InfoSonics Corporation (“InfoSonics” or the “Company”) (NASDAQ: IFON) and Cooltech Holding Corp. (“Cooltech”) today announced that the companies have entered into a definitive merger agreement under which InfoSonics will acquire Cooltech. Cooltech is an Apple licensed partner and reseller that operates as a vertically integrated company combining a diverse distribution business with a growing retail footprint under its OneClick branded stores. Cooltech is one of a limited number of partners under the Apple Premium Reseller and Apple Authorized Reseller Mono-Brand programs in Latin America, as well as a growing presence of OneClick stores in the United States.
Upon the closing of the merger transaction, Cooltech will become a wholly-owned subsidiary of InfoSonics in exchange for 62.5 million shares of InfoSonics common stock. The merger, which has been unanimously approved by the Special Committee of InfoSonics’ Board of Directors, is subject to approval by the Company’s shareholders and a number of customary closing conditions. The parties expect to close the transaction in the fourth quarter of 2017.
“Cooltech has built an exceptional relationship with the largest company in the world, Apple, to aggressively expand in related markets to our existing business,” said Joseph Ram, President and CEO of InfoSonics. “We believe this merger represents an accretive opportunity for InfoSonics shareholders to participate in Cooltech’s growth and maximize the value of our NASDAQ-listed company with several synergies between our businesses.”
Contemporaneous with the signing of the merger agreement, Cooltech has signed a binding financing obligation to purchase 2.5 million shares of InfoSonics common stock at a price of $0.40 per share in cash and warrants exercisable into 2.5 million additional shares of InfoSonics common stock with an exercise price of $0.484 per share (a 10% premium to the closing bid price of InfoSonics common stock on the NASDAQ Capital market on July 24, 2017). The approximately $1 million of proceeds from this private placement will be used by InfoSonics to cover costs associated with the merger. InfoSonics also agreed to sell investors an additional 4.375 million shares of common stock and warrants to purchase an equal number of shares under the same terms, contingent upon receipt of stockholder approval of such issuance in accordance with Nasdaq rules. The proceeds from such sale will be escrowed pending receipt of stockholder approval and the closing of the merger.
“We are excited about this combination with InfoSonics to enter the public markets as we continue to execute on our growth plans in various regions with strong partners,” said Mauricio Diaz, President and CEO of Cooltech. “Our senior team has a depth of experience in consumer electronics at many high profile companies, including Apple, Cisco Systems, Samsung, Panasonic, and Tech Data. Our investors have significant private equity and industry expertise, including very successful investments in a number of other retail plays.”
About InfoSonics Corporation
InfoSonics is a San Diego-based manufacturer and provider of wireless handsets, tablets and related products to carriers, distributors and retailers in Latin America under the verykool® brand. The Company is committed to delivering quality products with innovative designs that appeal to consumers and offer exceptional value. Additional information can be found on its corporate websites at www.infosonics.com and www.verykool.net.
About Cooltech Holding Corp.
Cooltech is a Miami-based company comprised of OneClick, a chain of retail stores and an Apple authorized reseller under the Apple Premier Partner, APR (Apple Premium Reseller) and AAR MB (Apple Authorized Reseller Mono-Brand) programs; and Icon Networks, an authorized distributor to the OneClick stores and other resellers of Apple products and other high-profile consumer electronic brands. OneClick is one of a very limited and select number of partners currently under the APR and AAR MB program in Latin America. Oneclick currently has over 20 stores open in the Americas, and has committed with Apple to an expansion plan of stores in the region, given the
experience of Cooltech’s management in this area where Apple currently has limited market presence. Cooltech also has 4 stores in the United States, a focal point of its growth plan moving forward. Additional information can be found on its websites at www.cooltech.co/site/ and www.oneclickstore.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes statements related to the proposed merger between InfoSonics and Cooltech that contain forward-looking statements, including statements regarding expected benefits of the merger, the timing of the merger, and the contemporaneous financings. Actual results could differ materially from those projected or forecast in the forward-looking statements. Factors that could cause actual results to differ materially include the
following: InfoSonics shareholders may not approve the transaction; the conditions to the completion of the transaction may not be satisfied; closing of the transaction may not occur or may be delayed, either as a result of litigation related to the transaction or otherwise; the parties may be unable to achieve the anticipated benefits of the transaction; revenues following the transaction may be lower than expected; operating costs, customer loss, and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, and suppliers) may be greater than expected; the Company may assume unexpected risks and liabilities; completing the merger may distract the Company’s management from other important matters; and the other factors discussed in “Risk Factors” in InfoSonics’ Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and in the Company’s other filings with the U.S. Securities and Exchange Commission (“SEC”), which are available at http://www.sec.gov. InfoSonics assumes no obligation to update the information in this release, except as otherwise required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
Important Additional Information and Where to Find It
In connection with the proposed transaction, InfoSonics will file with the SEC and mail or otherwise provide to its shareholders a registration statement on Form S-4 and proxy statement regarding the registration of the merger consideration shares and approval if the proposed transaction. BEFORE MAKING ANY VOTING DECISION, INFOSONICS’ SHAREHOLDERS ARE URGED TO CAREFULLY READ THE PROXY STATEMENT IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION OR INCORPORATED BY REFERENCE THEREIN BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION. Investors and security holders may obtain a free copy of the proxy statement and other documents that InfoSonics files with the SEC (when available) from the SEC’s website at www.sec.gov and InfoSonics’ website at http://www.infosonics.com/. In addition, the proxy statement and other documents filed by InfoSonics with the SEC (when available) may be obtained from InfoSonics free of charge by directing a request to Vern LoForti, Vice President and Chief Financial Officer, InfoSonics Corporation, 3636 Nobel Drive, Suite 325, San Diego, CA 92122, firstname.lastname@example.org; Phone: 858-373-1675.