Sevcon, Inc. Announces Terms of Rights Offering to Its Stockholders
SOUTHBOROUGH, Mass., July 29, 2014 (GLOBE NEWSWIRE) -- Sevcon, Inc.
(Nasdaq:SEV), a world leader in the design and manufacture of
microprocessor-based controls for zero emission electric and hybrid vehicles,
today announced the terms for its pending rights offering for shares of
convertible preferred stock.
The rights offering, for which Sevcon has filed a registration statement with
the Securities and Exchange Commission, is intended to raise $10 million
before expenses in a cost-effective manner that gives all of Sevcon's existing
stockholders the opportunity to participate. The net proceeds will be used for
general corporate purposes and growth, including funding Sevcon's ongoing
research and development and product commercialization initiatives and
acquisitions of other businesses.
The preferred stock carries a 4% cumulative annual dividend and will be
convertible at any time at the holder's option into shares of Sevcon's common
stock at an initial conversion price of $8.00 per share, representing a
conversion ratio of three shares of common stock for each share of preferred
stock, subject to adjustment. Sevcon will be able to require conversion at any
time after five years if the closing sale price of the common stock has
exceeded $15.50 for 20 out of 30 consecutive trading days.
Common stockholders will receive one transferable subscription right for each
share of common stock owned at 5:00 p.m., Eastern Daylight Time, on July 25,
2014. Each subscription right will be exercisable for 0.13022 shares of
preferred stock at a subscription price of $21.50 per whole share. This is
equivalent to $7.17 per share of common stock on an as-converted basis, a 7.3%
discount from the closing sale price of $7.73 per share on July 28, 2014. No
fractional shares will be issued, but the number of shares of preferred stock
issuable upon exercise of one right shall be rounded up if and to the extent
necessary so that each holder may subscribe for at least one whole share. The
subscription rights, which will be listed for trading on Nasdaq under the
symbol SEVRR, will expire if they are not exercised by 5:00 p.m., Eastern
Daylight Time, on September 8, 2014, unless Sevcon extends the rights offering
Sevcon has received standby commitments from Meson Capital LP, whose managing
partner is Ryan J. Morris, a director of Sevcon, and Walter M. Schenker,
another director, to purchase shares of preferred stock not subscribed for by
other stockholders up to an aggregate amount of $1.15 million, less any amount
they invest to purchase shares upon exercise of subscription rights. A
majority of the other directors and officers have indicated their intention to
participate as well.
The registration statement relating to the rights offering has been filed with
the SEC but has not yet become effective. The securities may not be sold, nor
may offers to buy be accepted, before the registration statement is declared
effective. At that time, a copy of the prospectus forming a part of the
registration statement may be obtained free of charge at the website
maintained by the SEC at www.sec.gov or by contacting the Information Agent
for the rights offering at (855) 793-5068. This press release shall not
constitute an offer to sell or the solicitation of an offer to buy, nor shall
there be any sale of these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful before the registration or
qualification under the securities laws of any such jurisdiction.
About Sevcon, Inc.
Sevcon is a world leader in the design and manufacture of microprocessor-based
controls for zero emission electric and hybrid vehicles. The controls are used
to vary the speed and movement of vehicles, to integrate specialized
functions, and to optimize the energy consumption of the vehicle's power
source. Sevcon supplies customers throughout the world from its operations in
the USA, the UK, France and the Asia Pacific region and through an
international dealer network. Sevcon's customers are manufacturers of on and
off road vehicles including cars, trucks, buses, motorcycles, fork lift
trucks, aerial lifts, mining vehicles, airport tractors, sweepers and other
electrically powered vehicles. For more information visit www.sevcon.com.
Statements in this release about the rights offering and our plans are
forward-looking statements subject to risks and uncertainties that could cause
actual results to differ materially from those we anticipate. Among other
things, the rights offering may not be successful so Sevcon may not raise the
additional capital it desires for funding its business initiatives.Even if
the offering is successful, global demand for electric vehicles incorporating
our products may not grow as much as we expect, we may not be able to attract
and retain the level of high quality engineering staff that we need to develop
the new and improved products we need to be successful, and companies we
acquire may be more costly to acquire and integrate, or may not generate as
much revenue and earnings, as we anticipate. Please see the Company's most
recent Forms 10-K and 10-Q on file with the SEC for further information
regarding Sevcon's risk factors.
CONTACT: David Calusdian
Sharon Merrill Associates
1 (617) 542 5300
President and CEO
1 (508) 281 5503
Sevcon, Inc. Logo
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