Uniserve Communications closes Megawire acquisition

Mr. Kwin Grauer reports UNISERVE CLOSES ACQUISITION OF BUSINESS OF MEGAWIRE INC. Uniserve Communications Corp. has closed its transaction to acquire all of the business, assets and undertaking of Megawire Inc. Megawire is a full-service managed IT (information technology) services provider. It services all of Ontario and the rest of Canada and the United States virtually. It provides IT infrastructure assessments, network security audits, cloud computing solutions and data centre services, structured cabling, and IT support and security for businesses of all sizes and industries. The total purchase price paid by Uniserve under the transaction was $6.5-million, as follows: Pursuant to an asset purchase agreement (the Megawire APA) dated as of Nov. 19, 2025, between Uniserve and Megawire, Uniserve issued an aggregate of 3,431,961 common shares of Uniserve at a price of 58.28 cents per Uniserve share (representing an aggregate purchase price of $2-million) to acquire all of Megawire's assets. The Uniserve shares are subject to a four-month hold period expiring April 23, 2026, pursuant to applicable securities laws and the policies of the TSX Venture Exchange. Of the Uniserve shares, 2,573,971 were issued to Megawire directly, and the remaining 857,990 Uniserve shares are held in escrow and will be released in accordance with the terms of the Megawire APA upon completion of any gross margin purchase price adjustments thereunder. Pursuant to the Megawire APA, six months following closing the transaction, Uniserve will calculate the postclosing gross margin benchmark. If the postclosing margin benchmark is less than the closing margin benchmark stipulated in the Megawire APA by more than 7 per cent, then the purchase price payable under the Megawire APA will be reduced by the amount that such difference exceeds 7 per cent (the margin difference) and the number of escrowed Uniserve shares equal to the margin difference will be cancelled. Any remaining escrowed Uniserve shares will be released from escrow to Megawire. Megawire and Uniserve do not anticipate any adjustments to the purchase price pursuant to the margin adjustment. The Megawire APA also includes a purchase price adjustment clause, pursuant to which any costs incurred by Megawire prior to closing but applicable to the Megawire business postclosing and any revenues applicable to the Megawire business postclosing but received by Megawire will be adjusted. The net amount of any postclosing adjustments (which amount is not expected to be material) will be paid in cash by the relevant party. Pursuant to a share purchase agreement (the Brimax SPA) dated as of Nov. 19, 2025, among Uniserve, Brimax Financial Services Inc. and the Brimax shareholders (Brian Patrick Maxwell and Gail Maureen Maxwell), Uniserve paid $2.4-million in cash to acquire all of the issued and outstanding Brimax shares. Of the cash payment, $2.15-million was paid to the Brimax shareholders and will be allocated equally between them, and the remaining $250,000 of the cash payment is held in escrow and will be released in accordance with the terms of the Brimax SPA upon completion of any closing purchase price adjustments thereunder. Under the Brimax SPA, Brimax is obligated to make the adjustment amount (the positive or negative amount equal to Brimax's current assets, less Brimax's current liabilities and indebtedness) equal nil. If the adjustment amount is a negative amount, then the purchase price under the Brimax SPA will be reduced by such negative amount and Uniserve will recover such negative amount from the funds held in escrow, with any remaining funds to be released from escrow to the Brimax shareholders. If the adjustment amount is a positive amount, then the purchase price under the Brimax SPA will remain unchanged. Brimax and Uniserve do not anticipate any material adjustment amount to apply to reduce or increase the purchase price. Pursuant to a share purchase agreement (the Waterloo SPA) dated as of Nov. 19, 2025, among Uniserve, Waterloo Wireless Inc. and the Waterloo shareholder (Steven Maxwell, the noteholder), Uniserve paid $2.1-million through the issuance of a non-transferable convertible note (as further described below) in such amount to acquire all of the issued and outstanding Waterloo shares. Under the Waterloo SPA, Waterloo is obligated to make the adjustment amount (the positive or negative amount equal to Waterloo's current assets, less Waterloo's current liabilities and indebtedness) equal nil. If the adjustment amount is a negative amount, then the purchase price under the Waterloo SPA and the amount owing under the note will be reduced by such negative amount. If the adjustment amount is a positive amount, then the purchase price under the Waterloo SPA will remain unchanged. Waterloo and Uniserve do not anticipate any material adjustment amount to apply to reduce or increase the purchase price. The note has a three-year term expiring Dec. 22, 2028, bears annual interest at 7 per cent, payable monthly. At any time during the term of the note, the noteholder m ay elect to convert up to 50 per cent of the note value then outstanding into Uniserve shares. In each of the three years following closing of the transaction, Uniserve may elect to pay up to one-third of the original value of the note and, upon Uniserve so electing, the noteholder may choose to instead convert the proposed prepayment amount into Uniserve shares. On the first and second anniversaries of closing of the transaction, 10 per cent of the then outstanding principal sum of the note (less any amounts prepaid by Uniserve for such year) will be payable by Uniserve in cash, provided that the noteholder may elect to instead receive an anniversary payment in Uniserve shares. The note includes a 10-per-cent blocker clause, which prohibits the conversion of any amount owing under the note into Uniserve shares if such conversion would result in the noteholder or his associates or affiliates holding 10 per cent or greater of the number of Uniserve shares at the time of conversion. Any Uniserve shares issued under the note will be issued at the following price, depending on the year in which the Uniserve shares are issued: Year 1: convertible at 75 cents per Uniserve share; Year 2: convertible at $1 per Uniserve share; Year 3: convertible at $1.25 per Uniserve share. In connection with the note, Waterloo has executed and delivered a guarantee, under which Waterloo has guaranteed all of Uniserve's obligations under