RMG Networks (RMGN) to Raise $4.8M From Rights Offering

November 30, 2016 5:34 PM EST

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RMG Networks Holding Corporation (NASDAQ: RMGN) today announced that it has commenced a rights offering ("Rights Offering") to raise gross proceeds of up to approximately $4.8 million. The Company has granted, at no charge to the holders of record of its common stock on November 29, 2016, the record date for the Rights Offering, 0.20991 of a non-transferable subscription right for each share of our common stock owned, as more fully described in the prospectus supplement relating to the Rights Offering. Each whole subscription right entitles the holder to purchase one share of common stock at a subscription price of $0.62 per share. In addition, holders of subscription rights who fully exercise their basic subscription rights are entitled to oversubscribe for additional shares of common stock, subject to proration and to the extent available following the purchase of certain unsubscribed shares by standby purchasers pursuant to a standby purchase agreement described below.

Gregory H. Sachs, the Executive Chairman of RMG's Board of Directors; Robert Michelson, RMG's Chief Executive Officer and a director; and Jana Ahlfinger Bell, RMG's Executive Vice President & Chief Financial Officer, have advised the Company that they intend to participate in the Rights Offering although they have not entered into any agreement to do so.

The Company has entered into a standby purchase agreement with three existing stockholders (collectively, the "standby purchasers"), which collectively own an aggregate of approximately 33.5% of the Company's outstanding common stock (not taking into account an aggregate of 2,533,333 shares of the Company's common stock underlying warrants owned by one of the standby purchasers). Subject to certain conditions, the standby purchasers have agreed to acquire from RMG, at the same subscription price offered to its stockholders in the rights offering, a number of shares of common stock that are not subscribed for pursuant to the exercise of basic subscription privileges or over-subscription privileges up to a maximum of $3.5 million in gross proceeds.

The subscription offering is expected to expire at 5:00 p.m., New York City time, on December 22, 2016, subject to extension or earlier termination. The Company will not issue subscription rights to acquire fractional shares of its common stock but rather will round down the aggregate number of shares for which holders may subscribe to the nearest whole share.

The Company expects to utilize the net proceeds of the Rights Offering for general working capital purposes.

Shareholders who hold their shares directly will receive a prospectus (including a prospectus supplement), together with a letter from the Company describing the Rights Offering, a subscription rights certificate and an IRS Form W-9. Those wishing to exercise their rights should review all materials, properly complete and execute the subscription rights certificate and deliver it and payment in full to the subscription agent:

By mail: Broadridge Corporate Issuer Solutions, Inc. Attn: BCIS Re-Organization Dept. P.O. Box 1317 Brentwood, New York 11717-0693 (855) 793-5068 (toll free)

By hand or overnight courier: Broadridge Corporate Issuer Solutions, Inc. Attn: BCIS IWS 51 Mercedes Way Edgewood, New York 11717 (855) 793-5068

Holders of subscription rights whose shares are held in street name through a broker, custodian bank or other nominee must instruct their broker, custodian bank or nominee whether or not to exercise subscription rights on their behalf. Those wishing to obtain a separate subscription rights certificate should promptly contact their broker, custodian bank or other nominee with that request, although it is not necessary to have a physical subscription rights certificate to elect to exercise rights if shares are held in street name.

The Company has engaged Monarch Capital Group, LLC as dealer-manager for the Rights Offering.



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