Dye & Durham Affirms its Liquidity and Addresses Investor Questions About Financial Position

TORONTO, Oct. 27, 2025 /CNW/ - Dye & Durham Limited ("Dye & Durham" or the "Company") today issued the following update to address investor inquiries regarding its financial position and progress on the previously announced sale of Credas Technologies Limited ("Credas").

Dye & Durham Has Financial Flexibility and the Ability to Pay Debt Service Obligations

Dye & Durham continues to generate positive operating cash flow and maintains sufficient liquidity to service its debt obligations and day-to-day working capital needs. The Company's key financial maintenance covenants provide significant flexibility:

1. The revolving credit facility must be drawn above 35% on the last day of any quarter before the financial maintenance covenant test is triggered; and
2. If that threshold is met, the Consolidated First Lien Net Leverage Ratio as defined in the Credit Agreement must remain below 5.8x.

Both conditions must be met simultaneously for a financial maintenance covenant breach to occur. The revolver can be used freely throughout the quarter for working-capital purposes without impacting financial maintenance covenant compliance.

These provisions provide substantial operational flexibility for managing liquidity and day-to-day working capital needs.

Credas Sale Expected to Close by January; Proceeds to Be Used for Debt Reduction

The Credas divestiture reflects Dye & Durham's continued focus on simplifying its portfolio and strengthening its core legal, property, and corporate software platforms.

The transaction is expected to close by January 2026 and will generate approximately C$146 million in gross proceeds. The closing of the transaction is subject only to customary closing conditions, including compliance with the notification and approval process of the United Kingdom (UK) Secretary of State under the UK's national security legislation which regulates foreign investment into the UK. This is a typical approval process given the nature of the Credas business and approval is anticipated to be received by December 2025, with closing to follow promptly thereafter. There are no other material closing conditions. 

Net proceeds from the sale will be used to reduce debt, with the following allocation plan:

• Up to C$30 million will be used to repay the revolver balance (which, based on current estimates, would bring the Company below the 35% financial covenant trigger threshold);
• The remaining net proceeds will be used to repay first lien indebtedness.

The transaction is expected to reduce Dye & Durham's net leverage ratio by approximately 0.5x.

Funds Held in Escrow for Settlement of the 2026 Convertible Debentures

The Company has C$185 million of cash held in two escrow accounts which are required to be used for settlement of the convertible senior unsecured debentures maturing March 1, 2026, as per the terms of the Credit Agreement. The cash is to be held to the earlier of (a) the repurchase by the Company of all of the outstanding Original Debentures, or (b) the maturity date.

The Company has earned a positive return on this restricted cash relative to the interest expense on the debentures. Management is currently prioritizing its strategic business objectives, including customer first initiatives and investing in new products to meet our customers' needs, and will consider any early action on the 2026 convertible debentures in taking into account these factors and objectives.

Quiet Period Until Financial Reporting is Complete

During the current period in which the Company has yet to file its audited consolidated financial statements for the fiscal year ended June 30, 2025, and its consolidated financial statements for the quarter ended September 30, 2025, the Company intends to restrict its regular investor engagement and public commentary, including debtholder and investor meetings and calls. The Company will provide any further information regarding its financial position and related matters by way of public announcement as and when required by law or the Company otherwise determines that disclosure is warranted.

Once the Company's filings are up to date, the Company will resume regular investor engagement and public commentary. In the interim, the Company has posted a set of Frequently Asked Questions (FAQ) on its investor site to address additional questions. The FAQ may be updated periodically to reflect any additional public release of information by the Company.

About Dye & Durham

Dye & Durham Limited is a leading provider of cloud-based software and technology solutions designed to improve efficiency and transparency for legal and business professionals. The Company serves customers globally across its core platforms, enabling critical business transactions and regulatory compliance.

Forward-Looking Information

This press release may contain forward-looking information within the meaning of applicable securities laws, which reflects Dye & Durham's current expectations regarding future events. In some cases, but not necessarily in all cases, forward-looking statements can be identified by the use of forward looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "appears", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In particular, statements regarding compliance with the Company's debt covenants, the release of current financial statements, the gross

proceeds generated from the sale of Credas, the expected reduction in the Company's Consolidated First Lien Net Leverage Ratio as a result of the consummation of the Credas transaction, the use of proceeds from the sale of Credas and the timing of the transaction, and the timing for repayment of the Company's 2026 Convertible Debentures are forward-looking statements.

Forward-looking statements are not historical facts, nor guarantees or assurances of future performance but instead represent management's current beliefs, expectations, estimates and projections regarding future events and operating performance. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dye & Durham's control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to the ability to successfully divest non-core assets, the ability to achieve operational improvements and optimize core products, the Company's ability to execute on its cash management activities, the Company's ability to reduce its Consolidated First Lien Net Leverage Ratio, the risk associated with the Company's and SmartSearch's ability to obtain the approvals that are required to consummate the Credas transaction and the timing of the closing of the Credas transaction, the risk that the conditions to the Credas transaction are not satisfied on a timely basis or at all, or the failure of the Credas transaction to close for any other reason, the risk that a consent or authorization that may be required for the Credas transaction is not obtained or is obtained subject to conditions that are not anticipated, unanticipated difficulties or expenditures relating to the Credas transaction, the response of business partners and lenders, and retention risks arising as a result of the announcement and pendency of the Credas transaction, and the diversion of management time on Credas transaction-related issues, as well as the factors discussed under "Risk Factors" in Dye & Durham's most recent annual information form. Dye & Durham does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

SOURCE Dye & Durham Limited

For more information: Investor Relations, [email protected]; Longacre Square Partners LLC, Amy Freedman, Email: [email protected]