· A+ generated US$1.4 million in annual revenue and US$207K normalized EBITDA during 2023 (unaudited)
· Transaction is non-dilutive to Xcyte Digital shareholders
· Acquisition to be funded via existing cash on hand
POMPANO BEACH, FL, April 3, 2024 - Xcyte Digital Corp. (TSXV: XCYT) ("Xcyte" or the "Company"), a spatial computing, event technology aggregator and developer providing a high value, cost-effective, multi-platform subscription service to host online virtual and immersive events, announced it has signed an asset purchase agreement today with A+ Conferencing, Ltd. ("A+","A+ Conferencing or Seller"), pursuant to which a wholly owned subsidiary of the Company acquired all of the assets of A+, a Texas-based conferencing services limited partnership (the "Transaction"). The consideration for the Transaction is comprised of a revenue share, whereby Xcyte will receive 70% of the gross revenue derived from the acquired business each quarter (subject to certain adjustments). This revenue share expires five (5) years from the signing of this agreement. Xcyte will make a cash payment of US$300K at the closing of the Transaction (the "Closing") today. Xcyte will also execute a promissory note in the principal amount of US$200K, which will be payable by Xcyte in four equal quarterly installments of US$50K, commencing on July 1, 2024 to the Seller. During the twelve months ended December 31, 2023, A+ generated US$1.4 million in revenue and approximately US$207K in normalized EBITDA[footnoteRef:1] (unaudited). During the same period, being the twelve months ended December 31, 2023, Xcyte generated revenue and a normalized EBITDA loss of approximately US$1.2 million and US$915K[footnoteRef:2] respectively (unaudited). This transaction is Arms-Length and no finder fees have been paid in relation to it.
A+ Conferencing operates a full-service conferencing services business, providing audio, video, and web conferencing services for medium to high volume customers, resellers, and agents. A+ Conferencing provides a comprehensive range of services, from reservation-less conference calling to web conferencing and video email, tailored to meet specific client needs.
"The combination of the A+ and Xcyte businesses creates a company with a combined 30+ years of experience and talent. The synergies are expected to enhance our clients' overall experience and provide a high level of service excellence in the conferencing services arena”
A+ CEO Mike Burns
“We believe combining A+ and Xcyte’s conferencing businesses will bolster our service offering, enabling us to begin to scale our revenue and EBITDA as we progress the Company to its medium term growth goals. This acquisition is the first from our deep M&A funnel, and is intended to help Xcyte grow our infrastructure, talent and client base, and accelerate our organic growth.”
Xcyte CEO, Randy Selman
About A+ Conferencing
Founded in 2000, and led by Mike Burns, A+ Conferencing specializes in audio, operator assisted, web and desktop video conferencing solutions for businesses and non-profit organizations. A+'s services range from small conference calls to large townhall meeting calls with thousands of conferees on each call. For more information, visit www.aplusconferencing.com
About Xcyte Digital Inc.
Xcyte Digital (TSXV: XCYT) is a spatial computing event technology aggregator and developer providing high value, cost-effective, multi-platform subscription services to host online virtual and immersive events. Xcyte was formed in 2022 through an amalgamation of operating businesses and assets in the virtual & immersive event sectors. The Company went public on the TSX Venture Exchange on November 15, 2023. Based in Fort Lauderdale, FL, Xcyte has operations in London, UK, Charlotte, NC and Union, NJ. Xcyte provides immersive event technology, virtual event technology and event support services. Visit us at xcytedigital.com.
Non-IFRS Financial Measures
This press release may include references to certain non-IFRS financial measures. These non-IFRS measures do not have any standardized meanings prescribed by International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and are therefore unlikely to be comparable to similar measures presented by other companies. Accordingly, they should not be considered in isolation, in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with IFRS.
For further information, please contact:
Xcyte Digital Corp.
Randy Selman, Chief Executive Officer and Director
Phone: (647) 777 7501
Email: investment@xcytedigital.com
Randy Selman, Chief Executive Officer and Director
Phone: (647) 777 7501
Email: investment@xcytedigital.com
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Information
Certain information in this news release constitutes forward-looking statements and forward-looking information under applicable Canadian securities legislation (collectively, "forward-looking information"). Forward-looking information in this release includes, but is not limited to, statements with respect to the expected synergies that Xcyte may realize as a result of the acquisition of A+, and the impact that the Transaction may have on Xcyte's growth prospects generally. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events. Forward looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by management as of the date of this news release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements and future events to be materially different from those expressed or implied by such forward-looking information, including that the A+ assets may not perform or generate revenue at the levels experienced historically; that there may be obstacles to absorbing the A+ assets into Xcyte's broader business; that the synergies anticipated by the A+ acquisition may not materialize to the extent expected or at all; and other factors that apply to the Company's business generally as described in greater detail in the documents filed under the Company's profile at www.sedarplus.ca. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. Investors are cautioned that undue reliance should not be placed on any such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Company. The Company does not intend, and does not assume any obligation, to update the forward-looking information in this release except as otherwise required by applicable law.
1 Non-IFRS measurement, A+ Normalized EBITDA of approximately US$207,200 for the twelve months ended December 31, 2023, was calculated based on a loss of $59,000 before interest ($0), taxes ($4,200), depreciation and amortization ($7,500), and considering non-recurring and discretionary partner compensation of $254,500.
2 Non-IFRS measurement, Xcyte Normalized EBITDA of a loss approximately $915,000 for the twelve months ended December 31, 2023, was calculated based on a loss of $3,715,000 before interest ($261,000), taxes ($0), depreciation and amortization ($13,000) and non-recurring listing expense ($1,016,000), stock based compensation ($872,000) and non-recurring professional fees related to the Company’s qualifying transaction ($638,000).