INNOVATE Corp. Announces Preliminary Results of Rights Offering
April 22 2024 - 8:01AM
INNOVATE Corp. (“INNOVATE” or the “Company”) (NYSE: VATE), a
diversified holding company, announced today the preliminary
results of its successful rights offering, which expired
at 5:00 p.m., New York City time, on April 19,
2024 (the “expiration date”). According to Computershare
Trust Company, N.A. (the “subscription agent”), as of the
expiration date, 18.1 million basic subscription rights were
exercised to purchase an aggregate of 5.2 million shares of common
stock and 0.1 million additional shares of common stock were
subscribed for under the over-subscription privilege, subject to
proration.
Further, in accordance with the Investment
Agreement (the “Investment Agreement”) entered into by the Company
with Lancer Capital LLC (“Lancer Capital”), an investment
fund led by Avram Glazer, the Chairman of the Board of
Directors of the Company and the Company’s largest
stockholder, Lancer Capital agreed to partially backstop
the rights offering in an amount not to exceed $19.0
million by purchasing newly issued Series C Non-Voting
Convertible Participating Preferred Stock, par
value $0.001 per share (the “preferred stock”). Based on
the preliminary results, we expect that 15.3 thousand shares of
preferred stock at a price of $1,000 per share will be purchased
under the backstop commitment. This includes 6.3 thousand shares of
preferred stock to be purchased at the upcoming closing and 9.0
thousand shares already purchased as part of an equity advance
arrangement under the Investment Agreement (the “equity advance”).
On March 28, 2024, the Company issued and sold 25.0 thousand shares
of the preferred stock to Lancer Capital for an aggregate purchase
price of $25.0 million under the equity advance. The remaining 16.0
thousand shares of preferred stock purchased under the equity
advance are part of the previously announced concurrent private
placement. The preferred stock can be convertible into common stock
at the price equivalent to the subscription price under the rights
offering contingent on shareholder approval, which will be voted on
at the next annual meeting.
The shares of common stock to be issued at the
closing of the rights offering will be purchased at the
subscription price of $0.70 per whole share. The Company
expects the subscription agent to distribute the shares of common
stock and the proceeds from the rights offering on or
about April 24, 2024, subject to customary closing
conditions.
The results of the rights offering are
preliminary and subject to change pending finalization of
subscription procedures by the subscription agent. The Company
expects to issue a press release on April 24, 2024, to
announce the final results of the rights offering.
The Company will receive aggregate gross
proceeds of approximately $35.0 million from the rights
offering and concurrent private placement, and expects to use the
proceeds for general corporate purposes, including debt service and
for working capital.
If a holder did not exercise its subscription
rights prior to the expiration date, such rights have expired and
are void and have no value. Investors who have participated in the
rights offering should expect to see the shares of common stock
issued to them in uncertificated book-entry form. Any excess
subscription payments received by subscription agent will be
returned by the subscription agent to investors, without interest
or deduction, through the same method by which they participated in
the rights offering.
The rights offering was made pursuant to
INNOVATE’s effective shelf registration statement on Form S-3,
filed with the SEC on September 29, 2023, and declared effective on
October 6, 2023, and a prospectus supplement containing the
detailed terms of the rights offering filed with the SEC on March
8, 2024, as amended by that certain Amendment No. 1 to the
prospectus supplement, filed with the SEC on March 25, 2024, and
further amended by that certain Amendment No. 2 to the prospectus
supplement, filed with the SEC on April 9,
2024. The information in this press
release is not complete and is subject to change, including with
respect to the expected closing date of the rights offering. This
press release shall not constitute an offer to sell or a
solicitation of an offer to buy any securities (including without
limitation the preferred stock to be issued and sold in the
concurrent private placement), nor shall there be any offer,
solicitation or sale of the securities in any state or jurisdiction
in which such offer, solicitation or sale would be unlawful under
the securities laws of such state or jurisdiction. The rights
offering was made only by means of a prospectus and a related
prospectus supplement, copies of which were distributed to all
eligible rights holders as of the rights offering record date and
may also be obtained free of charge at the website maintained by
the SEC
at www.sec.gov or by
contacting the information agent for the rights
offering.
The preferred stock to be issued to
Lancer Capital pursuant to the backstop commitment and the
concurrent private placement will not be registered under the
Securities Act of 1933, as amended, and may not be offered or sold
in the United States absent registration or an applicable exemption
from registration requirements.
About INNOVATE
INNOVATE Corp. is a portfolio of
best-in-class assets in three key areas of the new economy –
Infrastructure, Life Sciences and Spectrum. Dedicated to
stakeholder capitalism, INNOVATE employs approximately 4,000 people
across its subsidiaries. For more information, please
visit: www.INNOVATECorp.com.
Cautionary Statement Regarding
Forward-Looking Statements
Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995: This press release
contains, and certain oral statements made by our representatives
from time to time may contain, forward-looking statements regarding
the proposed rights offering, including, among others, statements
related to the expected timing, eligible offerees, backstop
purchasers and expectations regarding participation in
the rights offering, the use of proceeds from the rights offering,
the size of the rights offering and other terms of the rights
offering, all of which involve risks, assumptions and
uncertainties, many of which are outside of the Company’s control,
and are subject to change. Accordingly, no assurance can be given
that the rights offering will be consummated on the terms described
above or at all. All forward-looking statements speak only as of
the date made, and unless legally required, INNOVATE undertakes no
obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Contact:
Solebury Strategic CommunicationsAnthony
Rozmusir@innovatecorp.com(212) 235-2691
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