Strategic and Accretive Acquisition Strengthens Global Sales and Technology Capabilities
Not for distribution to United States newswire services or for dissemination in the United States.
We anticipate the platform formerly owned by Streamlined Communications being acquired once fully integrated will bolster both revenue and EBITDA
In connection with the acquisition, the Company has completed a US$3 million debt financing
Acquisition was funded using a combination of Cash, Debt, and Shares
POMPANO BEACH, FLORIDA / ACCESS Newswire / January 24, 2025 / Xcyte Digital Corp. (TSXV:XCYT) ("Xcyte", the "Parent", or the "Company"), a trusted global events technology company, specializing in next-generation event solutions, announced it signed an Agreement for Sale of Collateral Pursuant to Uniform Commercial Code 9-610 with Acquisition 8410 LLC (the "Seller"), a Delaware limited liability company. The agreement, along with other closing documents, was signed on January 23rd, 2025 (the "Closing"). Acquisition 8410 LLC was the holder of certain assets of Streamlined Communications Ltd. ("Streamlined Communications", or "SLC"), pursuant to the agreement, a wholly owned subsidiary of the Company (the "Purchaser"), acquired these assets (the "Transaction"). The sale included SLC's technology and revenue-producing assets, such as intellectual property, customer contracts, and essential business infrastructure. Streamlined Communications was a US-based provider of audio conferencing, collaboration solutions, webcasting, and virtual events. This strategic Transaction represents a significant step forward for Xcyte to enhance its market and technology footprint globally.
Xcyte was provided Streamlined's financials for the Trailing Twelve Months (TTM) ended August 31st 2024 by the Seller. For that period, Streamlined reported revenue of US$3.6 million, with a Gross Margin of 50.6%, EBITDA of US$1.3 million and Net Earnings of US$917.126 with no Net Loss. Streamlined had total assets of US$6.0 million, and liabilities of US$6 million. Xcyte is only assuming certain of these assets, and none of these liabilities. Based on our analysis of the assets being purchased, we concluded upon reviewing existing contracts, bank statements, third party accounting company prepared documents, and giving effect to contracts that had no contractual guarantees and no definitive assignment language, that the amount of revenue and EBITDA realized by Xycte may be different than Streamlined's reported results.
The total Transaction consideration of US$3.56 million for SLC assets is comprised of 1) US$3 million in cash, which was funded by existing Xcyte shareholders in two tranches. The first being a US$1.9 million subordinated debt financing carrying an annual interest rate of 12% with an 18-month term and the second being a US$1.1 million subordinated debt financing carrying an annual interest rate of 12% with a 36-month term, with all payments due at maturity 2) a US$0.5 million term loan payable to the Seller (carrying an annual interest rate of 10% with an 18-month term), and 3) fifty (50) Multiple Voting Shares (each an "MV Share", each of which is convertible into ten thousand 10,000 Subordinate Voting Shares in the capital of the Parent each, an "SV Share", being the shares of the Company listed on the TSXV) issued by Xcyte, to the Seller.
All of the securities that may be issued in connection with the Transaction will be subject to a hold period under applicable Canadian securities laws of four months and one day from the date of issuance. In addition, the securities will contain a legend, restricting trading for one year from the closing date, as well as applicable restrictions under United States securities laws. None of the securities will be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or applicable state securities laws, and may not be offered or sold to, or for the account or benefit of, persons in the United States or "U.S. Persons" (as such term is defined in Regulation S under the 1933 Act), unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration is available. This Transaction is Arms-Length and no finder fees have been paid in relation to it.
"This asset acquisition underscores our commitment to delivering exceptional technology and service to our clients worldwide," said Randy Selman, CEO of Xcyte Digital Corp. "The addition of Streamlined Communications' assets including its innovative platform and experienced team will enhance our product offerings and customer experience. Our clients will gain access to a state of the art, cloud-based system offering a robust set of features, including:
automated scheduling
instant post-event deliverable generation
efficient booking even during peak periods with blackout dates
integration with popular web conferencing tools such as Zoom and Webex
API support for easy connection to other reservation systems
Leverages distributed cloud infrastructure for seamless scalability
This transaction also positions Xcyte for substantial growth in international markets by deepening our presence in North America, the U.K, Singapore and Australia", Mr. Selman added.
