agree or publicly announce any intention to do any of the foregoing for a period commencing on the date hereof and ending 180 days after the Closing Date, subject to certain limited exceptions. The Subordinate Voting Shares purchased by Rhino Co-Invest 2 Limited Partnership pursuant to the Offering will not be subject to the lock-up arrangements.

Holders of 100% of the Company’s issued and outstanding shares prior to the completion of the Offering have agreed to be subject to these lock-up arrangements.

Form of Offering: Marketed public offering by way of a long-form prospectus filed in all provinces and territories of Canada. Private placement into the U.S. via Rule 144A and internationally as permitted. A copy of the long-form prospectus will be available on www.sedar.com.

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	Thinkific Labs Inc.
	Initial Public Offering of Subordinate Voting Shares
	April 22, 2021
Listing:	The TSX has conditionally approved the listing of the Subordinate Voting Shares
	under the symbol “THNC”. Listing of the Subordinate Voting Shares is subject to
	the Company fulfilling all of the requirements and conditions of the TSX on or before
	July 20, 2021, including distribution of the Subordinate Voting Shares to a minimum
	number of public shareholders.
Eligibility:	Eligible for RRSPs, RRIFs, RESPs, TFSAs, RDSPs and DPSPs.
Joint	BMO Capital Markets, CIBC Capital Markets.
Bookrunners:
Commission:	6.00% (no commission is payable to the Underwriters on the Rhino Shares
	purchased by Rhino Co-Invest 2 Limited Partnership).
Closing:	April 27, 2021.

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