Quisitive Announces Conversion of Debentures and Achievement of Earnout Milestones under Purchase Agreements

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(TheNewswire)



 

Toronto, ON - TheNewswire – July  2, 2020 – Quisitive Technology Solutions, Inc. (“Quisitive” or the “Company”) (TSXV:QUIS), a premier Microsoft solutions provider that helps customers navigate the ever-changing climate that their business relies upon, announces that the remaining US$4.7 million in principal amount on the convertible debentures (the “Debentures”) that were issued by the Company as partial consideration for the acquisition of Menlo Technologies, Inc. on January 2, 2020, and initially due on January 2, 2022, were converted effective July 2, 2020 into an aggregate of 32,025,800 Common Shares.

The Company also announces that it has satisfied the criteria to issue Common Shares to former shareholders of Quisitive, LLC, a subsidiary of the Company, in respect of earn-out milestones (the “Fusion Earned Interest”) under an agreement and plan of merger and membership interest among Fusion Agile Tech Holdings Ltd., MRA Digital Consulting Inc., and Michael Reinhart, the President and Chief Executive Officer of the Company (the “Fusion Agreement”). The Company issued today an aggregate of 9,861,441 Common Shares to holders of the Fusion Earned Interest. For more information relating to the Fusion Earned Interest please refer to the Fusion Agreement and the filing statement of Nebo Capital Corp. dated July 27, 2018, each available under the Company’s issuer profile on SEDAR at www.sedar.com.

The Company also announces that Corporate Renaissance Group Inc. (“CRG”), a wholly-owned subsidiary of the Company, achieved certain financial thresholds during the fiscal year-ended 2019 pursuant to the terms of a share purchase agreement among the Company, 2691876 Ontario Inc., and the vendors of CRG (the “CRG Purchase Agreement”). The Company issued today an aggregate of 5,158,731 Common Shares in the form of a performance earn-out as contingent consideration to the former vendors of CRG. For more information relating to the performance earn-out, please refer to the CRG Purchase Agreement available under the Company’s issuer profile on SEDAR at www.sedar.com.

 

The Company also announces that it has caused the issuance of 1,000,000 shares of LedgerPay, Inc. (“LedgerPay”), a subsidiary of the Company, to key employees, subject to vesting over the next two years. The shares of LedgerPay are convertible into Common Shares of the Company based on the ratio of 1:2.124 per share.

The Company believes that the conversion of the Debentures will provide balance sheet flexibility and will reduce annual debt servicing costs for the Company. Approximately 93% of the Common Shares issued pursuant to the conversion of the Debentures and the earnouts described in this news release are held by insiders and key employees of the Company, and approximately 80% of the Common Shares are subject to a lock-up period expiring in October 2020.

Early Warning Disclosure Pursuant to National Instrument 62-103

 

Michael Reinhart

 

Prior to the issuance of Common Shares pursuant to the Fusion Earned Interest, Michael Reinhart beneficially owned or controlled 11,608,073 Common Shares, 3,175,000 restricted stock units, 55,191 Common Share Purchase Warrants, and 1,062,500 rights under existing employment incentives exchangeable into Common Shares, representing approximately 8.7% of the issued and outstanding Common Shares on a non-diluted basis, and approximately 15% of the Common Shares on a partially-diluted basis, assuming the conversion of all convertible securities of the Company held my Mr. Reinhart. As of the date hereof, after giving effect to the issuance of Common Shares pursuant to the conversion of the Fusion Earned Interest, Mr. Reinhart beneficially owns or controls 20,350,744 Common Shares, 3,175,000 restricted stock units, 55,191 Common Share purchase warrants and 1,062,500 rights under existing employment incentives exchangeable into Common Shares, representing approximately 11.3% of the issued and outstanding Common Shares on a non-diluted basis, and approximately 13.6% of the issued and outstanding Common Shares on a partially diluted basis, assuming the conversion of all convertible securities of the Company held my Mr. Reinhart.

 

While Mr. Reinhart currently has no plans or intentions with respect to the securities of the Company he holds, Mr. Reinhart may from time to time acquire additional securities of the Company, may sell all or a portion of his securities of the Company, or may continue to hold his securities of the Company, or other securities of the Company, depending on market conditions, and other factors considered relevant to Mr. Reinhart, subject to any contractual arrangements with respect to the disposition of securities of the Company held by Mr. Reinhart and pursuant to the Company’s insider trading policy.

 

A copy of the early warning report to be filed by Mr. Michael Reinhart will be available under the Company’s issuer profile on SEDAR at www.sedar.com or by contacting Mr. Reinhart at 972.573.0995 or 1431 Greenway Drive, Suite 1000, Irving, Texas 75038.

