/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES
OR DISSEMINATION IN THE UNITED
STATES./
TORONTO, May 3, 2021 /CNW/ - Magnet Forensics Inc.
("Magnet Forensics" or the "Company"), a developer of
digital investigation software that acquires, analyzes, reports on,
and manages evidence from digital sources, announced today the
closing of its initial public offering (the
"Offering") of 6,773,500 subordinate voting shares
of the Company ("Subordinate Voting Shares") at a price of
C$17.00 per share, which includes the
exercise in full by the Underwriters (as defined below) of their
option to purchase up to 883,500 additional Subordinate Voting
Shares, for total gross proceeds of C$115,149,500. The Company expects to use the net
proceeds from the Offering to strengthen its balance sheet,
providing it with flexibility to fund its future growth
strategies.
The Subordinate Voting Shares began trading on the Toronto Stock
Exchange ("TSX") on April 28,
2021 under the symbol "MAGT".
"I'm proud of the team that has gotten Magnet Forensics to this
important milestone," said Adam
Belsher, Magnet Forensics' CEO. "Our customers are
seeing significant growth of cybercrime and digital evidence
related to their investigations globally. The investment in Magnet
Forensics, through the IPO, is ultimately an acknowledgement of the
importance of these challenges and provides resources to tackle
them more aggressively."
The Offering is being made through a syndicate of underwriters
led by BMO Capital Markets and Canaccord Genuity Corp, as co-lead
underwriters and joint bookrunners, and CIBC Capital Markets,
National Bank Financial Inc., RBC Dominion Securities Inc. and
Scotiabank (collectively, the "Underwriters").
The Offering was completed pursuant to the Company's
supplemented PREP prospectus dated April 28,
2021 (the "Prospectus"), and filed with the
securities regulators in each of the provinces and territories of
Canada, a copy of which is
available under the Company's profile on SEDAR at
www.sedar.com.
The securities under the Offering have not been, and will not
be, registered under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act"), or the securities
laws of any state of the United
States and may not be offered, sold or delivered, directly
or indirectly, in the United
States, except pursuant to an exemption from the
registration requirements of the U.S. Securities Act and applicable
state securities laws. This news release does not constitute an
offer to sell or solicitation of an offer to buy any of these
securities in any jurisdiction in which the offering or sale is not
permitted.
Early Warning Reports
On April 30, 2021, in connection
with and prior to closing of the Offering, the Company completed a
series of transactions (the "Pre-Closing
Reorganization") pursuant to which, among other things, the
Company amalgamated with 2415112 Ontario Ltd. ("Holdco"), a
holding company owned and controlled by Mr. Belsher, Jad Saliba, President and Chief Technology
Officer of the Company, and Jim
Balsillie, Chair of the Board of Directors of the Company
(collectively, the "Principal Shareholders"). As a result of
such amalgamation, among other things, the common shares of the
Company held by Holdco were cancelled and the common shares of
Holdco held by the Principal Shareholders were converted into
multiple voting shares of the Company ("Multiple Voting
Shares") in proportion to their respective interests in Holdco.
In addition, as part of the Pre-Closing Reorganization, the common
shares of the Company indirectly held by Jim Balsillie were converted into Subordinate
Voting Shares and exchanged for Multiple Voting Shares.
Prior to the completion of the Pre-Closing Reorganization, none
of the Principal Shareholders owned or controlled any Multiple
Voting Shares or Subordinate Voting Shares. Immediately following
the Pre-Closing Reorganization but before giving effect to the
Offering, Mr. Belsher directly owned and indirectly controlled (in
his capacity as the sole trustee of The Belsher 2014 Family Trust)
12,162,096 Multiple Voting Shares (representing approximately 39.1%
of the issued and outstanding Multiple Voting Shares), Mr. Saliba
directly owned and indirectly controlled (in his capacity as the
sole trustee of The Saliba 2014 Family Trust) 12,710,679 Multiple
Voting Shares (representing approximately 40.9% of the issued and
outstanding Multiple Voting Shares), and Mr. Balsillie indirectly
owned and controlled (through Amolino Holdings Inc., a holding
Company indirectly controlled by Mr. Balsillie) 6,199,050 Multiple
Voting Shares (representing approximately 20.0% of the issued and
outstanding Multiple Voting Shares).
