/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
BRAMPTON, ON, June 23, 2017 /CNW/ - DATA Communications
Management Corp. (TSX: DCM) ("DATA" or the "Company")
is pleased to announce that it has completed its previously
announced rights offering (the "Rights Offering"), raising
gross proceeds of $4.6 million. The
Company also announced that it intends to complete a non-brokered
equity private placement (the "Private Placement") to raise
up to $3.9
million. Collectively, the gross proceeds from the
Rights Offering and the Private Placement will be up to
$8.5 million.
Rights Offering
Under the terms of the Rights Offering, each eligible
securityholder was entitled to subscribe for one common share of
the Company ("Common Share") for every two rights held upon
payment of the subscription price of $1.40 per Common Share. The Company will issue
3,312,368 Common Shares or approximately 50% of the Common
Shares available under the Rights Offering for gross proceeds of
approximately $4.6 million.
To the knowledge of the Company, after reasonable inquiry,
directors, officers, employees and other insiders of the
Company exercised subscription privileges, including subscription
privileges associated with additional rights acquired in the
market, to acquire 1,219,179 Common Shares under the Rights
Offering representing total subscription proceeds of approximately
$1.7 million. To the knowledge
of the Company, after reasonable inquiry, no person that was not an
insider became an insider of the Company as a result of the Rights
Offering.
Upon closing the Rights Offering the Company has
16,572,631 Common Shares outstanding.
DATA retained Kingsdale Advisors as the information agent in
connection with the Rights Offering.
Private Placement
The Company also announced that it intends to complete the
Private Placement of up to 2,762,104 units ("Units"), with
each Unit consisting of one Common Share and one-half of a Common
Share purchase warrant (each whole Common Share purchase warrant, a
"Warrant") at a price per Unit of $1.40 for gross proceeds to the Company of up to
$3.9 million. Each full Warrant will
entitle the holder to acquire one Common Share (a "Warrant
Share") at a price of $1.75 for a
period of two years from the closing of the Private Placement. If
the volume weighted average price of the Common Shares on the
Toronto Stock Exchange equals or exceeds $2.75 for 20 consecutive trading days, the
Company will have the right (the "Acceleration Right") to
accelerate the expiry date of the Warrants to a date that is 30
days from the date on which the Company notifies the Warrant
holders of its intent to exercise the Acceleration Right.
Michael G. Sifton, DATA's Chief
Executive Officer, Gregory J.
Cochrane, DATA's President, and a group of third party
investors have agreed to subscribe for a total of approximately
$3.5 million (2,521,465 Units)
pursuant to the Private Placement. DATA expects to close the
Private Placement on or about June 28,
2017. Completion of the Private Placement is subject to
receipt of all necessary regulatory approvals, including the
approval of the Toronto Stock Exchange.
If the Private Placement is fully completed, the Company will
issue a total of 2,762,104 additional Common Shares pursuant to the
Private Placement and a total of 19,334,735 Common Shares will be
outstanding (before giving effect to the exercise of any Warrants
or the exercise of existing anti-dilution rights held by an
existing shareholder of the Company). The Common Shares, Warrants
and Warrant Shares will be subject to a statutory hold period
expiring four months and one day after the Private Placement
closes.
The Company determined it was prudent to take advantage of
expressions of interest received from certain investors to raise
additional equity capital through the Private Placement, in order
to provide additional financial flexibility to assist with the
Company's current and projected capital requirements, including
payment of principal and accrued and unpaid interest on the
Company's outstanding 6.00% convertible unsecured subordinated
debentures (the "Debentures") which mature on June 30, 2017.
Use of Proceeds
The Company intends to use the net proceeds from the Rights
Offering and the Private Placement, together with borrowings under
credit facilities established by the Company, to repay the
Debentures at maturity and for general corporate purposes.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities of the
Company in the United States. The securities described in
this news release have not been and will not be registered under
the United States Securities Act of 1933, as amended (the "U.S.
Securities Act") or any state securities laws and may not be
offered or sold within the United
States or to U.S. persons unless registered under the U.S.
Securities Act and applicable state securities laws or an exemption
from registration is available.
Early Warning Reporting Information
The following information is being provided in respect of
Michael G. Sifton in accordance with
National Instrument 62-103 – The Early Warning System and
Related Take-Over Bid and Insider Reporting
Issues.
