SOURCE: Covata

Covata

July 18, 2016 09:00 ET

Covata Receives Shareholder Approval for Second and Final Tranche of AU$13.2 Million Private Placement of Common Stock to U.S. and Asia-Pac Sophisticated and Institutional Investors

Successful Extraordinary General Meeting Approves Funding Led by Major Shareholders Fidelity International and TPG Telecom

WASHINGTON, DC--(Marketwired - July 18, 2016) - Covata Limited (ASX: CVT), a global leader in data-centric security solutions for enterprises, has received shareholder approval at an extraordinary general meeting 'EGM' held on July 14, 2016 in Melbourne, Australia for the second and final tranche of its AU$13.2 million private placement. The shareholder approval closes the definitive agreements to issue 57.7 million fully-paid ordinary shares to high net worth, small family office and institutional investors in the United States and Asia-Pac at a price of AU$0.23 per share in a private placement, raising gross proceeds of approximately AU$13.2 million.

The net cash proceeds to the company will be used for working capital to execute key partnerships with Fortune Global 500 companies, including its 10-year contract with Cisco and the rollout of Safe Share within its UK Government pipeline. The Company held AU$7.7 million in cash equivalents at March 31, 2016.

The EGM ratified the November 2015 private placement of AU$6.9 million with Fidelity International and acknowledged shareholder support of Covata's two largest shareholders TPG Telecom and Fidelity International for approximately 50% of the AU$13.2 million private placement. Additionally, the private placement included five new U.S. institutional funds with technology and data security investment expertise.

Net cash proceeds from the private placement provide a strong financial foundation necessary to support the progress underway with the company's Fortune Global 500 aerospace and defense prime contractor 'Prime' referred to in the last quarterly update. Key deliverables have been completed with the Prime and the second phase of deliverables outlined in the last quarterly update, known as 'Future State' are in the advanced stages of approval between the Prime and the customer. These deliverables are part of a multi-year program and formal approval triggers the Covata licensing agreement, which the company expects to generate material revenues in the next three to six months given the size of the contract between the Prime and customer.

Trent Telford, CEO of Covata, commented: "First and foremost, we would like to thank our shareholders for their support in the EGM and recognize their commitment to supporting our near-term growth initiatives. We have been building strong momentum into the fiscal year ended June 30, 2016 and look forward to executing on our business plan with the additional capital. I firmly believe the acquisition of long-term, blue chip revenue opportunities, backed by what is now a very strong balance sheet will place Covata in a prominent position against our peer competitors. We are also confident of delivering material signed TCV (total contract value) licensing deals and associated booked revenue in the coming quarters. Lastly, I look forward to updating our shareholders and new investors in early August on our year-end conference call where we will review our global business with respect to Cisco, FCOS and the UK Government Prime deal."

Results of General Meeting

A general meeting of shareholders of the company was held at the Waratah Room, Adina Apartment Hotel Melbourne, 189 Queen Street, Melbourne, Victoria at 10:00 a.m. AEDT July 14, 2016.

Resolution 4B, relating to a proposed issue of shares to Mr. Charles Archer was withdrawn by the company immediately prior to the general meeting. All resolutions put to the meeting were passed unanimously by a show of hands.

In accordance with ASX Listing Rule 3.13.2 and section 251AA of the Corporations Act 2011 (CTH), details of the resolutions and proxies received for the meeting held today are set out in the proxy summary below:


RESOLUTIONS:
 
For
 
Against
 
Abstain
 Undirected (all held by Chair)
1  Ratification of prior issue of shares - Fidelity International  66,601,016  5,666,960
 87,102  1,837,732
2  Ratification of prior issue of placement shares  66,324,541  5,665,102  50,100  1,804,399
3  Approval for issue of placement shares  62,758,041  8,997,602  284,100  1,804,399
4A  Approval for issue of shares to Trent Telford  62,054,146  9,926,039  36,012,652  1,837,732

Chardan Capital Markets LLC and Ord Minnett acted as joint lead managers for the offering.

The securities offered and sold in the Placement have not been registered under the Securities Act of 1933, as amended, or any United States state securities laws, and may not be offered or sold in the United States absent registration, or an applicable exemption from registration under the Securities Act and applicable state securities laws. This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities in any jurisdiction.

About Covata

Covata Limited (ASX: CVT) enables true ownership and control over your data in the cloud and over mobile services. We deliver data-centric security solutions without compromising simple usability, providing true end-to-end security. Your data is always protected wherever it may travel -- inside your network, beyond the domain, to mobile devices and to the cloud -- with granular access controls that extend to external users, view-only restrictions, real-time revocation and complete visibility and auditability. Own Your Data, control your data and choose where it is stored -- with complete assurance that it is protected and secure. For further information, please visit Covata.com.

Contact Information

  • Media and Investor Relations:
    Nikki Parker
    Covata
    Vice President Corporate Communications, Growth & IR
    +1 (571) 353-4273
    nichola.parker@covata.com

    Chris Tyson
    MZ Group
    Managing Director - MZ North America
    +1 (949) 491-8235
    chris.tyson@mzgroup.us