About Xcyte Digital
Xcyte Digital (TSXV:XCYT) is a trusted global events technology company, specializing in next-generation applications for physical, hybrid, virtual, immersive, and phone-based events. Combining proprietary technology with a robust partner ecosystem, Xcyte offers both do-it-yourself and managed services, ensuring secure and scalable solutions worldwide. Thousands of clients, from innovative startups to major corporations, rely on Xcyte's cost-effective solutions to meet their event needs. Xcyte Digital is headquartered in Canada and the USA, with operations across the globe. Visit us at xcytedigital.com.
Non-IFRS Financial Measures
This news release includes references to certain non-IFRS financial measures, including Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"). These non-IFRS measures do not have any standardized meanings prescribed by International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and are therefore unlikely to be comparable to similar measures presented by other companies. Accordingly, they should not be considered in isolation, in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with IFRS.
The measures above have been described and presented in order to provide shareholders, potential investors and analysts with additional measures for assessing the performance of Xcyte Digital, Streamlined Communications and, where applicable, the pro forma expectations of the combined entity, as applicable, and should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS.
Future-Oriented Financial Information
This press release contains information that may constitute future-oriented financial information or financial outlook information ("FOFI") about Xcyte Digital, newly acquired assets and the combined entity's prospective financial performance, financial position or cash flows, all of which is subject to the same assumptions, risk factors, limitations and qualifications as set forth above. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may provide to be imprecise or inaccurate and, as such, undue reliance should not be placed on FOFI. Xcyte Digital, newly acquired assets or the combined entity's actual results, performance and achievements could differ materially from those expressed in, or implied by, FOFI. Xcyte Digital and newly acquired assets have included FOFI in this press release in order to provide readers with a more complete perspective on the combined entity's future operations and management's current expectations regarding the combined entity's future performance. Readers are cautioned that such information may not be appropriate for other purposes. FOFI contained herein was made as of the date of this press release. Unless required by application laws, Xcyte Digital does not undertake any obligation to publicly update or revise any FOFI statements, whether as a result of new information, future events, or otherwise.
For further information, please contact:
Xcyte Digital Corp.
Randy Selman, Chief Executive Officer and Director
Phone: (647) 777 7501
Email: investment@xcytedigital.com
Investor Relations
Nikhil Thadani, Sophic Capital
Email: nik@sophiccapital.com
Phone: (647) 777 7501
To receive Xcyte investor news, please sign up at https://xcytedigital.com/investors/
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Information
Certain information in this news release constitutes forward-looking statements and forward-looking information under applicable Canadian securities legislation (collectively, "forward-looking information"). Forward-looking information in this release includes, but is not limited to, statements with respect to the expected benefits that Xcyte may realize as a result of the acquisition of former Streamlined Communications assets, and the impact that the Transaction may have on Xcyte's growth prospects generally. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events. Forward looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by management as of the date of this news release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements and future events to be materially different from those expressed or implied by such forward-looking information, including that the former Streamlined Communications assets may not perform or generate revenue at the levels experienced historically; that there may be obstacles to absorbing the former Streamlined Communications assets into Xcyte's broader business; that the synergies anticipated by the former Streamlined Communications assets' acquisition may not materialize to the extent expected or at all; and other factors that apply to the Company's business generally as described in greater detail in the documents filed under the Company's profile at www.sedarplus.ca. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. Investors are cautioned that undue reliance should not be placed on any such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Company. The Company does not intend, and does not assume any obligation, to update the forward-looking information in this release except as otherwise required by applicable law.
SOURCE: Xcyte Digital Corp.
View the original press release on ACCESS Newswire
