Xcyte Digital Corp. Signs Agreement to Purchase Assets of Webinar.net

• The assets of Webinar.net being acquired generated US$2.8 million annual revenue and EBITDA of US$0.6 million for the twelve months ended December 31, 2023 (unaudited)¹
• Xcyte Pro Forma annual revenue run-rate of 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)²
• Acquisition to be funded via Shares, Warrants, Contingent Value Rights, and Debt

Not for distribution to United States newswire services or for dissemination in the United States

POMPANO BEACH, FL / ACCESSWIRE / May 1, 2024 / Xcyte Digital Corp. (TSXV:XCYT) ("Xcyte", the "Parent" 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 as well as providing professional managed services for physical and hybrid events, announced it has signed an asset purchase agreement on May 1, 2024 with Webinar.net Incorporated ("Webinar" or "Seller"), pursuant to which a wholly owned subsidiary of the Company ("Purchaser") will acquire all of the assets of Webinar, a Delaware corporation (the "Transaction"), including Webinar's technology and revenue-producing assets.

The consideration for the Transaction is comprised of 1) four hundred (400) Multiple Voting Shares (each an "MV Share", each of which is convertible into ten thousand 10,000 Subordinate Voting Shares in the capital of the Parent each, an "SV Share"), 2) Contingent Value Rights (CVR) of up to an additional five hundred and fifty (550) MV Shares, based upon Webinar attaining certain revenue and EBITDA milestones within four years of the Transaction closing, 3) two hundred thousand Warrants (200,000), each of which will be exercisable into one SV Share at an exercise price of C$0.25 per SV Share for five years after the closing of the Transaction. Pursuant to the terms of the asset purchase agreement (APA), Xcyte, indirectly via the Purchaser, proposes to acquire certain intangible assets of Webinar (collectively, the "Assets"), including certain technology (Software as a Service, source code and all derivatives); customer accounts; deferred revenue, and cash and cash equivalents of not less than Six Hundred Thousand Dollars (US$600,000). The Issuer has also agreed to assume debt in the approximate amount of US$1,400,000 at annual interest rate of 11.5% (the "Montage Debt") owing by Webinar to Montage Capital II, L.P. ("Montage"), which will be secured by, among other things, a security interest in the Assets and a personal guarantee by a principal of Webinar. The Montage Debt must be repaid in full by the Issuer by the date that is 18 months following the closing of the Transaction ("the Closing") and will be paid back from general operations. It is expected that Montage's existing security will remain in place following the closing of the Transaction and no further security or guarantees will need to be provided by the Issuer with respect to the Montage Debt. The CVRs can be earned over 4 years from closing based on Quarterly and Yearly Gross Revenue and EBITDA targets along with Time. In addition, the Issuer will assume approximately $1.7m of deferred revenue to be serviced and recognized as revenue over the twelve months following the transaction. Servicing the deferred revenue is not expected to incur any incremental costs alongside servicing new revenue and clients are not intitled to any refunds.

All of the securities that may be issued in connection with the Transaction will be subject to a hold period under applicable Canadian securities laws of four months and one day from the date of issuance and will be restricted securities under United States securities laws. None of the securities will be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or applicable state securities laws, and may not be offered or sold to, or for the account or benefit of, persons in the United States or "U.S. Persons" (as such term is defined in Regulation S under the 1933 Act), unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration is available.

Closing of the Transaction is expected to occur on or about May 24, 2024 and is subject to the satisfaction of customary closing conditions, including approval of the board of directors of the Company and The TSX Venture Exchange (the "TSXV"). This transaction is Arms-Length and no finder fees have been paid in relation to it.

The MV Shares are being issued to Webinar in order to maintain the Issuer's foreign private issuer status. Subject to compliance with applicable securities laws, Webinar may direct the Issuer to register certain of the MV Shares to be issued to Webinar in connection with the APA to certain creditors of Webinar. All MV Shares and CVRs (including the MV Shares underlying the CVRs but excluding the Warrants and SV Shares underlying the Warrants) will be deposited into escrow pursuant to the terms of, or on terms substantially similar to, the Issuer's Value Security Escrow Agreement dated effective November 9, 2023, subject to execution of a joinder thereto by Webinar and any Webinar creditor to be issued Consideration Securities pursuant to the APA.

During the trailing twelve months ended December 31, 2023, the Webinar assets being acquired generated approximately US$2.8 million in revenue, positive EBITDA (unaudited) and approximately US$343,000 Net Income (unaudited) as per the table below. 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(unaudited). As a result, for the year ended December 31, 2023 the combined Xcyte businesses would have Pro Forma annual revenue run rate of US$5.0 million before any revenue or cost synergies. The revenue estimates (unaudited) provided by Webinar contains non-GAAP measures and future oriented financial information (FOFI).

