/THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN
CANADA ONLY AND IS NOT AUTHORIZED
FOR DISTRIBUTION TO UNITED STATES
NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
TORONTO, April 14, 2021 /CNW/ - TeraGo Inc.
("TeraGo" or the "Company") (TSX: TGO)
(www.terago.ca), is pleased to announce that it has entered into
subscription agreements dated April 14,
2021 (the "Subscription Agreements"), pursuant to
which Cymbria Corporation, acting at the direction of its portfolio
manager, EdgePoint Investment Group
Inc. ("Cymbria") and other certain institutional
investors (collectively with Cymbria, the "Purchasers") will
subscribe for an aggregate of 934,100 Series A Units, 934,100
Series B Units and 934,100 Series C Units of the Company at a
subscription price of $5.25 per Unit,
for an aggregate purchase price of $14,712,075, all by way of a private placement
(the "Private Placement").
Each Series A Unit is comprised of one common share in the
capital of the Company (a "Unit Share") and one-half (½) of
one Series A Warrant; each Series B Unit is comprised of one Unit
Share and one-half (½) of one Series B Warrant; and each Series C
Unit is comprised of one Unit Share and one-half (½) of one Series
C Warrant. Each whole Series A Warrant, Series B Warrant or Series
C Warrant (each a "Warrant") will entitle the holder to
purchase one common share in the capital of the Company (a
"Warrant Share") at an exercise price of $7.00, $7.50 and
$8.00, respectively, within a period
of 24 months, 30 months and 36 months, respectively, from the date
of closing of the Private Placement.
The Company intends to use the net proceeds of the Private
Placement in support of the Company's proposed launch of 5G fixed
wireless services in Canada, to
continue testing and trialling 5G technology, upgrade its core
network, and support its current networking business. In addition,
portions of the net proceeds will be used to repay indebtedness and
for general corporate purposes.
"We are excited to announce Cymbria as a strategic financial partner,
allowing TeraGo access to capital to invest in our proposed 5G
fixed wireless business that further leverages the use of our
spectrum assets," said Matthew
Gerber, CEO of TeraGo. "The investments they are making with
the other institutional investors will facilitate our strategic
plan of becoming one of Canada's
first 5G fixed wireless operators."
Closing of the Private Placement is expected to occur on or
about April 21, 2021 (the "Closing
Date") and will be subject to customary closing conditions and
required approvals, including approval from the Toronto Stock
Exchange to list all the Unit Shares and the Warrant Shares.
Upon closing of the Private Placement, Cymbria's Subscription Agreement will provide
it with certain participation rights to future equity offerings of
TeraGo to maintain its pro-rata ownership in the common shares
("Common Shares") of the Company (the "Participation
Right"). The Participation Right will remain in place for up to
three years from the Closing Date so long as Cymbria owns more than 10% of the outstanding
common shares of TeraGo. In addition, so long as Cymbria owns more than 10% of the outstanding
common shares, it will have the right to specify an individual to
be nominated to the board of directors of the Company (the
"Board"). Subject to customary background checks, TeraGo has
also agreed to appoint a designee director to be put forward by
Cymbria to fill the current
vacancy on the Board within 30 days of the Closing Date.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities in
the United States. The securities
have not been and will not be registered under the United States
Securities Act of 1933, as amended 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 such registration is available.
Cymbria Early Warning Disclosure
Immediately prior to the Private Placement, Cymbria did not have beneficial ownership of,
or control or direction over, any securities of TeraGo. Immediately
following the closing of the Private Placement, Cymbria will have ownership of, or control or
direction over, (i) 2,418,300 Common Shares, representing
approximately 12.33% of the issued and outstanding Common Shares,
and (ii) Warrants to purchase 1,209,150 Common Shares. If
Cymbria were to exercise the Warrants, it would have ownership of,
or control or direction over 3,627,450 Common Shares, representing
approximately 17.26% of the issued and outstanding Common
Shares.
Cymbria's acquisition of the
Common Shares and Warrants is being made in the ordinary course of
business and for investment purposes. Cymbria may acquire or dispose of additional
securities of TeraGo or may enter into derivative or other
transactions with respect to such securities.
Cymbria will prepare and file a
report containing the information required by Form 62-103F1 –
Required Disclosure under the Early Warning Requirements in
connection with the matters referred to in this press release. Once
filed, a copy of this report can be obtained by contacting
Sayuri Childs, Chief Compliance
Officer at EdgePoint Investment Group Inc. (Cymbria's portfolio manager) at (416)
963-9353. Cymbria's head office is
located at 150 Bloor Street West, Suite 500, Toronto, Ontario M5S 2X9. TeraGo's head office
is located at 55 Commerce Valley Drive West, Suite 800,
Thornhill, Ontario L3T 7V9.
Forward-Looking Statements
This news release includes certain forward-looking statements
that are made as of the date hereof. Such forward-looking
statements may include, but are not limited to, statements relating
to proposed upgrades to the Company's core network, the Company's
continued testing and trialing of 5G technology, the Company's
launch of 5G fixed wireless services in Canada, the intended use of proceeds of from
the Private Placement, becoming one of Canada's first 5G fixed wireless
operators, the future exercise of the Warrants and the
appointment of a designee director to the Board. All such
statements constitute "forward-looking information" as defined
under applicable Canadian securities laws. Any statements contained
herein that are not statements of historical facts constitute
forward-looking information. The forward-looking statements reflect
the Company's views with respect to future events and are subject
to risks, uncertainties and assumptions, including risks relating
to the inability of the Company to complete the Private Placement,
the continued availability of 5G equipment that is suitable and
will allow the Company to complete its technical and customer
trials, the impacts and restrictions caused by the COVID-19
pandemic which may be prolonged and which may further delay
technical and customer trials, the results of the technical and
customer trials not being satisfactory to TeraGo or any of its
technology partners, the economic viability of any potential
services that may result from the technical and customer trials,
industry competitors who may have superior technology or are
quicker to take advantage of 5G technology, the inability of the
Company to launch a 5G fixed wireless business, future regulatory
decisions that would be unfavourable to the Company and the
spectrum licences it currently holds, and those risks set forth in
the "Risk Factors" section in the annual MD&A of the Company
for the year ended December 31, 2020,
which is available on www.sedar.com under the Company's
corporate profile. Factors that could cause actual results or
events to differ materially include the ability to satisfy
conditions of the Private Placement, the failure to receive
regulatory approvals with respect to the Private Placement, changes
in the Canadian securities markets and the inability of the Company
to launch a successful 5G fixed wireless business. Accordingly,
readers should not place undue reliance on forward-looking
statements as a number of factors could cause actual future
results, conditions, actions or events to differ materially from
the targets, expectations, estimates or intentions expressed with
the forward-looking statements. Except as may be required by
applicable Canadian securities laws, TeraGo does not intend, and
disclaims any obligation, to update or revise any forward-looking
statements whether in words, oral or written as a result of new
information, future events or otherwise.
About TeraGo
TeraGo owns a national spectrum portfolio of exclusive 24 GHz
and 38 GHz wide-area spectrum licences including 2,120 MHz of
spectrum across Canada's 6 largest
cities. TeraGo provides businesses across Canada with cloud, colocation, and
connectivity services. TeraGo manages over 3,000 cloud workloads,
operates five data centres in the Greater
Toronto Area, the Greater
Vancouver Area, and Kelowna, and owns and manages its own IP
network. The Company serves business customers in major markets
across Canada including
Toronto, Montreal, Calgary, Edmonton, Vancouver, Ottawa and Winnipeg.
For more information about TeraGo, please visit
www.terago.ca.
SOURCE TeraGo Inc.