/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE
SERVICES OR DISSEMINATION IN THE UNITED
STATES./
WATERLOO, ON, Dec. 7, 2021 /CNW/ - Magnet Forensics Inc.
("Magnet Forensics" or the "Company") (TSX: MAGT), a
developer of digital investigation software used globally by public
safety organizations and enterprises, announced today that certain
shareholders, including Jad Saliba,
our Founder, President & Chief Technology Officer, Adam Belsher, our Chief Executive Officer,
certain other members of management and In-Q-Tel, Inc.
(collectively, the "Selling Shareholders"), have
entered into an agreement with an underwriting syndicate led by
Canaccord Genuity Corp. and BMO Capital Markets (collectively, the
"Underwriters") for the sale, on a "bought deal" basis,
of an aggregate of 2,456,814 subordinate voting shares at an
offering price of C$30.30 per share
for aggregate gross proceeds to the Selling Shareholders of
C$74.4 million (the
"Offering").
Each of Jad Saliba and
Adam Belsher will sell their
respective portions of the offered shares, being 900,000
subordinate voting shares each, through holding companies
controlled by them. In-Q-Tel, Inc., a not-for-profit strategic
investor, will be selling all 431,814 subordinate voting shares
held by it and will not hold any shares following closing of the
Offering. The remaining shares will be sold by certain other
members of management through holding companies controlled by
them.
The Underwriters have also been granted an over-allotment
option, exercisable for a period of 30 days from the date of the
closing of the Offering, to purchase at the offering price from the
holding companies controlled by Messrs. Jad
Saliba and Adam Belsher up to
an additional 368,522 subordinate voting shares in the aggregate,
representing 15% of the aggregate subordinate voting shares to
be sold pursuant to the Offering. If exercised in full, this would
increase the total size of the Offering to approximately
C$85.6 million.
In connection with the Offering, the Company will file a
prospectus supplement to its short form base shelf prospectus dated
October 29, 2021 with the securities
regulatory authorities in each of the provinces and territories of
Canada. Prospective investors should read the base shelf
prospectus and the prospectus supplement before making an
investment decision. Copies of the base shelf prospectus and
prospectus supplement will be available on SEDAR at
www.sedar.com.
To satisfy the sale under the Offering, an aggregate of
1,800,000 multiple voting shares of the Company currently held,
directly or indirectly, by Messrs. Jad
Saliba and Adam Belsher will
be converted into subordinate voting shares on a one-for-one basis
(2,168,522 multiple voting shares of the Company if the
over-allotment option is exercised in full). Following completion
of the Offering, our principal shareholders, being Messrs.
Jad Saliba, Adam Belsher and Jim
Balsillie, will continue to beneficially own or control,
directly or indirectly, 100% of our multiple voting shares,
representing 96.2% of the total voting power of our issued and
outstanding shares (96.1% if the over-allotment option is exercised
in full), with Messrs. Jad Saliba,
Adam Belsher and Jim Balsillie beneficially owning or
controlling, directly or indirectly, multiple voting shares
representing 38.8%, 37.0% and 20.4% of the total voting power of
our shares, respectively (38.6%, 36.8% and 20.6%, respectively, if
the over-allotment option is exercised in full).
Closing of the Offering is expected to occur on or about
December 14, 2021, subject to
customary closing conditions. Following the closing of the Offering
(assuming no exercise of the over-allotment option and no other
issuances of shares as a result of the exercise of options or
conversion of shares), the total number of issued and outstanding
shares of the Corporation is expected to be 40,688,439 of which
11,416,614 will be subordinate voting shares and 29,271,825 will be
multiple voting shares, and certain calculations relating to the
share ownership of our principal shareholders following the
Offering contained in this news release have been calculated on
such basis.
No securities regulatory authority has either approved or
disapproved the contents of this press release. The subordinate
voting shares have not been registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities
Act") or any state securities laws. Accordingly, the
subordinate voting shares may not be offered or sold within
the United States unless
registered under the U.S. Securities Act and applicable state
securities laws or pursuant to exemptions from the registration
requirements of the U.S. Securities Act and applicable state
securities laws. This press release shall not constitute an offer
to sell or the solicitation of an offer to buy nor shall there be
any sale of the subordinate voting shares in any province, state or
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to the registration or qualification under the
securities laws of any such province, state or jurisdiction.
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. In some cases, forward-looking information is identified by
words such as "will", "expects", "anticipates", "intends", "plans",
"believes", "estimates" or similar expressions concerning matters
that are not historical facts. In addition, any statements that
refer to expectations, intentions, projections or other
characterizations of future events or circumstances contain
forward-looking information. Forward-looking information contained
in this news release, includes, but is not limited to, statements
with respect to the Offering, including the expected timing of
closing of the Offering, the number of shares to be sold by each
Selling Shareholder and the exercise of the over-allotment option,
the filing of the prospectus supplement, the conversion of the
multiple voting shares into subordinate voting shares, the expected
number of issued and outstanding shares following closing of the
Offering and the calculation of ownership levels of certain of our
shareholders. Statements containing forward-looking information are
not historical facts but instead represent management's
expectations, estimates and projections regarding future events or
circumstances. Actual results could differ materially from those
projected herein.
Forward-looking information is based on a number of opinions,
estimates and assumptions that, while considered by the Company to
be appropriate and reasonable as of the date of this news release,
are subject to a number of known and unknown risks and
uncertainties, many of which are beyond the Company's control. Such
risks and uncertainties include, but are not limited to, risks
related to failure to complete the Offering and those factors
discussed in greater detail under "Risk Factors" in the Company's
short form base shelf prospectus dated October 29, 2021 and under "Summary of Factors
Affecting our Performance" section of the Company's MD&A for
the three and nine months ended September
30, 2021, both of which are available under the
Company's SEDAR profile at www.sedar.com, and should be considered
carefully by prospective investors.
If any of these risks or uncertainties materialize, or if the
opinions, estimates or assumptions underlying the forward-looking
information prove incorrect, actual results or future events might
vary materially from those anticipated in the forward-looking
information. Although we have attempted to identify important risk
factors that could cause actual results to differ materially from
those contained in forward-looking information, there may be other
risk factors not presently known to us or that we presently believe
are not material that could also cause actual results or future
events to differ materially from those expressed in such
forward-looking information. There can be no assurance that such
information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
information. No forward-looking statement is a guarantee of future
results. Accordingly, you should not place undue reliance on
forward-looking information, which speaks only as of the date made.
The forward-looking information contained in this press release
represents our expectations as of the date specified herein, and
are subject to change after such date. However, we disclaim any
intention or obligation or undertaking to update or revise any
forward-looking information whether as a result of new information,
future events or otherwise, except as expressly required under
applicable securities laws.
All of the forward-looking information contained in this
press release is expressly qualified by the foregoing cautionary
statements.
SOURCE Magnet Forensics Inc.