Globalive Technology is exercising its previously-disclosed
call right to acquire control of Flexiti, leveraging artificial
intelligence and machine learning to optimize Flexiti's
point-of-sale consumer financing solution. Flexiti is a leading
fintech point-of-sale lender in Canada with over 1 million customers and more
than $250 million in loan
receivables.
TORONTO, Jan. 9, 2019 /CNW/ - Globalive Technology Inc.
(TSX-V: LIVE) (the "Company"), a technology company focused on
developing innovative payment, billing and credit solutions for
consumers and businesses, today announced it is exercising a
previously-disclosed call right, from Globalive Capital Inc. ("GC")
over GC's wholly-owned subsidiary, 2629331 Ontario Inc. ("Flexiti
Holdco").
Flexiti Holdco owns 41.0% of, and has 51% voting control over,
the parent of Flexiti Financial Inc. ("Flexiti"), a leading
point-of-sale consumer financing solutions company in Canada with over 1 million customers and a
loan book of more than a quarter of a billion dollars.
Upon closing, the Company would acquire 100% of, and amalgamate
with, Flexiti Holdco (the "Transaction"). Consummation of the
Transaction is subject to certain conditions, including the Company
or Flexiti successfully raising equity financing, approval of the
TSX Venture Exchange ("TSX-V"), and minority shareholder approval
in accordance with Multilateral Instrument 61-101 ("MI 61-101").
The Company intends to raise approximately $10 million on a private placement basis, of
which GC expects to provide a lead order of $4 million.
The Transaction is subject to MI 61-101 as GC owns Flexiti
Holdco and GC is the controlling shareholder of the Company. As
previously disclosed, Anthony
Lacavera, the Company's Chief Executive Officer, controls
GC. Upon completion of the amalgamation, as previously disclosed,
the Company would assume $7.5 million
in secured debt obligations of Flexiti Holdco (convertible into
shares of Globalive Technology at $1.00 per share), as well as a $6 million debt obligation, which (plus
approximately $0.75 million in
accrued interest and fees) would be due and payable to GC, which
provided $2.6 million to Flexiti in
bridge financing earlier this week.
Further details regarding the call right can be found in the
press release of the Company dated June 21,
2018 and in its other SEDAR filings. In addition, the
Company intends to call a shareholder meeting and to file on SEDAR
and mail to shareholders a management information circular and
related materials in the coming weeks that will contain further
details regarding the Transaction.
Separately, depending on market conditions and other factors,
the Company is contemplating acquiring the balance of Flexiti on
terms acceptable to the Company and to Flexiti's other existing
shareholders. Discussions regarding such an acquisition are only
preliminary at this point and no assurance can be provided that
such a transaction or even an agreement relating to such
transaction will be reached.
Flexiti's award-winning technology delivers instant credit
approvals for customers at the point of sale for big–ticket
retailers, both in-store and online. The omnichannel solution is
fully automated, 100% paperless and can adjudicate loan
applications in less than 3 minutes with high approval rates,
helping to drive significant increases in financed sales volumes
over other more conventional financing products. In June 2018, Flexiti acquired TD Financing
Services' Canadian private label credit card portfolio on
which more than 2 million transactions valued at more than
$3 billion have been
facilitated. Flexiti's loan receivables as at November 30, 2018 total approximately
$255 million. As a result of the
acquisition and the company's strong organic growth, Flexiti has
experienced growth in loan originations of 270% in the past
year.
As previously announced, the Company has entered into a
technology development agreement with Flexiti focused on optimizing
consumer financing at the point–of–sale. The Company intends to
leverage artificial intelligence and machine learning applications
with Flexiti's historical loan data to increase the volume of
high–quality loans on the company's books while reducing instances
of bad debt and the associated collection costs. The Company also
intends to leverage the AI software to develop a loyalty program
for retailers and to further drive sales and repeat purchases at
Flexiti's retail partners. The Company will retain the ability to
license the AI software solution to non-competitive financial
services firms worldwide once it is operational at scale.
"Flexiti has demonstrated an enviable ability to execute on its
growth strategy and establish itself as a market leader," said
Anthony Lacavera, the Company's
Chief Executive Officer. "We see phenomenal potential to leverage
artificial intelligence in the company's point–of–sale
solutions and we look forward to working closely with
Peter Kalen and his team to realize
that vision."
