VANCOUVER, B.C. and PRINCETON, NJ — Xybion Digital Inc. (TSXV: XYBN) (“Xybion” or the “Company“) is pleased to announce the closing of an acquisition (the “Acquisition”) of all of the issued and outstanding shares in the capital of Autoscribe Limited (“Autoscribe”) pursuant to a share purchase agreement among the Company, Autoscribe and all of the shareholders of Autoscribe (the “Purchase Agreement”).

Autoscribe is a global LIMS (Laboratory Information Management System) software company headquartered in the United Kingdom with operations and offices in the United States near Boston and in Australia near Adelaid. During the fiscal year ending on March 31, 2023, Autoscribe, on an unaudited and non-IFRS basis, recorded revenue of US$6.18 million with an adjusted EBITDA of US$0.678 million.

Pursuant to the terms of the Purchase Agreement, the Company’s wholly-owned subsidiary, Xybion Corporation, acquired all of the issued and outstanding shares of Autoscribe in consideration for a closing payment of US$12.094 million as well as three deferred payments of US$1 million payable on the 18, 30 and 48-month anniversaries of the closing date for an aggregate purchase price of US$15 million. As part of the Acquisition, Xybion acquired US$2.9 million cash reflected on Autoscribe’s balance sheet as of the Closing Date (as defined below).

“This acquisition is an important strategic milestone for Xybion’s growth plan.” said Dr. Pradip K. Banerjee, Chairman and CEO of Xybion Digital. “In addition to the fully built LIMS product modules in multiple industries globally, Autoscribe’s locations in UK meets our strategic need of having a European operation and it also brings a much needed specialized talent pool to drive growth of Xybion’s LIMS line of business” continued Dr. Banerjee. John Boother, founder of Autoscribe Limited, stated “I believe that Xybion is the right home for the next phase of Autoscribe’s development. I feel that the Autoscribe employees will be highly valued and respected, and our products and technologies will be a strong foundation for LIMS business into the future as part of Xybion.”

Prior to closing of the Acquisition, the Company and  its wholly-owned subsidiary, Xybion Corporation, as borrower (the “Borrower”), entered into a credit agreement (the “Credit Agreement”) with Capital Finance Opportunities 2303F LLC and such other lenders as may from time to time become party to the Credit Agreement, as lenders (the “Lenders”) and Capital Finance Administration, LLC, as administrative agent (the “Agent”) pursuant to which the Lenders will make available to the Borrower a senior secured first lien term facility in the principal amount of up to US$15 million credit facility (the “Credit Facility”) for a period of four years from the date hereof (the “Closing Date”). The Credit Facility is comprised of an initial draw of US$10 million which was funded on the Closing Date and a delayed draw of up to US$5 million. Amounts drawn under the Credit Facility will accrue interest at a rate equal to the secured overnight financing rate plus 8.25% per annum, accruing daily and payable monthly.

As consideration for the Lenders making the Credit Facility available to the Borrower, the Company issued to the Lenders an aggregate of 1,000,000 share purchase warrants (each a “Warrant”), exercisable to acquire 1,000,000 subordinate voting shares of the Company (each, a “Share”) for a period of four years following the Closing Date (the “Expiry Date”) at a price of $0.75 per Share. In addition, the Company will issue to the Lenders 100,000 additional Warrants for every additional US$1 million drawn under the Credit Facility, subject to a maximum of 500,000 additional Warrants. Each such additional Warrant will be exercisable to acquire one Share at an exercise price equal to the “Market Price” (as such term is defined under TSX Venture Exchange policies) on the date of issuance until the Expiry Date. All Warrants will be subject to a hold period of four months and a day following the date of issuance in accordance with applicable securities laws.

The Company and the Borrower granted to the Lenders a first lien security interest on substantially all of the tangible and intangible assets of the Company and the Borrower, including the grant of share pledges over all of the subsidiaries of the Company.

The proceeds of the initial draw under the Credit Facility were used to fund the Acquisition and costs and expenses ancillary to the Acquisition. The Company anticipates utilizing the delayed draw under the Credit Facility to fund the deferred payment obligations under the Purchase Agreement.

