Key highlights of new go-to-market
- Company integration and new efficiencies expected to
generate cost structure improvements of greater than 25% beginning
in Q4 2022 compared year-over-year with Q4 2021
- mCloud exits low-margin Technical Project Services business
and retires low-value legacy connected assets and workers in Q3
2022
- AssetCare™ fully migrates to the Google Cloud Platform,
retaining support for other cloud services in regions not yet
supported by Google Cloud
Update on funding initiatives
- Reaches agreement to close US$12.5
million with consortium of strategic investors based in
Saudi Arabia supporting the growth
of Company's sustainability applications on Google Cloud, aligned
with Saudi Vision 2030
- Company continues to await regulatory approval in connection
with previously announced preferred share offering and reaffirms
plans to repay in full the outstanding principal and interest on
outstanding unsecured convertible debentures
SAN
FRANCISCO, Nov. 1, 2022 /CNW/ - mCloud
Technologies Corp. (Nasdaq: MCLD) (TSXV: MCLD), ("mCloud" or
the "Company") a provider of cloud technology solutions optimizing
the performance, reliability, and sustainability of
energy-intensive assets today announced it has implemented a new
go-to-market plan on the back of its recent announcement it had
entered a strategic partnership with Google Cloud.
As announced on October 27, 2022,
this strategic partnership closely integrates and aligns the
Company with Google Cloud to jointly co-market, co-sell, and
deliver AssetCare sustainability solutions to customers worldwide,
starting with specific customers already working with both
companies globally and in the United
States, Canada, UK and
Europe, Saudi Arabia, Malaysia, and Japan. These activities will widen the
AssetCare business and expand mCloud's customer base.
As a result of this integration, mCloud expects it will benefit
from greater than 25% improvements to its cost structure beginning
in calendar Q4 2022 and fully in place by end of Q1 2023. These
optimizations include an approximate 25% reduction in headcount
already implemented in Q3 2022, aligned with the Company's exit
from its Technical Project Services business (see below), along
with sustained improvements to costs associated with sales and
marketing and research and development as these align with Google
Cloud.
Go-to-Market Plan Specifics with Google Cloud
- Account-based sales with Google Cloud: mCloud has
already taken action to collaborate and coordinate with Google
Cloud to define and kick-off joint sales with key accounts
globally. These joint sales activities are focused near-term on
annual recurring revenue ("ARR") growth through the close of
immediate AssetCare opportunities, complemented by longer-term
account plans that increase account ARR through mutual up-sell and
cross-sell of AssetCare and Google services.
- Exit from Technical Project Services: With joint
mCloud-Google Cloud sales activities now underway, the Company
decided in Q3 2022 to fully exit its Technical Project Services
business in favor of focusing the Company's resources on
higher-margin AssetCare growth. The renewed focus on AssetCare
sales and delivery enables mCloud to leverage the continued
customer access it achieved through its Technical Project Services
business in western Canada. These
customers are now among the key accounts being jointly targeted by
mCloud and Google Cloud. The Company reduced headcount primarily in
the areas of direct delivery of professional services, retaining
the data and expertise from this business, which remains invaluable
in the development and delivery of AssetCare worldwide.
- Retirement of low-value legacy connected assets and
workers: As the Company integrates AssetCare with Google Cloud,
the Company has also elected not to continue delivering or pursuing
the renewal of numerous assets and workers contracted early in
mCloud's history. Most of these connected assets and workers are
from disparate small-box retail facilities that would not see any
direct benefit from the transition to Google Cloud and relied on
legacy infrastructure that will be made obsolete with AssetCare on
the Google Cloud Platform. Growth from sales jointly with Google
Cloud is expected to rapidly make up and exceed the minor recurring
value of these connections.
- Migration and integration of AssetCare technologies with
Google Cloud: Technology development activities to move
AssetCare to Google Cloud are already underway. For customer
applications such as AssetCare connected worker capabilities using
Agnity communications capabilities, the move to Google Cloud will
mean faster deployment, streamlined onboarding by way of
eliminating legacy dependencies on virtual machines no longer
required on Google Cloud, and a more powerful, more precise, and
more robust user experience via AssetCare capabilities in the
field.
- Auto dealerships focus in North
America: mCloud and Google Cloud are also jointly
pursuing the digital transformation of auto dealerships, aligned
with mCloud's focus on delivering electric vehicle (EV) charging
optimization capabilities at these facilities. Google offers unique
workplace solutions for auto dealerships that translate into an
even more compelling AssetCare value proposition for auto
dealerships looking to digitalize their operations.
