NEW YORK, May 20, 2022--(BUSINESS WIRE)--GetSwift Technologies Limited ("GetSwift" or the "Corporation"; NEO: "GSW") is pleased to announce the signing of a non-binding letter of intent with Stage Equity Partners ("Stage") for the acquisition of all of GSW’s SaaS business (the "Business") at an enterprise value of $10 million.
Stage proposes to acquire all of the assets associated with the Business at an enterprise value of $10 million (the "Purchase Price") on a debt free and excess-cash free basis with adequate working capital, to be paid at close. Prior to the transaction being completed, the final Purchase Price and terms shall be agreed by both GSW and Stage and a term sheet must be accepted and signed off on by GSW. Stage contemplates a delayed signing and closing to enable Seller (and Seller’s ultimate parent company, as applicable) to obtain any necessary stockholder and stock exchange approval. The "drop dead" date for the closing will be 6 months after the signing of the definitive agreements (the "Drop Dead Date").
$1M paid on closing, less the amount of any outstanding Bridge Loan (as defined below).
Up to $1.2M A/P of the Business will be assumed. No other liabilities will be assumed.
$4.5M senior secured Seller’s note:
6% interest (compounded annually) in Year 1, waived if seller’s note paid within 12 months of closing.
10% interest (compounded annually) commencing in Year 2.
Principal and interest payable only at maturity, prepayment permitted.
Stage retains the right to secure the Business with up to $2M of additional senior secured debt on a pari passu basis with the Seller’s note, subject to consultation rights in favor of the Seller.
Customary limitations on distributions to Buyer’s equity holders, other than tax distributions.
Common membership interests ("Common Units") representing 30% of the new entity (the "Buyer") (as of the closing) on account of the balance of the Purchase Price (the "Rollover Units"). For so long as Seller holds at least 75% of the Rollover Units, Seller shall be entitled to appoint a member of the board of managers (or analogous governing body) of Buyer. For so long as Seller holds any Rollover Units, Seller shall be entitled to (i) customary tag-along (co-sale) rights, and shall be subject to customary drag along obligations, (ii) participate on a pro rata basis in any future issuances of securities of Buyer (subject to customary exceptions), (iii) piggy-back registration rights, and (iv) certain limited pre-approval rights which are customary for minority common equity holders in a private company, including (A) relating to changes or amendments to the constituent documents of the Buyer that adversely affect the holders of Common Units in a manner different from the holders of any other class or series of membership interest of Buyer, (B) the issuance or declaration of any dividends or distributions (subject to the Preferred Return (as defined below) in certain limited circumstances), unless the holders of Common Units are entitled to participate in such dividend or distribution on a pro rata basis, (C) the entering into of any transaction involving the Buyer and any affiliate of Buyer on non-arm’s length terms, and (D) until such time as Stage’s Initial Capital Commitment (as defined below) is fully paid, issuing any additional membership interests, subject to customary limited exceptions. The parties hereto acknowledge and agree that the purpose of the foregoing clause (D) is that Seller’s 30% equity interest in the Buyer shall not be subject to dilution from additional investment capital by any issuance of additional membership interests or other securities of the Buyer (subject to certain customary exceptions, including, without limitation, with respect to compensatory equity awards to employees, consultants, and other service providers) until Stage’s Initial Capital Commitment has been fully paid(1). The Buyer’s constituent documents shall provide that the membership interests issued to Stage (the "Preferred Units"), representing the remaining 70% of the outstanding membership interests (as of the closing), shall be entitled to receive distributions, in priority to the Common Units, in an amount equal to Stage’s aggregate capital contributions to Buyer(2). Stage’s initial capital commitment to Buyer shall be $5M ("Stage’s Initial Capital Commitment"), inclusive of the amounts set out in (1) and (2) above, to be contributed when and as requested by the board of managers of the Buyer. The Preferred Units will be entitled to participate pro rata on all distributions in excess of the Preferred Return.
