Stellar Acquisition III, Inc.
(“Stellar”) (NASDAQ:STLR) announced today that it has
entered into a definitive Agreement and Plan of Merger (the “Merger
Agreement”) to combine with Phunware, Inc. (“Phunware”). The
transaction values Phunware at an enterprise value of $301 million,
on a cash-free, debt-free basis, with the transaction consideration
to be paid in newly issued equity securities of Stellar.
The transaction with Phunware enables Stellar to
enter two of the most innovative and rapidly growing sectors within
the technology space: mobile cloud software and blockchain.
Phunware’s mobile application lifecycle management platform
delivers mobile marketing automation, analytics and business
intelligence, alerts, notifications and messaging, content
management, location-based services, audience engagement, audience
monetization, vertical solutions, big data and cryptonetworking.
The platform processes over 4 billion events per day, totaling over
1.4 trillion events per year. This amounts to petabytes of
actionable data across thousands of mobile application portfolios.
Currently, Phunware receives revenue from a large and diversified
customer base that includes numerous Fortune 5000 companies in both
Software-as-a-Service (SaaS) via recurring revenue streams and
transactional formats.
Phunware intends to initiate within the 1st half
of 2018 a Token Generation Event (“TGE”) based on its “PhunCoin™”
cryptonetworking ecosystem.
Phunware was established in February 2009, and
has grown rapidly to date through acquisitions and venture capital
offerings to strategic investors and partners. The company today
has notable investors such as Wavemaker Partners (Draper
Network Fund), Fraser McCombs Ventures, Maxima Ventures, Samsung,
Cisco Investments, World Wrestling Entertainment, PLDT Capital,
Central Texas Angel Network (CTAN), Baylor Angel Network (BAN) and
others. We believe that having strategic partners with aligned
interests is important in the achievement of common goals.
Following the closing, the common stock and
warrants of the combined entity are expected to trade on the NASDAQ
Stock Market under the name Phunware, Inc. and trading symbols
“PHUN” and “PHUNW”, respectively. The combined company will be led
by Mr. Alan S. Knitowski, who will continue as Phunware’s Chief
Executive Officer, and Mr. Matthew Aune, who will continue as
Phunware’s Chief Financial Officer. As part of the transaction, the
combined company will redomesticate from the Marshall Islands
(Stellar’s jurisdiction of formation) to Delaware.
Management Commentary
Mr. Alan S. Knitowski, CEO of
Phunware, said, “Our stated goal has always been to reach every
connected device on Earth through mobile applications, and this
transaction turbocharges our ability to achieve that vision. With a
current reach to over one in ten devices worldwide, our platform is
a formidable foundation to build upon. Merging with Stellar will
enable us to scale that foundation through organic and inorganic
growth, including the PhunCoin Token Generation Event. We are
extremely proud of this important milestone and are excited for the
future.”
Mr. Matt Aune, CFO of Phunware,
added, “Since Phunware’s founding in 2009, we have seen dramatic
growth both financially and as a platform. We are now at an
exciting stage of our development where we are prepared to take our
products and scale to the next level, and this transaction provides
the resources that we will use to implement our ambitious plans
worldwide.”
Mr. Akis Tsirigakis, Co-CEO of
Stellar, stated “We are very pleased to announce this transaction
and our entry into the mobile cloud software and blockchain
sectors, both extremely attractive and rapidly growing market
segments, with great potential for many years to come. Phunware is
in the process of implementing its ambitious plan to become the
global leader in Multiscreen as a Service (MaaS) and becoming a
public company, which will allow Phunware to further enhance its
quality and governance foundations.”
Mr. George Syllantavos, Co-CEO
of Stellar, added “Through this transaction, we offer our
shareholders the opportunity to participate in the growth prospects
of this innovative company within the exciting MaaS/SaaS/blockchain
sectors. Phunware is a company on the forefront of technological
advancements, having the vision and unique ability to integrate
mobile cloud software and blockchain technology for the benefit of
the global consumer. We are excited about the future and are
committed to contribute to the company’s success.”
