VANCOUVER, March 19, 2020 /CNW/ - mCloud Technologies
Corp. (TSX-V: MCLD, MCLD.DB) (OTCQB: MCLDF) ("mCloud" or the
"Company"), a leading provider of asset management solutions
combining IoT, cloud computing, artificial intelligence ("AI"), and
analytics, today announced the filing of its amended and restated
management's discussion and analysis and amended and restated
interim financial statements for the third quarter ended
September 30, 2019 (the "Amended
Filings"). The Amended Filings are required by the British Columbia
Securities Commission ("BCSC") in support of the regulatory process
for the Company's filing of a short form prospectus on November 15, 2019. As a result of this review by
the BCSC, we are issuing the following press release to clarify our
disclosure.
"The impact of this filing is a result of the Company completing
its preliminary purchase price allocation for the assets acquired
and the liabilities assumed in relation to the acquisitions of
Agnity Global, Inc. ("Agnity") and Autopro Automation Consultants
Ltd. ("Autopro"), the adoption of IFRS 16, certain other updated
accounting analysis as well as the standard and routine transition
to working with our new auditors, KPMG LLP, as announced on
November 15, 2019. These processes
were well underway before engaging with the BCSC with the filing of
the prospectus," stated Chantal
Schutz, mCloud's Executive Vice President and Chief
Financial Officer. "The Amended Filings have no impact on the
previously reported and audited financial statements for the year
ended December 31, 2018."
The following is a summary of the changes made in the Amended
Filings (all figures in Canadian dollars):
1. Agnity Transaction - Review of the timing of
Agnity consolidation.
The Company refined the purchase price allocation ("PPA") for
Agnity, which was driven by the change in the timing of the
consolidation of Agnity to April 22,
2019, from January 22, 2019.
This caused the Company to update its analysis of the acquisition
of Flow Capital's interest in its royalty agreement with Agnity. As
a result of this timing change, intangible assets increased by
$8.936 million and non-controlling
interest decreased by $8.826 million.
Revenue also decreased by $2.721
million.
The above does not reflect any errors, omissions, or
overstatement of actual revenues or cash flows earned by either
entity before or after the acquisition date, and instead reflects
the timing and proper allocation of items in the PPA process.
2. Autopro Transaction - Update to the analysis
of Autopro acquisition.
As part of the Company's acquisition accounting and valuation
related to Autopro, the Company determined that the value of the 24
million shares issued to Fulcrum founding shareholders should be
considered recorded as a transaction cost of $8.880 million and not included in the valuation
of Autopro.
In addition, the fair value of the Share consideration to
Autopro's shareholders increased by $6.1
million based on the trading price of the Company's share at
the acquisition date but did not change the value of the cash
consideration. Other significant changes to the preliminary
analysis of the Autopro acquisition included accounting-based
allocations resulting in an increase to intangible assets by
$23.919 million, a decrease in
goodwill of $19.818 million and an
increase in deferred tax liability of $5.937
million.
In connection with the analysis of the acquisition, the Company
finalized the impact of IFRS 16 and recognized right-of-use assets
of $3.951 million at the acquisition
date, together with $4.014 million in
lease liability.
3. Other Matters – Acquisition and accounting
for (multi-year) complex revenue contracts with customers.
The Company updated its accounting analysis with respect to
certain complex revenue arrangements with its customers. The
updated accounting analysis resulted in a decrease in trade and
other receivables of $1.918 million,
a decrease in long-term receivables of $0.107 million, an increase in deferred revenue
of $0.216 million at September 30, 2019, a decrease in revenue of
$2.710 million, a decrease in cost of
sales of $0.725 million, and an
increase in expenses of $0.253
million for the nine months ended September 30, 2019.
4. Finalization of the valuation of convertible
debentures issued on July 11,
2019.
The Company finalized the complex valuation of its convertible
debentures. This resulted in the allocation of a portion of its
values to equity for accounting purposes, as prescribed by IFRS, as
well as the tax implications of these convertible debentures. The
adjustment impacted long term liabilities, contributed surplus,
deferred tax recovery, and expenses and did not impact working
capital.
5. Adoption of IFRS 16 and impact on Autopro
PPA.
The Company updated its transition analysis for the adoption of
IFRS 16 in addition to the impacts of IFRS 16 on the acquisition
account of Autopro.
