Friday, December 26, 2008: IXI Mobile, Inc. has entered into a subscription agreement with Runcom Technologies, a WiMAX solution company, for a private placement of $1.0 million which is subject to the completion of due diligence to Runcom's satisfactory by no later than 31 December 2008.
Upon closing, IXI will issue 8,695,652 shares of common stock at a price per share of $0.115. Runcom will also be issued warrants to purchase up to 115,942 shares of a newly created series of preferred stock at an exercise price of $34.50 per share for an aggregate amount of $4.0 million exercisable at any time in the next twelve months. The new series of preferred stock will carry 300 votes per share and will vote together with the common stock on all matters.
IXI has also amended its outstanding loans with Southpoint Master Fund, LP and Gemini Israel III, LP (and three other funds affiliated with this shareholder), to allow each lender to convert their outstanding loans into shares of IXI's preferred stock.
After giving effect to the acquisition of 8,887,894 common shares, warrants to purchase up to 3,056,667 shares of Common Stock and 441,618 preferred shares held by Southpoint and Gemini, Runcom will own shares holding approximately 90 per cent of the voting power of the issued and outstanding capital stock of IXI. If all warrants are exercised, Runcom will own approximately 93 per cent of IXI's voting power.
Messrs Gideon Barak, Amit Haller, Shlomo Shalev, Yossi Sela, and Matt Hills shall resign from the IXI board, and the board of directors shall nominate additional members of the board to be specified by the Runcom.
IXI Mobile will remain a public company after giving effect to the transaction. The partnership will enable the companies to combine IXI's technology with Runcom's WiMAX (4G) capabilities for mobile and fixed rich media solutions. Furthermore, this transaction will enable them to leverage each others' existing customer base, while expanding based on new offerings, according to the duo.
Dr Zion Hadad, chief executive officer, Runcom, commented, "Our decision to invest in IXI was a strategic one, where we believe that the synergy formed by our two businesses will provide for a significant amount of growth. In combining our strengths with the cutting-edge technology on which IXI is founded, we see no better opportunity than what we have now to improve our business and expand our clientele."
In dealing with IXI's expenses in regards to the current economic environment in conjunction with the new partnership with Runcom, IXI will be laying off approximately 30 per cent of its work force.
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