Stage is willing to extend up to $250,000 in bridge financing, to be funded in advances from and after signing of the definitive agreements in amounts subject to Stage’s approval in its sole discretion, with the proceeds thereof to be used solely to fund GSW’s ordinary working capital needs during the period between signing and closing (or the Drop Dead Date, if earlier), which will be evidenced by a first priority secured note (the "First Bridge Loan"). Stage may also extend up to $750,000 of additional bridge financing to be funded in advances from and after signing of the definitive agreements in amounts subject to Stage’s approval in its sole discretion (the "Second Bridge Loan" and together with the First Bridge Loan, the "Bridge Loan"). The Bridge Loan will be evidenced by a first priority note or credit agreement secured by the Business and will be subject to customary terms and conditions for a transaction of this nature, including, without limitation, (i) restrictions on the payment of any dividends or distributions without Stage’s written consent, (ii) restrictions on the use of proceeds without Stage’s written consent, (iii) restrictions on entering into or exiting existing commercial relationships without Stage’s written consent, (iv) information and reporting rights, and (v) the payment of all outstanding principal and accrued interest no later than the Drop Dead Date.
"We are excited to work with Stage on sale of the SaaS business. Stage is a valued partner to GetSwift. This is in line that our next step forward in our strategic review that we announced on May 10th," said Joel Macdonald, interim CEO. "We look forward to working with Stage to finalize this sale," Macdonald continued.
About GetSwift Technologies Limited
Technology to Optimise Global Delivery Logistics
GetSwift is a technology and services company that offers a suite of software products and services focused on business and logistics automation, data management and analysis, communications, information security, and infrastructure optimization and also includes ecommerce and marketplace ordering, workforce management, data analytics and augmentation, business intelligence, route optimization, cash management, task management shift management, asset tracking, real-time alerts, cloud communications, and communications infrastructure (collectively, the "GetSwift Offering"). The GetSwift Offering is used by public and private sector clients across industries and jurisdictions for their respective logistics, communications, information security, and infrastructure projects and operations.
GetSwift is headquartered in New York and its common shares are listed for trading on the NEO Exchange under the symbol "GSW". For further background, please visit the Corporation’s profile on SEDAR at www.sedar.com and the Corporation’s website at www.getswift.co.
Forward Looking Information
Certain statements contained in this news release constitute forward-looking information within the meaning of Canadian securities laws ("Forward-looking Information"). Forward-looking Information may relate to matters disclosed in this news release and to other matters identified in public filings relating to the Corporation, to the future outlook of the Corporation and anticipated events or results and may include statements regarding the future financial performance of the Corporation. In some cases, Forward-looking Information can be identified by terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward-looking Information in this news release include statements related to short and long term strategic opportunities involving the Corporation and the timing, details, and outcome of the strategic review undertaken by the Board, and the type of strategic opportunity that may be pursued, and the outcome of the Notice of Discontinuances regarding the Australian Securities and Investments Commission v. GetSwift Limited & others Federal Court of Australia VID 146 of 2019, if any.
Forward-looking Information involves various risks and uncertainties and is based on certain factors and assumptions. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. Forward-looking Information in this news release include, but are not limited to, statements with respect to: the availability of capital resources to the Corporation in the short and long term, the status of the Corporation’s evaluation of strategic opportunities, the evaluation of specific strategic opportunities, including the sale of the Corporation’s GSW business, and the Logo Sale Agreement, the Logo Call Option Agreement and the anticipated timing for completion of the transactions contemplated by such agreements.
Important factors that could cause actual results to differ materially from the Corporation's expectations include, without limitation, general market conditions, the ability of the Board to obtain short term financing to enable the Corporation to continue as a going-concern, the ability of the Board to identify strategic opportunities and of the Corporation to enter into agreements in respect of such strategic opportunities, the ability of the Corporation to complete the transactions contemplated by any strategic opportunity identified by the Board, the ability of management and the Board to dedicate resources to the strategic review and the effect of a strategic opportunity on maximizing shareholder value, the effect of the strategic review on maximizing shareholder value, the ability of the Corporation and the Logo Purchasers to complete the transactions contemplated by the Logo Sale Agreement and Logo Call Option Agreement, and the ability of the Corporation and Logo Purchasers to enter into and deliver the documentation required by the Logo Call Option Agreement.
The Corporation undertakes no obligation to update or revise any Forward-looking Information, whether as a result of new information, future events or otherwise, except as may be required by law. New factors emerge from time to time, and it is not possible for the Corporation to predict all of them, or assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any Forward-looking Information. Any Forward-looking Information contained in this news release is expressly qualified in its entirety by this cautionary statement.
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