Alithya Group inc

Fiscal 2024 Developments

On September 13, 2023, the Company announced the renewal of its normal course issuer bid (“NCIB”) to purchase for cancellation up to 2,411,570 subordinate voting shares, representing 5% of the Company’s public float as of the close of markets on September 7, 2023. Purchases for cancellation under the NCIB commenced on September 20, 2023 and will end on the earlier of September 19, 2024 and the date on which the Company will have acquired the maximum number of subordinate voting shares allowable under the NCIB or otherwise decided not to make any further purchases. Purchases may be made on the open market through the facilities of the TSX, through alternative trading systems, if eligible, or outside the facilities of the TSX pursuant to exemption orders issued by securities regulatory authorities. Purchases could also be made on the Nasdaq until February 9, 2024.

On December 22, 2023, the Company entered into a second amended and restated credit agreement to, among others, extend its maturity date from April 1, 2024 to April 1, 2026 and allow for annual extensions, and increase the principal amount of the Company’s credit facility (the “Credit Facility”) to $140 million and the accordion to $50 million.

On January 30, 2024, the Company announced it was consolidating the trading of its subordinate voting shares on the TSX and that it was voluntarily delisting from the Nasdaq. On February 9, 2024, the subordinate voting shares ceased trading on the Nasdaq and were officially delisted on February 19, 2024.

During the year ended March 31, 2024, the Company purchased for cancellation 500,560 subordinate voting shares for approximately $1 million at a weighted average price of $1.91 under the previous and current NCIB. As at March 31, 2024, the Company could still purchase up to 2,007,049 subordinate voting shares for cancellation under the current NCIB.

Fiscal 2023 Developments

On April 1, 2022, the Company acquired, through Alithya Consulting Inc., all the issued and outstanding shares of Trafic 3W Inc., an information technology (“IT”) consulting firm specialized in the digital transformation in Québec, for total consideration of approximately $2 million, paid in cash and through the issuance of 83,449 subordinate voting shares. Immediately following the acquisition, Trafic 3W Inc. was amalgamated with Alithya Consulting Inc.

On July 1, 2022, the Company acquired, through Alithya USA, Inc. and 9466-6997 Québec inc., two wholly-owned subsidiaries, all the issued and outstanding equity interests of Datum Consulting Group, LLC and its affiliates, a leader in IP digital transformation services for data-rich insurers and other regulated entities such as state governments and which specialized in application modernization and data migration, for a purchase price of approximately up to US$45.5 million, consisting of (i) US$13.6 million paid in cash at closing, net of working capital adjustment; (ii) US$4.3 million paid by the issuance of 1,867,262 subordinate voting shares at closing; (iii) US$10.3 million of deferred cash consideration, payable over three years on July 1, 2023, 2024 and 2025; (iv) deferred share consideration of 1,867,261 subordinate voting shares with a value of US$4.3 million; and (v) a potential earnout consideration of up to US$13 million, payable over three years in 2023, 2024 and 2025, based on annual gross profit increases, also payable in cash (75%) and shares (25%).

The consideration payable in cash at closing was financed by a C$2.5 million draw on the Company’s subordinate unsecured loan with Investissement Québec (the “IQ Loan”), and the remainder through available funds under the Company’s Credit Facility.

On September 14, 2022, the Company announced the renewal of its NCIB to purchase for cancellation up to 2,491,128 subordinate voting shares, representing 5% of the Company’s public float as of the close of markets on September 8, 2022. Purchases for cancellation under the then current NCIB commenced on September 20, 2022 and ended on September 19, 2023. Purchases could be made on the open market through the facilities of the TSX and Nasdaq, or through alternative trading systems, if eligible, or outside the facilities of the TSX pursuant to exemption orders issued by securities regulatory authorities.

On January 30, 2023, Bernard Dockrill joined the Company as Chief Operating Officer and Claude Rousseau, the former Chief Operating Officer, was appointed Special Advisor to the President and Chief Executive Officer, a position he held until his retirement on March 31, 2023.

