ON24 Returns $141 Million of Capital to Shareholders Since Fourth Quarter 2021 through New $100 Million Capital Return Program

San Francisco--(BUSINESS WIRE)--ON24 (NYSE: ONTF) ("ON24" or the "Company"), an industry leader in digital marketing and sales engagement, announced today that the Board of Directors has approved a $100 million capital return program to replace the Company's prior capital return program. The capital return program will be executed with available cash on hand, and the Company expects to begin the program as soon as possible after the announcement of its quarterly financial results.

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Since ON24 announced its previously authorized repurchase authorization of $50 million in December 2021, 451 million shares of the company's outstanding common stock have been repurchased under that authorization as of the fourth quarter of 2021. As a result of the new capital return program, ON24 expects to have returned more than $140 million to shareholders by the end of the fourth quarter of 2021 as a result of its new capital return program.

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ON24's Board of Directors released the following statement regarding the new capital program:

Taking into account feedback from investors as well as reviewing our balance sheet in relation to our business needs, I am confident that the substantial return of capital we are announcing today is the appropriate balance between enhancing the value of our shareholders in the near term and maintaining our focus on growth. ON24 still has ample liquidity to invest in strategic priorities whilst navigating uncertain macroeconomic headwinds as a result of the authorization.

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To accelerate our path to profitability, the Board and management have been simultaneously reviewing our business and operations. ON24 has a significant opportunity ahead to create additional value for shareholders as a result of our capital return program and our ability to leverage a strong balance sheet. ON24's upcoming earnings call will provide more details about the company.

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The following statement was also released as a response to the letter sent today by Indaba Capital Management (“Indaba ”):

It is ON24's policy to maintain open communication with its shareholders on a regular basis, as the Company values constructive input as it strives to enhance value for all shareholders. As part of the $100 million capital return program that we are announcing today, we have tried to engage constructively with Indaba at every stage leading up to this announcement.

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We have provided significant access to ON24 directors since Indaba first requested a meeting late last year. A non-disclosure agreement ("NDA") has recently been signed by the Board and management of the Company, which allows them to engage more openly with Indaba. In December 2022, the Board members met directly with Indaba four times to discuss the capital allocation and other matters, including the Company's long-term business outlook and path to profitability.

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There has been consistent, constructive, and transparent engagement between the Board and Indaba throughout the process, however, Indaba has regularly changed its demands. It was in September 2022 that Indaba approached the Company regarding the possibility of returning more capital to the Company. Indaba proposed the return of $100 million through a tender offer to the Company. Over the past couple of years, the amount of money they have asked for has escalated and ranged from $150 million to $175 million, with almost weekly changes in the form by which they want to receive their money back.

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Throughout the process of updating our capital allocation plan, the Company's management team and the board of directors have viewed the decision in a comprehensive manner. We have taken an unbiased look at our financial plan and we have taken into account the input from all shareholders, not just one shareholder. In order to understand other top shareholders' perspectives on capital return and appropriate minimum cash balances, as well as alignment with our long-term growth objectives, we spent time with them. The Board of Directors and management team members are currently considering the method of capital distribution that will be most beneficial to all shareholders, and we would welcome additional shareholder input into that process, including more engagement with Indaba in the process.

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Accordingly, as I indicated to Indaba, we were open to continuing to engage them under an NDA in order to further incorporate their feedback and views ahead of our upcoming presentation of our financial results. Due to the fact that the Board has not simply caved into Indaba's demands, rather than engage further in the conversation, Indaba now appears intent on making public noise, prior to the expiration of our current NDA, while threatening an unnecessary camaign to further their own short-term interests.

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All shareholders' interests are represented by ON24's dedicated and experienced Board of Directors. Six of the ON24 Board members are independent, and two have joined the Board in the past year. In order to ensure ON24 shareholders receive value for their investment, the Board regularly evaluates its composition. Continuing our usual course of refreshment as part of our ongoing governance planning, we expect to have a full review of any potential Indaba candidate in accordance with the Board's usual process as part of ongoing governance planning.

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There is much excitement about the future of the Company, and the potential we have to drive near- and long-term value for our shareholders. We are committed to continuing our dialogue with all shareholders throughout the course of our efforts to achieve our common goal of creating long-term value for all shareholders.

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Share repurchases under the Company's new capital return authorization do not constitute a legal obligation. It is at the discretion of the management to determine when, and how many shares are to be repurchased and at what price the shares will be repurchased under this program. The timing, number of shares to be repurchased, as well as price for the purchased shares, will depend upon market conditions and regulatory limitations, including any applicable blackout periods. The Company can implement the capital return program through an accelerated share repurchase, an open market purchase, a special dividend, a block trade, unsolicited negotiated transactions, a trading plan that may be adopted in accordance with Rule 10b5-1, a tender offer, or any other method that is compliant with the provisions of the Securities Exchange Act of 1934, as amended.

