Impact's acquisition will expand its reach with an established footprint in the United States.

Toronto, Ontario--(Newsfile Corp. - August 19, 2024) - Impact Development Group Inc. (TSXV: IMPT) ("Impact Development Group", "IDG" or the "Company"), a leading Panamanian developer of affordable housing solutions, is pleased to announce that it has entered into a non-binding term sheet to acquire 100% of the issued and outstanding shares of Fusion Inc. ("Fusion"), a software company located in Ohio, the United States (the "Transaction").

ACQUISITION OF FUSION INC.

IDG is pleased to announce the acquisition of Fusion, the creators of an innovative software platform designed to streamline the administration of Low-Income Housing Tax Credits ("LIHTC") for asset managers, developers and syndicators. This strategic acquisition marks a significant step in IDG's expansion into adjacent markets and revenue streams while leveraging over a decade of experience and in building affordable homes in Central America. Through the integration of Fusion's platform, IDG is better positioned to broaden its mission in promoting the development of affordable housing across a wider geographic area.

Fusion is a specialized software platform designed for the efficient management of LIHTC portfolios. Developed by asset managers for asset managers, Fusion simplifies the complex processes involved in LIHTC administration, from property construction to stabilization. The platform offers comprehensive tools for finance and compliance, data management, reporting, tax credit management, and property oversight, all within a single, user-friendly interface. Fusion enhances visibility, maximizes returns, and enables rapid scaling, making it an indispensable asset for organizations managing affordable housing investments.

By acquiring Fusion, IDG significantly enhances its ability to manage other mission-critical aspects of affordable housing development and positions IDG for continued expansion into other parts of the value chain. By integrating Fusion's robust platform, IDG can begin to offer a more comprehensive suite of services, enabling greater visibility over the development process and ensuring more efficient, scalable, and sustainable housing solutions.

"Acquiring Fusion is a strategic move that aligns perfectly with our mission to promote affordable housing opportunities. By integrating this powerful software, we can bring our expertise learned over years of developing homes in Panama to the U.S. market, ensuring more efficient LIHTC management and compliance. This acquisition allows us to leverage our core competencies, expand our geographic reach and diversify our revenue streams all while enhancing our ability to serve low-income families more effectively," commented Tom Wenz, IDG Chief Executive Officer.

TERMS OF THE TRANSACTION

The Company has agreed to issue to Fusion, or shareholders of Fusion, an aggregate of:

(a) 1,666,667 IDG common shares ("IDG Shares"), each issued at a deemed price of USD $3.00 (collectively, the "Consideration Shares");

(b) 1,166,668 IDG Shares (collectively, the "Earn-Out Shares"), conditional upon the satisfaction of revenue milestones on the first, second, and third year anniversaries of the closing of this Transaction; and

(c) 1,000,000 warrants, each exercisable by the holder for the purchase of one IDG Share at a price equal to the greater of (i) of USD$3.00; or (ii) the closing price of the IDG Shares on the closing date of the Transaction. If any of the revenue milestones are met after the applicable mandatory exercise date, then the warrants associated with such prior mandatory exercise date shall be required to be exercised within 15 days.

All securities issued pursuant to this Transaction will be subject to a hold period of four months and one day from the date of issuance.

Closing of this Transaction is subject to customary closing conditions as are standard for a Transaction of this nature, including, but not limited to (i) receipt of conditional approval from the TSXV; and (ii) receipt of all requisite corporate and shareholder consents and approvals.

ACTIVITIES IN PANAMA

Following the appointment of new presidential leadership in Panama on July 1st, 2024, the Ministry of Housing and Land Management ("MIVIOT") commenced a comprehensive review of the Solidarity Fund Program (the "Program") governing subsidies issued in connection with home built for social interest purposes. Prior to the MIVIOT review, homes built under the Program for social interest purposes were eligible for a $10,000 subsidy, representing approximately 15% of the total purchase price, paid directly by MIVIOT to incentivize development and improve affordability for buyers.

While the Program is under review, MIVIOT has paused the issuance of all subsidies in connection with the building and delivery of new homes from July 1st, 2024. Homes that have received certification from MIVIOT prior to June 30, 2024, remain eligible for subsidy payments under the Program. As at August 1, 2024, the Company has 176 homes, either completed or under construction, in its inventory. All the 176 houses have received MIVIOT subsidy certification but are pending collection of subsidy payment on delivery. In addition, there are 40 homes that have been delivered during the year but are still pending receipt of subsidy payments. In total, there are 216 homes that remain at risk of not receiving the subsidy payments should MIVIOT permanently discontinue the Program following their review.

Following the recent development related to the Program, and pending further guidance from MIVIOT, IDG has reprioritized strategic objectives to focus on the delivery of existing inventory under construction. Subsequently, IDG has paused all planning and development activities related to Phase 8, Phase 6/7, and La Reserva 2 at the Santiago project.

IDG's management is evaluating its future strategy and will provide an update once a strategy has been identified. The immediate impact of this change is not known and is still to be evaluated by IDG's management.

ABOUT IMPACT DEVELOPMENT GROUP

Impact Development Group is a Panamanian based real estate developer that provides affordable housing solutions to Panama's growing middle-class supported by a longstanding subsidized government program. The vision of IHC Panama is effectuated by a vertically integrated model which coordinates all services necessary to develop high-quality residential and commercial buildings, including land acquisition, financing, architectural, engineering, off-site manufacturing, general contracting, property management, and administration.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

FORWARD-LOOKING STATEMENTS

This press release contains certain "forward-looking statements" that reflect the Company's current expectations and projections about its future results. Wherever possible, words such as "may", "will", "should", "could", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict" or "potential" or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. Forward-looking statements in this press release include, but are not limited to, statements relating to the Company's business activities in Panama; the Company's plans to bring its expertise acquired in the Panamanian market into the US market; the Company's plans to expand its global reach; the Company's plans to utilize Fusion's software platform to expand into adjacent markets and revenue streams; and the Company's hopes of promoting the development of affordable housing across a wider geographic area.

The forward-looking statements, while considered reasonable by the Company, are inherently based upon assumptions that are subject to significant risks and uncertainties, including, but not limited to, the Company being able to carry out its business plan as contemplated in the term sheet; the Company's ability to continue receiving subsidies from the MIVOT as part of the Program; MIVIOT continuing to disburse subsidies representing approximately 15% of the total purchase price of homes built for social purposes in Panama; the Company continuing to plan and develop housing at the Santiago project related to Phase 8, 6/7, and La Reserva 2; the Company maintaining and retaining the intellectual property rights to the Fusion software platform; and the Company's plans to scale and develop more sustainable housing solutions in Central America and globally. Although the Company believes that the expectations reflected in forward-looking statements are reasonable, they can give no assurances that the expectations of any forward-looking statements will prove to be correct.

Such statements and information reflect the current view of the Company. Risks and uncertainties exist that may cause actual results to differ materially from those indicated or implied in the forward-looking statements and information. Such factors include, among others: the limited business history of the Company; the Company's reliance on key management; risks related to the Company's growth strategy, including that previous and future acquisitions do not meet expectations or potential acquisitions cannot be completed; dependence on and availability of third party financing; the business of the Company being subject to broader economic and political factors; disruptions or changes in the credit or security markets; financial results of the Company's operations; unanticipated costs and expenses; and general market and industry conditions.

The forward-looking information contained in this press release represents the expectations of the Company as of the date of this press release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While the Company may elect to, it does not undertake to update this information at any particular time except as required in accordance with applicable laws.

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