Xcyte Digital Corp. to Acquire Assets of Webinar.net

Xcyte Digital Corp. has signed an agreement to acquire the assets of Webinar.net, which generated approximately US$2.8 million in annual revenue and EBITDA of US$0.6 million for the twelve months ended December 31, 2023 (unaudited). Xcyte’s pro forma annual revenue run-rate was approximately US$2.2 million with prior acquisitions and EBITDA loss of US$0.7 million normalized before synergies for the twelve months ended December 31, 2023 (unaudited). The acquisition will be funded through shares, warrants, contingent value rights, and debt.

The consideration for the transaction includes: 1) four hundred (400) Multiple Voting Shares, each convertible into ten thousand 10,000 Subordinate Voting Shares in Xcyte’s capital, 2) Contingent Value Rights of up to an additional five hundred and fifty (550) MV Shares, based on Webinar achieving certain revenue and EBITDA milestones within four years of the transaction closing, 3) two hundred thousand warrants, each exercisable into one SV Share at an exercise price of C$0.25 per SV Share for five years after closing. Pursuant to the asset purchase agreement, Xcyte, indirectly via the purchaser, proposes to acquire certain intangible assets of Webinar, including certain technology, customer accounts, deferred revenue, and cash and cash equivalents of not less than six hundred thousand dollars (US$600,000). Xcyte has also agreed to assume approximately US$1.4 million in debt at an annual interest rate of 11.5% owing by Webinar, which will be secured and must be repaid within 18 months of closing. The CVRs can be earned over 4 years from closing based on quarterly and yearly gross revenue and EBITDA targets along with time. Xcyte will also assume approximately $1.7 million in deferred revenue to be recognized as revenue over the twelve months following the transaction.

Closing is expected on or about May 24, 2024 and is subject to customary closing conditions including board approval and TSX Venture Exchange approval. The MV Shares are being issued to maintain Xcyte’s foreign private issuer status. Subject to compliance with applicable securities laws, Webinar may direct Xcyte to register certain MV Shares issued to Webinar to certain creditors. All MV Shares and CVRs will be deposited in escrow.

During the trailing twelve months ended December 31, 2023, the Webinar assets generated approximately US$2.8 million in revenue, positive EBITDA, and approximately US$343,000 net income. During the twelve months ended December 31, 2023, Xcyte and prior acquisitions generated revenue of approximately US$2.2 million and EBITDA loss of US$0.7 million. As a result, the combined businesses would have had pro forma annual revenue run rate of US$5.0 million before any revenue or cost synergies.

Webinar.net is an online presentation platform offering a simple, engaging, and cost-effective solution for global webinars with branded experiences. Hosted on the cloud with enterprise-grade scale and security, Webinar.net simplifies online meetings, handling millions of attendees worldwide. Founded by professionals with over three decades of experience, Webinar.net provides a user-friendly, affordable solution for marketing, training, and corporate presentations, offering live, simulive, and on-demand streaming options. Webinar.net’s infrastructure is expected to be incorporated into Xcyte’s offerings to provide customers with unlimited attendee scale and drive traffic to create actionable engagement while continuing to enjoy clear, cost-effective pricing.