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It should be noted that Goldman Sachs & Company, LLC is serving as ON24's financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is serving as ON24's legal counsel as part of their advisory role.

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Financial Results for the Fourth Quarter and the Full Year

Following the closing of the U.S. markets on Tuesday, February 28, 2023, ON24 Corporation will announce its financial results for the fourth quarter and the full year of 2022. A conference call and a webcast will be held by ON24's management on the same day at 2:00 P.M. Pacific Time (5:00 p.m. Eastern Time) in order to discuss the company's business and financial results.

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About ON24

In a digital world, ON24 aims to reimagine how companies engage with, understand, and build relationships with their audience. Businesses use our leading digital engagement sales and marketing platform to drive engagement, generate first-party data, and drive revenue growth across the enterprise – from demand generation to customer success to partner enablement – through our webinar, virtual event, and content experiences.

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On24 is the leading digital engagement platform for industry leaders worldwide, including three of the five largest global technology companies, three of the six largest US banks, three of the five biggest healthcare companies, and three of the five biggest industrial manufacturers worldwide. Through the use of this platform, organizations are able to reach millions of professionals every month, generating billions of engagement minutes per year through the capture, generation, and integration of all of their first-party data. As an international company with offices in North America, Europe, and Asia Pacific, ON24 is headquartered in San Francisco. You can find more information about ON24 at www.ON24.com.

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Forward-Looking Statement

Several of the statements contained in this document may be considered forward-looking statements under applicable securities laws. There are instances where such statements can be identified by words such as: "expect," "convert," "belief," "plan," "future," "may," "should," "will," and similar references to future periods of time. As a result of forward-looking statements, we may express or imply our expectation that we will accomplish our business strategy, grow, or experience any other future event or circumstance. The statements contained in this section are made based on our current beliefs, expectations, and assumptions about future events and conditions, which are subject to inherent risks and uncertainties, which include the risks and uncertainties that we discuss in our filings with the Securities and Exchange Commission from time to time. Despite the fact that forward-looking statements may not reflect the actual results, you should not place undue reliance on them if your actual results differ significantly from those anticipated. The statements contained in this document are based solely on information we have access to at this time and are only accurate as of the date they were made. Unless we are required to do so by law, we do not assume any obligation to update any such statement unless so required by law.

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Important Additional Information and Where to Find It

The Company intends to file proxy materials with the U.S. Securities and Exchange Commission (the "SEC") in connection with its 2023 annual meeting (the "2023 Annual Meeting"). ON24 will file a definitive proxy statement (the "Proxy Statement") along with a WHITE proxy card prior to the 2023 Annual Meeting. The COMPANY URGES THE SHAREHOLDERS TO READ THE PROXY STATEMENT (INCLUDING AMENDMENTS AND SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT THE COMPANY WILL FILE WITH THE SEC CAREFULLY AND ENTIRELY WHEN THEY BECOME AVAILABLE, AS THEY WILL CONTAIN IMPORTANT INFORMATION. In addition to the Proxy Statement, any amendments or supplements thereto, as well as any other documents, will be available free of charge to shareholders. (including the WHITE proxy card) will be available to the public upon filing by the Company with the SEC with reference to the 2023 Annual Meeting at the SEC’s website (http://www.sec.gov) or at the Company’s website https://investors.on24.com/overview/default.aspx) or by contacting Okapi Partners LLC by phone at (212-297-0720), by email at info@okapipartners.com, or by mail at 1212 Avenue of the Americas, 24th Floor, New York, New York 10036.

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Certain Information Regarding Participants

In connection with the 2023 Annual Meeting, the Company, its directors, and certain of its executive officers and other employees may be considered to be participants in the solicitation of proxy votes from stockholders in order to vote at the meeting. Moreover, there is additional information that can be provided regarding the identity of these potential participants, of whom none, except Sharat Sharan, Jayesh Sahasi, and James Blackie, own more than one percent (1%) of the Company's shares. As part of the Proxy Statement and other materials to be submitted to the SEC in connection with the Annual Meeting in 2023, the details of their direct or indirect interests, whether through security holdings or otherwise, will be included. This information can also be found in the Company's definitive proxy statement for its annual meeting of stockholders in 2022 (the "2022 Proxy Statement"), which was filed with the Securities and Exchange Commission on April 27, 2022. The information outlined in the 2022 Proxy Statement has been or will be reflected on Statements of Change in Ownership on Forms 3 and 4 filed with the SEC to the extent holdings of the Company's securities by such potential participants (or the identity of such participants) have changed since that information was printed in the 2022 Proxy Statement. By visiting the above-mentioned sources, you will be able to get a free copy of these documents.