MSG Sports to invest up to C$13.4M in Xtract One

Xtract One Technologies (XTRAF), and Madison Square Garden Sports Corp. (MSGS) announced that MSG Sports will invest up to C$13.4M in Xtract One. The initial investment of C$8.4M is effective immediately, with the subsequent investment of C$5M being conditional on the approval of Xtract One’s shareholders and all applicable regulatory approvals. The Investment is comprised of the sale of up to 31,925,595 units at a price of C$0.42 per Unit. Each Unit will be comprised of one common share of Xtract One and one Common Share purchase warrant exercisable at a price of C$0.60 for a period of five years following the date of its issuance. The initial tranche of the Investment comprised the issuance of 20,000,000 Units for aggregate gross proceeds of C$8,400,000. The proposed second tranche of the Investment will be comprised of the issuance of 11,925,595 Units for aggregate gross proceeds of C$5,008,749.90. All securities issued under the Investment will be subject to Canadian resale restrictions of four months and one day, in addition to applicable US resale restrictions. No commission or fee is or will be paid in connection with the Investment. The initial and proposed subsequent equity Investment will enable Xtract One to further innovate its advanced security solution and accelerate its growth into new market segments. The investment by MSG Sports took place through its wholly-owned subsidiary MSG Sports Ventures, which is located at 2 Penn Plaza, New York, New York 10121. Prior to its investment, MSGSV did not hold any securities of Xtract One. As a result of its investment for total gross proceeds of C$8.4M, MSGSV holds 20,000,000 Common Shares and 20,000,000 Warrants, representing approximately 10.92% of the issued and outstanding Common Shares on a non-diluted basis and 19.69% on a partially diluted basis. Should its investment increase to C$13.4M, MSGSV would hold an aggregate of 31,925,595 Common Shares and 31,925,595 Warrants, representing approximately 16.36% of the issued and outstanding Common Shares on a non-diluted basis, and 28.12% of the issued and outstanding Common Shares on a partially diluted basis, based on the current issued and outstanding Common Shares. In connection with its investment, MSGSV entered into an investor rights agreement with Xtract One pursuant to the terms of which MSGSV has been granted the right to appoint an observer to the board of directors of Xtract One. Under the Investor Rights Agreement, subject to certain limitations set forth therein, MSGSV is also entitled to: certain "demand" registration rights that will allow MSGSV to request that Xtract One qualify for resale under Canadian securities laws and/or register for resale under the United States Securities Act of 1933, as amended, any Common Shares acquired by MSGSV as a result of its investment or upon exercise of the Warrants; and certain "piggyback" registration rights that will allow MSGSV to include the Registrable Securities in any public offering of equity securities initiated by Xtract One or another shareholder having registration rights.