Overview of Phunware
Phunware is the pioneer of Multiscreen as a
Service (MaaS), a fully integrated suite of platform products,
solutions and data that allows brands to engage, manage and
monetize their anytime, anywhere mobile application users
worldwide. Phunware creates category-defining mobile experiences
for the world’s most respected brands, with petabytes of data
across thousands of mobile application portfolios. Its offerings
include:
- Enterprise mobile software including content management,
location-based services, marketing automation, business
intelligence and analytics, alerts, notifications and messaging,
audience engagement, audience monetization, vertical solutions and
cryptonetworking, as well as an Application Framework for
developers and publishers building their own mobile applications
in-house;
- Media for mobile audience building and activation, application
discovery, brand awareness, user engagement, user monetization and
more; and
- Data for audience insights, campaign engagement and business
process optimization.
Phunware will use commercially reasonable
efforts to launch PhunCoin, a blockchain-powered utility token and
ecosystem that enables consumers, brands and application developers
to transact directly and create a value-based and voluntary data
exchange.
Summary of the Transaction
Under the terms of the Merger Agreement,
Phunware shareholders will receive consideration in the form of
newly issued Stellar equity securities, valued based on an
enterprise value of $301 million for Phunware and subject to
customary adjustments for cash and debt and, at the election of
Phunware’s shareholders, acquire from Stellar sponsors up to
929,890 warrants to purchase Stellar common stock at $0.50 per
warrant. In addition, all Phunware stock options and warrants will
be assumed by Stellar in the transaction as part of the merger
consideration. Cash proceeds released from Stellar’s trust account
after any shareholder redemptions and payment of transaction
expenses and other Stellar liabilities shall remain with the
combined company, and Phunware intends to use the cash proceeds
from the trust account to grow its business, fund inorganic growth
initiatives and for working capital.
The transaction is subject to the satisfaction
of customary closing conditions. The transaction is currently
expected to close in the second quarter of 2018.
The description of the transaction contained
herein is only a summary and is qualified in its entirety by
reference to the definitive Merger Agreement relating to the
transaction, a copy of which will be filed by Stellar with the
Securities and Exchange Commission (the “SEC”) as an exhibit to a
Current Report on Form 8-K.
Additional Information About the
Transaction and Where to Find It
Stellar intends to file with the SEC a
registration statement on Form S-4 with a proxy statement
containing information about the proposed transaction and the
respective businesses of Phunware and Stellar. Stellar will mail a
final prospectus and definitive proxy statement and other relevant
documents after the SEC completes its review. Stellar and Phunware
shareholders are urged to read the preliminary prospectus and proxy
statement and any amendments thereto and the final prospectus and
definitive proxy statement in connection with the solicitation of
proxies for the special meetings to be held to approve the proposed
transaction, because these documents will contain important
information about Stellar, Phunware and the proposed transaction.
The final prospectus and definitive proxy statement will be mailed
to shareholders of Stellar and Phunware of a record date to be
established for voting on the proposed transaction. Shareholders
will also be able to obtain a free copy of the proxy statement, as
well as other filings containing information about Stellar without
charge, at the SEC’s website (www.sec.gov) or by calling
1-800-SEC-0330. Copies of the proxy statement and other filings
with the SEC can also be obtained, without charge, by directing a
request to: Stellar Acquisition III Inc., 90 Kifisias Avenue,
Marousi 15125, Athens, Greece. Additionally, all documents filed
with the SEC can be found on Stellar’s website,
www.stellaracquisition.com.
Advisors and Counsel
Maxim Group LLC and Graceworth Ltd. are acting
as financial advisors to Stellar in connection with the proposed
transaction. Ellenoff Grossman & Schole LLP is acting as
counsel to Stellar. BTIG LLC is acting as financial advisor to
Phunware in connection with the proposed transaction. Wilson
Sonsini Goodrich & Rosati, P.C. is acting as counsel to
Phunware.
About Stellar
Stellar is a Republic of Marshall Islands blank
check company, also commonly referred to as a Special Purpose
Acquisition Company, or SPAC, formed for the purpose of effecting a
merger, asset acquisition or other business combination with one or
more businesses or entities. Stellar’s units, shares of common
stock and warrants are currently listed on the Nasdaq Capital
Market under the symbols “STLRU,” “STLR” and “STLRW,
respectively.
Participants in the Solicitation
Stellar, Phunware and their respective directors
and executive officers and other persons may be deemed to be
participants in the solicitations of proxies from Stellar’s
shareholders in respect of the proposed transaction. Information
regarding Stellar’s directors and executive officers is available
in its annual report on Form 10-K filed with the SEC. Additional
information regarding the participants in the proxy solicitation
and a description of their direct and indirect interests will be
contained in the proxy statement when it becomes available.
