GPS Industries, Inc (GPSI), the leading innovator of Wi-Fi enabled GPS systems for golf facilities and residential communities, has signed a definitive investment agreement with Great White Shark Enterprises (GWSE) and Leisurecorp LLC (Leisurecorp).
Leisurecorp is part of the Istithmar group. Istithmar is an alternative investment house based in the United Arab Emirates. It is 100 percent owned by Dubai World, which is in turn wholly owned by the Government of Dubai.
Under the terms of the agreement, GWSE and Leisurecorp will invest $15.7m in aggregate in GPSI through the purchase of 1,574,089 newly issued Series B convertible preferred shares and related warrants.
Robert C. Silzer, president and CEO of GPSI, commented, “I believe these commitments, from both GWSE and Leisurecorp, are persuasive evidence that our technology and our business plan are attractive to even the most demanding investors. Greg Norman has been a valued strategic investor in GPSI for several years and has reaffirmed his support of the company through this additional investment. Management’s conversion of debt to equity also signals the highest confidence in the opportunities that lie ahead for GPSI.”
The Series B preferred shares are restricted from trading and will be convertible into common shares once the company’s shareholders have approved an increase in GPSI’s authorized number of common shares. In connection with their investment, GWSE and Leisurecorp also receive the right to invest an additional $13.0m in GPSI within 120 days of their original investment.
In a related transaction, certain officers and directors of the Company agreed to convert $3.7m of outstanding short term obligations in exchange for common and preferred stock of the Company. In addition, Bart Collins, president of GWSE and a current director of the company, was elected to the office of executive vice president at GPSI.
Approximately $2.8m of proceeds from the transaction have been used to redeem at a discount outstanding convertible debentures that were issued to entities affiliated with N.I.R. Group, LLC, thus extinguishing all financial obligations under such debentures.
The remaining proceeds will be used to fund working capital and ongoing research and development, virtually eliminate company debt, and support the company’s growth initiatives.
TM Capital Corp. served as financial advisor to GPSI in connection with this transaction.
Commenting on the investment by Great White Shark Enterprises, Bart Collins said, “Part of our business at GWSE is the design and development of golf courses around the world, so we are keenly interested in products which enhance the game and foster profitability for the industry. At nearly 100 facilities around the world GPSI’s patented technology is already transforming the way golf courses are managed. But the company’s technology also has vast potential beyond the golf industry.”
Collins continues, “I believe the Company’s unique array of wireless products will dramatically impact the amenities offered in high-value residential developments and resort communities. This recapitalization of the business provides the platform for GPSI to realize that potential.”
Silzer concludes, “This is a landmark agreement for GPSI and our shareholders. The company is now well capitalized to develop all of the opportunities of our technology and the strategic vision of our management team.”
GPS Industries www.gpsindustries.com