Montreal, Quebec–(Newsfile Corp. – January 11, 2021) – GOLO Mobile Inc. doing business as Usewalter (TSXV: WLTR) (“Usewalter” or “the Company”) today announced that it has entered into subscription agreements with certain insiders and related parties to complete a non-brokered, non-arm’s length private placement of an aggregate of 45,833,331 common shares of the Company (the “Shares”) at a price of C$0.09 per Share for aggregate gross proceeds of C$4,125,000 (the “Private Placement”).
Closing of the Private Placement is subject to approval of the TSXV and other closing conditions customary for offerings of this nature. The Company intends to use the net proceeds of the Private Placement to fund general working capital requirements and for general corporate purposes.
In connection with the Private Placement, Paysafe UK GOLO Holdco Limited (“UK Holdco”), James McRoberts, Danny Chazonoff, and Habsfan Holdings Inc. (“HHI”) are expected to purchase 27,777,777 Shares, 4,166,666 Shares, 7,222,222 Shares and 6,666,666 Shares, respectively. Each of the subscribers is a related party of the Company and, as a result, the Private Placement will be a related party transaction for purposes of Multilateral Instrument 61-101 – Protection of Minority Shareholders in Special Transactions (“MI 61-101”). On the date hereof, UK Holdco, Mr. McRoberts and HHI (including persons affiliated with each of them, respectively) own, directly or indirectly, approximately 46.9%, 19.3% and 6.0%, respectively, of the issued and outstanding Shares on an undiluted basis, each of Mr. McRoberts and HHI (including persons affiliated with each of them, respectively) hold certain warrants to acquire additional Shares and Mr. Chazonoff holds certain options to acquire additional Shares. Following completion of the Private Placement, UK Holdco, Mr. McRoberts, Mr. Chazonoff and HHI (including persons affiliated with each of them, respectively) will hold approximately 50.01%, 17.02%, 3.57% and 7.96%, respectively, of the issued and outstanding Shares on an undiluted basis.
The Company will rely on the exemption from the requirement to obtain a formal valuation in Section 5.5(g) of MI 61-101 and on the exemption from the requirement to obtain minority approval in Section 5.7(1)(e) of MI 61-101 as: (i) the Board, and each of the Company’s independent directors in respect of the Private Placement, acting in good faith have determined that: (A) the Company is in serious financial difficulty; (B) the Private Placement is designed to improve the financial position of the Company; (C) Section 5.5(f) of MI 61-101 is not applicable; and (D) the terms of the Private Placement are reasonable in the circumstances of the Company; and (ii) there is no other requirement, corporate or otherwise, to hold a meeting to obtain any approval of the Company’s shareholders for the Private Placement. To Usewalter’s knowledge, no formal valuation of the Company or its securities or material assets has been made in the 24 months prior to the date hereof.
Following discussion and deliberation among the members of the Board who are independent with respect to the Private Placement, the Board determined that the Private Placement is in the best interests of the Company and the Private Placement was unanimously approved by the Board, provided that Danny Chazonoff disclosed his interest in the resolutions relating to the Private Placement and abstained from voting thereon in accordance with Section 120 of the Canada Business Corporations Act. In considering and approving the Private Placement and relying on the formal valuation exemption in Section 5.5(g) of MI 61-101 and the minority approval exemption in section 5.7(1)(e) of MI 61-101, the Board took into account factors including, but not limited to: (i) the financial position and outlook of the Company, including as more particularly disclosed in the Company’s financial statements and management’s discussion and analysis for the three and nine months ended September 30, 2020; (ii) the Company’s immediate and pressing need for capital to fund its working capital needs, the speed and certainty with which the Private Placement could be completed and the fact that the Private Placement is essential to fund such immediate working capital needs; (iii) the alternative sources of financing explored by the Company and the lack of alternative sources that could be completed on similarly favourable terms or quickly enough to satisfy the Company’s immediate working capital needs or with adequate certainty of completion; and (iv) its understanding that the terms of the Private Placement are likely more favourable to the Company than those that could be obtained from arm’s length investors for similar aggregate proceeds.
The Company expects that it will not file a material change report in respect of the Private Placement more than 21 days before the expected closing date of the Private Placement as the Company wishes to close the Private Placement on an expedited basis for sound business reasons and in a timeframe consistent with usual market practice for transactions of this nature.
Usewalter is a smart building technology SaaS solution for property managers and residents in high‐density urban environments. Designed as ‘the one app no one can live without’, Usewalter enables efficient and cost‐effective management of a building across the key areas of communication, Internet of Things management and commerce and delivery within multi‐residential and commercial properties. The Company is positioned to leverage its first‐mover advantage to access new markets, secure additional partners and further build revenue momentum. Usewalter is publicly traded on the TSXV. Learn more at www.usewalter.com.
When used in this news release, the words “estimate”, “project”, “belief”, “anticipate”, “intend”, “expect”, “plan”, “predict”, “may” or “should” and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. Although the Company believes, in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in these forward-looking statements and information in this news release are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. The forward-looking statements and information in this news release include, without limitation: information relating to the Private Placement including the timing and ability of the parties to satisfy the conditions to the completion thereof; the approval of the TSXV for the Private Placement; the terms of the Private Placement (including the structure, subscribers, size, offering price, securities to be issued, and gross proceeds); the use of proceeds from the Private Placement; and the post-closing shareholdings of the Private Placement subscribers.
With respect to the forward-looking statements contained in this news release, assumptions have been made regarding, among other things: the completion of the Private Placement; timing of receipt of approvals of the TSXV for the Private Placement; the Company’s ability to achieve, sustain or increase profitability, and fund its operations with existing capital and/or raise additional capital to fund operations; expenditures by the Company, merchants and customers in the Company’s network; continuing demand for the Company’s services and the pricing of such services; the ability of the Company to market its services successfully to existing and new merchants and customers; the economy generally; competition in the mobile delivery industry; stability of the general regulatory environment in which the Company operates; and the absence of significant disruptions to the Company’s operations such as may result from pandemic, harsh weather, natural disaster, accident or other calamitous event.
By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks: there is no assurance that the Private Placement will be completed on the terms contemplated in this news release or at all; there is no assurance that the Company will obtain all requisite approvals for the Private Placement, including the approval of the TSXV; following completion of the Private Placement, the Company may require additional financing from time to time in order to continue its operations and financing may not be available when needed or on terms and conditions acceptable to the Company; although the Company has expectations regarding the use of proceeds from the Private Placement, there may be circumstances where, for business reasons, a reallocation of funds may be necessary as may be determined at the Company’s discretion and there can be no assurance as to how those funds may be reallocated; and the other risk factors that are set forth under the heading “Risk Factors” in the Company’s Management Information Circular dated July 23, 2020, which is available on SEDAR at www.sedar.com.
The Company cautions that the foregoing lists of assumptions and risks are not exhaustive. When relying on the Company’s forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing assumptions and risks and other uncertainties and potential events. The forward-looking information contained in this news release represents the expectations of the Company as of the date of this news release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. GOLO does not undertake to publicly update or revise the forward-looking information contained in this news release to reflect new events or circumstances, except as required pursuant to applicable laws.
For Further Information:
Peter Mazoff, Chief Executive Officer
5 Quarters Investor Relations, Inc.
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