Pursuant to the terms of the Credit Agreement, the Borrower paid to the Lenders a closing fee equal to 3.0% of the initial draw under the Credit Facility and will pay an additional closing fee equal to 3.0% on amounts drawn under delayed draws on the Credit Facility. A commitment fee of 0.50% per annum on undrawn amounts under the Credit Facility will be payable monthly beginning on the date that is 12 months following the Closing Date and an administrative agent fee of US$15,000 is payable annually to the Agent.

Copies of the Purchase Agreement and the Credit Agreement will be made available under the Company’s profile on SEDAR+ at www.sedarplus.ca.

About Xybion Digital Inc.

Xybion is a global SaaS company that helps enterprise life sciences organizations accelerate new drug development into approved medicines that may save lives and keep employees safe. We digitize drug research and development, laboratory testing, regulatory approvals, and pharmaceutical manufacturing on a single, unified cloud platform that is cost-effective, ready to deploy, and easy to use. Xybion has over 160 clients in 29 countries using its low-code software to accelerate timelines, improve compliance, expand capacity, minimize operating risks, and reduce expenses while keeping employees safe.

The TSX Venture Exchange has neither approved nor disapproved the contents of this press release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

CAUTIONARY NOTE WITH RESPECT TO FORWARD-LOOKING STATEMENTS

This release includes certain statements and information that may constitute forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking statements relate to future events or future performance and reflect the expectations or beliefs of management of the Company regarding future events. Generally, forward-looking statements and information can be identified by the use of forward-looking terminology such as “intends” or “anticipates”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “should”, “would” or “occur”. This information and these statements, referred to herein as “forward‐looking statements”, are not historical facts, are made as of the date of this news release and include without limitation, statements regarding discussions of future plans, estimates and forecasts and statements as to management’s expectations and intentions with respect to, among other things, [the anticipated benefits of the Acquisition], the anticipated use of proceeds from delayed draws under the Credit Facility, the ability of the Company to satisfy the deferred payment obligations under the Purchase Agreement and to do so on the required timelines, and the ability of the Borrower to repay the Credit Facility on the timelines required pursuant to the Credit Agreement.

These forward‐looking statements involve numerous risks and uncertainties, and actual results might differ materially from results suggested in any forward-looking statements. These risks and uncertainties include, among other things: [the risk that the Company is unable to realize the anticipated benefits of the Acquisition; the risk that the Company is unable to satisfy future payment obligations under the Purchase Agreement or the inability to do so on the required timelines; the risk that the Borrower is unable to satisfy its repayment obligations under the Credit Agreement or being unable to do so on the required timelines; and the risks described in the Company’s public disclosure documents filed by the Company on SEDAR. 

In making the forward-looking statements in this news release, the Company has applied several material assumptions, including without limitation, that the Company and the Borrower, as applicable, will be able to satisfy their respective future obligations under the Purchase Agreement and the Credit Agreement and that they will be able to do so on the required timelines.

Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. 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 and forward-looking information. Readers are cautioned that reliance on such information may not be appropriate for other purposes. The Company does not undertake to update any forward-looking statement, forward-looking information or financial out-look that are incorporated by reference herein, except in accordance with applicable securities laws. We seek safe harbor.

Non-GAAP Measures

This news release contains reference to certain financial performance measures that are not recognized or defined under IFRS (termed “Non-GAAP Measures”). As a result, this data may not be comparable to data presented by other issuers operating in the same or similar industries as the Company. Non-GAAP Measures in this news release include, but are not limited to, earnings before interest, income taxes, depreciation and amortization (“EBITDA”). Management believes the presentation of these metrics gives useful information to investors and shareholders as they provide increased transparency and insight into the performance of Autoscribe.

EBITDA is most directly comparable to net income of Autoscribe as reflected in the unaudited financial statements of Autoscribe for the fiscal year ending on March 31, 2023, as adjusted to remove the impact of interest, income taxes, depreciation and amortization in order to reflect the operating performance of the company.

The non-GAAP measures described above are not measures that have standardized meaning prescribed by generally accepted accounting principles in the United States of America (U.S. GAAP) and are not U.S. GAAP measures. Therefore, these measures may not be comparable with similar measures presented by other issuers.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein in the United States. The securities described herein have not been registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“), or any state securities law and may not be offered or sold in the “United States”, as such term is defined in Regulation S promulgated under the U.S. Securities Act, unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration requirements is available.