Jasper Announces Transaction to Divest of its Operating Business

Trading Will be Suspended from the TSX Venture Exchange

June 14, 2024 7:18 PM EDT | Source: Jasper Commerce Inc.

Vancouver, British Columbia--(Newsfile Corp. - June 14, 2024) - Jasper Commerce Inc. (TSXV: JPIM) ("Jasper" or the "Company") today announced that it has settled the terms of an asset purchase agreement (the "Purchase Agreement") pursuant to which Jasper is to sell its Product Information Management ("PIM") business and related assets (the "Transaction") to Digital Commerce Payments Inc. ("DCP"), a private company that is arm's length to Jasper. The Purchase Agreement has not been executed pending the receipt by Jasper of the written consent of shareholders (the "Shareholder Consent") holding more than 50% of the issued and outstanding shares of Jasper.

The decision by the Board of Directors of Jasper to approve the Transaction follows a comprehensive process undertaken over several months to maximize value for the Company's stakeholders. The strategic review was initially focused on organizational changes in order to continue to operate the business as a going concern on a cash-flow positive basis by reducing expenses and increasing sales. However, among challenging operating conditions, Jasper was unable to achieve its objectives in this regard and was forced to explore other strategic alternatives such as capital raising transactions, business combination transactions and divestiture of the business.

Pursuant to the Transaction, Jasper's wholly-owned subsidiary, Jasper Interactive Studios Inc. ("JISI") will sell all of its assets to DCP for total consideration of up to $1,500,000 (subject to certain customary purchase price adjustments) with a revenue earn out over a three-year period following closing equal to 25% of gross revenue (not including sales taxes) earned by DCP in respect of the business undertaken by it in respect of the assets acquired pursuant to the Transaction subject to the maximum transaction consideration. Following completion of the Transaction, JISI will not have any active business operations or assets other than its contingent rights to receive the Earn-Out Payments, if any, and the Company's only assets will be its equity interest in JISI.

The proceeds from the Transaction will not be sufficient to discharge all of the liabilities of Jasper on a consolidated basis. As such the Transaction will not provide any economic return for Jasper shareholders. The net proceeds of the transaction, after payment of transaction expenses, are expected to be distributed to JISI's creditors in accordance with their relative ranking and applicable law.

The Transaction constitutes an arm's length transaction within the meaning of the policies of the TSX Venture Exchange (the "Exchange") and constitutes a "Reviewable Disposition" in accordance with Exchange Policy 5.3 - Acquisitions and Dispositions of Non-Cash Assets, and therefore remains subject to the review and acceptance of the Exchange. Moreover, Exchange Policy 5.3 requires shareholder approval for the Transaction. Accordingly, and as permitted by the policies of the Exchange, Jasper will obtain such shareholder approval by way of Shareholder Consent. A finder's fee is payable by Jasper to xiVentures Fund Management Inc., an arm's length party, equal to 3.5% of Transaction gross proceeds up to $1,000,000 and 5% on gross proceeds above $1,000,000 to the maximum gross proceeds for the Transaction of $1,500,000. Payment of the finder's fee is subject to acceptance by the Exchange.

The Transaction is expected to be completed as soon as possible following the receipt of the Shareholder Consent, currently targeted for on or before June 21, 2024. The Transaction remains subject to the satisfaction of customary closing conditions, including applicable regulatory approvals, including the acceptance of the Exchange, and the receipt of the Shareholder Consent. Further information regarding the Transaction will be provided in a disclosure document being prepared so that shareholders from whom Shareholder Consent is sought will be fully informed of the Transaction. An electronic copy of this disclosure document will be emailed to shareholders upon request.

Upon closing of the Transaction, should additional capital be available, the Company may focus its efforts on identifying and evaluating suitable assets or businesses to acquire or merge with, with a view to maximizing value for shareholders. The Company will have to raise additional capital to fund such initiatives. There can be no assurance that such capital will be available on reasonable terms, or at all, nor that the Company will be successful in pursuing any transaction.

