Elevates Business Unit Leadership and Moves to Align All Key Stakeholders Across the Company
Top-Level Reorganization to Drive Tangible Integration Benefits, Reposition the Company, and Accelerate Global Growth
TORONTO, Jan. 15, 2024 (GLOBE NEWSWIRE) -- NowVertical Group Inc. (“NowVertical” or the “Company”) (TSX-V: NOW) (OTCQB: NOWVF), a leading data analytics and AI solutions company, today announced the appointment of Sandeep Mendiratta as Chief Executive Officer of the Company. Mr. Mendiratta’s appointment is a critical step in the strategic reorganization of NowVertical designed to fast-track the integration of its global asset base and propel the company into its next phase of growth.
Mr. Mendiratta joined NowVertical in January 2023 as the former CEO of Acrotrend during the Acrotrend acquisition. He has a proven track record of scaling businesses, is a seasoned expert in the data analytics industry, and is a well-respected leader within the Company.
To support Mr. Mendiratta, the Company is also pleased to announce that Santiago Trógolo, former CEO of CoreBI, acquired by NowVertical in February 2022, will be promoted to EVP LATAM, and Mostafa Hashem, former CEO of Smartlytics, acquired by NowVertical in January 2023, will be promoted to EVP Product and Technology. Each of Mr. Mendiratta, and Mr. Hashem, have meaningful shareholdings in NowVertical and are directly aligned with other shareholders.
Over the last three years, NowVertical's strategic acquisitions have positioned the Company as a powerhouse in data science, advanced AI solutions, and pragmatic data consultancy. This evolution has empowered NowVertical to offer comprehensive data management services to top-tier global clients spanning diverse industries and regions.
However, over the past six months, NowVertical’s board of directors (the “Board”) determined that the Company had not maximized the expected benefit from the integration of the Company’s acquisitions, nor was it effectively positioning those business units or their respective leadership teams for success.
The Board also determined that the current course of growth, and the Company’s spending across the enterprise, was unsustainable without substantial dilution to shareholders on potentially punitive terms amid poor market conditions.
In order to preserve shareholder value and put NowVertical on a course for sustainable long-term organic and inorganic growth, the Board led several critical initiatives including:
- Empowering Business Leadership: Founders and leaders of acquired business units have assumed key leadership roles within NowVertical. These founders and leaders, distinguished experts in the data analytics space, bring not only a wealth of operational expertise but also possess long-term institutional knowledge critical for navigating the complexities of the evolving industry landscape. Integration efforts will continue to elevate key performing leaders within NowVertical.
- Aligning All Key Stakeholders: Commencing the renegotiation of commitments with key business unit stakeholders to ensure cash is paid only when available, and to create an environment where all individual stakeholders are working towards the same metrics that are relevant to the Company as a whole and not just the individual business units.
- Cost Efficiencies: Initiatives to enhance financial and operational efficiency by minimizing redundancy, fostering synergies across individual business units, and reducing corporate expenses, were accelerated in Q3. These efforts, which will continue, resulted in a substantial reduction of operating cash burn from ($3.6) million USD in Q1 2023 to just ($0.3) million USD in Q3 2023.
Non-GAAP net cash flow from operations:
- Integration, Simplification and Execution: Focus on driving the integration of NowVertical’s existing business units, including across similar markets, targeting and measuring the Company’s greatest market opportunities. Deploy an easy-to-understand framework to engage with customers and prospects. Unify the Company’s global design strategy to create clarity and efficiency in NowVertical’s offering. Execute on strategic account growth opportunities. Drive engagement and profitability through long-term recurring revenue.
- Board Refreshment and Enhancement: This past week the Board was pleased to appoint Mr. David Charron, CFO of Tiny Ltd., a technology holding company with a strategy of acquiring majority stakes in businesses; and Mr. Chris Ford, President of Intelliware Development, a consulting and technology delivery organization focused on delivering business impact through technology, and the former CEO of Capco Canada, a leading business and technology professional services firm specializing in the financial services domain. Earlier this year, the Board elevated director Elaine Kunda, Founder and Managing Partner at Disruption Ventures, a leading Canadian early-stage VC firm to the position of Board chair; and welcomed Andre Garber, NowVertical’s co-founder and Chief Development Officer, to the Board. Each of these individuals brings a unique set of skills, experience, expertise, and shareholder-focused perspective to the Board.
- Appointment of New Auditor: In October 2023, the Board was pleased to appoint Ernst & Young LLP (“EY”) as the Company’s auditor. In making its selection, the audit committee of the Board, among other factors, considered the experience of audit firms’ in working with technology and M&A-led enterprises with multiple business units.
“We are very pleased to welcome Sandeep Mendiratta as NowVertical’s CEO. Sandeep has a proven track-record of scaling businesses and driving value. In addition, the elevation of other seasoned operators from our key business units, positions NowVertical to scale a business originally and solely focused on growth by acquisition. These leaders work directly with our blue-chip customers daily, and we are excited to enable our acquisitions to truly integrate by placing the most resourceful and passionate operators where they need to be, right around the leadership table. Our management team will also benefit from our enhanced and strengthened Board who will support them with their relevant expertise and experience,” said Board Chair Elaine Kunda.
