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Axios Mobile Assets gains heavyweight backer in Relay Ventures

Last updated: 09:35 23 Dec 2015 AEDT, First published: 18:39 22 Dec 2015 AEDT

Pallet
Axios is using mobile sensor technology to disrupt an unsophisticated, yet critical component of the supply chain

---ADDS DETAIL ON RELAY VENTURES' INVOLVEMENT---

Relay Ventures, the venture capital firm that led Axios Mobile Assets (CNQ:AXA) recent fund-raising, has appointed Osama Arafat as chairman of the pallet technology company.

Arafat is the former chief executive officer of Q9 Networks, the Canadian data center provider that was bought out by Bell Canada for C$1.1bn.

John Albright, managing partner of Relay Ventures, will also serve as a director of Axios it was announced on Tuesday as part of an arrangement that will see the Toronto and Silicon Valley-based venture capital funds outfit take a keener interest in Axios and its next generation bio-based pallet technology.

Under the terms of an investor rights agreement, Relay Ventures has the right to designate two nominees for election to the Axios board, provided Relay has a stake in Axios that is equal to or greater than 7.5% of the outstanding share capital.

Relay will also have the right to demand that Axios facilitates a secondary offering in Canada, at Relay Ventures' expense, of all or any portion of the common shares held by Relay Ventures or its affiliates, provided that Relay Ventures does not make more than three such demand registrations in total and no more than one demand registration in any 12-month period.

Finally, Relay will have the right to "piggy-back" upon a distribution by the company of its own securities, which is to say that when Axios offers shares to investors, some of Relay's Axios shares can be included in the offer.

The demand registration rights and "piggy-back" registration rights granted to Relay Ventures will terminate at such time as Relay Ventures no longer owns, directly or indirectly, common shares representing at least 5% of the outstanding common shares of Axios.

"Axios is utilizing mobile sensor technology to disrupt an unsophisticated, yet critical component of the supply chain" said Albright.

"The company has been able to attract top-tier customers within their entry vertical and is continuing to build strong demand for the Axios smart pallet," he added.

Axios revealed on Tuesday that the non-brokered private placement of units announced on 24 November has now completed. In all, the company raised C$13.43mln after the deduction of broker fees.

Funds from the share issue will mostly be used to help the company meet rising demand for its proprietary pallet-based logistics system from food producers in the United States, and for general working capital purposes.

The company said it has also completed the acquisition of Axsense for C$2.5mln, settled in Axios shares.

Axsense has developed a proprietary sensor and system that Axios believes will enhance its pallet systems by adding a device that can provide temperature sensing, and potentially also shock sensing, CO2 sensing and GPS sensing.

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