RABI:CC - AdRabbit Limited Provides Update to Proposed Reverse Takeover Transaction and Other Corporate Updates

(TheNewswire)

Vancouver, British Columbia – TheNewswire - December 9, 2022 - AdRabbit Limited (TSXV:RABI) (the " Company ")provides an update with respect to the proposed transaction withSanolla Ltd. (" Sanolla ") which, if completed, wouldresult in a reverse takeover of the Company by Sanolla and itsshareholders (the " Proposed Transaction ").

As previously announced in its press releases dated August 19, 2022 andOctober 25, 2022, the Company had entered into a heads of agreement (the " HOA ") dated August 18, 2022 with Sanollaproviding for certain indicative commercial terms and conditions ofthe Proposed Transaction, including the condition that the partiesnegotiate and enter into a definitive agreement. The HOA has expiredin accordance with its terms and there is no binding agreementcurrently in place between the parties with respect to the ProposedTransaction. Nevertheless, the Company and Sanolla are continuing tonegotiate the parameters of the Proposed Transaction, including amongother things, the structure and terms. The Company believes that thereare material conditions and open items remaining to negotiate –including conditions relating to final valuation, definitivetransaction structure, and funding amount  –  before the partieswould consider entering into a further exclusivity period or otherbinding agreement with respect to the Proposed Transaction, and, assuch, readers are cautioned not to place undue reliance on thesenegotiations or the potential for entering into a definitiveagreement. Since there is no binding agreement in place, either partyis currently free to explore other opportunities and there is noobligation to negotiate toward the Proposed Transaction.

In light of the above, the Company is considering thefollowing:

• Continue exploring a business combination with Sanollato the extent the definitive commercial and other terms and conditionscan be successfully negotiated and a binding agreement enteredinto;

• Explore strategic alternativesthat may be available to the Company to increase shareholder valuewhich could include, among others, merger or other businesscombination with another party, including thosethat may be synergistic with the products of the Company , strategic investment, or other strategictransaction

• Explore debt or equity financings to capitalize theCompany in order to reach a successful merger and businessgrowth

• As discussed below, maintain its legacy product whilecontinuing the pause of the development and rollout of its newplatform, AdRabbit App (as defined below), as well as continuing toreduce expenses and

• Consider settling payables or other debt as part of itsstrategic review in an effort to improve its financial position byreducing its accrued liabilities

Since the HOA has expired, readers are cautioned thatpreviously disclosed terms relating to the HOA (including those setout in the Company's press release dated August 19, 2022) are notnecessarily indicative of the terms that may be negotiated between theparties.

Trading of the Company's ordinary shares on theExchange was halted in connection with theannouncement of the Proposed Transaction inaccordance with Exchange policies and remains halted as of the datehereof. The Company intends to discuss with the Exchange the potentialfor a resumption of trading.

Update Regarding AdRabbit Businessand Other Corporate Updates

As previously announced in the Company's press releasesand in its MD&A for the third quarter ended September 30, 2022, following the strain on the global financialmarkets and in light of its consideration and negotiation of strategictransactions such as the Proposed Transaction, as well as otherfactors including those noted below, the Companyhas made changes to its business and plans and is continuing with itscost reduction strategy and pausing development and rollout of its newplatform, the AdRabbit App (as defined below).

The Company currently maintains its legacy existing software-as-a-service (SaaS) offering (the " AppsVillage Platform ") which allows SMBs to create apps for their business, although the Company has reduced spending in development,marketing and customer acquisition (as noted below). The Company has removed from the app market the beta forAdRabbit (the " AdRabbitApp "), a standalone app which the Companybegan developing and beta-testing in 2021 as an automation tool topower digital advertising campaigns using a backend ArtificialIntelligence (AI) powered software. The AdRabbit App was initiallyplanned for rollout in 2022, subject to further development andcommercialization, which has been paused.

The Company undertook or is undertaking the followingcost reduction strategies and other operational changes, among others:

• The Company has reduced the salaries of its CEO and CTOexecutive positions and has transitioned such positions from anemployee to a consultancy basis;

• The Company has reduced the number of employees tosupport and maintain the existing AppsVillage Platform and its currentsubscriber base and pausing all of its marketing, promotional, anddevelopment activities resulting in churn or pausing of its SaaSsubscriptions, thereby leading to decreased revenues. The Company hasalso transitioned the remaining employees required to support theAppsVillage Platform to a consultancybasis;

• The Company will continue to re-evaluate its existingSaaS subscriptions with its current AppsVillage Platform subscriberbase and delay its decision to renew any such subscriptions while itcontinues to explore strategic transactions such as the ProposedTransaction; and

• The Company has paused further development and theproposed rollout of the commercial version of the AdRabbit App(initially planned for 2022) and has pulled the AdRabbit App betaproduct from the app market due to, among other reasons: rising costsand budget constraints associated with maintaining and promoting theproduct

In contemplation of potential strategic transactionssuch as the Proposed Transaction , the Company isfocusing on rebuilding shareholder value and will continue tore-evaluate its business plans, operations and product offerings,further details of which, once known, will be provided in a subsequentpress release.

Please also refer to the Company's MD&A for thethird quarter ended September 30, 2022 in respect of the abovematters, available under the Company's profile on SEDAR at www.sedar.com .

