NOT FOR DISTRIBUTION TO UNITED STATES
NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
XTM INC. (CSE: PAID; QB: XTMIF; FSE:7XT) (“XTM” or the
“Company”), further to its news releases of December 13, 2023 and
February 6, 2024, the Company is pleased to announce that it has
completed its previously announced non-brokered private placement
offering (the “Offering”) of secured convertible debentures
(“Debentures”) for aggregate gross proceeds of US$11,028,468
oversubscribed from the original maximum offering size from US$5
million. The secured convertible debentures will bear interest at
the rate of 12.0% per annum from the date of issuance, calculated
and payable quarterly beginning on September 30, 2024.
“We are poised and ready to take on the reported 75% of US
workers who want same day pay,” said Marilyn Schaffer, XTM, CEO.
“We are thankful for the patience and loyalty of our team, our long
shareholders and our invaluable partners.”
Secured Convertible Debentures
The Debentures shall be convertible at the option of the holder
thereof (“Conversion Date”) into units (“Units”) of the Company at
a price of US$0.11 per Unit. Each Unit shall entitle the holder
thereof to receive one common share of the Company (“Common
Shares”), and one warrant to purchase a Common Share (each a
“Warrant”) upon payment of US$0.11 to the Company for a period of
24 months from the date of issuance, provided, however, that if the
daily volume-weighted average trading price of the Common Shares on
the Canadian Securities Exchange (the “Exchange”) is greater than
C$0.50 for any 5 consecutive trading days (the “Acceleration
Trigger”), the Company may, within 3 trading days of the
Acceleration Trigger, accelerate the expiry date of the Warrants to
a date that is at least 30 days following the date of such written
notice. The Debentures mature on the date (the “Maturity Date”)
that is 24 months from the date of issuance.
The Debentures will be a secured obligation of the Company
ranking junior in right of payment to all existing secured credit
agreements and financing arrangements of the Company, and senior in
right of payment to all current and future unsecured obligations of
the Company.
In connection with the Offering, XTM paid a further cash
finder’s fee in the amount of US400,000 to a finder (the
“Finder”).
The closing of the Offering (the “Closing”) is subject to
certain conditions, including, but not limited to, the satisfaction
of customary closing conditions and the receipt of regulatory
approvals, including the approval of the Exchange. The Company
intends to use the proceeds of the Offering for general corporate
and working capital purposes, including to satisfy working capital
requirements of its U.S. subsidiary, Q-Rails, as well as to as well
as to extinguish an obligation of US$1,058,342 concurrently with
the Closing. The offering closed in three tranches on January 25,
2024, February 16, 2024 and February 23, 2024. The Company
increased the maximum size of the offering from US$5 million to
US$12 million to accommodate closing on gross proceeds of US$11
million.
A director of the Company (the “Insider”) participated in the
first tranche of the Offering for a total of approximately
US$2,148,900 which constitutes a “related party transaction”
pursuant to Multilateral Instrument 61-101 Protection of Minority
Security Holders in Special Transactions (“MI 61-101”). The Company
is exempt from the requirements to obtain a formal valuation and
minority shareholder approval in connection with the Insiders’
participation in the Offering, in reliance of sections 5.5(a) and
5.7(a) of MI 61-101, respectively, on the basis that participation
in the Offering by the Insider did not exceed 25% of the fair
market value of the Company’s market capitalization. The Company
did not file a material change report in respect of the related
party transaction at least 21 days before the closing of the first
tranche, which the Company deems reasonable in the circumstances as
the details of the participation by the Insider of the Company were
not settled until shortly prior to closing of the tranche and the
Company wished to complete the first tranche in an expeditious
manner.
The securities issued in connection with the Offering are
subject to a statutory hold period of four months and one day from
the date of issuance.
About XTM
XTM with offices in Miami, Toronto, Denver and London is a
Fintech creator of payment innovations including fully certified
Earned Wage Access through its AnyDay™ product. Founded in the
cloud-banking space to further support businesses to inspire their
workforce in the hospitality, personal care and services staffing
industries, XTM provides on-demand pay for many large brands
including Earls, Maple Leaf Sports & Entertainment, Cactus
Club, Marriott Hotels and Live Nation. QRails is a fully owned
subsidiary of XTM. A cloud-based, API-driven issuer-processor,
QRails enables payroll providers, financial institutions and other
global fintech companies to keep up with the on-demand economy by
delivering innovative digital payment solutions to their employees.
