Lee Enterprises Announces Proposed $50M Equity Rights Offering

Lee Enterprises, Inc. (NASDAQ:LEE) ("the Company"), a leading provider of local news and information, today announced its intent to commence a proposed equity rights offering (the "Proposed Rights Offering").

The Company is pursuing the Proposed Rights Offering as a means to raise capital to support the Company's planned digital transformation. The Proposed Rights Offering will have an aggregate offering value of up to $50.0 million (the "Offering Amount").

In connection with the Proposed Rights Offering, we have an agreement in-principle with our term loan lender that, if we successfully raise the full Offering Amount of $50.0 million, we will receive a reduction in our annual interest rate from 9% to 5% for five years, resulting in interest savings of approximately $18 million annually and up to $90 million over the five-year period. The Proposed Rights Offering, however, is not conditioned on receipt of this interest rate reduction.

The net proceeds from the Proposed Rights Offering will be used for working capital and other activities necessary for the Company's operations, such as investments in technology with respect to advertising strategies, audience outreach, the Company's internal operations, and digital products.

The Company is also seeking stockholder consent to amend its charter to provide for authorization of (i) additional shares of its existing common stock (the "voting common stock"), (ii) shares of a new class of convertible non-voting common stock (the "non-voting common stock," and together with the voting common stock, "common stock") and (iii) "blank check" preferred stock. The Proposed Rights Offering will be conditioned on receipt of the requisite consents for items (i) and (ii) of the previous sentence.

In the Proposed Rights Offering, holders of the Company's voting common stock will receive subscription rights that will consist of one basic subscription right and an over-subscription privilege.

• Each basic subscription right will entitle a holder to purchase a fixed number of shares of voting common stock at a to be determined subscription price.
• Holders that elect to fully subscribe to their basic subscription rights will be entitled to an over-subscription privilege that will allow such holders to elect to subscribe for additional shares of the Company's common stock at the subscription price (up to the Offering Amount). Participants in the over-subscription will have the option to elect to receive either voting common stock or non-voting common stock.

To the extent subscription rights (including the over-subscription privilege) are not exercised for the full Offering Amount, the Proposed Rights Offering will allow for a subsequent placement of any shares of common stock that are not subscribed for within 45 days following the closing on a reasonable best efforts basis.

The Company's non-voting common stock issued in the Proposed Rights Offering is expected to be automatically convertible upon the third anniversary of such stock's issuance into the Company's voting common stock. The non-voting common stock and the voting common stock will be identical in all respects, except that the non-voting common stock may not vote in any elections for our board of directors and may not vote upon any other matters voted on by our holders of our voting common stock. We do not intend to apply for listing of the Company's non-voting common stock that will be offered in the over-subscription privilege.

The Company has initially filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission (the "SEC") to effectuate the Proposed Rights Offering. The Company will provide notice of the record date and subscription price in the future at such time as they are determined.

The Company reserves the right to modify, postpone or cancel the Proposed Rights Offering at any time. There is no assurance that the Proposed Rights Offering will be completed on the terms described in this press release or at all, including with respect to any reduction in our interest expense (or any other related amendments to our term loan), as the terms of which are subject to definitive documentation with our term loan lender. There is no assurance that any or all of the proposed amendments at the Special Meeting will be approved by our stockholders or ultimately implemented by our board of directors.