Montreal, Quebec–(Newsfile Corp. – August 10, 2021) – GOLO Mobile Inc. doing business as Usewalter (TSXV: WLTR) (“Usewalter” or the “Company“) announces that its Board of Directors (the “Board“) has determined, after extensive and careful consideration of potential strategic alternatives, that it is in the best interests of the Company and its shareholders to dissolve the Company (the “Dissolution“). Notwithstanding the foregoing, until such time as shareholder approval for the Dissolution is received, the Company will continue to evaluate other opportunities that have the potential of providing a return to its shareholders.
The Board has called a special meeting of shareholders to be held on October 12, 2021 (the “Meeting“) in Montreal, at which time the shareholders will vote to approve by special resolution the voluntary Dissolution of the Company in accordance with the Canada Business Corporations Act. Shareholder approval for the Dissolution will be sought and must be approved by a special resolution of at least 66 2/3% of the votes cast by shareholders present in person or by proxy at the Meeting.
Notwithstanding the receipt of shareholder approval of the Dissolution, the Board will retain the discretion not to proceed if it determines that the Dissolution is no longer in the best interests of the Company and its shareholders. For example, if, prior to its Dissolution the Company receives an offer for a transaction that will, in the view of the Board, provide value to the shareholders, taking into account all factors that could affect valuation, including timing and certainty of payment or closing, proposed terms and other factors, the Dissolution could be abandoned in favour of such a transaction.
It is expected that the proxy materials, comprised of the notice of meeting, management information circular (the “Circular“) and instrument of proxy, describing the proposed Dissolution of the Company will be mailed out on or about September 20, 2021. Shareholders of the Company are encouraged to read the Circular as it will contain important information about the Dissolution process. A copy of the Circular will be available at www.sedar.com after the proxy materials are mailed to the shareholders in accordance with applicable laws.
Reasons for the Dissolution
In reaching its decision that the Dissolution is in the best interests of the Company and its shareholders, the Board considered a number of factors.
The Company has incurred significant operating losses and negative cash flow from operations since inception, resulting in an accumulated deficit of $51,756,157 as of March 31, 2021. The Company expects to incur further losses in the development of its business in the near‐term due to the continuing impact of the COVID-19 pandemic on its business.
The Company was in the process of upgrading and launching its mobile order platform to deliver a variety of concierge services to the commercial office tower sector when the COVID-19 pandemic began in early in 2020, which led to the closing of commercial office towers to the public and the commencement of remote business activity. Faced with the uncertainty of the duration and long-term impact of the COVID-19 pandemic, the Company determined to pivot its platform to other uses, focusing on a last mile delivery solution for properties in areas with high population density. This change in business strategy required the re-tooling of the Company’s platform, and the expansion and repurposing of its sales and marketing team to target developers and property managers of multi-residential buildings. Despite the Company’s efforts to date, the Company has been unable to secure any significant new arrangements with developers and property managers.
In the current environment, the Board does not believe that the Company has the ability to successfully implement its marketing strategy with respect to its SaaS‐based, smart building technology in time to generate sufficient revenue to stem continuing operating losses.
The Company has explored raising capital through equity issuances, strategic partnerships or debt financing. Discussions with current shareholders and outside lenders in that regard have not yielded positive results. Raising additional funds is chiefly dependent on the return to the central business core of the major business centers of users of commercial office building rental space, the timing of which, due to the COVID-19 pandemic, is uncertain. In addition, the Board considered the costs of both maintaining a listing on the TSX Venture Exchange (the “TSXV“) and complying with the requisite continuous disclosure obligations under applicable securities laws.
Based on this information, the Board’s business judgment of the risks associated with continuing the Company and the remote possibility of the Company acquiring additional financing on acceptable terms, if at all, or identifying a buyer or strategic transaction, the Board has concluded that dissolving the Company is in the best interests of the Company and its shareholders.
Dissolution Process and Distribution
Upon receipt of required shareholder approvals and any required regulatory approvals, the Company will proceed with the wind up of its business and affairs and the Company will be dissolved in accordance with the Canada Business Corporations Act.
It is expected that Usewalter shareholders will receive the net proceeds of the liquidation and distribution in one or more distribution installments.
The amount of the distributions will be determined by the Board following review of the Company’s tax and other potential liabilities, and its then cash on hand. The Board is not currently aware of any material item that could give rise to unforeseen tax liabilities or other liabilities or costs which would materially reduce the amount of cash available for distribution to Usewalter shareholders, but there is no assurance that this will remain the case.
The Company cautions investors that no distributions or returns of capital have been declared by the Board at this time. Notwithstanding receipt of shareholder approvals for the matters described above, the Board may at any time determine that the Dissolution is not the best alternative for maximizing shareholder value and decide not to proceed to implement the proposed transactions.
Further details regarding the timing of and process of the Dissolution will be included in the proxy materials.
TSXV Listing and Reporting Issuer Status
The common shares of the Company are currently listed on the TSXV and the Company is a reporting issuer in the provinces of Alberta, British Columbia and Ontario. If the requisite shareholder approval is received, the Company will take the appropriate steps to voluntarily delist from the TSXV and following the Dissolution will submit the certificate of dissolution to the Alberta Securities Commission, the British Columbia Securities Commission and the Ontario Securities Commission causing it to cease to be a reporting issuer.
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “may”, “will”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward-looking information or statements. All statements included herein, other than statements of historical fact, constitute forward-looking information and such information involves various risks and uncertainties. Specifically, and without limitation, this press release contains forward-looking statements and information relating to the preparation and mailing of the Circular and associated proxy materials, the approval of matters to be presented to shareholders at the Meeting and the Dissolution.
In respect of the forward-looking statements and information set out in this press release, the Company has provided such in reliance on certain assumptions that they believe are reasonable at this time, including: the inability of the Company to raise funds through the issuance of equity on acceptable terms, the Company’s high expected future losses in the development of its business and the remote possibility of the Company identifying a buyer or strategic transaction. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include risks and uncertainties inherent in the nature of the Dissolution, receipt of all required regulatory and shareholder approvals, changes in tax laws, the possible delay in the timing of the Dissolution and unknown liabilities which may be asserted in connection with the Dissolution. The Company does not undertake to update any forward-looking information except in accordance with applicable securities laws.
The Company cautions that the foregoing lists of assumptions and risks are not exhaustive. When relying on the Company’s forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing assumptions and risks and other uncertainties and potential events. The forward-looking information contained in this news release represents the expectations of the Company as of the date of this news release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. Usewalter does not undertake to publicly update or revise the forward-looking information contained in this news release to reflect new events or circumstances, except as required pursuant to applicable laws.
For Further Information:
Peter Mazoff, Chief Executive Officer
5 Quarters Investor Relations, Inc.
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