QRails helps companies modernize and leverage payroll as a
differentiator in attracting and retaining talent all at low to no
cost for the employee and employer. QRails’ flagship solution,
AnyDay™, is the first provider to own their full tech stack that
powers their Earned Wage Access solution. Founded in 2016, QRails,
Inc., together with its U.K. subsidiary, QRails Limited is
SAP-certified, QRails also has earned several industry
certifications under PCI DSS, and SOC. For more information, please
visit www.QRails.com.
For further information, please visit www.xtminc.com.
Cautionary Notes
Forward-Looking Statements:
This news release contains forward-looking information within
the meaning of applicable Canadian securities laws
(“forward-looking information”). Generally, forward-looking
information can be identified by the use of forward-looking
terminology such as “plan”, “continue”, “expect”, “project”,
“intend”, “believe”, “anticipate”, “estimate”, “may”, “will”,
“potential”, “proposed” and other similar words, or statements that
an event or result “may”, “will”, “should”, “could” or “might”
occur or be achieved and other similar expressions. Forward-looking
information contained in this press release may include, without
limitation, statements regarding the Offering; conversion of the
Debentures; the exercise of Warrants; the terms, timing or
completion of the Offering, or the pricing in respect thereof; the
closing of the Offering; the anticipated use of proceeds of the
Offering, including but not limited to the use of the proceeds of
the Offering for proposed acquisitions; events or developments that
the Company expects or anticipates will or may occur in the future;
and the receipt of all applicable governmental and regulatory
approvals, including the approval of the Exchange.
Forward-looking information is based on estimates and
assumptions that, while considered reasonable by management, are
inherently subject to significant business, financial, operational
and other risks, uncertainties and other factors, including those
described below, which could cause actual results, performance or
achievements of the Company to be materially different from
results, performance or achievements expressed or implied by such
forward-looking information and, as such, undue reliance must not
be placed on them. Forward-looking information is also based on
numerous material factors and assumptions, including but not
limited to, Exchange approval of the Offering; the availability and
timing of required regulatory and other approvals in connection
with the Offering; and the lack of material changes to general
economic, market and business conditions. Forward looking
statements address future events and conditions and are reliant on
opinions and estimates of management as of the date such statements
and assumptions are made, which involve inherent risks and
uncertainties, known and unknown risks, such as business, industry,
political and economic risks and uncertainties, and other factors
that may cause the actual results, level of activity, performance
or achievements of the Company, as the case may be, to be
materially different from those expressed or implied by such
forward-looking information and may also include, without
limitation: the inability of the Company to achieve positive cash
flows from operations or obtain any necessary future financing to
continue with its planned market expansion, competition;
litigation; lower than anticipated demand for the Company’s
products and services; the Company’s failure to satisfy its
covenants under the Debentures; changes in technology that
adversely affect the Company’s products and services; the failure
of the Company to successfully protect its intellectual property;
and the attraction and retention of key employees and other
qualified personnel. Please see the Company’s public documents
available on SEDAR+ at www.sedarplus.ca for a comprehensive
discussion of the risks faced by the Company and which may cause
actual results, performance or achievements of the Company to be
materially different from results, performance or achievements
expressed or implied by forward-looking information. All
information contained in this press release, other than statements
of current and historical fact, is forward looking information.
Although the Company has attempted to identify important factors
that could cause actual results to differ materially from those
contained in forward-looking information, there may be other
factors that cause results not to be as anticipated, estimated or
intended. The Company provides no assurance that forward-looking
statements and information will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements or information. Accordingly, readers
should not place undue reliance on forward-looking statements or
information. The Company assumes no obligation to update
forward-looking information, and expressly renounces any
obligation, to update any forward-looking statements, other than as
required by law.
The securities offered pursuant to the Offering 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 U.S. state
securities laws, and may not be offered or sold in the United
States unless registered under the U.S. Securities Act and
applicable state securities laws or pursuant to exemptions from the
registration requirements of the U.S. Securities Act and applicable
state securities laws. This press release shall not constitute an
offer to sell or the solicitation of an offer to buy securities in
the United States, nor shall there be any sale of these securities
in any jurisdiction in which such offer, solicitation or sale would
be unlawful.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240223505222/en/
Marilyn Schaffer Chief Executive Officer XTM Inc. 416.260.1641
finance@xtminc.com
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