Martello Co-Chairmen Execute Letter of Intent to Provide $5 Million Subordinated Debt Instrument

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OTTAWA, April 29, 2020 /CNW/ – 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, today announced that Co-Chairmen of the Martello Board of Directors Sir Terry Matthews, through Wesley Clover International, and Bruce Linton through a wholly owned company have executed an letter of intent (LOI) to provide an unsecured subordinated debt instrument to Martello in the amount of CDN $5 million, (the “Subordinated Debt Instrument“) to meet the capital requirements for the acquisition of GSX Participations SA (“GSX“). This facility is subject to intercreditor agreements and the finalization of definitive loan agreements between Martello Technologies Corporation (“MTC”), Bruce Linton and Wesley Clover International.

Today’s announcement follows a Martello press release on April 28, 2020, announcing that the Company will acquire GSX, a provider of end-user experience monitoring for Microsoft Office 365 headquartered in Geneva, Switzerland with more than 400 enterprise customers globally. This acquisition will add monthly recurring revenue as Martello enters the Microsoft Office 365 market. As usage of Office 365 continues to grow, this acquisition will provide an additional opportunity to scale the existing GSX addressable market by moving it to a true cloud SaaS platform.

“As Martello’s principal lenders have recognized even in uncertain market conditions, Martello has a significant opportunity to enter the rapidly growing Microsoft Office 365 market by acquiring GSX”, said Bruce Linton, Co-Chairman of Martello. “I’m pleased to join Terry Matthews in backing Martello’s continued growth, driven by their software as a service (SaaS)-based digital experience monitoring technology stack”

“Recent events including the shift to remote work have only served to underscore Martello’s opportunity in delivering a reliable user experience for the cloud-based services that businesses rely on every day”, said Sir Terry Matthews, Co-Chairman of Martello Technologies and Chairman of Wesley Clover International. “I’m pleased to support Martello’s strategy and look forward to the Company’s continued growth”

“This support from our co-chairmen along with lenders Vistara Capital and National Bank is a testament to the strength of our opportunity”, said Martello President and CEO John Proctor. “We are executing on our digital experience monitoring strategy and look forward to working with GSX to grow recurring revenues and expand the GSX addressable market”.

The Subordinated Debt Instrument constitutes a “related party transaction” within the meaning of TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61‑101 ‑Protection of Minority Security Holders in Special Transactions (“MI 61‑101“). 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 Subordinated Debt Instrument as neither the fair market value (as determined under MI 61-101) of the subject matter of, nor the fair market value of the consideration for, the loan, insofar as it involved the related parties, exceeds 25% of the Company’s market capitalization (as determined under MI 61-101).

About Martello Technologies Group

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 https://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.

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,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding accretive monthly recurring revenues, closing of the proposed transaction, effect of closing on the Company’s gross margins.

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. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. 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:

• Continued volatility in the capital or credit markets.
• 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.

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.

SOURCE Martello Technologies Group

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