Pressreleaser | 16 Nov 2022 | Smart Wires

Smart Wires: SMART WIRES TECHNOLOGY LTD. ANNOUNCES A FINANCING OF USD $5 MILLION AND ITS INTENTION TO APPLY FOR DELISTING OF ITS SDRS FROM NASDAQ FIRST NORTH GROWTH MARKET

The Company has entered into a Preferred Shares Subscription Agreement with two existing Members of the Company, FW Smart Wires Investors, LLC and two funds affiliated with 3X5 Partners, LLC, which provides for an immediate investment of USD $5 million in exchange for 5,000 Preferred Shares at a purchase price of USD $1,000 per share, a second investment of USD $5 million in exchange for an additional 5,000 Preferred Shares at a purchase price of USD $1,000 per share on or around December 1, 2022, and additional funding of up to USD $10 million for up to 10,000 Preferred Shares at a purchase price of USD $1,000 per share, subject to the terms and conditions outlined in the Amended and Restated Memorandum and Articles of Association (the ”AR M&A”). The AR M&A were filed with the appropriate corporate authorities on November 14, 2022, and are posted on the website of the Company.  The Preferred Shares, which are not listed on the Nasdaq First North Growth Market and are considered restricted securities, provide for preferential rights in favor of the new investors, including with respect to, among other rights, dividends, distributions and liquidation preferences, and the right to convert into the equity securities in the next equity financing of the Company at a price of 85% of the lowest cash price paid for such equity securities, as further outlined in the AR M&A.  In addition to the issuance of Preferred Shares in connection with such investment, the new investors will enter into a Warrant Agreement with the Company whereby each new investor will have an option to purchase additional Ordinary Shares of the Company at USD $0.01 per share of Ordinary Share. The investors will receive warrants to purchase 2,558,456.4 Ordinary Shares for every USD $1,000,000 of Preferred Shares purchased, for an aggregate of up to 51,169,128 Ordinary Shares. The warrants expire upon the earlier of ten years from the date of issuance, a sale of the Company or an initial public offering of the Company’s equity securities.

In addition to the noted investment, the Board of Directors of the Company has determined it is in the best interests of the Company and the Members to delist the SDRs, taking into consideration the evolution of trading since the Company listed their SDRs on Nasdaq First North Growth Market in May of 2021 and noting the trading volumes of and market prices for the SDRs that the Board of Directors believes may not be reflective of the Company’s value proposition. The Company has also considered the additional costs related to maintaining the listing of the SDRs on the Nasdaq First North Growth Market weighed against its benefits, as well as the administrative burden of complying with the listing rules as it considers future strategic transactions.

Notice of termination of the SDR Program is expected to be sent to the holders of SDRs in the near future by Pareto Securities AB, the SDR Custodian.  Holders of SDRs will be able to remain Members of the Company and be registered in the Company’s register of Members by following the process described in that communication.

Further information about the delisting will be provided once the formal delisting process has been initiated with Nasdaq First North Growth Market.