Mr. Michel Guay reports

ATW TECH INC. ANNOUNCES UPDATE ON ACQUISITION, FINANCING AND CHANGE OF AUDITOR

ATW Tech Inc. has provided an update on a previously announced acquisition, its intention to complete a financing in the amount of $1.55-million and a change of auditor.

Acquisition

On June 21, 2022, the company announced its intention to proceed with the acquisition of two target entities and subsequently provided an update on these transactions on Nov. 25, 2022. The company intends to close the acquisition of one of these two companies (the target) by May 31, 2023.

The target provides data analytics tools and expert consulting services to help clients drive business transformation through sophisticated data strategies. Fuelled by strong management, more than 15 seasoned employees and tailored analytics solutions, the target helps clients fast-track their data initiatives and drive tangible value in the fields of public safety, finance, retail and more.

The base purchase price is $2.6-million, consisting of a combination of (i) $250,000 in cash; (ii) the assumption of debt in an estimated amount of $500,000; and (iii) $1.85-million in units of the company, each consisting of one common share of the company together with a warrant entitling the holder to acquire one share at an exercise price of seven cents for a period of 36 months from the date of closing. The purchase price is subject to customary postclosing adjustments for working capital, transaction costs and net debt. This transaction and the purchase price also remain subject to due diligence acceptable to ATW. This transaction is at arm's length and no finder's fees are expected to be paid by ATW in connection with the transaction.

The transaction is expected to close on or before May 31, 2023. The transaction is subject to a number of closing conditions, including the approval of the TSX Venture Exchange.

Financing

In order to, among other things, finance the transaction, the corporation intends to complete a financing by way of a private placement and two secured loans.

The non-brokered private placement consists of 19.5 million units at a price of five cents per unit for aggregate gross proceeds of $975,000. The company expects to enter into secured loan agreements with each of (i) Gercanoit Inc., for an amount of $250,000, and (ii) Sifaben Hypotheque sec, for an amount of $325,000. The loans have a maximum term of 12 months and bear interest at an annual rate of 18 per cent. In addition, ATW may prepay all or a portion of the loans at any time without penalty.

The proceeds of the financing will be used by ATW for the benefit of ATW and its subsidiaries, for the transaction, and its continuing operations.

The financing is considered a related party transaction within the meaning of Regulation 61-101 -- Protection of Minority Security Holders in Special Transactions, as (i) certain insiders, including senior officers and directors of the corporation, are expected to subscribe for up to an aggregate of five million units in the private placement, and (ii) the lenders are insider of a company controlled by an insider of the corporation. The financing is exempt from the formal valuation requirement and the minority shareholder approval requirement of Regulation 61-101 (pursuant to sections 5.5(a) and 5.7(a)), as neither the fair market value of the units to be distributed to the insiders, nor the value of the consideration received in exchange for such units, nor the value of the loans exceeds 25 per cent of the market capitalization of the corporation. The financing has been approved by the independent directors of the company. The company did not file a material change report in respect of the financing more than 21 days prior to the closing date of the financing for valid business reasons in order to ensure that the closing took place within a time frame consistent with the normal market practice for transactions of this nature.

The securities issued under the private placement will be subject to a four-month restricted trading period in accordance with the applicable securities legislation. In addition, the private placement is subject to the approval of the TSX-V.

Change of auditor

The company has decided to replace its auditor, the firm Raymond Chabot Grant Thornton SENCRL (the predecessor auditor), with the firm Guimond Lavallee Inc. (the new auditor).

The predecessor auditor has resigned as auditor of ATW on its own initiative, effective April 21, 2023. The board of directors of the company has considered and approved the resignation of the predecessor auditor and the appointment of the new auditor, effective April 21, 2023.

To date, there are no restrictions in the predecessor auditor's reports for the fiscal years ended Dec. 31, 2021, and 2020, as they do not contain a modified opinion or reportable event as defined in Regulation 51-102. In accordance with Regulation 51-102, the notice of replacement auditor and the required letters from the predecessor auditor and the new auditor have been reviewed by the board of directors and will be duly filed on SEDAR.

About ATW Tech Inc.

ATW Tech is a technology company and owner of several recognized technology platforms, such as Semeon Analytics, Option.vote and Voxtel. Semeon Analytics is a highly accurate and flexible text analysis platform for customer reviews and uses a unique combination of machine learning and natural language processing (NLP) to discover significant trends in customer reviews across all channels. Option.vote offers a customized multimethod voting system for unions, political parties, professional associations, and anyone looking for a secure way to reduce their voting costs and improve their participation rate. VoxTel specializes in telephone billing and alternative payment solutions for fixed and mobile lines.

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