Tandem, Hawthorn-backed nGrain to be bought by mCloud

Universal mCloud Corp (TSX-V: MCLD) has agreed to acquire 100 percent of nGrain, a Vancouver-based technology company that uses artificial intelligence to assess damage to vehicles and property. The cash-and-stock deal, valued at about $2.95 million, including debt, is expected to close in Q1 2018. MCloud, a Vancouver-based provider of internet-of-things-connected asset care solutions, said the purchase will give it additional patents and capabilities, as well as an increased customer base. Founded in 2000, nGrain has been backed by Canadian growth equity firm Tandem Expansion Fund, Canadian private equity firm Hawthorn Equity Partners, and others.


Universal mCloud Corp. Signs Binding Agreement to Purchase NGRAIN Corporation, a Global Leader in Artificial Intelligence and 3D Augmented Reality Software

– Adds Patents and Expands the Company’s Fortune 500 Customer Base –
– Positions mCloud as an Industrial Cloud Leader in Artificial Intelligence/3D –
– $200,000 (10%) of Total Share Consideration Paid to NGRAIN Employees –

VANCOUVER, Jan. 4, 2018 /CNW/ – Universal mCloud Corp. (TSX-V: MCLD) (“mCloud” or the “Company”), a leading provider of IoT-connected asset care technology solutions, today announced that it has signed a binding Share Purchase Agreement (“SPA”) to purchase 100% of NGRAIN (Canada) Corporation (“nGrain”). The deal is expected to close in Q1, 2018 and will strengthen mCloud’s AssetCare™ Cloud Solution by:

Adding Key Technology Capabilities: The acquisition will significantly enhance mCloud’s AssetCare™ Solution by adding critical Artificial Intelligence (“AI”) experience and expanding its 3D/Augmented Reality technology capabilities.
Expanding the Customer Base: nGrain expands mCloud’s Fortune 500 customer base who use nGrain’s inspection and AI interpretation for analyzing surfaces at a high level of precision and for identifying damages in critical assets such as military fighter jets.
Bulking up the Patent Portfolio: The acquisition will also add 10 patents in applied 3D technology, complementing mCloud’s existing patents in HVAC diagnostic technology.

“This transaction solidifies our position in IoT analytics by adding another critical component of our overall strategic vision,” said Russel McMeekin, mCloud CEO. “We will leverage nGrain’s AI and 3D Augmented Reality technology to greatly enhance our AssetCare™ platform starting immediately with our AssetCare™ Wind solution.”

The precision standards that nGrain technology utilizes meets rigorous requirements, including deployment in such applications as F-22 and F-35 fighter jet inspections. This standard of precision will greatly enhance mCloud’s AssetCare™ offering, initially as a wind turbine solution for blade inspection, and will drastically reduce the cost of inspection while providing a highly accurate virtual representation to be used for future comparisons and correlating to continuous IoT sensor data.

According to Russel McMeekin, “The nGrain technology opens up a very compelling customer value proposition to offset costly inspection methods with the ability to correlate field observations with a 24/7 connected IoT data stream. Furthermore, the nGrain technology exceeds mainstream industrial requirements providing us a “best in breed” offering for the critical assets that we service. We are particularly happy to have the nGrain team join us, whom we see as helping drive our innovation agenda forward.”

nGrain enhances mCloud’s innovation culture and it is expected that the application of its AI/3D technology will expand beyond wind turbine inspection, to supplement additional asset classes, including building energy management and distributed electrical transformers. AssetCare™ Mobile, which supports field service technicians, will also gain with enhanced and secure Augmented Reality capabilities.

Barry Po, Senior Director, Product and Business Development says, “The entire nGrain team is excited to be joining mCloud. We see a natural cultural fit, but more importantly we see a path to bringing the nGrain technology to a broader audience through mCloud’s distribution and growth plans.”

Marc Weiner of Tandem Expansion Fund, a major shareholder in nGrain says, “As investors in nGrain, we have come to know both the technology and the people. We see the combination of this capability with mCloud’s team and vision as game changing, yielding market winning solutions and a strong return on our investment going forward.”

Summary of NGRAIN Financials (unaudited estimates):

2017 Revenue $1.2M, Gross Margin 78%, EBITDA ($330,000)

Summary of Deal Terms:

Approximate number of mCloud Shares at deal closing of 5,250,000 ($2.1M valued at $0.40 per share) including 500,000 shares for nGrain employees ($200,000 valued at $0.40 per share). An additional $100,000 worth of shares to be provided as employee performance awards.

Cash at deal closing of $300,000, and additional cash of $307,500 in the form of a Vendor Note to be paid within 90 days of closing. The deal also includes the assumption of $142,500 in long-term, unsecured debt.

This is an arm’s length transaction and no finder’s fees are payable in connection with the acquisition.

Completion of this transaction is subject to the approval of TSX Venture Exchange.

About Universal mCloud Corp.
mCloud is headquartered in Vancouver, BC with technology and operations centers in San Francisco, CA and Bristol, PA. mCloud is an IoT connected asset care cloud solution company utilizing connected IoT devices, leading deep energy analytics, secure mobile and 3D technologies that rally all asset stakeholders around an Asset-Circle-of-Care™, providing complete real-time and historical data coupled with guidance and advice based on deep analytics and diagnostics resulting in optimal performance and care of critical equipment. It’s all about the asset. The powerful and secure AssetCare™ environment is accessible everywhere, 24/7 through standard mobile devices, ruggedized headsets, and web browsers. For more information, visit www.mCloudCorp.com.

About NGRAIN (Canada) Corporation
NGRAIN brings artificial intelligence to damage assessment, serving customers in insurance, aerospace, and defense. Since 2000, the company has helped organizations transform their maintenance and inspection practices through the use of AI and 3D. With proprietary technology developed in-house, NGRAIN helps organizations settle damage claims faster, get every inspection right the first time, and create opportunities to serve customers better. The company is headquartered in Vancouver, Canada with satellite offices in Ottawa, Canada and Des Moines, USA

For further information: Justin Canivet, NATIONAL | Equicom, T: 416-586-1942, jcanivet@national.ca; Russ McMeekin, Chief Executive Officer, Universal mCloud Corp., T: 415-378-6001

Photo courtesy of nGrain