Quisitive Announces Sale of PayiQ

TORONTO, Nov. 28, 2023 (GLOBE NEWSWIRE) — Quisitive Technology Solutions Inc. (“Quisitive” or the “Company”) (TSXV: QUIS, OTCQX: QUISF), a premier Microsoft solutions provider and payments solutions provider, announced that it has entered into a definitive stock purchase agreement dated November 28, 2023 with Fulcrum IT Partners (“Fulcrum”) pursuant to which Quisitive has agreed to sell its LedgerPay, Inc (“PayiQ”) subsidiary which includes the PayiQ cloud-enabled payment processing platform, operations and team (the “Transaction”). The details of the Transaction are set forth in a definitive share purchase agreement between the Company, a wholly-owned subsidiary of the Company, and a wholly-owned subsidiary of Fulcrum (“Fulcrum Payments”), that was negotiated at arm’s length. Completion of the Transaction is subject to a number of standard conditions and is expected to close on or about December 31, 2023.

Fulcrum and its related companies are leaders in the IT services and solutions industry with operations throughout North America and Europe. Fulcrum, a private holding company, specializes in investing in companies poised for significant growth and industry leadership through organic expansion and strategic consolidations. The planned divestiture opens doors for PayiQ’s platform to rapidly advance towards commercialization. The Transaction leverages Fulcrum’s substantial resources and its strong retail industry customer relationships, providing PayiQ with avenues for growth, including payments-focused mergers and acquisitions. The longstanding history and existing rapport between key leaders of Fulcrum and Quisitive, coupled with Fulcrum’s profound expertise and relationships, position them as the ideal catalysts to spearhead the next stage of the PayiQ business, ensuring rapid growth and uncovering new opportunities.

Moving forward, Quisitive will forge a close strategic alliance with Fulcrum to support the commercialization of PayiQ as well as leverage Quisitive’s partnership with Microsoft, and the Company’s Microsoft IT solutions capabilities, creating incremental synergies between Fulcrum’s IT Services companies and Quisitive’s Cloud Solutions business. Additionally, Quisitive will provide transition support services for a period of time, including IT, finance and human resources to assist with Fulcrum’s PayiQ commercialization efforts.

“This shift allows Quisitive to realign resources and focus on our primary revenue-generating activities, which are central to our organization,” stated Quisitive CEO Mike Reinhart. “Concurrently, it provides PayiQ with the necessary space, funding, and additional expertise to bring the product’s full potential to realization. We are confident that this move will greatly benefit our company as we refocus and grow our core business areas.”

Upon closing of the Transaction, Quisitive will secure a position on the Board of Directors of Fulcrum’s Payments business, with CEO Mike Reinhart assuming a role as a board member.

“Fulcrum is excited to be acquiring PayiQ and looks forward to moving ahead as quickly as possible towards commercialization of its payment solutions,” said Kyle Lanzinger, President of Fulcrum. “PayiQ’s strong team and unique value proposition in the market set the stage for PayiQ to be a leader in the payment solutions space for years to come.”

The divestiture of the PayiQ platform provides several benefits to Quisitive. In addition to reducing the capital allocation of the Company annually by nearly US$12 million, Quisitive will further consolidate time and resources towards continuing its vision of becoming the premier, global Microsoft partner through transformative solution services, high-value M&A, and superior customer service. More specifically, the Company will deepen its focus in key strategic areas of the Cloud Solutions business, including artificial intelligence and industry-focused services.

Acquisition Terms

The consideration for the sale of the PayiQ subsidiary will consist of the issuance of 27,000 preferred shares of Fulcrum Payments (the “Consideration Shares”) to Quisitive. On the third anniversary of the effective date of the Transaction, the Consideration Shares shall be automatically converted into common shares of Fulcrum Payments with a value equal to US$1,000 per share, provided that the common shares of Fulcrum are listed and posted for trading on a recognized stock exchange in Canada or the United States. If Fulcrum’s common shares are not publicly traded at such time, Quisitive shall have the right to require Fulcrum to purchase all or a portion of the Consideration Shares for a purchase price equal to US$1,000 per share, for aggregate consideration of up to US$27 million.

