Relay Ventures Funds Acquire Securities of Axios Mobile Assets Corp.

TORONTO, Dec. 21, 2015 /CNW/ - Relay Ventures Fund III L.P. and Relay Ventures Parallel Fund III L.P. (collectively, "Relay" or the "Relay Funds") announces that it has entered into an investment agreement with Axios Mobile Assets Corp. ("Axios"), pursuant to which it has acquired ownership and control over 6,666,667 units of Axios at a purchase price of C$0.90 per unit on a private placement basis (the "Offering"). Relay Ventures Fund III L.P. acquired 6,366,367 units and Relay Ventures Parallel Fund III L.P. acquired 300,300 units. Each unit consists of one common share of Axios ("Common Shares") and one common share purchase warrant (each, a "Warrant"). Each Warrant will entitle the holder to subscribe for one Common Share at a price of C$1.50 per share for a period of 36 months following the closing of the Offering, subject to anti-dilution adjustments. Prior to completion of the Offering, Relay did not own any securities of Axios.

The Relay Funds are both limited partnerships managed by their sole general partner, Relay Ventures Fund III G.P. ("Relay GP"). Relay GP is controlled by the holder of all of its voting shares, Relay Ventures Fund III Capital Inc. ("Capital Inc."), all of the voting shares of which are held by Kevin Talbot ("Talbot") and John Albright ("Albright"). Capital Inc. indirectly controls the Common Shares and Warrants acquired by the Relay Funds. The Relay Funds, Relay Ventures Fund III L.P. and Relay Ventures Parallel Fund III L.P., are joint actors. For purposes of Canadian securities laws, Relay GP and Capital Inc. are deemed to be joint actors with the Relay Funds and Talbot and Albright are presumed to be joint actors with the Relay Funds.  

Upon completion of the purchase of 6,666,667 Common Shares pursuant to the Offering, Relay will own and control (with Relay GP, Capital Inc. and Messrs. Albright and Talbot) an aggregate of 6,666,667 Common Shares, representing approximately 15.78% of the outstanding Common Shares after giving effect to the issuance of such shares but before giving effect to the exercise of the Warrants. In addition, if Relay elects to purchase all 6,666,667 Common Shares issuable upon exercise of the Warrants, Relay will own and control (with Relay GP, Capital Inc. and Messrs. Albright and Talbot) an aggregate of 13,333,334 Common Shares, representing approximately 27.26% of the outstanding Common Shares after giving effect to the Offering, the exercise of the Warrants and assuming no conversion of any other securities of Axios. The 6,666,667 Common Shares underlying such Warrants represent approximately 13.63% of the outstanding Common Shares after giving effect to the Offering, the exercise of the Warrants and assuming no conversion of any other securities of Axios.

Relay and Axios have also entered into an investor rights agreement (the "Investor Rights Agreement"), setting forth certain rights and obligations of Relay in connection with its securityholdings of Axios. Under the Investor Rights Agreement, Relay is entitled to nominate 2 individuals for election as directors of Axios for so long as Relay owns, directly or indirectly, 7.5% or more of the outstanding Common Shares.  The size of the board of directors is limited to 6 directors.

The Investor Rights Agreement also provides Relay with the right to demand that Axios facilitate a secondary offering in Canada of all or any portion of the Common Shares held by Relay or its affiliates, provided that Relay may not make more than three such demand registrations in total and no more than one demand registration in any 12-month period. The Investor Rights Agreement further provides Relay with the right to "piggy-back" upon a distribution by Axios  of its own securities. The demand registration rights and "piggy-back" registration rights granted to Relay will terminate at such time as Relay no longer owns, directly or indirectly, such number of Common Shares representing at least 5% of the outstanding Common Shares.

The acquisition was made for investment purposes. Relay will evaluate its investment in Axios from time to time and may, based on such evaluation of market conditions and other circumstances, increase or decrease securityholdings in Axios as circumstances require.

This press release is being issued as required under the early warning requirements of applicable Canadian securities laws and an early warning report regarding the acquisition of the Common Shares and Warrants by Relay (the "Early Warning Report") will be filed on SEDAR at www.sedar.com in accordance with applicable securities laws. A copy of the Early Warning Report may be obtained by contacting Jeannette Wiltse of Relay, 333 Bay Street, Suite 1130, Toronto, Ontario M5H 2R2, at (416) 367-0027.

About Relay Ventures
Relay Ventures is an early stage venture capital firm focused exclusively on mobile software, services, technology and content. More than 1.4B mobile devices world-wide run software from a Relay portfolio company. With offices in Menlo Park and Toronto, the firm is active throughout North America. For additional information, visit www.relayventures.com

SOURCE Relay Ventures

For further information: Jeannette Wiltse of Relay, 333 Bay Street, Suite 1130, Toronto, Ontario M5H 2R2, at (416) 367-0027

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http://www.relayventures.com

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