Smart Wires Technology LTD (Smart Wires or the Company) today announced that its Board of Directors  and Members holding at least a majority of the outstanding Ordinary Shares in the Company approved revisions to its Amended and Restated Memorandum and Articles of Association (the AR M&A) to increase authorized share capital, to change the par value of the Ordinary Shares from $0.01 USD per Ordinary Share to no par value,  and to create a new class of Preferred Shares with various preferential rights, which are generally described below.

The revisions include an increase in the authorized number of equity securities of the Company to the total of 1,500,020,000, which reflects an increase of 20,000 of Preferred Shares in connection with the creation of a new class of Preferred Shares, alongside the existing Ordinary Shares. The Ordinary Shares and Preferred Shares each have no par value. The Preferred Shares have, among others, the right to optional conversion, at the election of the holder thereof, into the equity securities in certain future equity financings of the Company at a price equal to 85% of the lowest cash price paid for such equity securities. In addition, there is priority of payment over Ordinary Shares in any distribution or dividend by the Company, and a liquidation preference of three times the original issue price of $1,000 per share, subject to increases of up to five times the original issue price upon certain triggering events. The liquidation preference applies in the event of a sale of the Company, or certain similar transactions, or upon a liquidation of the Company.

For so long as at least fifty percent of the Preferred Shares if and when issued to members remain outstanding the Company cannot undertake, among others, the following activities without the written consent of the holders of a majority of the Preferred Shares:

• Make certain changes in the authorized share capital of the Company.
• Redeem any outstanding shares of the Company, other than in connection with customary exceptions.
• Declare distributions.
• Incur additional indebtedness in excess of $500,000.
• Sell or dispose of assets have a value in excess of $500,000.
• Enter into related party transactions, subject to reasonable exceptions.
• Change the number of directors constituting the Board of Directors.
• Liquidate, dissolve or effectuate a sale of the Company.

The AR M&A reflects that Members holding at least 5,000 shares of Preferred Shares (when and if issued) have a right of first refusal with respect to new issuances of equity of the Company, subject to customary exceptions. Upon the occurrence of certain events, such as the Company not obtaining minimum funding from an equity financing by July 1, 2023, the holders of a majority of the Preferred Shares can require the Company to redeem the outstanding Preferred Shares at a price per share equal to the Liquidation Preference. If the Company does not satisfy payment for the redemption of the Preferred Shares, the holders of the Preferred Shares will have the right to appoint a majority of the Board of Directors.  Members holding at least 5,000 shares of Preferred Shares maintain certain information rights, such as rights to receive annual and quarterly financial statements and such other information as they may reasonably request. The rights of the Preferred Shares cannot be altered or amended without the written consent of the holders of a majority of the Preferred Shares.

The Company anticipates that approval of the revisions of the Company’s AR M&A will assist the Company in obtaining financing as mentioned in prior releases. 

The Company’s AR M&A are located at https://smartwires.com/governance/.

About Smart Wires Technology LTD

Smart Wires conducts grid technology business that helps utilize, modernize, optimize and monetize grid capacity to meet the demands and opportunities of the energy transition. The Company operates in the global transmission grid technology market and is a leader in modular power flow control technology. Power flow control technology controls and directs power flow on high voltage electric transmission systems. Smart Wires serves transmission owners, primarily electric utilities. Transmission owners use power flow controllers to eliminate line overloads by redirecting power to other lines, to reduce transmission congestion, and to enable renewable energy connection and dispatch. Currently, Smart Wires’ main projects are located in Europe, the United States and Australia with upcoming projects in South America and Canada. The Company has a large customer base comprised of utilities globally. Smart Wires Technology Ltd is listed on the Nasdaq First North Growth Market. For more information, please visit www.smartwires.com.

CONTACTS

Julie Andrews, Chief Financial Officer

Email: julie.andrews@smartwires.com

Tel: + 1 901-687-8314

Smart Wires’ Certified Adviser is Erik Penser Bank AB, Apelbergsgatan 27, Box 7405, SE-103 91 Stockholm, E-mail: certifiedadviser@penser.se, Tel: 08-463 83 00, www.penser.se.

This information is information that Smart Wires Technology Ltd is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2022-11-14, 19:15 CET.