The consideration for the sale of the PayiQ subsidiary will consist of the issuance of 27,000 preferred shares of Fulcrum Payments (the “Consideration Shares”) to Quisitive. On the third anniversary of the effective date of the Transaction, the Consideration Shares shall be automatically converted into common shares of Fulcrum Payments with a value equal to US$1,000 per share, provided that the common shares of Fulcrum Payments are listed and posted for trading on a recognized stock exchange in Canada or the United States. If Fulcrum Payments’ common shares are not publicly traded at such time, Quisitive shall have the right to require Fulcrum Payments to purchase all or a portion of the Consideration Shares for a purchase price equal to US$1,000 per share, for aggregate consideration of up to US$27 million.

Quisitive may also be entitled to additional contingent consideration in the form of performance earn-outs if PayiQ achieves certain financial thresholds during the three-year period following the closing of the Transaction. The amount of the earn-out is a maximum of US$18,000,000 payable in cash based on PayiQ exceeding revenue growth targets.

Immediately prior to entering into the stock purchase agreement, former minority shareholders of PayiQ exercised their put right and were issued an aggregate of 4,238,000 common shares of Quisitive in exchange for their equity interests in PayiQ, resulting in Fulcrum agreeing to acquire 100% of PayiQ from Quisitive.

About Quisitive:
Quisitive (TSXV: QUIS, OTCQX: QUISF) is a premier, global Microsoft partner that harnesses the Microsoft cloud platform and complementary technologies, including custom solutions and first-party offerings, to generate transformational impact for enterprise customers. Our Cloud Solutions business focuses on helping enterprises move, operate, and innovate in the three Microsoft clouds. For more information, visit www.Quisitive.com and follow @BeQuisitive on X (formerly known as Twitter).

About Fulcrum IT Partners
Fulcrum IT Partners is the parent company of an expanding portfolio of established and successful IT solution companies in the UK, Canada, and the U.S., with proven expertise in cybersecurity, cloud, consumption-based IT and managed services. Fulcrum is dedicated to using technology to deliver better business outcomes to vertically focused industries through its breadth of expertise and longstanding relationships with respected industry partners.

Quisitive Investor Contact
Matt Glover and John Yi
Gateway Investor Relations
QUIS@gatewayir.com
949-574-3860

Tami Anders
Chief of Staff
tami.anders@quisitive.com
972.573.0995

Cautionary Note Regarding Forward Looking Information

This news release contains certain “forward‐looking information” and “forward‐looking statements” (collectively, “forward‐looking statements”) within the meaning of applicable Canadian securities legislation regarding Quisitive and its business. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward‐looking statements. Forward‐looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward‐looking statements. These forward-looking statements include, but are not limited to, statements relating to: the completion of the Transaction; the anticipated benefits of the Transaction to Quisitive and its shareholders; the future growth potential of the Company on a post-Transaction basis; and future financial performance.

These forward-looking statements are based on reasonable assumptions and estimates of management of the Company at the time such statements were made. Actual future results may differ materially as forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors, among other things, include: the expected results from the completion of the Transaction; fluctuations in general macroeconomic conditions; fluctuations in securities markets; the Company’s limited operating history; future capital needs and uncertainty of additional financing; the competitive nature of the technology industry; unproven markets for the Company’s product offerings; lack of regulation and customer protection; the need for the Company to manage its planned growth and expansion; the effects of product development and need for continued technology change; protection of proprietary rights; network security risks; the ability of the Company to maintain properly working systems; foreign currency trading risks; use and storage of personal information and compliance with privacy laws; use of the Company’s services for improper or illegal purposes; global economic and financial market conditions; uninsurable risks; changes in project parameters as plans continue to be evaluated; and those factors described under the heading “Risks Factors” in the Company’s annual information form dated May 23, 2023 available on SEDAR+ at www.sedarplus.ca. Although the forward-looking statements contained in this news release are based upon what management of the Company believes, or believed at the time, to be reasonable assumptions, the Company cannot assure shareholders that actual results will be consistent with such forward-looking statements, as there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking statements and information. There can be no assurance that forward-looking information, or the material factors or assumptions used to develop such forward-looking information, will prove to be accurate. The Company does not undertake any obligations to release publicly any revisions for updating any voluntary forward-looking statements, except as required by applicable 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.