In anticipation of the Transaction closing, DCP has provided JISI with a secured, non-interest bearing demand loan in the amount of $35,000 in order to fund certain of JISI's working capital needs. The security interest is a general security interest over the assets of JISI. It is expected that, subject to completion of the Transaction, JISI will satisfy the amounts owing in respect of this loan by setting such amount off against the purchase price otherwise payable by DCP to JISI under the Purchase Agreement.

Jasper also announces that the Exchange will suspend trading in the Company's securities as a result of a failure to meet continued listing requirements of the Exchange. Trading in Jasper's stock has been halted since April 22, 2024. It is not expected that trading will be able to resume as Jasper is not expected to meet the Exchange's continued listing requirements upon completion of the Transaction. The Exchange may transfer Jasper to the NEX, a separate board of the Exchange if Jasper fails to meet the ongoing minimum listing requirements of the Exchange.

Mag Saad, Chairman of the Board of Directors of Jasper, said, "The Company conducted a thorough review of strategic alternatives with the assistance of outside advisors. We evaluated a variety of potential outcomes and determined that the proposed Transaction, is the most viable option for Company stakeholders. We believe that DCP is well-suited to continue to provide excellent service to our customers and to continue to operate our excellent PIM platform."

"We are very excited to be acquiring Jasper's leading PIM platform, as it is a perfect fit within our technological stack. With our resources, we anticipate being able to provide first class service to Jasper's existing customer base and to expand its offering to other ecommerce participants." said Jeffrey Smith, Chief Executive Officer of DCP.

About Jasper Commerce Inc.

Jasper offers a PIM solution that has the objective of empowering eCommerce merchants to manage and merchandise their products from a single source of truth, facilitating them to sell more, sell faster and work smarter. Jasper's PIM is accessible from anywhere via a web-browser and is intended to simplify the process by which online merchants import product data into the PIM. Once uploaded, merchants can add various product data including product attributes, images, videos, marketing information, inventory quantities and price books and efficiently merchandise their products using various features that include, among other things, the ability to adjust product categorization, pricing data and other key metrics. Jasper's PIM also allows for automatic syncing to popular eCommerce storefronts, marketplaces, or other connected channels, whenever new products are added to the PIM.

For further information: Mag Saad, Chairman, magpsaad@gmail.com, (416) 930-1659

Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release is not an offer to sell or the solicitation of an offer to buy the securities in the United States or in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to qualification or registration under the securities laws of such jurisdiction. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from U.S. registration requirements and applicable U.S. state securities laws.

The TSX Venture Exchange Inc. has neither approved nor disapproved the contents of this press release.

Forward Looking Statements

This release may contain forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although Jasper believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Jasper expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Forward-looking statements in this news release include statements relating to: the stated terms, benefits, and timing of the Transaction; the Company's intentions to obtain all necessary approvals required to complete the Transaction, including obtaining shareholder consent for the Transaction; the time and manner in which the bridge financing is expected to be satisfied; and the stated plans of Jasper and JISI following completion of the Transaction and the availability of capital for such purposes.

Forward-looking information in this press release are based on certain assumptions and expected future events, namely: the Company's ability to carry out the stated terms and realize upon the stated benefits of the Transaction under the stated timelines; the Company's ability to obtain all necessary approvals required to complete the Transaction; and the Company's ability to carry out its stated plans, including the availability of capital for such purposes.

These statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from those expressed or implied by such statements, including but not limited to: the inability of the Company to continue as a going concern; the Company's inability to carry out the stated terms and realize upon the stated benefits of the Transaction under the stated timelines; the Company's ability to obtain all necessary approvals required to complete the Transaction; and the Company's ability to carry out its stated plans.

Readers are cautioned that the foregoing list is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. 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, including but not limited to: the Company's inability to carry out the stated terms and realize upon the stated benefits of the Transaction under the stated timelines; the Company's inability to obtain all necessary approvals required to complete the Transaction; and the Company's inability to carry out its stated plans.

Forward-looking statements contained in this press release are expressly qualified by this cautionary statement and reflect the Company's expectations as of the date hereof and are subject to change thereafter. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, estimates or opinions, future events or results or otherwise or to explain any material difference between subsequent actual events and such forward-looking information, except as required by applicable law.


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