Frankly Announces Shares-for-Debt Transaction

The deemed price per Common Share is the closing trading price of the Common Shares on the TSX Venture Exchange (“TSXV“) on the date prior to the date the board of directors of Frankly resolved to implement the Retention Plan. The Company entered into the Retention Plan in connection with its previously announced strategic process. Completion of the Transaction is subject to obtaining necessary regulatory approvals, including acceptance of the TSXV. Frankly is choosing to settle the outstanding indebtedness through the issuance of Common Shares to preserve its funds for forward operations.

Background to the Transaction

On October 19, 2017, Frankly entered into the Retention Plan to induce selected key contributors to remain employed with Frankly and to enhance Frankly’s value during the strategic process by providing the participants in the Retention Plan incentive benefits to help assure the success of any strategic transaction. The Retention Plan entitled its participants to certain cash and securities-based payments in the event the participants remained employed with Frankly through February 15, 2018.

Related Party Transaction

The Transaction constitutes a related party transaction for Frankly pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“), as certain participants eligible to receive Common Shares in the Transaction are senior officers, and therefore related parties, of Frankly.

Frankly is exempt from the requirements to obtain a formal valuation for the Transaction pursuant to section 5.5(b) of MI 61-101 – Issuer not Listed on Specified Markets, as Frankly is not listed or quoted on any of the Toronto Stock Exchange, the New York Stock Exchange, the American Stock Exchange, the NASDAQ Stock Market, or a stock exchange outside of Canada and the United States other than the Alternative Investment Market of the London Stock Exchange or the PLUS markets operated by PLUS Markets Group plc. The Transaction is also exempt from the minority approval requirement of MI 61-101 pursuant to section 5.7(a) of MI 61-101 – Fair Market Value Not More Than 25% of Market Capitalization, as the fair market value of the subject of the Transaction and the consideration paid in the Transaction, in both cases as in relation to the interested parties, is less than 25% of the market capitalization of Frankly.

Frankly expects to file a material change report in respect of the Transaction less than 21 days prior to the closing of the Transaction, which Frankly deems reasonable in the circumstances so as to be able to satisfy the obligations due under the Retention Plan in an expeditious manner.

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