No Offer or Solicitation
This communication shall not constitute an offer
to sell or the solicitation of an offer to buy any securities, nor
shall there be any sale of securities in any jurisdiction in which
the offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Cautionary Note Regarding Forward-Looking
Statements
Some of the statements in this release and in
presentations by Stellar’s management relating to the matters
described herein are or may constitute “forward-looking
statements.” Words such as “believe,” “expect,” “anticipate,”
“project,” “target,” “optimistic,” “intend,” “aim,” “will”, “may”
and variations and similar words and expressions are intended to
identify such forward-looking statements, but the absence of these
words does not mean that a statement is not forward-looking.
Forward-looking statements relating to the proposed transaction and
the SEC registration statement and proxy voting process (as well as
the combined company's post-closing activities) include, but are
not limited to: (i) statements about the benefits of the
transaction involving Stellar and Phunware, including future
financial and operating results; (ii) Stellar’s and Phunware’s
plans, objectives, expectations and intentions (including with
respect to the future Token Generation Event and the use of
proceeds from Stellar’s trust account); (iii) the expected timing
of completion of the transaction and the SEC registration statement
and proxy voting process; and (iv) other statements relating to the
transaction, the SEC registration statement and proxy voting
process and the combined company’s post-closing activities that are
not historical facts. Forward-looking statements involve estimates,
expectations and projections and, as a result, are subject to risks
and uncertainties. Actual results could differ materially if not
substantially from those described in the forward-looking
statements.
Important risks and other factors could cause
actual results to differ materially from those indicated by such
forward-looking statements. With respect to the transaction, the
SEC registration statement and proxy voting process and the
combined company’s post-closing activities, such risks and
uncertainties include, among many others: (i) the risks associated
with Stellar’s SEC registration statement and proxy voting process,
including uncertainty regarding the number of Stellar shareholders
who may request redemption and whether Phunware shareholders will
approve the transaction; (ii) the risk that the benefits to Stellar
and its shareholders anticipated from transaction may not be fully
realized or may take longer to realize than expected; (iii) the
risk that any projections, including earnings, revenues, expenses,
synergies, margins or any other financial items are not realized,
(iv) the risks associated with concentration of Phunware’s business
with certain customers; (v) the potential for reductions in
industry profit margins due to, among other factors, declining
service revenues; (vi) the inability of the post-closing combined
company to expand and diversify the business of Phunware; (vii)
changing interpretations of generally accepted accounting
principles; ( viii) the combined company’s continued compliance
with government regulations; changing legislation and regulatory
environments; (ix) the ability of the post-closing company to meet
Nasdaq’s continued listing standards; (x) the potential for lower
return on investment by Phunware’s expected TGE; (xi) the inability
of Phunware to manage growth; (xii) requirements or changes
affecting the MaaS/SaaS industry; (xiii) the general volatility of
market prices of Stellar’ s securities and general economic
conditions; ( xiv) the combined company’s ability to implement new
strategies and react to changing market conditions; (xv) risks
associated with operating hazards; (xvi) risks associated with
competition; (xvii) risks associated with the loss of key
personnel; (xviii) unexpected costs, liabilities or delays in the
proposed transaction; (xix) the outcome of any legal proceedings
related to the transaction; (xx) the occurrence of any event,
change or other circumstances that could give rise to the
termination of the Merger Agreement or (xxi) any of the factors in
detailed in the “Risk Factors” section of Stellar’ s filings with
the SEC.
The foregoing listing of risks is not
exhaustive. These risks, as well as other risks associated with the
transaction, will be more fully discussed in Stellar’s registration
statement to be filed with the SEC in connection with the
transaction. Additional risks and uncertainties are identified and
discussed in Stellar’s reports filed or to be filed with the SEC
and available at the SEC's website at http://www.sec.gov.
Forward-looking statements included in this press release speak
only as of the date of this press release. Stellar undertakes and
assumes no obligation, and does not intend, to update Stellar’s
forward-looking statements, except as required by law.
Company
Contact:George Syllantavosco-CEO & CFOStellar
Acquisition III Inc.90 Kifissias Avenue,Maroussi 15123, Athens,
Greece Email: gs@stellaracquisition.com Website:
www.stellaracquisition.com |
Investor
Relations / Media Contact: Daniela GuerreroCapital Link,
Inc. 230 Park Avenue, Suite 1536 New York, N.Y. 10169 Tel.: (212)
661-7566 Fax: (212) 661-7526 E-Mail:
stellaracquisition@capitallink.com |
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