Webinar.net Financial Summary

Balance Sheet		As of December 31,
		2023 (Unaudited)				2022 (Unaudited)
		($USD)				($USD)
Assets			1,510,147				2,202,264
Liabilities3			4,292,305				5,327,932
Shareholders' Equity			(2,782,158	)			(3,125,667	)
Income Statement		Years ended
		2023 (Unaudited)				2022 (Unaudited)
		($USD)				($USD)
Revenue			2,787,857				3,946,340
Cost of Sales			551,006				1,347,148
Gross Profit			2,236,851				2,599,192
Operating Expenses			1,739,983				4,183,657
Interest, Taxes and Other			154,379				(366,030	)
Net Income (Loss)			342,490				(1,218,436	)

Webinar.net is a 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 the complex world of online meetings, handling millions of attendees worldwide. Founded by professionals with over three decades of experience in streaming/virtual events, 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.

"I am thrilled to join a team of digital event pioneers at Xcyte Digital. Their wealth of expertise will be instrumental as we collaborate to redefine the landscape of enterprise grade web-based event solutions. With a mutual dedication to excellence, we are primed to transform the webinar industry and establish unprecedented standards for exceptional service and software," said webinar.net CEO Mike Nelson.

"The addition of Webinar.net further enhances Xcyte's suite of solutions by adding a technology platform that was built for and hosted on the cloud with enterprise grade scale and security. Webinar.net infrastructure is built to handle millions of online presentation attendees from global businesses. This acquisition further enhances our revenue and EBITDA growth in alignment with our medium-term expansion objectives," said Xcyte CEO Randy Selman.

¹ Non-IFRS measurement, Webinar EBITDA of approximately US$615,000 for the twelve months ended December 31, 2023, was calculated based on a net income of $342,000, interest $272,000, taxes $1,000, depreciation and amortization ($0).

² Non-IFRS measurement, Xcyte Digital EBITDA loss of approximately $700,000 for the twelve months ended December 31, 2023, was calculated based on net loss of $3,774,000, interest of $261,000, taxes of $4,200, depreciation of $20,500 and non-recurring expenses of $254,500 related to discretionary partner compensation, $1,016,000 non-recurring listing expenses, $872,000 of stock-based compensation and $638,000 of non-recurring professional fees related to the Company's qualifying transaction, and incorporates the results of both Xcyte Digital and A+ Conferencing, Ltd. ("A+").

³ Liabilities to be assumed include the Montage Debt, and deferred revenue of approximately US$1.6m.

About Webinar.net

Webinar.net is at the forefront of webinar technology, providing a modern, feature-rich platform that simplifies the hosting and management of webinars. Known for its ease of use and innovative features, Webinar.net is the choice of businesses looking for reliable and cutting-edge webinar solutions. For more information, visit www.webinar.net

About Xcyte Digital Inc.

Xcyte Digital (TSXV: XCYT) is 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 as well as providing professional managed services for physical and hybrid events. Xcyte was formed in 2022 through an amalgamation of operating businesses & assets in the virtual & immersive event sectors. The Company went public on the TSX Venture exchange on November 15, 2023. Headquartered in Toronto Ontario (Canada) and Fort Lauderdale, FL (USA), Xcyte also has personnel and operations in London, UK; Charlotte, NC; Union, NJ and Cape Town, SA. 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, including Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"). 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.

The measures above have been described and presented in order to provide shareholders, potential investors and analysts with additional measures for assessing the performance of Xcyte Digital, Webinar.net and, where applicable, the pro forma expectations of the combined entity, as applicable, and should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS.

Future-Oriented Financial Information

This press release contains information that may constitute future-oriented financial information or financial outlook information ("FOFI") about Xcyte Digital, Webinar.net and the combined entity's prospective financial performance, financial position or cash flows, all of which is subject to the same assumptions, risk factors, limitations and qualifications as set forth above. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may provide to be imprecise or inaccurate and, as such, undue reliance should not be placed on FOFI. Xcyte Digital, Webinar.net or the combined entity's actual results, performance and achievements could differ materially from those expressed in, or implied by, FOFI. Xcyte Digital and Webinar.net have included FOFI in this press release in order to provide readers with a more complete perspective on the combined entity's future operations and management's current expectations regarding the combined entity's future performance. Readers are cautioned that such information may not be appropriate for other purposes. FOFI contained herein was made as of the date of this press release. Unless required by application laws, Xcyte Digital and Webinar.net do not undertake any obligation to publicly update or revise any FOFI statements, whether as a result of new information, future events, or otherwise.

For further information, please contact:

Xcyte Digital Corp.
Randy Selman, Chief Executive Officer and Director
Phone: [phone]
Email: [e-mail]

Investor Relations
Nikhil Thadani, Sophic Capital
Email: [e-mail]
Phone: [phone]

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 Closing of the Transaction, expected timing of the Closing, final terms of the Transaction, approval of the Transaction by the TSXV, the expected synergies that Xcyte may realize as a result of the acquisition of Webinar.net, 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 Webinar.net assets may not perform or generate revenue at the levels experienced historically; that there may be obstacles to absorbing the Webinar.net assets into Xcyte's broader business; that the synergies anticipated by the Webinar.net 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.

SOURCE: Xcyte Digital Corp.

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