CEO.CA Chairman's Briefing

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CALGARY, AB / ACCESSWIRE / October 30, 2023 / Ivrnet Inc. ("Ivrnet" or the "Company") (TSXV:IVI) announces that it has entered into a support agreement (the "Support Agreement") with N. Harris Computer Corporation (the "Purchaser"), an arm's length party and a wholly owned subsidiary of Constellation Software Inc. (TSX:CSU), R.C. Morris & Company S.O. Fund III Holdings Ltd ("RCM"), an arm's length party, David Snell ("Snell"), a director of the Company and a non-arm's length party, and Parlee McLaws LLP ("Parlee"), an arm's length party, (collectively, the "Supporting Creditors") for the Company to enter into a restructuring transaction whereby the Purchaser will acquire Ivrnet and Ivrnet will make a proposal (the "BIA Proposal") under the Bankruptcy and Insolvency Act (Canada) ("BIA"). In connection with the Support Agreement, Ivrnet has entered into an arm's length purchase agreement (the "Purchase Agreement") with the Purchaser whereby Ivrnet will issue 100 new common shares of the Company (the "New Common Shares") to the Purchaser, for an aggregate cash purchase price of $4,451,000, subject to certain adjustments (the "Transaction"), resulting in the Purchaser owning 100% of the issued and outstanding common shares of Ivrnet at the completion of the Transaction, subject to (among other things) the approval of the BIA Proposal by the statutory requisite majorities of Ivrnet's unsecured creditors (the "Unsecured Creditors") and the Alberta Court of King's Bench (the "Court").

Reason for the Transaction

Ivrnet is unable to pay its debts to creditors as and when they become payable. In addition, the expiry date of the Company's term debt and credit facility (the "Loan") due to RCM is the earlier of October 31, 2023, and on demand by RCM. Recently Ivrnet has struggled to service the interest on the Loan and it has been unable to generate sufficient cash flow from operations to repay the principal of the Loan. The Company has attempted to raise additional capital, obtain alternative financing at lower interest rates, and solicit other opportunities for transactions involving Ivrnet's business and assets, without success. RCM has not agreed to further extend the expiry date of the Loan and Ivrnet is unable to repay the Loan on the expiry date. The Board of Directors of Ivrnet believes that the Transaction is in the best interest of Ivrnet and its stakeholders.

Support Agreement

Ivrnet, the Purchaser, and the Supporting Creditors have entered into the Support Agreement dated October 27, 2023, whereby each party has agreed to support the Transaction and the BIA Proposal.

The Supporting Creditors have agreed to:

• accept payment in the aggregate amount of $3,998,271.72 in full satisfaction of their debts;
• releasing and discharging their security against Ivrnet upon payment;
• voting their remaining unsecured deficiency claims in favour of the BIA Proposal; and
• waiving their entitlement to a distribution under the BIA Proposal in respect of their deficiency claims.

Purchase Agreement

Pursuant to terms of the Purchase Agreement dated October 27, 2023, Ivrnet will issue 100 New Common Shares, subject to certain resale restrictions under applicable securities laws, including being subject to a 4-month and a day hold period, to the Purchaser for an aggregate cash purchase price of $4,451,000, subject to certain adjustments (the "Purchase Price"), to be paid as follows:

• $3,998,271.72 to be paid to the Supporting Creditors as contemplated above; and
• the balance of the Purchase Price to the Trustee, to be used to fund the professional fees associated with the BIA Proposal and the distributions contemplated by the BIA Proposal.

The completion of the Purchase Agreement is subject to (among other things) the approval of the BIA Proposal by the statutory requisite majorities of the Unsecured Creditors and the Court and conditional approval from the TSX Venture Exchange. In addition, completion of the Purchase Agreement is conditional upon Ivrnet having been delisted from the TSX Venture Exchange. Accordingly, in connection with closing the Transaction, Ivrnet will be making application to delist, whereupon its shares will cease to trade on the TSX Venture Exchange. Ivrnet will provide further details regarding the timing of same once coordinated with the TSX Venture Exchange.

The Purchase Agreement is anticipated to close 5 business days following the date on which the Court approves the BIA Proposal.

The Company's common shares are currently halted from trading, and the trading of the Company's common shares is expected to remain halted until they cease to be traded on the TSX Venture Exchange, in connection with the closing of the Transaction.

