Borqs Technologies Completes $20 Million Private Placement to Support Growth

Rhea-AI Summary

Borqs Technologies, Inc. (BRQS) announced on February 25, 2021, that it has signed agreements for the sale of $20 million in convertible notes to institutional and individual investors. The notes, which carry an 8% annual interest rate and a 10% discount on ordinary share conversion, are expected to fund orders and the development of next-generation 5G products. One-third of the notes will be sold at the agreement's execution, with the remainder contingent on certain conditions, including a registration statement effective by April 15, 2021.

Positive

• Secured $20 million in convertible notes to support growth initiatives.
• 8% interest rate offers a reasonable return for investors.
• Funds will support development of next-generation 5G products.

Negative

• Two-thirds of the notes are conditional on meeting certain criteria, introducing uncertainty.
• Potential risks include failure to satisfy conditions for the sale of $13.3 million of the notes.

SANTA CLARA, Calif., Feb. 25, 2021 (GLOBE NEWSWIRE) -- Borqs Technologies, Inc. (Nasdaq: BRQS, the “Company”), a global provider of embedded software and products for the Internet of Things (IoT), reported today that the Company has signed agreements with institutional and individual investors on February 25, 2021 for sale of $20 million in convertible notes. The notes are due in two years, have an annual interest rate of 8%,    convertible into ordinary shares of Borqs at 10% discount from the market price and has 90% warrant coverage with the warrants exercisable at 110% of the conversion price. One-third of the notes are sold at the execution of definitive agreements and two-thirds of the notes will be sold upon the satisfaction of certain conditions, including effectiveness of a registration statement to be filed by the Company by April 15, 2021. Proceeds will be used for the procurement of orders the Company expects to receive from its customers this year and also for development of the next generation 5G products.

About Borqs Technologies, Inc.
Borqs Technologies is a global leader in software and products for the IoT, providing customizable, differentiated and scalable Android-based smart connected devices and cloud service solutions. Borqs has achieved leadership and customer recognition as an innovative end-to-end IoT solutions provider leveraging its strategic chipset partner relationships as well as its broad software and IP portfolio.

Borqs’ unique strengths include its Android and Android Wear Licenses which enabled the Company to develop a software IP library covering chipset software, Android enhancements, domain specific usage and system performance optimization, suitable for large and low volume customized products. The Company is also currently in development of 5G products for phones and hotspots.

Forward-Looking Statements and Additional Information
This press release may include “forward-looking statements” that involve risks and uncertainties that could cause actual results to differ materially from what is expected, . Words such as “expects”, “believes”, “anticipates”, “intends”, “estimates”, “predicts”, “seeks”, “may”, “might”, “plan”, “possible”, “should” 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. Such forward-looking statements relate to future events or future results, based on currently available information and reflect our management’s current beliefs. Many factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements, including that conditions for sale of $13.3 million of the notes will not be satisfied, including effectiveness of the registration statement referenced above. The reader is also advised to refer to the Risk Factors sections of the Company’s filings with the Securities and Exchange Commission for additional information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements. Except as expressly required by applicable securities law, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Contact:

Sandra Dou
Director of Finance
Borqs Technologies, Inc.
sandra.dou@borqs.net  
www.borqs.com

FAQ

What financial arrangement did Borqs Technologies announce on February 25, 2021?

Borqs Technologies announced a $20 million convertible notes sale with an 8% interest rate.

How will Borqs Technologies use the proceeds from the convertible notes?

The proceeds will be used for procurement of orders and developing next-generation 5G products.

What are the key terms of the convertible notes issued by Borqs Technologies?

The notes have an 8% annual interest rate and can be converted at a 10% discount from market price.

What conditions must Borqs Technologies meet for the sale of the convertible notes?

The sale of two-thirds of the notes is contingent upon the effectiveness of a registration statement by April 15, 2021.