Montreal – TheNewswire - May 1, 2023 – ATW Tech Inc. (the “Company” or “ATW”) (TSXV:ATW) is pleased to announce an update on a previously announced acquisition, its intention to complete a financing in the amount of $1,550,000, and a change of auditor.

Acquisition

On June 21, 2022, the Company announced its intention to proceed with the acquisition of two target entities and subsequently provided an update on these transactions on November 25, 2022. The Company intends to close the acquisition of one of these two companies (the “Target”) by May 31, 2023 (the “Transaction”).

The Target provides data analytics tools and expert consulting services to help clients drive business transformation through sophisticated data strategies. Fueled by strong management, more than 15 seasoned employees and tailored analytics solutions, the Target helps clients fast-track their data initiatives and drive tangible value in the fields of public safety, finance, retail and more.

The base purchase price is $2,600,000, consisting of a combination of (i) $250,000 in cash (ii) the assumption of debt in an estimated amount of $500,000 and (iii) $1,850,000 in units of the Company (the “Units”), each consisting of one common share of the Company (a “Share”) together with a warrant entitling the holder to acquire one Share at an exercise price of $0.07 for a period of 36 months from the date of closing. The purchase price is subject to customary post-closing adjustments for working capital, transaction costs and net debt. This Transaction and the purchase price also remain subject to due diligence acceptable to ATW. This Transaction is at arm’s length and no finder’s fees are expected to be paid by ATW in connection with the Transaction.

The Transaction is expected to close on or before May 31, 2023. The Transaction is subject to a number of closing conditions, including the approval of the TSX Venture Exchange (“TSXV”).

Financing

In order to, among other things, finance the Transaction, the Corporation intends to complete a financing by way of a private placement and two secured loans (the “Financing”).

The non-brokered private placement consists of 19,500,000 Units at a price of $0.05 per Unit for aggregate gross proceeds of $975,000 (the “Private Placement”).

The Company expects to enter into secured loan agreements (the “Loans”) with each of (i) Gercanoit Inc. (“Gercanoit”), for an amount of $250,000 and (ii) Sifaben Hypothèque s.e.c. (with Gercanoit, the “Lenders”), for an amount of $325,000. The Loans have a maximum term of 12 months and bear interest at an annual rate of 18%. In addition, ATW may prepay all or a portion of the Loans at any time without penalty.

The proceeds of the Financing will be used by ATW, for the benefit of ATW and its subsidiaries, for the Transaction and its ongoing operations.

The Financing is considered a “related party transaction” within the meaning of Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions (the “Regulation 61-101”), as (i) certain insiders, including senior officers and directors of the Corporation, are expected to subscribe for up to an aggregate of 5,000,000 Units in the Private Placement, and (ii) the Lenders are insider of a company controlled by an insider of the Corporation. The Financing is exempt from the formal valuation requirement and the minority shareholder approval requirement of Regulation 61-101 (pursuant to sections 5.5(a) and 5.7(a)), as neither the fair market value of the Units to be distributed to the insiders, nor the value of the consideration received in exchange for such Units, nor the value of the Loans exceeds 25% of the market capitalization of the Corporation. The Financing has been approved by the independent directors of the Company. The Company did not file a material change report in respect of the Financing more than 21 days prior to the closing date of the Financing for valid business reasons in order to ensure that the closing took place within a time frame consistent with the normal market practice for transactions of this nature.

The securities issued under the Private Placement will be subject to a four-month restricted trading period in accordance with the applicable securities legislation. In addition, the Private Placement is subject to the approval of the TSXV. Neither the TSXV nor its Regulation Services Provider (as the term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Change of Auditor

The Company has decided to replace its auditor, the firm Raymond Chabot Grant Thornton S.E.N.C.R.L. (the “Predecessor Auditor”), with the firm Guimond Lavallée Inc. (the “New Auditor”).

The Predecessor Auditor has resigned as auditor of ATW on its own initiative, effective April 21, 2023. The Board of Directors of the Company has considered and approved the resignation of the Predecessor Auditor and the appointment of the New Auditor, effective April 21, 2023.

To date, there are no restrictions in the Predecessor Auditor’s reports for the fiscal years ended December 31, 2021 and 2020, as they do not contain a modified opinion or reportable event as defined in Regulation 51-102.

In accordance with Regulation 51-102, the notice of replacement auditor and the required letters from the Predecessor Auditor and the New Auditor have been reviewed by the Board of Directors and will be duly filed on SEDAR.

 

ATW TECH PROFILE

ATW Tech is a technology company, owner of several recognized technology platforms such as Semeon Analytics, Option.vote and Voxtel. Semeon Analytics is a highly accurate and flexible text analysis platform for customer reviews and uses a unique combination of machine learning and natural language processing (NLP) to discover significant trends in customer reviews across all channels. Option.vote offers a customized multimethod voting system for unions, political parties, professional associations, and anyone looking for a secure way to reduce their voting costs and improve their participation rate. VoxTel specializes in telephone billing and alternative payment solutions for fixed and mobile lines.

 

Forward-Looking Statements and Disclaimer

 

Certain statements in this press release may be forward-looking. These statements include those relating to the Transactions, the closing date of the Transactions, the potential impact of the acquisitions on the Company, the ability of the Company to raise funds in connection with the private placement and the use of the proceeds raised in connection with said private placement. Although the Company believes that such forward‑looking statements reflect expectations based on reasonable assumptions, it cannot guarantee that its expectations will be realized. These assumptions, which may prove to be inaccurate, include, but are not limited to, the following:

(i) All the conditions of the transactions will be met. In particular, ATW will perform satisfactory due diligence on the Targets’ operations, finances, legal status and other matters; (ii) ATW and the Targets’ shareholders will be able to negotiate and conclude a purchase agreement and other documents related to the transaction; (iii) ATW will obtain the necessary regulatory approvals for the acquisition of the Targets on commercially reasonable terms; (iv) The acquisition of the Targets will enable ATW to realize the anticipated synergies; (v) ATW's officers will not set or achieve any other strategic objectives using the proceeds of the Financing. The factors that may affect the achievement of the expected results include (i) The discovery in the due diligence process of elements unfavorable to the Target that would prevent ATW from proceeding with the purchase; (ii) The failure of negotiations between the parties with respect to final documentation; (iii) The Company's inability to realize the anticipated synergies for any reason or due to technical issues that prevent the integration of the Targets’ systems with those of ATW; (iv) The Company's inability to effectively use the proceeds of the private placement; (v) The Company's inability to obtain the regulatory approvals necessary for the acquisitions or the private placement; (vi) Labor disputes or the occurrence of similar risks; (vii) ) a deterioration in the financial market conditions that prevent the Company from raising the required funds in a timely manner, and (viii) the Company's inability to develop and implement a business plan in general and for any reason whatsoever. A description of the risks affecting the Company’s business and activities appears under the heading "Risks and Uncertainties" on pages 10 and 11 of ATW's 2022 annual management's discussion and analysis, which is available on SEDAR at www.sedar.com. No assurance can be given that any events anticipated by the forward-looking information in this press release will transpire or occur, or if any of them do, the benefits that ATW will derive therefrom. In particular, no assurance can be given as to the future financial performance of ATW. ATW disclaims any intention or obligation to update or revise any forward-looking statements in order to account for any new information or any other event. The reader is warned against undue reliance on these forward-looking statements.

Additional information regarding ATW Tech is available on SEDAR www.sedar.com

  

Source

ATW Tech Inc. 
Michel Guay 
Founder, president and CEO 
mguay@atwtech.com 
www.atwtech.com