RUTHERFORD, N.J., June 17, 2005 - AXS-One Inc. (AMEX: AXO), a leading provider of high performance records compliance management software solutions, today announced that it has entered into a definitive agreement with a number of investors including Potomac Capital and RIT Capital Partners plc, as well as AXS-One Management and Board members to sell shares of its common stock for $1.49 per share. In connection with the sale of common stock, the Company will also issue to the investors three-year warrants to purchase 20% of the number of shares of common stock issued in connection with the offering, with the warrants being priced at $1.90 and $2.15 in two equal tranches. This transaction, which is subject to American Stock Exchange approval and other customary closing conditions, will result in gross proceeds of approximately $6.75 million (with net proceeds of approximately $6.45 million after transaction expenses). UK based RIT Capital Partners plc, the publicly listed UK investment trust chaired by Lord Rothschild, is the largest investor in the offering which is being led by New York City based Potomac Capital, an existing shareholder. AXS-One Management and Board together represent 10% of the investment. The closing with respect to the shares being offered to the company's Management and Board of Directors will be subject to shareholder approval. Kaufman Bros., L.P. served as the placement agent in this transaction.
Following the close of the private placement, Anthony H. Bloom will be appointed to the Company's Board of Directors, replacing Edwin T. Brondo. The Board will remain with eight directors. Mr. Bloom, a professional investor, was previously Chairman and CEO of The Premier Group, one of South Africa's largest diversified industrial enterprises. He is currently Chairman of Cineworld UK Ltd and has been a director of a number of other companies including RIT Capital Partners plc.
"We are pleased that several notable institutions have committed investment capital in AXS-One, and we welcome Tony Bloom to our Board. Tony is an accomplished business executive with relationships across the world. His knowledge of the law, finance and compliance will be an invaluable help in leveraging our success. Both actions represent a direct endorsement of our opportunities in Records Compliance Management, and the potential of the market itself," commented Bill Lyons, CEO of AXS-One. "I would also thank Ed Brondo for his untiring service over the past 8 years. Ed's expertise as a long-standing customer of AXS-One's products as well as his accounting background has provided the Board with valuable insights over the years."
The shares of common stock issuable in the private placement and issuable upon exercise of the warrants have not been registered under the Securities Act of 1933 and may not be subsequently offered or sold by the investors absent registration or an applicable exemption from the registration requirements. AXS-One has agreed to file a registration statement covering the resale of the securities issued in this transaction and issuable upon exercise of the warrants.
For additional information, please refer to AXS-One's current report on Form 8-K to be filed with the Securities and Exchange Commission with respect to this transaction.