the note. Waterloo has also executed a general security agreement in favour of the noteholder, pursuant to which, in connection with the guarantee, the note is secured by a first-priority security interest in favour of the noteholder against all present and after-acquired property of Waterloo. The Megawire assets being acquired under the Megawire APA comprise substantially all of the business and undertaking of Megawire, including, without limitation, all books and records, goodwill, intellectual property, approximately $100,000 in inventory, and Megawire's real property lease in Waterloo, Ont. The Megawire APA explicitly excludes the following Megawire assets from the transaction: Megawire as a corporate entity (and accordingly all liabilities of Megawire that would have been included by operation of corporate law under a share purchase); all Megawire cash and working capital; all Megawire indebtedness; Megawire's contracts with its employees (and, in addition, Megawire is liable for all claims by its employees made by such employees for their employment preclosing); all inventory not explicitly included; and all IPv4 Internet protocol numbers of Megawire. Megawire's obligations being assumed by Uniserve include vehicle leases associated with Megawire's service vehicles and licences for cellular towers being acquired. In addition, under the Megawire APA, Uniserve has agreed to offer employment to all Megawire employees on closing of the transaction, on substantially the same terms and conditions of employment, provided, however, that Uniserve is not obligated to offer participation in employee plans that are substantially similar to the Megawire's employee plans and shall only be obligated to offer participation in Uniserve's employee plans; in addition, for purposes of any later severance of any former Megawire employee, Uniserve has agreed to recognize the seniority of Megawire employees who accept Uniserve's offers of employment. Pursuant to the terms of the Megawire APA, Emerald Flow Consulting Inc. (Steven Maxwell's services company) entered into a 12-month consulting agreement with Uniserve to provide management services respecting Megawire's business until Dec. 31, 2026. As consideration for the services to be provided under the management services agreement, Uniserve will pay Emerald Flow $18,750 per month ($225,000 over the 12-month term of the agreement). In addition, each of Megawire and Steven Maxwell entered into non-competition agreements applying across Canada for 24 months. Pursuant to the Megawire APA, Uniserve has also entered into a 10-year lease with DKS Group Holdings Inc. (the Landlord and an affiliate of Steven Maxwell) for approximately 9,450 square feet of office space located in Waterloo, Ont. Under the lease, Uniserve will pay rent of approximately $31,000 per month (approximately $356,500 per year). "The acquisition of this MSP will further enhance the depth of services that Uniserve will deliver and strengthen our data centre portfolio by allowing us to provide service in Eastern Canada. This acquisition will further support the growth of Uniserve's recurring-revenue-based service offerings and consolidate our ability to provide these services in Ontario. As Canadian businesses continue their digital transformations, we are working to build on our ability to provide quality bandwidth and infrastructure to meet growing customer needs in these areas. We expect this acquisition to bring strong top-line sales and an expected EBITDA [earnings before interest, taxes, depreciation and amortization] to the organization, which will provide a solid platform for us to scale up operations in Ontario," said Kwin Grauer, Uniserve's acting interim chief executive officer. In connection with the transaction, Uniserve borrowed $2.5-million, evidenced by a promissory note dated as of Dec. 22, 2025, from 369 Terminal Holdings Ltd. (the lender), an insider of the company by virtue of holding over 10 per cent of the issued and outstanding Uniserve shares. The loan is repayable by Uniserve on demand and will bear interest at 8 per cent per annum commencing on the date of advance, with interest payable monthly. In connection with the loan, the company granted the lender 3.5 million non-transferable share purchase warrants, each exercisable for one Uniserve share at an exercise price of 57 cents per share until Dec. 22, 2026. Of the loan, $2.4-million was used to pay the purchase price under the Brimax SPA, and the remaining $100,000 will be used by Uniserve for working capital, including transaction expenses. The loan will be repaid from cash flows generated by Uniserve's continuing operations. The loan warrants and any Uniserve shares issued on exercise thereof are subject to a four-month hold period expiring April 23, 2026, pursuant to applicable securities laws and the policies of the TSX-V. Pursuant to Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions, the loan is considered a related party transaction as 369 Terminal Holdings Ltd. is an insider of the company. The loan is exempt from the formal valuation requirement and the minority shareholder approval requirement under MI 61-101 as the aggregate fair market value of the loan transaction does not exceed 25 per cent of Uniserve's market capitalization. As previously announced by Uniserve, on Nov. 26, 2025, following execution of the Megawire APA, the Brimax SPA and the Waterloo SPA and in anticipation of closing the transaction, Steven Maxwell was appointed as a director of Uniserve. Other than the foregoing, Megawire, Brimax, Waterloo, Emerald Flow, and their respective principals, directors and shareholders are arm's length to the company and to the lender. No finders' fees were paid by the company in connection with the transaction, and the transaction did not result in a change of control of the company. The company also announces that it will not be issuing one million common share purchase warrants in connection with its lease in Vancouver, B.C. (see the company's news releases dated Sept. 3, 2025, and Sept. 15, 2025, for further information respecting the lease), and the company has withdrawn its application to the TSX-V seeking approval of the issuance of these warrants. About Uniserve Communications Corp. Uniserve provides IT solutions, including data centre solutions, managed IT services and business Internet, through its offices in Vancouver, Calgary and Waterloo. The company focuses on delivering secure, reliable and scalable services to support client operations. We seek Safe Harbor.