News ReleaseHigh Wire Networks Inc (OTCMKTS:HWNI) Replaces Convertible Note with Conventional Loan
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The cybersecurity and information technology sectors have both grown at a breakneck pace over the course of the past decades and given the fact that the world is only going to get more connected, the sectors are expected to grow more. As a consequence, it is perhaps not really a surprise that investors continue to be interested in companies that are involved in these sectors. One of the companies to fit that bill is High Wire Networks Inc (OTCMKTS:HWNI), which is involved in the IT enablement and cybersecurity services space. The company works through more than 600 channel partners and through those partners it offers its managed services to more than 1000 managed security clients and thousands upon thousands of technology clients. The end customers which use High Wire Networks services include a large number of companies in the Fortune 500 and also some of the biggest government agencies in the United States. Last week, the company was in the news after it made a fairly positive announcement with regard to its debt situation. High Wire Networks announced that it had exchanged the principal as well as accrued interest related to a convertible note totaling as much as $236,000 for a conventional loan of the same amount. It was a significant move from the company considering the fact that in the previous arrangement, the note could have been turned into common shares at $0.06 a share. The conversion into a conventional loan would get rid of the feature and reduce the dilution of the company’s shares by as many as 4 million shares, which works out to around 1.4% of its outstanding and issued shares. The company is scheduled to pay the loan off at some point in August this year. The latest announcement came close on the heels of an announcement from High Wire Networks about the sale of its legacy staffing business for $11.5 million. That transaction helped in the elimination of other convertible debt and also canceled Series D preferred shares. The conversion provisions elimination helped in reducing the fully diluted shares by as much as 16% and also eliminated monthly debt repayments to the tune of $325,000. The sale of the company’s legacy staffing business was primarily a function of High Wire Networks’ strategy to focus completely on its faster-growing tech enablement and cybersecurity businesses. As mentioned earlier, it helped in eliminating monthly debt repayments to the tune of around $3.9 million annually. Hence, the transaction has been able to free up a large chunk of capital for the company, which it would deploy toward the faster-growing and higher-margin businesses. The cybersecurity and technology businesses have been generating revenues on a recurring basis and that has primarily been the case because of the presence of longer-term contracts with different clients. Mark Porter, the Chief Executive Officer of High Wire Networks, noted that although the staging business was growing at a steady pace, the sale of the business had been a strategic move. Disclaimers: The Private Securities Litigation Reform Act of 1995 provides investors a safe harbor in regard to forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, assumptions, objectives, goals, assumptions of future events or performance are not statements of historical fact may be forward looking statements. Forward looking statements are based on expectations, estimates, and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. 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March 15, 2023 08:51 PM Eastern Daylight Time
