Redknee Announces Standby Purchase Agreement in Furtherance of its Strategic Plan

Redknee Solutions Inc. (“Redknee” or the “Company”) (TSX: RKN) has announced that it has entered into a Standby Purchase Agreement with Wave Systems Corp. (“Wave”), an affiliate of ESW Capital, LLC (“ESW”), and ESW in connection with the launching of an approximately US$54 million rights offering, fully backstopped by Wave (the “Rights Offering”). The net proceeds of the Rights Offering will be used to fund a restructuring of the business (the “Restructuring”) in furtherance of the previously announced strategic plan (the “Strategic Plan”) which will, among other things, create a strong platform for long-term growth, simplified operations and sustained profitability for the Company. The Company is also announcing certain leadership changes in connection with the Restructuring.

Subject to the closing of the Rights Offering, the Company will enter into (i) a services agreement with Crossover Markets, Inc. (“Crossover”) pursuant to which Crossover will provide the Company with access to service providers (the “Crossover Services Agreement”), and (ii) a technology services agreement with DevFactory FZ-LLC (“DevFactory”) pursuant to which DevFactory will provide certain technology services to the Company (the “DevFactory Services Agreement” and, together with the Crossover Service Agreement, the “Services Agreements”). The Company has extended the interim Services Agreements with Crossover and DevFactory to the earlier of (i) the Special Meeting referred to below, if the necessary shareholder approvals are not obtained, and (ii) the termination of the Standby Purchase Agreement. Crossover and DevFactory are affiliates of ESW.

Entering into the Standby Purchase Agreement represents the outcome of a review of alternatives undertaken by a special committee of independent directors (the “Special Committee”) of the board of directors of the Company (the “Board”), comprised of Mr. Keith Graham (chair), Ms. Christina Jones and Mr. Farhan Thawar (the “Independent Directors”). The Special Committee was advised by TD Securities Inc., as financial advisor, and Goodmans LLP, as legal advisor. The Special Committee, with the assistance of its advisors, has determined that the Rights Offering, the Standby Purchase Agreement and the Services Agreements collectively represent the best available alternative for the Company.

Subscribe

The Canadian Business Quarterly (The CBQ) provides an in-depth view of business and economic development issues taking place across the country. Featuring interviews with top executives, government policy makers and prominent industry bodies The CBQ examines the news beyond the headlines to uncover the drivers of local, provincial, and national affairs.

All copy appearing in The Canadian Business Quarterly is copyrighted. Reproduction in whole or part is not permitted without written permission. Any financial advice published in The Canadian Business Quarterly or on www.thecbq.ca has been prepared without taking in to account the objectives, financial situation or needs of any reader. Neither The Canadian Business Quarterly nor the publisher nor any of its employees hold any responsibility for any losses and or injury incurred (if any) by acting on information provided in this magazine or website. All opinions expressed are held solely by the contributors and are not endorsed by The Canadian Business Quarterly or www.thecbq.ca.

All reasonable care is taken to ensure truth and accuracy, but neither the editor nor the publisher can be held responsible for errors or omissions in articles, advertising, photographs or illustrations. Unsolicited manuscripts are welcome but cannot be returned without a stamped, self-addressed envelope. The publisher is not responsible for material submitted for consideration. The CBQ is published by Romulus Rising Pty Ltd, ABN: 77 601 723 111.

Subscribe

© 2023 The Canadian Business Quarterly. All rights reserved. A division of Romulus Rising Pty Ltd, an Australian media company (www.RomulusRising.com).