BIA Proposal

Pursuant to the Support Agreement and Purchase Agreement, Ivrnet will commence proposal proceedings under the Bankruptcy and Insolvency Act (Canada) and appoint Alvarez & Marsal Canada Inc. (the "Trustee") as Proposal Trustee under the BIA Proposal. The Trustee will file the BIA Proposal no later than October 30, 2023 (the "Filing Date") and will schedule a meeting of creditors (the "Creditors' Meeting") to be held within twenty-one (21) days of the Filing Date. Unsecured Creditors who wish to vote on the BIA Proposal at the Creditors' Meeting must file a proof of claim (the "Unsecured Claims") in the prescribed form prior to the Creditors' Meeting.

Provided that the BIA Proposal is approved by the statutory requisite majorities of the Unsecured Creditors and the Court, under the terms of the Purchase Agreement and BIA Proposal, the Purchase Price will be paid, as follows:

• to the Supporting Creditors pursuant to the terms of the Support Agreement and in the amount as identified above in the Purchase Agreement section;
• to the Trustee, the Trustee's counsel and Ivrnet's counsel for professional fees incurred pursuant to the Transaction; and
• to creditors holding an Unsecured Claim as follows, in full satisfaction of their Unsecured Claims:
• first, to creditors with proven Preferred Claims (as defined in the BIA Proposal), in full and in priority to all other Unsecured Claims in accordance with the scheme of distribution set forth in the BIA;
• second, to creditors with Unsecured Claims that are Convenience Claims (as defined in the BIA Proposal), in the lesser amount of: (i) $2,200; and (ii) the amount of their Convenience Claim; and
• third, to all other Unsecured Claims that are proven claims, with exception of the Unsecured Claim of any of the Supporting Creditors pursuant to the Support Agreement, a pro rata share of the amount remaining after payment of the above and any holdback required.

As part of the Transaction and the BIA Proposal, all of the issued and outstanding equity interest of Ivrnet outstanding immediately prior to the filing of the Articles of Reorganization (as defined in the BIA Proposal) will be cancelled, without consideration.

The BIA Proposal is subject to approval by the creditors of the Company and the Court.

About Ivrnet

Ivrnet is a software and communications company that develops, hosts, sells and supports value‐added business automation software. The company's products and services are delivered through the Internet and traditional phone network. These applications facilitate automated interaction through personalized communication between people, mass communication for disseminating information to thousands of people concurrently, and personalized communication between people and automated systems.

About N. Harris Computer Corporation

Harris acquires vertical market software businesses, manages them using industry best practices, and builds them for the future. Through acquisitions, Harris has grown extensively from its roots in the utilities, local government, education, and healthcare sectors to operate over 170 businesses globally across more than twenty industries. Harris is an operating group of Constellation Software Inc. (TSX:CSU), one of North America's most active acquirers of software businesses.

About Constellation Software Inc.

Constellation's common shares are listed on the Toronto Stock Exchange under the symbol "CSU". Constellation acquires, manages and builds vertical market software businesses. 

For further information on Ivrnet, please contact:

Andrew Watts, President and CEO
PO Box 47078 Creekside, Calgary, Alberta, T3P 0B9
Tel/fax: 1.800.351.7227
E-mail: investors@ivrnet.com
Website: www.ivrnet.com

Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward Looking Information

This press release contains forward-looking statements and information that are based on the beliefs of management and reflect Ivrnet's current expectations. When used in this press release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information.

Such statements and information reflect the current view of Ivrnet. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Such forward information and statements are based on numerous assumptions, including among others, that all conditions required for the Transaction will be fulfilled, that the Company will be able to obtain receipt of all creditors, regulatory and third party approvals required for the Transaction, and that general business and economic conditions will not change in a material adverse manner. Although the assumptions made by the Company in providing forward looking information or making forward-looking statements are considered reasonable by management at the time, there can be no assurance that such assumptions will prove to be accurate.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those contained in the forward-looking information or implied by forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended Accordingly, readers should not place undue reliance on forward-looking statements or information.

The forward-looking information contained in this press release represents the expectations of Ivrnet as of the date of this press release and, accordingly, is subject to change after such date. Accordingly, readers should not rely upon this information as of any other date. While Ivrnet may elect to, it does not undertake to update this information at any particular time except as required in accordance with applicable laws.

SOURCE: Ivrnet Inc.