Morpheus Purchaser Inc. entered into a definitive arrangement agreement to acquire 60.92% stake in Magnet Forensics Inc. (TSX:MAGT) from Nellore Capital Management LLC and others for CAD 1.07 billion on January 20, 2023. Under the terms of the arrangement agreement, holders of the outstanding Subordinate Voting Shares (?SV Shares?) of the Company (other than ?Rolling Shareholders?) will receive CAD 44.25 cash per SV Share and the Rolling Shareholders will receive CAD 39.00 for each outstanding SV Share and Multiple Voting Share (?MV Share?) of the Company (together with the SV Shares, the ?Shares?) they sell for cash to the Purchaser. The Rolling Shareholders are effectively rolling over 55% of their Shares (in the aggregate approximately 15.9 million MV Shares and approximately 0.2 million SV Shares, collectively, the ?Rollover Shares?) at an implied value per Share equal to CAD 39.00 per Share, such that upon completion of the transaction, they will be minority shareholders of the Purchaser. The remaining Shares owned by the Rolling Shareholders (in the aggregate approximately 13.0millionMV Shares and approximately 0.2millionSV Shares) will be sold to the Purchaser for cash at CAD 39.00 per Share. As at the date hereof, the Rolling Shareholders own or control, directly or indirectly, all of the issued and outstanding 28,903,303 MV Shares, and Messrs Saliba and Belsher, together, own or control, directly or indirectly, an aggregate of 368,522 SV Shares, representing approximately 3.0% of the Company?s issued and outstanding SV Shares. Upon completion of the Transaction, Magnet will become a privately held company. Upon closing of the Transaction, the Purchaser intends to cause the SV Shares to cease to be listed on the TSX and to cause the Company to submit an application to cease to be a reporting issuer under applicable Canadian securities laws. The break fee payable by Magnet of CAD 50 million is reasonable in the circumstances and only payable in customary and limited circumstances, and Magnet is entitled to a reverse break fee of Cad 70 million in certain circumstances if the arrangement agreement is terminated. Following the closing of the Transaction, Morpheus Purchaser Inc. intends to combine Magnet and Grayshift LLC, which Morpheus Purchaser Inc. acquired majority control of in July 2022. Adam Belsher and Jad Saliba, Founders of Magnet, and David Miles and Braden Thomas, Founders of Grayshift, will each hold critical leadership positions in the combined company. Magnet?s Chair, Jim Balsillie, will serve on the board of the combined company. The Transaction is subject to certain approvals at the Shareholders? Meeting, including by: (i) at least two-thirds of the votes cast by Shareholders (voting together as a single class, with each holder of SV Shares being entitled to one vote per Share and each holder of the MV Shares being entitled to ten votes per Share); and (ii) a simple majority of the votes cast by holders of SV Shares. Completion of the transaction is subject to other customary conditions, including receipt of Court and regulatory approvals. As of February 21, 2023, the special meeting of the shareholders of Magnet to be held on March 23, 2023. As of March 23, 2023, Magnet Forensics shareholders approve plan of arrangement. Assuming the timely receipt of all required approvals. As of March 27, 2023, Magnet Forensics has obtained a final order from the Ontario Superior Court of Justice. As of March 23, 2023, the transaction is expected to close by the second quarter of 2023. The board of Magnet Forensics unanimously approved the Arrangement Agreement following receipt of the unanimous recommendation of the Special Committee, Morgan Stanley is acting as exclusive financial advisor to the Special Committee. As of March 27, 2023, the transaction is expected to close on or about April 6, 2023.

CIBC Capital Markets is acting as independent valuator to the Special Committee. Chris Hewat, Jacob Gofman of Blake, Cassels & Graydon LLP is acting as legal advisor to the Company. Jason Saltzman of Dentons Canada LLP is acting as legal advisor to the Special Committee. Aisha P. Lavinier, Eric Y. Cohen, Theodore A. Peto, P.C., Adam Kool, Fred N. Lim, Daniel S. Schwimmer, Sally Evans, Chuck Boyars, Aaron H. Lorber, Joanna Schlingbaum and Fishel Schreiber of Kirkland & Ellis LLP is acting as legal advisor to Morpheus Purchaser Inc. and Michael Whitcombe, Paul Davis of McMillan LLP is acting as Canadian legal advisor to Morpheus Purchaser Inc. Computershare Trust Company of Canada acted as depository bank to Morpheus Purchaser Inc. CIBC will receive a fixed fee in the amount of CAD 1,350,000 upon substantial completion or delivery to the Special Committee of the CIBC Formal Valuation and Fairness Opinion. Laurel Hill Advisory Group, LLC acted as proxy solicitor to Magnet and will pay customary fees of CAD 175,000 for such servicesin addition to certain out-of-pocket expenses. Goodmans LLP acted as legal advisor to Goodmans. Kingsdale Advisors acted as proxy advisor to TB. Carson Proxy Advisors acted as proxy advisor to Nellore.

Morpheus Purchaser Inc. completed the acquisition of to acquire 60.92% stake in Magnet Forensics Inc. (TSX:MAGT) from Nellore Capital Management LLC and others on April 6, 2023. The independent directors of Magnet Forensics (other than Jim Balsillie) resigned from the board of directors of the Company and have been replaced with persons appointed by Morpheus Purchaser.