Ability to acquire supplier of principal cellular interception system
Ability announced that, subject to the terms and conditions of a Stock Purchase Agreement, including the company's satisfactory due diligence, the company has entered into an agreement to acquire the supplier that develops and licenses to the company on an exclusive basis Ultimate Interception, or ULIN, the company's principal cellular interception system. Under the Stock Purchase Agreement, subject to the company's satisfactory due diligence, the company has agreed to purchase all the issued and outstanding shares of the supplier and in consideration, the company agreed to issue 354,609 ordinary shares of the company, which is the equivalent to $1M, based on the closing share price of the company on the Nasdaq Capital Market on November 20, 2018. In addition, the company agreed to issue to the Seller three warrants, each warrant exercisable for 100,000 ordinary shares of the company at an exercise price of $3.81, with the first warrant exercisable for 30 days from the first anniversary of the closing date, the second warrant exercisable for 30 days from the second anniversary of the closing date, and the third warrant exercisable for 30 days from the third anniversary of the closing date. Closing is subject to satisfactory due diligence by the company, entry into a service agreement, and other closing conditions. There can be no assurance that the closing conditions will be satisfied or that the acquisition will be completed as contemplated or at all. If the acquisition is completed, the company estimates that the company will incur additional operating expenses of approximately $750,000 on an annualized basis while the company would no longer be subject to the revenue share arrangement under the existing reseller agreement with the supplier.