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WATERLOO, ON, Dec. 14, 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 (collectively, the "Selling
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., have successfully completed the previously
announced bought deal offering of an aggregate of
2,456,814 subordinate voting shares (the "Offered
Shares"). The subordinate voting shares were offered and sold
at a price of C$30.30 per share for
aggregate gross proceeds to the Selling Shareholders of
approximately C$74.4
million (the "Offering").
Each of Jad Saliba and
Adam Belsher sold their respective
portions of the Offered Shares, being 900,000 subordinate voting
shares, through holding companies controlled by them. In-Q-Tel,
Inc., a not-for-profit strategic investor, sold all of its 431,814
subordinate voting shares and no longer holds any shares of the
Company following closing of the Offering. The remaining shares
were sold by holding companies controlled by other members of
management.
The underwriting syndicate consisted of Canaccord Genuity Corp.
("Canaccord"), BMO Capital Markets ("together with
Canaccord, the "Co-Lead Underwriters"), National Bank
Financial Inc., RBC Capital Markets and CIBC Capital Markets
(collectively, with the Co-Lead Underwriters, the
"Underwriters"). The Underwriters were granted an
over-allotment option in connection with the Offering (the
"Over-Allotment Option").
Each of the Company, its directors and all of its named
executive officers, including the Selling Shareholders, agreed to a
lock-up period of 90 days, during which time they will be
restricted from disposing of any further securities of Magnet
Forensics without the prior consent of the Co-Lead Underwriters, on
behalf of the Underwriters.
The subordinate voting shares were offered in Canada by way of a prospectus supplement dated
December 9, 2021 (the "Prospectus
Supplement") to its short form base shelf prospectus dated
October 29, 2021 (the "Base Shelf
Prospectus") with the securities regulatory authorities in each
of the provinces and territories of Canada. The Offering was
made in Canada only by means of
the Base Shelf Prospectus and Prospectus Supplement. Such documents
contain important information about the Offering. Copies of the
Base Shelf Prospectus and Prospectus Supplement are available on
SEDAR at www.sedar.com.
No securities regulatory authority has either approved or
disapproved the contents of this press release. 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.
Early Warning Reports
Unless otherwise indicated or the context otherwise requires,
the references to numbers and percentages of shares of the Company
beneficially owned or controlled in this press release are
calculated on the basis of 31,071,825 Multiple Voting Shares and
9,616,614 Subordinate Voting Shares issued and outstanding as of
December 8, 2021 as disclosed in the
Company's Prospectus Supplement and does not give effect to the
potential exercise of the Over-Allotment Option.
On December 14, 2021, immediately
prior to closing of the Offering, the Company shares held by Mr.
Saliba and certain Saliba Group Permitted Holders (as defined in
the Base Shelf Prospectus) were reorganized (the "Saliba Group
Reorganization"), resulting in (i) Candestra Holdings Inc. (the
"Saliba Holdco") holding 3,612,237 multiple voting shares
and 1,084,261 subordinate voting shares, 900,000 of such
subordinate voting shares representing a portion of the Offered
Shares, (ii) The Saliba 2014 Family Trust holding an aggregate of
7,779,568 multiple voting shares and (iii) Mr. Saliba directly
holding 234,613 multiple voting shares.
Also immediately prior to closing of the Offering, the Company
shares held by Mr. Belsher and certain Belsher Group Permitted
Holders (as defined in the Base Shelf Prospectus) were reorganized
(the "Belsher Group Reorganization", and together with the
Saliba Group Reorganization, the "Pre-Closing
Reorganizations"), resulting in (i) Fortis Investments Inc.
(the "Belsher Holdco") holding 3,681,847 multiple voting
shares and 1,084,261 subordinate voting shares, 900,000 of such
subordinate voting shares representing a portion of the Offered
Shares, (ii) The Belsher 2014 Family Trust holding an aggregate of
7,260,271 multiple voting shares and (iii) Mr. Belsher directly
holding 135,717 multiple voting shares.
Prior to the completion of the Pre-Closing Reorganizations and
the closing of the Offering, Mr. Saliba directly and indirectly
owned or controlled 12,710,679 multiple voting shares (representing
approximately 40.9% of the issued and outstanding multiple voting
shares), Mr. Belsher directly and indirectly owned or controlled
12,162,096 multiple voting shares (representing approximately 39.1%
of the issued and outstanding multiple voting shares), and Mr.
Jim Balsillie indirectly owned or
controlled 6,199,050 multiple voting shares (representing
approximately 20.0% of the issued and outstanding multiple voting
shares).
After the closing of the Offering, Mr. Saliba directly and
indirectly owns or controls 184,261 subordinate voting shares,
representing approximately 1.6% of the issued and outstanding
subordinate voting shares and 11,626,418 multiple voting shares,
representing approximately 40.2% of the issued and outstanding
multiple voting shares, Mr. Belsher directly and indirectly owns
184,261 subordinate voting shares, representing approximately 1.6%
of the issued and outstanding subordinate voting shares and
11,077,835 multiple voting shares, representing approximately 38.3%
of the issued and outstanding multiple voting shares, and Mr.
Balsillie continues to directly and indirectly own 6,199,050
multiple voting shares, representing approximately 21.4% of
the issued and outstanding multiple voting shares.
One of the Selling Shareholders, Angelo
Loberto, the Company's Chief Financial Officer and Chief
Operating Officer, prior to the completion of the Pre-Closing
Reorganizations and the closing of the Offering, beneficially
owned or controlled, directly or indirectly, an aggregate of
1,260,000 subordinate voting shares, representing approximately
13.1% of the issued and outstanding subordinate voting shares, of
which (i) 1,010,000 were held directly by Mr. Loberto and (ii)
250,000 were held by 1000019034 Ontario Inc. (the "Loberto
Holdco"), an entity wholly owned by Mr. Loberto with 150,000 of
such subordinate voting shares representing Mr. Loberto's portion
of the Offered Shares. Upon completion of the Offering, Mr. Loberto
beneficially owns or controls, directly or indirectly, an aggregate
of 1,110,000 subordinate voting shares, representing approximately
9.4% of the issued and outstanding subordinate voting Shares.
The subordinate voting shares were disposed of in the Offering
as a result of investment considerations including price, market
conditions, availability of funds, evaluation of alternative
investments and other factors. Messrs. Belsher, Saliba, Balsillie
and Loberto, and entities controlled by each of them, respectively,
may further purchase, hold, vote, trade, dispose or otherwise deal
in the securities of the Company, in such manner as they deem
advisable from time to time, subject to applicable laws and the
terms of the Company's articles and of agreements to which they are
party, as described in Early Warning Reports to be filed by each of
them on SEDAR at www.sedar.com and available from the Company
contact referred to at the end of this press release.
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.
SOURCE Magnet Forensics Inc.