INNOVATE Corp. Announces Closing of Rights Offering

INNOVATE Corp.
INNOVATE Corp.

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NEW YORK, April 24, 2024 (GLOBE NEWSWIRE) -- INNOVATE Corp. (“INNOVATE” or the “Company”) (NYSE: VATE), a diversified holding company, announced today the closing of its successful rights offering, which expired at 5:00 p.m., New York City time, on April 19, 2024. Pursuant to the terms of the rights offering, 5.2 million shares of common stock are being purchased pursuant to the exercise of basic subscription rights and 0.1 million additional shares of common stock are being purchased under the over-subscription privilege.

In accordance with the Investment Agreement (the “Investment Agreement”) entered into by the Company with Lancer Capital LLC (“Lancer Capital”), an investment fund led by Avram Glazer, the Chairman of the Board of Directors of the Company and the Company’s largest stockholder, Lancer Capital partially backstopped the rights offering in the amount of $15.3 million by purchasing Series C Non-Voting Convertible Participating Preferred Stock, par value $0.001 per share (the “preferred stock”). In total, 15.3 thousand shares of preferred stock at a price of $1,000 per share were issued to Lancer Capital. This includes the approximately 6.3 thousand shares of preferred stock issued in connection with the closing of the rights offering and the 9.0 thousand shares already purchased as part of an equity advance arrangement under the Investment Agreement (the “equity advance”). On March 28, 2024, the Company issued and sold 25.0 thousand shares of the preferred stock to Lancer Capital for an aggregate purchase price of $25.0 million under the equity advance. The remaining 16.0 thousand shares of preferred stock purchased under the equity advance are part of the previously announced concurrent private placement. The preferred stock can be convertible into common stock at the price equivalent to the subscription price under the rights offering contingent on shareholder approval, which will be voted on at the next annual meeting.

In the aggregate, the Company is issuing 5.3 million new shares of common stock at the subscription price of $0.70 per whole share for gross proceeds of $3.7 million to the Company, in addition to 31.3 thousand shares of preferred stock to Lancer Capital for gross proceeds of $31.3 million to the Company. After giving effect to the rights offering, the Company will have 85.2 million shares of common stock issued and outstanding. If approved at the annual meeting, the conversion of the 31.3 thousand shares of preferred stock purchased by Lancer Capital would result in the issuance of an additional 44.7 million shares of common stock.