Encourages the Company to Establish a Specific Plan for Returning At Least $150 Million to Shareholders, Which It Can Comfortably Afford Given Its Overcapitalized Balance Sheet

Urges the Company to Appoint an Indaba Designee as a Director and Modernize Governance, Including by De-Staggering the Board

Indaba Capital Management L.P. (together with its affiliates, “Indaba” or “we”), which is the second largest shareholder of ON24, Inc. (NYSE: ONTF) (“ON24” or the “Company”) with an ownership interest of nearly 9% of the Company’s outstanding shares, today issued an open letter to the Company’s Board of Directors (the “Board”).

Members of the Board,

As you know, Indaba is ON24’s second largest shareholder. We are strong proponents of ON24 enacting a meaningful capital return program, a plan to achieve profitability and corporate governance enhancements. We believe these actions are necessary in light of the Company’s approximately 80% share price decline over the past two years.

Unfortunately, the need for change at ON24 is evidenced by much more than just objectively terrible shareholder returns. ON24 has a classified Board, long serving directors, no shareholder representative in the boardroom and a history of excessive spending and questionable capital allocation under Co-Founder and Chief Executive Officer Sharat Sharan. These apparent issues are all the more concerning when taking into account that ON24 had a hoard of cash, cash equivalents and marketable securities on its balance sheet as of the end of its last reporting period.

As the Board has overseen billions of dollars in value erosion over the past 24 months, it has not offset share price declines by meaningfully returning excess capital on the balance sheet to shareholders. This leads us to fear that the Board may allow Mr. Sharan to sustain elevated expenses and squander capital on questionable acquisitions. We believe the Board should address these concerns – which we suspect are shared by many other shareholders – by taking the following steps:

1. Returning at least $150 million in capital to shareholders. There is no plausible rationale for ON24 keeping so much cash on its balance sheet, especially when the Company has not disclosed a clear and credible plan for investing that capital and producing strong returns for shareholders. Shareholders should not have to bear the risk of entrusting Mr. Sharan and his boardroom allies to steward their cash. That is why we believe the best path forward is returning at least $150 million to shareholders, while still leaving a significant amount of capital on hand for the Company’s operations and to fund prospective tuck-in acquisitions.
   
   
   
   
2. Returning capital in a credible and confidence-inspiring manner. We believe the Board needs to be thoughtful about the best and most tax-efficient ways to return capital to shareholders. Ideally, ON24 should draw on a combination of a special dividend, accelerated share repurchase (“ASR”) program, 10b5-1 share repurchase plan and provide a specific plan to shareholders. We believe a $75 million dividend, a $50 million ASR program and a $25 million 10b5-1 plan is appropriate and would be well received by shareholders.
   
   
   
   
3. Improving corporate governance. If the Board wants to regain shareholder trust after overseeing massive value destruction, we believe it should appoint an Indaba designee as a director, de-stagger its director classes and set up a committee of independent directors to oversee capital allocation initiatives.

At this point, we hope the Board simply acts in shareholders’ best interests rather than seeming to prioritize the interests of ON24’s Co-Founder and Board. The time for debate is over. The time for transparent action is here.

Sincerely,

Derek Schrier

Managing Partner

Indaba Capital Management L.P.

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About Indaba Capital

Indaba was founded in 2010 to invest in corporate equity and debt. It is based in San Francisco. Learn more at www.IndabaCapital.com.

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