On September 29, 2022 and February 13, 2023, the Company’s amended and restated credit agreement was amended to, among others, include an accordion provision pursuant to which the maximum amount of the Credit Facility was increased from $125 million to $140 million during a period ending no later than January 31, 2023 (the “Bulge Period”), and to change applicable margins during the Bulge Period.

During the year ended March 31, 2023, the Company purchased for cancellation 378,425 subordinate voting shares for approximately $1 million at a weighted average price of $2.77 under the then current NCIB. As at March 31, 2023, the Company could still purchase up to 2,396,589 subordinate voting shares for cancellation under the then current NCIB.

ALITHYA -Annual Information Form 4

Fiscal 2022 Developments

On April 1, 2021, the Company acquired all the issued and outstanding shares of R3D Consulting Inc. (“R3D Consulting”), whose name was thereafter amended for Alithya IT Services Inc., a digital solutions firm specialized in consulting and digital application development in the insurance, finance, government services, healthcare and telecommunications sectors (the “R3D Transaction”), in consideration for the issuance of 25,182,676 subordinate voting shares to R3D Consulting's shareholders, which represented approximately 30% of the Company's issued and outstanding shares immediately following the closing of the R3D Transaction, as well as payments in cash totaling approximately $978,000. The R3D Transaction, evaluated at approximately $75 million (excluding the assumption of approximately $8.5 million in debt), included commercial commitments totaling approximately $600 million in combined revenues during the 10-year term commercial agreements entered into with 9429-1143 Québec Inc. (a subsidiary of Quebecor Media Inc.) (“Quebecor”) and La Capitale Civil Service Insurer Inc. (which was amalgamated with SSQ, Life Insurance Company Inc. to form Beneva Inc. on January 1, 2023) (“Beneva”), two of R3D Consulting's principal shareholders. Following the closing of the R3D Transaction, Beneva and Quebecor became principal shareholders of the Company, and each held more than 10% of the Company’s share capital as at April 1, 2021.

On September 15, 2021, the Company announced the launch of its first NCIB to purchase for cancellation up to 5,462,572 subordinate voting shares, representing 10% of the Company’s public float as of the close of markets on September 8, 2021. Purchases for cancellation under the then current NCIB commenced on September 20, 2021 and ended on September 19, 2022. Purchases could be made on the open market through the facilities of the TSX and Nasdaq, or through alternative trading systems, if eligible, or outside the facilities of the TSX pursuant to exemption orders issued by securities regulatory authorities.

On each of June 30, 2021, September 28, 2021, September 30, 2021 and January 27, 2022, the Company’s amended and restated credit agreement was amended to, among others, change applicable margins, increase the maximum amount of the Credit Facility from $60 million to $125 million, and change the maturity date to April 1, 2024.

On January 31, 2022, the Company acquired all the issued and outstanding membership interests of Vitalyst, LLC (“Vitalyst”), a US-based learning, employee experience and transformative change enablement business, for a total consideration of approximately US$45.4 million, including working capital and other adjustments, comprised of the assumption of certain accounts payable and accrued liabilities of US$2.3 million and of long-term debt of US$30.2 million and a payment in cash of US$12.9 million. The transaction also included a potential earnout of up to US$1 million payable by March 31, 2023, but it was determined that no such earnout would be payable. The purchase price and related transaction costs were funded through a combination of (i) a private placement of 6,514,658 subordinate voting shares to a company indirectly controlled by a director then in office and 1,628,664 subordinate voting shares to Investissement Québec, in both cases at an issue market price of C$3.07 per share, for aggregate gross proceeds of C$25 million, (ii) a C$7.5 million draw on the Company’s IQ Loan, and (iii) available funds under the Credit Facility.

During the year ended March 31, 2022, the remaining two unsecured promissory notes entered into in connection with funding received by certain U.S. subsidiaries under the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security Act that were then still under review for forgiveness and which amounted to US$4.8 million were forgiven by the U.S. Small Business Administration.

During the year ended March 31, 2022, the Company purchased for cancellation 349,400 subordinate voting shares for approximately $1.2 million at a weighted average price of $3.31 under the then current NCIB. As at March 31, 2022, the Company could still purchase up to 5,113,172 subordinate voting shares for cancellation under the then current NCIB.