LeddarTech Announces Adjustments to Warrant Exercise Price and Related Terms

Rhea-AI Summary

LeddarTech Holdings Inc. announced a reduction in the exercise price of outstanding warrants to purchase shares of LeddarTech common stock without par value. The exercise price will be reduced to US $11.17 per share from US $11.50 per share due to the potentially dilutive impact of a share dividend. Adjustments to the redemption provisions will also be made. The changes are effective as of February 9, 2024.

Insights

Financial Analyst

The adjustment of the warrant exercise price for LeddarTech's shares from $11.50 to $11.17 is a strategic financial move that reflects the company's response to the dilutive effects of the Prospector Share Dividend. This decision, while seemingly minor in the decrement of the exercise price, can have a substantive impact on the company's capital structure and potentially influence investor sentiment. By lowering the exercise price, LeddarTech is effectively making it more attractive for warrant holders to convert their warrants into shares, which could lead to an increase in the number of shares outstanding and consequently dilute existing shareholders.

However, this dilution is counterbalanced by the anti-dilution provisions that aim to preserve the value for current warrant holders. The involvement of an independent investment banking firm to assess the adjusted price suggests a methodical approach to maintaining fairness and market integrity. Investors should consider the potential for increased liquidity and market participation that such warrant adjustments could bring, while also being cognizant of the dilutive effects on their equity stake.

Tax Expert

The announcement also touches upon the U.S. Federal income tax treatment of the adjustment, which is an important consideration for investors. The tax implications of warrant exercises and adjustments can be complex and they play a crucial role in the decision-making process for investors. An adjustment to the exercise price of the warrants could potentially alter the tax basis of the investment. This, in turn, affects the capital gains tax liabilities upon eventual sale of the common stock.

Investors should review the detailed tax information available on LeddarTech's website to fully understand the tax consequences of the adjustment. Proper understanding of these tax implications is essential for making informed investment decisions, particularly for those considering exercising their warrants in light of the new exercise price.

Market Research Analyst

From a market perspective, the adjustment in the warrant exercise price could be indicative of the company's current valuation and future prospects. The reduction aligns with the intent to mitigate the dilutive effect of the Prospector Share Dividend, but it also sends signals to the market about LeddarTech's self-assessment of its share value. Such adjustments are usually scrutinized by the market as they can provide insights into management's expectations and confidence in the company's future performance.

Additionally, the market's reception to this news will depend on the perceived fairness and transparency of the process, as well as the impact on LeddarTech's financial health. If the market views the adjustment as a positive step towards maintaining value for warrant holders, it could lead to increased interest in the company's stock. Conversely, if the adjustment is seen as a move to simply dilute existing shares without corresponding value, it could result in negative sentiment.

QUEBEC CITY, Feb. 14, 2024 /PRNewswire/ - LeddarTech Holdings Inc. ("LeddarTech") (Nasdaq: LDTC), an automotive software company that provides patented disruptive AI-based low-level sensor fusion and perception software technology for ADAS, AD and parking applications, today announced that in accordance with the terms of the outstanding warrants expiring December 21, 2028 (CUSIP: 52328E113) (the "Warrants") to purchase shares of LeddarTech common stock without par value, the Warrant exercise price will be reduced to US $11.17 per share from the current US $11.50 per share. Corresponding adjustments will be made to the redemption provisions applicable to the Warrants. The adjustments are effective as of the close of business on February 9, 2024.

The adjustments are being made after LeddarTech considered the potentially dilutive impact on the Warrants of the share dividend (the "Prospector Share Dividend") previously declared and paid by Prospector Capital Corp. ("Prospector") to non-redeeming Prospector public stockholders at the time of the closing of the business combination between LeddarTech and Prospector, as more fully described in LeddarTech's public filings with the U.S. Securities and Exchange Commission. The Prospector Share Dividend was not made with respect to any other Prospector or LeddarTech shares issued and outstanding prior to or upon consummation of the business combination.

Pursuant to the terms of the Warrants, LeddarTech retained an independent investment banking firm of recognized national standing who rendered their opinion that an adjusted exercise price of US $11.17, without any adjustment to the number of common shares issuable upon exercise, would be necessary to effectuate the intent and purpose of the anti-dilution provisions set forth in the warrant agreement. Further information on the Warrants and the adjustment to the Warrant exercise price, including the U.S. Federal income tax treatment of this adjustment, is available in the "Investors" section of LeddarTech's website.

