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Edgewater Wireless Closes First Tranche of Private Placement

OTTAWA, Ontario--(BUSINESS WIRE)--

Edgewater Wireless Systems Inc. (YFI.V) (KPIFF) (the “Company”) is pleased to announce the closing of its previously announced private placement.

The Company issued an aggregate of 11,000,000 units (the “Units”) at a price of $0.10 per Unit to raise aggregate gross proceeds of $1,100,000, completing parts one and two of the first tranche. Each Unit consists of one common share of the Company and one-half of one non-transferable share purchase warrant. Each whole warrant entitles the holder to purchase one additional common share of the Company, for a period of 24 months from closing, at an exercise price of $0.20 per share.

Four members of the board of directors and management participated in the financing for an aggregate of 600,000 Units. The participation of each of these directors is considered to be a related party transaction pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transaction (“MI 61-101”). The Company determined that exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 were available for the related party transaction pursuant to Section 5.5(a) and Section 5.7(1)(a) of MI 61-101 on the basis that the fair market value of the transaction involving related parties was not more than 25% of the Company’s market capitalization.

We anticipate closing the second and final tranche on or before the end of June.

In connection with the funds raised in the first tranche of the private placement, finders’ fees will be paid to PI Financial Corp. which will receive a finder’s fee of $7,980 in cash and 79,800 broker warrants, Canaccord Genuity Corp. which will receive a finder’s fee of $4,830 in cash and 48,300 broker warrants, Hobart Capital Markets LLP which will receive a finder’s fee of $6,020 in cash and 60,200 broker warrants and Industrial Alliance Securities Inc. which will receive a finder’s fee of $1,470 in cash and 14,700 broker warrants. Each broker warrant entitles the holder to acquire one common share of the Company at an exercise price of $0.20 per share for a period of 24 months following the date of issuance. Finders’ fees will be paid subject to TSX Venture Exchange approval.

The securities issued pursuant to the private placement are subject to statutory four month hold periods ending on October 11, 2019 and October 25, 2019.

It is intended that the maximum proceeds from the Offering will be used for: Operating Expenses, including those relating to expanding the Company’s product footprint into the global residential WiFi sector and growing its sales and marketing teams (8%); business development and marketing expenses for systematic prospect outreach and industry visibility (23%); Engineering and Product Development (53%) and Working Capital (25%). The Company may reallocate the proceeds from the Offering as may be required depending upon the development of the Company’s business.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The securities offered have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements. This news release does not constitute an offer to sell or the solicitation of any offer to buy nor will there be any sale of these securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such province, state or jurisdiction.

This document contains certain forward-looking information and forward-looking statements within the meaning of applicable securities legislation (collectively “forward-looking statements”). The use of the word “will”, “intended” and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Such forward-looking statements should not be unduly relied upon. This document contains forward-looking statements and assumptions pertaining to the following: the Offering; the completion of the Offering; and the use of proceeds from the Offering. Actual results achieved may vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. The Company believes the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct.

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