TeraGo Inc.

TeraGo Inc.

May 27, 2015 10:47 ET

TeraGo Announces Terms of $10 Million Equity Offering

TORONTO, ONTARIO--(Marketwired - May 27, 2015) -


TeraGo Inc. ("TeraGo" or the "Company") (TSX:TGO) (www.terago.ca), announced today that it has entered into an underwriting agreement with a syndicate of underwriters led by National Bank Financial Inc. and TD Securities Inc., and includes Cormark Securities Inc., PI Financial Corp. and RBC Capital Markets (collectively, the "Underwriters") to sell 1,755,000 common shares of TeraGo ("Common Shares") at a price of $5.70 per Common Share (the "Offering Price") to raise gross proceeds of $10,003,500 (the "Offering"). In connection with the announcement of the Offering Price and the number of Common Shares to be sold, the Company will file an amended and restated preliminary short form prospectus, which amends the preliminary short form prospectus of the Company dated May 27, 2015.

The Company has also granted the Underwriters an over-allotment option (the "Over-Allotment Option") to purchase up to an additional 263,250 Common Shares, exercisable at any time up to 30 days after the closing of the Offering at a price equal to the Offering Price. If the Over-Allotment Option is exercised in full, the gross proceeds to TeraGo will be $ 11,504,025.

The Company intends to use the net proceeds of the Offering to fund its growth strategy, including potential strategic acquisitions; operational efficiency activities; invest in new product development activities; and working capital.

The Offering is anticipated to close on or about June 11, 2015 and is subject to certain customary conditions and regulatory approval, including the approval of the Toronto Stock Exchange.

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 (the "U.S. Securities Act") 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.

An amended and restated preliminary short form prospectus containing important information relating to these securities has been filed with securities commissions or similar authorities in certain jurisdictions of Canada. The amended and restated preliminary short form prospectus is still subject to completion or amendment. Copies of the amended and restated preliminary short form prospectus may be obtained from National Bank Financial Inc., 130 King Street West, Suite 3200, Toronto, Ontario, M5X 1J9 (email: Heather.McLennan@nbc.ca), or TD Securities Inc., TD Tower, 9th Floor, 66 Wellington Street, Toronto, Ontario, M5K 1A2 (email: sdconfirms@td.com). A copy of the amended and restated preliminary short form prospectus can also be obtained under the Company's corporate profile on SEDAR at www.sedar.com. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final short form prospectus has been issued.

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 the Offering, the intended use of proceeds of the Offering, and the closing date. All such statements are made pursuant to the 'safe harbour' provisions of, and are intended to be forward-looking statements under, applicable Canadian securities laws. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. The forward-looking statements reflect the Company's views with respect to future events and is subject to risks, uncertainties and assumptions, including those risks set forth in the "Risk Factors" section in the amended and restated preliminary short form prospectus and in the "Risk Factors" section in the annual MD&A of the Company for the year ended December 31, 2014, each 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 Offering, the failure to receive regulatory approvals with respect to the Offering, and changes in the Canadian securities markets. 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, through its wholly owned subsidiaries TeraGo Networks Inc. and Rackforce Networks Inc., provides businesses across Canada and globally with network and voice services, data center services and cloud enterprise services including Infrastructure as a Service (IaaS), Platform as a Service (PaaS), cloud computing and cloud storage solutions. TeraGo owns and manages its IP network servicing over 4,200 business customers in 46 major markets across Canada including Toronto, Montreal, Calgary, Edmonton, Vancouver and Winnipeg, as well as six data centers in the Greater Toronto Area, the Greater Vancouver Area and Kelowna. TeraGo Networks is a Competitive Local Exchange Carrier (CLEC) and was selected as one of Canada's Top Small and Medium Employers for 2015.

For more information about TeraGo, please visit www.terago.ca.

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