As previously announced in the Company's press releasedated November 29, 2022, in connection with the board resignations andreplacements, the board of directors has been reconstituted, and thecurrent directors and officers are: Max Bluvband (Chief ExecutiveOfficer and Director), Gidi Krupnik (Chief Financial Officer), ShaharHajdu (Chief Technology Officer and Director), Noah Herscovici(Director), and Moshe Cohen (Director). As previously announced, theCompany is searching for additional directors to be appointed to theBoard to ensure compliance with Australian corporate law and TSXVrequirements, in terms of both residency requirements and theinclusion of independent Board members.  The Company is also seekinga replacement corporate secretary, including considering one of itscurrent officers to assume such role.

For further information, pleasecontact:

Max Bluvband, CEO and Director of the Company
Email: info@appv.io
Telephone: (604) 283-6110

NEITHER THE TSX VENTURE EXCHANGE INC.NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THEPOLICIES OF THE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY ORACCURACY OF THIS RELEASE.

Caution Regarding Forward-LookingInformation

The information in this news releaseincludes certain information and statements about management's view offuture events, expectations, plans and prospects that constituteforward-looking statements. Forward-looking statements are statementsthat relate to future, not past, events. In this context,forward-looking statements often address expected future events,plans, prospects, business, and financial performance, and oftencontain words such as "anticipate", "believe","plan", "estimate", "expect", and"intend", statements that an action or event"may", "might", "could","should", or "will" be taken or occur, or othersimilar expressions. All statements, other than statements ofhistorical fact, included herein are forward-looking statements,including, without limitation, statements regarding: the results ofthe negotiations regarding the Proposed Transaction and the ability tosuccessfully enter into a definitive agreement; plans and expectationsregarding other strategic business combinations, transactions, orequity or debt financings; the ability to manage and reduce expensesor settle or manage accrued liabilities, the ability to continueoperations or growth strategies; plans and expectations regarding thebusiness and its products (including the AppsVillage Platform and theAdRabbit App) and subscribers; the expectation to identify appropriateadditional director candidates; the expectation regarding resumptionin trading.

These statements are based uponfactors and assumptions that are subject to significant risks anduncertainties. Such factorsand assumptions include, but are not limited to: a steady improvementin the global financial markets and other general economic factors; the Company's ability to maintain its current subscriber base forits legacy platform; that costs can be managed or reduced based oncurrent strategies; its ability to execute on its business plans andstrategies; its ability to identify and/or negotiate  strategictransactions (including Proposed Transaction) on acceptable terms; its operations and overall financial performance; no changes in thecompetitive environment or legal or regulatory developments affectingits business; its ability to mitigate inflationary pressures; itsability to manage its liabilities and expenses, including its abilityto negotiate acceptable deferral or settlement with its current orfuture vendors and creditors; and its ability to maintain keypersonnel such as directors and officers of the Company. While theCompany considers these expectations and assumptions to be reasonable,many expectations and assumptions are based on factors and events thatare not within its control and there is no assurance that they willprove to be correct.

There are a number of risks relatedto these forward-looking statements, which include, but are notlimited to, the Company's ability to remain attractive, economic orother conditions, its ability to reduce expenses and manage debt so asto remain attractive for potential strategic transactions, its abilityto manage the legacy business and maintain value, if any, in thepaused AdRabbit App. In addition, there is no guarantee or assurancethat the Company's ordinary shares will resume trading. Furthermore,given that the HOA has expired, the terms should not be taken asindicative of the terms of any future deal whether with Sanolla or anyother party, with respect to the Proposed Transaction, or any otherstrategic transaction, business combination, reverse takeover, orsimilar transaction or with respect to any financing (any suchtransaction, an " Alternative Transaction "), and investors should not placeundue reliance on any such plans or proposals unless definitive termshave been disclosed in a subsequent press release, and subject to theterms and conditions described therein. The Company does not have anybinding agreement with any party with respect to any such plannedtransaction, and there is no guarantee the Company will be able tocomplete any such Alternative Transactions or what the terms would be.The Company will require further capital, and in light of the currentstatus of credit and equity markets, there is a substantial risk thatthe Company will not be able to complete such transactions or uponterms satisfactory to the Company. The Company's business, to theextent its re-evaluating its business plans and product offerings,remains subject to the risks identified in the Company's listingapplication dated November 15, 2021 available under the Company'sprofile on SEDAR at www.sedar.com .

Although the Company has attemptedto identify important factors that could cause actual actions, events,conditions, results, performance or achievements to differ materiallyfrom those described in forward-looking statements, there may be otherfactors that cause actions, events, conditions, results, performanceor achievements to differ from those anticipated, estimated orintended. There can be no assurance that forward-looking statementswill prove to be accurate, as actual results and future events coulddiffer materially from those anticipated in such statements.Forward-looking statements are provided for the purpose of providinginformation about management's expectations and plans relating to thefuture, as at the date they are provided. The Company disclaims anyintention or obligation to update or revise any forward-lookingstatements whether as a result of new information, future events orotherwise, or to explain any material difference between subsequentactual events and such forward-looking statements, except to theextent required by applicable law. Accordingly, investors should notplace undue reliance on forward-looking statements. All theforward-looking statements are expressly qualified by the foregoingcautionary statements.

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