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ESW Capital, LLC Acquires Subordinate Voting Shares and Warrant of Redknee Solutions Inc.

This press release is issued pursuant to Multilateral Instrument 62-104 – Take-Over Bids and Issuer Bids and National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues.

TORONTO, Ontario, Sept. 06, 2017 (GLOBE NEWSWIRE) -- ESW Capital, LLC ("ESW"), and its affiliate Wave Systems Corp. ("Wave"), announced today that pursuant to a rights offering of Redknee Solutions Inc. (the “issuer”) which closed on September 6, 2017 (the “Closing Date”) ESW acquired 15,131,274 subordinate voting shares in the capital of the issuer (“Subordinate Voting Shares”) at a price of CAD$0.63 per Subordinate Voting Shares (the “Subscription Price”), and Wave acquired a subordinate voting shares purchase warrant (“Warrant”) for gross proceeds of CAD$9,532,702.62 (the “Rights Offering”). The Warrant entitles Wave to acquire, upon its exercise, 2,500,000 Subordinate Voting Shares (each a “Warrant Share”) for a period of ten years from the Closing Date at an exercise price of US$0.50 per Warrant Share (the “Standby Warrant”).     

In connection with the Rights Offering, the Offeror and Wave, entered into a standby purchase agreement dated June 8, 2017 (the “Standby Purchase Agreement”) pursuant to which Wave agreed to subscribe for and purchase such maximum number of Subordinate Voting Shares that may be issued under the Rights Offering (the “Standby Commitment”).  No additional Subordinate Voting Shares were acquired pursuant to the Standby Commitment.    

Additionally, on the Closing Date, ESW and Wave Systems Investment Corp. (“Wave Systems”) entered into a subscription agreement pursuant to which Wave Systems agreed to purchase 44,604,981 Subordinate Voting Shares (“Subsequent Issuance Shares”) at the Subscription Price in accordance with the right previously granted to Wave Systems to maintain its pro rata interest in the issuer, which is scheduled to close on or about September 12, 2017 for gross proceeds of approximately CAD$28 million (the “Subsequent Issuance”).        

Prior to the Closing Date, ESW was the holder of 14,106,300 Subordinate Voting Shares, representing approximately 13% of the total issued and outstanding Subordinate Voting Shares on a non-diluted basis.  In addition, prior to the Closing Date, Wave was the holder of a Warrant exercisable into 46,285,582 Subordinate Voting Shares (the “January 2017 Warrant”).  Accordingly, prior to the Closing Date, ESW owned and controlled 60,391,882 Subordinate Voting Shares in the aggregate, representing approximately 39% of the issued and outstanding Subordinate Voting Shares on a partially diluted basis.       

Following the Closing Date, ESW is the holder of 29,237,574 Subordinate Voting Shares, representing approximately 13.5% of the issued and outstanding Subordinate Voting Shares and Wave is the holder of Warrants (comprised of the January 2017 Warrant and the Standby Warrant) exercisable into an aggregate of 48,785,582 Subordinate Voting Shares, representing approximately 29% of the issued and outstanding Subordinate Voting Shares; a decrease in securityholding percentage of approximately 10%, calculated on a partially diluted basis.       

Upon closing of the Subsequent Issuance the Offeror will own and control 73,842,555 Subordinate Voting Shares, representing approximately 28% of the total issued and outstanding Subordinate Voting Shares on a non-dilated basis and Warrants (comprised of the Standby Warrant and the January 2017 Warrant) exercisable into 48,785,582 Subordinate Voting Shares, representing approximately 39.5% of the issued and outstanding Subordinate Voting Shares on a partially diluted basis.  Additionally, upon completion of the Rights Offering and the Subsequent Issuance, the exercise price of the January 2017 Warrant will be reduced from approximately US$1.30 to US$0.68.     

The securities mentioned herein were acquired in accordance with the commercial and financial business objectives of ESW, Wave and Wave Systems, for the purpose of which the issuer stated in a press release dated September 6, 2017 was to fund a restructuring of the business of the issuer in furtherance of the previously announced strategic plan of the issuer. Except in connection with the transactions contemplated herein, ESW has not made any determinations with respect to its role in the future of the issuer and its business or with respect to future acquisitions of, ownership of, or control over, any additional securities of the issuer.  ESW and/or its joint actors may in the future acquire additional securities of the issuer in the market or through private or other transactions, sell all or some portion of the securities of the issuer it controls or owns, or enter into derivative or other transactions with respect to its securities of the issuer.

The issuer is located at 2560 Matheson Blvd. East Mississauga, Ontario, L4W 4Y9, Canada. ESW is located at 401 Congress Avenue, Suite 2650, Austin, TX 78701, United States. A copy of the early warning report to which this news release relates can be obtained from Andrew Simon Price at +1 512 524-6149 or on the SEDAR profile of the issuer at www.sedar.com.

About ESW Capital, LLC

Based in Austin, Texas, the ESW Capital group (www.eswcapital.com) focuses on buying, strengthening, and growing mature business software companies. By taking advantage of its unique operating platform, ESW revitalizes its acquisitions for sustainable success while making customer satisfaction a top priority. ESW has been in the enterprise software space since 1988, and the group includes notable brands such as Aurea, Ignite Technologies, Trilogy, and Versata. For more information, email info@eswcapital.com.

Andrew Simon Price
                    +1 512 524-6149

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