“The past year has been an active one for the Board and management team, we had to make difficult but necessary decisions to preserve shareholder value and put the Company back on track for growth. On behalf of the NowVertical board of directors, I would also like to commend Sasha Grujicic for playing a key role in our achievements, we appreciate his contributions to this transformative journey, and wish him well in his next endeavor,” continued Ms. Kunda.
“I am excited about the opportunity ahead of NowVertical and thank the Board for their confidence in me. I look forward to working very closely with all of my colleagues, to translate the hard work of integration into tangible growth opportunities. I am also committed to aligning all of our key business units towards our shared success and ultimately driving value for all of our shareholders,” said Sandeep Mendiratta, CEO of NowVertical.
Mr. Grujicic, in connection with the completion of his service as CEO, has stepped down from the Board, effective as of January 12, 2024.
The co-founder of NowVertical and an owner of over 5% of the Company’s shares, Andre Garber, will retain his current role as Chief Development Officer and Board member, steering corporate functions, capital markets, and specific M&A initiatives from the Company’s corporate headquarters in Toronto, Canada.
Investor Webinar:
NOW invites shareholders, analysts, investors, media representatives, and other stakeholders to attend a webinar where Sandeep Mendiratta, Chief Executive Officer; Elaine Kunda, Board Chair; and Andre Garber, Chief Development Officer, will discuss the new transitions.
Webinar RegistrationDate: January 15, 2024Time: 4:30 pm EST (1:30 pm PST)Register here: https://bit.ly/NOW-investor-update
A recording of the webinar and supporting materials will be made available in the investor’s section of the company’s website at https://nowvertical.com/news-and-media
About NowVertical Group Inc.:
NowVertical Group is a Vertical Intelligence (VI) software and services provider that delivers vertically-specific data, technology, and artificial intelligence (AI) applications into private and public verticals globally. NOW’s proprietary solutions sit at the foundation of the modern enterprise by transforming AI investments into VI, enabling its customers to minimize their risk, accelerate the time to value, and reduce costs. NOW is rapidly growing organically and through targeted acquisitions. For more information about NOW, visit www.nowvertical.com.
Neither the TSX Venture Exchange nor its Regulation 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.
For further information, please contact:
Andre Garber, Co-founder, CDO and Board memberIR@nowvertical.com
Glen Nelson, Investor Relations and Communications: glen.nelson@nowvertical.comt: (403) 763-9797
Cautionary Statement
This news release contains forward-looking information and forward-looking information within the meaning of applicable Canadian securities laws (together “forward-looking statements”), including, without limitation: information regarding the integration of the Company’s business units, the benefits associated with integration, the marketability of the Company’s business and the ability of the Company to meet client needs and expectations, the ability of the Company to renegotiate payments associated with the Company’s prior acquisitions, the benefits of empowering the Company’s business leaders, the alignment of key stakeholder interests, the ability of the Company to continue to achieve operational efficiencies and cost-reductions, the ability of the Company to execute on its business plan and to drive engagement and profitability, the benefits associated with the appointment of EY as the Company’s auditor, and the Company’s goals, strategies and growth plans. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, and contingencies. Forward-looking statements generally can be identified by the use of forward-looking words such as "may", "should", "will", "could", "intend", "estimate", "plan", "anticipate", "expect", "believe" or "continue", or the negative thereof or similar variations. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause future results, performance, or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by the forward-looking statements and the forward-looking statements are not guarantees of future performance. Forward-looking statements are qualified in their entirety by inherent risks and uncertainties, including: direct and indirect material adverse effects from the COVID-19 pandemic; adverse market conditions; risks inherent in the data analytics and artificial intelligence sectors in general; regulatory and legislative changes; that future results may vary from historical results; inability to obtain any requisite future financing on suitable terms; any inability to realize the expected benefits and synergies of acquisitions; that market competition may affect the business, results and financial condition of the Company and other risk factors identified in documents filed by the Company under its profile at www.sedarplus.ca, including the Company’s managements discussion and analysis for the ear ended December 31, 2022 dated April 28, 2023 and the prospectus supplement (including all documents incorporated by reference therein) dated February 22, 2023. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, the Company assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Cautionary Note Regarding Non-IFRS Measures
This news release refers to certain financial performance measures, including “operating cash burn”, that are not defined by and do not have a standardized meaning under International Financial Reporting Standards (termed "non-IFRS measures"). Non-IFRS measures are used by management to assess the financial and operational performance of NowVertical. The Company believes that these non-IFRS measures, in addition to conventional measures prepared in accordance with International Financial Reporting Standards, enable investors to evaluate the Company’s operating results, underlying performance and prospects in a similar manner to the Company's management. As there are no standardized methods of calculating these non-IFRS measures, the Company’s approach may differ from those used by others, and accordingly, the use of these measures may not be directly comparable. Accordingly, these non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with International Financial Reporting Standards.
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