About LeddarTech

A global software company founded in 2007 and headquartered in Quebec City with additional R&D centers in Montreal, Toronto and Tel Aviv, Israel, LeddarTech develops and provides comprehensive AI-based low-level sensor fusion and perception software solutions that enable the deployment of ADAS, autonomous driving (AD) and parking applications. LeddarTech's automotive-grade software applies advanced AI and computer vision algorithms to generate accurate 3D models of the environment to achieve better decision making and safer navigation. This high-performance, scalable, cost-effective technology is available to OEMs and Tier 1-2 suppliers to efficiently implement automotive and off-road vehicle ADAS solutions.

LeddarTech is responsible for several remote-sensing innovations, with over 150 patent applications (80 granted) that enhance ADAS, AD and parking capabilities. Better awareness around the vehicle is critical in making global mobility safer, more efficient, sustainable and affordable: this is what drives LeddarTech to seek to become the most widely adopted sensor fusion and perception software solution.

Additional information about LeddarTech is accessible at www.LeddarTech.com and on LinkedIn, Twitter (X), Facebook and YouTube.

Forward-Looking Statements
Certain statements contained in this press release may be considered forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (which forward-looking statements also include forward-looking statements and forward-looking information within the meaning of applicable Canadian securities laws), including, but not limited to, statements relating to LeddarTech's anticipated strategy, future operations, prospects, objectives and financial projections and other financial metrics. Forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as "may," "will," "should," "would," "expect," "anticipate," "plan," "likely," "believe," "estimate," "project," "intend" and other similar expressions among others. Statements that are not historical facts are forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: (i) the possibility that anticipated benefits of LeddarTech's recent business combination will not be realized; (ii) the risk that shareholder litigation in connection with the business combination or other settlements or investigations may result in significant costs of defense, indemnification and liability; (iii) changes in general economic and/or industry-specific conditions; (iv) possible disruptions from the business combination that could harm LeddarTech's business; (v) the ability of LeddarTech to retain, attract and hire key personnel; (vi) potential adverse reactions or changes to relationships with customers, employees, suppliers or other parties, including as a result of the business combination; (vii) potential business uncertainty, including changes to existing business relationships following the business combination that could affect LeddarTech's financial performance; (viii) legislative, regulatory and economic developments; (ix) unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism, outbreak or escalation of war or hostilities and any epidemic, pandemic or disease outbreak (including COVID-19), as well as management's response to any of the aforementioned factors; * access to capital and financing and LeddarTech's ability to maintain compliance with debt covenants; (xi) LeddarTech's ability to execute its business model, achieve design wins and generate meaningful revenue; and (xii) other risk factors as detailed from time to time in LeddarTech's reports filed with the U.S. Securities and Exchange Commission (the "SEC"), including the risk factors contained in LeddarTech's Annual Report on Form 20-F for the fiscal year ended September 30, 2023. The foregoing list of important factors is not exhaustive. Except as required by applicable law, LeddarTech does not undertake any obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

Contact:
Daniel Aitken, Vice-President, Global Marketing, Communications and Investor Relations, LeddarTech Holdings Inc. Tel.: + 1-418-653-9000 ext. 232 daniel.aitken@LeddarTech.com

• Investor relations website: investors.LeddarTech.com
• Investor relations contact: Kevin Hunt, ICR Inc. kevin.hunt@icrinc.com
• Financial media contact: Dan Brennan, ICR Inc. dan.brennan@icrinc.com

Leddar, LeddarTech, LeddarVision, LeddarSP, VAYADrive, VayaVision and related logos are trademarks or registered trademarks of LeddarTech Holdings Inc. and its subsidiaries. All other brands, product names and marks are or may be trademarks or registered trademarks used to identify products or services of their respective owners.

LeddarTech Holdings Inc. is a public company listed on the Nasdaq under the ticker symbol "LDTC."

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SOURCE LeddarTech Inc.

FAQ

What is the new exercise price for the outstanding warrants of LeddarTech Holdings Inc.?

The new exercise price is US $11.17 per share, reduced from US $11.50 per share.

Why was the exercise price reduced for the warrants?

The exercise price was reduced due to the potentially dilutive impact of a share dividend.

When will the adjustments to the redemption provisions be made?

The adjustments are effective as of the close of business on February 9, 2024.

Who rendered the opinion regarding the adjusted exercise price?

An independent investment banking firm of recognized national standing provided the opinion.

Where can more information on the warrants and the adjustment be found?

More information is available in the 'Investors' section of LeddarTech's website.