Martello Announces $2M USD Private Placement Resulting in the Creation of a Control Person

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OTTAWA, ON, Nov. 16, 2022 /CNW/ – Martello Technologies Group Inc., (“Martello” or the “Company”) (TSXV: MTLO), a provider of software that optimizes the Microsoft Modern Workplace, a segment of the broader market for digital experience monitoring (DEM), announced today a non-brokered private placement of common shares in the capital of the Company (“Common Shares”) for aggregate gross proceeds of approximately USD$2,000,000 (the “Private Placement”) as a result of which, Wesley Clover International Corporation (“Wesley Clover”), a corporation controlled by Terence Matthews, will become a Control Person of the Company (as such term is defined in the policies of the TSX Venture Exchange (the “TSXV”).

The Private Placement is subject to approval of the TSXV and disinterested shareholder approval. Approval for the creation of a new Control Person pursuant to the Private Placement will be sought at a special meeting of the shareholders of the Company (the “Special Meeting”) to be held on January 12, 2023.

Pursuant to the Private Placement, the Company intends to issue 54,000,000 Common Shares at a price of CDN$0.05 per Common Share, representing a premium of 67% on the trading price of the Common Shares on the TSXV at closing on November 15, 2022.  The Private Placement is expected to close on or about January 24, 2023.

The sole subscriber in the Private Placement is Wesley Clover, a corporation controlled by Terence Matthews, co-chairman of the Company, and the Company’s largest shareholder. Under the policies of the TSXV, a “Control Person” is defined as any person that holds or is one of a combination of persons that holds a sufficient number of any of the securities of a corporation so as to affect materially the control of the corporation, or that holds more than 20% of the outstanding voting shares of a corporation except where there is evidence showing that the holder of those securities does not materially affect the control of the issuer. Pursuant to the policies of the TSXV, if a transaction will result in the creation of a new Control Person, the TSXV will require the Company to obtain shareholder approval of the transaction on a disinterested basis excluding any shares held by the proposed new Control Person and its associates and affiliates.

Wesley Clover currently holds 63,255,571 Common Shares and 2,631,600 warrants to purchase Common Shares (“Warrants”). Following the closing of the Private Placement, it is expected that Wesley Clover will hold 117,255,571 Common Shares and 2,631,600 Warrants, which will be equal to approximately 30.8% of the issued and outstanding voting shares of the Company. As a result, upon the completion of the Private Placement, Wesley Clover would become a Control Person of the Company. Shareholders of the Company will be asked at the Special Meeting to consider and, if thought fit, to pass a resolution (the “Control Person Resolution”) approving the creation of Wesley Clover as a new Control Person.  Additional information regarding the Private Placement and the Control Person Resolution will be provided in the Circular.

The Private Placement constitutes a “related party transaction” within the meaning of TSXV Policy 4.1 and Section 5.9 and Multilateral Instrument 61–101 Protection of Minority Security Holders in Special Transactions (“MI 61–101”) because Insiders (and associated entities of certain Insiders) of the Company, including Wesley Clover, will participate in the Private Placement and are expected to acquire 54,000,000 Common Shares in connection with the Private Placement. The Company has relied on exemptions from the formal valuation and minority shareholder approval requirements of MI 61–101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61–101 in respect of the Private Placement as the fair market value (as determined under MI 61-101) of the Insider participation in the Private Placement is below 25% of the Company’s market capitalization (as determined in accordance with MI 61-101).

Martello (TSXV: MTLO) is a technology company that provides monitoring solutions to optimize the Microsoft Modern Workplace. The Company’s products provide actionable insight on the performance and user experience of cloud business applications, while giving IT teams and service providers control and visibility of their entire IT infrastructure. Martello’s software products include Vantage DX, which provides Microsoft 365 and Microsoft Teams end user experience monitoring and optimization. Martello is a public company headquartered in Ottawa, Canada with employees in Europe, North America and the Asia Pacific region. Learn more at http://www.martellotech.com

This press release does not constitute an offer of the securities of the Company for sale in the United States. The securities of the Company have not been registered under the United States Securities Act of 1933, (the “1933 Act”) as amended, and may not be offered or sold within the United States absent registration or an exemption from registration under the 1933 Act.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

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 news release.

This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods and ” includes, but is not limited to, information and statements regarding: the completion of the Private Placement on the terms set out above; the creation of a new Control Person; the Company’s ability to obtain disinterested shareholder approval and TSXV approval of the creation of a new Control Person; the details of the Special Meeting; and expectations with respect to other activities, events or developments that the Company expects or anticipates will or may occur in the future.

Forward-looking information is neither a statement of historical fact nor assurance of future performance. Instead, forward-looking information is 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 information relates to the future, such statements are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking information. Therefore, you should not rely on any of the forward-looking information. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking information include, among others, the following:

• Continued volatility in the capital or credit markets and the uncertainty of additional financing.
• Our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so.
• 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.
• and other risks disclosed in the Company’s filings with Canadian Securities Regulators, including the Company’s annual information form for the year ended March 31, 2021 dated January 7, 2022, which is available on the Company’s profile on SEDAR at www.sedar.com.

Any forward-looking information provided by the Company in this news release is based only on information currently available and speaks only as of the date on which it is made. Except as required by applicable securities laws, the Company undertakes no obligation to publicly update any forward-looking information, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

SOURCE Martello Technologies Group Inc.

For further information: Tracy King, Vice President of Marketing, tking@martellotech.com, 613.410.7636; John Proctor, President & CEO, jproctor@martellotech.com, 613.271.5989