"We're pleased to be deepening our partnership with Globalive
Technology," said Flexiti Chief Executive Officer Peter Kalen. "The AI–driven software solutions
we're building together will enable smarter lending decisions and
ultimately drive higher sales at Flexiti's merchant partners."
About Globalive Technology Inc.
Globalive Technology
is a next generation software company and venture partner
developing innovative solutions to disrupt traditional industries
by leveraging artificial intelligence and machine learning
technology stacks, with a particular focus on delivering innovative
payment, billing and credit solutions. Globalive Technology is
controlled by Globalive Capital Inc., which has founded and
co-founded 12 businesses over the past 20 years with six successful
exits ranging from $10M to
$1.3B USD. It has also made over 100
venture investments and has over 45 technology companies in its
portfolio. For more information, visit www.globalivetech.com.
About Flexiti Financial Inc.
Flexiti has reimagined
point-of-sale (POS) consumer financing to drive sales for retailers
in-store and online and is one of Canada's leading private label credit card
issuers. Through its award-winning platform, Flexiti delivers a POS
financing experience across any device that is customer-centric,
simple and intuitive. Without the need to integrate into existing
POS systems, retail partners can easily offer the same fast and
paperless financing solution across all retail locations and sales
channels to increase revenue and build loyalty through repeat
purchases. Flexiti's joint venture with Globalive Technology
demonstrates its commitment to innovation in the payments space
through the development of solutions leveraging artificial
intelligence. With high approval rates, innovative products and
services, flexible promotional offers and a partnership-first
approach, Flexiti is helping people improve their lives through
better financing. For more information, visit www.flexiti.com.
For investor inquiries:
Melanie Barbeau
Account Manager, Renmark Financial Communications
InvestorRelations@globalivetech.com
For media inquiries:
Rob
Moysey
Communications Manager, Globalive
Media@globalivetech.com
CAUTION REGARDING FORWARD-LOOKING INFORMATION
This
news release contains forward-looking statements relating to the
Company, its software and artificial intelligence
development projects, its exercise of the call right to acquire
control of Flexiti, its contemplation of further capital raises,
including the contemplated $10
million private placement, and other matters, as well as
forward-looking statements about Flexiti, its products and
services, financial performance, and existing and future
technologies. Such forward-looking statements are identified
by terms such as "will", "is exercising", "subject to",
"contemplating", "of up to", "intends", "once it is",
"preliminary" and similar expressions. All statements, other
than statements of historical fact included in this release,
including those noted above, are forward-looking statements that
involve risks and uncertainties. There can be no assurance that
such statements will prove to be accurate and actual results and
future events could differ materially from those anticipated in
such statements. Important factors that could cause actual results
to differ materially from the Company's expectations include an
inability to consummate the proposed transactions, failure to
satisfy the necessary conditions to the transaction including TSX-V
approval, shareholder approval and raising adequate financing, a
material change in Flexiti's business, a breakdown in the Company's
relationship with Flexiti, Flexiti not performing in accordance
with expectations or historical trends, difficulties integrating
Flexiti into the Company's existing management and administrative
structure, software not functioning as expected,
difficulties or delays in developing the proposed software, the
software not functioning as expected, third parties not using or
responding to the software as expected, competitors
operating in the same spaces or industries, economic conditions
making the technologies or licenses not as attractive as expected,
difficulties raising capital and/or meeting the requirements for
investors to provide capital, and other risks as set out in the
Company's Filing Statement available on its SEDAR page at
www.sedar.com.
The reader is cautioned that assumptions used in the
preparation of any forward-looking information may prove to
be incorrect. Events or circumstances may cause actual results to
differ materially from those predicted as a result of
numerous known and unknown risks, uncertainties, and other
factors, many of which are beyond the control of the
Company. The Company cannot guarantee that any of the
forward-looking statements contained in this press release will
occur as disclosed herein or at all. The reader is cautioned not to
place undue reliance on any forward-looking information.
Such information, although considered reasonable by
management at the time of preparation, may prove to be
incorrect and actual results may differ materially from those
anticipated. Forward-looking statements contained in this news
release are expressly qualified by this cautionary statement. The
forward-looking statements contained in this news release are made
as of the date of this news release and the Company will only
update or revise publicly the included forward-looking statements
as expressly required by Canadian securities law.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Globalive Technology