After giving effect to the Pre-Closing Reorganization and the
Offering, Mr. Belsher directly and indirectly owns or controls
12,162,096 Multiple Voting Shares (representing approximately 39.1%
of the issued and outstanding Multiple Voting Shares), Mr. Saliba
directly and indirectly owns or controls 12,710,679 Multiple Voting
Shares (representing approximately 40.9% of the issued and
outstanding Multiple Voting Shares), and Mr. Balsillie indirectly
owns or controls 6,199,050 Multiple Voting Shares (representing
approximately 20.0% of the issued and outstanding Multiple Voting
Shares).
Pursuant to the terms of the Multiple Voting Shares, they are
each convertible into Subordinate Voting Shares on a one-for-one
basis, and will convert automatically upon the occurrence of
certain events. Upon completion of the Offering, assuming that only
the Multiple Voting Shares directly and/or indirectly owned and/or
controlled by any one of Messrs. Belsher, Saliba, or Balsillie, as
applicable, are converted into Subordinate Voting Shares in
accordance with their terms, the Multiple Voting Shares directly
and/or indirectly owned and/or controlled by any one of Messrs.
Belsher, Saliba, or Balsillie will represent approximately 56.9%,
58.0% and 40.2%, respectively, of the issued and outstanding
Subordinate Voting Shares, on a partially-diluted basis, as the
case may be.
The Multiple Voting Shares referenced in this press release were
issued pursuant to the Pre-Closing Reorganization effected in
connection with the Offering and were acquired for investment
purposes. The Principal Shareholders may further purchase, hold,
vote, trade, dispose or otherwise deal in the securities of the
Company, in such manner as it deems advisable from time to time,
subject to applicable laws and the terms of the Corporation's
articles and of the lock up agreements, coattail agreement and
investor rights agreement entered into by each of the Principal
Shareholders, each as described in the Prospectus.
The Subordinate Voting Shares are currently listed for trading
on the Toronto Stock Exchange, while the Multiple Voting Shares are
not listed on a marketplace. For further information and to obtain
a copy of the early warning reports to be filed under applicable
Canadian securities laws in connection with the foregoing matters,
please see the Company's profile on SEDAR at www.sedar.com.
About Magnet Forensics
Founded in 2010, Magnet Forensics is a developer of digital
investigation software that acquires, analyzes, reports on, and
manages evidence from digital sources, including computers, mobile
devices, IoT devices and cloud services. Magnet Forensics' software
is used by more than 4,000 public and private sector customers in
over 90 countries and helps investigators fight crime, protect
assets and guard national security.
Forward-Looking Statements
This news release contains "forward-looking information"
within the meaning of applicable securities legislation, which
reflects the Company's current expectations regarding future
events, including statements with regard to expected use of the net
proceeds for the Offering, the commencement of trading of the
Subordinate Voting Shares on the Toronto Stock Exchange and the
expected growth of cybercrime and digital evidence investigations
globally. Forward-looking information is based on a number of
assumptions, including but not limited to the projected market size
of the global digital investigations and intelligence market, and
is subject to a number of risks and uncertainties, many of which
are beyond the Company's control. Such risks and uncertainties
include, but are not limited to, the factors discussed under "Risk
Factors" in the Prospectus filed on SEDAR. Actual results could
differ materially from those projected herein. Unless otherwise
noted or the context otherwise indicates, the forward-looking
information contained in this news release is provided as of the
date of this news release and Magnet Forensics does not undertake
any obligation to update such forward-looking information, whether
as a result of new information, future events or otherwise, except
as expressly required under applicable securities laws.
SOURCE Magnet Forensics Inc.