Mr. Mike Reinhart reports

QUISITIVE ANNOUNCES SALE OF PAYIQ

Quisitive Technology Solutions Inc. has entered into a definitive stock purchase agreement dated Nov. 28, 2023, with Fulcrum IT Partners 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 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, 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 Dec. 31, 2023.

Fulcrum and its related companies are leaders in the IT (information technology) 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 toward 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 long-standing 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 chief executive officer 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 chief executive officer 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 $12-million (U.S.), Quisitive will further consolidate time and resources toward continuing its vision of becoming the premier, global Microsoft partner through transformative solution services, high-value M&A (mergers and acquisitions), 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 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 $1,000 (U.S.) 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 $1,000 (U.S.) per share, for aggregate consideration of up to $27-million (U.S.).

Quisitive may also be entitled to additional contingent consideration in the form of performance earnouts if PayiQ achieves certain financial thresholds during the three-year period following the closing of the transaction. The amount of the earnout is a maximum of $18-million (U.S.) 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 per cent of PayiQ from Quisitive.

About Quisitive Technology Solutions Inc.

Quisitive 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. The company's cloud solutions business focuses on helping enterprises move, operate and innovate in the three Microsoft clouds.