Novatel Wireless, Inc. (NASDAQ: NVTL, the “Company”), a leading provider
of Internet of Things, today announced that it has completed a
transaction with HC2 Holdings 2, Inc. (“HC2”), a wholly owned subsidiary
of HC2 Holdings, Inc. (HCHC), for a strategic investment in the Company.
In exchange for a combination of common stock, warrants and convertible
preferred stock, HC2 will invest up to an aggregate of approximately
$23.7 million in the Company, comprised of an initial cash investment of
approximately $14.4 million, which was funded today, and up to another
$9.3 million if the warrants are exercised for cash. HC2’s initial
ownership stake in the outstanding common stock of the Company is
approximately 17%. When and if the preferred stock is fully converted,
HC2’s ownership is expected to increase to approximately 18% and when
and if both the preferred stock is fully converted and the warrants are
fully exercised, HC2’s ownership stake is expected to increase to
approximately 25%, both percentages based on the Company’s current
outstanding shares. In connection with its investment, HC2 is also
entitled to certain rights under an Investors' Rights Agreement with the
Company, including Board observation rights and expected future
appointments for Philip Falcone, HC2’s Chairman, President & CEO, and
Robert Pons, its Executive Vice President – Business Development, to the
Novatel Wireless Board of Directors.
“I am very pleased to announce this agreement with HC2, which we believe
validates our vision to transition our Company and MiFi portfolio of
products into an ever increasing and exciting Internet of Things world,”
said Alex Mashinsky, CEO of Novatel Wireless. “HC2 has a strong track
record of partnering with companies to help them accelerate their growth
and realize their potential. We are excited about the opportunity to
leverage their deep experience in wireless technology and
telecommunications infrastructure to further Novatel Wireless’ strategic
and business success. We also expect our strengthened balance sheet to
positively impact our supplier and customer relationships.”
Philip Falcone, HC2’s Chairman, President and Chief Executive Officer,
stated, “We are pleased to have acquired a minority interest in Novatel
Wireless, with its extensive experience in wireless technologies. We
look forward to working with Alex and his management team on executing
Novatel’s business plan.”
Upon the closing of this transaction, the Company issued to HC2 (a)
7,363,334 shares of its common stock at a price of $1.75 per share, (b)
5-year warrants to purchase an additional 4,117,647 shares of common
stock at an exercise price of $2.26 per share and (c) 87,196 shares of
Series C Convertible Preferred Stock at a price of $17.50 per share,
with each share being convertible into 10 shares of the Company’s common
stock upon the satisfaction of certain conditions. Beginning on December
31, 2014, and continuing until such time as the Series C Preferred Stock
is converted into common stock or redeemed by the Company, the Series C
Preferred Stock will carry dividends at the rate of 12.5% per year.
ABOUT NOVATEL WIRELESS
Novatel Wireless, Inc. is a leader in the design and development of
intelligent wireless solutions based on 2G, 3G and 4G technologies. The
Company delivers specialized wireless solutions to carriers,
distributors, retailers, OEMs and vertical markets worldwide. Product
lines include MiFi® Intelligent Mobile Hotspots, Ovation™ USB modems,
Expedite® embedded modules, Mobile Tracking Solutions, Asset Tracking
Solutions, and Enabler smart M2M modules. These innovative products
provide anywhere, anytime communications solutions for consumers and
enterprises. Headquartered in San Diego, California, Novatel Wireless is
listed on NASDAQ: NVTL. For more information please visit www.nvtl.com.
(NVTLF)
ABOUT HC2 HOLDINGS, INC.
HC2 Holdings, Inc. operates as a holding company of operating
subsidiaries primarily in the United States and the United Kingdom. HC2
Holdings, Inc. owns 70% of Schuff International, Inc., the largest steel
fabrication and erection company in the United States. HC2 Holdings,
Inc.’s indirectly wholly-owned subsidiary PTGi International Carrier
Services, Inc. (“PTGi ICS”) is one of the leading international
wholesale service providers to fixed and mobile network operators
worldwide. HC2 Holdings, Inc. owns a majority interest in ANG Holding,
Inc., a premier retailer of compressed natural gas (CNG) motor fuel in
the United States. HC2 Holdings, Inc.’s indirectly wholly owned
subsidiary Genovel Orthopedics, Inc. is researching the development of
innovative products to treat early osteoarthritis of the knee. Founded
in 1994, HC2 Holdings, Inc. is headquartered in Herndon, Virginia. For
more information, visit: www.HC2.com.
FORWARD LOOKING STATEMENTS
Certain statements in this press release may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements relate to a variety
of matters, including, without limitation, statements regarding the
anticipated exercise or conversion of the Company’s convertible
securities and the ownership stake of HC2 that is expected to result
from any such exercise or conversion, the anticipated aggregate
investment to be made by HC2, the Company’s use of the proceeds from the
transaction and other statements that are not purely statements of
historical fact. These forward-looking statements can sometimes be
identified by our use of terms such as "intend," "expect," "plan,"
"estimate," "future," "strive" and similar words. These forward-looking
statements are made on the basis of the current beliefs, expectations
and assumptions of the management of the Company and are subject to
significant risks and uncertainty. Investors are cautioned not to place
undue reliance on any such forward-looking statements. All such
forward-looking statements speak only as of the date they are made, and
the Company undertakes no obligation to update or revise these
statements, whether as a result of new information, future events or
otherwise. Although the Company believes that the expectations reflected
in these forward-looking statements are reasonable, these statements
involve many risks and uncertainties that may cause actual results to
differ materially from what may be expressed or implied in these
forward-looking statements. For a further discussion of risks and
uncertainties that could cause actual results to differ from those
expressed in these forward-looking statements, as well as risks relating
to the business of the Company in general, see the risk disclosures in
the Company’s Annual Report on Form 10-K for the year ended December 31,
2013 and in subsequent reports on Forms 10-Q and 8-K and other filings
made with the SEC by the Company.
(C) 2014 Novatel Wireless, Inc. All rights reserved. The Novatel
Wireless name and logo are trademarks of Novatel Wireless, Inc.
Copyright Business Wire 2014