Announced on May 5, 2022, mCloud
has worked with Carbon Royalty Corp throughout this calendar year
to advance this growth focus. Carbon Royalty Corp has provided
mCloud with the working capital to implement AssetCare at auto
dealerships, including the purchase of required permit
applications, hardware, and the support needed to develop carbon
credits and foster the generation of carbon offsets. With the
Google Cloud partnership now in place, mCloud has approached Carbon
Royalty Corp with the possibility of potentially restructuring the
original agreement while Carbon Royalty Corp continues to operate
and manage the carbon credits and all other offsets jointly
generated by mCloud and Google Cloud.
While no agreement has yet been reached and there is no
guarantee such an agreement will be achieved, mCloud and Carbon
Royalty Corp are working toward a mutually beneficial arrangement
where mCloud returns the deployed capital used in customer
deployment, permitting, and solution development, evolving the
relationship to one focused around leveraging Carbon Royalty Corp's
expertise to manage and develop carbon credits and carbon offsets
across all joint mCloud and Google Cloud activities, tracked
through AssetCare for a fixed royalty rate.
mCloud President and CEO Russ
McMeekin offered additional commentary on the plan:
"The nature of our strategic partnership and integration with
Google Cloud includes mechanisms for contracting via Google Cloud
as the contracting entity to end customers. As a result, the
details of customer contracts must remain confidential in
accordance with Google Cloud policies. As announced earlier this
week, we are moving very quickly to join forces with Google Cloud
in co-selling AssetCare worldwide to drive ARR growth. mCloud and
Google Cloud together is truly a sum greater than its parts."
Announcement of Common Share Offering with Strategic
Investors
mCloud also announced today it has entered into securities
purchase agreements with a consortium of strategic investors,
largely industrial organizations based in Saudi Arabia aligned with Saudi Vision 2030,
for the purposes of completing a non-brokered common share
financing for gross proceeds of up to USD$12,500,000 (the "Offering"). These
organizations are closely aligned with mCloud's customers and
expansion plans in the Kingdom of Saudi
Arabia. mCloud plans to take advantage of these
relationships to pursue opportunities such as the adoption of
AssetCare connected worker capabilities paired with Google's
Natural Language AI in collaboration with these organizations.
Under the terms of the Offering, the Company intends to issue up
to 10,964,913 common shares at a price of USD$1.14 per share.
Subject to receipt of all required approvals, including the
approval of the TSX Venture Exchange (the "TSXV"), the Offering is
expected to be completed within the next several days. The Company
expects to use the net proceeds of the Offering to accelerate the
deployment of the Company's sustainability and decarbonization
capabilities on Google Cloud.
The securities issued under the Offering will be subject to a
four-month hold period in accordance with applicable securities
legislation.
Update on Repayment of Convertible Debentures
Today, the Company also provided an update on the planned
repayment of its outstanding unsecured convertible debentures (the
"Debentures"). mCloud continues to await approval of its F-1
registration statement filed with the SEC in connection with the
preferred share offering (the "Offering") previously announced on
May 16, 2022. The Company reaffirmed
its plans to repay in full the outstanding principal and accrued
interest under the Debentures upon completion of the
Offering.
This news release does not constitute an offer to sell, or a
solicitation of an offer to buy, any of the securities in
the United States. The securities
have not been and will not be registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act") or
any state securities laws and may not be offered or sold within
the United States or to U.S.
Persons unless registered under the U.S. Securities Act and
applicable state securities laws or an exemption from such
registration is available.
About mCloud Technologies Corp.
mCloud is unlocking the untapped potential of energy-intensive
assets with cloud-based solutions that curb energy waste, maximize
energy production, eliminate harmful emissions, and get the most
out of critical energy infrastructure. Through mCloud's portfolio
of AssetCare™ solutions, mCloud enables asset owners and operators
in energy- and asset-intensive industries such as oil and gas,
wind, and commercial facilities to use cloud-based digital twins,
AI, and analytics to optimize asset performance, reliability, and
sustainability. mCloud has a worldwide presence with offices in
North America, Europe, the Middle
East, and Asia-Pacific.
The company's common shares trade in the United States on Nasdaq and in
Canada on the TSX Venture Exchange
under the symbol MCLD. Visit mcloudcorp.com to learn more.
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 harbor 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
herein may include information related to expected improvements to
the Company's cost structure, its integration plans with Google
Cloud, the expected impact of retiring legacy connected assets and
workers, the completion of the proposed Offering and the receipt of
the approval of the TSXV for the Offering, and the Company's
planned repayment of the Debentures under the Offering.
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.
A more complete discussion of the risks and uncertainties facing
the Company appears in the Company's Annual Information Form and
other continuous disclosure filings, which are available on SEDAR
at www.sedar.com and EDGAR at www.sec.gov. 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, and the Company does not undertake to update
any forward-looking information and/or forward-looking statements
that are contained or referenced herein, except in accordance with
applicable securities laws. All subsequent written and oral
forward-looking information and statements attributable to the
Company or persons acting on its behalf is expressly qualified in
its entirety by this notice.
Neither 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.
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SOURCE mCloud Technologies Corp.