SuperCom Issues Shares at Price of $43.7 per Share, Significant Premium to Market, to Pay $4.37 Million of Outstanding Debt

Rhea-AI Summary

SuperCom (NASDAQ: SPCB) announced the issuance of 100,000 ordinary shares at $43.74 per share, a significant premium to market price, to pay down $4.374 million of outstanding debt. The agreement with their senior lender includes favorable modifications to enhance financial flexibility:

- Extension of debt maturity to December 31, 2028
- Elimination of monthly cash interest and amortization payments
- Interest will accrue and be paid with principal at maturity

This debt paydown represents a 32% reduction in SuperCom's total outstanding debt over the past year. The company has expanded into 6 new U.S. states since summer 2024 and won over 15 national projects in Europe in recent years. The improved terms are expected to increase free cash flow for growth strategies over the next 4 years.

Positive

• Share issuance at $43.74 per share, representing a significant premium to market price
• 32% reduction in total outstanding debt over the past year
• Debt maturity extended to December 31, 2028
• Elimination of monthly cash interest and amortization payments
• Expansion into 6 new U.S. states and winning 15+ national projects in Europe

Negative

• Issuance of 100,000 new shares causing shareholder dilution
• Company still carries significant debt despite reduction

The shares issuance and other favorable terms agreed upon with SuperCom's senior lender increase the free cash flows to be used by the company to support its growth strategy

TEL AVIV, Israel, Jan. 23, 2025 /PRNewswire/ -- SuperCom (NASDAQ: SPCB), a global provider of secure solutions for the e-Government, IoT, and Cybersecurity sectors, announced today the issuance of 100,000 of its ordinary shares at a price of $43.74 per share, which reflects a significant premium to the last closing price, to pay down $4.374 million of SuperCom's outstanding debt. This issuance and debt paydown were part of an amendment that SuperCom executed with its senior lender, a large national investment management firm. This amendment includes a broader set of favorable modifications designed to enhance SuperCom's financial flexibility and support its strategic growth objectives.

In addition to the debt paydown through the shares issuance at a price premium to the market, SuperCom secured an extension of the maturity date of the lender's debt to December 31, 2028. Furthermore, monthly cash interest payments and amortization payments to lender will no longer be required; interest will accrue and be paid along with the principal at maturity.

The $4.37 million debt balance paydown and other favorable terms are expected to provide SuperCom with additional free cash flow to be used for its growth strategies over the next 4 years.

This debt paydown completes a 32% reduction of SuperCom's total outstanding debt in the past year.

"We are very pleased with this amendment, reflecting the strong relationship and trust we have built with our senior lender over the years. This amendment not only allowed us to issue shares at a premium price of $43.74, but also provides us the financial flexibility we need to support our strategic plans and continued global expansion," commented Ordan Trabelsi, President and CEO of SuperCom. "After winning more than 15 national projects in Europe in recent years and rapidly expanding into the U.S. market with entry into 6 new states since the summer of 2024, we are well positioned to capitalize on unique opportunities with high expected returns on investment. By securing more favorable terms and increasing free cash flows, we are better equipped to reach our long-term growth objectives and drive long-term value for our stakeholders."

More details on this debt amendment are described in SuperCom's Report on Form 6-K filed by SuperCom with the U.S. Securities and Exchange Commission on January 23, 2025.

About SuperCom

Since 1988, SuperCom has been a global provider of traditional and digital identity solutions, providing advanced safety, identification, and security solutions to governments and organizations, both private and public, worldwide. Through its proprietary e-Government platforms and innovative solutions for traditional and biometrics enrollment, personalization, issuance, and border control services, SuperCom has inspired governments and national agencies to design and issue secure Multi-ID documents and robust digital identity solutions to its citizens and visitors. SuperCom offers a unique all-in-one field-proven RFID & mobile technology and product suite, accompanied by advanced complementary services for various industries, including healthcare and homecare, security and safety, community public safety, law enforcement, electronic monitoring, and domestic violence prevention. For more information, please visit SuperCom's website: www.supercom.com

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements preceded or followed by or that otherwise include the words "believes", "expects", "anticipates", "intends", "projects", "estimates", "plans", and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical or current facts. These forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from the statements made. Examples of these statements include, but are not limited to, statements regarding business and economic trends, the levels of consumer, business and economic confidence generally, the adverse effects of these risks on our business or the market price of our ordinary shares, and other risks and uncertainties described in the forward looking statements and in the section captioned "Risk Factors" in our Annual Report on Form 20-F for the year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission (the "SEC") on April 22, 2024, our reports on Form 6-K filed from time to time with the SEC and our other filings with the SEC. Except as required by law, we not undertake any obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this press release.

SuperCom Investor Relations:
ir@supercom.com

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SOURCE SuperCom

FAQ

What is the share price for SuperCom's (SPCB) latest stock issuance in January 2025?

SuperCom issued shares at $43.74 per share, which was at a significant premium to the market price.

How much debt did SuperCom (SPCB) pay down with the January 2025 share issuance?

SuperCom paid down $4.374 million of outstanding debt through the issuance of 100,000 ordinary shares.

What is the new debt maturity date for SuperCom (SPCB) following the January 2025 amendment?

The debt maturity date has been extended to December 31, 2028.

How much has SuperCom (SPCB) reduced its total debt in the past year?

SuperCom has reduced its total outstanding debt by 32% in the past year.

How many new U.S. states has SuperCom (SPCB) expanded into since summer 2024?

SuperCom has expanded into 6 new U.S. states since summer 2024.

How many national projects has SuperCom (SPCB) won in Europe in recent years?

SuperCom has won more than 15 national projects in Europe in recent years.