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

 Martello Technologies Group Inc. 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 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.  

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 61101“). 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).

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