Pursuant to the Rights Offering, Mr. Sifton, a family member and
a family holding corporation acquired beneficial ownership of, or
control over, a total of 500,907 Common Shares (the "Acquired
Shares") at a price of $1.40 per
share and an aggregate purchase price of $701,269.80. The Acquired Shares represent
approximately 3.0% of the issued and outstanding Common Shares
(after giving effect to the completion of the Rights
Offering). Prior to the completion of the Rights Offering,
Mr. Sifton and his joint actors described above had beneficial
ownership of, or control over, 1,043,447 Common Shares, 499,377
stock options to acquire Common Shares and $62,000 aggregate principal amount of Debentures,
representing 11.21% of the outstanding Common Shares. After
giving effect to the acquisition of the Acquired Shares and the
completion of the Rights Offering and assuming the exercise in
whole of such options and the conversion in whole of such
Debentures, Mr. Sifton and his joint actors described above have
beneficial ownership of, or control over, 2,043,783 Common
Shares, representing 12.0% of the issued and outstanding Common
Shares.
The Acquired Shares were acquired pursuant to the Rights
Offering and will be held (together with the other securities of
the Company beneficially owned, or over which Mr. Sifton and his
joint actors have control) for investment purposes. Other
than the possible exercise of stock options granted to Mr. Sifton
pursuant to the Company's long-term incentive plan, and the
acquisition of Units pursuant to the proposed Private Placement,
Mr. Sifton and his joint actors do not have any present plans or
intentions to acquire or dispose of Common Shares. Depending
upon the circumstances, including but not limited to the Company's
business and prospects, market and general economic conditions and
other available investment opportunities, however, Mr. Sifton and
his joint actors may, in the future, acquire additional securities
or related financial instruments of the Company or dispose of all
or a portion of the securities or related financial instruments of
the Company previously acquired.
The foregoing Early Warning Reporting Information does
not give effect to the proposed Private Placement, pending the
closing of that transaction.
About DATA Communications Management Corp.
DATA is a leading provider of business communication solutions,
bringing value and collaboration to marketing and operation teams
across North America. We
help marketers and agencies unify and execute communications
campaigns across multiple channels, and we help operations teams
streamline and automate document and communications management
processes. Our core capabilities include direct marketing, print
services, labels and asset tracking, event tickets and gift cards,
logistics and fulfilment, content and workflow management, data
management and analytics, and regulatory communications. We
serve clients in key vertical markets such as financial services,
retail, healthcare, lottery and gaming, not‐for‐profit, and energy.
We are strategically located across Canada to support clients on a national basis,
and serve the U.S. market through our facilities in Chicago, Illinois.
Additional information relating to DATA Communications
Management Corp. is available on www.datacm.com, and in the
disclosure documents filed by DATA Communications Management Corp.
on the System for Electronic Document Analysis and Retrieval
(SEDAR) at www.sedar.com.
Forward-Looking Statements
Certain statements in this press release constitute
"forward-looking" statements that involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance, objectives or achievements of DATA, or industry
results, to be materially different from any future results,
performance, objectives or achievements expressed or implied by
such forward-looking statements. When used in this press
release, words such as "may", "would", "could", "will", "expect",
"anticipate", "estimate", "believe", "intend", "plan", and other
similar expressions are intended to identify forward-looking
statements. These statements reflect DATA's current views
regarding future events and operating performance, are based on
information currently available to DATA, and speak only as of the
date of this press release. These forward-looking statements
involve a number of risks, uncertainties and assumptions and should
not be read as guarantees of future performance or results, and
will not necessarily be accurate indications of whether or not such
performance or results will be achieved. Many factors could
cause the actual results, performance, objectives or achievements
of DATA to be materially different from any future results,
performance, objectives or achievements that may be expressed or
implied by such forward-looking statements. The principal
factors, assumptions and risks that DATA made or took into account
in the preparation of these forward-looking statements include the
Company's ability to obtain Toronto Stock Exchange and other
regulatory approval and the Company's ability to close the proposed
Private Placement. Additional factors are discussed under the
headings "Risk Factors" and "Risks and Uncertainties" in DATA's
management 's discussions and analysis and in DATA's other publicly
available disclosure documents, as filed by DATA on SEDAR
(www.sedar.com). Should one or more of these risks or uncertainties
materialize, or should assumptions underlying the forward-looking
statements prove incorrect, actual results may vary materially from
those described in this press release as intended, planned,
anticipated, believed, estimated or expected. Unless required
by applicable securities law, DATA does not intend and does not
assume any obligation to update these forward-looking
statements.
SOURCE DATA Communications Management Corp.