TrackX Secures up to C$5.2 Million Loan Facilities

TrackX News | August 29, 2018

Vancouver, BC — August 29, 2018 — TrackX Holdings Inc. (TSX.V:TKX) (“TrackX” or the “Company”), is pleased to announce it has entered into secured loan facilities with affiliates of G&G Private Capital, Inc. (the “Lenders”) for up to C$5.2 million (collectively, the “Loan”) and has completed the first drawdown on the Loan for an aggregate amount of C$2,600,000.

Outstanding principal of the Loan will bear interest at a rate of 10% per annum payable in cash payable quarterly in arrears; or 12% in kind payable quarterly in arrears; or, subject to approval by the TSX Venture Exchange (“TSX-V”), 13.5% payable in common shares of the Company (the “Common Shares”), valued at the closing price on the TSX-V on the last trading day preceding payment, less the maximum allowable discount permitted by the TSX-V.  No repayment of outstanding principal is required before August 29, 2019.  The Loan will mature on August 29, 2022.

The proceeds of the Loan will be used by the Company to fund expansion of the TrackX team in sales, delivery services, and customer success. This expansion will enable TrackX to accelerate the delivery of both existing customer expansion opportunities and its growing pipeline of new customer implementations.

“TrackX is very pleased to complete this financing with G&G Private Capital,” said Tim Harvie, TrackX CEO. “G&G’s knowledge of SaaS-based software and experience in the capital markets  will provide tremendous strategic value to TrackX.”

“Given the strength of TrackX’s leadership team, technology platform and presence within the growing Industrial Internet of Things and Asset Management industries, we believe TrackX is uniquely positioned with significant potential,” said George Small, G&G Principal. “This financing will not only strengthen TrackX’s balance sheet, but provide funds necessary for TrackX to more readily achieve its potential in the industry.”

The Loan is secured against all current and future assets of the Company and its subsidiary, TrackX, Inc., as outlined in a general security agreement corresponding to the loan agreements.  To facilitate the Loan, broTECH Solutions LLC agreed to release an existing security interest that it held over certain assets that the Company purchased from broTECH Solutions LLC in June 2017. In consideration for the release of such security, the Company agreed to accelerate certain payments owing to broTECH Solutions LLC pursuant to that transaction, including the early release of TrackX shares that were held in a voluntary escrow

In connection with the first drawdown under the Loan, the Company has issued to the Lenders an aggregate of 800,000 non-transferable common share purchase warrants (the “Warrants”).  On the date of any subsequent drawdown under the Loan, the Company will issue to the Lenders 200,000 Warrants for each drawdown of C$650,000.  Each Warrant may be exercised by the holder to purchase one Common Share at an exercise price equal to the market price for the Common Shares as of the date of the applicable drawdown for a period of four years from the date of issuance, subject to adjustment. The Warrants, and the underlying Common Shares, will be subject to a four-month hold period from their date of issuance. The Company has also paid financing and drawdown fees of 1.5% each to the Lenders concurrently with the first drawdown. Additional drawdown fees of 1.5% of the amount of each drawdown will be payable concurrently with each subsequent drawdown.

Further drawdowns on the Loan will be available to the Company subject to:

a)   the Company havingachieved an average fifteen percent (15%) increase in recurring and total revenue for two (2) successive fiscal quarters commencing October 1, 2018; and

b)  the Company having achieved a positive adjusted EBITDA as calculated pursuant to the Company’s Management’s Discussion and Analysis for the same successive fiscal quarters as above.

About G&G Private Capital

G&G Private Capital Inc. (“G&G”), based in Toronto, Canada is an independent finance and investment company that provides private and public companies with debt and/or equity financing. G&G’s principals are experienced business people and former entrepreneurs focused on the capital and investments needs of high-growth technology companies. G&G works with profitable and near-profitable organizations and aligns itself with the long-term interests of its clients.

For more information, please contact:

George Small, G&G Private Capital Inc.

About TrackX 

TrackX, based in Denver, Colorado, is an enterprise Industrial Internet of Things (IIoT) software platform provider leveraging multiple auto-ID technologies for the comprehensive management of physical assets. TrackX’s Global Asset Management for Enterprises (GAME) platform enables the IIoT by providing unique item level tracking, workflow processing, event management, alerts and powerful analytics to deliver solutions across a growing number of industries.  This platform creates unprecedented visibility and business intelligence of man-to-machine and machine-to-machine interaction.  TrackX delivers significant value to a growing list of Fortune 500 companies and for customers in industries such as transportation, beverage, brewery, healthcare, hi-tech, hospitality, mining, agriculture, horticulture, manufacturing and government.

For more information, please contact:

Gene McConnell
TrackX Holdings Inc.
(303) 325-7300

Sean Peasgood
Sophic Capital
(647) 361-8358

Neither TSX Venture Exchange nor its Regulations 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.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain “forward-looking statements” under applicable Canadian securities legislation, including statements in respect of future drawdowns under the Loan and the proposed use of proceeds. Forward looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. All statements that address future plans, activities, events or developments that the Company believes, expects or anticipates will or may occur including the Company’s anticipated pipeline and value of current and customer deployments and future opportunities are the managements best estimates and cannot be guaranteed or relied upon and is forward-looking information.  There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements in this news release, whether as a result of new information, future events or otherwise, except as required by law.

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