MTLO Martello Technologies Group Inc

Martello Technologies Group Inc. ("Martello" or the "Company") (TSXV:MTLO) a provider of digital experience monitoring (DEM) solutions deployed in more than 5,000 enterprise networks around the world, is pleased to announce that it has entered into an agreement with PI Financial Corp. and Eight Capital to act as co-lead underwriters, on behalf of a syndicate of underwriters (collectively the "Underwriters"), pursuant to which the Underwriters will purchase, on a bought deal basis, an aggregate of 23,810,000 units of Martello (the "Units") at a price of $0.21 per Unit (the "Offering Price") for aggregate gross proceeds of $5,000,100 (the "Offering"). The net proceeds of the Offering will be used to pay a portion of the purchase price in connection with the previously announced acquisition by the Company (the “Acquisition”) of all of the issued and outstanding securities of GSX Participations SA (“GSX”) pursuant to a share purchase agreement dated April 28, 2020.

The Units will be offered by way of a short-form prospectus in Ontario, Alberta, and British Columbia, and such other additional jurisdictions in Canada as agreed to by the Company and the Underwriters.

The Company has also granted the underwriters an option to cover over-allotments (the “Over-Allotment Option”), which will allow the underwriters to offer up to an additional 15% of the Offering, on the same terms as the Units. The Over-Allotment Option may be exercised in whole or in part at any time up to 30 days following the closing date of the Offering, for any number of Units, Unit Shares, Warrants, or any combination thereof at a price equal to the Offering Price for a Unit and a price to be agreed upon for the Warrant.

GSX Acquisition

The Company has entered into a share purchase agreement dated April 28, 2020 to acquire 100% of the shares of GSX, a provider of end-user experience monitoring for Microsoft Office 365 headquartered in Geneva, Switzerland with more than 400 enterprise customers globally. The consideration for the acquisition is 22,000,000 common shares and CDN$13,860,000 cash for an aggregate purchase price of $18,700,000, subject to adjustment (the "Purchase Price").

Terms of the Offering

Each Unit shall consist of one common share of the Company (each, a “Unit Share”) and one transferable common share purchase warrant (each such warrant, a “Warrant”). Each Warrant shall be exercisable into one common share at an exercise price of $0.30 per common share for a period of 36 months from the Closing Date (the “Warrant Shares” or together with the Unit Shares, “Shares”). Commencing on the date that is 12 months following the Closing Date, if the daily volume weighted average trading price of the common shares of the Company on the TSX Venture Exchange (“TSXV”) for any 10 consecutive days equals or exceeds $0.50, the Company may, upon providing written notice to the holders of the Warrants, accelerate the expiry date of the Warrants to the date that is 30 days following the date of such written notice.

The Offering is expected to close on or about May 26, 2020, or such other date as agreed between the Company and the Underwriters, and is subject to certain conditions including, but not limited to, the closing in escrow of the Acquisition and the receipt of all necessary regulatory and other approvals including the approval of the TSXV.

The Company has agreed to pay a cash commission of 7.0% of the gross proceeds of the Offering and will issue to the Underwriters compensation options (the “Compensation Options”) equal to 5.0% of the aggregate number of Units sold under the Offering (the “Underwriting Fee”). The Compensation Options will be exercisable into common shares of the Company at a price per Compensation Options equal to the Offering Price for a period of 24 months from the closing of the Offering.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities 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 U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

About Martello Technologies Group Inc.

Martello Technologies Group Inc. (TSXV: MTLO) is a technology company that provides digital experience monitoring (DEM) solutions. The company develops products and solutions that provide monitoring and analytics on the performance of real-time applications on networks, while giving IT teams and service providers control and visibility of their entire IT infrastructure. Martello’s products include unified communications performance analytics software, and IT analytics software. Martello Technologies Group is a public company headquartered in Ottawa, Canada with offices in Montreal, Amsterdam, Paris, Dallas and New York. Learn more at http://www.martellotech.comNeither 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 news release.

Cautionary Note Regarding Forward-Looking Statements

This news release contains "forward-looking statements". Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "expect," "future," "may," "should," "will" and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding anticipated closing date of the Offering, adjustments to the Purchase Price, and accelerated exercise of Warrants.Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: 

• Changes in customer demand.
• Disruptions to our technology network including computer systems and software, as well as natural events such as severe weather, fires, floods and earthquakes or man-made or other disruptions of our operating systems, structures or equipment.
• Delayed purchase timelines and disruptions to customer budgets, as well as Martello’s ability to maintain business continuity as a result of COVID-19.Any forward-looking statement made by us in this news release is based only on information currently available to us and speaks only as of the date on which it is made. Except as required by applicable securities laws, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

For more information, please contact:

Tracy King Vice President of Marketing tking@martellotech.com 613.271.5989 x 2112

John Proctor President & CEO jproctor@martellotech.com 613.271.5989