6. Miscellaneous Matters - Share-based
compensation, Impairment of Intangible Assets, September 30, 2018, unaudited condensed
consolidated interim financial statements
The Company also adjusted for several other items as
follows:
- Share-based compensation expense calculation was revised
resulting in a reduction of contributed surplus of $1.043 and a corresponding decrease in
share-based compensation expense;
- $0.508 million of Impairment of
intangible assets acquired in 2017;
- Errors related to September 30,
2018, unaudited condensed consolidated interim financial
statements resulting from adjustments recorded by the Company at
December 31, 2018, that had an impact
on prior quarters. These errors have been corrected retrospectively
in accordance with IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors.
The management's discussion and analysis and interim financial
statements for the period ended September
30, 2019, originally filed on SEDAR on November 14, 2019 (the "Previous Filings") should
not be relied upon.
The foregoing is a summary of certain changes in the Amended
Filings as compared to the Previous Filings and does not constitute
a complete analysis of the changes. For a full understanding of the
changes, we encourage you to review the Amended Filings, which are
available on SEDAR at www.sedar.com and the Company's website at
www.mcloudcorp.com.
About mCloud Technologies Corp.
mCloud is creating a more efficient future with the use of AI
and analytics, curbing energy waste, maximizing energy production,
and getting the most out of critical energy infrastructure. Through
mCloud's AI-powered AssetCare™ platform, mCloud offers complete
asset management solutions to three distinct segments: smart
facilities, power generation, and process industries, including oil
and gas. IoT sensors bring data from connected assets into the
cloud, where AI and analytics are applied to maximize their
performance.
Headquartered in Vancouver,
Canada, with offices in twelve locations worldwide, the
mCloud family includes an ecosystem of operating subsidiaries that
deliver high-performance IoT, AI, 3D, and mobile capabilities to
customers, all integrated into AssetCare. With over 100 blue-chip
customers and more than 41,000 assets connected in thousands of
locations worldwide, mCloud is changing the way energy assets are
managed.
mCloud's common shares trade on the TSX Venture Exchange under
the symbol MCLD and on the OTCQB under the symbol MCLDF. mCloud's
convertible debentures trade on the TSX Venture Exchange under the
symbol MCLD.DB. For more information, visit www.mcloudcorp.com.
Forward-Looking Information and Statements
This press release contains certain "forward-looking
information" within the meaning of applicable Canadian securities
legislation and may also contain statements that may constitute
"forward-looking statements" within the meaning of the safe harbour
provisions of the U.S. Private Securities Litigation Reform Act of
1995. Such forward-looking information and forward-looking
statements are not representative of historical facts or
information or current condition but instead represent only the
Company's beliefs regarding future events, plans or objectives,
many of which, by their nature, are inherently uncertain and
outside of the Company's control. Generally, such forward-looking
information or forward-looking statements can be identified by the
use of forward-looking terminology such as "plans", "expects" or
"does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases
or may contain statements that certain actions, events or results
"may", "could", "would", "might" or "will be taken", "will
continue", "will occur" or "will be achieved". The forward-looking
information contained in this press release includes information
relating to the impact of the filing of the amended and restated
management's discussion and analysis and amended and restated
interim financial statements for the period ended September 30, 2019.
By identifying such information and statements in this manner,
the Company is alerting the reader that such information and
statements are subject to known and unknown risks, uncertainties
and other factors that may cause the actual results, level of
activity, performance or achievements of the Company to be
materially different from those expressed or implied by such
information and statements.
An investment in securities of the Company is speculative and
subject to several risks, as discussed under the heading "Risk
Factors" in the Company's annual information form dated
October 31, 2019. Although the
Company has attempted to identify important factors that could
cause actual results to differ materially from those contained in
the forward-looking information and forward-looking statements,
there may be other factors that cause results not to be as
anticipated, estimated or intended.
In connection with the forward-looking information and
forward-looking statements contained in this press release, the
Company has made certain assumptions. Although the Company believes
that the assumptions and factors used in preparing, and the
expectations contained in, the forward-looking information and
statements are reasonable, undue reliance should not be placed on
such information and statements, and no assurance or guarantee can
be given that such forward-looking information and statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such information and
statements. The forward-looking information and forward-looking
statements contained in this press release are made as of the date
of this press release.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accept responsibility for the adequacy or
accuracy of this release.
SOURCE mCloud Technologies Corp.