 

William Chang

 

Prior to the issuance of Common Shares pursuant to the conversion of the Debentures, William Chang beneficially owned or controlled 4,784,981 Common Shares and US$2,164,812 principal amount of Debentures, representing approximately 3.6% of the issued and outstanding Common Shares on a non-diluted basis, and approximately 13.2% of the Common Shares on a partially-diluted basis, assuming the conversion of all of the Debentures held by Mr. Chang. As of the date hereof, after giving effect to the issuance of Common Shares pursuant to the conversion of the Debentures, Mr. Chang beneficially owns or controls 19,536,012 Common Shares, representing approximately 10.8% of the issued and outstanding Common Shares on a non-diluted basis.

 

While Mr. Chang currently has no plans or intentions with respect to the securities of the Company he holds, Mr. Chang may from time to time acquire additional securities of the Company, may sell all or a portion of his securities of the Company, or may continue to hold his securities of the Company, or other securities of the Company, depending on market conditions, and other factors considered relevant to Mr. Chang, and subject to any contractual arrangements with respect to the disposition of securities of the Company held by Mr. Chang.

 

A copy of the early warning report to be filed by Mr. William Chang will be available under the Company’s issuer profile on SEDAR at www.sedar.com or by contacting Mr. Chang at 300 3rd St., Suite 1, Los Altos, California 94022, or at the number below.

 

The securities referred to in this news release have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, “U.S. Persons” (as such term is defined in Regulation S  under the U.S. Securities Act) absent such registration or an applicable exemption from the registration requirements of the U.S. Securities Act. This news release does not constitute an offer for sale of securities for sale, nor a solicitation for offers to buy any securities. Any public offering of securities in the United States must be made by means of a prospectus containing detailed information about the company and management, as well as financial statements.

 

For more information, contact:

Quisitive Technology Solutions, Inc.

Mike Reinhart, Chief Executive Officer and Director

e: mike.reinhart@quisitive.com

t: 972.573.0995

About Quisitive:


Quisitive is a premier Microsoft solutions provider that helps enterprise organizations move, operate, and innovate in the Microsoft cloud: Microsoft Azure, Microsoft Dynamics and Microsoft 365. Quisitive also provides proprietary Software as a Service ("SaaS") solutions, such as CRG emPerform™ and Quisitive LedgerPay that complement the Microsoft platform. Quisitive serves clients globally with offices in Austin, TXDallas, TXDenver, COMinneapolis, MNSilicon Valley, CA; Washington, DCOttawa, ONToronto, ON and Hyderabad, India. For more information, visit www.Quisitive.com and follow @BeQuisitive.

Cautionary Note Regarding Forward Looking Information

Some statements in this news release contain forward-looking information. These statements include, but are not limited to, statements with respect to proposed activities, consolidation strategy and future expenditures. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, among others, statements with respect to expected financial flexibility of the Company following the conversion of the Debentures.

These forward-looking statements are based on reasonable assumptions and estimates of management of the Company at the time such statements were made. Actual future results may differ materially as forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors, among other things, include: changes in technology, customer markets and demand for the Company's services; the efficacy of the Company's software and product offering; sales and margin risk; acquisition and integration risks; dependence on economic and market conditions including, but not limited to, access to equity or debt capital on favourable terms if required; changes in market dynamics including business relationships and competition; information system risks; risks associated with the introduction of new products; product design risk; risks related to the Company being a holding company; environmental risks; customer and vendor risks; credit risks; tax and insurance related risks; risks of legislative changes; risks relating to remote operations; key executive risk; risk of litigation risks; risks related to contracts with third party service providers; risks related to the enforceability of contracts; risks related to the COVID-19 pandemic; risks related to the economy generally; the limited operating history of the Company; reliance on the expertise and judgment of senior management of the Company; risks related to proprietary intellectual property and potential infringement by third parties; risks relating to financing activities including leverage; risks relating to the management of growth; increased costs associated with the Company becoming a publicly traded company; increasing competition in the industry; risks relating to energy costs; reliance on key inputs, suppliers and skilled labour; cyber-security risks; risks related to quantifying the Company's target market; risks related to industry growth and consolidation; fraudulent activity by employees, contractors and consultants; conflicts of interest; risks related to the cost structures of certain projects; risks relating to certain remedies being limited and the difficulty of enforcement of judgments and effect service outside of Canada; risks related to future dispositions; sales by existing shareholders; the limited market for securities of the Company; price volatility of the common shares of the Company; no guarantee regarding use of available funds; currency fluctuations; and those factors described under the heading "Risks Factors" in the Company's annual information form dated May 15, 2020 available on SEDAR. Although the forward-looking statements contained in this news release are based upon what management of the company believes, or believed at the time, to be reasonable assumptions, the company cannot assure shareholders that actual results will be consistent with such forward-looking statements, as there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking statements and information. There can be no assurance that forward-looking information, or the material factors or assumptions used to develop such forward-looking information, will prove to be accurate. The Company does not undertake any obligations to release publicly any revisions for updating any voluntary forward-looking statements, except as required by applicable securities law.

Neither the TSXV nor its Regulation Services provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.


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