ESW Capital, LLC

January 27, 2017 16:07 ET

ESW Capital, LLC Acquires Preferred Shares and Warrant of Redknee Solutions Inc.

This press release is issued pursuant to Multilateral Instrument 62-104 - Take-Over Bids and Issuer Bids and National Instrument 62-103 - The Early Warning System and Related Take-Over Bid and Insider Reporting Issues

TORONTO, ONTARIO--(Marketwired - Jan. 27, 2017) - ESW Capital, LLC ("ESW Capital"), and its affiliate Wave Systems Corp. (the "ESW Capital Investor"), announced today that pursuant to a private placement of Redknee Solutions Inc. (the "issuer") which closed on January 26, 2017 (the "Closing") the ESW Capital Investor subscribed for 800,000 Series A Preferred Shares (the "Preferred Shares") in the capital of the issuer and a common share purchase warrant (the "Warrant") for gross proceeds of US$83.2 million (the "Transaction"). The Warrant entitles the ESW Capital Investor to acquire, upon its exercise, 46,285,582 common shares ("Common Shares") in the capital of the issuer (each a "Warrant Share") which is equal to US$60 million divided by the exercise price per Warrant Share of US$1.2963 (the "Warrant Exercise Price") for a period of ten years from the closing date of the Transaction (the "Closing Date").

Following the closing of the Transaction, ESW Capital owns and controls all of the issued and outstanding Preferred Shares and the Warrant, in addition to the 14,103,600 Common Shares (representing approximately 13% of the issued and outstanding Common Shares) already owned by ESW Capital prior to the closing of the Transaction. Prior to the date hereof, the ESW Capital Investor did not own any securities of the issuer or have the right to acquire any securities of the issuer. Upon exercise of the Warrant, ESW Capital would own and control 60,391,882 Common Shares representing approximately 39% of the issued and outstanding Common Shares on a partially diluted basis.

The Transaction was completed in accordance with the commercial and financial business objectives of ESW Capital and the ESW Capital Investor, the purpose of which the issuer stated in a press release dated December 9, 2016 was to provide the issuer with alternative strategic financing to enhance shareholder value. Except as contemplated by the subscription agreement associated with the Transaction, ESW Capital has not made any determinations with respect to its role in the future of the issuer and its business or with respect to future acquisitions of, ownership of, or control over, any additional securities of the issuer. ESW Capital and/or the ESW Capital Investor may in the future acquire additional securities of the issuer in the market or through private or other transactions, sell all or some portion of the securities of the issuer it controls or owns, or enter into derivative or other transactions with respect to its securities of the issuer.

The issuer is located at 2560 Matheson Blvd. East Mississauga, Ontario, L4W 4Y9, Canada. ESW Capital is located at 401 Congress Avenue, Suite 2650, Austin, TX 78701, United States. A copy of the early warning report to which this news release relates can be obtained from Andrew Simon Price at +1 512 524-6149 or on the SEDAR profile of Redknee at www.sedar.com.

About ESW Capital, LLC

Based in Austin, Texas, the ESW Capital group (www.eswcapital.com) focuses on buying, strengthening, and growing mature business software companies. By taking advantage of its unique operating platform, ESW revitalizes its acquisitions for sustainable success while making customer satisfaction a top priority. ESW has been in the enterprise software space since 1988, and the group includes notable brands such as Aurea, Ignite Technologies, Trilogy, and Versata. For more information, email info@eswcapital.com.

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