Xtract One Technologies Inc. (TSX: XTRA)(OTCQX: XTRAF)(FRA:0PL)
(“Xtract One”), and Madison Square Garden Sports Corp. (NYSE: MSGS)
(“MSG Sports”) today announced that MSG Sports will invest up to
C$13.4 million (US$10 million) in Xtract One, a leading security
technology company that prioritizes the patron access experience by
leveraging AI. The initial investment of C$8.4 million (US$6.3
million) is effective immediately, with the subsequent investment
of C$5 million (US$3.7 million) being conditional on the approval
of Xtract One’s shareholders and all applicable regulatory
approvals (together the “Investment”). The Investment is comprised
of the sale of up to 31,925,595 units (each a “Unit”) at a price of
C$0.42 per Unit. Each Unit will be comprised of one common share of
Xtract One (a “Common Share”) and one Common Share purchase warrant
(each a “Warrant”) exercisable at a price of C$0.60 for a period of
five years following the date of its issuance. The initial tranche
of the Investment comprised the issuance of 20,000,000 Units for
aggregate gross proceeds of C$8,400,000. The proposed second
tranche of the Investment will be comprised of the issuance of
11,925,595 Units for aggregate gross proceeds of C$5,008,749.90.
All securities issued under the Investment will be subject to
Canadian resale restrictions of four months and one day, in
addition to applicable US resale restrictions. No commission or fee
is or will be paid in connection with the Investment.
The Units issued pursuant to the Investment have
not been registered under the United States Securities Act of 1933,
as amended, and may not be offered or sold within the United States
in the absence of U.S. registration or an applicable exemption from
the U.S. registration requirements.
The initial and proposed subsequent equity
Investment will enable Xtract One to further innovate its advanced
security solution and accelerate its growth into new market
segments.
Xtract One is transforming perimeter screening
and security, replacing obsolete walk-through metal detectors with
a fast, frictionless entry experience, while simultaneously
providing a security solution that delivers exceptional experiences
and safer environments.
“We are thrilled to announce this investment and
partnership with MSG Sports. We continue to see impressive growth
in market interest and customer adoption of our security technology
solutions,” said Peter Evans, CEO of Xtract One. “I believe this
relationship will create unique opportunities and benefit multiple
industries.”
Xtract One will hold a special meeting of
shareholders to obtain disinterested shareholder approval of the
second tranche of the Investment, currently scheduled for April 11,
2023.
About MSG Sports’ InvestmentThe
investment by MSG Sports took place through its wholly-owned
subsidiary MSG Sports Ventures, LLC (“MSGSV”), which is located at
2 Penn Plaza, New York, New York 10121.
Prior to its investment, MSGSV did not hold any
securities of Xtract One. As a result of its investment for total
gross proceeds of C$8.4 million, MSGSV holds 20,000,000 Common
Shares and 20,000,000 Warrants, representing approximately 10.92%
of the issued and outstanding Common Shares on a non-diluted basis
and 19.69% on a partially diluted basis. Should its investment
increase to C$13.4 million, MSGSV would hold an aggregate of
31,925,595 Common Shares and 31,925,595 Warrants, representing
approximately 16.36% of the issued and outstanding Common Shares on
a non-diluted basis, and 28.12% of the issued and outstanding
Common Shares on a partially diluted basis, based on the current
issued and outstanding Common Shares.
In connection with its investment, MSGSV entered
into an investor rights agreement with Xtract One (the “Investor
Rights Agreement”) pursuant to the terms of which MSGSV has been
granted the right to appoint an observer to the board of directors
of Xtract One. Under the Investor Rights Agreement, subject to
certain limitations set forth therein, MSGSV is also entitled to:
(a) certain “demand” registration rights that will allow MSGSV to
request that Xtract One (i) qualify for resale under Canadian
securities laws and/or (ii) register for resale under the United
States Securities Act of 1933, as amended, any Common Shares
acquired by MSGSV as a result of its investment or upon exercise of
the Warrants (collectively, the “Registrable Securities”); and (b)
certain “piggyback” registration rights that will allow MSGSV to
include the Registrable Securities in any public offering of equity
securities initiated by Xtract One or another shareholder having
registration rights.
MSGSV acquired ownership of the Common Shares
and Warrants for investment purposes and may, from time to time,
acquire additional securities of Xtract One, dispose of some or all
of the securities of Xtract One that it holds or continue to hold
the Common Shares and Warrants. For additional information, please
contact Ari Danes at (212) 465-6072.
About Xtract OneXtract One
Technologies is a leading technology-driven threat detection
and security solution leveraging AI to provide seamless and secure
patron access control experiences. The company makes unobtrusive
threat detection systems that enable venue building operators to
prioritize and deliver improved patron experiences while providing
unprecedented safety. Xtract One’s innovative Multi-Sensor Gateway
product enables companies to covertly screen for weapons at points
of entry without disrupting the flow of traffic. Its AI-based
software allows venue and building operators to identify weapons
and other threats inside and outside of facilities, and receive
valuable intelligence for optimizing operations. For more
information, visit www.xtractone.com or connect on Facebook,
Twitter, and LinkedIn.
For further information, please
contact:
Xtract One
Inquiries info@xtractone.comhttp://www.xtractone.com/
Investor Relationsxtract1@rbmilestone.com
Press Inquiries:Kristen Aikey JMG
Public Relations212-206-1645 kristen@jmgpr.com
Forward Looking Statements
This news release contains forward-looking
statements within the meaning of applicable securities laws. All
statements that are not historical facts, including without
limitation, statements regarding future estimates, plans, programs,
forecasts, projections, objectives, assumptions, expectations or
beliefs of future performance, are “forward-looking statements”.
Forward-looking statements can be identified by the use of words
such as “plans”, “expects” or “does not expect”, “is expected”,
“estimates”, “intends”, “anticipates” or “does not anticipate”, or
“believes”, or variations of such words and phrases or statements
that certain actions, events or results “may”, “could”, “would”,
“might” or “will” be taken, occur or be achieved. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results,
events or developments to be materially different from any future
results, events or developments expressed or implied by such
forward looking statements. Such risks and uncertainties include,
among others, the Company’s limited operating history and lack of
historical profits; risks related to the obtention of shareholder
approval in order to permit the subsequent US$3.7 million
investment by MSG Sports; risks related to the Company’s business
and financial position; fluctuations in the market price of the
Common Shares; that the Company may not be able to accurately
predict its rate of growth and profitability; risks related to the
COVID-19 pandemic and its impact on the Company, economic
conditions, and global markets; the failure of the Company to use
any of the proceeds received from the Offering in a manner
consistent with current expectations; reliance on management; the
Company's requirements for additional financing, and the effect of
capital market conditions and other factors on capital
availability; competition, including from more established or
better financed competitors; and the need to secure and maintain
corporate alliances and partnerships, including with research and
development institutions, clients and suppliers. These factors
should be considered carefully, and readers are cautioned not to
place undue reliance on such forward-looking statements. Although
the Company has attempted to identify important risk factors that
could cause actual actions, events or results to differ materially
from those described in forward-looking statements, there may be
other risk factors that cause actions, events or results to differ
from those anticipated, estimated or intended. There can be no
assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in forward-looking statements.
The Company has no obligation to update any forward looking
statement, even if new information becomes available as a result of
future events, new information or for any other reason except as
required by law.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/0b0a0ae4-a916-42fd-8e15-5f5c4315fc4e
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