- Rights Offering Closes and ESW
Exercises Subsequent Issuance Right -
TORONTO, Sept. 6, 2017 /CNW/ - Redknee Solutions
Inc. ("Redknee" or the "Company") (TSX: RKN) announces that it
has closed its previously announced rights offering to holders of
its subordinate voting shares (the "Rights Offering"). Under
the Rights Offering, an aggregate of 108,519,936 subordinate voting
shares were issued at a subscription price of Cdn$0.63 per share for gross proceeds to the
Company of approximately Cdn$68
million. The net proceeds of the Rights Offering will
be used to fund a restructuring of the business in furtherance of
the previously announced strategic plan (the "Strategic Plan").
The Rights Offering was over-subscribed prior to ESW Capital,
LLC ("ESW") exercising its additional rights and, as such, Wave
Systems Corp. was not required to fulfill its obligations under the
standby purchase agreement. ESW exercised all of its rights
received as a shareholder under the basic subscription privilege as
well as all of the rights to which it was entitled under the
additional subscription privilege.
Pursuant to the right previously granted to ESW to maintain its
pro rata interest in the Company, ESW has agreed to subscribe for
an additional 44,604,981 subordinate voting shares at a price of
Cdn$0.63 per share for additional
aggregate gross proceeds to the Company of approximately
Cdn$28 million (the "Subsequent ESW
Issuance"). The Subsequent ESW Issuance is scheduled to
close on or about September 12,
2017.
The following table presents the holdings of subordinate voting
shares by ESW and its affiliates before and immediately following
the completion of the Rights Offering and the Subsequent ESW
Issuance:
Security
Type
|
ESW Holdings before
the
Rights Offering
|
ESW Holdings after
the
Rights Offering and the
Subsequent ESW
Issuance
|
Subordinate Voting
Shares
|
14,106,300
(13.00%)
|
73,842,555
(28.2%)
|
The shareholdings above are presented on a non-diluted
basis. Following the Rights Offering and the Subsequent ESW
Issuance, ESW and its affiliates will beneficially own and control
approximately 39.5% of the issued and outstanding subordinate
voting shares, on a partially diluted basis. As a result of the
completion of the Rights Offering and the Subsequent ESW Issuance,
the exercise price of the warrant issued to Wave Systems Corp. (the
"Wave Warrant") in January 2017 will
be reduced from US$1.30 to
US$0.68. The Wave Warrant entitles
the holder thereof to acquire 46,285,582 subordinate voting
shares.
Details of the Rights Offering
Under the Rights Offering, 101,622,337 subordinate voting shares
were distributed pursuant to the basic subscription privilege, of
which, to the knowledge of Redknee after reasonable inquiry,
approximately 31,193,141 subordinate voting shares were distributed
to shareholders who were insiders prior to the distribution or
shareholders who became insiders as a result of the distribution
under the Rights Offering, and approximately 70,429,196 subordinate
voting shares were distributed to the remaining subscribers.
Under the Rights Offering, 6,897,599 subordinate voting shares
were distributed pursuant to the additional subscription privilege,
of which, to the knowledge of Redknee after reasonable inquiry,
approximately 1,103,871 subordinate voting shares were distributed
to shareholders who were insiders prior to the distribution or
shareholders who became insiders as a result of the distribution
under the Rights Offering, and approximately 5,793,728 subordinate
voting shares were distributed to the remaining
subscribers.
Upon closing of the Rights Offering and following the closing of
the Subsequent Issuance Right, a total of 261,644,853 subordinate
voting shares of Redknee will be issued and outstanding.
The Services Agreements
Upon closing of the Rights Offering, the Company entered into
the previously announced services agreements with Crossover
Markets, Inc. ("Crossover") and DevFactory FZ-LLC ("DevFactory"),
which consisted of (i) a services agreement with Crossover pursuant
to which Crossover will provide the Company with access to service
providers, and (ii) a technology services agreement with DevFactory
pursuant to which DevFactory will provide certain technology
services to the Company.
Board of Directors
The Company also announces that the board of directors (the
"Board") has accepted Mr. Keith
Graham's resignation as director of the Company, effective
immediately.
Remaining on the Board are Scott
Brighton (Chairman), Demetrios
Anaipakos, Chris Helling,
Farhan Thawar, Andrew Price and
Christy Jones. The Company is
actively pursuing a replacement lead independent director to fill
the Board vacancy.
About Redknee
Redknee monetizes today's digital world for communications
service providers. Our market-leading portfolio of monetization and
subscriber management solutions includes real-time billing,
charging, policy and customer care modules and is available on
premise, cloud-based, or as Software-as-a-Service. With a central
focus on driving customer success, Redknee's products power growth
and innovation for operators globally. Established in 1999, Redknee
Solutions Inc. (TSX: RKN) can be found on the Toronto Stock
Exchange. For more information about Redknee, please go to
www.redknee.com.
SOURCE Redknee Solutions Inc.